Datawatch Corporation (Nasdaq:DWCH), a leading global provider of
self-service data preparation and visual data discovery solutions,
today announced that total revenue for its second fiscal quarter of
2015 ended March 31, 2015 was $7.46 million, a decrease of 7% from
revenue of $8.00 million in the second quarter a year ago and an
increase of 7% from revenue of $6.96 million in the first fiscal
quarter. License revenue for the second quarter of fiscal 2015 was
$3.91 million, a decrease of 11% from the $4.38 million recorded in
the comparable quarter a year ago and an increase of 23% from the
$3.18 million recorded in the first fiscal quarter. Net loss for
the second quarter of fiscal 2015 was ($5.81) million, or ($0.50)
per diluted share, compared to a net loss of ($6.74) million, or
($0.70) per diluted share, for the year ago period. Excluding the
effects of the non-cash amortization associated with the purchase
of certain intellectual property and other intangible assets,
non-cash stock compensation costs, and severance costs, the
Company's non–GAAP net loss for its second fiscal quarter of 2015
was ($3.25) million, or ($0.28) per diluted share, compared to net
loss of ($2.78) million, or ($0.29) per diluted share in the second
fiscal quarter of 2014.
"As we detailed last quarter, we remain laser focused on
improving our sales execution, creating broader market awareness
for our highly differentiated platform offering and delivering
continuous product innovation," said Michael A. Morrison, president
and chief executive officer of Datawatch. "With regard to market
awareness, Datawatch's inclusion in Gartner's 2015 Magic Quadrant
for Business Intelligence and Analytics Platforms, which was
released by Gartner in late February, was a milestone for Datawatch
and has already generated growing inbound interest."
Mr. Morrison added, "Equally important, at the end of the
quarter, Datawatch announced the highly-anticipated latest release
of our Managed Analytics Platform, the only solution in the market
that provides data preparation capabilities tightly integrated with
real-time visual data discovery, as well as data preparation as a
stand-alone offering. With this latest release, Datawatch is now
the only vendor that can scale from individual analysts using
self-service data preparation and visualizations on their desktops
all the way up to the enterprise – not just with structured data
but with multi-structured data as well, where the growth in data
volumes is 'unprecedented' according to Gartner."
"Our work to realign the go-to-market organization to focus the
direct selling force on vertical industries, create a more robust
inside selling machine and target the partner program to highly
qualified managed analytics opportunities began to gain traction
last quarter. The response from the publication of the Gartner
Magic Quadrant and to our new Managed Analytics Platform release
has brought positive attention to what we believe is our compelling
product differentiation and we intend to capitalize on this rising
market interest."
James L. Eliason, chief financial officer, commented,
"Continuing the efforts we began in Q1 to rebalance investments to
match the go-to-market model, we reduced the workforce at the end
of the second quarter by nearly 15%. This action resulted in a
severance charge in the second fiscal quarter of $1.2 million and
will lower our operating expenses by approximately $4 million on an
annualized basis."
Second Quarter 2015 Business Highlights
- Datawatch was positioned for the first time in Gartner's 2015
Magic Quadrant for Business Intelligence and Analytic Platforms,
the only new vendor in 2015 to debut in this prestigious
research.
- Datawatch launched the Managed Analytics Platform for
self-service data preparation and visual data discovery, extending
its technology leadership in delivering self-service data
preparation and visualization for individual analysts through to
the enterprise, while embracing the most challenging
multi-structured data sets.
- Datawatch added new customers and expanded a number of customer
engagements globally through its focused self-service data
preparation and visualization sales approach, including Nomura,
HSBC, PricewaterhouseCoopers, State of Wisconsin, Thomas Cook and
Partners Healthcare.
- Datawatch was named to KMWorld Magazine's "100 Companies that
Matter in Knowledge Management" for the fourth year running.
Second Quarter 2015 Financial Highlights
- Cash and short-term investments were $38.49 million at March
31, 2015, down 11% from $43.19 million at December 31, 2014 and
down 28% from $53.92 million at March 31, 2014.
- Gross margin (excluding IP amortization expense) for the second
fiscal quarter of 2015 was 83%, compared to 85% for the first
fiscal quarter of 2015 and 88% for the second fiscal quarter of
2014.
- Days sales outstanding were 69 days at March 31, 2015, compared
to 81 days at December 31, 2014 and 57 days at March 31, 2014.
