Current Report Filing (8-k)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported) April 20, 2015

Datawatch Corporation

(Exact Name of Registrant as Specified in Its Charter)

Delaware

(State or Other Jurisdiction of Incorporation)

000-19960	02-0405716
(Commission File Number)	(IRS Employer Identification No.)

Quorum Office Park
271 Mill Road
Chelmsford, Massachusetts	01824
(Address of Principal Executive Offices)	(Zip Code)

(978) 441-2200

(Registrant’s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

On April 21, 2015, Datawatch issued a press release reporting its financial results for its quarter ended March 31, 2015. A copy of the press release is attached as Exhibit 99.1 to this report and is incorporated herein by reference.

The information contained in this Item 2.02, including in Exhibit 99.1 attached hereto and incorporated herein by reference, is intended to be furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained herein and in the accompanying exhibits shall not be incorporated by reference into any filing with the U.S. Securities and Exchange Commission made by Datawatch, whether made before or after the date hereof, regardless of any general incorporation language in such filings.

Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

Ben Plummer has resigned as Chief Marketing Officer and Senior Vice President of Datawatch Corporation (the “Company”), effective May 1, 2015. His resignation is not due to a disagreement with the Company or any concerns relating to the Company’s operations, policies or practices. In connection with Mr. Plummer’s resignation, the Company will enter into an amendment to Mr. Plummer’s executive severance agreement with the Company dated as of October 1, 2012 (the “Executive Agreement”). Under the amended Executive Agreement, Mr. Plummer is entitled to a continuation of base salary for a period of nine months from the date of his termination, subject to his execution of a general release and compliance with the provisions of his Proprietary Information, Inventions and Non-Competition Agreement with the Company. In connection with the amended Executive Agreement, Mr. Plummer will enter into a consulting agreement with the Company to provide support on strategic initiatives for a nine-month period, beginning at the time of his resignation. As compensation for his consulting services, on April 20, 2015, the Company granted an award of 33,334 restricted stock units for shares of Datawatch common stock (“RSUs”) under the Datawatch Second Amended and Restated 2011 Equity Compensation and Incentive Plan to Mr. Plummer. Such RSUs provide for vesting in full as of January 31, 2016 subject to the completion of the contemplated consulting engagement.

A copy of the amendment to the Executive Agreement dated April 17, 2015 is attached hereto as Exhibit 10.1 and is incorporated herein by reference. The description of the Executive Agreement contained in this Current Report on Form 8-K is qualified in its entirety by reference to such document and to the original agreement as filed with the SEC as Exhibit 10.27 to the Company’s Form 10-K filed on December 17, 2013.

Item 5.07 Submission of Matters to a Vote of Security Holders

The Annual Meeting of Stockholders of Datawatch was held on April 20, 2015, at which the stockholders voted on the following matters:

The election of Richard de J. Osborne, Joan McArdle, Thomas H. Kelly, Terry W. Potter, Christopher T. Cox, David C. Mahoney and Michael A. Morrison, constituting all of the directors of Datawatch, to the Board of Directors to serve for the ensuing year or until their respective successors are duly elected and qualified; and

The ratification of the appointment of McGladrey LLP, Datawatch’s independent registered public accounting firm (“Auditor Ratification”).

Votes were cast as follows:

Director Nominee	Total Votes For		Total Votes Withheld		Broker Non-Votes
Richard de J. Osborne		5,612,967		674,009		3,641,172
Joan McArdle		5,623,067		663,909		3,641,172
Thomas H. Kelly		5,621,667		665,309		3,641,172
Terry W. Potter		5,622,766		664,210		3,641,172
Christopher T. Cox		5,622,167		664,809		3,641,172
David C. Mahoney		5,622,566		664,410		3,641,172
Michael A. Morrison		5,622,472		664,504		3,641,172

Proposal		Total Votes For				Total Votes Against				Abstentions				Broker Non-Votes
Auditor Ratification			9,890,368				25,825				11,955				3,641,172

Item 9.01 Financial Statements and Exhibits

(d)

Exhibits

The following Exhibit is furnished as part of this report:

