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3PAR Inc. (ININ)
Q4 2008 Earnings Call
January 29, 2009 at 4:30 pm ET
Don Brown - Chairman, President and Chief Executive Officer
Steve Head - Chief Financial Officer, Vice President of Finance and Administration, Secretary and Treasurer
Paul Weber - Vice President of Sales for North America
David Eller - Raymond James
Tavis McCourt - Morgan Keegan & Co.
Michael Latimore - Northland Securities
[Gramy Rein] - Bears Capital
Previous Statements by ININ
» Interactive Intelligence Inc Q3 2009 Earnings Call Transcript
» Interactive Intelligence Inc. Q1 2009 Earnings Call Transcript
» Interactive Intelligence, Inc. Q3 2008 Earnings Call Transcript
At this time, I would like to turn the conference over to Dr. Don Brown, President and CEO of Interactive Intelligence.
Okay thanks for joining us. Presenting with me on the call today is Steve Head, our CFO, and we are also joined by Paul Weber, our Vice President of Sales for North America. After our discussion and concluding remarks, we will have a Q&A session at which time we will available to answer your questions and for any of you not able to ask questions today, please follow up with Steve after the call.
I hope you have already received our fourth quarter earnings release by now. If not, it is available up on our website. Before we get any further into the call, Steve will present the standard legal disclaimer.
Thanks Don. Over the course of this conference call, we will make predictive statements about our results, performance, plans and objectives in an effort to assist you in understanding our Company. The enterprise software industry combined with the rapidly evolving uncertainties in the economic environment makes predictions challenging and problematic. These predictive statements are forward-looking statements under Federal Securities laws. Our actual results could differ materially as a result of a variety of potential risks and uncertainties. For more information, you should look to our 2007 Form 10-K and 2008 third quarter Form 10-Q, which we filed with the SEC and which describes factors, risks, and uncertainties that could cause our actual results to differ materially. The Company disclaims any obligation or undertaking to update or revise any forward-looking statements. Also, during this call, we may refer to non-GAAP financial measures. These non-GAAP results eliminate the impact of non-cash stock option expense and non-cash income tax expense and benefits. Management uses these non-GAAP financial measures in analyzing the business.
Now, Don will provide some overview comments on the quarter.
Thanks Steve. I will begin by providing an overview of our results for the quarter and Steve will then provide an added level of detail on the numbers and after Steve's comments, I will take a few minutes to update you on another Company items and outlook.
For the fourth quarter of 2008, we recognized revenues of $31.3 million, up 7% over the same quarter last year. We have received orders from 106 new customers during the quarter with one exceeding a million dollars and 13 others over a $0.25 million. In addition to the new customer orders, we saw an improvement as compared to the past couple of quarters in orders from current customers. We achieved record service revenues in the quarter of $15.9 million, an increase of 13% from the fourth quarter of 2007. We are reporting non GAAP income and the EPS in the earnings release.
On a non GAAP basis, earnings for the fourth quarter of 2008 were $3.2 million or $0.18 per diluted share compared to $3.1 million or $0.16 per diluted share for the fourth quarter of 2007. For the full year of 2008, we are reporting revenues of $121.4 million, an increase of 10.5% over the previous year. Our non GAAP earnings for the full year 2008 were $10.5 million with EPS of $0.56 which compares to $12.5 million and EPS of $0.65 last year.
I will now turn the call over to Steve for some more detail on the numbers.
As usual, I will comment on our operating performance, then the balance sheet and cash flows. I will start with three comments on three major items that impacted the information we will discuss.
First on the GAAP basis, we recorded income tax expense of $1.1 million in the fourth quarter, which compares to a benefit of $8.1 million in the same quarter last year. As we discussed in prior calls, we recorded a large tax credit in the fourth quarter of 2007 to recognize deferred tax assets related to tax operating losses and tax credit carry-forwards. As a result of recognizing net asset, we are now recording tax expense most of which does not require cash payments. On a non-GAAP basis, our tax expense was only $50,000 for the fourth quarter of 2008.
Second, we recorded non-cash stock-option expense of $651,000 for our fourth quarter of 2008 compared to $840,000 in the fourth quarter of 2007. Finally, cost of services, sales and marketing development and general and administrative expenses all benefited from the tax credit for settling a long-standing fringe tax dispute. As stated in the earnings release this credit or reduction of expenses was $577,000 for the quarter.
Our partners continue to generate the majority of orders with 68% of orders coming from the channel during the fourth quarter. For the full year, 67% of our orders were through partners compared to 65% in 2007. As Don stated, we signed a 106 new customers in the quarter for our contact center, enterprise messaging and IT PBX solution. The overall average new customer order in the quarter was $91,000 with an average new customer order of $95,000 for the contact center and large enterprise IT PBX licenses. For the fourth quarter, North America provided 59% of the orders while EMEA was 26% of the orders. For the full year, North America orders were 67% of the total and EMEA was 21% of the total.