Attunity Ltd.
ATTUNITY LTD (Form: 6-K, Received: 11/02/2016 16:36:44)


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16
OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of November 2016

Commission file number: 001-20892

ATTUNITY LTD.
(Name of registrant)

16 Atir Yeda Street, Atir Yeda Industrial Park, Kfar Saba, 4464321, Israel
  (Address of principal executive office)
_____________________

        Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.  
 
Form 20-F S Form 40-F £

        Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): £

        Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): £

____________________

The GAAP financial statements included in the press release attached hereto as Exhibit 99.1 are hereby incorporated by reference into: Form F-3 Registration Statements File Nos. 333-205799, 333-205798, 333-173205, 333-138044, 333-122937 and 333-119157 and Form S-8 Registration Statements File Nos. 333-122302, 333-142284, 333-164656, 333-184136 and 333-193783 .
 

 
CONTENTS
 
Exhibit

99.1
Press Release, November 2, 2016: ATTUNITY REPORTS THIRD QUARTER 2016 RESULTS
 

 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
ATTUNITY LTD.
 
 
By: /s/ Dror Harel-Elkayam
 
Dror Harel-Elkayam
Chief Financial Officer and Secretary
 
Date: November 2, 2016
 


 

Exhibit 99.1
 
ATTUNITY REPORTS THIRD QUARTER 2016 RESULTS
--
Company updates financial guidance for the full year 2016
--

Burlington, MA – November 2, 2016 – Attunity, Ltd. (NasdaqCM: ATTU) , a leading provider of Big Data management software solutions, today reported its unaudited financial results for the three-month period ended September 30, 2016.

“After 12 consecutive quarters of year-over-year growth, our third quarter 2016 results were below our internal expectations and not reflective of the market potential we believe exists. In 2016, we closed several larger and strategic deals with global companies, as our technology is well aligned with modern Big Data architectures and customer needs. This quarter, while we continued to see a number of significant deals in our pipeline, we were unable to complete the sales cycle before the end of the third quarter. The longer sales cycle associated with these types of deals are one of the challenges we are working to overcome through adjustments to our sales and marketing strategies,” said Shimon Alon, Chairman and CEO of Attunity. “We believe the Company is on the right path towards driving solid long-term growth.”

Recent Operational Highlights
·
Introduced Attunity Enterprise Manager, a new data ingest management and monitoring solution for large-scale data lakes, designed to support thousands of data sources
 
·
Launched Attunity Replicate for SAP, a new SAP data integration solution for Big Data analytics on premises or in the cloud
 
·
Recognized by Gartner in the Magic Quadrant for Data Integration Tools 1
 
·
Received several industry awards, including ‘2016 Top 50 Big Data Company’ by Big Data Quarterly Magazine and ‘Best Change Data Capture Solution’ by DBTA's 2016 Readers' Choice Awards - for Attunity Replicate
 
Financial Highlights for Q3 2016, compared with Q3 2015
·
GAAP total revenue was $13.0 million, compared with $12.7 million
 
·
Non-GAAP total revenue was $13.0 million, compared with $13.0 million*
 
·
GAAP operating expenses were $17.0 million, compared with $14.0 million
 
o
The operating expenses in Q3 2016 include an approximately $2.0 million charge for partial impairment of acquired intangible assets associated with the Appfluent acquisition.
 
·
Non-GAAP operating expenses were $13.5 million, compared with $12.0 million *
 
·
GAAP net loss of $4.0 million, compared with net loss of $1.9 million
 
·
Non-GAAP net loss of $1.7 million, compared with non-GAAP net income of $0.2 million *
 
·
Generated positive cash flow from operations of $1.0 million, compared with $0.4 million
 
Big Data Management and Cloud Solutions

Attunity is recognized across the industry as a leading provider of Big Data management and Hadoop solutions, including its award-winning data integration and management offerings that provide data replication and ingest with real-time change data capture (CDC), data warehouse automation, data usage analytics, data connectivity, cloud data delivery, and test data management. In the third quarter of 2016, the Company’s solutions were recognized by a number of industry sources, most notably by Gartner as a challenger in their Magic Quadrant for Data Integration tools, which was based on evaluation of the Company’s expanded product suite as well as customer feedback.

