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Attunity Reports Third Quarter 2011 Results

October 25, 2011

BURLINGTON, Massachusetts, October 25, 2011 /PRNewswire/ –

Attunity Ltd. (OTC Bulletin Board: ATTUF.OB), a leading provider of
real-time data integration, reported today its unaudited financial results
for the quarter ended September 30, 2011.

Financial Highlights:

        - License revenues increased 103% to $1.75 million in the
          third quarter of 2011, compared to $0.86 million for the same period
          last year
        - Total revenues increased 57% to $3.45 million in the third
          quarter of 2011, compared to $2.20 million for the same period last year
        - Non-GAAP Net Income increased to $456,000 in the third quarter
          of 2011, compared to $114,000 for the same period last year

Recent Operational Highlights:

        - Completed the acquisition of RepliWeb, a leading provider of
          enterprise file replication and managed file transfer technologies
        - Received payments of $3.55 million under OEM agreements with
          Microsoft for delivery of CDC and ODBC components; Approximately half of
          these payments are recognized in the second half of 2011 and the
          remainder will be recognized ratably over 2012.
        - Launched Attunity Replicate, a high-performance data replication
          software

“I am pleased with our continued growth and our completion of several
key milestones during the quarter, which have advanced our position as a
leading provider of real-time data integration for the enterprise
environment and Cloud computing. This includes the acquisition of RepliWeb,
which significantly expands our data replication capabilities and our cloud
offering with its fast load technology. The expansion of our business and
product offering has properly positioned the Company for rapid revenue
growth and profitability,” said Shimon Alon, Chairman and CEO of Attunity.

“The third quarter results were driven by strong software license and
maintenance revenues, which increased by approximately 103% and 27%,
respectively, compared to the same period last year. In addition, Non-GAAP
operating income for the third quarter of 2011 increased by 168% compared to
the same period last year.

“During the next few months, we plan to introduce an advanced data
replication platform for the ‘Big Data’ and Cloud replication, using our new
Repliweb capabilities, which platform is expected to further drive our
growth,” concluded Mr. Alon.

Total revenues for the third quarter of 2011 increased 57% to $3.45
million, compared to $2.2 million in the third quarter of 2010.

Net operating income (loss) for the third quarter of 2011 was
($407,000), compared to ($133,000) for the same period of 2010. Non-GAAP net
operating income for the third quarter of 2011 was $620,000, compared to
$231,000 for the same period last year. Non-GAAP net operating income for
the third quarter of 2011 excludes equity-based compensation and
amortization of software development costs of $163,000 compared to $364,000
for the third quarter of 2010 as well as $864,000 in expenses and
amortization related to the acquisition of RepliWeb (see footnotes 1,2 and 3
at the end of this release).

Net income (loss) for the third quarter of 2011 increased to ($792,000),
or ($0.02) per share, from ($188,000), or ($0.01) per share, in the third
quarter of 2010. Net income for the third quarter of 2011 was negatively
impacted primarily by $1,172,000 in expenses and amortization associated
with the acquisition of RepliWeb. Non-GAAP net income (loss) for the third
quarter of 2011 was $456,000 compared to $114,000 for the same period last
year. Non-GAAP net income for the third quarter of 2011 excludes $1,172,000
in expenses and amortization related to the acquisition of RepliWeb as well
as equity-based compensation expenses and amortization of software
development costs net of capitalization and expenses associated with the
revaluation of conversion features related to the Company’s convertible debt
and outstanding warrants (see footnotes 1, 2, 3, 4 and 5 at the end of this
release).

Cash and cash equivalents were $6.3 million as of September 30, 2011,
compared to $1.9 million as of June 30, 2011. The increase of approximately
$4.4 million is attributable to the acquisition of RepliWeb and includes
$4.2 million that has been paid to RepliWeb’s shareholders following the end
of the third quarter, in October 2011.

