Blue Coat Systems, Inc. (NASDAQ: BCSI), a leader in WAN Application Delivery and Secure Web Gateway, today reported its financial results for its second quarter of fiscal 2008 ended October 31, 2007. Net revenue for the second fiscal quarter of 2008 was $73.4 million, an increase of 85% compared to net revenue of $39.7 million for the same quarter last year and an 18% increase compared to net revenue of $62.4 million in the prior quarter.
On a GAAP basis, the Company reported net income of $7.0 million, or $0.17 per diluted share, in the second quarter of fiscal 2008, compared to net income of $2.6 million, or $0.07 per diluted share in the first quarter of fiscal 2008. Net income in the second quarter of fiscal 2008 includes $4.0 million in stock-based compensation expense, $0.7 million in expenses associated with the stock option investigation, $0.4 million in amortization of intangible assets, and approximately $0.3 million related to legal settlement expenses. In the first quarter of fiscal 2008, net income included $3.3 million in stock-based compensation expense, $1.9 million in expenses associated with the stock option investigation, and $0.4 million in amortization of intangible assets.
The Company reported non-GAAP net income of $12.4 million, or $0.30 per diluted share, in the second quarter of fiscal 2008, compared to non-GAAP net income of $8.3 million, or $0.21 per diluted share in the first quarter of fiscal 2008.
“It is becoming increasingly evident that the WAN optimization market is evolving in a way that favors our unique approach to stopping the bad and accelerating the good,” said Nidal Taha, Blue Coat Systems Middle East Regional Director. “Our momentum demonstrates that the market is beginning to understand and insist on solving the broader, more strategic issues in application delivery.”
Blue Coat ended the quarter on October 31, 2007, with cash, cash equivalents, short-term investments, and restricted investments totaling $152.4 million, an increase of $34.4 million from the prior quarter.The non-GAAP financial measures presented above exclude stock-based compensation expense, expenses associated with the stock option investigation and related restatement of the Company’s consolidated financial statements, amortization of intangible assets, and legal settlement expenses. Refer to the accompanying tables for a detailed reconciliation of GAAP to non-GAAP net income and earnings per share.
Financial Outlook
For the fiscal quarter ending January 31, 2008, the Company currently anticipates net revenue in the range of $78 - $81 million. On a non-GAAP basis, which excludes the amortization of intangible assets, stock-based compensation expense, and expenses associated with the stock option investigation, earnings per share is expected to be between $0.31 - $0.35 per diluted share.
About Non-GAAP Financial Measures
Blue Coat uses the non-GAAP financial measures of income discussed above for internal evaluation and to report the results of its business. These non-GAAP financial measures include non-GAAP cost of revenue, non-GAAP gross profit, non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income, and non-GAAP net income per share. These measures are not in accordance with, or an alternative to, GAAP.
The measures are intended to supplement GAAP financial information, and may be different from non-GAAP financial measures used by other companies. Blue Coat believes that these measures provide useful information to its management, board of directors and investors regarding its ongoing operating activities and business trends related to its financial condition and results of operations. Blue Coat believes that it is useful to provide investors with information to understand how specific line items in the statement of operations are affected by certain items, such as stock-based compensation expense, expenses related to the stock option investigation and restatement of the Company’s consolidated financial statements, amortization of intangible assets, restructuring expense, and legal settlement expenses.
About Blue Coat Systems:
Blue Coat secures Web communications and accelerates business applications across the distributed enterprise. Blue Coat’s family of appliances and client-based solutions – deployed in branch offices, Internet gateways, end points, and data centers – provide intelligent points of policy-based control enabling IT organizations to optimize security and accelerate performance between users and applications. Blue Coat has installed more than 30,000 appliances worldwide and is ranked #1 by IDC in the Secure Content and Application Delivery market. Blue Coat is headquartered in Sunnyvale, California, and can be reached at (408) 220-2200 or www.bluecoat.com
Note: All trademarks, trade names or service marks used or mentioned herein belong to their respective owners.