·
The Company made several product announcements during the third quarter of 2016, further expanding the capabilities of its existing solutions, as well as introducing new innovative solutions to the market, such as the following: Attunity launched the Attunity Enterprise Manager (AEM), a new data ingest management offering, aimed at strengthening the Company’s value proposition and differentiation for large Data Lake initiatives.

·
The Company also launched Attunity Replicate for SAP, aimed at extending the Company's value proposition to the IT industry’s largest application market. Attunity Replicate for SAP is uniquely designed to enable high-performance data replication that is optimized to deliver SAP application data in real-time for Big Data analytics on premises or in the cloud.
 
[1] Source: 2016 Gartner Magic Quadrant for Data Integration Tools, Mark A. Beyer, Eric Thoo, Ehtisham Zaidi and Rick Greenwald, 08 August 2016.
 

 
The cloud continues to be an area of growth where enterprises are looking to migrate databases to cloud platforms, as well as leverage the cloud to analyze their data. These customer needs require an efficient and reliable way to move data from their data centers. We believe that Attunity is well positioned to accommodate this growing need with the Company’s innovative products and alliances with leading global providers, such as Amazon Web Services (AWS), Microsoft and Google.

During the third quarter of 2016, Attunity increased its investments and programs with key partners in the Hadoop, Data Warehousing and Cloud markets, including Hortonworks, Cloudera, Confluent, Teradata, Microsoft and AWS. These programs include targeting their partners’ field organizations, as well as executing more joint demand generation activities.

Consulting Services

The Company has seen increased demand from customers requiring Attunity’s consulting services for their larger-scale and enterprise-wide implementations. Attunity established a consulting services group to leverage its skills and expertise to help customers move to production faster. Attunity continues to make investments in building out this group as well as engaging system integration partners to address this demand.

Financial Results for Q3 2016

GAAP total revenue for the third quarter of 2016 increased 1.6% to $13.0 million, compared with $12.7 million for the same period in 2015. This includes license revenue of $6.3 million, which decreased 9% compared with $7.0 million for the same period in 2015, and maintenance and service revenue, which grew 15% to $6.6 million, compared with $5.8 million for the same period in 2015.

Non-GAAP total revenue for the third quarter of 2016 remained constant at $13.0 million, compared to the same period in 2015. This includes non-GAAP maintenance and service revenue of $6.6 million, which grew 10% from the same period in 2015 (license revenue of $6.3 million was not used as a non-GAAP measure).   Non-GAAP maintenance and service revenue for the third quarter of 2016 excludes immaterial sums associated with a valuation adjustment on acquired deferred service revenue, compared with $0.2 million of a similar adjustment for the same period in 2015.*

GAAP operating expenses for the third quarter of 2016 increased 22% to $17.0 million, compared with $14.0 million for the third quarter of 2015. The increase in operating expenses is primarily related to a $2.0 million charge for partial impairment of acquired intangible assets associated with the Appfluent acquisition; and a $1.0 million increase in costs related to the Company’s global expansion, with total headcount increasing by 30 people between the third quarter of 2015 and the third quarter of 2016 - including 21 additions to the sales, sales support, marketing and consulting services teams.

Non-GAAP operating expenses for the third quarter of 2016 increased 12% to $13.5 million, compared with $12.0 million for the third quarter of 2015. The Non-GAAP operating expenses in the third quarter of 2016 exclude an approximately $2.0 million charge for partial impairment of acquired intangible assets associated with the Appfluent acquisition, as well as $1.6 million in expenses and amortization   associated with acquisitions and equity-based compensation expenses. This is compared with $2.3 million in adjustments, expenses and amortization associated with acquisitions and equity-based compensation expenses for the same period in 2015 . *

GAAP operating loss for the third quarter of 2016 was $4.1 million, compared with $1.3 million for the same period in 2015.

