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Keynote Reports Fourth Fiscal Quarter And Year-End 2012 Results

Stocks in this article: KEYN

Keynote Systems (NASDAQ:KEYN), the global leader in mobile and web cloud testing & monitoring, reported financial results for its fourth fiscal quarter and year-ended September 30, 2012.

Umang Gupta, Chairman and CEO of Keynote, said: "Our solid fourth quarter results top off our fiscal 2012 year where we saw progress across all of our businesses. Our Internet products posted record quarterly revenue, our telecom business successfully weathered accounting related and European headwinds and we completed the integration of DeviceAnywhere into our enterprise organization. We exit fiscal 2012 better positioned to take advantage of the cloud and mobile market opportunities we see in the coming year.”

Quarter Ended September 30, 2012 Compared to Quarter Ended September 30, 2011

Revenue was $30.4 million for the fourth fiscal quarter of 2012, compared to $27.5 million in the fourth fiscal quarter of 2011. Total Internet revenue was a record $16.1 million, up from $14.2 million a year ago. Total mobile revenue was $14.3 million, increasing from $13.3 million a year ago. The revenue accounting headwind in the quarter was $2.2 million, which equals the decrease in mobile ratable licenses revenue from $2.6 million a year ago to $445,000 in the fourth fiscal quarter of 2012. In addition, the average Euro exchange rate was 13% lower this quarter compared to the year ago quarter. Keynote DeviceAnywhere contributed $3.7 million in revenue in the quarter and has more than doubled its deferred revenue balance since the acquisition.

Total costs and expenses for the quarter were $29.8 million, compared to $24.0 million in the same quarter a year ago. Of this increase, $5.7 million was due to expenses associated with Keynote DeviceAnywhere, which included $1.4 million of amortization of purchased intangibles, depreciation and stock-based compensation.

Net income for the fourth fiscal quarter of 2012 was $226,000, or $0.01 per diluted share, compared to net income of $39.8 million, or $2.16 per diluted share, for the same period last fiscal year, which included a one-time benefit from the release of the valuation allowance on deferred tax assets of $37.3 million. Non-GAAP net income for the fourth fiscal quarter of 2012 was $2.9 million, or $0.16 per diluted share, compared to $4.9 million, or $0.27 per diluted share, for the same period last fiscal year. Much of the decrease was related to the revenue accounting headwind and also to operating losses associated with Keynote DeviceAnywhere. The company defines non-GAAP net income as GAAP net income (loss) adjusted for the provision (benefit) for income taxes, cash taxes from on-going operations, stock-based compensation expense, amortization of purchased intangibles, and any unusual items. Non-GAAP net income per diluted share equals non-GAAP net income divided by the diluted weighted average shares outstanding for the period.

Adjusted EBITDA was $4.6 million for the fourth fiscal quarter of 2012, or 15% of revenue, compared to $6.2 million, or 23% of revenue, for the same period last fiscal year. The company defines Adjusted EBITDA as earnings before interest income, taxes, depreciation, amortization of purchased intangibles, stock-based compensation, other income (expense), net, and any unusual items. Much of the decrease was related to the revenue accounting headwind and also to operating losses associated with Keynote DeviceAnywhere.

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