Datawatch Reports Fiscal Fourth Quarter 2012 Results, Announces New
Brand And Positioning To Support Growth In Fiscal 2013
CHELMSFORD, Mass., Nov. 27, 2012 /PRNewswire/
-- Datawatch Corporation (NASDAQ-CM: DWCH), the leading
global provider of information optimization solutions, today
announced that total revenue for its fourth quarter ended
September 30, 2012 was $6.02 million, an increase of 24% from revenue of
$4.84 million in the fourth quarter a
year ago. License revenue for the fourth quarter of fiscal
2012 was $3.62 million, a 29%
increase over the $2.80 million
recorded in the comparable quarter a year ago. Net loss for
the fourth quarter of fiscal 2012 was $277,000, or ($0.04) per diluted share, compared to net income
of $201,000, or $0.03 per diluted share, for the year ago
period. Datawatch continues to engage in larger enterprise
opportunities and in the fourth quarter of fiscal 2012 closed
another seven-figure license transaction with a worldwide
information technology company. Due to the structure of the
transaction, the license revenue associated with this deal was not
recognized in the fourth quarter of 2012, but instead will be
recognized ratably over the 12 months of fiscal year 2013.
The increase in deferred revenue on Datawatch's balance sheet as of
September 30, 2012 is largely related
to this significant transaction.
(Logo: http://photos.prnewswire.com/prnh/20121015/NE92833LOGO
)
Total revenue for fiscal year 2012 was $26.01 million, a 45% increase from revenue of
$17.89 million in fiscal year
2011. License revenue for 2012 was $16.80 million, a 70% increase compared to
$9.86 million in 2011. Net
income for 2012 was $1,034,000 or
$0.15 per diluted share, as compared
to net income of $132,000 or
$0.02 per diluted share, for
2011. Excluding the effects of the non-cash amortization
associated with the acquisition of the intellectual property
underlying the Monarch software in March
2012, as well as non-cash stock compensation costs and
severance expenses, the Company's non–GAAP net income for the
fourth quarter of 2012 was $526,000,
or $0.08 per diluted share, as
compared to non-GAAP net income of $319,000, or $0.05
per diluted share, for the fourth quarter of 2011. The
Company's non-GAAP net income for fiscal year 2012 was $3,019,000, or $0.45 per diluted share, as compared to non-GAAP
net income of $1,037,000, or
$0.17 per diluted share, for fiscal
year 2011.
"Datawatch closed a very productive fiscal 2012 and is entering
fiscal 2013 with strong momentum. With increased sales
capacity, key additions to the executive management team and a new
and powerful cloud-based complement to our award-winning technology
portfolio, we are better positioned than ever to capture the
growing demand among companies of all sizes for information
optimization solutions," said Michael A.
Morrison, president and CEO of Datawatch. "Datawatch
is setting new standards for reporting and analytics, especially in
the area of Big Data applications where harnessing a greater
variety of data is as important as the volume and velocity of data
in understanding the complete 360 degree view of the
business. We continue to benefit from these Big Data market
dynamics that increasingly recognize the analytic value of
all types of information - structured, semi-structured and
unstructured – and that this information often comes from both
inside and outside an organization. Our newly revitalized
messaging and branding are already enhancing our market awareness
and providing us with access to new opportunities arising from
these market dynamics. We expect that our focus on expanding
global alliances, selling domain-specific applications of our
information optimization solutions and increased efforts to promote
brand awareness with industry analysts and financial analysts will
all serve to build our momentum and drive accelerated performance
for Datawatch in fiscal 2013."
Fourth Quarter Business Highlights
- Datawatch entered into an agreement with Unisys Belgium to
extend Datawatch's information optimization solutions in support of
an outsourcing arrangement between Unisys Belgium and one of
Belgium's largest banking and
insurance companies. The Datawatch solution is being used to
archive, manage, share and retrieve hundreds of millions of
documents and Big Data artifacts for use by employees throughout
the organization.
- Datawatch entered into new business partnerships in
Japan, Korea, Thailand and the
Philippines with several premier resellers and
implementation partners, including Xlsoft, Synetcom, Brainchild,
WorkCentric and Tricor that greatly expand Datawatch's channels in
the Asia Pacific region.
Datawatch also added automotive leader Audi Japan as a customer to
deliver a key performance indicator dashboard application to senior
management and stakeholders throughout Japan.
