Attunity Reports Fourth Quarter and Full Year 2017 Results

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Feb 01,2018
Attunity Reports Fourth Quarter and Full Year 2017 Results
Record Quarterly Revenue of $18.3 Million
Estimated Full Year 2018 Revenue of $73 - $75 Million

BURLINGTON, MA, Feb. 1, 2018 /PRNewswire/ -- Attunity Ltd. (NasdaqCM: ATTU), a leading provider of data integration and Big Data management software solutions, today reported its unaudited financial results for the three-month period and year ended December 31, 2017.

"We had a strong close to the year. In the fourth quarter, we achieved record total revenue, record license revenue, positive cash flow from operations and significantly enhanced our balance sheet through a successful public offering. We reported total quarterly revenue of $18.3 million, an increase of 17% year-over-year, and $62.1 million for the full year 2017, in line with our annual guidance. Revenue in the quarter was driven by a combination of an increase in new customer engagements as well as existing customers' expansion," stated Shimon Alon, Chairman and CEO of Attunity. "Customers successfully using the Attunity platform are now looking to expand their current environments to accommodate additional data sources, driving return business. For example, during the fourth quarter, we closed two large expansion deals with existing customers, each for approximately $1.0 million."

"The strong momentum we experienced in the second half of 2017 is carrying into 2018. In 2017, we continued to close large customer engagements, partnered with key players in the IT industry, enhanced our technology platform, increased term-license bookings (which is growing in demand among customers) and expanded our senior management team with the new hire of a COO. With these achievements, we believe we are well positioned to accelerate our revenue growth, penetrate additional Fortune 1000 companies, and continue to replace traditional vendors. We plan to further expand and ramp up our sales and marketing investments and anticipate our pipeline will further grow in 2018 and for years to come," concluded Mr. Alon.

Recent Operational Highlights

  • Raised approximately $21.0 million in total net proceeds from public offering in December 2017.
  • Closed multiple agreements for Attunity Replicate, including one with a leading global manufacturing company.
  • Closed an aggregate of more than $2.0 million of additional business with two existing Fortune 100 clients, a healthcare company and a pharmacy benefit management company.
  • Launched new service offering on Amazon Web Services (AWS) Marketplace, enabling universal migration and hybrid data replication for on-premises data sources to AWS.

Financial Highlights for the Fourth Quarter of 2017 compared with the Fourth Quarter of 2016

  • Total revenue was $18.3 million, compared with $15.6 million
  • Operating profit was $0.2 million, similar to the same period in 2016
  • Non-GAAP operating profit was $1.6 million, similar to the same period in 2016*
  • Net loss of $1.6 million, compared with a net loss of $0.2 million
  • Non-GAAP net loss of $0.04 million, compared with non-GAAP net income of $1.1 million*

Financial Highlights for the Full Year 2017, compared with the Full Year 2016

  • Total revenue was $62.1 million, compared with $54.5 million
  • Operating loss was $2.9 million, compared with an operating loss of $11.4 million
  • Non-GAAP operating profit was $2.2 million, compared with an operating loss of $0.1 million*
  • Net loss of $6.7 million, compared with a net loss of $10.7 million
  • Non-GAAP net loss of $1.7 million, compared with a non-GAAP net loss of $2.2 million*

Financial Results for Fourth Quarter of 2017

Total revenue for the fourth quarter of 2017 was $18.3 million, compared with $15.6 million for the same period in 2016. This includes license revenue of $10.3 million, which grew 17% compared with $8.8 million for the same period in 2016, and maintenance and service revenue, which grew 18% to $8.0 million, compared with $6.8 million for the same period in 2016.

Operating expenses for the fourth quarter of 2017 increased 18% to $18.1 million, compared with $15.4 million for the same period in 2016.

Non-GAAP operating expenses for the fourth quarter of 2017 increased 20% to $16.7 million, compared with $14.0 million for the same period in 2016. Non-GAAP operating expenses exclude approximately $1.4 million in equity-based compensation expenses and amortization associated with acquisitions, similar to the same period in 2016.*

Operating profit for the fourth quarter of 2017 was $0.2 million, similar to the same period in 2016.

