Guidance Software Reports Second Quarter Financial Results
- Second quarter product revenue increased 29% sequentially and 16% year-over-year
- Total endpoint deployment count reaches 33 million
- Increased velocity of new products with release of EnForce™ Risk Manager, EnCase® Forensic v8,
EnCase® Endpoint Investigator v8 and EnCase® Endpoint Security v5.13
- Second half expense savings of $2.5 - $3 million
Guidance Software, Inc. (NASDAQ: GUID) today reported financial results for the second quarter ended June 30,
2016.
Financial highlights, on a generally accepted accounting principles (GAAP) basis include:
- Revenue of $27.6 million, compared to $27.5 million in the second quarter of 2015.
- Net loss of $9.7 million, or ($0.33) per share, compared to a net loss of $3.5 million, or ($0.13)
per share, in the second quarter of 2015. Net loss in the 2016 second quarter included charges associated with the settlement of
patent infringement litigation ($2.3 million), proxy contest expenses ($1.5 million) and realignment expenses ($0.9
million).
Financial highlights, on a non-GAAP basis, which excludes share-based compensation, amortization of intangibles, litigation
settlement, proxy contest and realignment expenses, include:
- Pre-tax net loss of $2.4 million, or ($0.08) per share, in the second quarter of 2016, compared to
non-GAAP pre-tax net loss of $1.3 million, or ($0.05) per share, in the second quarter of 2015.
“We had a strong second quarter, once again delivering solid top line results while maintaining the pace to reach our revenue
growth goals for the year,” said Patrick Dennis, Guidance Software’s Chief Executive Officer. “Total revenues of $27.6 million grew
on both a year-over-year and sequential basis. The performance of the Forensic Security suite proves our pivot towards Cyber
Security is working. In the second quarter our Forensic Security suite was 75% of our enterprise revenue, up from 39% a year ago.
Furthermore, our Endpoint Detection and Response product revenue increased 40% year over year.”
“With strong growth in product revenue, especially around our Forensic Security suite, we can also focus on driving the Company
towards profitability,” said Barry Plaga, Chief Operating and Financial Officer. “As we transform the business, we are also
focusing on disciplined spending and continued overhead reduction, resulting in second half expense savings of approximately $2.5
to $3 million. We should expect positive EBITDA in the back half of 2016 and then each quarter in 2017.”
Second Quarter 2016 Highlights and Recent Noteworthy Events
- In June, EnForce™ Risk Manager, a purpose built product to help security professionals reduce the
attack surface area associated with sensitive data (PII, PCI, PHI), was broadly released for commercial availability.
- In May, the Company announced EnCase® Forensic and EnCase® Endpoint Investigator v8. These new
products, released in June and developed based on direct customer feedback, streamline workflows, enrich breadth and depth of
reporting, and facilitate the onboarding of new examiners. EnCase investigation products enable examiners to rapidly acquire data
from a wide variety of devices, identify potential evidence through deep forensic analysis, and produce accurate reports.
- The Company also released EnCase® Endpoint Security v5.13 during the second quarter, which delivers
real-time continuous monitoring capabilities and includes enhanced features to identify known indicators of compromise (IoCs)
through improved support for YARA rules. This technology automates the process digital forensic incident response experts use to
establish a chronological view and understanding during the incident response investigation of endpoints.
2016 Financial Guidance
The Company's updated guidance for the year ending December 31, 2016 is as follows:
- Revenue is expected to be in the range of $108.0 million to $112.0 million
- Non-GAAP pre-tax loss is now expected to be in the range of ($0.21) - ($0.25) per share due to
benefits from realignment initiatives, compared with prior guidance of ($0.30) - ($0.36) per share
- EBITDA is expected to be positive for the second half of 2016
Conference Call Information and Supplemental Information Slide Presentation:
The Company will host a conference call today at 2:00 p.m. Pacific Time, 5:00 p.m. Eastern Time, to discuss its second quarter
2016 results. Participants should call 877-407-0784 (North America) or 201-689-8560 (International) at least five minutes prior to
the conference call.
A supplemental information slide presentation, webcast and replay of the call may also be found online through Guidance
Software's Investor Relations website at http://investors.guidancesoftware.com/events.cfm. Registered users may access this content over the Internet,
and there is no cost to register. If you have not already registered, please do so at least 15 minutes prior to the start of
the conference call.
