EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

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CONTACT:   
Ian Halifax    Anne Marie McCauley
Wind River    Wind River
Chief Financial Officer    Vice President, Investor Relations
+1.510.749.2155    +1.510.749.2551
ian.halifax@windriver.com    annemarie.mccauley@windriver.com

FOR IMMEDIATE RELEASE

Wind River Reports First Quarter Fiscal Year 2010 Results

ALAMEDA, Calif., June 4, 2009— Wind River Systems, Inc. (NASDAQ: WIND), the global leader in Device Software Optimization (DSO), today reported results for the first quarter of fiscal year 2010, ended April 30, 2009. Revenues for the first quarter of fiscal 2010 were $82.5 million, compared with $87.9 million reported in the first quarter of fiscal 2009, a decrease of 6 percent.

GAAP Results: Net income for the first quarter of fiscal 2010 was $0.6 million, compared to net income of $0.5 million in the first quarter a year ago. Net income per diluted share for the quarter was $0.01, compared to net income per diluted share of $0.01 in the first quarter a year ago.

Non-GAAP Results: Non-GAAP net income for the first quarter of fiscal 2010 was $7.3 million, compared to non-GAAP net income of $7.8 million in the first quarter a year ago. Non-GAAP net income per diluted share for the quarter was $0.09, compared to net income per diluted share of $0.09 in the first quarter a year ago. A detailed reconciliation of GAAP to non-GAAP results is provided at the end of this release.

Deferred revenues as of April 30, 2009 were $121.3 million, compared to $145.2 million as of April 30, 2008, a decrease of 16 percent. Cash, cash equivalents and investments totaled $169.8 million as of April 30, 2009. Cash flows from operations for the first quarter of fiscal 2010 were $5.5 million.

Financial Outlook

In light of this morning’s announcement that we have entered into a definitive agreement to be acquired by Intel, Wind River is not providing any financial outlook for the second quarter fiscal 2010 and is withdrawing its previously issued financial outlook for the full fiscal year 2010.

Conference Call

Wind River will hold its quarterly conference call today at 5:00 p.m. ET/2:00 p.m. PT to discuss its first quarter financial results and business highlights. Investors can listen to the conference call via webcast at http://ir.windriver.com or by calling +1.800.399.5927 in the United States or +1.706.643.3427 internationally.

A replay of the webcast can be accessed via Wind River’s web site at http://ir.windriver.com.


Additionally, an audio replay of the conference call will be available through June 12, 2009 by calling +1.800.642.1687 in the United States or +1.706.645.9291 internationally (conference id required: 97031711).

Use of Non-GAAP Financial Information

This press release includes the following supplemental non-GAAP financial measures: non-GAAP gross profit, non-GAAP operating income, non-GAAP net income and non-GAAP net income per diluted share. The presentation of this supplemental non-GAAP financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with generally accepted accounting principles. In addition, these measures may be materially different from non-GAAP financial measures used by other companies. Wind River is providing these non-GAAP financial measures because it believes that such measures provide important supplemental information to management and investors about the company’s core operating results, primarily because the non-GAAP measures exclude certain expenses and other amounts that management does not consider to be indicative of the company’s core operating results or business outlook. Wind River management uses these non-GAAP financial measures, in addition to the corresponding GAAP financial measures, in evaluating the company’s operating performance, in planning and forecasting future periods, in making decisions regarding business operations and the allocation of resources, and in comparing the company’s performance against its historical performance. For a description of these non-GAAP financial measures, including the reasons management uses these measures, and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with GAAP, please see the following sections of this release entitled “About Non-GAAP Financial Measures” and “Reconciliation of GAAP to Non-GAAP Financial Measures.” All non-GAAP financial measures should be read in conjunction with the comparable information presented in accordance with GAAP. Unless specified otherwise in this release, all references to GAAP and non-GAAP net income (loss) per share are calculated on a fully-diluted basis.


About Wind River

Wind River is the global leader in Device Software Optimization (DSO). Wind River enables companies to develop, run and manage device software faster, better, at lower cost and more reliably. Wind River platforms are pre-integrated, fully standardized, enterprise-wide development solutions. They 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, with operations worldwide. To learn more, visit Wind River at www.windriver.com or call 1-800-872-4977.

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.


