-- Provides
Update on Strategic Review of Alternatives Process --
BEDFORD, Mass., Nov. 02, 2016
(GLOBE NEWSWIRE) -- Datawatch
Corporation (NASDAQ-CM:DWCH), a leading global provider of
self-service data preparation and fast data analytics solutions,
today announced that total revenue for its fourth quarter of fiscal
2016 ended September 30, 2016 was $8.60 million, an increase of 17%
from the $7.40 million recorded in the third quarter of fiscal
2016, and an increase of 7% from total revenue of $8.02 million in
the fourth quarter of fiscal 2015. License revenue for
the fourth quarter of fiscal 2016 was $4.76 million, a 30% increase
from the $3.67 million recorded in the prior quarter this fiscal
year, and a 16% increase from the $4.10 million recorded in the
same quarter a year ago. Deferred revenue as of September 30,
2016 was $9.9 million, compared to $8.6 million as of September 30,
2015.
Net loss for the fourth quarter of
fiscal 2016 was ($1.9) million, or ($0.16) per diluted share,
compared to a net loss of ($2.98) million, or ($0.26) 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, and non-cash
stock compensation costs, the Company's non-GAAP net loss for its
fourth quarter of fiscal 2016 was ($0.75) million, or ($0.06) per
diluted share, compared to a non-GAAP net loss of ($1.70) million,
or ($0.15) per diluted share, for the fourth quarter of fiscal
2015.
Total revenue for fiscal 2016 was
$30.46 million, a 1% increase from revenue of $30.22 million for
fiscal 2015. License revenue for fiscal 2016 was $15.22
million, a 1% decrease compared to $15.30 million for fiscal 2015.
Net loss for 2016 was ($14.63) million, or ($1.24) per
diluted share, as compared to a net loss of ($49.79) million or
($4.38) per diluted share, for fiscal 2015, a period that included
a non-cash charge for impairment of goodwill of approximately $32
million. The Company's non-GAAP net loss for fiscal year 2016
was ($7.82) million, or ($0.66) per diluted share, as compared to
non-GAAP net loss of ($10.46) million, or ($0.92) per diluted
share, for fiscal 2015.
"I am pleased with the improvement
in sales execution that we delivered during the fourth fiscal
quarter," said Michael A. Morrison, president and chief executive
officer of Datawatch. "We've been laying a foundation for
better results through improved execution since we introduced
Monarch for self-service data preparation five quarters ago. The
organizational changes, new sales processes and heightened forecast
discipline introduced by Ken Tacelli, who joined us to become
senior vice president of worldwide sales during Q3, combined to
produce solid results this past quarter."
Mr. Morrison continued, "We had a
particularly strong quarter with the 'expand' aspect of our 'land
and expand' strategy, expanding deployments in 58 'land' customers
during the quarter, more than our total expands in the first three
quarters of the fiscal year. We are encouraged by the market
reception for our next generation self-service data preparation
solution, both from our heritage customers as well as from many new
customers. We are seeing specific interest in Monarch
being deployed as the core of analytic solutions that deliver
measurable ROI in industries such as financial services,
healthcare, retail and the public sector."
Mr. Morrison concluded, "During
the fourth fiscal quarter, we announced two major, innovative
product releases that allow us to address the evolving Big Data and
fast data analytics needs of business analysts, data scientists and
IT users. The latest release of Monarch includes support for
additional data sources, including Google Analytics and Salesforce,
new export integrations, including Microsoft Power BI, and advanced
data preparation features for very large data sets. The
latest release of Panopticon is the most significant since the
original launch of the product, and expands upon Datawatch's
approach to fast data analytics with a Web client architecture that
supports the most challenging real-time visualization requirements
for data in motion."
James L. Eliason, chief financial
officer, commented, "We reduced our non-GAAP operating loss in the
fiscal fourth quarter to $751,000, the first time our quarterly
non-GAAP loss was less than $1 million in the past 12
quarters. We continue to manage our expenses toward our goal
of achieving operating profitability, and we continue to manage our
balance sheet in a disciplined manner, with deferred revenue at an
all-time high, accounts receivables in good shape, and $28 million
in cash and equivalents."