An audio-only replay of the call will be available by calling 877-870-5176, passcode 13641062, available from 8:00 p.m. Eastern
Time, August 2, 2016, through midnight Eastern Time, August 9, 2016.
About Guidance Software:
Guidance (GUID) exists to turn chaos and the unknown into order and the known—so that companies and their customers can go about
their daily lives as usual without worry or disruption, knowing their most valuable information is safe and secure. The makers of
EnCase®, the gold standard in forensic security, Guidance provides a mission-critical foundation of market-leading applications
that offer deep 360-degree visibility across all endpoints, devices and networks, allowing proactive identification and remediation
of threats. From retail to financial institutions, our field-tested and court-proven solutions are deployed on an estimated 33
million endpoints at more than 70 of the Fortune 100 and hundreds of agencies worldwide. Guidance provides forensic security
solutions, from beginning to endpoint.
For more information about Guidance Software, please visit guidancesoftware.com, "Like" our Facebook page, follow us on Twitter, or follow our LinkedIn page.
Guidance Software® and EnCase® are trademarks owned by Guidance Software and may not be used without prior written permission.
All other trademarks and copyrights are the property of their respective owners.
GUID-F
Notes to Unaudited Condensed Consolidated Statements of Operations:
Guidance Software reports its financial results in accordance with generally accepted accounting principles, or GAAP. To
supplement this information, we present from time to time non-GAAP gross profit, operating expenses, operating income (loss) and
net income (loss), as well as non-GAAP net income (loss) per share. Non-GAAP gross profit consists of GAAP gross profit as reported
and adds back realignment expenses and share-based compensation expense booked for GAAP purposes. Non-GAAP operating income (loss)
consists of GAAP operating income (loss) as reported and excludes realignment expenses, amortization of intangibles, litigation
settlement, proxy contest and share-based compensation expense. Non-GAAP net income (loss) consists of GAAP operating income (loss)
as reported and excludes realignment expenses, amortization of intangibles, litigation settlement, proxy contest expense,
share-based compensation expense and the income tax provision.
We use these non-GAAP financial measures for internal managerial purposes, when publicly providing our business outlook, and to
facilitate period-to-period comparisons. We describe limitations specific to each non-GAAP financial measure below. Management
generally compensates for limitations in the use of non-GAAP financial measures by relying on comparable GAAP financial measures
and providing investors with a reconciliation of the non-GAAP financial measures only in addition to and in conjunction with
results presented in accordance with GAAP. We believe that these non-GAAP financial measures reflect an additional way of viewing
aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends
affecting our business. These non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior
to, net income (loss) and net income (loss) per share calculated in accordance with GAAP.
Accordingly, management and the Board of Directors do not consider these excluded items for purposes of evaluating the
performance of the Company, its business units and its management teams and when making decisions to allocate resources among the
Company's business units.
Realignment Expenses. Realignment expenses represent one-time severance and related employment costs associated with a
reduction in headcount. Guidance Software excludes realignment expenses from non-GAAP operating income and non-GAAP net income
because it believes (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance
of Guidance Software business operations and (ii) such expenses are not expected to recur in future periods.
Proxy Contest Expenses. Proxy contest expenses represent one-time legal and other consulting expenses related to the
proxy contest between Guidance Software and its founder and former chairman, which was settled on April 22, 2016. Guidance Software
excludes proxy contest expenses from non-GAAP operating income and non-GAAP net income because it believes (i) the amount of such
expenses in any specific period may not directly correlate to the underlying performance of Guidance Software business operations
and (ii) such expenses are uncommon and not expected to recur in future periods.
Litigation Settlement. Litigation settlement expense represents a one-time settlement expense of a patent infringement
lawsuit with MyKey Technology, LLC. Guidance Software excludes litigation settlement expense from non-GAAP operating income and
non-GAAP net income because it believes (i) the amount of such expense may not directly correlate to the underlying performance of
Guidance Software business operations and (ii) such expense is uncommon and not expected to recur in future periods.
Amortization of Intangibles. Amortization of intangibles is a non-cash expense arising from the acquisition of intangible
assets in connection with acquisitions. Guidance Software excludes acquisition-related amortization expense from non-GAAP operating
income and non-GAAP net income because it believes (i) the amount of such expenses in any specific period may not directly
correlate to the underlying performance of Guidance Software business operations and (ii) such expenses can vary significantly
between periods as a result of new acquisitions and full amortization of previously acquired intangible assets. Investors should
note that the use of these intangible assets contributed to revenue in the periods presented and will contribute to future revenue
generation and the related amortization expense will recur in future periods.
