FalconStor Software Reports Third Quarter Financial Results

FalconStor and FalconStor Software are registered trademarks of FalconStor Software, Inc. in the US and other countries. All other company and product names contained herein may be trademarks of their respective holders.

FalconStor Software, Inc. and Subsidiaries CONDENSED CONSOLIDATED BALANCE SHEETS
		September 30, 2012			December 31, 2011
		(unaudited)
Assets
Current assets:
Cash and cash equivalents		$	12,154,409		$	16,257,694
Marketable securities			13,201,701			20,894,328
Accounts receivable, net			10,965,296			19,314,789
Prepaid expenses and other current assets			4,716,228			1,912,831
Inventory			721,827			1,769,007
Deferred tax assets, net			175,624			177,798
Total current assets			41,935,085			60,326,447
Property and equipment, net			4,387,606			4,364,180
Long-term marketable securities			489,999			611,082
Deferred tax assets, net			205,879			217,771
Software development costs, net			1,243,885			1,001,530
Other assets, net			2,207,272			2,183,973
Goodwill			4,150,339			4,150,339
Other intangible assets, net			190,106			191,572
Total assets		$	54,810,171		$	73,046,894
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable		$	1,514,250		$	2,883,844
Accrued expenses			11,063,649			17,609,766
Deferred revenue, net			17,526,719			19,450,966
Total current liabilities			30,104,618			39,944,576
Other long-term liabilities			4,433,219			2,587,327
Deferred revenue, net			6,098,952			7,698,053
Total liabilities			40,636,789			50,229,956
Commitments and Contingencies
Total stockholders' equity			14,173,382			22,816,938
Total liabilities and stockholders' equity		$	54,810,171		$	73,046,894

FalconStor Software, Inc. and Subsidiaries CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
		Three Months Ended September 30,								Nine Months Ended September 30,
		2012				2011				2012				2011
Revenues:
Product revenues		$	8,550,551			$	10,176,275			$	27,049,072			$	33,045,050
Support and services revenues			8,538,462				8,680,115				25,874,214				24,398,610
			17,089,013				18,856,390				52,923,286				57,443,660
Cost of revenues:
Product			1,562,359				1,467,141				5,370,031				5,456,186
Support and service			3,318,558				3,339,448				9,570,969				9,877,256
Total cost of revenues			4,880,917				4,806,589				14,941,000				15,333,442
Gross profit		$	12,208,096			$	14,049,801			$	37,982,286			$	42,110,218
Operating expenses:
Research and development costs			4,643,102				5,033,211				14,115,388				16,383,318
Selling and marketing			8,272,973				9,878,069				27,302,960				28,873,468
General and administrative			3,461,880				2,904,767				9,590,909				8,463,762
Investigation, litigation andsettlement related costs			(1,353,571	)			531,507				(1,793,368	)			4,331,298
Restructuring costs			770,749				822,320				770,749				822,320
Total operating expenses			15,795,133				19,169,874				49,986,638				58,874,166
Operating loss			(3,587,037	)			(5,120,073	)			(12,004,352	)			(16,763,948	)
Interest and other income (loss), net			102,059				(71,266	)			(142,805	)			379,690
Loss before income taxes			(3,484,978	)			(5,191,339	)			(12,147,157	)			(16,384,258	)
Provision for income taxes			83,073				206,837				490,888				869,221
Net loss		$	(3,568,051	)		$	(5,398,176	)		$	(12,638,045	)		$	(17,253,479	)
Basic net loss per share		$	(0.08	)		$	(0.12	)		$	(0.27	)		$	(0.37	)
Diluted net loss per share		$	(0.08	)		$	(0.12	)		$	(0.27	)		$	(0.37	)
Weighted average basic sharesoutstanding			47,542,304				46,779,040				47,353,922				46,563,004
Weighted average diluted sharesoutstanding			47,542,304				46,779,040				47,353,922				46,563,004

