Attunity Reports Second Quarter 2011 Results
License Revenue Increases 43% Year-Over-Year
BURLINGTON, Massachusetts, August 10, 2011 /PRNewswire/ --
Attunity Ltd. (OTC Bulletin Board: ATTUF.OB), a leading provider of real-time data integration and event capture software, reported today its unaudited financial results for the quarter ended June 30, 2011.
Second Quarter 2011 Highlights:
- License revenues increased 43% to $1.62 million
- Total revenues increased 20% to $3.05 million
- Net income increased 235% to $178,000
- Rapid Decisions selected Attunity as an OEM partner, with deals this quarter.
"We continue to report solid financial results with total revenue increasing by approximately 20% for the second quarter compared to last year. The growth in the second quarter was primarily due to strong direct sales of software licenses as well as strong demand from companies worldwide for real-time data integration," stated Mr. Shimon Alon, Attunity's Chairman and CEO. "We have maintained a strong pattern of growth through the successful implementation of our strategy to be a leading supplier of data integration and event capture software, supporting the ever growing need for companies to have real-time access to their information. The next phase of our strategy is geared towards penetrating larger markets of cloud computing and application replication. As part of this phase, we have made ongoing investments into R&D, and are currently planning to launch several new products into the market by year-end."
Total revenues for the second quarter of 2011 increased 20% to $3,049,000, compared to $2,544,000 in the second quarter of 2010.
Net Operating income for the second quarter of 2011 was $130,000, compared to a net operating income of $53,000 for the same period of 2010. Non-GAAP net operating income for the second quarter of 2011 was $294,000 compared to $317,000 for the same period last year. Non-GAAP net operating income for the second quarter of 2011 excludes equity-based compensation and amortization and capitalization of software development costs of $164,000 compared to $264,000 for the second quarter of 2010 (see footnotes 1 and 2 at the end of this release).
Net income for the second quarter of 2011 increased 235% to $178,000, or $0.01 per diluted share, compared to $53,000, or $0.00 per diluted share, in the second quarter of 2010. Net income for the second quarter of 2011 was positively impacted by the financial income due to revaluation of conversion features related to the Company's convertible debt and outstanding warrants, which was partially offset by equity-based compensation expenses and amortization of software development costs net of capitalization.
Non-GAAP net income for the second quarter of 2011 was $139,000 compared to $120,000 for the same period last year. Non-GAAP net income for the second quarter of 2011 excludes 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 and 3 at the end of this release).
Cash and cash equivalents were approximately $1.9 million as of June 30, 2011, compared to approximately $2.4 million as of March 31, 2011. The decrease is partially due to reclassification of approximately $0.2 million to Restricted Cash in order to secure foreign currency hedging activities. Restricted Cash was $0.4 million as of June 30, 2011, compared to approximately $0.2 million as of March 31, 2011.
Shareholders' equity was approximately $2.5 million as of June 30, 2011 compared to $2.0 million as of March 31, 2011. Approximately 100 thousands of the increase in shareholders' equity is related to the reclassification of the fair value of warrants previously presented as liabilities to equity, due to securing waivers from price protection rights from the majority of the security holders. Once executed, these waivers allowed the Company to no longer mark-to-market such securities at each balance-sheet date.
Mr. Alon concluded: "We continue to generate profits while investing into our Sales and Marketing, and Research and Development operations, aimed towards driving future growth. We are on track with our plan to launch our new innovative replication platform for cloud computing and for the large and scalable enterprise environment. During the quarter, we have successfully delivered the Open-Data-Base-Connectivity (ODBC) component and are on schedule with the delivery of the Change-Data-Capture (CDC), all in accordance with the OEM agreements with Microsoft. In the second half of 2011, we expect to recognize a pro-rated portion of revenues attributable for 2011, of approximately $1.5 million from these agreements, with cash proceeds of approximately $3.5 million."
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 and event capture software.