Share-based Compensation Expense. Share-based compensation expense is a non-cash expense arising from the grant of stock
awards to employees. Guidance Software excludes share-based compensation expense from non-GAAP operating income and non-GAAP net
income because it believes (i) the amount of such expenses in any specific period may not directly correlate to the underlying
performance of Guidance Software business operations and (ii) such expenses can vary significantly between periods as a result of
the timing of grants of new share-based awards. Investors should note that share-based compensation is a key incentive offered to
employees whose efforts contributed to the operating results in the periods presented and are expected to contribute to operating
results in future periods and such expense will recur in future periods.
Forward Looking Statements:
This news release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements in this release involve risks and
uncertainties that could cause actual results to differ materially from current expectations. There can be no assurance that demand
for Guidance Software's products will continue at current or greater levels, or that the Company will continue to grow revenues, or
be profitable. There are also risks that Guidance Software's pursuit of providing network security and e-discovery technology might
not be successful, or that if successful, it will not materially enhance Guidance Software's financial performance; that the
Company could fail to retain key employees; that changes in customer requirements and other general economic and political
uncertainties could impact Guidance Software's relationship with its customers; and that delays in product development, competitive
pressures or technical difficulties could impact timely delivery of next-generation products; and other risks and uncertainties
that are described from time to time in Guidance Software's periodic reports and registration statements filed with the Securities
and Exchange Commission. The Company specifically disclaims any responsibility for updating these forward-looking statements.
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Guidance Software, Inc. |
Unaudited Condensed Consolidated Statements of Operations |
(in thousands, except per share amounts) |
|
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Three Months Ended |
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Six Months Ended |
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|
June 30, |
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June 30, |
|
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|
2016 |
|
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|
2015 |
|
|
|
2016 |
|
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|
2015 |
Revenues: |
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Product revenue |
|
|
|
$ |
9,635 |
|
|
|
|
$ |
8,280 |
|
|
|
|
$ |
17,093 |
|
|
|
|
$ |
15,334 |
|
|
|
Services revenue |
|
|
|
|
8,177 |
|
|
|
|
|
9,264 |
|
|
|
|
|
16,686 |
|
|
|
|
|
17,446 |
|
|
|
Maintenance revenue |
|
|
|
|
9,744 |
|
|
|
|
|
10,005 |
|
|
|
|
|
19,576 |
|
|
|
|
|
19,773 |
|
Total revenues |
|
|
|
$ |
27,556 |
|
|
|
|
$ |
27,549 |
|
|
|
|
$ |
53,355 |
|
|
|
|
$ |
52,553 |
|
|
|
|
|
|
|
|
|
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Cost of revenues: |
