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99.1	Press Release, February 1, 2018: Attunity Reports Fourth Quarter and Full Year 2017 Results

	ATTUNITY LTD.
	By: /s/ Dror Harel-Elkayam
	Dror Harel-Elkayam Chief Financial Officer and Secretary

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Record Quarterly Revenue of $18.3 Million

Estimated Full Year 2018 Revenue of $73 – $75 Million

- - -

Burlington, MA – February 1, 2018 – 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

●

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*

●

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*

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 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.

		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	%

 

Conference Call and Webcast Information

The Company will host a conference call with the investment community on Thursday, February 1^st 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.

 

(*) 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.

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.

For more information, please contact:

 

CONSOLIDATED FINANCIAL STATEMENTS

 

AS OF DECEMBER 31, 2017

 

UNAUDITED

 

U.S. DOLLARS IN THOUSANDS

 

INDEX
	Page
Condensed Consolidated Balance Sheets	F-2 - F-3
Consolidated Statements of Operations	F-4
Consolidated Statements of Cash Flows	F-5
Reconciliation of Supplemental, Non-GAAP Financial Information	F-6 - F-7

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

 

 

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