- Datawatch announced the appointment of three new executives to
drive company growth and enhance market visibility:
Ben Plummer, Chief Marketing Officer
and Senior Vice President of Strategic Alliances; Jon Pilkington, Vice President of Products; and
Mike Carroll, Vice President of
Worldwide Sales Support.
- Datawatch launched its new Information Optimization messaging
focused on the company's ability to provide data variety to Big
Data, business intelligence and business process improvement
applications and introduced new branding to support this messaging
through the launch of a newly designed website, updated sales
materials, improved product positioning and redesigned
collateral.
Fourth Quarter Financial Highlights
- Cash and short-term investments were $8.72 million at September
30, 2012, up 11% from $7.84
million at June 30, 2012 and
up 4% from $8.38 million a year
ago. In Q2 of FY12, the company used $3.04 million in cash to partially fund the
purchase of the Monarch intellectual property.
- Gross margin for the fourth quarter of 2012 was 82.8%, compared
to 83.6% for the third quarter of 2012.
- Days sales outstanding were 70 days at September 30, 2012, compared to 65 days at
June 30, 2012 and 59 days at
September 30, 2011.
- Deferred revenue was $6.30
million as of September 30,
2012, a 65% increase over deferred revenue of $3.82 million as of September 30, 2011, with the increase in large
part reflecting the seven-figure license transaction signed in the
fourth quarter of 2012 that will be recognized ratably over the
course of fiscal year 2013.
"During our fiscal fourth quarter, we generated approximately
$1.5 million in cash, and we used a
portion of that cash to pay down $600,000 of our $1.5
million working capital loan with Silicon Valley Bank.
We continue to invest in the growth of our business in a
disciplined manner, and this has positioned us to enter fiscal 2013
with a strong foundation upon which to further build out our
product platform and sales organization in order to achieve our
2013 objectives," stated Mr. Morrison.
Investor Conference Call and Webcast
The senior management of Datawatch will host a conference call and
webcast to discuss the fourth quarter results this afternoon,
Tuesday, November 27, 2012 at
4:30 pm ET. To access the call,
please dial 1-877-407-0782. Internationally, the call may be
accessed by dialing 1-201-689-8567. The conference call will be
broadcast live on the Internet at:
http://www.investorcalendar.com/IC/CEPage.asp?ID=169892. It
is recommended that listeners register to participate and download
any necessary audio software from the website 15 minutes prior to
the scheduled call. The webcast will be available as a replay
starting one hour after the call is completed at the same
location.
ABOUT DATAWATCH CORPORATION
Datawatch Corporation
(NASDAQ-CM: DWCH) is a leader in providing information optimization
products and solutions that allow organizations to deliver the
greatest data variety possible into their big data and analytic
applications. Datawatch provides organizations the ability to
integrate structured, unstructured, and semi-structured sources
like reports, PDF files, and EDI streams into these applications to
provide a 360 degree perspective of the issues and opportunities
that exist in their businesses. More than 40,000 organizations
worldwide use Datawatch's products and services, including 99 of
the Fortune 100, and businesses of every type can benefit from the
power and flexibility of Datawatch's industry leading solutions.
Datawatch is headquartered in Chelmsford,
Massachusetts with offices in London, Munich, Singapore, Sydney and Manila, and with partners and customers in
more than 100 countries worldwide. For more information, visit
www.datawatch.com.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995
Any statements contained in this press
release that do not describe historical facts may constitute
forward-looking statements as that term is defined in the Private
Securities Litigation Reform Act of 1995. Any such statements,
including but not limited to those relating to results of
operations, contained herein are based on current expectations, but
are subject to a number of risks and uncertainties that may cause
actual results to differ materially from expectations. The factors
that could cause actual future results to differ materially from
current expectations include the following: risks associated with
the continuing weak global economy; risks associated with
fluctuations in quarterly operating results due, among other
factors, to the size and timing of large customer orders; the
volatility of Datawatch's stock price; limitations on the
effectiveness of internal controls; rapid technological change;
Datawatch's dependence on the introduction of new products and
possible delays in those introductions; competition in the software
industry generally, and in the markets for information optimization
in particular; Datawatch's dependence on its principal products,
proprietary software technology and software licensed from third
parties; risks associated with international sales; risks
associated with indirect distribution channels; the adequacy of
Datawatch's sales returns reserve; risks associated with a
subscription sales model; risks associated with acquisitions,
including the recent acquisition of intellectual property from Math
Strategies; Datawatch's dependence on its ability to hire and
retain skilled personnel; disruption or failure of Datawatch's
technology systems that may result from a natural disaster,
cyber-attack or other catastrophic event; and uncertainty and
additional costs that may result from evolving regulation of
corporate governance and public disclosure. Further information on
factors that could cause actual results to differ from those
anticipated is detailed in various publicly-available documents,
which include, but are not limited to, filings made by Datawatch
from time to time with the Securities and Exchange Commission,
including but not limited to, those appearing in the Company's
Annual Report on Form 10-K for the year ended September 30, 2011 and Form 10-Q for the quarters
ended December 31, 2011, March 31, 2012 and June
30, 2012. Any forward-looking statements should
be considered in light of those factors.