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|
|
|
|
|
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|
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|
Cost of product revenue |
|
|
|
$ |
2,415 |
|
|
|
|
$ |
2,293 |
|
|
|
|
$ |
4,371 |
|
|
|
|
$ |
4,036 |
|
|
|
Cost of services revenue |
|
|
|
|
5,650 |
|
|
|
|
|
6,285 |
|
|
|
|
|
11,285 |
|
|
|
|
|
12,501 |
|
|
|
Cost of maintenance revenue |
|
|
|
|
636 |
|
|
|
|
|
690 |
|
|
|
|
|
1,242 |
|
|
|
|
|
1,180 |
|
Total cost of revenues |
|
|
|
$ |
8,701 |
|
|
|
|
$ |
9,268 |
|
|
|
|
$ |
16,898 |
|
|
|
|
$ |
17,717 |
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
|
$ |
18,855 |
|
|
|
|
$ |
18,281 |
|
|
|
|
$ |
36,457 |
|
|
|
|
$ |
34,836 |
|
|
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|
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Operating expenses: |
|
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Selling and marketing |
|
|
|
$ |
11,613 |
|
|
|
|
$ |
10,257 |
|
|
|
|
$ |
22,114 |
|
|
|
|
$ |
19,201 |
|
|
|
Research and development |
|
|
|
|
6,500 |
|
|
|
|
|
5,244 |
|
|
|
|
|
12,742 |
|
|
|
|
|
10,409 |
|
|
|
General and administrative |
|
|
|
|
9,133 |
|
|
|
|
|
4,629 |
|
|
|
|
|
15,323 |
|
|
|
|
|
9,184 |
|
|
|
Depreciation and amortization |
|
|
|
|
1,307 |
|
|
|
|
|
1,596 |
|
|
|
|
|
2,722 |
|
|
|
|
|
3,237 |
|
Total operating expenses |
|
|
|
$ |
28,553 |
|
|
|
|
$ |
21,726 |
|
|
|
|
$ |
52,901 |
|
|
|
|
$ |
42,031 |
|
|
|
|
|
|
|
|
|
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|
|
|
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|
|
|
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|
Operating loss |
|
|
|
$ |
(9,698 |
) |
|
|
|
$ |
(3,445 |
) |
|
|
|
$ |
(16,444 |
) |
|
|
|
$ |
(7,195 |
) |
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Interest income and other, net |
|
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|
6 |
|
|
|
|
|
10 |
|
|
|
|
|
13 |
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|
|
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|
18 |
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|
|
|
|
|
|
|
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|
Loss before income taxes |
|
|
|
$ |
(9,692 |
) |
|
|
|
$ |
(3,435 |
) |
|
|
|
$ |
(16,431 |
) |
|
|
|
$ |
(7,177 |
) |
|
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|
|
|
|
|
|
|
|
|
|
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|
Income tax provision |
|
|
|
|
38 |
|
|
|
|
|
96 |
|
|
|
|
|
91 |
|
|
|
|
|
167 |
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|
|
|
|
|
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|
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Net loss |
|
|
|
$ |
(9,730 |
) |
|
|
|
$ |
(3,531 |
) |
|
|
|
$ |
(16,522 |
) |
|
|
|
$ |
(7,344 |
) |
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|
Net loss per share - basic |
|
|
|
$ |
(0.33 |
) |
|
|
|
$ |
(0.13 |
) |
|
|
|
$ |
(0.58 |
) |
|
|
|
$ |
(0.27 |
) |
Net loss per share - diluted |
|
|
|
$ |
(0.33 |
) |
|
|
|
$ |
(0.13 |
) |
|
|
|
$ |
(0.58 |
) |
|
|
|
$ |
(0.27 |
) |
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|
Shares used in per share calculation - basic |
|
|
|
|
29,397 |
|
|
|
|
|
27,999 |
|
|
|
|
|
28,689 |
|
|
|
|
|
27,143 |
|
Shares used in per share calculation - diluted |
|
|
|
|
29,397 |
|
|
|
|
|
27,999 |
|
|
|
|
|
28,689 |
