8k filed today and earnings reported
Looking good!
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 10, 2010
ST. BERNARD SOFTWARE, INC.
(Exact name of registrant as specified in its charter)
Delaware
0-50813
20-0996152
(State or other jurisdiction of
incorporation)
(Commission File Number)
(I.R.S. Employer Identification No.)
15015 Avenue of Science
San Diego, CA 92128
(Address of principal executive offices and zip code)
Registrant’s telephone number, including area code: (858) 676-2277
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On August 10, 2010, St. Bernard Software, Inc., a Delaware corporation ( “St. Bernard” ), issued an earnings release announcing its unaudited financial results for its second quarter ended June 30, 2010. A copy of the earnings release is attached as Exhibit 99.1 to this Current Report.
The information in this Item 2.02 and Item 9.01, and Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or Exchange Act, regardless of any general incorporation language in such filing.
Item 9.01 Financial Statements and Exhibits.
(d)
Exhibits.
Exhibit
Number
Description
99.1
Earnings release dated August 10, 2010 of St. Bernard Software, Inc.
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
S T . B ERNARD S OFTWARE , I NC .
Dated: August 10, 2010
By:
/s/ Louis E. Ryan
Louis E. Ryan
Chief Executive Officer and Chairman of the Board of Directors
3
EXHIBIT INDEX
Exhibit
Number
Description
99.1
Earnings release dated August 10, 2010 of St. Bernard Software, Inc.
4
Exhibit 99.1
ST. BERNARD SOFTWARE ANNOUNCES ITS FINANCIAL RESULTS FOR THE SECOND QUARTER ENDED JUNE 30, 2010
SAN DIEGO, CA, August 10, 2010 -- St. Bernard Software, Inc. (OTC BB: SBSW.OB - News ), a leader in Web security appliances, today announced unaudited financial results for its second quarter ended June 30, 2010.
Second Quarter 2010 Financial Highlights:
•
Cash and cash equivalents increased to $2.6 million as of June 30, 2010 from $2.5 million as of December 31, 2009 and $1.1 million as of June 30, 2009
•
Generated positive cash flow of $167,000 for YTD 2010 compared to $1.0 million negative cash flow for the same period in 2009, an increase of 117%
•
Cash flow used by operating activities decreased $533,000 to $82,000, an improvement of 86.7%
•
Q2 2010 operating expenses remained relatively unchanged from Q2 2009
•
Net loss of $581,000 for the six months ended June 30, 2010, compared to a net loss of $685,000 for the same period in 2009
“Our second quarter met operational expectations and we are optimistic about the growth in new customer business that we saw compared to 2009”, said Lou Ryan, CEO of St. Bernard Software. “Additionally, we were able to prepare operationally for the integration of Red Condor that we announced last week. The integration along with the additional investment we received will help support our drive for greater growth in our core security markets.”
Financial Results
St. Bernard reported revenues of $4.3 million and $8.7 million for the three and six months ended June 30, 2010, respectively, compared to revenues of $4.8 million and $9.2 million for the same periods in 2009; operating expenses of $3.6 million and $7.1 million for the three and six months ended June 30, 2010, respectively, compared to operating expenses of $3.6 million and $7.6 million for the same periods in 2009; and a net loss for the three and six months ended June 30, 2010 of $432,000 and $581,000, respectively, compared to a net loss of $52,000 and $685,000 for the same periods in 2009.
The Company ended the second quarter of 2010 with cash and cash equivalents of $2.6 million compared to $2.5 million at December 31, 2009 and $1.1 million at June 30, 2009. Cash used by operations decreased $533,000 to $82,000 for the three months ended June 30, 2010 compared to cash used by operations of $615,000 for the same period in 2009.
Sales and marketing expense consists primarily of salaries, related benefits, commissions, consultant fees, advertising, lead generation and other costs associated with our sales and marketing efforts. For the three months ended June 30, 2010 sales and marketing expense increased 6.8%, or approximately $108,000, over the same period in 2009.