- There were 5 six-figure deals in the second fiscal quarter
compared to 9 six-figure deals in the second fiscal quarter of 2014
and 4 six-figure deals in the first fiscal quarter.
- The average deal size in the second fiscal quarter was $31,000
as compared to $44,000 in the second fiscal quarter of 2014.
Subsequent to the end of the quarter, Ben Plummer, chief
marketing officer and senior vice president of strategic
alliances, announced his resignation from the company. Dan Potter,
currently vice president of product marketing, has been appointed
Chief Marketing Officer. Said Mr. Morrison, "Ben has made
significant contributions to Datawatch since he joined us in 2012.
He's helped shape our message, and built a comprehensive marketing
program that has raised our visibility substantially in the visual
data discovery space. He was pivotal in spearheading our
acquisition of Panopticon in 2013, a move that added visualizations
to Datawatch's existing self-service data preparation technology
and enabled our move into managed analytics. We are very grateful
for Ben's leadership and insights and wish him all the best moving
forward. We are confident in Dan's ability to build upon our strong
market trajectory as he brings a successful track record running
marketing teams for companies including IBM, Oracle and Progress
Software."
Conference Call
Datawatch's second quarter of fiscal year 2015 earnings
conference call will take place on Wednesday, April 22, 2015 at
8:30 a.m. Eastern Time. To access the conference call, the
toll-free dial in number is (877) 407-0782. Internationally, the
call may be accessed by dialing (201) 689-8567. The conference call
will be broadcast live on the Internet at:
http://www.investorcalendar.com/IC/CEPage.asp?ID=173742. It is
recommended that listeners register to participate and download any
necessary audio software from the website 15 minutes prior to the
scheduled call. An archived replay of the broadcast will be
available for 30 days at the same location.
About Datawatch Corporation
Datawatch Corporation (Nasdaq:DWCH) provides the only managed
analytics platform to leverage any data at any speed – delivering
valuable insights for improving business. The unique ability to
acquire, prepare, and transform data from structured and
multi-structured sources such as PDF and log files, as well as
real-time streaming data, into visually rich analytic applications
allows users to dynamically discover key factors that impact any
operational aspect of their business. This ability to perform
visual discovery against any data at any speed sets Datawatch apart
in the big data and visualization markets. Organizations of every
size, worldwide use Datawatch products, including 93 of the Fortune
100. Datawatch is headquartered in Chelmsford, Massachusetts with
offices in New York, London, Frankfurt, Stockholm, Singapore,
Melbourne and Manila, and with partners and customers in more than
100 countries worldwide. See the Whole Story for yourself by
downloading the free trial at www.datawatch.com/free-trial.
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 long sales cycle with
enterprise customers and the size and timing of large customer
orders; risks associated with acquisitions, including the
acquisition and integration of Panopticon; the risk that our
goodwill resulting from acquisitions may become impaired and
require a write-down; limitations on the effectiveness of internal
controls; rapid technological change; Datawatch's dependence on the
introduction of new products and product enhancements and possible
delays in those introductions; competition in the software industry
generally, and in the markets for next generation analytics in
particular; Datawatch's dependence on its principal products,
proprietary software technology and software licensed from third
parties; Datawatch's concentration of customers in the financial
sector; risks associated with international sales and operations;
risks associated with indirect distribution channels and
co-marketing arrangements, many of which were only recently
established; the adequacy of Datawatch's sales returns reserve;
risks associated with a subscription sales model; 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, security breach 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, 2014 and Form 10-Q for the quarter ending
December 31, 2014. Any forward-looking statements should be
considered in light of those factors.
© 2015 Datawatch Corporation. Datawatch and the Datawatch logo
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.
