-- iPrism experienced 13.5% year-over-year billings growth
-- LivePrism acquired 202 new customers in the first six months of 2007
-- Hired new VP Marketing to spearhead global marketing efforts
-- Joined Jamcracker Delivery Network
-- Secured new $4 Million credit facility with Silicon Valley Bank
-- iPrism® and LivePrism™ named Winners of the 2007 Global Product
Excellence Awards by Info Security Products Guide
Financial Results
Revenue in the second quarter was $5.0 million, in line with the $4.6 to
$5.2 million guidance previously provided. Subscription revenue from
iPrism and LivePrism was $3.6 million in the second quarter. GAAP net loss
was $(4.7) million, or $(0.32) per share for the second quarter compared to
$(1.2) million, or $(0.12) loss per share reported for the second quarter
of 2006. The company cautioned that the review by the company's independent
auditors of the second quarter financial statements contained in this
release was not completed at the time of this release, and so, the
financial statements that will be filed with the company's Quarterly Report
on Form 10-QSB may differ.
Divestiture of Legacy Open File Manager™ Product
In conjunction with our new strategy to focus the company on network based
secure content management solutions, the company signed a definitive
agreement on August 13th to sell our legacy Open File Manager product line
to EVault. The value of the transaction is $6.875M in cash and is expected
to close in August 2007. The proceeds of this sale will provide critically
important funding for St. Bernard to support growth of our core iPrism and
LivePrism products and continue the execution of our company strategy. We
believe that Seagate is an excellent organization that will provide great
value to our Open File Manager customers and partners.
Third Quarter Business Outlook
Mr. Rossi said, "We believe that we will continue to achieve solid sales
growth and excellent customer retention in our iPrism and LivePrism product
lines. In combination with our sales growth, the expense restructuring in
Q2'07 will move our business toward a cash flow positive position. We
currently expect our Q3 2007 revenue to range from $4.2 to $4.8 million.
As a reminder, the company divested its UpdateEXPERT product line early in
the first quarter of 2007 and also divested the Open File Manager product
line in August 2007. Our guidance reflects the impact of these
divestitures."
Conference Call Information
What: St. Bernard's Second Quarter 2007 Financial Results Conference Call
When: Tuesday, August 14th at 1:30pm PT (4:30 pm ET)
Dial In Number: 800-257-3401 (US and Canada)
303-205-0033 (International) Company name, 'St. Bernard'
Webcast: To listen to the live Webcast, use the following link:
http://www.vcall.com/IC/CEPage.asp?ID=119614
Or, log onto www.stbernard.com under the Investor Relations section.
Web Replay: 30 days
Call Replay: A replay of the conference call will be available at
www.stbernard.com in the Investor Relations area of the site starting two
hours after the call through Tuesday, May 22, 2007 at 11:59 pm PT
Replay Number: 800-405-2236 or 303-590-3000 (International) and enter the
pass code: 11094529#
For the conference call, please dial-in five minutes in advance to ensure a
proper connection. Questions and answers will be taken only from
participants on the line. For the Webcast, please allow 15 minutes to
register, download and install any necessary software.
About St. Bernard
St. Bernard Software, Inc. (
St. Bernard Software, Inc.
Consolidated Balance Sheets
June 30, 2007 December 31, 2006
------------------ ------------------
(Unaudited)
Assets
Current Assets
Cash and cash equivalents $ 336,686 $ 4,841,871
Accounts receivable - net of
allowance for doubtful
accounts of $646,000 and
$678,000 at June 30, 2007, and
December 31, 2006, respectively 4,087,960 3,964,403
Inventories 725,911 729,739
Prepaid expenses and other
current assets 492,000 483,840
------------------ ------------------
Total current assets 5,642,557 10,019,853
Fixed Assets - Net 1,857,772 1,726,050
Other Assets 3,540,610 3,937,848
Goodwill 7,542,664 7,709,212
------------------ ------------------
$ 18,583,603 $ 23,392,963
================== ==================
Liabilities and Stockholders' Deficit
Current Liabilities
Line of credit $ 2,338,408 $ 296,410
Accounts payable 3,995,139 4,559,323
Accrued compensation expenses 1,413,962 1,525,821
Accrued expenses and other
current liabilities 386,267 291,718
Current portion of capitalized
lease obligations 144,846 75,087
Deferred revenue 10,878,632 11,873,376
------------------ ------------------
Total current liabilities 19,157,254 18,621,735
Capitalized Lease Obligations,
Less Current Portion 249,526 141,617
Deferred Revenue 5,604,670 5,842,809
------------------ ------------------
Total liabilities 25,011,450 24,606,161
------------------ ------------------
Commitments and Contingencies
Stockholders' Deficit
Preferred stock, $0.01 par
value; 5,000,000 shares
authorized and 0 shares issued
and outstanding - -
Common stock, $0.01 par value;
50,000,000 shares authorized
and 14,742,534 and
14,764,251 shares issued
and outstanding in 2007 and
2006, respectively 147,425 147,643
Additional paid-in capital 38,757,731 38,304,771
Accumulated deficit (45,333,003) (39,665,612)
------------------ ------------------
Total stockholders' deficit (6,427,847) (1,213,198)
------------------ ------------------
$ 18,583,603 $ 23,392,963
================== ==================
St. Bernard Software, Inc.
