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Tumbleweed Press Releases
TUMBLEWEED ANNOUNCES RECORD REVENUE FOR SECOND QUARTER OF 2005
Revenue Increase of 25%; Operations Continue to Generate Positive Cash Flow Redwood City, CA — July 26, 2005 — Tumbleweed® Communications Corp. (NASDAQ:TMWD), a leading provider of email security, file transfer security, and identity validation software and appliances, today reported results for the second quarter ended June 30, 2005. Tumbleweed reported Q2-05 revenue of $12.5 million, up 25% from $10.0 million in Q2-04; a net loss of $791,000, compared to a net loss of $3.3 million in Q2-04; and non-GAAP income, which excludes certain items described below, of $37,000, compared to a non-GAAP loss of $1.6 million in Q2-04. Net loss per share was $(0.02). Non-GAAP income per share was $0.00. Cash balances grew by $497,000 in the quarter to $22.3 million at June 30, 2005. “I am very pleased to announce record revenue,” said Craig Brennan, Chief Executive Officer of Tumbleweed. “Clearly, our initiatives and investments to strengthen our product offerings and channels are the right strategies to meet customer needs and grow our business. New orders increased more than 40% year over year, providing for top-line growth of $2.5 million as well as an increase in deferred revenue. I look forward to building on this success in the second half of 2005.” “We continue to generate positive cash flow from operations,” said Tim Conley, Chief Financial Officer of Tumbleweed. “As important, we demonstrated operating leverage with more than 65% of the year over year revenue increase directly contributing to an improvement in non-GAAP results.” Quarterly Highlights Tumbleweed's customer base grew this quarter, with more than 100 new customers purchasing products during the period. Tumbleweed entered into more than 500 customer contracts, including 150 with repeat customers, exclusive of maintenance renewals. Tumbleweed now has more than 1,200 enterprise and government customers. Tumbleweed broadened its distribution and market reach by adding new channel partners and doubled the level of business received from resellers quarter over quarter. Third Quarter Financial Outlook
Conference Call Information Tumbleweed management will host a conference call at 2:00 p.m. PDT (5:00 p.m. EDT) today to discuss these results. The call can be accessed by dialing 800-219-6110 and giving the company name, “Tumbleweed.” Participants are asked to call the assigned number approximately 10 minutes before the conference call begins. A replay of the conference call will be available two hours after the call for the following five business days by dialing 800-405-2236 and entering the following pass code: 11034150#. Also, the conference call will be available over the Internet at http://www.tumbleweed.com in the Investor Relations area of the site or by going to http://www.mkr-group.com. Non-GAAP Information The non-GAAP financial information included in this press release is not prepared in accordance with generally accepted accounting principals (“GAAP”) as it excludes amortization of intangible assets, stock-based compensation expense, and merger-related and other expenses. Management believes that the presentation of non-GAAP information may provide useful information to investors because Tumbleweed has historically provided this information and understands that some investors consider it useful in evaluating Tumbleweed's expenses. Management also uses this non-GAAP information, along with GAAP information, in evaluating Tumbleweed's expenses. The non-GAAP results should not be considered a substitute for financial information presented in accordance with generally accepted accounting principles, and may be different from non-GAAP measures used by other companies. A reconciliation between net loss on a GAAP basis and non-GAAP net loss is provided in the attached financial statements. About Tumbleweed Communications Corp. SAFE HARBOR STATEMENT Except for the historical information contained herein, the matters discussed in this press release may constitute forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected, particularly with respect to Tumbleweed’s financial outlook and quarterly financial results, as well as Tumbleweed’s markets, products, and services, and the future success of Tumbleweed . In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “should,” “potential,” “continue,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” and similar expressions. For further cautions about the risks of investing in Tumbleweed, we refer you to the documents Tumbleweed files from time to time with the Securities and Exchange Commission, particularly Tumbleweed’s Form 10-K filed March 16, 2005 and Form 10-Q filed May 10, 2005. Tumbleweed assumes no obligation to update information contained in this press release, which represents the Company’s expectations only as of the date of this release and should not be viewed as a statement about the Company’s expectations after such date. Although this release may remain available on the Company’s website or elsewhere, its continued availability does not indicate that the Company is reaffirming or confirming any of the information contained herein. ###
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