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Attunity Reports Third Quarter 2012 Results

October 31, 2012

BURLINGTON, Massachusetts, October 31, 2012 /PRNewswire/ –

Attunity, Ltd. (NASDAQ: ATTU), a leading provider of information availability software
solutions, today reported its unaudited financial results for the three month period ended
September 30, 2012.

Financial Highlights for the Third Quarter of 2012:

        - Total revenues increased 72% to $5.9 million in the third quarter of 2012,
          compared to $3.5 million for the same period last year
        - License revenues increased 73% to $3.0 million in the third quarter of 2012,
          compared to $1.8 million for the same period last year
        - Non-GAAP operating income increased 60% to $1.0 million in the third quarter
          of 2012, compared to $0.6 million for the same period last year
        - Net income increased to an income of $43,000 in the third quarter of 2012,
          compared to a loss of ($792,000) for the same period last year
        - Non-GAAP net income increased 90% to $0.9 million in the third quarter of
          2012, compared to $0.5 million for the same period last year
        - Shareholders' equity increased to $8.1 million as of September 30, 2012
          compared to $5.2 million as of December 31, 2011.

Recent Operational Highlights:

        - Successfully returned to trading ordinary shares on the NASDAQ Capital
          Market
        - Closed first deal of Attunity Replicate for EMC Greenplum Big Data analytics
        - Introduced Attunity Replicate to Oracle Exadata, continuing expansion into the
          Big Data market with Business Intelligence (BI) and enterprise analytics initiatives
        - Teamed with Teradata to optimize Attunity Replicate for Big Data warehouses to
          enable Big Data replication
        - Signed several major customer agreements for Attunity Replicate across all
          regions, including a major European financial institution, and a large
          telecommunication provider in Asia Pacific further improving its competitive advantage
          for Big Data with analytics
        - Expanded services for Amazon Web Services (AWS) Simple Storage Service (S3)
          with Attunity's new data replication SaaS solution, providing disaster recovery,
          backup and data distribution between different AWS regions
        - Awarded the #1 Data Replication Innovator distinction on the "Top 40 Companies
          We're Watching" List from Information Management Magazine.

We are quickly gaining market share and becoming a go-to-provider of replication
software solutions amid growing demand from new customers deploying Big Data warehouses
for Big Data analytics. These customers are quickly recognizing the value and the
advantages our solutions offer and have often chosen Attunity over other Big Data
replication solution in today’s market,” stated Mr. Shimon Alon, Chairman and CEO of
Attunity. “We are pleased to report a 72% increase in revenue compared to the third
quarter of 2011. This strength in market demand for our solutions is also resulting in a
continuous rise in our average sales price for our replication products. And, while the
third quarter is generally our weakest quarter of the year due to the seasonality of our
business, we continue to demonstrate strong growth and profitability on a year-over-year
basis. As a result, we expect our fourth quarter to be the strongest this year in terms of
record quarterly revenues and profits.”

“The Attunity Replicate has led to several new industry partnership and
collaborations, including EMC Greenplum, Teradata, HP Vertica and Action Vectorwise, who
have recognized the critical need and value of our solutions to enhance their BI and Big
Data analytics capabilities. I am pleased that we already closed the first deal of
Replicate for EMC Greenplum just several weeks after its introduction in the beginning of
the third quarter. Additionally, we have launched the public beta of our SaaS upload and
replication solutions for the cloud for Amazon Web Services (AWS) Simple Storage Service
(S3), and will showcase these solutions with AWS in the November 2012 AWS re: Invent
Conference, including new solutions for data automation and management for cloud
replication.”

Mr. Alon concluded, “Since our successful listing on NASDAQ, we have seen increased
interest in the company from the capital markets, as demonstrated by our invitations to
more investor conferences and general excitement within the investment community. We are
also excited by the growth potential from the recent deals we have closed. And we believe
our penetration of the Big Data and BI markets will increase as our offerings now include
solutions for major Big Data warehouse players, such as Oracle Exadata, Teradata and EMC
Greenplum. As we look to the future, several of our new solutions for the Cloud and Big
Data are expected to generate a new stream of customers in 2013.”