Non-GAAP operating loss was $0.5 million for the third quarter of 2016, compared with operating income of $1.0 million for the third quarter of 2015. Non-GAAP operating loss for the third quarter of 2016 excludes a total of $3.6 million in expenses, including a $2.0 million charge for partial impairment of acquired intangible assets associated with the Appfluent acquisition, and $1.6 million in expenses and amortization   associated with acquisitions and equity-based compensation expenses. This is compared with $2.3 million in adjustments, expenses and amortization associated with acquisitions and equity-based compensation expenses for the third quarter of 2015.*

GAAP net loss for the third quarter of 2016 was $4.0 million, or $0.24 per diluted share, compared with a net loss of 1.9 million, or $0.12 per diluted share, in the third quarter of 2015.


Non-GAAP net loss for the third quarter of 2016 was $1.7 million, or $0.10 per diluted share, compared with non-GAAP net income of $0.2 million, or $0.01 per diluted share, for the same period in 2015. Non-GAAP net loss for the third quarter of 2016 excludes approximately $2.3 million in expenses, amortization and impairment charges associated with acquisitions, equity-based compensation expenses, and non-cash tax benefits, related mainly to the aforesaid impairment, of $1.2 million, compared with approximately $2.1 million in adjustments, expenses and amortization associated with acquisitions, equity-based compensation expenses, and non-cash tax benefits of $0.6 million for the same period in 2015.*

Cash and cash equivalents were $8.9 million as of September 30, 2016, same as of June 30, 2016. During the third quarter of 2016 we generated positive cash flow from operations of $1.0 million, which was offset by a final earn-out payment of $0.75 million to former Hayes Technology Group shareholders, compared with positive cash flow from operations of $0.4 million for the same period in 2015.

Appfluent's intangible assets, which were acquired in March 2015, decreased by additional $2.0 million to $0.6 million as of September 30, 2016, due to the $2.0 million partial impairment charge recorded in the third quarter of 2016. This accounting charge was taken in order to reflect the fair value of the intangible assets following delayed and reduced sales trends with longer sales cycles of Attunity Visibility, a product that incorporates the Appfluent technology and is aimed at optimizing enterprise data warehouses with Hadoop.

Shareholders' equity as of September 30, 2016 decreased to $31.8 million, compared with $34.5 million as of June 30, 2016.

 * See "Use of Non-GAAP Financial Information" below for more information regarding Attunity's use of Non-GAAP financial measures.
 
Revised Outlook for Full Year 2016

"Considering the trends currently impacting the business, we have updated our guidance for full year 2016 to between $52.5 million and $55 million in revenues and 0%-4% of Non-GAAP operating loss. As we look beyond 2016, we believe the current challenges will have a short-term impact on our business. The management team is implementing changes companywide in order to enhance our ability to tap into current market trends.  At the same time, we are confident that our customer value proposition remains compelling across a relatively large and growing addressable market, as Attunity offers higher productivity, faster time to value and better manageability to customers’ existing and new Big Data and Hadoop environments," concluded   Mr. Alon.

Based on, among other things, the financial results for the third quarter and first nine months of 2016, as well as current market and business trends expected to at least partially carry through the fourth quarter of 2016, the Company now expects revenue for the full year 2016 to be between approximately $52.5 million and $55 million, replacing the previous guidance provided at the beginning of the year of between approximately $58 and   $62 million.

Additionally, the Company now expects Non-GAAP operating margin loss to range between 0% and 4% for the full year 2016 (replacing the previous guidance provided at the beginning of the year of non-GAAP operating income margin of between 5% and 8%).
 
Financial Reconciliation to Non-GAAP figures for 2016 Outlook:
 
   
From
   
To
 
GAAP operating margin loss
   
(20
)%    
(26
)%
Equity-based compensation expenses
   
7
%
   
8
%
Amortization and other adjustments - related acquisitions, including impairment
   
13
%
   
14
%
Non-GAAP operating margin loss (*)
   
0
%
   
(4
)%
 
(*) Non-GAAP Operating Margin Loss is calculated by dividing the Non-GAAP Operating Loss by the total Non-GAAP revenues for the period.
 
The Company reiterated that it does not expect to provide or update guidance more often than on an annual basis.
 