Exhibit No.	Description

10.1	Letter Agreement by and between the Company and Ben Plummer, dated April 17, 2015.

99.1	Press release issued by Datawatch Corporation, dated April 21, 2015.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	DATAWATCH CORPORATION


	By:	/s/ James Eliason
	Name:	James Eliason
	Title:	Chief Financial Officer

Date: April 21, 2015

EXHIBIT INDEX

Exhibit No.	Description

10.1	Letter Agreement by and between the Company and Ben Plummer, dated April 17, 2015.

99.1	Press release issued by Datawatch Corporation, dated April 21, 2015.

Exhibit 10.1

April 17, 2015

Ben Plummer

Via Hand Delivery

Dear Ben:

In connection with the termination of your employment with Datawatch Corporation (the “Company”) as of Friday, May 1, 2015 (the “Separation Date”), you will be eligible to receive the severance benefits described in Paragraph 1 below if (a) you sign and deliver this letter agreement (“Agreement”) to me by Monday, May 11, 2015, and (b) do not revoke your signature within seven (7) days thereafter.

By signing and returning this Agreement and not revoking your acceptance, you will be entering into a binding agreement with the Company and will be agreeing to the terms and conditions set forth in the numbered paragraphs below, including the release of claims set forth in Paragraph 3 below. Therefore, you are advised to consult with an attorney of your own choosing before signing this Agreement and you have been given at least twenty-one (21) days to do so. If you sign this Agreement, you may change your mind and revoke your agreement during the seven (7) day period after you have signed it, as described more fully in Paragraph 16(vi) below. If you do not so revoke, this Agreement will become a binding agreement between you and the Company upon the expiration of the Revocation Period.

If you choose not to sign and return this Agreement by Monday, May 11, 2015, if you breach any of the terms of the Agreement prior to signing it, or if you revoke your signature during the Revocation Period, you shall not receive the severance benefits outlined in Paragraph 1 below from the Company and this offer and Agreement will become null and void. You will, however, receive payment on your termination for your final wages and any unused vacation time accrued through the Separation Date. Also, regardless of signing this Agreement, if eligible, you may elect to continue receiving group medical insurance pursuant to the federal “COBRA” law (the terms for that opportunity will be set forth in a separate written notice). Your eligibility to participate in any other employee benefit plans and programs of the Company ceases on the Separation Date. You may be eligible to apply for unemployment compensation.

In addition, the terms of the October 2, 2012 Proprietary Information, Inventions and Non-Competition Agreement (the “Non-Competition Agreement”) which you signed as a condition of your employment with the Company, shall continue in full force and effect regardless of whether you enter into this Agreement.

With those understandings, the following numbered paragraphs set forth the terms and conditions which will apply if you timely sign and return this Agreement and do not revoke it within the Revocation Period:

Severance Benefits - If you timely sign, return, and do not revoke this Agreement, and if you comply fully with its terms, the Company will:

(A) provide you with payments in equal semi-monthly installments at your semi-monthly base salary rate ($12,500.00 for a period of nine months (the “Severance Pay”);

(B) if you elect continuing COBRA health insurance coverage, continue its present level of contribution to the payment of your medical and dental insurance premiums (the “Benefits Continuation”) through the earlier of January 31, 2016, (ii) your acceptance of employment with another individual or entity, or (iii) your becoming eligible for medical benefits under any plan covering a member of your immediate family. You agree that in the event that either (B) or (C) occurs prior to January 31, 2016, you will immediately so notify Brigid MacDonald at the Company; and

Severance Pay shall commence on the first payroll date following the Effective Date. All Severance Pay under this paragraph shall be made in accordance with the Company’s customary payroll practices and shall be subject to all applicable federal and state withholding, payroll and other taxes.

Receipt of Compensation - You acknowledge and agree that as of the Separation Date, your employment, positions, officerships, and all other affiliations with the Company will end. You further acknowledge and agree that you are not owed any wages, bonuses, commissions, vacation time, severance pay, expense reimbursements, compensation or benefits from the Company other than the compensation and benefits expressly referenced in this Agreement. You further acknowledge and agree that you have received all leave or other time off under the Family Medical Leave Act and any other leave or disability laws to which you were entitled, and that you have not suffered from any workplace injuries or illnesses during your employment with the Company.

