CHELMSFORD, Mass., April 25, 2013 /PRNewswire/ -- Datawatch
Corporation (NASDAQ-CM: DWCH), the leading global provider of
information optimization solutions, today announced that total
revenue for its second quarter ended March
31, 2013 was $6.83 million, an
increase of 4% from revenue of $6.55
million in the second quarter a year ago. License
revenue for the second quarter of fiscal 2013 was $4.30 million, an increase of 1% from the
$4.27 million recorded in the
comparable quarter a year ago. Net loss for the second
quarter of fiscal 2013 was $626,000,
or ($0.10) per diluted share,
compared to net income of $160,000,
or $0.02 per diluted share, for the
year ago period. Excluding the effects of the non-cash
amortization associated with the purchase of the Monarch
intellectual property in March 2012
as well as non-cash stock compensation costs, the Company's
non–GAAP net income for its second fiscal quarter of 2013 was
$390,000, or $0.06 per diluted share, compared to $354,000, or $0.05
per diluted share in the second fiscal quarter of 2012.
(Logo:
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"In the second quarter we continued to see proof that the
strategic initiatives and operational changes we put in place over
the past year are having a positive impact on our market
credibility and our pipelines," said Michael A. Morrison, President and Chief
Executive Officer of Datawatch. "The market acceptance of our
industry changing Information Optimization solutions coupled with
the expanding marketing alliances has resulted in a steady growth
of larger enterprise-wide opportunities. While we are pleased
to be engaged in these types of opportunities, they are more
complex and often have longer sales cycles. However, looking
forward, we are fully prepared to execute on these opportunities
and we anticipate a steady improvement in both close rates and deal
sizes throughout the remainder of the year."
Mr. Morrison added, "Of particular note is the level of activity
we are seeing in our partner recruitment and enablement
initiatives. We added eighteen new partners this quarter,
once again expanding our domain and channel capacity
globally. Even more importantly, we began to see our partners
make a meaningful contribution to our pipeline and to the growth of
our solutions strategy. We executed coordinated marketing
programs with several of our new partners this past quarter, and
these programs have yielded some very interesting opportunities. We
are encouraged by the progress we are making here and believe our
expanding partner ecosystem will be a catalyst for our growth over
the remainder of the year and well into the future."
Second Quarter Business Highlights
- Datawatch expanded its partner channel by adding 18 new
partners globally, including new partnerships with MarkLogic, the
enterprise NoSQL platform for Big Data applications; BI Inform, a
business intelligence service provider specializing in IBM Cognos
solutions; John Daniels Associates, a performance management
solution provider specializing in QlikTech and IBM Cognos
solutions; ASTA Systems LTD, a Big Data service provider in
Hong Kong; and PT Mitrasoft, an IT
solution provider in Indonesia.
- Datawatch replaced ASG DocuAnalyzer at three Fortune 100
companies, two major global financial institutions and one health
insurance provider, resulting in three significant six-figure
transactions.
- Datawatch released Datawatch Data Pump 11.6, which features
support for Hadoop and Hive to deliver Big Data support.
- Datawatch launched the Datawatch Unstructured Data Connector
for QlikView on the QlikTech QlikMarket, further solidifying the
partnership announced in late 2012.
Second Quarter Financial Highlights
- Cash and short-term investments were $9.68 million at March 31,
2013, up 8% from $8.94 million
at December 31, 2012 and up 37% from
$7.06 million at March 31, 2012.
- Gross margin for the second fiscal quarter of 2013 was 84.0%,
compared to 84.6% for the first fiscal quarter of 2013 and 79.5%
for the second fiscal quarter of 2012.
- Days sales outstanding were 57 days at March 31, 2013, compared to 61 days at
December 31, 2012 and 61 days at
March 31, 2012.
- There were 5 six-figure deals in the second fiscal quarter, as
compared to 4 six-figure deals in the second fiscal quarter of
2012.
- The average deal size in the second fiscal quarter was
$86,000, as compared to $70,000 in the second fiscal quarter of
2012.
Subsequent to the conclusion of the second quarter of 2012,
Datawatch announced that James
Eliason has joined the company as Chief Financial Officer
effective April 23, 2013.
"Datawatch continues to execute on the business model that was
implemented last year, with disciplined investment targeted to
accelerate revenue growth and strong cash management. In the
fiscal second quarter of 2013, we added nearly $800,000 to Datawatch's cash balances through
this balanced approach. We believe we are in a solid
financial position as we enter the second half of our fiscal 2013,"
said Mr. Morrison.
Investor Conference Call and Webcast
The senior
management of Datawatch will host a conference call and webcast to
discuss the second quarter results this afternoon, Thursday, April 25, 2013 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=170724. 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, 2012 and Form 10-Q for the quarter
ended December 31, 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:
Sarah
Bernardi
Datawatch Corporation
Sarah_Bernardi@datawatch.com
Phone: (978) 441-2200 ext. 8387
Twitter: @datawatch
© 2013 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.