WIND RIVER SYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

 

     Three Months Ended
April 30,
 
     2009     2008  

Revenues, net:

    

Product

   $ 30,174     $ 32,898  

Subscription

     29,020       33,070  

Service

     23,276       21,897  
                

Total revenues, net

     82,470       87,865  

Cost of revenues:

    

Product

     661       750  

Subscription

     2,964       4,662  

Service

     14,284       16,746  

Amortization of purchased intangibles

     399       528  
                

Total cost of revenues

     18,308       22,686  
                

Gross profit

     64,162       65,179  

Operating expenses:

    

Selling and marketing

     32,969       35,172  

Product development and engineering

     20,872       20,307  

General and administrative

     8,281       9,040  

Amortization of other intangibles

     882       107  

Restructuring and other charges

     848       2,930  
                

Total operating expenses

     63,852       67,556  
                

Income (loss) from operations

     310       (2,377 )

Other income, net

     109       2,563  
                

Income before income taxes

     419       186  

Benefit from income taxes

     (142 )     (276 )
                

Net income

   $ 561     $ 462  
                

Net income per share:

    

Basic and diluted

   $ 0.01     $ 0.01  
                

Shares used in per share calculation:

    

Basic

     76,676       85,211  
                

Diluted

     77,127       85,496  
                


WIND RIVER SYSTEMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

     April 30,
2009
    January 31,
2009
 

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $ 74,585     $ 78,825  

Short-term investments

     16,400       15,815  

Accounts receivable, net

     61,943       78,557  

Prepaid and other current assets

     19,034       18,928  
                

Total current assets

     171,962       192,125  

Long-term investments

     78,783       74,499  

Property and equipment, net

     77,761       78,825  

Goodwill

     111,798       108,102  

Other intangibles, net

     11,426       10,866  

Other assets

     14,858       14,582  
                

Total assets

   $ 466,588     $ 478,999  
                

LIABILITIES AND EQUITY

    

Current liabilities:

    

Accounts payable

   $ 7,388     $ 9,066  

Accrued and other current liabilities

     11,712       14,566  

Accrued compensation

     20,778       27,364  

Income taxes payable

     293       85  

Deferred revenues

     105,055       114,456  
                

Total current liabilities

     145,226       165,537  

Long-term deferred revenues

     16,252       17,765  

Other long-term liabilities

     10,949       10,164  
                

Total liabilities

     172,427       193,466  
                

Wind River Systems, Inc. stockholders’ equity:

    

Common stock

     93       92  

Additional paid-in-capital

     898,514       893,791  

Treasury stock

     (153,208 )     (152,406 )

Accumulated other comprehensive loss

     (4,473 )     (8,637 )

Accumulated deficit

     (446,889 )     (447,450 )
                

Total Wind River Systems, Inc. stockholders’ equity

     294,037       285,390  

Noncontrolling interest

     124       143  
                

Total equity

     294,161       285,533  
                

Total liabilities and equity

   $ 466,588     $ 478,999  
                


WIND RIVER SYSTEMS, INC.

ABOUT NON-GAAP FINANCIAL MEASURES

In addition to the company’s condensed consolidated financial statements prepared in accordance with generally accepted accounting principles, or GAAP, Wind River is providing in this release certain supplemental non-GAAP measures of financial performance. These non-GAAP financial measures include: non-GAAP gross profit, non-GAAP operating income, non-GAAP net income and non-GAAP net income per diluted share. For a reconciliation of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with GAAP, see the following section of this release entitled “Reconciliation of GAAP to Non-GAAP Financial Measures.”

The presentation of supplemental non-GAAP financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. In addition, these measures may be materially different from non-GAAP financial measures used by other companies.

Wind River is providing these non-GAAP financial measures because it believes that such measures provide important supplemental information to management and investors about the company’s core operating results, primarily because the non-GAAP measures exclude certain expenses and other amounts that management does not consider to be indicative of the company’s core operating results or business outlook. Wind River management uses these non-GAAP financial measures, in addition to the corresponding GAAP financial measures, in evaluating the company’s operating performance, in planning and forecasting future periods, in making decisions regarding business operations and the allocation of resources, and in comparing the company’s performance against its historical performance. Wind River excludes the following items from its non-GAAP financial measures:

Stock-based compensation expense. The company’s non-GAAP financial measures exclude stock-based compensation expense related to the grant of stock options, other related instruments and restricted stock issued in the Interpeak acquisition. While stock-based compensation is a significant expense affecting the company’s results of operations, management excludes stock-based compensation from its budget and operating decision-making processes because it believes that these non-cash expenses do not reflect the company’s ongoing operating results. Since stock-based compensation expense is excluded from non-GAAP financial measures, the company also excludes unamortized stock-based compensation in its computation of non-GAAP dilutive shares, which generally decreases the weighted number of buyback shares under the treasury stock method.

