HRchitect featured SumTotal Systems in our May 2008 release of The Suite Life of Integrated Talent Management and also includes them in our list of top Talent Management Systems and top Learning Management Systems vendors that businesses should consider. SumTotal Systems participated in the HRchitect Beauty Pageant on Learning Management Systems on December 19, 2008 and will compete in the Performance Management Beauty Pageant on February 6, 2009.
SumTotal Systems (Nasdaq:SUMT), the market leader and a global provider of talent development solutions, today announced its financial results for the fourth quarter and year ended December 31, 2008.
Fiscal Year 2008 Results
On an unaudited Generally Accepted Accounting Principles (GAAP) basis, total revenue for the fiscal year 2008 was $126.6 million compared to $121.9 million for the fiscal year 2007. Unaudited GAAP net loss, before any potential charge for goodwill impairment, was $1.6 million, or $0.05 per share on a basic and diluted basis, compared to a net loss of $7.7 million, or $0.25 per share on a basic and diluted basis, for the fiscal year 2007.
Given the economy and a sustained decline in its market capitalization, the Company anticipates recording a non-cash goodwill impairment charge in the fourth quarter. The potential size of the charge is being calculated.
Non-GAAP revenue for the year was $126.9 million compared to $123.1 million for the fiscal year 2007. Non-GAAP net income for the year was $9.7 million, or $0.30 per share on a diluted basis, compared to non-GAAP net income of $7.1 million, or $0.23 per share on a diluted basis, for the prior year.
Non-GAAP results exclude the impact of certain charges primarily related to restructuring activities and non-cash charges related to acquisition accounting and stock-based compensation and any related income tax effects. Any goodwill impairment charge would be excluded from the non-GAAP results. A reconciliation to the GAAP results is provided in the attached statements.
For the fiscal year 2008, cash flows from operating activities were $12.2 million.
“2008 was a good year for SumTotal Systems especially in light of a tough economy. We improved non-GAAP profitability and generated over $12 million in cash from operating activities. We had significant growth in parts of the company including 50% growth in our SaaS business,” said Arun Chandra, chief executive officer of SumTotal Systems. “In 2009, we will continue to accelerate our SaaS business and win in the learning, performance, and talent development markets by offering best-of-breed solutions.”
2008 Business Highlights
– Doubled talent development customer base, adding customers such as Erie Insurance, Newmont Mining, and Heraeus Medical;
– Continued growth in performance management, adding customers such as H&R Block, the PGA TOUR – Golf Course Properties Division, the County of Los Angeles, and Genmab;
– Significant growth in SaaS business through the ResultsOnDemand offering, adding customers such as Chevron Products Company, Wendy’s International, and Mizuho Corporate Bank;
– Maintained leadership position in learning management with new deals including Kohl’s Department Stores, Citrix, and CareerBuilder;
– Continued growth in international markets, adding new deals with customers including Amcor, Dubai Holding, Nihon Chouzai Co., Ltd. and Scania;
– Recognized as a market leader in Performance Management by industry analyst Bersin & Associates in its study titled The Essential Guide to Performance Management Systems; and
– Positioned in the Leadership Quadrant by Gartner, Inc., in the 2008 “Magic Quadrant for Corporate Learning Systems.”
Fourth Quarter 2008 Results
On an unaudited GAAP basis, total revenue for the fourth quarter 2008 was $29.6 million compared to $33.3 million in the fourth quarter 2007. Unaudited GAAP net loss, before any potential charge for goodwill impairment, was $1.2 million, or $0.04 per share on a basic and diluted basis, compared to a net loss of $2.4 million, or $0.07 per share in the fourth quarter 2007.
Non-GAAP revenue for the fourth quarter 2008 was $29.6 million compared to $33.5 million in the fourth quarter 2007. Non-GAAP net income was $1.8 million, or $0.06 per share on a diluted basis, compared to non-GAAP net income of $1.7 million, or $0.05 per share on a diluted basis, a year ago.
Cash flows from operating activities were $3.7 million for the quarter.
Guidance
Due to economic uncertainties, the company is unable to provide guidance for the full year 2009. For the first quarter 2009, SumTotal estimates its revenue on both a GAAP and non-GAAP basis will be between $24.0 million and $26.0 million. GAAP net loss is estimated to be between $6.8 million and $5.8 million.
On a non-GAAP basis, net loss is estimated to be between $2.5 million and $1.5 million. The principal reconciling items between GAAP loss and non-GAAP income are estimated to be $1.1 million for amortization of intangibles, $1.7 million for stock-based compensation, and $1.5 million for restructuring charges.
For more information on SumTotal Systems, please visit www.sumtotalsystems.com
Matt Lafata, HRchitect
Posted by mattlafata 
