CommVault: Preliminary Fiscal 1Q11 Financial Results

CommVault announced preliminary results for the first fiscal quarter ended June 30, 2010.

Based on preliminary results that have not yet been reviewed by its auditors, the Company expects to report revenue for the first quarter of approximately $66.3 million. This would represent an increase of 10% over the first fiscal quarter of 2010 and a decrease of 10% compared with revenue in the fourth fiscal quarter of 2010. Software revenue is expected to be approximately $28.3 million and services revenue is expected to be approximately $38.0 million.

Non-GAAP income from operations (EBIT) for the first quarter of fiscal 2011 is expected to be approximately $7.6 million, a decrease of 19% compared to the same period of the prior year. The Company expects Non-GAAP net income for the first quarter of fiscal 2011 to be approximately $5.1 million, a decrease of 21% compared to the same period of the prior year. Non-GAAP earnings per diluted share are expected to be approximately $0.11 using a Non-GAAP effective tax rate of 34%.

N. Robert Hammer, CommVault’s chairman, president and CEO stated: "The sequential decrease in revenue is mainly due to lower than normal close rates due to an unprecedented amount of deals that slipped in both the Americas and Europe. The lower than normal close rates in the Americas was caused primarily by the unexpectedly high sales productivity loss of the Americas sales force which was restructured to have much sharper focus on named enterprise accounts as well as a sharper focus on high-end SMB accounts. In Europe, the lower than normal close rates were primarily due to extended customer procurement cycles."

In addition, Mr. Hammer stated: "We believed that given the momentum we had exiting fiscal 2010, we would have been able to achieve much better results than we did in the first quarter. However, I remain confident that the company’s position in the market remains strong and we can deliver strong double digit growth in fiscal 2011. Our products and support services remain best in class, our partners and strategic relationships are the strongest that they have ever been and we have a staffed sales force that is capable of executing in the near term. Our performance this quarter was not the result of losing deals to competitors as we expect the majority of the deals that slipped in the first quarter to close in the second quarter."

Additional first quarter 2011 preliminary results include:

• Operating cash flow is expected to be approximately $16 million for the first quarter of fiscal 2011 compared to $13 million in the first quarter of fiscal 2010.
• Cash and investments are expected to be approximately $180.4 million on June 30, 2010 compared to $174.6 million on March 31, 2010.
• Repurchased approximately 623,000 shares of our common stock totaling approximately $12.9 million under our stock repurchase program.

These unaudited preliminary revenue and other preliminary results are subject to further review and completion by the Company and, therefore, may change. The Company expects to announce final first quarter 2011 results on Tuesday, August 3, 2010.