Shareholders’ equity was $4.2 million as of September 30, 2011 compared
to $2.5 million as of June 30, 2011. The increase is mainly due to the
issuance of approximately 4.0 million shares as part of the consideration to
RepliWeb’s shareholders. This increase was partially offset by a net loss of
($792,000).

See “Use of Non-GAAP Financial Information” below for more information
regarding Attunity’s use of Non-GAAP financial measures.

About Attunity

Attunity is a leading provider of real-time data integration software
that enables access, sharing and distribution of data across heterogeneous
enterprise platforms, organizations, and the cloud. Our offering includes
software solutions such as data replication
[http://www.attunity.com/attunity_replicate ], real-time change data capture
[http://www.attunity.com/attunity_stream ] (CDC) and real-time data
connectivity [http://www.attunity.com/attunity_connect ], as well as
enterprise file replication
[http://www.repliweb.com/products/r1-r/index.php ] and managed-file-transfer
[http://www.repliweb.com/products/rmft/index.php ] (MFT) offered through our
RepliWeb division. Using Attunity’s software solutions, our customers enjoy
dramatic business benefits by enabling real-time access and availability of
data and files where and when needed, across the maze of heterogeneous
systems making up today’s IT environment.

Attunity has supplied innovative software solutions to its
enterprise-class customers for nearly 20 years and has successful
deployments at thousands of organizations worldwide. Attunity provides
software directly and indirectly through a number of partners such as
Microsoft, Oracle, IBM and HP. Headquartered in Boston, Attunity serves its
customers via offices in North America, Europe, and Asia Pacific and through
a network of local partners. For more information, visit
http://www.attunity.com and join our community on Twitter
[http://www.twitter.com/attunity ], Facebook
[http://www.facebook.com/attunity ] and LinkedIn
[http://www.linkedin.com/groups?about=&gid=2884948&trk=anet_ug_grppro ].

Use of Non-GAAP Financial Information

In addition to reporting financial results in accordance with generally
accepted accounting principles, or GAAP, Attunity uses Non-GAAP measures of
net income (loss), net operating income (loss) and net income (loss) per
share, which are adjustments from results based on GAAP to exclude expenses
and amortization associated with the acquisition of RepliWeb,non-cash equity
based compensation charges in accordance with ASC 718, non-cash
capitalization and amortization of software development costs in accordance
with ASC 985-20 and non-cash financial expenses such as revaluation of
conversion features related to its convertible debt and outstanding warrants
in accordance with ASC 815-40 (affected, among other factors, by changes in
Attunity’s share price). Attunity’s management believes the non-GAAP
financial information provided in this release is useful to investors’
understanding and assessment of Attunity’s on-going core operations and
prospects for the future. Management uses both GAAP and non-GAAP information
in evaluating and operating business internally and as such has determined
that it is important to provide this information to investors. The
presentation of this non-GAAP financial information is not intended to be
considered in isolation or as a substitute for results prepared in
accordance with GAAP.

Safe Harbor Statement

This press release contains forward-looking statements within the
meaning of the “safe harbor” provisions of the Private Securities Litigation
Reform Act of 1995 and other Federal Securities laws. Statements preceded
by, followed by, or that otherwise include the words “believes”, “expects”,
“anticipates”, “intends”, “estimates”, “plans”, and similar expressions or
future or conditional verbs such as “will”, “should”, “would”, “may” and
“could” are generally forward-looking in nature and not historical facts.
For example, when we discuss future growth of revenues and profitability, we
are using a forward-looking statement. Because such statements deal with
future events, they are subject to various risks and uncertainties and
actual results could differ materially from Attunity’s current expectations.
Factors that could cause or contribute to such differences include, but are
not limited to: risks and uncertainties relating to the acquisition of
RepliWeb, including costs and difficulties related to integration of
acquired businesses, the combined companies’ financial results and
performance, and ability to repay debt and timing thereof; our liquidity
challenges and the need to raise additional capital in the future; market
acceptance of the Attunity Replicate and the development of a market for
such product; timely availability and customer acceptance of Attunity’s new
and existing products; any unforeseen developmental or technological
difficulties with regard to Attunity’s products; changes in the competitive
landscape, including new competitors or the impact of competitive pricing
and products; a shift in demand for products such as Attunity’s products;
unknown factors affecting third parties with which Attunity has formed
business alliances; the impact on revenues of economic and political
uncertainties and weaknesses in various regions of the world, including the
commencement or escalation of hostilities or acts of terrorism; and other
factors and risks on which Attunity may have little or no control. This list
is intended to identify only certain of the principal factors that could
cause actual results to differ. For a more detailed description of the risks
and uncertainties affecting Attunity, reference is made to Attunity’s Annual
Report on Form 20-F for the year ended December 31, 2010, which is on file
with the Securities and Exchange Commission (SEC) and the other risk factors
discussed from time to time by Attunity in reports filed or furnished to the
SEC. Except as otherwise required by law, Attunity undertakes no obligation
to publicly release any revisions to these forward-looking statements to
reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.