Conference Call and Webcast Information

The Company will host a conference call with the investment community on Wednesday, November 2 nd at 8:30 a.m. Eastern Time featuring remarks by Shimon Alon, Chairman and CEO of Attunity, and Dror Harel-Elkayam, CFO of Attunity. The dial-in numbers for the conference call are +1-888-572-7033 (U.S. Toll Free), +1 80 924 5906 (Israel), or +1-719-325-2361 (International). All dial-in participants must use the following code to access the call: 3908637.  


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 November 16, 2016, 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: 3908637. 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 Big Data management software solutions that enable access, management, sharing and distribution of data across heterogeneous enterprise platforms, organizations, and the  cloud . Our software solutions include  data replication and distribution test data management change data capture (CDC) data connectivity enterprise file replication   (EFR),  managed file transfer  (MFT),  data warehouse automation data 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 community on Twitter , Facebook , LinkedIn , 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 income (loss), and diluted net income (loss) per share, which are adjusted from results based on GAAP to exclude expenses, amortization and impairment charges associated with the acquisitions, stock-based compensation expenses in accordance with ASC 718, non-cash financial expenses such as the effect of a revaluation of liabilities presented at fair value and accretion of payment obligations, and tax benefits 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.

Important Note:   Attunity   is not responsible for the awards mentioned in this press release or the entities that award them.


Safe Harbor Statement
This press release contains forward-looking statements, including statements regarding the anticipated features and benefits of Replicate Solutions, 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 say that we are on the right path towards driving solid long-term growth or when we provide our updated outlook for 2016, we are using forward-looking statements. 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 profitability; our reliance on strategic relationships with our distributors, OEM, VAR and "go-to-market" and other business partners, and on our other significant customers; our ability to manage our growth effectively; acquisitions, including costs and difficulties related to integration of acquired businesses and possible impairment charges; our ability to expand our business into the SAP market and the success of our Gold Client offering; timely availability and customer acceptance of Attunity's new and existing products, including Attunity Compose and Attunity Visibility; fluctuations in our quarterly operating results, which may not necessarily be indicative of future periods; 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 as well as cyber-attacks; 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 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.
 
© 2016 Attunity Ltd. All rights reserved. Attunity is a trademark of Attunity Inc.
 
For more information, please contact:
Garth Russell / Allison Soss
KCSA Strategic Communications
P: + 1 212-682-6300
grussell@kcsa.com    /  asoss@kcsa.com   

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


ATTUNITY LTD. AND SUBSIDIARIES
 
CONSOLIDATED FINANCIAL STATEMENTS
 
AS OF SEPTEMBER 30, 2016
 
UNAUDITED
 
U.S. DOLLARS IN THOUSANDS
 
INDEX
 
 
Page
   
2-3
   
4
   
5
   
6-7


 
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
 
   
September 30,
   
December 31,
 
   
2016
   
2015
 
   
Unaudited
       
ASSETS
           
             
CURRENT ASSETS:
           
Cash and cash equivalents
 
$
8,932
   
$
12,522
 
Trade receivables (net of allowance for doubtful accounts of $15 at September 30, 2016 and December 31, 2015)
   
5,723
     
4,524
 
Other accounts receivable and prepaid expenses
   
1,109
     
639
 
                 
Total current assets
 
$
15,764
   
$
17,685
 
                 
LONG-TERM ASSETS:
               
                 
Severance pay fund
 
$
3,852
   
$
3,513
 
Property and equipment, net
   
1,280
     
1,260
 
Goodwill and Intangible assets, net
   
34,131
     
40,116
 
Other assets
   
2,177
     
584
 
                 
Total long-term assets
   
41,440
     
45,473
 
                 
Total assets
 
$
57,204
   
$
63,158
 

2

 
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands, except share and per share data
 
   
September 30,
   
December 31,
 
   
2016
   
2015
 
   
Unaudited
       
LIABILITIES AND SHAREHOLDERS' EQUITY
           
CURRENT LIABILITIES:
           