Research and development expense consists primarily of salaries, related benefits, third-party consultant fees and other engineering related costs. Research and development expenses were $927,000 in Q2 2010, which is down from $979,000 in Q2 2009 resulting in a 5.3% decrease quarter over prior year quarter. The decrease was primarily the result of a net decrease in consulting costs. During 2009, after making the decision to move research and development in-house, the Company modified its consulting agreement with Softworks Group Pty Ltd. The transition from outside consulting to in-house occurred during the latter half of 2009 and into 2010, resulting in a significant decrease in consulting expenses. Management believes that significant investments in research and development is required to remain competitive, and as such, expects research and development expenses to increase in order to extend the core functionality and features within our products.
General and administrative expenses were $1.0 million and $1.1 million for the three months ended June 30, 2010 and 2009, respectively, a $33,000 or 3.1%, decrease year over prior year. The decrease was primarily a result of the reduction in stock-based compensation expenses, offset by an increase to lease and rents expense. During 2009, we subleased approximately 30,000 square feet of our unused office space to a company. The proceeds from the sublease were used to offset our monthly facilities rent expense. The company’s current corporate facility lease expires at the end of 2010. On August 2, 2010, the Company entered into a lease agreement with Kilroy Realty, L.P. The lease commences January 1, 2011 with a term of sixty-five (65) months from the commencement date.
Liquidity
The Company has existing credit facilities with Silicon Valley Bank and Partners for Growth, LP (“PFG”), under which there was borrowing availability of $440,000 and $750,000, respectively, as of June 30, 2010. On July 20, 2010, the PFG note was paid off, and on August 3, 2010 the Company received proceeds of $3.0 million in connection with the issuance of subordinated convertible notes.
Business Outlook
Mr. Ryan added, “In addition to strong current quarter sales and operational execution, we anticipate significant expense savings as we move into 2011 with our announced move to a new headquarters building in Q4, 2010. The move enables us to significantly improve our space which will create long term operational benefits. Moreover, the move also represents an annual cost savings of about $1 million which we will be able to reinvest in our growth strategy.”
About St. Bernard
St. Bernard Software develops and markets Internet security appliances and services that empower IT professionals to effectively, efficiently and intelligently manage their enterprise's Internet-based resources. Incorporated in 1986, the Company has evolved to become a well recognized leader in the SWG market and now recognized for delivering one of the leading Web filtering and security appliances, iPrism®. With millions of end users worldwide in approximately 6,000 enterprises, educational institutions, small and medium businesses, and government agencies, St. Bernard strives to deliver simple, high performance solutions that offer excellent value to our customers. Based in San Diego, California, St. Bernard (OTCBB: SBSW) markets its solutions through a network of value added resellers, distributors, system integrators, OEM partners and directly to end users. For more information about St. Bernard Software, visit www.stbernard.com .
©2010 St. Bernard Software, Inc. All rights reserved. The St. Bernard Software logo, LivePrism, iPrism, and iGuard are trademarks of St. Bernard Software, Inc. All other trademarks and registered trademarks are hereby acknowledged.
Forward Looking Statement
This press release may contain forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including, among other things, any projections of savings and our ability to reinvest any savings towards our growth strategy; any statements of the plans, strategies, and objectives of management for future operations (including statements about our ability to support our drive for greater growth in our core business); any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; statements of belief and any statement of assumptions underlying any of the foregoing. The risks, uncertainties and assumptions referred to above include, among other things, performance of contracts by customers and partners; employee management issues; the timely development, production and acceptance of products and services and their feature sets; the challenge of managing asset levels, including inventory; the flow of products into third-party distribution channels; our ability to integrate our acquisitions in accordance to plan; and the difficulty of keeping expense growth at modest levels while increasing revenues. These and other risks and factors that could cause events or our results to differ from those expressed or implied by such forward-looking statements are described in our most recent annual report on Form 10-K, as well as other subsequent filings with the Securities and Exchange Commission. We assume no obligation and do not intend to update these forward-looking statements.
Contact:
St. Bernard Software
Lorrie Hunsaker
St. Bernard Software
Investor and Public Relations Manager
(858) 524-2002
IR@stbernard.com