Financial Results for Q3 2012

Total revenues for the third quarter of 2012 increased 72% to $5.9 million, compared
to $3.5 million for the same period of 2011. This included license revenues for the third
quarter of 2012, which increased 73% to $3.0 million, compared to $1.8 million for the
same period of 2011. RepliWeb products contributed $2.4 million in total revenues and $1.0
million in license revenues in the third quarter of 2012.

Net operating income for the third quarter of 2012 was $569,000, compared to an
operating loss of ($407,000) for the same period of 2011.

Non-GAAP operating income for the third quarter of 2012 was $993,000, compared to
$620,000 for the same period last year. Non-GAAP operating income for the third quarter of
2012 excludes equity-based compensation and amortization of software development costs
totaling $197,000, compared to $163,000 for the same period last year; and $227,000 in
amortization and expenses related to the acquisition of RepliWeb compared to $864,000 for
the same period last year (see footnotes 1 and 2 at the end of this release).

Net income for the third quarter of 2012 was $43,000, or $0.00 per diluted share,
compared to a loss of ($792,000), or ($0.10) per diluted share (adjusted to reflect the
recent reverse stock split), in the third quarter of 2011.

Non-GAAP net income for the third quarter of 2012 was $865,000, compared to $456,000
for the same period last year. Non-GAAP net income for the third quarter of 2012 excludes
a total of $822,000 in expenses and amortization, including $414,000 of financial expenses
associated with the revaluation of liabilities presented at fair value (attributed mainly
to the rise of our share price) and the revaluation of the conversion feature related to
the Company’s convertible debt; $227,000 in amortization and expenses associated with
acquisition of RepliWeb; and $157,000 in expenses related to stock based compensation (see
footnotes 1 and 2 at the end of this release).

Cash and cash equivalents were $1.7 million as of September 30, 2012, compared to $1.5
million as of December 31, 2011.

Shareholders’ equity increased to $8.1 million as of September 30, 2012, compared to
$5.2 million as of December 31, 2011.

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

Conference Call Information

The Company’s management will host a conference call today, October 31, 2012, at 10:00
a.m. Eastern Time. The dial-in numbers for the conference call are 1-866-691-3082 (US Toll
Free), +1-480-629-1941 (International) or 072-273-3197 (Israel). All dial-in participants
must use the following code to access the call: 4569045. Please call at least five minutes
before the scheduled start time.

The conference call will be available via webcast and can be accessed through the
Events section of Attunity’s website, http://www.attunity.com/events, and
http://www.kcsa.com, the contents of which are not part of this press release. Please
allow extra time prior to the call to visit the site and download any necessary software
to listen to the Internet broadcast.

For interested individuals unable to join the conference call, a replay of the call
will be available through November 30, 2012 at 1-800-406-7325 (US Toll Free),
+1-303-590-3030 (International) or 072-273-3198 (Israel) . Participants must use the
following code to access the replay of the call: 4569045. The online archive of the
webcast will be available on http://www.attunity.com/events or http://www.kcsa.com
for 30 days following the call.

About Attunity

Attunity is a leading provider of information availability software solutions that
enable access, sharing and distribution of data, including Big Data, across heterogeneous
enterprise platforms, organizations, and the cloud
[http://www.attunity.com/products/attunity-cloudbeam ]. Our software solutions include data
replication [http://www.attunity.com/products/attunity-replicate ], change data capture
[http://www.attunity.com/products/attunity-cdc ] (CDC), data connectivity
[http://www.attunity.com/products/attunity-connect/data-connectivity ], enterprise file
replication [http://www.attunity.com/products/attunity-efr-r1-r ] (EFR) and
managed-file-transfer [http://www.attunity.com/products/attunity-mft-rmft ] (MFT). Using
Attunity’s software solutions, our customers enjoy significant 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 or our In Tune
blog [http://www.attunity.com/blog ] and join our community on Twitter
[http://www.twitter.com/attunity ], Facebook [http://www.facebook.com/attunity ], LinkedIn
[http://linkd.in/attunity ] and YouTube [http://www.youtube.com/attunity ].

