SLRY » Topics » Fiscal Year Ended March 31, 2006 Compared to Fiscal Year Ended March 31, 2005

This excerpt taken from the SLRY 10-K filed Jun 28, 2007.

Fiscal Year Ended March 31, 2006 Compared to Fiscal Year Ended March 31, 2005

Revenues.    Revenues for fiscal 2006 were $15.3 million, an increase of $5.3 million, or 53%, compared to revenues of $10.0 million for fiscal 2005. Subscription revenues were $13.0 million in fiscal 2006, an increase of $4.4 million, or 52%, over subscription revenues of $8.6 million in fiscal 2005. The growth in subscription revenues was due principally to an increase of $1.8 million in renewal revenues to existing subscription customers, an increase of $1.5 million in revenues to new subscription customers and due to an increase of $0.6 million in revenues from additional products sold to existing customers in fiscal 2006 compared to fiscal 2005. The increase in total revenues was due to our hiring of additional sales personnel focused on retaining existing customers, adding new customers and upselling to existing customers. Although we introduced TalentManager in 2004, we have not yet recognized a material amount of revenues from this solution partly due to the requirement to recognize revenue over the subscription period. Advertising revenues for fiscal 2006 were $2.3 million, an increase of $0.9 million, or 60%, compared to advertising revenues of $1.4 million in fiscal 2005. The growth in advertising revenues was primarily due to increased advertising volume. Total deferred revenue as of March 31, 2006 was $10.5 million, representing an increase of $4.1 million, or 65%, compared to total deferred revenue of the $6.4 million as of March 31, 2005.

Cost of Revenues.    Cost of revenues for fiscal 2006 was $3.1 million, an increase of $1.3 million, or 70%, over cost of revenues of $1.8 million for fiscal 2005. The increase was primarily due to a $1.0 million increase in employee related costs due to the addition of 8 personnel during fiscal 2006 to our compensation and professional services teams and a $0.1 million increase in stock-based compensation expense. As a percent of total revenues, cost of revenues increased slightly to 20% in fiscal 2006 as compared to 18% in fiscal 2005. We increased the number of professional service personnel in order to provide implementation services to our increasing number of customers.

Research and Development Expenses.    Research and development expenses for fiscal 2006 were $2.2 million, an increase of $0.8 million, or 59%, over research and development expenses of $1.4 million for fiscal 2005. The increase in research and development expenses was primarily due to a $0.6 million increase in employee related costs due to the addition of 5 personnel during fiscal 2006, and a $123,000 increase in stock-based compensation expense. Our research and development headcount increased as we hired additional personnel to upgrade and expand our on-demand software.

Sales and Marketing Expenses.    Sales and marketing expenses for fiscal 2006 were $8.6 million, an increase of $2.7 million, or 46%, compared to sales and marketing expenses of $5.9 million for fiscal 2005. The increase was primarily due to a $1.7 million increase in employee related costs due to the addition of 20 personnel during fiscal 2006 to our sales and marketing teams, a $0.5 million increase in sales commissions as a result of increased sales, and a $0.2 million increase in stock-based compensation expense. Our sales and marketing headcount increased as we hired additional personnel to focus on adding new customers and increasing revenues from existing customers.

General and Administrative Expenses.    General and administrative expenses for fiscal 2006 were $4.3 million, an increase of $1.5 million, or 55%, compared to general and administrative expenses of $2.8 million for fiscal 2005. The increase in general and administrative expenses was primarily due to a $0.9 million increase in employee related costs due to the addition of 5 personnel during fiscal 2006, a $0.3 million increase in rent expense related to taking on additional space to support continued growth, and to a lesser extent, a $60,000 increase in stock-based compensation expense. Our general and administrative headcount increased as we hired additional personnel to support our growth.

Other Income (Expense).    Other income (expense) for fiscal 2006 was an expense of $0.2 million, a decrease of $0.2 million from other expense of $0.4 million in fiscal 2005. This decrease in other expense was primarily due to decreased interest expense attributable to a lower average outstanding balance on our line of credit.

 

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"Fiscal Year Ended March 31, 2006 Compared to Fiscal Year Ended March 31, 2005" elsewhere:

Allot Communications (ALLT)
ANSYS (ANSS)
Magic Software Enterprises (MGIC)
Phoenix Technologies (PTEC)
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