|
|
|
|
|
27,143 |
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Supplemental Financial Data
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|
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|
Non-GAAP loss before income taxes excluding amortization of intangibles,
proxy contest expense, litigation settlement, realignment expense, and share-based compensation expense |
|
|
|
$ |
(2,356 |
) |
|
|
|
$ |
(1,293 |
) |
|
|
|
$ |
(4,530 |
) |
|
|
|
$ |
(2,920 |
) |
|
|
|
|
|
|
|
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|
|
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|
Non-GAAP loss per share before income taxes excluding amortization of
intangibles, proxy contest expense, litigation settlement, realignment expense, and share-based compensation expense |
|
|
|
|
|
|
Basic |
|
|
|
$ |
(0.08 |
) |
|
|
|
$ |
(0.05 |
) |
|
|
|
$ |
(0.16 |
) |
|
|
|
$ |
(0.11 |
) |
|
|
Diluted |
|
|
|
$ |
(0.08 |
) |
|
|
|
$ |
(0.05 |
) |
|
|
|
$ |
(0.16 |
) |
|
|
|
$ |
(0.11 |
) |
|
|
|
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|
Guidance Software, Inc. |
Calculation of Pre-Tax Non-GAAP Income |
(unaudited) |
(in thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
Six Months Ended |
|
|
|
|
June 30, |
|
|
|
June 30, |
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
Calculation of pre-tax non-GAAP income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss |
|
|
|
$ |
(9,730 |
) |
|
|
|
$ |
(3,531 |
) |
|
|
|
$ |
(16,522 |
) |
|
|
|
$ |
(7,344 |
) |
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision |
|
|
|
|
38 |
|
|
|
|
|
96 |
|
|
|
|
|
91 |
|
|
|
|
|
167 |
|
Amortization of intangibles |
|
|
|
|
379 |
|
|
|
|
|
413 |
|
|
|
|
|
766 |
|
|
|
|
|
862 |
|
Proxy contest expense |
|
|
|
|
1,512 |
|
|
|
|
|
- |
|
|
|
|
|
2,176 |
|
|
|
|
|
- |
|
Litigation settlement |
|
|
|
|
2,250 |
|
|
|
|
|
- |
|
|
|
|
|
2,250 |
|
|
|
|
|
- |
|
Realignment expense |
|
|
|
|
920 |
|
|
|
|
|
- |
|
|
|
|
|
3,112 |
|
|
|
|
|
- |
|
Share-based compensation expense (including related payroll taxes paid by the
Company) |
|
|
|
|
2,275 |
|
|
|
|
|
1,729 |
|
|
|
|
|
3,597 |
|
|
|
|
|
3,395 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP loss before income taxes excluding amortization of intangibles,
proxy contest expense, litigation settlement, realignment expense, and share-based compensation expense |
|
|
|
$ |
(2,356 |
) |
|
|
|
$ |
(1,293 |
) |
|
|
|
$ |
(4,530 |
) |
|
|
|
$ |
(2,920 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP loss per share before income taxes excluding amortization of intangibles,
proxy contest expense, litigation settlement, realignment expense, and share-based compensation expense |
|
|
|
|
|
|
|
|
Basic |
|
|
|
$ |
(0.08 |
) |
|
|
|
$ |
(0.05 |
) |
|
|
|
$ |
(0.16 |
) |
|
|
|
$ |
(0.11 |
) |
Diluted |
|
|
|
$ |
(0.08 |
) |
|
|
|
$ |
(0.05 |
) |
|
|
|
$ |
(0.16 |
) |
|
|
|
$ |
(0.11 |
) |
Shares used in per share calculations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
29,397 |
|
|
|
|
|
27,999 |
|
|
|
|
|
28,689 |
|
|
|
|
|
27,143 |
|
Diluted |
|
|
|
|
29,397 |
|
|
|
|
|
27,999 |
|
|
|
|
|
28,689 |
|
|
|
|
|
27,143 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Detail of Proxy Contest Expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative |
|
|
|
$ |
1,512 |
|
|
|
|
$ |
- |
|
|
|
|
$ |
2,176 |
|
|
|
|
$ |
- |
|
