Datawatch Corporation (NASDAQ-CM: DWCH), a leader in Business
Intelligence (BI), today announced results for its second quarter
ended March 31, 2010.
Revenues for the quarter ended March 31, 2010 were $4,571,000,
as compared to $5,092,000 for the quarter ended March 31, 2009. Net
loss for the second quarter of fiscal 2010 was $(97,000), or
$(0.02) per diluted share, as compared to net loss of $(5,854,000),
or $(0.99) per diluted share, for the second quarter of fiscal
2009. Revenues for the six months ended March 31, 2010 were
$8,806,000 as compared to $10,294,000 for the six months ended
March 31, 2009. Net loss for the six months ended March 31, 2010
was $(297,000), or $(0.05) per diluted share, as compared to net
loss of $(5,469,000), or $(0.92) per diluted share, for the six
months ended March 31, 2009. The results for the three and six
months ended March 31, 2009 include a $6.4 million goodwill and
trademark impairment charge.
As of March 31, 2010, the Company had $6,337,000 in net cash and
cash equivalents, an increase of $457,000, or 8 percent, compared
to December 31, 2009.
Commenting on the second quarter results, President and CEO Ken
Bero said, “While the quarterly loss was a disappointment, the
overall business climate seems to be improving. Monarch sales
showed a quarter on quarter increase which we haven’t seen for 18
months. Our channel sales remained strong throughout Q2 in both the
United States and in Europe, Middle East and Africa (EMEA). We had
several large customer orders for our new Monarch V10.5 product as
well as an increase to the training backlog. For our desktop
business, these indicators were positive. In addition, we had a
strong enterprise quarter.”
While revenues for the current quarter increased over those of
the first quarter of fiscal 2010, expenses did as well. “During the
second quarter, we ended our business management arrangement with
Avanquest for our EMEA Monarch business,” added Bero. “Over the
past year, we’ve analyzed the Avanquest management fee structure
and decided that the timing was right to bring this part of the
operation back in house and run it directly. In addition to the
non-recurring legal expenses related to the termination of this
contract, Datawatch incurred a substantial rate increase and second
quarter payment for Massachusetts state unemployment taxes for 2009
headcount reductions. The maximum payroll levels associated with
the increased tax levies were reached during the quarter. Finally,
Q2 expenses were impacted by our higher marketing spend along with
higher royalty and commission payouts.”
“We continue to proactively manage our business and its
expenses, implementing changes as necessary in order to quickly
return to profitability. We believe that the changes in EMEA
regarding our Monarch business are strategic, and will pay
dividends going forward. Finally, the Company has a solid, growing
cash position with no debt on the balance sheet.”
As previously announced, Datawatch will host a live webcast to
discuss its second quarter results today at 2:00 p.m. (EDT). The
webcast can be accessed at:
http://www.investorcalendar.com/IC/CEPage.asp?ID=157276. Please
register at least 15 minutes early to download any necessary audio
software. An archive of the broadcast will be available for 30 days
at the same location.
ABOUT DATAWATCH CORPORATION
Datawatch Corporation (NASDAQ-CM: DWCH), a leader in Business
Intelligence (BI), helps companies make better decisions and solve
business problems by simplifying access to and analysis of
information. Unique among BI vendors, Datawatch transforms the
massive amounts of data and documents generated inside or outside a
company into actionable insight, without any changes needed to
existing systems. Datawatch customers benefit from the right
information, in the right context, at the right time. More than
40,000 organizations worldwide rely on Datawatch products including
its market-leading Monarch report and data mining solutions.
Datawatch is based in Chelmsford, Mass., with offices in London,
Sydney and Manila. 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 net of any impairment
charges, 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 uncertainty of the current economic climate; risks associated
with fluctuations in quarterly operating results; Datawatch's
dependence on its principal products; risks associated with
international sales and operations; risks associated with
distributor sales; risks associated with acquisitions; an
unfavorable result in any litigation; market acceptance of new
products; dependence on the introduction of new products and
possible delays in those introductions. 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, 2009
and Form 10-Q for the quarter ended December 31, 2009. Any
forward-looking statements should be considered in light of those
factors.
© 2010 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.
DATAWATCH CORPORATION Condensed Consolidated Statements of
Operations Amounts in Thousands (except per share data) (Unaudited)
Three Months Ended Six
Months Ended March 31, March 31, 2010 2009
2010 2009 REVENUE:
Software licenses and subscriptions $ 2,593 $ 2,973 $ 4,759 $ 5,813
Maintenance and services 1,978 2,119
4,047 4,481 Total revenue 4,571 5,092
8,806 10,294 COSTS AND EXPENSES: Cost of software licenses
and subscriptions 648 531 1,222 1,061 Cost of maintenance and
services 747 834 1,506 1,707 Sales and marketing 1,588 1,854 3,135
3,515 Engineering and product development 710 585 1,419 1,298
General and administrative 970 1,018 1,806 2,184 Impairment of
goodwill and other intangibles - 6,401
- 6,401 Total costs and expenses
4,663 11,223 9,088 16,166
LOSS FROM OPERATIONS (92 ) (6,131 ) (282 ) (5,872 )
Other income, net of expenses 1 (7 ) (1
) 163 LOSS BEFORE INCOME TAXES (91 ) (6,138 )
(283 ) (5,709 ) Income tax (benefit) provision 6
(284 ) 14 (240 ) NET LOSS $ (97
) $ (5,854 ) $ (297 ) $ (5,469 ) Net loss per share - Basic
$ (0.02 ) $ (0.99 ) $ (0.05 ) $ (0.92 ) Net loss per share -
Diluted $ (0.02 ) $ (0.99 ) $ (0.05 ) $ (0.92 ) Weighted
Average Shares Outstanding - Basic 5,930 5,916
5,928 5,915 Weighted
Average Shares Outstanding - Diluted 5,930
5,916 5,928 5,915 DATAWATCH
CORPORATION Condensed Consolidated Balance Sheets Amounts in
Thousands (Unaudited) March 31, September 30,
2010 2009 Cash and cash equivalents $ 6,337 $ 5,649 Accounts
receivable, net 2,409 2,968 Prepaid expenses and other current
assets 520 405 Total current assets 9,266 9,022
Property and equipment, net 413 498 Intangible and other
assets, net 1,984 2,523 $ 11,663 $ 12,043
Accounts payable and accrued expenses $ 2,541 $ 2,676
Deferred revenue - current portion 3,822 3,719 Total
current liabilities 6,363 6,395 Total long-term liabilities
377 482 Total shareholders' equity 4,923 5,166
$ 11,663 $ 12,043
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