Use of Non-GAAP Financial Information

In addition to reporting financial results in accordance with U.S. generally accepted
accounting principles, or GAAP, Attunity uses Non-GAAP measures of net income, net
operating income and net income per share, which are adjustments from results based on
GAAP to exclude expenses and amortization associated with the acquisition of RepliWeb net
of related tax, non-cash equity based compensation charges in accordance with ASC 718,
amortization of software development costs in accordance with ASC 985-20, and non-cash
financial expenses such as revaluation effect of liabilities presented at fair value and
convertible debt inducement expenses. 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 our expected revenues and profits or demand for our new solutions
for cloud computing, 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: our reliance on
strategic relationships with our distributors, OEM and VAR partners, including Microsoft;
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 known or unknown contingent liabilities, including
litigation, costs, tax and expenses; our liquidity challenges and the need to raise
additional capital in the future; timely availability and customer acceptance of
Attunity’s new and existing products, including Attunity Replicate; 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; 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/A for the year ended
December 31, 2011, 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) 2012 Attunity Ltd. All rights reserved. Attunity is a trademark of Attunity Inc.

                         CONSOLIDATED BALANCE SHEETS
                          U.S. dollars in thousands
                                   September 30,     December 31,
                                       2012              2011
                                     Unaudited
            ASSETS
            CURRENT ASSETS:
            Cash and cash
            equivalents        $       1,714      $     1,484
            Restricted cash               21              362
            Trade receivables
            (net of allowance
            for doubtful
            accounts of $15 at
            September 30, 2012
            and December 31,
            2011)                      3,036            1,988
            Other accounts
            receivable and
            prepaid expenses             260              158
            Total current
            assets                     5,031            3,992
            LONG-TERM ASSETS:
            Other long term
            assets                        89               72
            Severance pay fund         2,740            2,684
            Property and
            equipment, net               421              380
            Intangible assets
            ,net                       2,084            2,854
            Goodwill                  13,050           13,011
            Total long-term
            assets                    18,384           19,001
            Total assets       $      23,415     $     22,993

                        CONSOLIDATED BALANCE SHEETS
                U.S. dollars in thousands except share data
                                     September       December
                                        30,             31,
                                       2012            2011
            LIABILITIES AND
            SHAREHOLDERS'
            EQUITY                   Unaudited
            CURRENT
            LIABILITIES:
            Current maturities
            of long-term
            convertible debt      $        -       $      835
            Current maturities
            of long-term debt              6              115
            Trade payables               423              452
            Deferred revenues          4,835            5,733
            Employees and
            payroll accruals           2,015            2,151
            Accrued expenses
            and other current
            liabilities                1,016            1,906
            Bifurcated
            conversion feature
            , presented at fair
            value                          -              227
            Contingent payment
            obligation                 1,867                -
            Total current
            liabilities               10,162           11,419
            LONG-TERM
            LIABILITIES:
            Contingent payment
            obligation                     -            1,669
            Long term deferred
            tax liability, net           309              352
            Other long-term
            liabilities                  329              388
            Liabilities
            presented at fair
            value                        766              510
            Accrued severance
            pay                        3,742            3,467
            Total long-term
            liabilities                5,146            6,386
            SHAREHOLDERS'
            EQUITY:
            Share capital -
            Ordinary shares of
            NIS 0.4 par value -
            Authorized:
            32,500,000 shares
            at September 30,
            2012 and December
            31, 2011 Issued and
            outstanding:
            10,882,902 shares
            at September 30,
            2012 and 9,987,777
            at December 31,
            2011                       1,225           1,146
            Additional paid-in
            capital                  109,967         107,572
            Accumulated other
            comprehensive loss          (671)           (690)
            Accumulated deficit     (102,414)       (102,840)
            Total shareholders'
            equity                     8,107           5,188
            Total liabilities
            and shareholders'
            equity              $     23,415     $    22,993

*) On July 19 2012, the Company performed a reverse stock split of the Company’s
ordinary shares of four (4) for one (1).