Transition
to Subscription Sales
In the third quarter of fiscal
2015, Datawatch changed its pricing practice for Monarch,
transacting the majority of small volume orders on a subscription
basis only, rather than a perpetual license basis. The total
value over the life of the subscription is recorded as bookings,
and only the ratable portion of the annual subscription fee earned
in the quarter sold is treated as revenue in that quarter.
The balance is deferred and recorded as revenue over the life
of the subscription. This lowers current reported
revenue, but builds deferred revenue that will be recorded as
revenue over the life of the subscription. Since subscription
sales include maintenance, current maintenance revenue will be
reduced somewhat as a result.
Fourth
Quarter Fiscal 2016 Business Highlights
- Harley Davidson, one of the most
recognized brands for custom, cruiser and touring motorcycles,
became one of the first joint customers of Datawatch Monarch and
IBM Watson Analytics for self-service data preparation and
automated data analysis, automatic visualization and predictive
analysis.
- Datawatch increased its presence in
state and local governments, with sales of Monarch for self-service
data preparation to the Texas Department of Criminal Justice,
Jacksonville Transportation Authority, California Department of
Housing, State of Michigan and New York State Office of the
Comptroller.
- Datawatch extended its reach in the
United States Air Force with expanded sales of Monarch to Hill Air
Force Base, Bagram Airfield, Randolph Air Force Base, Minot Air
Force Base and Creech Air Force Base.
- HSBC, one of the world's largest
banking and financial institutions, extended its commitment to
Datawatch by selecting Panopticon for surveillance visual
analytics.
- Datawatch expanded self-service data
preparation deployments for analytic solutions in healthcare at
leading institutions including Memorial Sloan-Kettering, New
England Baptist, Cook Children's Hospital, Health First, Baptist
Health and Northwell Health.
Fourth
Quarter Fiscal 2016 Financial Highlights
- Cash and short-term investments were
$28.0 million at September 30, 2016, down from $28.8 million at
June 30, 2016 and $35.2 million at September 30, 2015.
- Gross margin (excluding IP
amortization expense) for the fourth quarter of fiscal 2016 was
92%, as compared to 90% for the fourth quarter of fiscal 2015.
- Days sales outstanding were 68 days
at September 30, 2016, compared to 75 days at September 30,
2015.
- There were 8 six-figure deals in the
fourth quarter this fiscal year, the same as in the fourth quarter
of fiscal 2015.
- The average deal size in the fourth
quarter of fiscal 2016 was $36,000, a decrease from $50,000 in the
fourth quarter of fiscal 2015, primarily due to the increase in the
number of 'land' deals year over year.
- Deferred revenue reached $9.9
million at September 30, 2016, the highest in the company's
history, and a 15% increase from $8.6 million at September 30,
2015.
Strategic
Review of Alternatives Process Update
Datawatch also announced today
that the Special Committee of its Board of Directors recently
concluded the previously-announced review of its strategic
alternatives with the assistance of its financial advisor,
Canaccord Genuity, and its legal counsel, Choate, Hall &
Stewart.
Following a comprehensive review
process commenced in July 2016, the Special Committee recommended
to the full Board that it was in the best interests of the Company
and its shareholders for Datawatch to execute on an updated and
enhanced strategic plan for fiscal 2017 as an independent company,
and the Board unanimously accepted the Committee's
recommendation.
"We engaged in a thorough process
and carefully considered a wide variety of alternatives," said
Michael A. Morrison, president and chief executive officer of
Datawatch. "At the conclusion of this process, and considering the
improved results the company reported in its fourth quarter of
fiscal 2016, we believe we can best maximize long-term shareholder
value by pursuing a new plan designed to capitalize on the growth
opportunity in the market. We intend to build upon the recent
successes we have demonstrated within the overall self-service data
preparation space, capitalizing on the competitive differentiation
of our market-leading technology and the next generation Monarch
server for 'data socialization', the vision for which we announced
today, while exerting tight control over expenses to achieve our
target of reaching operating profitability by the end of fiscal
2017."