Total proxy contest expense |
|
|
|
$ |
1,512 |
|
|
|
|
$ |
- |
|
|
|
|
$ |
2,176 |
|
|
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Detail of Litigation Settlement:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative |
|
|
|
$ |
2,250 |
|
|
|
|
$ |
- |
|
|
|
|
$ |
2,250 |
|
|
|
|
$ |
- |
|
Total litigation settlement |
|
|
|
$ |
2,250 |
|
|
|
|
$ |
- |
|
|
|
|
$ |
2,250 |
|
|
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Detail of Realignment Expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services revenue |
|
|
|
$ |
168 |
|
|
|
|
$ |
- |
|
|
|
|
$ |
622 |
|
|
|
|
$ |
- |
|
Selling and marketing |
|
|
|
|
87 |
|
|
|
|
|
- |
|
|
|
|
|
1,404 |
|
|
|
|
|
- |
|
Research and development |
|
|
|
|
- |
|
|
|
|
|
- |
|
|
|
|
|
351 |
|
|
|
|
|
- |
|
General and administrative |
|
|
|
|
665 |
|
|
|
|
|
- |
|
|
|
|
|
735 |
|
|
|
|
|
- |
|
Total realignment expense |
|
|
|
$ |
920 |
|
|
|
|
$ |
- |
|
|
|
|
$ |
3,112 |
|
|
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Detail of Share-based Compensation Expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product revenue |
|
|
|
$ |
14 |
|
|
|
|
$ |
29 |
|
|
|
|
$ |
29 |
|
|
|
|
$ |
61 |
|
Cost of services revenue |
|
|
|
|
205 |
|
|
|
|
|
281 |
|
|
|
|
|
376 |
|
|
|
|
|
568 |
|
Cost of maintenance revenue |
|
|
|
|
37 |
|
|
|
|
|
40 |
|
|
|
|
|
75 |
|
|
|
|
|
82 |
|
Selling and marketing |
|
|
|
|
714 |
|
|
|
|
|
406 |
|
|
|
|
|
824 |
|
|
|
|
|
761 |
|
Research and development |
|
|
|
|
701 |
|
|
|
|
|
376 |
|
|
|
|
|
1,128 |
|
|
|
|
|
814 |
|
General and administrative |
|
|
|
|
604 |
|
|
|
|
|
597 |
|
|
|
|
|
1,165 |
|
|
|
|
|
1,109 |
|
Total share-based compensation expense |
|
|
|
$ |
2,275 |
|
|
|
|
$ |
1,729 |
|
|
|
|
$ |
3,597 |
|
|
|
|
$ |
3,395 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guidance Software, Inc |
Reconciliation of GAAP to Non-GAAP Financial Measures |
(Unaudited and in thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
Six Months Ended |
|
|
|
|
|
|
|
|
June 30, |
|
|
|
June 30, |
|
|
|
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit, as reported |
|
|
|
$ |
18,855 |
|
|
|
|
$ |
18,281 |
|
|
|
|
$ |
36,457 |
|
|
|
|
$ |
34,836 |
|
|
|
Realignment expense |
|
|
|
|
168 |
|
|
|
|
|
- |
|
|
|
|
|
622 |
|
|
|
|
|
- |
|
|
|
Share-based compensation |
|
|
|
|
256 |
|
|
|
|
|
350 |
|
|
|
|
|
480 |
|
|
|
|
|
711 |
|
|
|
|
|
Gross profit adjustment |
|
|
|
|
424 |
|
|
|
|
|
350 |
|
|
|
|
|
1,102 |
|
|
|
|
|
711 |
|
Total non-GAAP gross profit |
|
|
|
$ |
19,279 |
|
|
|
|
$ |
18,631 |
|
|
|
|
$ |
37,559 |
|
|
|
|
$ |
35,547 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses, as reported |
|
|
|
$ |
28,553 |
|
|
|
|
$ |
21,726 |
|
|
|
|
$ |
52,901 |
|
|
|
|
$ |
42,031 |
|
|
|
Amortization of intangibles |
|
|
|
|
(379 |
) |
|
|
|
|
(413 |
) |
|
|
|
|
(766 |
) |
|
|
|
|
(862 |
) |
|
|
Proxy contest expense |
|
|
|
|
(1,512 |
) |
|
|
|
|
- |
|
|
|
|
|
(2,176 |
) |
|
|
|
|
- |
|
|
|
Litigation settlement |
|
|
|
|
(2,250 |
) |
|
|
|
|
- |
|
|
|
|
|
(2,250 |
) |
|
|
|
|
- |
|
|
|
Realignment expense |
|
|
|
|
(752 |
) |
|
|
|
|
- |
|
|
|
|
|
(2,490 |
) |
|
|
|
|
- |
|
|
|
Share-based compensation |
|
|
|
|
(2,019 |
) |
|
|
|
|
(1,379 |
) |
|
|
|
|
(3,117 |
) |
|
|
|
|
(2,684 |
) |
|
|
|
|
Operating expense adjustment |
|
|
|
|
(6,912 |
) |
|
|
|
|
(1,792 |
) |
|
|
|
|
(10,799 |