The earning per share amounts and the share data presented for all prior periods were
restated to reflect the effects of the reverse stock split.

                             CONSOLIDATED STATEMENTS OF OPERATIONS
                       U.S. dollars in thousands, except per share data
                                 9 months ended                     3 months ended
                                 September 30,                      September 30,
                                 2012           2011                2012           2011
                            Unaudited      Unaudited           Unaudited      Unaudited
        Software
        licenses       $       10,185  $       4,959       $       3,044  $       1,754
        Maintenance
        and services            8,227          4,499               2,892          1,697
                               18,412          9,458               5,936          3,451
        Operating
        expenses:
        Cost of
        revenues                1,747            966                 574            353
        Research and
        development             5,827          2,741               1,899          1,161
        Selling and
        marketing               6,964          3,576               2,151          1,338
        General and
        administrative          2,274          2,112                 743          1,006
        Total
        operating
        expenses               16,812          9,395               5,367          3,858
        Operating
        Income /
        (Loss)                  1,600             63                 569           (407)
        Financial
        expenses , net          1,046            376                 489            329
        Income /
        (loss) before
        income taxes              554           (313)                 80           (736)
        Taxes on
        income                    128            122                  37             56
        Net income /
        (loss)         $          426  $        (435)       $         43  $        (792)
        Basic net
        income /
        (loss) per
        share          $         0.04 $        (0.05)      $        0.00 $        (0.09)
        Weighted
        average number
        of shares used
        in computing
        basic net
        income per
        share                  10,506          8,426              10,752          8,578
        Diluted net
        income /
        (loss) per
        share                    0.04 $        (0.06)      $        0.00 $        (0.10)
        Weighted
        average number
        of shares used
        in computing
        diluted net
        income per
        share                  11,782          8,426              12,356          8,578

*) On July 19, 2012, the Company performed a reverse stock split of the Company’s
ordinary shares of four (4) for one (1).

The earning per share amounts and the share data presented for all prior periods were
restated to reflect the effects of the reverse stock split.