Investor Contact:
Datawatch Investor
Relations
investor@datawatch.com
Phone: (978) 441-2200 ext. 8323
Media Contact:
Kellee
McGolpin
Datawatch Corporation
Kellee_McGolpin@datawatch.com
Phone: (978) 441-2200 ext. 8238
Twitter: @datawatch
© 2012 Datawatch Corporation. Datawatch, Monarch and their
respective logos are trademarks or registered trademarks of
Datawatch Corporation in the United
States and/or other countries. All other names are
trademarks or registered trademarks of their respective
companies.
Use of Non-GAAP Financial Information
To supplement our financial results presented in accordance with
Generally Accepted Accounting Principles (GAAP), this press release
and the accompanying tables contain certain non-GAAP financial
measures that we believe are helpful in understanding our past
financial performance and future results. Our non-GAAP financial
measures are not meant to be considered in isolation or as a
substitute for comparable GAAP measures and should be read in
conjunction with our consolidated financial statements prepared in
accordance with GAAP. Our management regularly uses our
supplemental non-GAAP financial measures internally to understand
and manage our business and make operating decisions. Our non-GAAP
financial measures include adjustments based on the following
items, as well as the related income tax effects and adjustments to
the valuation allowance:
Amortization of purchased software: We have excluded the effect
of amortization of the Monarch software and related intellectual
property that we acquired from Math Strategies on March 30, 2012 from our non-GAAP operating
expenses and net income measures. Amortization of this
purchased software resulted from a material transaction that is not
likely to occur in the foreseeable future. Investors should
note that the use of the purchased software will contribute to
future period revenues. Amortization of the purchased
software will recur in future periods.
Share-based compensation expenses: We have excluded the effect
of share-based compensation expenses from our non-GAAP operating
expenses and net income measures. Although share-based compensation
is a key incentive offered to our employees, we continue to
evaluate our business performance excluding share-based
compensation expenses. Share-based compensation expenses will recur
in future periods.
Restructuring: We incurred significant expenses with the
restructuring of our sales and marketing operations in fiscal 2011
and other restructuring actions taken in fiscal 2012, principally
related to selected headcount reductions. We believe it is useful
for investors to understand the effects of these items on our total
operating expenses and net income.