) |
|
|
|
|
(3,546 |
) |
Total non-GAAP operating expenses |
|
|
|
$ |
21,641 |
|
|
|
|
$ |
19,934 |
|
|
|
|
$ |
42,102 |
|
|
|
|
$ |
38,485 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss, as reported
|
|
|
|
$ |
(9,698 |
) |
|
|
|
$ |
(3,445 |
) |
|
|
|
$ |
(16,444 |
) |
|
|
|
$ |
(7,195 |
) |
|
|
Gross profit adjustment |
|
|
|
|
424 |
|
|
|
|
|
350 |
|
|
|
|
|
1,102 |
|
|
|
|
|
711 |
|
|
|
Operating expense adjustment |
|
|
|
|
6,912 |
|
|
|
|
|
1,792 |
|
|
|
|
|
10,799 |
|
|
|
|
|
3,546 |
|
Total non-GAAP operating loss |
|
|
|
$ |
(2,362 |
) |
|
|
|
$ |
(1,303 |
) |
|
|
|
$ |
(4,543 |
) |
|
|
|
$ |
(2,938 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss, as reported
|
|
|
|
$ |
(9,730 |
) |
|
|
|
$ |
(3,531 |
) |
|
|
|
$ |
(16,522 |
) |
|
|
|
$ |
(7,344 |
) |
|
|
Gross profit adjustment |
|
|
|
|
424 |
|
|
|
|
|
350 |
|
|
|
|
|
1,102 |
|
|
|
|
|
711 |
|
|
|
Operating expense adjustment |
|
|
|
|
6,912 |
|
|
|
|
|
1,792 |
|
|
|
|
|
10,799 |
|
|
|
|
|
3,546 |
|
|
|
Income tax provision |
|
|
|
|
38 |
|
|
|
|
|
96 |
|
|
|
|
|
91 |
|
|
|
|
|
167 |
|
Total non-GAAP net loss |
|
|
|
$ |
(2,356 |
) |
|
|
|
$ |
(1,293 |
) |
|
|
|
$ |
(4,530 |
) |
|
|
|
$ |
(2,920 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share-diluted, as reported |
|
|
|
$ |
(0.33 |
) |
|
|
|
$ |
(0.13 |
) |
|
|
|
$ |
(0.58 |
) |
|
|
|
$ |
(0.27 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net loss per share-diluted |
|
|
|
$ |
(0.08 |
) |
|
|
|
$ |
(0.05 |
) |
|
|
|
$ |
(0.16 |
) |
|
|
|
$ |
(0.11 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guidance Software, Inc. |
Unaudited Condensed Consolidated Balance Sheets |
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
|
|
|
|
|
|
|
December 31, |
|
|
|
|
|
|
|
|
2016 |
|
|
|
|
|
|
|
|
2015 |
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
$ |
13,040 |
|
|
|
|
|
|
|
|
|
$ |
18,967 |
|
|
|
Trade receivables, net |
|
|
|
|
15,401 |
|
|
|
|
|
|
|
|
|
|
21,434 |
|
|
|
Inventory |
|
|
|
|
2,644 |
|
|
|
|
|
|
|
|
|
|
2,543 |
|
|
|
Prepaid expenses and other current assets |
|
|
|
|
4,855 |
|
|
|
|
|
|
|
|
|
|
3,335 |
|
|
|
|
|
Total current assets |
|
|
|
$ |
35,940 |
|
|
|
|
|
|
|
|
|
$ |
46,279 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
|
$ |
13,124 |
|
|
|
|
|
|
|
|
|
$ |
13,513 |
|
|
|
Intangible assets, net |
|
|
|
|
5,390 |
|
|
|
|
|
|
|
|
|
|
6,157 |
|
|
|
Goodwill |
|
|
|
|
14,632 |
|
|
|
|
|
|
|
|
|
|
14,632 |
|
|
|
Other assets |
|
|
|
|
2,679 |
|
|
|
|
|
|
|
|
|
|
1,709 |
|
|
|
|
|
Total long-term assets |
|
|
|
|
35,825 |
|
|
|
|
|
|
|
|
|
|
36,011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
|
|
$ |
71,765 |
|
|
|
|
|
|
|
|
|
$ |
82,290 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
|
|
$ |
8,147 |
|
|
|
|
|
|
|
|
|
$ |
3,335 |
|
|
|
Accrued liabilities |
|
|
|
|
11,365 |
|
|
|
|
|
|
|
|
|
|
9,884 |
|
|
|
Deferred revenues |
|
|
|
|
39,063 |
|
|
|
|
|
|
|
|
|
|
41,553 |
|
|
|
|
|
Total current liabilities |
|
|
|
$ |
58,575 |
|
|
|
|
|
|
|
|
|
$ |
54,772 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred rent and other long-term liabilities |
|
|
|
$ |
7,002 |
|
|
|
|
|
|
|
|
|
$ |
7,527 |
|
|
|
Deferred revenues |
|
|
|
|
7,320 |
|
|
|
|
|
|
|
|
|
|
8,242 |
|
|
|
Deferred tax liabilities |
|
|
|
|
556 |
|
|
|
|
|
|
|
|
|
|
511 |
|
|
|
|
|
Total long-term liabilities |
|
|
|
$ |
14,878 |
