Wind River Reports Fourth Quarter and Fiscal Year 2007 Financial Results; Company Concludes Stock Option Review.Fourth Quarter Financial Highlights: * Reported revenue increased 8% year-over-year to $76.1 million * Deferred revenue increased 29% year-over-year and 13% sequentially to $127.0 million * GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net income per share of $0.01 and non-GAAP earnings per share of $0.10 ALAMEDA Alameda (ăləmē`də, –mā`də), city (1990 pop. 76,459), Alameda co., W central Calif., on an island just off the eastern shore of San Francisco Bay; settled 1850, inc. as a city 1884. , Calif. -- Wind River Systems, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :WIND), the global leader in Device Software Optimization Device Software Optimization is a concept promoted by Wind River Systems and CMP Publications at dso.com. It refers to a set of toolchains and analysis tools to develop and debug software for embedded systems. (DSO See CSO. ), announced today that fourth quarter 2007 net revenues were $76.1 million, compared with $70.2 million in the fourth quarter of 2006, an increase of 8%. Net income for the fourth quarter of 2007 was $546,000, compared with net income of $16.1 million in the fourth quarter a year ago. Net income per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share for the quarter was $0.01, compared to $0.18 in the fourth quarter a year ago. Non-GAAP net income was $8.8 million compared to the $9.7 million recorded in last year's fourth quarter. Non-GAAP earnings per diluted share for the quarter was $0.10, compared with $0.11 in the fourth quarter a year ago. For fiscal year 2007, net revenues were $285.3 million, compared with $266.3 million in fiscal year 2006, an increase of 7%. Net income per diluted share for fiscal year 2007 was $0.01, compared to $0.33 in fiscal year 2006. Non-GAAP net income was $26.8 million, 6% higher than the $25.3 million recorded in fiscal year 2006. Non-GAAP earnings per diluted share for fiscal year 2007 was $0.31, compared with $0.28 in fiscal year 2006. Net income for fiscal year 2007 was $921,000, compared with net income of $29.3 million in fiscal year 2006. The fiscal 2007 results reflect the impact of expensing stock-based compensation in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment. Deferred revenues as of January 31, 2007 were $127.0 million, compared with $98.3 million as of January 31, 2006, an increase of 29%. Cash and cash equivalents, short-term investments and long-term investments totaled $203.0 million as of January 31, 2007. "We are gaining momentum in the marketplace, and are investing to accelerate this momentum," said Ken Klein, Wind River Chairman, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "Our continued transition to a more predictable subscription licensing model, our new product momentum, the dramatic improvements we have made to our sales force and distribution channels position us to improve the consistency of our results and accelerate growth. It is also important to note that significant non-operating challenges we faced in fiscal year 2007, primarily surrounding the extensive historical option review, are now behind us. We have reported quarterly income statements for the second and third quarters of fiscal year 2007 today and expect to complete the 10-Q filings for these quarters as soon as practicable practicable adj. when something can be done or performed. ." Financial Outlook The following statements regarding Wind River's outlook for the first quarter of fiscal year 2008, and other statements in this press release are forward-looking and actual results may differ materially. Please consult the legal notice regarding forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. at the end of this press release and Wind River's reports filed with the Securities and Exchange Commission for a more comprehensive description of risks that may impact actual results. Wind River plans to discuss its business outlook, based on current expectations, on its earnings conference call. Wind River does The River Doe is a river in North Yorkshire, England. The river emerges near God's Bridge close to the settlement of Chapel-le-Dale and flows through Twisleton in a southwesterly direction to Ingleton, where it meets the River Twiss to form the River Greta. not plan to provide any further financial guidance beyond the information provided in this earnings release and earnings conference call. "For the first quarter of fiscal 2008, we expect revenues to be between $69-$71 million, deferred revenue to exceed $134 million, non-GAAP earnings per diluted share of $0.00-$0.01 and GAAP net loss per diluted share of $0.06-$0.07," stated Ian Halifax, Wind River CFO See Chief Financial Officer. and Senior Vice President Finance and Administration. "We will provide full fiscal year guidance at the end of the first fiscal quarter of fiscal 2008." Non-Cash Charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. for Historical Stock Option Grants In May 2006, the Audit Committee of the Board of Directors commenced a voluntary review of the company's historical stock option granting