Non-GAAP operating profit was $1.6 million for the fourth quarter of 2017, similar to the same period in 2016. Non-GAAP operating profit excludes approximately $1.4 million in equity-based compensation expenses and amortization associated with acquisitions, similar to the same period in 2016.*

Net loss for the fourth quarter of 2017 was $1.6 million, or ($0.09) per diluted share, compared with a net loss of $0.2 million, or ($0.01) per diluted share, in the fourth quarter of 2016.

Non-GAAP net loss for the fourth quarter of 2017 was $0.04 million, or ($0.00) per diluted share, compared with a non-GAAP net income of $1.1 million, or $0.07 per diluted share, for the same period in 2016. Non-GAAP net loss excludes approximately $1.6 million in equity-based compensation expenses, amortization associated with acquisitions and the effect of changes in deferred taxes related to non-GAAP adjustments, compared with approximately $1.3 million of similar expenses for the same period in 2016.*

Cash and cash equivalents were $29.1 million as of December 31, 2017, compared with $7.3 million as of September 30, 2017. Cash and cash equivalents at the end of the fourth quarter of 2017 were mainly impacted by approximately $21.0 million in net proceeds raised from a public offering closed in December 2017.

Shareholders' equity as of December 31, 2017 increased to $51.2 million, compared with $30.5 million as of September 30, 2017.

Financial Results for Full Year 2017

Total revenue for the full year 2017 was $62.1 million, compared with $54.5 million for the same period in 2016. This includes license revenue of $32.6 million, which grew 14% compared with $28.7 million for the same period in 2016, and maintenance and service revenue, which grew 14% to $29.5 million, compared with $25.8 million for the same period in 2016.

Operating expenses for the full year 2017 slightly decreased to $65.0 million, compared with $65.9 million for the same period in 2016.

Non-GAAP operating expenses for the full year 2017 increased 10% to $59.9 million, compared with $54.6 million for the same period in 2016. Non-GAAP operating expenses exclude approximately $5.1 million in equity-based compensation expenses and amortization associated with acquisitions, compared with (1) an approximately $4.1 million charge for partial impairment of acquired intangible assets associated with the acquisition of Appfluent in 2015 and (2) $7.1 million in equity-based compensation expenses and costs associated with acquisitions for the same period in 2016.*

Operating loss for the full year 2017 was $2.9 million, compared with $11.4 million for the same period in 2016.

Non-GAAP operating profit was $2.2 million for the full year 2017, compared with a non-GAAP operating loss of $0.1 million for the same period in 2016. Non-GAAP operating profit excludes approximately $5.1 million in equity-based compensation expenses and amortization associated with acquisitions, compared with (1) an approximately $4.1 million charge for partial impairment of acquired intangible assets associated with the Appfluent acquisition and (2) $7.1 million in equity-based compensation expenses and costs associated with acquisitions for the same period in 2016.*

Net loss for the full year 2017 was $6.7 million, or ($0.39) per diluted share, compared with a net loss of $10.7 million, or ($0.64) per diluted share, for the same period in 2016.

Non-GAAP net loss for the full year 2017 was $1.7 million, or ($0.10) per diluted share, compared with $2.2 million, or ($0.13) per diluted share, for the same period in 2016. Non-GAAP net loss excludes approximately $5.1 million in equity-based compensation expenses, amortization associated with acquisitions and the effect of changes in deferred taxes related to non-GAAP adjustments, compared with (1) an approximately $4.1 million charge for partial impairment of acquired intangible assets associated with the Appfluent acquisition, and (2) $4.3 million in equity-based compensation expenses and costs associated with acquisitions, including the effect of changes in deferred taxes related to non-GAAP adjustments, for the same period in 2016.*

Cash and cash equivalents were $29.1 million as of December 31, 2017, compared with $9.2 million as of December 31, 2016.

Shareholders' equity as of December 31, 2017 increased to $51.2 million, compared with $32.7 million as of December 31, 2016.

Outlook for Full Year 2018

The Company is introducing its outlook for the full year 2018 as follows:

  • Total revenue is estimated to grow to between $73 and $75 million.
  • Non-GAAP operating margin is estimated to be between 6% and 9%.

Financial Reconciliation to non-GAAP figures for 2018 Outlook:


From

To

GAAP Operating Profit (Loss) Margin

(1%)

2%

Equity-based compensation

(6%)

(6%)

Amortization associated with acquisitions

(1%)

(1%)

Non-GAAP Operating Profit margin (1)

6%

9%

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

These estimates for 2018 reflect the Company's current and preliminary views, which are subject to change (see below under "Safe Harbor Statement"). The Company clarified that it does not expect to provide or update guidance more often than on an annual basis.