General Release - In consideration of the payment of the Severance Pay, and Benefits Continuation (collectively, the “Severance Benefits”), which you acknowledge you would not otherwise be entitled to receive, you hereby voluntarily and unconditionally release and forever discharge the Company, its affiliates, parent companies, subsidiaries, predecessors, successors and assigns, and all of their respective current and former officers, directors, stockholders, employees, agents, representatives, plan administrators, attorneys, insurers and fiduciaries (each in their individual and corporate capacities) (hereinafter, the “Released Parties”) generally from any and all claims, charges, complaints, demands, actions, causes of action, suits, rights, debts, sums of money, costs, accounts, reckonings, covenants, contracts, agreements, promises, doings, omissions, damages, executions, obligations, liabilities, and expenses (including attorneys’ fees and costs), of every kind and nature (collectively, “Claims”), which you ever had or now have against the Released Parties, as of the date you sign this Agreement. This release includes, without limitation, all Claims:

relating to your employment by the Company;

relating to the termination of your employment with the Company;

for wrongful discharge, defamation, breach of privacy, intentional infliction of emotional distress, or any other tort or under common law;

for breach of contract, express or implied;

for violation of public policy, or alleged whistleblower activity;

relating to harassment, discrimination, retaliation, and/or civil rights;

for compensation, salary, wages, bonuses, commissions, overtime, expense reimbursement, incentive compensation, stock, stock options, vacation pay or any other compensation or benefits, including any claim conferred by or arising under any state, federal or local law, including M.G.L. ch. 149 ¶¶148 and 150 (also known as the Massachusetts Wage Act); the Arizona Wage Act, the Arizona Minimum Wage Act, or any other state, federal or local wage and hour laws;

for damages or other remedies of any sort, including, without limitation, compensatory damages, punitive damages, injunctive relief and attorney’s fees; and

Claims otherwise conferred by or arising under any federal, state, and/or municipal law including but not limited to Title VII of the Civil Rights Act, the Equal Pay Act, 42 U.S.C. §1981, the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, the Americans With Disabilities Act, the Family and Medical Leave Act, the Rehabilitation Act, the Worker Adjustment and Retraining Notification Act, the Employee Retirement Income Security Act, the Massachusetts Fair Employment Practices Act, the Massachusetts Civil Rights Act, the Massachusetts Equal Rights Act, the Arizona Employment Protection Act, the Arizona Civil Rights Act, the Arizona Equal Pay Act, the Arizona Occupational Health and Safety Act, Arizona Right to Work Act, Arizona Drug Testing of Employees Act, Arizona Medical Marijuana Act, and similar provisions under the laws of the Commonwealth of Massachusetts, the State of Arizona or any other state or municipality, all as amended.

Notwithstanding the foregoing, this release of claims shall not be construed to impair your right to enforce the terms of this Agreement or to file, comply with or participate in an investigation or proceeding instituted by the Equal Employment Opportunity Commission or any applicable state anti-discrimination agency (except that you acknowledge that you hereby waive any right to recover any monetary benefits in connection with any such claim, charge or proceeding).

As a material inducement to the Company to enter into this Agreement, you represent that you have not assigned to any third party and you have not filed with any agency or court any Claim released by this Agreement. You further acknowledge and agree that you have waived any relief available to you (including without limitation, monetary damages, equitable relief and reinstatement) under any of the Claims referenced in this Paragraph 3.

Return of Company Property - You confirm that you have returned to the Company all Company-owned property in your possession and control, including, without limitation, all keys, files, documents and records (and copies thereof), equipment (including, but not limited to, computer hardware, software and printers, wireless handheld devices, cellular phones, etc.), Company identification and Company vehicles, and that you have left intact all electronic records and other Company documents, including, but not limited to, those that you developed or helped to develop during your employment. You further confirm that you have cancelled all accounts for your benefit, if any, in the Company’s name, including, but not limited to, credit cards, telephone charge cards, cellular phone and/or and computer accounts.