Amortization of purchased and other intangible assets. In accordance with GAAP, Wind River incurs expenses for the amortization of purchased and other intangibles resulting from prior acquisitions. These charges are not factored into management’s evaluation of potential acquisitions, or our performance after completion of acquisitions, because they are not related to our core operating performance. In addition, the frequency and amount of such charges vary significantly based on the size and timing of our acquisitions and the maturities of the businesses being acquired. Excluding this data provides investors with a basis to compare the company against the performance of other companies without this variability.

Other costs. Wind River excludes amounts from non-GAAP financial measures related to restructuring and other charges, employer payroll taxes on stock option exercises, acquisition related costs and impairments on investments. The company excludes such costs because management believes that they are not related to the company’s core operating results and because the frequency and variability in the nature and amount of the charges can vary significantly from period to period.

Income tax related to non-GAAP items. In order to present full non-GAAP results, the company adjusts its provision for income taxes to reflect the tax effects of excluding the non-GAAP items noted above. In addition, the company includes the associated tax benefit related to stock option net operating losses and excludes amounts in its non-GAAP financial measures related to the establishment or reversal of income tax valuation allowances as management believes that such amounts are not indicative of the company’s ongoing business operating results and they are not included in budget or planning processes.

All supplemental non-GAAP financial measures should be read in conjunction with the comparable information presented in accordance with generally accepted accounting principles in the United States.


WIND RIVER SYSTEMS, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(In thousands, except per share amounts)

(Unaudited)

 

     Three Months Ended
April 30,
 
     2009     2008  

GAAP gross profit

   $ 64,162     $ 65,179  

Stock-based compensation (1)

     628       649  

Amortization of purchased and other intangibles

     399       528  

Employer payroll taxes on stock option exercises

     19       29  
                

Non-GAAP gross profit

   $ 65,208     $ 66,385  
                

GAAP operating income (loss)

   $ 310     $ (2,377 )

Stock-based compensation (1)

     4,150       4,288  

Amortization of purchased and other intangibles

     1,281       635  

Restructuring and other charges

     848       2,930  

Employer payroll taxes on stock option exercises

     104       33  

Acquisition related costs

     332       —    
                

Non-GAAP operating income

   $ 7,025     $ 5,509  
                

GAAP net income

   $ 561     $ 462  

Stock-based compensation (1)

     4,150       4,288  

Amortization of purchased and other intangibles

     1,281       635  

Restructuring and other charges

     848       2,930  

Employer payroll taxes on stock option exercises

     104       33  

Impairments on investments

     413       357  

Acquisition related costs

     332       —    

Income tax related to non-GAAP adjustments

     (371 )     (924 )
                

Non-GAAP net income

   $ 7,318     $ 7,781  
                

GAAP net income per diluted share

   $ 0.01     $ 0.01  

Stock-based compensation (1)

     0.04       0.05  

Amortization of purchased and other intangibles

     0.02       0.01  

Restructuring and other charges

     0.01       0.03  

Employer payroll taxes on stock option exercises

     —         —    

Impairments on investments

     0.01       —    

Acquisition related costs

     —         —    

Income tax related to non-GAAP adjustments

     —         (0.01 )
                

Non-GAAP net income per diluted share

   $ 0.09     $ 0.09  
                

Shares used in GAAP per diluted share amounts

     77,127       85,496  

Adjustments to diluted shares related to non-GAAP items

     1,878       791  
                

Shares used in non-GAAP per diluted share amounts

     79,005       86,287  
                

(1)    Includes stock-based compensation expense as follows:

    

Cost of revenues:

    

Product

   $ 17     $ 16  

Subscription

     381       413  

Service

     230       220  
                

Total cost of revenues

     628       649  
                

Operating expenses:

    

Selling and marketing

     1,347       1,469  

Product development and engineering

     929       929  

General and administrative

     1,246       1,241  
                

Total operating expenses

     3,522       3,639  
                

Total stock-based compensation expense

   $ 4,150     $ 4,288