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Attunity Reports First Quarter 2013 Results

May 2, 2013

Total revenues decreased by 25% to $4.6 million in the first quarter of 2013

BURLINGTON, Mass., May 2, 2013 /PRNewswire/ — Attunity, Ltd. (NASDAQ CM: ATTU), a leading provider of information availability software solutions, today reported its unaudited financial results for the three month period ended March 31, 2013.

“While we continue to win new customers and experience strong demand for our solutions, our financial results for the first quarter of 2013 reflect certain short-term challenges. These challenges include weak sales and marketing execution, as well as lower than expected OEM revenues. We are taking steps to quickly overcome these challenges and we plan to return to strong growth in the second half of the year,” stated Shimon Alon, Chairman and Chief Executive Officer of Attunity. “Some of these steps include a change in leadership of the marketing department, revamping the sales lead generation process, and a broad restructuring of our marketing efforts. In addition, we expect the recent expansion of our sales and business development team in North America and abroad to start making a positive impact on sales growth within the next few months.”

“The first quarter financial results were also negatively impacted by lower than expected revenues from one of our largest OEM customers. A new agreement with improved license and support terms was recently signed with this OEM customer for an additional 3-year period,” continued Mr. Alon. “We also experienced a temporary delay during the first quarter on our activities with EMC Greenplum, which we believe is related to its spin-off to become part of a new company, Pivotal. This spin-off, created by EMC Greenplum and VMware, is highly focused on Data Analytics and Cloud Computing. Consequently, we expect that, in the long-term, the spin-off and our partnership with Pivotal will actually have a positive impact on our growth as it creates even more new business opportunities for Attunity than previously expected.”

“With many of these events behind us now, we expect a return to strong growth during the second half of the year. We are now targeting full year revenue in the range of $27 million to $30 million, and expect non-GAAP operating profit margin to range between 13% and 18%,” Mr. Shimon concluded.

Recent Operational Highlights

  • Signed worldwide multi-year reselling agreement for Attunity Replicate with a leading Fortune 50 global technology company to expand the partner’s heterogeneous data replication capabilities
  • Signed an OEM agreement with a global provider of data analytics solutions servicing thousands of customers worldwide
    • Projected to generate several million dollars of revenue for Attunity over the next 3 years based on the vendor’s expectations
  • Closed two large deals with large telecommunications companies
  • Named in CRN’s “Big Data 100″ list for most innovative data management products and services to help businesses manage Big Data
  • Introduced high-speed data loading solution for Amazon Redshift, AWS’s new data warehouse in the Cloud
  • Introduced Turbo-Stream CDC, an innovative and proprietary technology for loading high transaction volumes into data warehouses including EMC Greenplum (now Pivotal) and Teradata

Financial Results for Q1 2013

Total revenues for the first quarter of 2013 were $4.6 million, compared to $6.1 million for the same period of 2012. This decrease is primarily a result of a 52% decline in license revenues to $1.7 million, compared to $3.6 million for the same period of 2012. The decrease in license revenues was partially offset by an increase in maintenance and services revenue in the amount of $0.3 million, compared to the same period of 2012.

Operating loss for the first quarter of 2013 was $1.3 million, compared to an operating income of $0.3 million for the same period of 2012.

Non-GAAP operating loss for the first quarter of 2013 was $950,000, compared to non-GAAP operating income of $831,000 for the same period of 2012. Non-GAAP operating loss for the first quarter of 2013 excludes the impact of stock-based compensation expenses and amortization of software development costs totaling $166,000, compared to $220,000 for the same period last year; and $187,000 in amortization and expenses related to the acquisition of RepliWeb, compared to $268,000 for the same period of 2012.

Net loss for the first quarter of 2013 was $1,355,000, or $0.12 per diluted share, compared to a net loss of $125,000, or $0.01 per diluted share (adjusted to reflect the recent reverse stock split) in the first quarter of 2012.

Non-GAAP net loss for the first quarter of 2013 was $1,008,000, compared to non-GAAP net income of $504,000 for the same period of 2012. Non-GAAP net loss for the first quarter of 2013 excludes a total of $347,000 in expenses and amortization, which is comprised mainly of $181,000 in amortization and other expenses associated with acquisition of RepliWeb, compared to $252,000 for the same period last year; and $166,000 stock-based compensation expenses, compared to $164,000 for the same period last year. See “Use of Non-GAAP Financial Information” below for more information regarding Attunity’s use of Non-GAAP financial measures.

