Pervasive Software Updates Guidance for the December Quarter
January 06 2009 - 6:19PM
Business Wire
Pervasive Software� Inc. (NASDAQ:PVSW), a global value leader in
embeddable data management and data integration software, today
announced updated guidance for financial results for the second
quarter ending December 31, 2008, providing a more narrow range
than that of guidance provided October 21, 2008. The company also
announced that Michael Bryars has joined Pervasive as general
manager of Pervasive DataRushTM. Based on preliminary unaudited
financial results, the company now expects total revenue for the
second quarter to be in the range of $11.0 million to $11.2 million
and GAAP-basis diluted earnings per share of $0.05 to $0.06,
representing Pervasive�s thirty-second consecutive quarter of
profitability. Guidance for the second quarter given in the
company�s October 21, 2008 press release was for revenue in the
range of $10.5 million to $11.5 million and GAAP-basis diluted
earnings per share of $0.02 to $0.05. Revenue and GAAP-basis
diluted earnings per share for the December quarter of last fiscal
year were $10.3 million and $0.03, respectively. On a non-GAAP
basis, Pervasive expects to realize diluted earnings per share of
$0.06 to $0.07. Guidance for the second quarter given in the
company�s October 21, 2008 press release was for non-GAAP diluted
earnings per share of approximately $0.04 to $0.07. Non-GAAP
diluted earnings per share for the December quarter of last fiscal
year was $0.05. Non-GAAP results exclude amortization of purchased
intangibles and stock-based compensation expense, and assume a
non-GAAP effective tax rate of 34%. Pervasive expects to report
positive cash flow from operations with approximately $1.2 million
in the second quarter of fiscal 2009, ending the quarter with
approximately $44.8 million in cash and marketable securities.
Pervasive acquired approximately 768,000 shares of Pervasive common
stock on the open market at a total cost of approximately $3.1
million, or approximately $3.98 weighted average price per share,
during the quarter ended December 31, 2008. The Company has
approximately $5.6 million authorized repurchase funds remaining
under its $10.0 million stock repurchase program announced in March
2008. Depending on market conditions and other factors, such
purchases may be commenced or suspended at any time without prior
notice. Issued and outstanding shares of common stock as of
December 31, 2008 totaled approximately 18.3 million. �We continued
to execute well during the quarter in both of our core product
lines, database and integration, while delivering profitable
operations and positive operating cash flow, and continuing to
maintain a strong balance sheet,� said John Farr, president and
CEO, Pervasive Software. �We are also continuing to invest in
innovation to expand addressable markets, including the exciting,
recent addition of Mike Bryars to head the Pervasive DataRush team.
Mike brings 25 years of diverse product strategy, development,
product marketing, sales management, engineering, business
development and design experience to his general manager role, and
he shares our passion for bringing the phenomenal speed of
Pervasive DataRush to diverse applications. Mike�s experience
managing P&L and divisional operations, most recently at
Freescale, spans software and hardware in a range of industries,
including aerospace, automotive, consumer electronics, multimedia
and industrial markets. We�re delighted to put his enthusiasm,
leadership and expertise to work bringing to market our ability to
deliver data-intensive applications that scale seamlessly on
commodity multicore hardware.� Business Outlook For the third
fiscal quarter ending March 31, 2009, Pervasive expects revenue to
be in the range of $10.5 million to $11.5 million and GAAP-basis
diluted earnings per share of $0.04 to $0.07, compared to $10.8
million revenue and $0.05 diluted earnings per share for the March
quarter of the previous fiscal year. GAAP-basis profitability is
expected to include amortization of stock-based compensation
expense representing approximately $0.4 million, pre-tax, in the
third quarter of fiscal year 2009. The company expects non-GAAP
adjustments to result in non-GAAP diluted and fully taxed earnings
per share of approximately $0.05 to $0.08 in the March quarter,
compared to $0.07 non-GAAP diluted and fully taxed earnings per
share for the March quarter of the previous fiscal year. Regularly
Scheduled Earnings Release Conference Call � January 20, 2009
Pervasive will provide the full financial results for its second
quarter ending December 31, 2008 in its regularly scheduled
earnings release conference call on January 20, 2009 at 5:00 P.M.
Eastern time. The dial-in numbers for the call are 877-808-2426
(toll-free) or 973-200-3975 (international). The conference name is
�Pervasive Software Inc.� The conference call may also be accessed
live over the Web at www.pervasive.com/ircalendar. Check the Web
site before the call for login information. Replay will be
available 8:00 P.M. Eastern Tuesday, January 20, to midnight,
Tuesday, January 27, by dialing 800-642-1687 (toll-free) or
706-645-9291 (international), and selecting Conference ID 78999523.