(c) 2011 Attunity Ltd. All rights reserved. Attunity is a trademark of
Attunity Inc.


                            CONSOLIDATED BALANCE SHEETS
                             U.S. dollars in thousands
                                             September          December
                                                30,                31,
                                                2011              2010
                                             Unaudited
        ASSETS
        CURRENT ASSETS:
        Cash and cash equivalents    $         6,339       $       872
        Restricted cash                          438               224
        Trade receivables (net of
        allowance for doubtful
        accounts of $30 at September
        30, 2011 and $15 at December
        31, 2010)                              1,246             1,201
        Other accounts receivable
        and prepaid expenses                     616               190
        Total current assets                   8,639             2,487
        LONG-TERM ASSETS:
        Other long term Assets                    72                61
        Severance pay fund                     2,628             1,323
        Property and equipment, net              379               205
        Intangible Assets ,net                 3,369               496
        Goodwill                              11,653             6,133
        Total long-term assets                18,101             8,218
        Total assets                 $        26,740      $     10,705

                               CONSOLIDATED BALANCE SHEETS
                        U.S. dollars in thousands excpt share data
                                                      September       December
                                                         30,             31,
                                                         2011           2010
        LIABILITIES AND SHAREHOLDERS' EQUITY          Unaudited
        CURRENT LIABILITIES:
        Short term payable on account of
        acquisition                              $      4,170      $       -
        Current maturities of long-term
        convertible debt                                1,255            245
        Current maturities of long-term debt              370          1,014
        Trade payables                                    829            220
        Deferred revenues                               6,332          2,048
        Employees and payroll accruals                  1,544            844
        Accrued expenses and other current
        liabilities                                     2,077            759
        Total current liabilities                      16,577          5,130
        LONG-TERM LIABILITIES:
        Earn out liability , presented at fair
        value                                           1,602              -
        Long-term convertible debt                        377          1,571
        Other long-term debt                              190             90
        Warrants and bifurcated conversion
        feature , presented at fair value                 431          1,215
        Accrued severance pay                           3,367          1,966
        Total long-term liabilities                     5,967          4,842
        SHAREHOLDERS' EQUITY:
        Share capital - Ordinary shares of NIS
        0.1 par value -
        Authorized: 130,000,000 shares at
        September 30, 2011 and December 31,
        2010. Issued and outstanding:
        38,108,439 shares at September 30,
        2011 and 32,269,695 at December 31,
        2010                                            1,098            939
        Additional paid-in capital                    106,121        102,459
        Accumulated other comprehensive loss             (563)          (640)
        Accumulated deficit                          (102,460)      (102,025)
        Total shareholders' equity                      4,196            733
        Total liabilities and shareholders'
        equity                                   $     26,740     $   10,705