practices and the related accounting. Subsequently, in September 2006, the Board of Directors appointed a Special Committee, comprised of a subset A group of commands or functions that do not include all the capabilities of the original specification. Software or hardware components designed for the subset will also work with the original. of the Audit Committee, which engaged independent legal counsel and accounting consultants to assist the Special Committee in its review. The review covered the timing and pricing of all stock option grants made under the company's stock option plans since its initial public offering in 1993. Based on the results of its review, the Special Committee concluded that the company did not engage in intentional in·ten·tion·al adj. 1. Done deliberately; intended: an intentional slight. See Synonyms at voluntary. 2. Having to do with intention. or fraudulent The description of a willful act commenced with the Specific Intent to deceive or cheat, in order to cause some financial detriment to another and to engender personal financial gain. misconduct MISCONDUCT. Unlawful behaviour by a person entrusted in any degree: with the administration of justice, by which the rights of the parties and the justice of the, case may have been affected. 2. in the granting of stock options. However, due to unintentional errors, the accounting measurement dates for certain historical stock option grants differed from the actual grant dates. As a result of revising the accounting measurement dates for these stock option grants, the company identified errors totaling approximately $6.8 million, net of tax benefits of $1.2 million, related to stock-based compensation expenses incurred primarily in fiscal year 1995 through fiscal year 2004. While these errors were not material to any previously filed financial statements, the company concluded that correcting the aggregate error of approximately $6.8 million would be material to its consolidated statement of operations See Income statement. for the six months ended July 31, 2006. Accordingly, prior period financial statements will be adjusted in the Form 10-Q Form 10-Q See 10-Q. for the quarter ended July 31, 2006, when filed, and in subsequent filings. Additional paid-in-capital and retained earnings Retained Earnings The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. will be adjusted as of January 31, 2006 as follows: [TABLE OMITTED] The company's independent registered public accounting firm has not completed its review of the findings of the Special Committee. The company's financial results for the second, third and fourth quarters of fiscal year 2007 are not audited and may change as a result of the finalization Writing the table of contents (TOC) on a recordable CD or DVD disc. The finalization process ensures that the disc can be played back on most CD and DVD players. See disc-at-once. of the review. The historical stock option practices under review and related matters could also lead to potential claims and proceedings relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc such matters, including litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. or action by the Securities and Exchange Commission and/or other regulatory agencies regulatory agency Independent government commission charged by the legislature with setting and enforcing standards for specific industries in the private sector. The concept was invented by the U.S. . Use of Non-GAAP Financial Information All references to earnings per share are calculated on a fully-diluted basis. Wind River provides non-GAAP net income, net income per share and other non-GAAP numbers as an alternative for understanding the company's operating results. Non-GAAP data are not in accordance with, or a substitute for, GAAP and may be materially different from non-GAAP measures used by other companies. The non-GAAP earnings per share forecast for the three-month period ending April 30, 2007 was computed by adjusting GAAP net loss per share to exclude stock-based compensation, amortization of restricted stock compensation, amortization of purchased and other intangibles, costs incurred for historical stock option review and the tax effects of these non-GAAP adjustments. Wind River provides a reconciliation of its GAAP and non-GAAP net income and net income per share for the three-month periods ended July 31, 2006 and 2005, October 31, 2006 and 2005, January 31, 2007 and 2006, and for the twelve-month periods ended January 31, 2007 and 2006 within this release. Wind River's management refers to these non-GAAP measures in making operating decisions because they believe they provide meaningful information regarding Wind River's operational performance. For example, the non-GAAP results are an indication of Wind River's baseline performance before gains, losses or other charges that are considered by management to be outside of the company's business operational results. In addition, these non-GAAP financial measures facilitate management's internal comparisons to Wind River's historical operating results and comparisons to competitors' operating results. Wind River includes these