             
Trade payables
   
1,025
     
664
 
Payment obligation related to acquisitions
   
277
     
2,204
 
Deferred revenues
   
10,455
     
9,354
 
Employees and payroll accruals
   
4,168
     
4,012
 
Accrued expenses and other current liabilities
   
2,144
     
1,248
 
                 
Total current liabilities
 
$
18,069
   
$
17,482
 
                 
LONG-TERM LIABILITIES:
       
                 
Deferred revenues
   
1,228
     
1,348
 
Liabilities presented at fair value and other long-term liabilities
   
881
     
1,037
 
Payment obligation related to acquisition s
   
-
     
254
 
Accrued severance pay
   
5,189
     
4,746
 
Total long-term liabilities
 
$
7,298
   
$
7,385
 
                 
SHAREHOLDERS' EQUITY:
               
Share capital - Ordinary shares of NIS 0.4 par value -
   
1,918
     
1,876
 
Authorized: 32,500,000 shares at September 30, 2016 and December 31, 2015; Issued and outstanding: 16,804,738 shares at September 30, 2016 and 16,406,243 shares at December 31, 2015
               
                 
Additional paid-in capital
   
148,614
     
144,836
 
Accumulated other comprehensive loss
   
(963
)
   
(1,137
)
Accumulated deficit
   
(117,732
)
   
(107,284
)
                 
Total shareholders' equity
   
31,837
     
38,291
 
                 
Total liabilities and shareholders' equity
 
$
57,204
   
$
63,158
 

3

 
 
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except share and per share data
 
   
Three months ended
   
Nine months ended
 
   
September 30,
   
September 30,
 
   
2016
   
2015
   
2016
   
2015
 
   
Unaudited
   
Unaudited
 
Software licenses
 
$
6,323
   
$
6,968
   
$
19,862
   
$
19,328
 
Maintenance and services
   
6,629
     
5,778
     
19,062
     
16,026
 
Total revenue
   
12,952
     
12,746
     
38,924
     
35,354
 
Operating expenses:
                               
Cost of revenues
   
2,292
     
1,912
     
6,671
     
5,155
 
Research and development
   
3,284
     
3,090
     
10,076
     
7,983
 
Sales and marketing
   
8,177
     
7,861
     
26,024
     
21,146
 
General and administrative
   
1,293
     
1,151
     
3,601
     
3,787
 
Impairment of acquisition-related intangible assets
   
1,990
     
-
     
4,122
     
-
 
Total operating expenses
   
17,036
     
14,014
     
50,494
     
38,071
 
Operating loss
   
(4,084
)
   
(1,268
)
   
(11,570
)
   
(2,717
)
Financial (income) expenses, net
   
75
     
509
     
(5
)
   
744
 
Loss before taxes on income
   
(4,159
)
   
(1,777
)
   
(11,565
)
   
(3,461
)
Taxes on income (benefit)
   
(160
)
   
130
     
(1,117
)
   
571
 
Net loss
 
$
(3,999
)
  $
(1,907
)  
 
$
(10,448
)
  $
(4,032
 
                               
Basic and diluted net loss per share
 
$
(0.24
)
 
$
(0.12
)
 
$
(0.63
)
 
$
(0.25
)
                                 
Weighted average number of shares used in computing basic and diluted net loss per share
   
16,790
     
16,421
     
16,711
     
16,075
 

 
4

 
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
 
 
 
Nine months ended September 30,
 
 
 
2016
   
2015
 
Cash  flows  activities:
           
Net loss
 
$
(10,448
)
 
$
(4,032
)
Adjustments required to reconcile net loss to net cash provided by (used in) operating activities:
               
Depreciation
   
366
     
300
 
Stock based compensation
   
3,255
     
1,832
 
Amortization of  intangible assets
   
1,948
     
2,073
 
Impairment of intangible assets
   
4,122
     
-
 
Accretion of payment obligation
   
33
     
377
 
Change in:
               
   Accrued severance pay, net
   
104
     
128
 
   Trade receivables
   
(1,212
)
   
1,335
 
   Other accounts receivable and prepaid expenses
   
(410
)
   