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,
|
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
REVENUE:
|
|
|
|
|
|
|
|
|
|
Software licenses
|
|
$
4,297
|
|
$
4,274
|
|
$
8,627
|
|
$
8,483
|
|
Maintenance
|
|
2,300
|
|
1,861
|
|
4,633
|
|
3,577
|
|
Professional services
|
|
234
|
|
412
|
|
392
|
|
758
|
|
Total revenue
|
|
6,831
|
|
6,547
|
|
13,652
|
|
12,818
|
|
|
|
|
|
|
|
|
|
|
COSTS AND EXPENSES:
|
|
|
|
|
|
|
|
|
|
Cost
of software licenses
|
|
531
|
|
659
|
|
1,052
|
|
1,234
|
|
Cost
of maintenance and services
|
|
565
|
|
684
|
|
1,095
|
|
1,352
|
|
Sales and marketing
|
|
4,218
|
|
2,996
|
|
7,994
|
|
5,797
|
|
Engineering and product
development
|
|
749
|
|
690
|
|
1,602
|
|
1,318
|
|
General and administrative
|
|
1,246
|
|
1,213
|
|
2,437
|
|
2,180
|
|
Total costs and expenses
|
|
7,309
|
|
6,242
|
|
14,180
|
|
11,881
|
|
|
|
|
|
|
|
|
|
|
(LOSS) INCOME FROM OPERATIONS
|
|
(478)
|
|
305
|
|
(528)
|
|
937
|
Other expense
|
|
(154)
|
|
(118)
|
|
(317)
|
|
(109)
|
|
|
|
|
|
|
|
|
|
|
(LOSS) INCOME BEFORE INCOME
TAXES
|
|
(632)
|
|
187
|
|
(845)
|
|
828
|
Income tax (benefit) provision
|
|
(6)
|
|
27
|
|
3
|
|
65
|
|
|
|
|
|
|
|
|
|
|
NET
(LOSS) INCOME
|
|
$
(626)
|
|
$
160
|
|
$
(848)
|
|
$
763
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(loss) income per share - Basic
|
|
$
(0.10)
|
|
$
0.03
|
|
$
(0.13)
|
|
$
0.12
|
|
|
|
|
|
|
|
|
|
|
Net
(loss) income per share - Diluted
|
|
$
(0.10)
|
|
$
0.02
|
|
$
(0.13)
|
|
$
0.12
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares Outstanding -
Basic
|
|
6,428
|
|
6,221
|
|
6,403
|
|
6,192
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares Outstanding -
Diluted
|
|
6,428
|
|
6,677
|
|
6,403
|
|
6,555
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Disclosure - Reconciliation of Net
(Loss) Income to Net Income Excluding the Effects of Certain
Items:
|
|
|
|
|
|
|
|
|
|
|
GAAP Net (Loss) Income
|
|
$
(626)
|
|
$
160
|
|
$
(848)
|
|
$
763
|
Add-back Amortization of
Monarch IP
|
|
431
|
|
9
|
|
862
|
|
9
|
Add-back Share-Based
Compensation
|
|
585
|
|
185
|
|
1,162
|
|
333
|
|
|
|
|
|
|
|
|
|
|
Net income (non-GAAP)
|
|
$
390
|
|
$
354
|
|
$
1,176
|
|
$
1,105
|
|
|
|
|
|
|
|
|
|
|
Net income per share -
Basic
|
|
$
0.06
|
|
$
0.06
|
|
$
0.18
|
|
$
0.18
|
|
|
|
|
|
|
|
|
|
|
Net income per share -
Diluted
|
|
$
0.06
|
|
$
0.05
|
|
$
0.17
|
|
$
0.17
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares Outstanding -
Basic
|
|
6,428
|
|
6,221
|
|
6,403
|
|
6,192
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares Outstanding -
Diluted
|
|
6,841
|
|
6,677
|
|
6,869
|
|
6,555
|
DATAWATCH CORPORATION
|
Condensed Consolidated Balance
Sheets
|
Amounts in Thousands
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
September 30,
|
|
|
2013
|
|
2012
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$
9,680
|
|
$
8,722
|
Accounts receivable, net
|
|
4,142
|
|
4,391
|
Prepaid expenses and other current
assets
|
|
988
|
|
591
|
Total current assets
|
|
14,810
|
|
13,704
|
|
|
|
|
|
Property and equipment, net
|
|
288
|
|
281
|
Intangible and other assets,
net
|
|
7,899
|
|
8,820
|
|
|
|
|
|
|
|
$
22,997
|
|
$
22,805
|
|
|
|
|
|
|
|
|
|
|
Current portion of long-term
debt
|
|
$
900
|
|
$
900
|
Accounts payable and accrued
expenses
|
|
2,358
|
|
2,468
|
Deferred revenue - current
portion
|
|
6,114
|
|
6,295
|
Total current liabilities
|
|
9,372
|
|
9,663
|
|
|
|
|
|
Note
payable
|
|
3,062
|
|
2,983
|
Other long-term liabilities
|
|
441
|
|
465
|
Total long-term liabilities
|
|
3,503
|
|
3,448
|
|
|
|
|
|
Total shareholders' equity
|
|
10,122
|
|
9,694
|
|
|
|
|
|
|
|
$
22,997
|
|
$
22,805
|
SOURCE Datawatch Corporation