FalconStor Software, Inc. and Subsidiaries Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited)
		Three Months Ended September 30,								Nine Months Ended September 30,
		2012				2011				2012				2011
GAAP loss from operations		$	(3,587,037	)		$	(5,120,073	)		$	(12,004,352	)		$	(16,763,948	)
Add: Non-cash stock option expense (1)			1,055,778				1,436,578				3,594,156				4,091,878
Legal related costs (3)			(1,353,571	)			531,507				(1,793,368	)			4,331,298
Restructuring costs (4)			770,749				822,320				770,749				822,320
Non-GAAP loss from operations			(3,114,081	)			(2,329,668	)			(9,432,815	)			(7,518,452	)
GAAP net loss		$	(3,568,051	)		$	(5,398,176	)		$	(12,638,045	)		$	(17,253,479	)
Add: Non-cash stock option expense,
net of income taxes (2)			1,055,778				1,436,578				3,594,156				4,091,878
Legal related costs (3)			(1,353,571	)			531,507				(1,793,368	)			4,331,298
Restructuring costs (4)			770,749				822,320				770,749				822,320
Non-GAAP net loss			(3,095,095	)			(2,607,771	)			(10,066,508	)			(8,007,983	)
GAAP gross margin – Product			82	%			86	%			80	%			84	%
Add: Non-cash stock option expense (1)			0	%			0	%			0	%			0	%
Non-GAAP gross margin - Product			82	%			86	%			80	%			84	%
GAAP gross margin – Support
and Service			61	%			62	%			63	%			60	%
Add: Non-cash stock option expense (1)			1	%			1	%			0	%			2	%
Non-GAAP gross margin – Support
and Service			62	%			63	%			63	%			61	%
GAAP operating margin			(21	%)			(27	%)			(23	%)			(29	%)
Add: Non-cash stock option expense (1)			6	%			8	%			7	%			7	%
Legal related costs (3)			(8	%)			3	%			(3	%)			8	%
Restructuring costs (4)			5	%			4	%			1	%			1	%
Non-GAAP operating margin			(18	%)			(12	%)			(18	%)			(13	%)
GAAP Basic EPS		$	(0.08	)		$	(0.12	)		$	(0.27	)		$	(0.37	)
Add: Non-cash stock option expense,
net of income taxes (2)			0.02				0.03				0.08				0.09
Legal related costs (3)			(0.03	)			0.01				(0.04	)			0.09
Restructuring costs (4)			0.02				0.02				0.02				0.02
Non-GAAP Basic EPS			(0.07	)			(0.06	)			(0.21	)			(0.17	)
GAAP Diluted EPS		$	(0.08	)		$	(0.12	)		$	(0.27	)		$	(0.37	)
Add: Non-cash stock option expense,
net of income taxes (2)			0.02				0.03				0.08				0.09
Legal related costs (3)			(0.03	)			0.01				(0.04	)			0.09
Restructuring costs (4)			0.02				0.02				0.02				0.02
Non-GAAP Diluted EPS			(0.07	)			(0.06	)			(0.21	)			(0.17	)
Weighted average basic shares
Outstanding (GAAP and as adjusted)			47,542,304				46,779,040				47,353,922				46,563,004
Weighted average diluted shares
Outstanding (GAAP and as adjusted)			47,542,304				46,779,040				47,353,922				46,563,004

Footnotes:
(1) Represents non-cash, stock-based compensation charges as follows:
		Three Months Ended September 30,						Nine Months Ended September 30,
		2012			2011			2012			2011
Cost of revenues - Product		$	113		$	1,169		$	212		$	2,641
Cost of revenues – Support and Service			53,314			111,830			103,158			385,032
Research and development costs			127,982			235,782			572,170			1,044,193
Selling and marketing			388,167			585,814			1,272,823			1,471,093
General and administrative			486,202			501,983			1,645,793			1,188,919
Total non-cash stock-basedcompensation expense		$	1,055,778		$	1,436,578		$	3,594,156		$	4,091,878

(2)		Represents the effects of non-cash stock-based compensation expense recognized in accordance with the FASB Accounting Standards Codification, Topic 718, net of related income tax effects. For the three and nine months ended September 30, 2012 and 2011, the tax expense for both GAAP and Non-GAAP basis approximate the same amount.
(3)		Legal related costs represent amounts in connection with the Company’s investigations, litigation and settlement related costs for each respective period presented.
(4)		Represents restructuring costs which were incurred during each respective period presented.

« First ‹ Previous 1 2 3 4 5 Next › Last »