Added Richard D. Osborne, chairman
of the Board and of the special committee, "The Special Committee
and its advisors looked at many strategic options, but in the end,
we believe that the company's enhanced business plan offers greater
potential for shareholder value creation than any other
alternatives. The clear momentum established last quarter
continues, and we have renewed confidence in Datawatch's ability to
produce improved market performance and execute on a range of
initiatives to reduce costs and focus on its areas of greatest
opportunity."
Conference
Call
Datawatch's fourth quarter of
fiscal year 2016 earnings conference call will take place on
Thursday, November 3, 2016 at 8:30 a.m. Eastern Time. To access the
conference call, the toll-free dial in number is (800) 362-0574.
Internationally, the call may be accessed by dialing (785)
424-1226. The conference call will be broadcast live on the
Internet
at: http://www.investorcalendar.com/IC/CEPage.asp?ID=175366.
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 90 days at the same location.
About
Datawatch Corporation
Datawatch
Corporation (NASDAQ-CM:DWCH) enables ordinary users to deliver
extraordinary results with all their data. Only Datawatch can
unlock data from the widest variety of sources and prepare it for
use with visualization tools or other business processes.
When real-time visibility to rapidly changing data is critical,
Datawatch enables you to visualize streaming data for the most
demanding business environments such as capital markets.
Organizations of every size worldwide use Datawatch products
including 93 of the Fortune 100. Datawatch is headquartered in
Bedford, Massachusetts with offices in New York, London, Frankfurt,
Stockholm, Singapore, and Manila, and with partners and customers
in more than 100 countries worldwide. See how Datawatch can
help you by downloading a free version
at 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 long sales cycle with enterprise customers and the
size and timing of large customer orders; risks associated with
acquisitions; 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; risks related to actions by activist stockholders, including
the amount of related costs incurred by Datawatch and the
disruption caused to Datawatch's business activities by these
actions; 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, 2015 and its subsequently filed Form 10-Q
reports. Any forward-looking statements should be considered
in light of those factors.
Use of Non-GAAP Financial
Information
We define non-GAAP net loss as
U.S. Generally Accepted Accounting Principles ("GAAP") net loss
plus goodwill and long-lived assets non-cash impairment charges,
non-cash amortization associated with the purchase of certain
intellectual property and other intangible assets, non-cash stock
compensation costs and Swedish non-cash deferred tax valuation
allowance. We discuss non-GAAP net loss in our quarterly earnings
releases and certain other communications as we believe non-GAAP
net loss is an important measure that is not calculated according
to GAAP. We use non-GAAP net loss in internal forecasts and models
when establishing internal operating budgets, supplementing the
financial results and forecasts reported to our Board of Directors
and evaluating short-term and long-term operating trends in our
operations. We believe that non-GAAP net loss assists in providing
an enhanced understanding of our underlying operational measures to
manage the business, to evaluate performance compared to prior
periods and the marketplace, and to establish operational goals. We
believe that these non-GAAP financial adjustments are useful to
investors because they allow investors to evaluate the
effectiveness of the methodology and information used by management
in our financial and operational decision-making.
Non-GAAP net loss is a non-GAAP
financial measure and should not be considered in isolation or as a
substitute for financial information provided in accordance with
GAAP. This non-GAAP financial measure may not be computed in the
same manner as similarly titled measures used by other companies.
We expect to continue to incur expenses similar to the non-GAAP net
loss financial adjustments described above, and investors should
not infer from our presentation of this non-GAAP financial measure
that these costs are unusual, infrequent or non-recurring.
The table below entitled "Non-GAAP
Disclosure - Reconciliation of Net Loss to Non-GAAP Net Loss"
reconciles the Company's GAAP net loss to the Company's non-GAAP
net loss.