Cash and cash equivalents were $3.7 million as of March 31, 2013, compared to $3.8 million as of December 31, 2012. Shareholders’ equity decreased to $8.4 million as of March 31, 2013, compared to $9.6 million as of December 31, 2012.

2013 Revised Guidance

Following the results of the first quarter, the Company has revised its outlook for 2013 with revenues now expected to be in the range of $27 million to $30 million and non-GAAP operating margin of between 13% and 18%. The Company reaffirmed that the revenue growth is expected to occur primarily in the second half of 2013.

The Company expects to continue providing annual guidance regarding revenues and Non-GAAP operating profit margin in future periods. However, the Company clarified that it does not expect to do so more often than on an annual basis.

    Financial Reconciliation to NON-
     GAAP figures:

                                                             From         To
                                                             ----        ---

    GAAP Operating Profit Margin                                    6.9%     12.5%

    Equity based compensation                                       3.3%        3%

    Amortization Associated with the
     acquisition of RepliWeb                                        2.8%      2.5%

    Non-GAAP Operating Profit
     margin (*)                                                      13%       18%

    (*) Non GAAP Operating Profit Margin is calculated by dividing the
     Non GAAP
    Operating Profit by the total revenues for the period.

Conference Call Information

The Company’s management will host a conference call today, May 2, 2013, at 10:00 a.m. Eastern Time. The dial-in numbers for the conference call are 1-877-249-9037 (U.S. Toll Free), +1 646 254 3367 (International) or 03-763-0146 (Israel). All dial-in participants must use the following code to access the call: 4463127. 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, and 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 June 2, 2013 at +1 347 366 9565 (all regions). Participants must use the following code to access the replay of the call: 4463127. The online archive of the webcast will be available on http://www.attunity.com/events or 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. Our software solutions include data replication, change data capture (CDC), data connectivity, enterprise file replication (EFR) and managed-file-transfer (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 and join our community on Twitter, Facebook, LinkedIn and YouTube, the content of which is not part of this press release.

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, operating income, operating profit margin 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, stock-based compensation expenses in accordance with ASC 718, amortization of software development costs in accordance with ASC 985-20, and non-cash financial expenses such as the effect of a revaluation 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 its 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 plan to return to strong growth in the second half of 2013, when we discuss our expectation that the recent expansion of our sales and business development team in North America and abroad will start making a positive impact on sales growth within the next few months, when we discuss our expectation that our partnership with the spin-off by EMC Greenplum and our partnership with Pivotal will have a positive impact on our growth, or when we discuss our expectation for revenue and Non-GAAP operating profit margin in 2013, we are using forward-looking statements. 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, EMC and Pivotal; risks and uncertainties relating to acquisitions, including costs and difficulties related to integration of acquired businesses; 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 for the year ended December 31, 2012, 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.

© 2013 Attunity Ltd. All rights reserved. Attunity is a trademark of Attunity Inc.

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

                                         CONSOLIDATED BALANCE SHEETS

                                          U.S. dollars in thousands

                                    March 31,                        December 31,

                                                             2013                            2012
                                                             ----                            ----

                                              Unaudited                           Audited

    ASSETS

    CURRENT
     ASSETS:

    Cash
     and
     cash
     equivalents                                           $3,733                          $3,778

    Trade
     receivables
      (net
      of
     allowance
     for
     doubtful
     accounts
     of $15
     at
     March                                                  2,171                           3,671
    31, 2013 and December 31, 2012)

    Other
     accounts
     receivable
     and
     prepaid
     expenses                                                 666                             303

     Deferred
     income
     taxes                                                    171                              20

    Total
     current
     assets                                                $6,741                          $7,772
    --------

    LONG-
     TERM
     ASSETS:

    Other
     long
     term
     assets                                                    85                              93

     Severance
     pay
     fund                                                   3,039                           2,880

     Property
     and
     equipment,
     net                                                      762                             423

     Intangible
     assets
     ,net                                                   1,683                           1,870

    Goodwill                                               13,030                          13,094