Our offering includes software solutions such as Attunity Stream®, a real-time change-data-capture (CDC) software, our Operational Data Replication (ODR) solution and Attunity Connect®, our real-time connectivity software.
Using Attunity's software solutions, our customers enjoy dramatic business benefits by enabling real time access to information 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, Facebook and LinkedIn.
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 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 or expected recognition of revenues from Microsoft, 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: 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; our liquidity challenges and the need to raise additional capital in the future; 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; unknown factors affecting third parties with which Attunity has formed business alliances; timely availability and customer acceptance of Attunity's new and existing products; 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.
© 2011 Attunity Ltd. All rights reserved. Attunity is a trademark of Attunity Inc.
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
June 30, December 31,
2011 2010
Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,894 $ 872
Restricted cash 396 224
Trade receivables (net of allowance for
doubtful accounts of $15 both at June 30 ,
2011 and December 31, 2010) 1,000 1,201
Other accounts receivable and prepaid
expenses 249 190
Total current assets 3,539 2,487
LONG-TERM ASSETS:
Long-term prepaid expenses 61 61
Severance pay fund 1,497 1,323
Property and equipment, net 229 205
Software development costs, net 304 496
Goodwill 6,315 6,133
Total long-term assets 8,406 8,218
Total assets $ 11,945 $ 10,705
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
June 30, December 31,
2011 2010
LIABILITIES AND SHAREHOLDERS' EQUITY Unaudited
CURRENT LIABILITIES:
Current maturities of long-term
convertible debt $ 939 $ 245
Current maturities of long-term debt 627 1,014
Trade payables 145 220
Deferred revenues 2,590 2,048
Employees and payroll accruals 1,052 844
Accrued expenses and other current
liabilities 949 759
Total current liabilities 6,302 5,130
LONG-TERM LIABILITIES:
Long-term convertible debt 755 1,571
Long-term debt 12 90
Warrants and bifurcated conversion
feature, presented at fair value 209 1,215
Accrued severance pay 2,201 1,966
Total long-term liabilities 3,177 4,842
SHAREHOLDERS' EQUITY:
Share capital - Ordinary shares of NIS
0.1 par value - 965 939
Authorized: 130,000,000 shares at June 30,
2011 and December 31, 2010. Issued and
outstanding: 33,240,197 shares at June
30, 2011 and 32,269,695 at December 31, 2010
Additional paid-in capital 103,574 102,459
Accumulated other comprehensive loss (405) (640)
Accumulated deficit (101,668) (102,025)
Total shareholders' equity 2,466 733
Total liabilities and shareholders'
equity $ 11,945 $ 10,705
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except per share data
6 months ended 3 months ended
June 30, June 30,
2011 2010 2011 2010
Unaudited Unaudited Unaudited Unaudited
Software licenses $ 3,205 $ 2,540 $ 1,618 $ 1,129
Maintenance and services 2,802 2,761 1,431 1,415
6,007 5,301 3,049 2,544
Operating expenses:
Cost of revenues 612 1,032 309 533
Research and development, net 1,581 1,148 829 550
Selling and marketing 2,238 2,038 1,221 965
General and administrative 1,106 866 558 443
Total operating expenses 5,537 5,084 2,918 2,491
Operating Income 470 217 130 53
Financial expenses, net 47 359 (74) (26)
Income / (loss) before
income taxes 423 (142) 204 79
Taxes on income 66 34 26 26
Net Income/(loss) $ 357 $ (176) $ 178 $ 53
Basic net Income/(loss)
per share $ 0.01 $ (0.01) $ 0.01 $ (*
Weighted average number
of shares used in computing
basic net Income/(loss)
per share 33,212 31,750 33,214 31,924
Diluted net Income/(loss)
per share $ 0.01 $ (0.01) $ (* $ (*
Weighted average number