|
|
|
|
|
|
|
|
|
$ |
16,280 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock |
|
|
|
$ |
26 |
|
|
|
|
|
|
|
|
|
$ |
25 |
|
|
|
Additional paid-in capital |
|
|
|
|
122,309 |
|
|
|
|
|
|
|
|
|
|
118,714 |
|
|
|
Treasury stock |
|
|
|
|
(11,479 |
) |
|
|
|
|
|
|
|
|
|
(11,479 |
) |
|
|
Accumulated deficit |
|
|
|
|
(112,544 |
) |
|
|
|
|
|
|
|
|
|
(96,022 |
) |
|
|
|
|
Total stockholders' equity |
|
|
|
$ |
(1,688 |
) |
|
|
|
|
|
|
|
|
$ |
11,238 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity |
|
|
|
$ |
71,765 |
|
|
|
|
|
|
|
|
|
$ |
82,290 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guidance Software, Inc |
Unaudited Cash Flow Summary |
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
|
|
|
|
|
|
|
|
|
|
2016 |
|
|
|
|
|
|
|
|
2015 |
Operating Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
|
|
|
$ |
(16,522 |
) |
|
|
|
|
|
|
|
|
$ |
(7,344 |
) |
|
|
Adjustments to reconcile net loss to net cash (used in) provided by
operating activities: |
|
|
|
|
|
|
|
|
|
|
Depreciation & amortization |
|
|
|
|
|
|
2,722 |
|
|
|
|
|
|
|
|
|
|
3,237 |
|
|
|
|
|
Share-based compensation |
|
|
|
|
|
|
3,597 |
|
|
|
|
|
|
|
|
|
|
3,395 |
|
|
|
|
|
Deferred taxes |
|
|
|
|
|
|
45 |
|
|
|
|
|
|
|
|
|
|
46 |
|
|
|
|
|
Loss on disposal of assets |
|
|
|
|
|
|
96 |
|
|
|
|
|
|
|
|
|
|
12 |
|
|
|
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted cash |
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
153 |
|
|
|
|
|
|
Trade receivables |
|
|
|
|
|
|
6,033 |
|
|
|
|
|
|
|
|
|
|
2,941 |
|
|
|
|
|
|
Inventory |
|
|
|
|
|
|
(101 |
) |
|
|
|
|
|
|
|
|
|
183 |
|
|
|
|
|
|
Prepaid expenses and other assets |
|
|
|
|
|
|
(2,490 |
) |
|
|
|
|
|
|
|
|
|
88 |
|
|
|
|
|
|
Accounts payable |
|
|
|
|
|
|
4,419 |
|
|
|
|
|
|
|
|
|
|
(2,341 |
) |
|
|
|
|
|
Accrued liabilities |
|
|
|
|
|
|
1,355 |
|
|
|
|
|
|
|
|
|
|
2,102 |
|
|
|
|
|
|
Deferred revenues |
|
|
|
|
|
|
(3,412 |
) |
|
|
|
|
|
|
|
|
|
1,582 |
|
|
|
|
|
Net cash (used in) provided by operating activities |
|
|
|
|
|
$ |
(4,258 |
) |
|
|
|
|
|
|
|
|
$ |
4,054 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property and equipment |
|
|
|
|
|
$ |
(1,630 |
) |
|
|
|
|
|
|
|
|
$ |
(3,015 |
) |
|
|
|
|
Net cash used in investing activities |
|
|
|
|
|
$ |
(1,630 |
) |
|
|
|
|
|
|
|
|
$ |
(3,015 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from the exercise of stock options |
|
|
|
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
$ |
1,677 |
|
|
|
Principal payments on capital lease and other obligations |
|
|
|
|
|
|
(39 |
) |
|
|
|
|
|
|
|
|
|
(42 |
) |
|
|
|
|
Net cash (used in) provided by financing activities |
|
|
|
|
|
$ |
(39 |
) |
|
|
|
|
|
|
|
|
$ |
1,635 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (decrease) increase in cash and cash equivalents |
|
|
|
|
|
$ |
(5,927 |
) |
|
|
|
|
|
|
|
|
$ |
2,674 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of period |
|
|
|
|
|
$ |
18,967 |
|
|
|
|
|
|
|
|
|
$ |
18,355 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of period |
|
|
|
|
|
$ |
13,040 |
|
|
|
|
|
|
|
|
|
$ |
21,029 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTOR CONTACT
Guidance Software, Inc.
Rasmus van der Colff, 626-768-4607
investorrelations@guidancesoftware.com
View source version on businesswire.com: http://www.businesswire.com/news/home/20160802006744/en/