    Total
     long-
     term
     assets                                               $18,599                         $18,360
    -------

    Total
     assets                                               $25,340                         $26,132
    -------                                               =======                         =======

                                CONSOLIDATED BALANCE SHEETS

                        U.S. dollars in thousands except share data

                                                    March 31,                December  31,

                                                                        2013                    2012

                                                   Unaudited                    Audited

    LIABILITIES AND
     SHAREHOLDERS' EQUITY

    CURRENT LIABILITIES:

    Trade payables                                                      397                     316

    Payment obligation                                                2,000                   1,934

    Deferred revenues                                                 5,907                   4,759

    Employees and payroll
     accruals                                                         1,971                   2,589

    Accrued expenses and other
     current liabilities                                                738                   1,220

    Total current
     liabilities                                                    $11,013                 $10,818

    LONG-TERM LIABILITIES:

    Other long-term liabilities                                         196                     145

    Long term deferred revenues                                         740                     888

    Liabilities  presented at
     fair value                                                         730                     730

    Accrued severance pay                                             4,282                   3,989

    Total long-term
     liabilities                                                     $5,948                  $5,752

    SHAREHOLDERS' EQUITY:

    Share capital -Ordinary
     shares of NIS 0.4 par
     value -                                                          1,278                   1,270

    Authorized: 32,500,000 shares at March 31, 2013
     and  December 31, 2012
    Issued and outstanding: 11,002,646 shares at
     March  31, 2013 and 10,919,930
    shares at  December 31, 2012

    Additional paid-in capital                                      110,532                 110,318

    Accumulated other
     comprehensive loss                                                (722)                   (672)

    Accumulated deficit                                            (102,709)               (101,354)

    Total shareholders' equity                                        8,379                   9,562
    --------------------------

    Total liabilities
     and
     shareholders'
     equity                                                         $25,340                 $26,132
    -----------------
                             CONSOLIDATED STATEMENTS OF OPERATIONS

                  U.S. dollars and shares in thousands, except per share data

                                                           Three months ended

                                                               March 31,
                                                               ---------

                                                            2013                     2012
                                                            ----                     ----

                                         Unaudited                Unaudited

    Software licenses                                     $1,730                   $3,563

    Maintenance and services                               2,855                    2,519

    Total revenue                                          4,585                    6,082

    Operating expenses:

    Cost of revenues                                         534                      636

    Research and development                               1,985                    2,037

    Selling and marketing                                  2,651                    2,282

    General and administrative                               718                      784

    Total operating expenses                               5,888                    5,739
    ------------------------

    Operating Income / (Loss)                             (1,303)                     343

    Financial expenses , net                                 113                      347

    Loss  before income taxes                             (1,416)                      (4)

    Taxes on income / (benefit)                              (61)                     121

    Net  loss                                            $(1,355)                   $(125)

    Basic and diluted net loss per
     share  *)                                            $(0.12)                  $(0.01)

    Weighted average number of shares used in
     computing basic and                                  10,961                   10,273
    diluted net loss per share  *)

    *) On July 19, 2012, the Company affected a reverse stock split of the Company's ordinary shares of four (4)
    for one (1).
    The net loss 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

                                                           Three Months Ended

                                          March 31,               March 31,

                                               2013                     2012
                                               ----                     ----

                                          Unaudited               Unaudited
                                          ---------               ---------

    Cash  flows  activities:
    ------------------------

    Net loss                                             $(1,355)              $(125)

    Adjustments required to
     reconcile net loss to net
     cash provided by
    operating activities:

    Depreciation                                              46                  48

    Stock based compensation                                 166                 164

    Amortization of  intangible
     assets                                                  187                 262

    Accretion of  payment
     obligation                                               66                  66

    Convertible debt inducement
     expenses                                     -                      108

    Increase  in accrued
     severance pay, net                                      134                 184

    Decrease in trade
     receivables                                           1,500                  38

    Increase in other accounts
     receivable and prepaid
     expenses                                               (363)               (180)

    Decrease in other long term
     assets                                                    8                   4

    Increase (decrease) in trade
     payables                                                 10                  43

    Increase  in deferred
     revenues                                              1,000                 945

    Decrease  in employees and
     payroll accruals                                       (618)               (198)