Additionally, the Webcast will be archived on Pervasive�s website
at www.pervasive.com/ircalendar. About Pervasive Software Pervasive
Software (NASDAQ:PVSW) helps companies get the most out of their
data investments through embeddable data management and agile data
integration software. Pervasive�s multi-purpose data integration
platform accelerates the sharing of information between multiple
data stores, applications, and hosted business systems and allows
customers to re-use the same software for diverse integration
scenarios. The embeddable PSQL database engine allows organizations
to successfully embrace new technologies while maintaining
application compatibility and robust database reliability in a
near-zero database administration environment. For more than two
decades, Pervasive products have delivered value to tens of
thousands of customers in more than 150 countries with a compelling
combination of performance, flexibility, reliability and low total
cost of ownership. Through Pervasive Innovation Labs, the company
also invests in exploring and creating cutting edge solutions for
the toughest data analysis and data delivery challenges. For
additional information, go to www.pervasive.com. About Non-GAAP
Financial Information This press release includes non-GAAP
financial measures. For a description of these non-GAAP financial
measures, including the reasons management uses each measure, and
reconciliations of these non-GAAP financial measures to the most
directly comparable financial measures prepared in accordance with
Generally Accepted Accounting Principles (GAAP), please see the
section entitled �About Non-GAAP Financial Measures� and the
accompanying table entitled �Reconciliation of GAAP Measures to
Non-GAAP.� Cautionary Statement This document contains
forward-looking statements that involve risks and uncertainties
concerning the company, including the company�s expected
performance for the second quarter ending December 31, 2008, and
the third quarter ending March 31, 2009. Pervasive emphasizes that
the expected results for the quarter ending December 31, 2008 are
preliminary and that actual results could vary when the company
reports final revenue and earnings for the second quarter on
January 20, 2009 at 5 P.M. Eastern time. Actual events or results
may differ materially from those described in this document due to
a number of risks and uncertainties. These risks and uncertainties
include, among others, the company�s ability to attract and retain
existing and/or new customers; the company�s ability to issue new
products or releases of solutions that meet customers� needs or
achieve acceptance by the company�s customers; changes to current
accounting policies which may have a significant, adverse impact
upon the company�s financial results; the introduction of new
products by competitors or the entry of new competitors; the
company�s ability to preserve its key strategic relationships; the
company�s ability to hire and retain key employees; and economic
and political conditions in the US and abroad. All of these factors
may result in significant fluctuations in the company�s quarterly
operating results and/or its ability to sustain or increase its
profitability. Additional information regarding these and other
factors can be found in Pervasive�s reports filed with the
Securities and Exchange Commission, including its Form 10-K for the
fiscal year ended June 30, 2008. Pervasive is not obligated to
update these forward-looking statements to reflect events or
circumstances after the date of this document. All Pervasive brand
and product names are trademarks or registered trademarks of
Pervasive Software Inc. in the United States and other countries.
All other marks are the property of their respective owners. About
Non-GAAP Financial Measures The Company provides non-GAAP measures
for net income and net income per share data as supplemental
information regarding the Company�s core business operational
performance. The Company believes that these non-GAAP financial
measures are useful to investors because they exclude certain
non-operating or non-recurring charges. The Company�s management
excludes these non-operating or non-recurring charges when it
internally evaluates the performance of the Company�s business and
makes operating decisions, including internal budgeting,
performance measurement and the calculation of bonuses and
discretionary compensation. In addition, these non-GAAP measures
more closely reflect the essential revenue generation activities of
the Company and the direct operating expenses (resulting in or from
cash expenditures) needed to perform these revenue generating
activities. Accordingly, management excludes the amortization of
purchased intangible assets related to the Data Junction
acquisition and stock-based compensation related to employee stock
options. The Company believes that providing the non-GAAP measures
that management uses is useful to investors for two primary
reasons. First, it provides a consistent basis for investors to
understand the Company�s financial performance on a trended basis
across many historical periods, particularly given the adoption of
SFAS 123R at the beginning of fiscal year 2006 and the changes it
has introduced for calculating stock-based compensation expenses
relative to prior periods. And second, it allows investors to
evaluate the Company�s performance using the same methodology and
information as that used by the Company�s management. Non-GAAP
measures are subject to material limitations as these measures are
not in accordance with, or a substitute for, US GAAP and therefore
the Company�s definition or interpretation may be different from
similar non-GAAP measures used by other companies and independent
financial analysts. However, the Company�s management compensates
for these limitations by providing the relevant and detailed
disclosure of the items excluded in the calculation of non-GAAP net
income and non-GAAP diluted earnings per share, which should be
supplementally considered when evaluating the Company�s results. In
addition, items such as amortization of purchased intangibles,
stock compensation charges and significant and non-recurring items
that are excluded from non-GAAP net income and non-GAAP diluted
earnings per share can have a significant impact on earnings.