* See "Use of Non-GAAP Financial Information" below for more information regarding Attunity's use of Non-GAAP financial measures.

Conference Call and Webcast Information

The Company will host a conference call with the investment community on Thursday, February 1st at 8:30 a.m. Eastern Time featuring remarks by Shimon Alon, Chairman and CEO, Dror Harel-Elkayam, CFO, and Itamar Ankorion, CMO of Attunity. The dial-in numbers for the conference call are +1-877-407-9039 (U.S. Toll Free), +1-80-940-6247 (Israel), or +1-201-689-8470 (International). All dial-in participants must use the following code to access the call: 13675269.

Please call at least five minutes before the scheduled start time. The conference call will also be available via webcast, which can be accessed through the Investor Relations section of Attunity's website, ir.attunity.com. Please allow extra time prior to the call to visit the site and download any necessary software to listen to the live broadcast.

For interested individuals unable to join the conference call, a replay of the call will be available through February 15, 2018, at +1-844-512-2921 (U.S. Toll Free) or +1-412-317-6671 (International). Participants must use the following code to access the replay of the call: 13675269. The online archive of the webcast will be available on ir.attunity.com/events for 30 days following the call.

About Attunity

Attunity is a leading provider of data integration and Big Data management software solutions that enable availability, delivery, and management of data across heterogeneous enterprise platforms, organizations, and the Cloud. Our software solutions include data replication and distributiontest data managementchange data capture (CDC)data connectivityenterprise file replication(EFR), managed file transfer (MFT), data warehouse automationdata usage analytics, and cloud data delivery.

Attunity has supplied innovative software solutions to its enterprise-class customers for over 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 Hewlett Packard Enterprise. 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 blog and join our communities on TwitterFacebookLinkedIn and YouTube.

(*) 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 (loss), operating expenses, operating profit (loss), and diluted net income (loss) per share, which are adjusted from results based on GAAP to exclude amortization and impairment charges associated with acquisitions, equity-based compensation expenses, acquisition-related compensation expenses, non-cash financial expenses, such as the effect of a revaluation of liabilities presented at fair value and accretion of payment obligations, and the effect of changes in deferred taxes related to non-GAAP adjustments. 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. For further details, see the Reconciliation of Supplemental Non-GAAP Financial Information table later in this press release.

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 applicable 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 the demand for our products, expectations regarding our pipeline and our outlook for 2018, we are using forward-looking statements. In addition, announced results for the fourth quarter and full year of 2017 are preliminary, unaudited and subject to year-end audit adjustment. Because such statements deal with future events, they are subject to various risks and uncertainties and actual results, expressed or implied by such forward-looking statements, 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: our history of operating losses and ability to achieve or sustain profitability; our ability to manage our growth effectively; our business and operating results dependency on the successful and timely implementation of our third party partner solutions; the lengthy sales cycle of our products; competition; acquisitions, including costs and difficulties related to integration of acquired businesses and impairment charges; global economic conditions; the potential loss of one or more of our significant customers or a decline in demand from one or more of these customers; timely availability and customer acceptance of Attunity's new and existing products; international operations; our need and ability to raise capital; 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 latest Annual Report on Form 20-F (as amended) 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 with, 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.

The contents of any website or hyperlinks mentioned in this press release are for informational purposes and the contents thereof are not part of this press release.© Attunity 2018. All Rights Reserved. Attunity is a registered trademark of Attunity Inc. All other product and company names herein may be trademarks of their respective owners.

 

CONDENSED CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands









December 31,


December 31,




2017


2016










Unaudited


Audited


ASSETS












CURRENT ASSETS:






Cash and cash equivalents

$

29,087

$

9,166


Trade receivables (net of allowance for doubtful accounts of $15 at December 31, 2017, 2016)


10,609


7,031


Other accounts receivable and prepaid expenses


1,074


663


Total current assets

$

40,770

$

16,860








LONG-TERM ASSETS:






Other assets


152


155


Deferred taxes


1,209


2,340


Severance pay fund


4,378


3,770


Property and equipment, net


1,287


1,214


Intangible assets, net


1,431


2,778


Goodwill


30,929


30,929


Total long-term assets

$

39,386

$

41,186








Total assets

$

80,156

$

58,046









 