    Decrease in accrued expenses
     and other liabilities                                  (494)               (329)

    Revaluation of restricted
     cash                                         -                       (5)

    Change in liabilities
     presented at fair value                      -                       49

    Change in deferred taxes,
     net                                                     (88)                 88

    Net cash  provided
     by operating
     activities                                             $199               1,162

    Cash flows from investing
     activities:
    -------------------------

    Purchase of property and
     equipment                                              (314)                (78)

    Net cash used in
     investing
     activities                                            $(314)                (78)

    Cash flows from financing
     activities:
    -------------------------

    Proceeds from exercise of
     stock options, warrants and
     rights                                                   56                  74

    Repayment of long-term debt                   -                      (92)

    Repayment of convertible
     debt                                         -                      (61)
                                                ---                      ---

    Net cash provided
     by (used in)
     financing
     activities                                              $56                 (79)

    Foreign currency translation
     adjustments on cash and
     cash equivalents                                         14                 (41)
                                                             ---                 ---

    Increase (decrease) in cash
     and cash equivalents                                    (45)                964

    Cash and cash equivalents at
     the beginning of the period                           3,778               1,484
                                                           -----               -----

    Cash and cash
     equivalents at
     the end of the
     period                                               $3,733              $2,448

    Supplemental disclosure of
     cash flow activities:
    --------------------------

    Cash paid during the period
     for:

     Income tax                                             $361                $209

    Non cash activities:
    --------------------

    Purchase of
     property and
     equipment                                               $71           $       -
                                                                                 ===

                                        RECONCILIATION OF SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION

                  U.S. dollars and shares in thousands, except per share data

                                                                                                           Three months ended

                                            March 31,
                                            ---------

                                                                                                              2013                      2012
                                                                                                              ----                      ----

                                                                                                        Unaudited                 Unaudited

                  GAAP operating  Income (loss)                                         $                   (1,303)                     $343

                  Stock based compensation (1)                                                                 166                       164

                  Amortization of Software Development Costs                                                     -                        56

                  Acquisition-related amortization and adjustments (2)                                         187                       268

                  Non-GAAP operating Income (loss)                                      $                     (950)                     $831
                                                                                                              ====                      ====

                  GAAP net loss                                                                             (1,355)                     (125)

                  Stock based compensation (1)                                                                 166                       164

                  Amortization of Software Development Costs                                                     -                        56

                  Acquisition-related amortization and adjustments (2)                                         187                       268

                   Revaluation of liabilities and conversion feature
                   presented at fair value                                                                       -                       157

                  Acquisition  related financial  expense                                                       66                        66

                  Tax related to the acquisition                                                               (72)                      (82)

                  Non-GAAP net Income (loss)                                            $                   (1,008)                     $504
                                                                                                            ======                      ====

                  GAAP diluted net loss per share *):                                                        (0.12)                    (0.01)

                   Stock based compensation and  Amortization of Software
                   Development Costs, Acquisition-                                                            0.03                      0.05
                  related amortization and adjustments

                   Revaluation of Liabilities presented at fair value,
                   and acquisition related financial expenses                                                 0.01                      0.02

                  Tax related to the acquisition                                                             (0.01)                    (0.01)

                  Non-GAAP diluted net Income (loss)  per share                         $                    (0.09)                    $0.05
                                                                                                             =====                     =====

                                                                                                            10,961                    10,273

                   Weighted average number of shares used in computing
                   diluted net income per share *)

             (1)   Stock-based compensation expenses  under ASC 718
                   included in:
                  -------------------------------------------------

                  Research and development                                                                      68                        60

                  Selling and marketing                                                                         52                        40

                  General and administrative                                                                    46                        64

                                                                                        $                      166                      $164
                                                                                                               ===                      ====

             (2)   Operating  Acquisition-related expenses, amortization
                   and adjustments:
                  ------------------------------------------------------

                   Valuation adjustment on acquired deferred services
                   revenue                                                                                       -                        62

                  Cost of Sales - Amortization of technology                                                   129                       140

                   Selling and marketing -Amortization of customers
                   relationship                                                                                 58                        66

                                                                                        $                      187                      $268
                                                                                                               ===                      ====

                   *) On July 19, 2012, the Company affected 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.

SOURCE Attunity


Source: PR Newswire