Management compensates for these limitations by evaluating the
non-GAAP measure together with the most directly comparable GAAP
measure. The Company has historically provided non-GAAP measures to
the investment community as a supplement to its GAAP results, to
enable investors to evaluate the Company�s core operating
performance the way management does. The non-GAAP adjustments, and
the basis for excluding them, are outlined below: Amortization of
Purchased Intangibles The Company has recorded amortization of
acquired intellectual property intangibles, included in its GAAP
financial statements, related to the acquisition of Data Junction.
Management excludes these items for purposes of calculating
non-GAAP net income and non-GAAP diluted earnings per share. The
Company believes that eliminating this expense in determining its
non-GAAP measures is useful to investors because doing so provides
a consistent basis for investors to understand the Company�s
financial performance on a trended basis across many historical
periods, it allows investors to evaluate the Company�s performance
using the same methodology and information as that used by the
Company�s management, and it allows a comparison with other peer
companies in the software industry, many of whom use similar
non-GAAP financial measures to supplement their GAAP results.
Finally, the Company believes that non-GAAP measures of
profitability that exclude amortization of acquired intellectual
property intangibles are widely used by analysts and investors in
the software industry. Stock-based Compensation Expense The Company
has incurred stock-based compensation expense as determined under
SFAS 123R for the quarters ending on or after September 30, 2005,
and under APB 25 for earlier comparable periods in its GAAP
financial results. Since stock-based compensation is a non-cash
charge, the Company excludes this item for the purposes of
calculating non-GAAP net income and non-GAAP diluted earnings per
share. In addition, the exclusion of stock-based compensation from
the non-GAAP measures is done to allow a consistent basis for
investors to understand the Company�s financial performance on a
trended basis across many historical periods, allow investors to
evaluate the Company�s performance using the same methodology and
information as that used by the Company�s management, and allow a
comparison with other peer companies in the software industry, many
of whom use similar non-GAAP financial measures to supplement their
GAAP results. The very nature of the stock-based compensation
expense also makes it very difficult to estimate prospectively,
since the expense will vary with changes in the stock price and
market conditions at the time of new grants, varying valuation
methodologies, subjective assumptions and different award types,
making the comparison of current results with forward looking
guidance potentially difficult for investors to interpret. The tax
effects of stock-based compensation expenses may also vary
significantly from period to period, without any change in
underlying operational performance, thereby obscuring the
underlying profitability of core revenue generating operations
relative to prior periods (including prior periods following the
adoption of SFAS 123R). Finally, the Company believes that non-GAAP
measures of profitability that exclude stock-based compensation are
widely used by analysts and investors in the software industry.
Income Tax Adjustment Income taxes represent a complex element of
any company�s income statement and effective tax rates can vary
widely from year to year and from company to company, especially in
periods in which adjustments are made to a company�s valuation
reserve for deferred tax assets. The Company uses a statutory tax
rate of 34% to reflect income tax adjustments in presentation of
its non-GAAP net income and non-GAAP diluted earnings per share.
Utilization of a statutory tax rate for presentation of the
non-GAAP measures is done to allow a consistent basis for investors
to understand the Company�s financial performance on a trended
basis across many historical periods, allow investors to evaluate
the Company�s performance using the same methodology and
information as that used by the Company�s management, and allow a
comparison with other peer companies in the software industry, many
of whom use similar non-GAAP financial measures to supplement their
GAAP results. Finally, the Company believes that non-GAAP measures
of profitability that are based on more standardized statutory tax
rates are widely used by analysts and investors in the software
industry. Pervasive Software Inc. Reconciliation of Forward-Looking
Guidance (Unaudited) � Diluted Earnings Per Share Range � � Three
months ended December 31, 2008 � GAAP expectation $ 0.05 $ 0.06 �
Adjustment to exclude amortization of purchased intangible assets $
0.01 $ 0.01 � Adjustment to exclude stock-based compensation
expense $ 0.01 $ 0.01 � Adjustment to exclude research and
development tax credit $ (0.01 ) $ (0.01 ) � � Non-GAAP expectation
$ 0.06 � $ 0.07 � � � Three months ended March 31, 2009 � GAAP
expectation $ 0.04 $ 0.07 � Adjustment to exclude stock-based
compensation expense $ 0.01 $ 0.01 � � Non-GAAP expectation $ 0.05
� $ 0.08 �
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