DATAWATCH CORPORATION
|
Condensed Consolidated Statements of
Operations
|
Amounts in Thousands (except per share
data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
Twelve
Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
REVENUE:
|
|
|
|
|
|
|
|
|
|
Software licenses
|
|
$
3,618
|
|
$
2,795
|
|
$
16,800
|
|
$
9,858
|
|
Maintenance
|
|
2,219
|
|
1,649
|
|
7,902
|
|
6,219
|
|
Professional services
|
|
178
|
|
394
|
|
1,304
|
|
1,808
|
|
Total revenue
|
|
6,015
|
|
4,838
|
|
26,006
|
|
17,885
|
|
|
|
|
|
|
|
|
|
|
COSTS AND EXPENSES:
|
|
|
|
|
|
|
|
|
|
Cost
of software licenses
|
|
526
|
|
576
|
|
2,270
|
|
2,237
|
|
Cost
of maintenance and services
|
|
511
|
|
595
|
|
2,530
|
|
2,537
|
|
Sales and marketing
|
|
3,222
|
|
2,049
|
|
12,263
|
|
6,268
|
|
Engineering and product
development
|
|
742
|
|
619
|
|
2,790
|
|
2,502
|
|
General and administrative
|
|
1,141
|
|
838
|
|
4,610
|
|
4,274
|
|
Total costs and expenses
|
|
6,142
|
|
4,677
|
|
24,463
|
|
17,818
|
|
|
|
|
|
|
|
|
|
|
INCOME (LOSS) FROM OPERATIONS
|
|
(127)
|
|
161
|
|
1,543
|
|
67
|
Other income (expense)
|
|
(174)
|
|
42
|
|
(459)
|
|
100
|
|
|
|
|
|
|
|
|
|
|
INCOME (LOSS) BEFORE INCOME
TAXES
|
|
(301)
|
|
203
|
|
1,084
|
|
167
|
Income tax provision (benefit)
|
|
(24)
|
|
2
|
|
50
|
|
35
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME (LOSS)
|
|
$
(277)
|
|
$
201
|
|
$
1,034
|
|
$
132
|
|
|
|
|
|
|
|
|
|
|
Net
Income (loss) per share - Basic
|
|
$
(0.04)
|
|
$
0.03
|
|
$
0.17
|
|
$
0.02
|
|
|
|
|
|
|
|
|
|
|
Net
Income (loss) per share - Diluted
|
|
$
(0.04)
|
|
$
0.03
|
|
$
0.15
|
|
$
0.02
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares Outstanding -
Basic
|
|
6,334
|
|
6,161
|
|
6,252
|
|
6,039
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares Outstanding -
Diluted
|
|
6,334
|
|
6,341
|
|
6,730
|
|
6,235
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Disclosure - Reconciliation of GAAP
Net Income to Net Income Excluding the Effects of Certain
Items:
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
$
(277)
|
|
$
201
|
|
$
1,034
|
|
$
132
|
|
|
|
|
|
|
|
|
|
|
Add-back
Amortization of Monarch IP
|
|
431
|
|
-
|
|
871
|
|
-
|
Add-back
Share-Based Compensation
|
|
319
|
|
118
|
|
879
|
|
264
|
Add-back
Restructuring Severance Charges
|
|
53
|
|
-
|
|
235
|
|
641
|
|
|
|
|
|
|
|
|
|
|
Net income (non-GAAP)
|
|
$
526
|
|
$
319
|
|
$
3,019
|
|
$
1,037
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income per share -
Basic
|
|
$
0.08
|
|
$
0.05
|
|
$
0.48
|
|
$
0.17
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income per share -
Diluted
|
|
$
0.08
|
|
$
0.05
|
|
$
0.45
|
|
$
0.17
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares Outstanding -
Basic
|
|
6,334
|
|
6,161
|
|
6,252
|
|
6,039
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares Outstanding -
Diluted
|
|
6,858
|
|
6,341
|
|
6,730
|
|
6,235
|
DATAWATCH CORPORATION
|
Condensed Consolidated Balance
Sheets
|
Amounts in Thousands
|
(Unaudited)
|
|
|
|
|
|
|
|
September 30,
|
|
September 30,
|
|
|
2012
|
|
2011
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$
8,722
|
|
$
8,384
|
Accounts receivable, net
|
|
4,391
|
|
2,966
|
Prepaid expenses and other current
assets
|
|
591
|
|
577
|
Total current assets
|
|
13,704
|
|
11,927
|
|
|
|
|
|
Property and equipment, net
|
|
281
|
|
270
|
Intangible and other assets,
net
|
|
8,820
|
|
937
|
|
|
|
|
|
|
|
$
22,805
|
|
$
13,134
|
|
|
|
|
|
|
|
|
|
|
Current portion of long-term
debt
|
|
$
900
|
|
$
-
|
Accounts payable and accrued
expenses
|
|
2,468
|
|
2,681
|
Deferred revenue - current
portion
|
|
6,295
|
|
3,823
|
Total current liabilities
|
|
9,663
|
|
6,504
|
|
|
|
|
|
Note
payable
|
|
2,983
|
|
-
|
Other long-term liabilities
|
|
466
|
|
288
|
Total long-term liabilities
|
|
3,449
|
|
288
|
|
|
|
|
|
Total shareholders' equity
|
|
9,693
|
|
6,342
|
|
|
|
|
|
|
|
$
22,805
|
|
$
13,134
|
SOURCE Datawatch Corporation