Non-Disparagement - You agree not to make any statement, written or oral, or cause any encourage others to make any statements, written or oral, that defame, disparage or in any way criticize the reputation, practices, products, services, business prospects, or conduct of the Company, its current or former officers, directors, shareholders, employees or agents, or any other affiliated party involved in a business relationship with the Company. This obligation extends to statements, written or oral, made in any manner (including email and social media) to anyone, including but not limited to, to the new media , investors, potential investors, any board of directors or advisory board or directors, industry analysts, competitors, strategic partners, vendors, employees (past and present) and clients.

Compliance with Non-Competition Agreement - By signing this Agreement, you confirm the existence and continued validity of the Non-Competition Agreement, and represent and warrant that you have fully complied with all terms of the Non-Competition Agreement to date and that you will continue to do so going forward, in accordance with its terms.

Cooperation - You hereby agree to provide any and all necessary assistance to and cooperation with the Company if called upon by it with regard to: (a) the transition of your job responsibilities at the Company, and (b) any lawsuit, claim, action, investigation, administrative review or otherwise that may be brought by a third party against the Company and which may involve facts or knowledge of which you may be aware as a result of your employment or position with the Company.

Consequences of Breach - You understand and agree that the Company may terminate your eligibility for the Severance Benefits if you violate this Agreement, and that the Company shall further have the right to recover from you any Severance Pay or Benefits Continuation paid to you or on your behalf during any time periods following the commencement of any such breach. You further agree that a breach of Paragraphs 3, 4, 5, 6, 7 and/or 8 herein would result in irreparable harm to the Company and that money damages would not provide an adequate remedy. Therefore, you agree that in addition to any other rights that it may have, the Company shall have the right to specific performance and injunctive relief in the event you breach any of those Paragraphs of this Agreement, as well as to an award of its attorneys’ fees in connection with its efforts to enforce its rights under this Agreement.

Compliance with Section 409A - The Severance Benefits shall be subject to and compliant with any requirements provided under Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”). The Company shall have no liability to you or any other person if the payments and benefits provided that are intended to be exempt from or compliant with Section 409A are not so exempt or compliant.

10.

Amendment/Waiver - This Agreement may not be modified in any manner, except by an instrument in writing of concurrent or subsequent date signed by you and by a duly authorized representative of the Company. No delay of omission by the Company in exercising any right under this Agreement shall operate as a waiver of that or any other right. No waiver of any provision of this Agreement shall be effective unless made in writing and signed by a duly authorized representative of the waiving party. A waiver or consent given by the Company on any once occasion shall be effective only in that instance and shall not be construed as a bar to or wavier or any right on any other occasion.

11.

Absence of Reliance - In signing this Agreement, you affirm that no other promises or representations of any kind have been made to you by any person or entity whatsoever to cause you to sign this Agreement, and that are not relying upon any promises, statements or representations made by anyone at or on behalf of the Company, except as set forth expressly in the Agreement.

12.

Validity; Interpretation - Should any provision of this Agreement be declared or be determined by any court of competent jurisdiction to be illegal or invalid, the validity of the remaining parts, terms or provisions shall not be affected thereby and said illegal or invalid part, term or provision shall enforced to the fullest extent possible, with the remaining invalid portions deemed not to be a part of this Agreement. In the event of any dispute, this Agreement will be construed as a whole, will be interpreted in accordance with its fair meaning, and will not be construed strictly for or against either you or the Company.

13.

Non-admission - This Agreement is a severance agreement and shall not be construed as an admission of any liability by the Company to you or of any act of wrongdoing by the Company. The Company specifically disclaims that it or any of its representatives has engaged in any wrongdoing or has taken any action that would be the basis for any finding of liability. This Agreement may not be used as evidence in any proceeding of any kind, except a proceeding in which one of the parties alleges a breach of the terms of this Agreement or a proceeding in which one of the parties elects to use this Agreement as a defense to any claim.

14.