non-GAAP financial measures in its earnings announcement because the company believes they are useful to investors in allowing for greater transparency to the supplemental information used by management in its financial and operational decision-making. Wind River has not completed its 10-Q or 10-K review process for the quarters ended July 31, 2006, October 31, 2006 or January 31, 2007 and accordingly, the operating results for these quarters may be adjusted upon completion of its review. Actual operating results for this period could be different based on factors such as settlement of accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. and certain other adjustments. Conference Call The company will host a conference call at 2:00 p.m. Pacific Time on March 8, 2007 to discuss these results. You may listen to the conference call by calling +1.800.399.5927 in the U.S. and +1.706.643.3427 internationally. You may also listen in live via our webcast at http://ir.windriver.com/phoenix.zhtml?c=91814&p=irol-EventDetails&Even tId=1210173 (Due to its length, this URL URL in full Uniform Resource Locator Address of a resource on the Internet. The resource can be any type of file stored on a server, such as a Web page, a text file, a graphics file, or an application program. may need to be copied/pasted into your Internet browser's address field. Remove the extra space if one exists.). A telephone replay of the conference call will be available after 5:00 p.m. Pacific Time on March 8, 2007 until 11:59 p.m. Pacific Time on March 15, 2007. You may listen to the replay of the conference call by calling +1.800.642.1687 in the U.S. and +1.706.645.9291 internationally and enter the conference i.d. 9324823. The audio webcast will be archived on the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of Wind River's website located at http://ir.windriver.com/phoenix.zhtml?c=91814&p=irol-irhome. About Wind River Wind River is the global leader in Device Software Optimization (DSO). The company's solutions enable customers to develop and run device software better, faster, at a lower cost and more reliably. Wind River's Workbench, General Purpose Platform and Market-Specific Platforms reduce effort, cost and risk, and optimize quality and reliability at all phases of the device software development process from concept to deployed product. Founded in 1981, Wind River is headquartered in Alameda, California Alameda is a city in Alameda County, California, United States. It is located on a small island of the same name next to Oakland, California in the San Francisco Bay. An additional part of the city is Bay Farm Island, which is adjacent to the Oakland International Airport. , with operations worldwide. To learn more, visit Wind River at http://www.windriver.com. Wind River Systems and the Wind River Systems logo are trademarks of Wind River Systems, Inc., and VxWorks and WIND RIVER are registered trademarks of Wind River Systems, Inc. Third party marks and brands are the property of their respective holders. Forward-Looking Statements This press release contains forward-looking statements, including those relating to expected revenue and deferred revenue and GAAP and non-GAAP earnings per share for the first quarter ending April 30, 2007, the extent and the amount of the adjustments relating to certain of our historical stock option grants, the expected completion of the stock option review and related activities of our independent registered public accounting firm, and the expected timing of our quarterly and annual filings with the Securities and Exchange Commission, as well as general statements about our business and its direction. Words such as "expects," "anticipates," "projects," "intends," "plans," "believes" and "estimates," variations of such words and similar expressions are also intended to identify forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those contemplated herein. Factors that could cause or contribute to such differences include but are not limited to accounting changes required by our independent registered accounting firm following completion of their review, delays in their review, other unexpected accounting adjustments,, the potential release of all or a portion of Wind River's valuation allowance associated with its deferred tax assets, the success of Wind River's implementation of its new and current products, business models and market strategies, the ability to address rapidly changing technology and markets and to deliver our products on a timely basis, the ability of our customers to sell products that include the company's software, the impact of competitive products and pricing, weakness in the economy generally or in the technology sector specifically, the success of the company's strategic relationships, the impact of other costs and risk factors detailed in Wind River's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended January 31, 2006, its Quarterly Reports on Form 10-Q and other periodic filings with the Securities and Exchange Commission. Wind River undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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