-- Financial tables to follow --
|
|
|
|
|
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, |
|
2015 |
2014 |
2015 |
2014 |
|
|
|
|
|
REVENUE: |
|
|
|
|
Software licenses |
$ 3,911 |
$ 4,375 |
$ 7,086 |
$ 9,807 |
Maintenance |
3,296 |
3,127 |
6,705 |
6,121 |
Professional services |
255 |
498 |
632 |
881 |
Total revenue |
7,462 |
8,000 |
14,423 |
16,809 |
|
|
|
|
|
COSTS AND EXPENSES: |
|
|
|
|
Cost of software licenses |
721 |
1,024 |
1,596 |
2,014 |
Cost of maintenance and
services |
1,084 |
634 |
1,962 |
1,483 |
Sales and marketing |
6,802 |
7,573 |
14,790 |
14,957 |
Engineering and product
development |
2,187 |
2,513 |
4,710 |
4,888 |
General and administrative |
2,434 |
2,147 |
4,575 |
4,816 |
Impairment of goodwill and long
lived intangible assets |
-- |
-- |
32,009 |
-- |
Total costs and expenses |
13,228 |
13,891 |
59,642 |
28,158 |
|
|
|
|
|
LOSS FROM OPERATIONS |
(5,766) |
(5,891) |
(45,219) |
(11,349) |
Other expense |
(11) |
(1,169) |
(2) |
(1,326) |
|
|
|
|
|
LOSS BEFORE INCOME TAXES |
(5,777) |
(7,060) |
(45,221) |
(12,675) |
Benefit for income taxes |
(32) |
323 |
2,536 |
323 |
|
|
|
|
|
NET LOSS |
$ (5,809) |
$ (6,737) |
$ (42,685) |
$ (12,352) |
|
|
|
|
|
Net loss per share - Basic |
$ (0.50) |
$ (0.70) |
$ (3.80) |
$ (1.37) |
Net loss per share -
Diluted |
$ (0.50) |
$ (0.70) |
$ (3.80) |
$ (1.37) |
Weighted Average Shares
Outstanding - Basic |
11,557 |
9,566 |
11,237 |
9,041 |
Weighted Average Shares
Outstanding - Diluted |
11,557 |
9,566 |
11,237 |
9,041 |
|
|
|
|
|
Non-GAAP Disclosure - Reconciliation of Net
Loss to Net Loss Excluding the Effects of Certain Items: |
|
|
|
|
|
|
|
|
|
GAAP Net Loss |
$ (5,809) |
$ (6,737) |
$ (42,685) |
$ (12,352) |
Add-back Impairment of Goodwill
& Long-Lived Assets |
-- |
-- |
32,009 |
-- |
Add-back Amortization of
Intangibles & IP |
570 |
870 |
1,438 |
1,740 |
Add-back Share-Based
Compensation |
798 |
2,100 |
2,539 |
4,818 |
Add-back Severance &
Unamortized Debt Discount |
1,193 |
983 |
1,611 |
1,003 |
Subtotal of additions |
2,561 |
3,953 |
37,597 |
7,561 |
|
|
|
|
|
Net (Loss) Income (non-GAAP) |
$ (3,248) |
$ (2,784) |
$ (5,088) |
$ (4,791) |
Net (loss) income per share -
Basic |
$ (0.28) |
$ (0.29) |
$ (0.45) |
$ (0.53) |
Net (loss) income per share -
Diluted |
$ (0.28) |
$ (0.29) |
$ (0.45) |
$ (0.53) |
Weighted Average Shares
Outstanding - Basic |
11,557 |
9,566 |
11,237 |
9,041 |
Weighted Average Shares
Outstanding - Diluted |
11,557 |
9,566 |
11,237 |
9,041 |
|
|
|
|
|
|
|
|
DATAWATCH CORPORATION |
Condensed Consolidated Balance
Sheets |
Amounts in Thousands |
(Unaudited) |
|
|
|
|
|
|
|
March 31, |
September 30, |
|
2014 |
2014 |
|
|
|
Cash and cash equivalents |
$ 38,487 |
$ 47,668 |
Accounts receivable, net |
6,290 |
7,024 |
Prepaid expenses and other current
assets |
1,924 |
1,633 |
Total current assets |
46,701 |
56,325 |
|
|
|
Property and equipment, net |
662 |
400 |
Intangible and other assets, net |
15,180 |
46,872 |
|
|
|
|
$ 62,543 |
$ 103,597 |
|
|
|
|
|
|
Accounts payable and accrued expenses |
$ 4,386 |
$ 3,809 |
Deferred revenue - current portion |
6,764 |
7,401 |
Deferred tax liability- current portion |
239 |
239 |
Total current liabilities |
11,389 |
11,449 |
|
|
|
Other long-term liabilities |
477 |
1,238 |
Total long-term
liabilities |
477 |
1,238 |
|
|
|
Total shareholders' equity |
50,677 |
90,910 |
|
|
|
|
$ 62,543 |
$ 103,597 |
|
|
|
CONTACT: 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
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