                  CONSOLIDATED STATEMENTS OF OPERATIONS
             U.S. dollars in thousands, except per share data
                             9 months ended                    3 months ended
                              September 30,                     September 30,
                        2011              2010              2011          2010
                      Unaudited         Unaudited         Unaudited     Unaudited
        Software
        licenses       $  4,959      $      3,403      $      1,754    $     863
        Maintenance
        and services      4,499             4,093             1,697        1,332
                          9,458             7,496             3,451        2,195
        Operating
        expenses:
        Cost of
        revenues            966              1,543              353          511
        Research and
        development,
        net               2,741             1,682             1,161          534
        Selling and
        marketing         3,576             2,855             1,338          816
        General and
        administrative    2,112             1,332             1,006          466
        Total
        operating
        expenses          9,395             7,412             3,858        2,328
        Operating
        Income               63                85              (407)        (133)
        Financial
        expenses, net       376               394               329           35
        Other expenses
        (income)              -                (2)                -           (2)
        Income /
        (loss) before
        income taxes       (313)             (307)             (736)        (165)
        Taxes on
        income              122                57                56           23
        Net Income/
        (loss)         $   (435)         $   (364)         $   (792)    $   (188)
        Basic net
        Income/(loss)
        per share      $  (0.01)         $  (0.01)         $  (0.02)   $   (0.01)
        Weighted
        average number
        of shares used
        in computing
        basic and
        diluted net
        Income/(loss)
        per share        33,704            31,897            34,312       32,185
                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                                U.S. dollars in thousands
                                                 9 months ended    9 months ended
                                                 September 30,      September 30,
                                                      2011               2010
                                                   Unaudited          Unaudited
        Cash from operating activities:
        Net Income /( loss)                    $     (435)        $      (364)
        Adjustments required to reconcile
        net income ( loss) to net cash
        provided by operating activities:
        Depreciation                                   80                  76
        Stock based compensation                      221                 169
        Amortization of intangible assets             328                 910
        Amortization of deferred interest               8                  -
        Increase (decrease) in accrued
        severance pay, net                             (4)                116
        Decrease (increase) in trade
        receivables                                   352                (283)
        Decrease ( increase) in other
        accounts receivable and prepaid
        expenses                                        71                (23)
        Decrease (increase) in long-term
        prepaid expenses                              (11)                 24
        Increase (decrease) in trade
        payables                                        7                  30
        Increase (decrease) in deferred
        revenues                                    2,827                  (6)
        Increase (decrease) in employees and
        payroll accruals                              178                (191)
        Increase (decrease) in accrued
        expenses and other liabilities              1,217                (232)
        Changes in fair value of warrants
        and bifurcated embedded conversion
        feature                                        76                  92
        Net cash provided by operating
        activities                                  4,915                 318
        Cash flows from investing
        activities:
        Purchase of property and equipment           (117)                (51)
        Capitalization of software
        development costs                               -                (110)
        Increase of restricted cash                  (192)                 (5)
        Cash paid in connection with the
        acquisition, net of acquired cash           1,499                   -
        Net cash provided by investing
        activities                                  1,190                (166)
        Cash flows from financing
        activities:
        Receipt of short term bridge loan to
        finance the acquisition                     3,000                   -
        Repayment of bridge loan                   (3,000)                  -
        Proceeds from exercise of stock
        options and warrants                          240                  73
        Receipt of long term loan                      57                  25
        Repayment of long-term debt                  (785)               (667)
        Repayment of convertible debt                (184)                 -
        Net cash provided by (used in)
        financing activities                         (672)               (569)
        Foreign currency translation
        adjustments on cash and cash
        equivalents                                    34                   3
        Increase (decrease) in cash and cash
        equivalents                                 5,467                (414)
        Cash and cash equivalents at the
        beginning of the period                       872               1,428
        Cash and cash equivalents at the end