© 2016 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.
|
DATAWATCH
CORPORATION |
Condensed Consolidated
Statements of Operations |
Amounts in Thousands
(except per share data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Month Ended |
|
Twelve Months Ended |
|
|
|
|
September 30, |
|
September 30, |
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUE: |
|
|
|
|
|
|
|
|
|
|
Software licenses |
|
$ |
4,758 |
|
|
$ |
4,101 |
|
|
$ |
15,219 |
|
|
$ |
15,304 |
|
|
|
Maintenance |
|
|
3,498 |
|
|
|
3,513 |
|
|
|
13,915 |
|
|
|
13,529 |
|
|
|
Professional services |
|
|
351 |
|
|
|
408 |
|
|
|
1,328 |
|
|
|
1,388 |
|
|
|
Total revenue |
|
|
8,607 |
|
|
|
8,022 |
|
|
|
30,462 |
|
|
|
30,221 |
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS AND
EXPENSES: |
|
|
|
|
|
|
|
|
|
|
Cost of software licenses |
|
|
761 |
|
|
|
709 |
|
|
|
2,828 |
|
|
|
3,002 |
|
|
|
Cost of maintenance and services |
|
|
470 |
|
|
|
603 |
|
|
|
2,177 |
|
|
|
3,122 |
|
|
|
Sales and marketing |
|
|
5,162 |
|
|
|
5,733 |
|
|
|
20,783 |
|
|
|
27,037 |
|
|
|
Engineering and product development |
|
|
2,078 |
|
|
|
2,197 |
|
|
|
8,167 |
|
|
|
8,894 |
|
|
|
General and administrative |
|
|
2,183 |
|
|
|
1,825 |
|
|
|
9,636 |
|
|
|
8,599 |
|
|
|
Impairment of goodwill and long lived intangible
assets |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
32,009 |
|
|
|
Total costs and expenses |
|
|
10,654 |
|
|
|
11,067 |
|
|
|
43,591 |
|
|
|
82,663 |
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS
FROM OPERATIONS |
|
|
(2,047 |
) |
|
|
(3,045 |
) |
|
|
(13,129 |
) |
|
|
(52,442 |
) |
|
Other
income (expense) |
|
|
(11 |
) |
|
|
(31 |
) |
|
|
(30 |
) |
|
|
(69 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
LOSS
BEFORE INCOME TAXES |
|
|
(2,058 |
) |
|
|
(3,076 |
) |
|
|
(13,159 |
) |
|
|
(52,511 |
) |
|
Income tax
(expense) benefit |
|
|
126 |
|
|
|
97 |
|
|
|
(1,473 |
) |
|
|
2,724 |
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS |
|
$ |
(1,932 |
) |
|
$ |
(2,979 |
) |
|
$ |
(14,632 |
) |
|
$ |
(49,787 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share -
Basic |
|
$ |
(0.16 |
) |
|
$ |
(0.26 |
) |
|
$ |
(1.24 |
) |
|
$ |
(4.38 |
) |
|
Net loss per share -
Diluted |
|
$ |
(0.16 |
) |
|
$ |
(0.26 |
) |
|
$ |
(1.24 |
) |
|
$ |
(4.38 |
) |
|
Weighted Average Shares
Outstanding - Basic |
|
|
11,835 |
|
|
|
11,541 |
|
|
|
11,758 |
|
|
|
11,368 |
|
|
Weighted Average Shares
Outstanding - Diluted |
|
|
11,835 |
|
|
|
11,541 |
|
|
|
11,758 |
|
|
|
11,368 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Disclosure - Reconciliation of Net Loss
to Net Loss Excluding the Effects of Certain Items: |
|
|
|
|
|
|
|
|
|
|
|
GAAP Net Loss |
|
$ |
(1,932 |
) |
|
$ |
(2,979 |
) |
|
$ |
(14,632 |
) |
|
$ |
(49,787 |
) |
|
Add-back
Impairment of Goodwill & Long-Lived Assets |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