CONDENSED CONSOLIDATED BALANCE SHEETS



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





December 31,


 December 31,




2017


2016












Unaudited


Audited



LIABILITIES AND SHAREHOLDERS' EQUITY






CURRENT LIABILITIES:












Trade payables

$

666

$

375


Payment obligation related to acquisitions


-


271


Deferred revenues


11,066


10,676


Employees and payroll accruals


5,730


4,741


Accrued expenses and other current liabilities


3,066


2,021


Total current liabilities


20,528


18,084














LONG-TERM LIABILITIES:






Other liabilities


321


277


Deferred revenues


2,163


1,438


Liability presented at fair value


-


512


Accrued severance pay


5,941


5,027


Total long-term liabilities


8,425


7,254








SHAREHOLDERS' EQUITY:






Share capital - Ordinary shares of NIS 0.4 par value -


2,361


1,921


Authorized: 32,500,000 shares at December 31, 2017 and 2016; Issued and outstanding 20,718,468 shares at December 31, 2017 and 16,841,238 shares at December 31, 2016





Additional paid-in capital


174,693


149,716


Accumulated other comprehensive loss


(1,222)


(1,013)


Accumulated deficit


(124,629)


(117,916)








Total shareholders' equity


51,203


32,708








Total liabilities and shareholders' equity

$

80,156

$

58,046












 

CONSOLIDATED STATEMENTS OF OPERATIONS

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














Three months ended


Year ended



December 31,  


December 31,  



2017


2016


2017


2016




Unaudited


Unaudited


Audited

Revenues:










Software licenses

$

10,251

$

8,791

$

32,604

$

28,653


Maintenance and services 


8,024


6,779


29,494


25,841


Total revenues


18,275


15,570


62,098


54,494


Operating expenses:










Cost of revenues 


2,627


2,109


9,855


8,780


Research and development


3,537


3,207


14,010


13,283


Selling and marketing


10,711


9,065


35,893


35,089


General and administrative


1,231


993


5,196


4,594


Impairment of acquisition-related intangible assets


-


-


-


4,122


Total operating expenses


18,106


15,374


64,954


65,868












Operating profit (loss)


169


196


(2,856)


(11,374)












Financial expenses, net


(64)


(59)


(101)


(54)












Profit (loss) before income taxes


105


137


(2,957)


(11,428)












Income tax benefit (taxes on income)


(1,725)


(382)


(3,756)


735












Net loss

$

(1,620)

$

(245)

$

(6,713)

$

(10,693)












Basic and diluted net loss per share

$

(0.09)

$

(0.01)

$

(0.39)

$

(0.64)


Weighted average number of shares used in computing basic net and diluted loss per share


18,052


16,818


17,264


16,739












































 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS


U.S. dollars in thousands




Year ended December 31,  




2017


2016




Unaudited


Cash flows activities:






Net loss

$

(6,713)

$

(10,693)


Adjustments required to reconcile net loss to net cash used in operating activities:





Depreciation


491


493


Stock based compensation


3,711


3,880


Retention plan associated with acquisition and other compensation in shares


-


370


Amortization of intangible assets


1,347


2,372


Impairment of acquisition-related intangible assets


-


4,122


Accretion of payment obligation


-


(8)


Changes in fair value of payment obligation


-


35








Change in:






   Accrued severance pay, net


306


24


   Trade receivables


(3,514)


(2,544)


   Other accounts receivable and prepaid expenses


(392)


(29)


   Other long term assets


8


14


   Trade payables


107


(279)


   Deferred revenues


823


1,570


   Employees and payroll accruals


973


1,101


   Accrued expenses and other liabilities


1,025


594


Liabilities presented at fair value


(212)


(185)


Tax deficiencies related to exercise of stock options


-


171


Change in deferred taxes, net


1,131


(1,833)


Net cash used in operating activities


(909)


(825)


Cash flows from investing activities:






Purchase of property and equipment


(556)


(456)


Net cash used in investing activities


(556)


(456)


Cash flows from financing activities:






Proceeds from exercise of options


881


289


Issuance of shares, net


21,048


-


Payment of contingent consideration


(271)


(1,990)


Repayment of contingent payment right


(300)


-


Tax deficiencies related to exercise of stock options


-


(171)


