FalconStor: Fiscal 3Q11 Financial Results

(in US$ millions)	3Q10	3Q11	9 mo. 10	9 mo. 11
Revenues	19.0	18.9	56.4	57.4
*Growth*		-0%		2%
Net income (loss)	(26.4)	(5.4)	(35.3)	(17.3)

FalconStor Software, Inc. announced financial results for its third quarter ended September 30, 2011.

Total revenues for the third quarter of 2011 were $18.9 million, compared with $19.0 for the same period a year ago.

GAAP loss from operations for the quarter was $5.1 million, compared with an operating loss of $4.8 million for the same period a year ago. GAAP net loss for the third quarter was $5.4 million, or $0.12 per share, compared with $26.4 million, or $0.58 per share in the third quarter of 2010.

Non-GAAP loss from operations was $2.3 million in the third quarter of 2011, compared with a loss from operations of $2.6 million for the same period a year ago. Non-GAAP net loss was $2.6 million, or $0.06 per share, in the third quarter of 2011, compared with a non-GAAP net loss of $22.7 million, or $0.49 per share, in the third quarter of 2010. Non-GAAP results exclude the effects of stock-based compensation, costs associated with the ongoing government investigations, and restructuring costs. Non-GAAP net loss in the third quarter of 2010 included a $16.2 million valuation allowance within the tax provision.

For the nine months ended September 30, 2011, revenues were $57.4 million, compared with $56.4 million for the same period a year ago. GAAP loss from operations for the nine month period was $16.8 million compared with a loss of $18.4 million in 2010. GAAP net loss was $17.3 million, or $0.37 per share, for the nine months ended September 30, 2011, compared with a loss of $35.3 million, or $0.78 per share, in the same period a year ago.

Non-GAAP loss from operations was $7.5 million for the nine months ended September 30, 2011, compared with a loss of $11.3 million in 2010. Non-GAAP net loss was $8.0 million, or $0.17 per share, compared with a loss of $28.2 million, or $0.62 per share, in the same period a year ago.

The Company closed the quarter with $37.2 million in cash, cash equivalents, and marketable securities. Deferred revenue at September 30, 2011 was $25.0 million, compared with $23.5 million as of December 31, 2010.

"We are pleased with the steps we have taken to reduce our operating expenses and to maintain a strong cash position, which allow us to continue investing in key areas of growth," said Jim McNiel, president and chief executive officer of FalconStor. "In addition, with a series of executive hires, we have assembled a senior management team with extensive experience and proven track records in our industry. Under the guidance of our new team and building on the success of our V7 launch, we will continue our primary mission to delight our customers with the highest quality, most innovative products in the data protection market."