32,009 |
|
|
Add-back
Amortization of Intangibles & IP |
|
|
519 |
|
|
|
572 |
|
|
|
2,191 |
|
|
|
2,586 |
|
|
Add-back
Share-Based Compensation |
|
|
662 |
|
|
|
708 |
|
|
|
2,831 |
|
|
|
4,733 |
|
|
Add-back
Swedish Deferred Tax Valuation Allowance |
|
|
- |
|
|
|
- |
|
|
|
1,794 |
|
|
|
- |
|
|
|
Subtotal of additions |
|
|
1,181 |
|
|
|
1,280 |
|
|
|
6,816 |
|
|
|
39,328 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Loss) Income (non-GAAP) |
|
$ |
(751 |
) |
|
$ |
(1,699 |
) |
|
$ |
(7,816 |
) |
|
$ |
(10,459 |
) |
|
Net (loss)
income per share - Basic |
|
$ |
(0.06 |
) |
|
$ |
(0.15 |
) |
|
$ |
(0.66 |
) |
|
$ |
(0.92 |
) |
|
Net (loss)
income per share - Diluted |
|
$ |
(0.06 |
) |
|
$ |
(0.15 |
) |
|
$ |
(0.66 |
) |
|
$ |
(0.92 |
) |
|
Weighted
Average Shares Outstanding - Basic |
|
|
11,835 |
|
|
|
11,541 |
|
|
|
11,758 |
|
|
|
11,368 |
|
|
Weighted
Average Shares Outstanding - Diluted |
|
|
11,835 |
|
|
|
11,541 |
|
|
|
11,758 |
|
|
|
11,368 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DATAWATCH
CORPORATION |
Condensed Consolidated
Balance Sheets |
Amounts in
Thousands |
(Unaudited) |
|
|
|
|
|
|
|
September 30, |
|
September 30, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
Cash and cash
equivalents |
|
$ |
28,034 |
|
|
$ |
35,162 |
|
Accounts receivable,
net |
|
|
6,932 |
|
|
|
7,081 |
|
Prepaid expenses and
other current assets |
|
|
2,265 |
|
|
|
2,013 |
|
Total current assets |
|
|
37,231 |
|
|
|
44,256 |
|
|
|
|
|
|
|
|
|
|
Property and
equipment, net |
|
|
1,210 |
|
|
|
614 |
|
Intangible and other
assets, net |
|
|
9,990 |
|
|
|
14,061 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
48,431 |
|
|
$ |
58,931 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and
accrued expenses |
|
$ |
4,077 |
|
|
$ |
4,202 |
|
Deferred revenue -
current portion |
|
|
9,630 |
|
|
|
8,452 |
|
Deferred tax
liability- current portion |
|
|
- |
|
|
|
274 |
|
Total current liabilities |
|
|
13,707 |
|
|
|
12,928 |
|
|
|
|
|
|
|
|
|
|
Other long-term
liabilities |
|
|
766 |
|
|
|
461 |
|
Total long-term liabilities |
|
|
766 |
|
|
|
461 |
|
|
|
|
|
|
|
|
|
|
Total shareholders' equity |
|
|
33,958 |
|
|
|
45,542 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
48,431 |
|
|
$ |
58,931 |
|
|
|
|
|
|
|
|
|
|
Source: Datawatch
Investor Contact:
Datawatch Investor Relations
investor@datawatch.com
Phone: (978) 441-2200 ext. 8323
Media Contact:
Erin Hoesly
Datawatch Corporation
Erin_Hoesly@datawatch.com
Phone: (978) 441-2200 ext. 8322
Twitter: @datawatch
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Datawatch Corporation via Globenewswire
Datawatch Corp. (delisted) (NASDAQ:DWCH)
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From Jun 2024 to Jul 2024
Datawatch Corp. (delisted) (NASDAQ:DWCH)
Historical Stock Chart
From Jul 2023 to Jul 2024