Applicable Law - This Agreement shall be interpreted and construed by the laws of the Commonwealth of Massachusetts, without regard to conflict of laws provisions. You hereby irrevocably submit to and acknowledge and recognize the exclusive jurisdiction of the courts of the Commonwealth of Massachusetts, or if appropriate, a federal court located in Massachusetts (which courts, for purposes of this Agreement, are the only courts of competent jurisdiction), over any suit, action or other proceeding arising out of, under or in connection with this Agreement or the subject matter hereof.

15.

Entire Agreement - This Agreement constitutes the entire agreement between you and the Company. This Agreement supersedes any previous agreements or understandings between you and the Company (including but not limited to the September 2012 letter agreement between you and the Company), provided that the Non-Competition Agreement shall survive execution of this Agreement and remain in full force and effect, and the Stock Agreements shall survive execution of this Agreement and remain in full force and effect except as expressly modified by Paragraph 1(C) herein.

16.

Time for Consideration; Effective Date - This Agreement is intended to comply with the Older Workers’ Benefit Protection Act of 1990 (“OWBPA”) with regard to your waiver and release of rights and/or claims under the Age Discrimination in Employment Act of 1967 (“ADEA”). To that end, you agree and acknowledge as follows:

i. You are specifically waiving rights and claims under the ADEA.

ii. You understand that rights or claims under the ADEA which may arise after the date this Agreement is executed are not waived by you.

iii. You are receiving consideration in addition to what you would otherwise be entitled.

iv. You have been advised to consult with or seek advice from an attorney of your choosing before executing this Agreement.

v. You acknowledge that you have had a period of twenty-one (21) days to consider the decision to enter into this Agreement. You also understand and agree that any changes to this letter agreement, whether material or immaterial, will not restart the 21-day review period.

vi. You may revoke your acceptance of this Agreement in the seven (7) day period following the date on which you sign the Agreement (the “Revocation Period”). Notice of revocation must be in writing, and delivered to the Company’s Acting Vice President of Human Resources, within the Revocation Period. This Agreement will not become effective or enforceable until the Revocation Period has expired. This Agreement shall become effective on the first business day following the expiration of the Revocation Period (the “Effective Date”).

17.

Counterparts - This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be taken to be an original, but all of which together shall constitute one and the same document. Facsimile and pdf signatures shall be deemed to have the same legal effect as originals. This Agreement shall be binding upon and inure to the benefit of the parties, their heirs, administrators, representatives, executors, successors, and assigns.

If you have any questions about the matters covered in this Agreement, please contact me at (978) 275-8215.

	Very truly yours,

	DATAWATCH CORPORATION.

	By:
		Brigid MacDonald
		Vice President, Human Resources

I hereby voluntarily and knowingly agree to the terms and conditions set forth above. I have been given at least twenty-one (21) days to consider this Agreement, I understand it fully, and I have voluntarily chosen to execute this on the date below. I intend that this Agreement become a binding agreement between me and the Company if I do not revoke my acceptance in seven (7) days.

		Date
Employee Name: Ben Plummer

To be returned no later than the close of business on Monday, May 11, 2015.

Exhibit 99.1

Datawatch Announces Second Quarter 2015 Financial Results

Chelmsford, Mass.—April 21, 2015—Datawatch Corporation (NASDAQ-CM: 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 ($0.51) 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 ($0.29) 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-CM: 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.

# # #

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

© 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 March 31,						Six Months Ended 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	$	(0.51	)	$	(0.70	)	$	(3.80	)	$	(1.37	)
Net loss per share - Diluted	$	(0.51	)	$	(0.70	)	$	(3.80	)	$	(1.37	)
Weighted Average Shares Outstanding - Basic		11,340			9,566			11,237			9,041
Weighted Average Shares Outstanding - Diluted		11,340			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	$	(0.29	)	$	(0.29	)	$	(0.45	)	$	(0.53	)
Net (loss) income per share - Diluted	$	(0.29	)	$	(0.29	)	$	(0.45	)	$	(0.53	)
Weighted Average Shares Outstanding - Basic		11,340			9,566			11,237			9,041
Weighted Average Shares Outstanding - Diluted		11,340			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