        of the period                         $     6,339        $      1,014
        Supplemental disclosure of cash flow
        activities:
        Cash paid during the period for:
        Interest                              $        63          $      392
        Non cash activity
        Shares issued as part of acquisition  $     2,500                   -
                  RECONCILIATION OF SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION
                        U.S. dollars in thousands, except per share data
                                   9 months ended                3 months ended
                                   September 30,                 September 30,
                                  2011      2010                2011      2010
                                Unaudited Unaudited           Unaudited Unaudited
         GAAP operating
         Income (loss)         $  63        85             $  (407)     (133)
         Stock based
         compensation (1)        221       170                  76        56
         Amortization and
         Capitalization of
         Software
         Development Costs
         (2)                     278       800                  87       308
         Acquisition-related
         expenses,
         amortization and
         adjsutments (3)         864         -                 864         -
         Non-GAAP operating
         Income             $  1,426     1,055              $  620       231
         GAAP net Income
         (loss)                 (435)     (364)               (792)     (188)
         Stock based
         compensation (1)        221       170                  76        56
         Amortization and
         Capitalization of
         Software
         Development Costs
         (2)                     278       800                  87       308
         Acquisition-related
         expenses,
         amortization and
         adjsutments (3)         864         -                 864         -
         Financial expenses
         (4)                    (224)       92                 (87)      (62)
         Acquisition-related
         financial expenses
         (5)                     308         -                 308         -
         Non-GAAP net Income
         (Loss)             $  1,012       698             $   456       114
         GAAP diluted net
         Income (loss) per
         share                 (0.01)    (0.01)              (0.02)    (0.01)
         Operating expenses
         Gaap                   0.04      0.03                0.03      0.01
         Financial expenses    (0.01)     0.00               (0.00)    (0.00)
                             $  0.02      0.02            $   0.00      0.00
         (1) Stock-based
         compensation
         expenses under ASC
         718 included in :
         Research and
         development              72        39                  29        14
         Selling and
         marketing                70        62                  26        19
         General and
         administrative           79        69                  21        23
                             $   221       170              $   76        56
         (2) Amortization of
         Software
         Development Costs
         net of
         capitalization
         Amortization and
         Capitalization of
         Software
         Development Costs
         resulting under ASC
         985-20                  278       800                  87       308
                             $   278       800              $   87       308
         (3)
         Acquisition-related
         expenses,
         amortization and
         adjustments
         Valuation
         adjustment on
         acquired deferred
         services revenue          7         -                   7         -
         Cost of Sales -
         Amortization of
         Technology               22         -                  22         -
         Research and
         development -
         Carve-out to
         RepliWeb employees      212         -                 212         -
         Selling and
         marketing -
         Carve-out to
         RepliWeb employees       87         -                  87         -
         Selling and
         marketing -
         Amortization of
         Customers
         relationship             28         -                  28         -
         General and
         administrative -
         Carve-out to
         RepliWeb employees       87         -                  87         -
         General and
         administrative-
         Acquisition
         expenses                421         -                 421         -
                             $   864         -             $   864         -
         (4) Financial
         expenses:
         Revaluation of
         warrants and
         conversion feature
         of long term
         convertible debt       (224)        92                (87)      (62)
                             $  (224)        92            $   (87)      (62)
         (5)
         Acquisition-related
         financial expenses
         Fair value of carve
         out feature related
         to warrants              300         -                 300         -
         Accretion related
         to earn-out
         obligation                 8         -                   8         -
                               $  308         -             $   308         -
         Total
         Acquisition-Related
         Expenses
         Acquisition-related
         expenses,
         amortization and
         adjustments - Note
         3                        864         -                 864         -
         Acquisition-related
         financial expenses
         - Note 5                 308         -             $   308         -
                             $  1,172         -            $  1,172         -
        For more information, please contact:

        Todd Fromer / Garth Russell
        KCSA Strategic Communications
        P: +1-212-682-6300
        tfromer@kcsa.com /  grussell@kcsa.com

        Dror Harel-Elkayam, CFO
        Attunity Ltd.
        Tel. +972-9-899-3000
        dror.elkayam@attunity.com

SOURCE Attunity Ltd


Source: PR Newswire