Unaudited Consolidated Statements of Operations
Three months ended June 30, Six months ended June 30,
-------------------------- --------------------------
2007 2006 2007 2006
------------ ------------ ------------ ------------
Sales
License $ 559,478 $ 975,987 $ 1,415,123 $ 1,860,382
Appliance 881,969 804,729 1,627,239 1,427,929
Subscription 3,600,039 3,831,228 7,372,356 7,592,236
------------ ------------ ------------ ------------
Total Sales 5,041,486 5,611,944 10,414,718 10,880,547
------------ ------------ ------------ ------------
Cost of Sales
License 17,936 20,505 50,253 29,891
Appliance 778,583 600,950 1,336,592 979,717
Subscription 1,007,742 957,438 2,065,381 1,921,327
------------ ------------ ------------ ------------
Total Cost of Sales 1,804,261 1,578,893 3,452,226 2,930,935
------------ ------------ ------------ ------------
Gross Profit 3,237,225 4,033,051 6,962,492 7,949,612
Sales and
marketing
expenses 3,414,415 2,712,357 7,474,019 5,276,687
Research and
development
expenses 1,805,270 1,432,447 3,682,872 3,027,811
General and
administrative
expenses 2,440,123 984,429 4,860,114 1,912,204
------------ ------------ ------------ ------------
Total Operating
Expenses 7,659,808 5,129,233 16,017,005 10,216,702
------------ ------------ ------------ ------------
Loss from Operations (4,422,583) (1,096,182) (9,054,513) (2,267,090)
Other Expense (Income)
Interest expense
- net 59,162 87,837 72,061 168,301
Loss (Gain) on
sale of
UpdateExpert 251,007 - (3,463,418) -
------------ ------------ ------------ ------------
Total Other
Expense (Income) 310,169 87,837 (3,391,357) 168,301
------------ ------------ ------------ ------------
Loss Before Income
Taxes (4,732,752) (1,184,019) (5,663,156) (2,435,391)
Income tax expense - - (4,235) -
------------ ------------ ------------ ------------
Net Loss $ (4,732,752) $ (1,184,019) $ (5,667,391) $ (2,435,391)
============ ============ ============ ============
Basic and Diluted
Loss Per Common
Share $ (0.32) $ (0.12) $ (0.38) $ (0.25)
------------ ------------ ------------ ------------
Weighted Average
Shares
Outstanding 14,764,512 9,756,433 14,779,434 9,752,043
============ ============ ============ ============
St. Bernard Software, Inc.
Unaudited Consolidated Statements of Cash Flows
Six months ended June 30,
-------------------------------
2007 2006
-------------- --------------
Cash Flows From Operating Activities
Net loss $ (5,667,391) $ (2,435,391)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 740,156 294,526
Provision for bad debts (31,654) 20,071
Gain on sale of UpdateExpert (3,463,418) -
Compensation expense 580,959 -
Noncash interest expense 2,318 -
Increase (decrease) in cash resulting
from changes in:
Accounts receivable (91,903) 486,045
Inventories 3,828 96,077
Prepaid expenses and other current
assets (24,169) 16,869
Accounts payable (564,184) 1,296,606
Accrued expenses and other current
liabilities 72,113 34,480
Deferred revenue 1,030,535 211,107
-------------- --------------
Net cash provided by (used in) operating
activities (7,412,810) 20,390
-------------- --------------
Cash Flows From Investing Activities
Additional costs related to purchase of
business (83,453) -
Purchases of fixed assets (230,573) (30,932)
Proceeds from the sale of UpdateExpert 1,200,000 -
-------------- --------------
Net cash provided by (used in) investing
activities 885,974 (30,932)
-------------- --------------
Cash Flows From Financing Activities
Merger costs - (464,941)
Proceeds from stock option and warrant
exercises 30,044 14,066
Principal payments on capitalized lease
obligations (50,391) (23,488)
Proceeds from note payable - 395,833
Net increase in line of credit 2,041,998 540,890
-------------- --------------
Net cash provided by financing activities 2,021,651 462,360
-------------- --------------
Net Increase (Decrease) in Cash and Cash
Equivalents (4,505,185) 451,818
Cash and Cash Equivalents at Beginning of
Period 4,841,871 9,211
-------------- --------------
Cash and Cash Equivalents at End of Period $ 336,686 $ 461,029
============== ==============
Cash paid during the period for:
Interest $ 125,386 $ 150,608
Income taxes $ 1,677 $ -
During the six months ended June 30, 2007, the Company entered into
capitalized lease obligations for the purchase of $218,542 in fixed assets.
In April 2007, the shares issued in conjunction with the purchase
AgaveOne were reduced by 66,667 shares or $250,000 as a result of
indemnification claims.
In May 2007, the Company issued 100,000 warrants in conjunction with a
loan agreement with a bank. See Note 4.
Contact Information: Contact: St Bernard Software: Al Riedler Chief Financial Officer (858) 524-2050 or MKR Group, Inc. Marie Dagresto or Todd Kehrli (323) 468-2300