FalconStor: Fiscal 1Q09 Financial Results

FalconStor Software, Inc. announced financial results for its first quarter ended March 31, 2009.

Revenues for the first quarter of 2009 were $21.0 million, compared with $21.8 million for the same period a year ago. GAAP loss from operations for the quarter was $0.8 million, compared with operating income of $1.8 million in the first quarter of 2008. GAAP net loss for the quarter was $0.9 million, or $0.02 per share, compared with GAAP net income of $1.3 million, or $0.03 per diluted share, in the first quarter of 2008. Stock-based compensation expense was $2.2 million in the first quarter of 2009 and $2.3 million in the first quarter of 2008.

Non-GAAP income from operations was $1.3 million in the first quarter of 2009, compared with non-GAAP income from operations of $4.1 million in the first quarter of 2008. Non-GAAP net income was $0.6 million, or $0.01 per diluted share, in the first quarter of 2009, compared with $2.9 million, or $0.06 per diluted share, in the first quarter of 2008. Non-GAAP results exclude the effects of stock-based compensation expense net of the related income taxes.

The Company closed the quarter with $41.8 million in cash, cash equivalents, and marketable securities. Cash flow from operations for the first quarter was $3.3 million. Deferred revenue at the end of the quarter was $21.9 million, which is a 10 percent increase compared with the same period a year ago. During the first quarter of 2009, the Company repurchased 0.6 million shares of Common Stock at a total purchase price of $1.5 million, or an average price of $2.69 per share.

For the year ending December 31, 2009,
the Company still anticipates:

• Revenues to be in the range of $96 million to $100 million
• Non-GAAP net income to be between $0.18 and $0.21 per diluted share, which excludes stock-based compensation, net of income taxes.

"We are pleased that we are on track to achieve our full-year target even in this difficult macroeconomic environment," said ReiJane Huai, chairman and CEO of FalconStor Software. “We are confident that our continued investment in development, marketing, sales, and support will enable us to expand our market share and to leapfrog the competition. As a result, we have continued to hire, knowing that it may impact our earnings in the short-term, but we believe it will foster the long-term growth of the company. Even with these investments, we are pleased that we had a non-GAAP profit for the quarter and that we continued to generate positive cash flows from operations.”