of shares used in computing
diluted net Income/(loss)
per share 40,041 31,750 38,985 31,924
* less than $ 0.01 per share
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
6 months ended 6 months ended
June 30, June 30,
2011 2010
Unaudited Unaudited
Cash from operating activities:
Net Income /( loss) $ 357 $ (175)
Adjustments required to reconcile
net income ( loss) to net cash
provided by operating activities:
Depreciation 53 53
Stock based compensation 144 113
Amortization of software development costs 192 602
Increase (decrease) in accrued severance pay, net 61 62
Decrease (increase) in trade receivables 215 (235)
Decrease ( increase) in other accounts
receivable and prepaid expenses (59) (80)
Decrease (increase) in long-term prepaid expenses - 14
Increase (decrease) in trade payables (76) (14)
Increase (decrease) in deferred revenues 489 464
Increase (decrease) in employees and
payroll accruals 206 (133)
Increase (decrease) in accrued expenses and
other liabilities 186 (239)
Increase of restricted cash (172) 5
Changes in fair value of warrants and
bifurcated embedded conversion feature (146) 154
Net cash provided by operating activities 1,449 591
Cash flows from investing activities:
Purchase of property and equipment (77) (43)
Capitalization of software development costs - (110)
Net cash used in investing activities (77) (153)
Cash flows from financing activities:
Proceeds from exercise of stock options
and warrants 137 73
Receipt of long term loan 57 25
Repayment of long-term debt (526) (417)
Repayment of convertible debt (123) -
Net cash provided by (used in)
financing activities (455) (319)
Foreign currency translation adjustments on
cash and cash equivalents 104 (11)
Increase (decrease) in cash and cash
equivalents 1,022 109
Cash and cash equivalents at the beginning
of the period 872 1,428
Cash and cash equivalents at the end
of the period $ 1,894 $ 1,537
Supplemental disclosure of cash flow
activities:
Cash paid during the period for:
Interest $ 48 $ 355
RECONCILIATION OF SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION
U.S. dollars in thousands, except per share data
6 months ended 3 months ended
June 30, June 30,
2011 2010 2011 2010
Unaudited Unaudited Unaudited Unaudited
GAAP operating
Income $ 470 $ 217 $ 130 $ 53
Stock based
compensation(1) 144 113 77 60
Amortization of Software
development costs net of
capitalization(2) 192 492 87 204
Non-GAAP operating
Income $ 806 $ 822 $ 294 $ 317
GAAP net Income (loss) 357 (176) 178 53
Stock based
compensation(1) 144 113 77 60
Amortization of Software
development costs net of
capitalization(2) 192 492 87 204
Financial expenses(3) (146) 154 (203) (197)
Non-GAAP net Income $ 547 $ 583 $ 139 $ 120
* GAAP diluted net Income
(loss) per share 0.01 (0.01) 0.00 0.00
Stock based compensation(1) 0.00 0.00 0.00 0.00
Amortization of Software
development costs net of
capitalization(2) 0.01 0.02 0.00 0.01
Financial expenses(3) (0.00) 0.00 (0.01) (0.01)
* Non-GAAP diluted net
Income per share $ 0.02 $ 0.02 $ 0.00 $ 0.01
Weighted average number
of shares used in
computing diluted net
income per share 40,041 31,750 38,985 31,924
(1) Equity-based compensation
expenses under ASC 718
included in :
Research and development 42 25 24 14
Selling and marketing 44 43 25 23
General and administrative 58 45 28 23
$ 144 $ 113 $ 77 $ 60
(2) Amortization and
capitalization of
software development
costs under ASC 985-20
Amortization 192 602 87 302
Capitalization - (110) - (98)
$ 192 $ 492 $ 87 $ 204
(3) Financial expenses:
Revaluation of warrants
and conversion feature of
long term convertible debt (146) 154 (203) (197)
$ (146) $ 154 $ (203) $ (197)
For more information, please contact:
Todd Fromer / Garth Russell
KCSA Strategic Communications
P: +1-212-682-6300
[email protected] / [email protected]
Dror Elkayam, CFO
Attunity Ltd.
Tel. +972-9-899-3000
[email protected]
SOURCE Attunity Ltd
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