                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                                U.S. dollars in thousands
                                                             9 months ended
                                                       September 30, September 30,
                                                           2012          2011
                                                         Unaudited     Unaudited
        Cash from operating activities:
        Net Income /( loss)                          $      426          (435)
        Adjustments required to reconcile net
        income ( loss) to net cash provided by
        (used in) operating activities:
        Depreciation                                        168            80
        Stock based compensation                            481           221
        Amortization of intangible assets                   770           328
        Accretion of contingent payment obligation          199             8
        Convertible debt inducement expenses                108             -
        Increase (decrease) in accrued severance
        pay, net                                            219            (4)
        Decrease (increase) in trade receivables         (1,048)          352
        Decrease ( increase) in other accounts
        receivable and prepaid expenses                    (127)           71
        Increase in other long term assets                  (17)          (11)
        Increase (decrease) in trade payables               (29)            7
        Increase (decrease) in deferred revenues           (898)        2,827
        Increase (decrease) in employees and
        payroll accruals                                   (136)          178
        Increase (decrease) in accrued expenses
        and other liabilities                              (890)        1,217
        Change in liabilities presented at fair
        value                                               742            76
        Change in deferred taxes, net                       (77)            -
        Net cash provided by (used in) operating
        activities                                         (109)        4,915
        Cash flows from investing activities:
        Purchase of property and equipment                 (209)         (117)
        decrease (increase) of restricted cash              341          (192)
        Cash paid in connection with the
        acquisition ,net of acquired cash                    -          1,499
        Net cash provided by investing activities           132         1,190
        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,
        warrants and rights                                 475           240
        Receipt of long term loan                            -             57
        Repayment of long-term debt                        (109)         (785)
        Repayment of convertible debt                      (138)         (184)
        Net cash provided by (used in) financing
        activities                                          228          (672)
        Foreign currency translation adjustments
        on cash and cash equivalents                        (20)           34
        Increase in cash and cash equivalents               230         5,467
        Cash and cash equivalents at the beginning
        of the period                                     1,484           872
        Cash and cash equivalents at the end of
        the period                                   $    1,714         6,339
        Supplemental disclosure of cash flow
        activities:
        Cash paid during the period for:
        Interest                                     $      225            63
        Income tax                                   $      234            -
        Non cash activity
        Conversion of convertible debt and
        bifurcated conversion feature                $      630            -
        Shares Issued as part of the 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,
                                   2012              2011       2012              2011
                              September 30, September 30,  September 30, September 30,
                              Unaudited       Unaudited    Unaudited       Unaudited
        GAAP operating
        Income / (loss)     $     1,600   $            63        569   $          (407)
        Stock based
        compensation (1)            481               221        157                76
        Amortization of
        Software
        Development Costs           152               278         40                87
        Acquisition-related
        expenses,
        amortization and
        adjustments (2)             740               864        227               864
        Non-GAAP operating
        Income              $     2,973   $         1,426        993   $           620
        GAAP net Income             426              (435)        43              (792)
        Stock based
        compensation (1)            481               221        157                76
        Amortization of
        Software
        Development Costs           152               278         40                87
        Acquisition-related
        expenses,
        amortization and
        adjustments (2)             740               864        227               864
        Revaluation of
        liabilities
        presented at fair
        value                       850              (224)       414               (87)
        Acquisition related
        financial expense           199               308         66               308
        Tax related to the
        acquisition                (247)                -        (82)                -
        Non-GAAP net Income $     2,601   $         1,012        865   $           456
        GAAP diluted net
        Income (loss) per
        share:                     0.04             (0.05)      0.00             (0.09)
        Operating expenses
        GAAP                       0.12              0.16       0.03              0.12
        Financial expenses         0.09              0.01       0.04              0.03
        Taxes on income           (0.02)                -      (0.01)                -
        Non-GAAP diluted
        net Income per
        share               $      0.22   $          0.12       0.07   $          0.05
        Weighted average
        number of shares
        used in computing
        diluted net income
        per share                11,782             8,426     12,356             8,578

        (1)Stock-based
        compensation
        expenses under ASC
        718 included in:
        Research and
        development                 219                72         98                29
        Selling and
        marketing                   132                70         56                26
        General and
        administrative              130                79          3                21
                            $       481   $           221        157   $            76
        (2)Operating
        acquisition-related
        expenses,
        amortization and
        adjustments:
        Valuation
        adjustment on
        acquired deferred
        services revenue            122                 7         21                 7
        Cost of Sales -
        Amortization of
        technology                  419                22        140                22
        Carve-out to
        RepliWeb employees            -               386          -               386
        Selling and
        marketing -
        Amortization of
        customers
        relationship                199                28         66                28
        General and
        administration -
        Acquisition
        expenses                      -               421          -               421
                            $       740   $           864        227   $           864
        (3)Total
        Acquisition-Related
        Expenses:
        Acquisition-related
        expenses,
        amortization and
        adjustments - Note
        2                           740               864        227               864
        Accretion of
        contingent payment
        obligation                  199                 8         66                 8
        Fair value of carve
        out feature related
        to warrants                   -               300          -               300
        Tax related to the
        acquisition                (247)                         (82)
                            $       692   $         1,172        211   $         1,172

*) On July 19,2012, the Company performed a reverse stock split of the Company’s
ordinary shares of four (4) for one (1).

The earning per share amounts and the share data presented for all prior periods were
restated to reflect the effects of the reverse

        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