Net cash provided by (used in) financing activities


21,358


(1,872)


Foreign currency translation adjustments on cash and cash equivalents


28


(203)








Increase (decrease) in cash and cash equivalents


19,921


(3,356)


Cash and cash equivalents at the beginning of the year


9,166


12,522


Cash and cash equivalents at the end of the period

$

29,087

$

9,166








Cash paid during the year for taxes

$

1,740

$

653


Supplemental disclosure of non-cash investing activities: 




Issuance of shares related to acquisition

$

-

$

224


 

RECONCILIATION OF SUPPLEMENTAL, NON-GAAP FINANCIAL INFORMATION

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


Three months ended


Year ended


December 31,  


December 31,  


2017


2016


2017


2016


Unaudited


Unaudited

GAAP revenues

$18,275


$15,570


$62,098


$54,494

Valuation adjustment on acquired deferred service revenue

-


8


-


43

Non-GAAP revenues

18,275


15,578


62,098


54,537


-







GAAP operating expenses

18,106


15,374


64,954


65,868

Cost of revenues (1)

(47)


(26)


(162)


(148)

Research and development (1) (2)

(227)


(266)


(805)


(1,210)

Sales and marketing (1) (2)

(538)


(448)


(1,817)


(2,379)

General and administrative (1)

(245)


(254)


(927)


(993)

Amortization of acquired intangible assets

(337)


(424)


(1,347)


(2,372)

Impairment of acquisition-related intangible assets

-


-


-


(4,122)

Non-GAAP operating expenses

16,712


13,956


59,896


54,644









GAAP operating income (loss)

169


196


(2,856)


(11,374)

Operating loss adjustments

(1,394)


(1,426)


(5,058)


(11,267)

Non-GAAP operating income (loss)

1,563


1,622


2,202


(107)









GAAP financial expenses, net

(64)


(59)


(101)


(54)

Revaluation of liabilities presented at fair value

-


6


(212)


(207)

Accretion of payment obligations

-


(6)


-


(8)

Non -GAAP financial expense, net

(64)


(59)


(313)


(269)









GAAP income tax benefit (taxes on income)

(1,725)


(382)


(3,756)


735

Taxes on income (tax benefits) related to non-GAAP adjustments

184


(84)


206


(2,587)

Non-GAAP taxes on income

(1,541)


(466)


(3,550)


(1,852)









GAAP net loss

(1,620)


(245)


(6,713)


(10,693)

Valuation adjustment on acquired deferred revenue

-


8


-


43

Amortization of acquired intangible assets

337


424


1,347


2,372

Impairment of acquisition-related intangible assets

-


-


-


4,122

Acquisition related expenses

-


-


-


779

Stock-based compensation

1,057


994


3,711


3,951

Revaluation of liabilities presented at fair value

-


6


(212)


(207)

Accretion of payment obligations

-


(6)


-


(8)

Taxes on income (tax benefits) related to non-GAAP adjustments

184


(84)


206


(2,587)

Non-GAAP net income (loss)

$(42)


$1,097


$(1,661)


$(2,228)









GAAP basic and diluted net loss per share

$(0.09)


$(0.01)


$(0.39)


$(0.64)

Non-GAAP diluted net income (loss) per share

$0.00


$0.07


$(0.10)


$(0.13)









Shares used in computing GAAP basic and diluted net loss per share

18,052


16,818


17,264


16,739









Shares used in computing Non-GAAP diluted net income (loss) per share

18,052


16,790


17,264


16,739

















(1) Stock-based compensation expenses (*):









Three months ended


Year ended


December 31,  


December 31,  


2017


2016


2017


2016

Cost of revenues

$      47


$      26


$     162


$      148

Research and development

227


266


805


1,024

Sales and marketing

538


448


1,817


1,715

General and administrative

245


254


927


993


$ 1,057


$ 994


$ 3,711


$   3,880

(*) Retention bonus paid in Attunity shares constitute part of (2) below









(2) Acquisition related expenses:








Research and development

-


-


-


$  186

Sales and marketing

-


-


-


664


-


-


-


$  850














 

For more information, please contact:
Todd Fromer / Allison Soss
KCSA Strategic Communications
P: +1-212-682-6300
tfromer@kcsa.com / asoss@kcsa.com  

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

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SOURCE Attunity Ltd.