(698
)
   Other long term assets
   
152
     
(28
)
   Trade payables
   
365
     
113
 
   Deferred revenues
   
1,077
     
2,132
 
   Employees and payroll accruals
   
495
     
1,286
 
   Accrued expenses and other liabilities
   
815
     
(373
)
Change in liabilities presented at fair value and other long term liabilities
   
(156
)
   
156
 
Excess tax benefit
   
146
     
(135
)
Change in deferred taxes, net
   
(1,745
)
   
(204
)
Net cash provided by (used in) operating activities
 
$
(1,093
)
   
4,262
 
Cash flows from investing activities:
               
Purchase of property and equipment
   
(392
)
   
(427
)
Decrease of restricted cash
   
-
     
430
 
Acquisition of company, net of cash acquired
   
-
     
(10,402
)
Net cash used in investing activities
 
$
(392
)
   
(10,399
)
 
               
Cash flows from financing activities:
               
Proceeds from exercise of stock options, warrants and rights
   
185
     
885
 
Repayment of contingent consideration
   
(1,990
)
   
(2,054
)
Excess tax benefit
   
(146
)
   
135
 
Net cash used in financing activities
 
$
(1,951
)
   
(1,034
)
Foreign currency translation adjustments on cash and cash equivalents
   
(154
)
   
(2
)
Decrease in cash and cash equivalents
   
(3,590
)
   
(7,173
)
Cash and cash equivalents at the beginning of the period
   
12,522
     
18,959
 
Cash and cash equivalents at the end of the period
 
$
8,932
   
$
11,786
 
Supplemental disclosure of cash flow activities:
               
Cash paid during the period for taxes
   
588
     
1,327
 
Supplemental disclosure of non- cash investing activities:
               
Issuance of shares related to acquisition
   
224
     
6,600
 

5

 
RECONCILIATION OF SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION
U.S. dollars in thousands, except share and per share data
 
   
Three months ended
   
Nine months ended
 
   
September 30,
   
September 30,
 
   
2016
   
2015
   
2016
   
2015
 
   
Unaudited
   
Unaudited
 
GAAP revenues
   
12,952
     
12,746
     
38,924
     
35,354
 
Valuation adjustment on acquired deferred service revenue
   
9
     
240
     
35
     
586
 
Non-GAAP revenues
   
12,961
     
12,986
     
38,959
     
35,940
 
GAAP cost of revenue
   
2,292
     
1,912
     
6,671
     
5,155
 
Amortization of acquired intangible assets
   
491
     
696
     
1,758
     
1,823
 
Cost of revenue adjustment (1)
   
42
     
-
     
122
     
-
 
Non-GAAP cost of revenue
   
1,759
     
1,216
     
4,791
     
3,332
 
                                 
GAAP operating expenses
   
17,036
     
14,014
     
50,494
     
38,071
 
Cost of revenues (1)
   
42
     
-
     
122
     
-
 
Research and development (1) (2)
   
265
     
333
     
944
     
667
 
Sales and marketing (1) (2)
   
473
     
732
     
1,931
     
1,521
 
General and administrative (1) (2)
   
255
     
196
     
739
     
1,062
 
Amortization of acquired intangible assets
   
555
     
789
     
1,948
     
2,073
 
Impairment of acquisition-related intangible assets
   
1,990
     
-
     
4,122
     
-
 
Non-GAAP operating expenses
   
13,456
     
11,964
     
40,688
     
32,748
 
                                 
GAAP Financial (income) expenses, net
   
75
     
509
     
(5
)
   
744
 
Revaluation of liabilities presented at fair value
   
(127
)
   
116
     
(213
)
   
175
 
Accretion of payment obligations
   
10
     
246
     
(2
)
   
379
 
Non-GAAP Financial expenses, net
   
192
     
147
     
210
     
190
 
                                 
GAAP taxes on income (benefit)
   
(160
)
   
130
     
(1,117
)
   
571
 
Income tax benefit related to non-GAAP adjustments
   
(1,189
)
   
(584
)
   
(2,503
)
   
(966
)
Non-GAAP taxes on income
   
1,029
     
714
     
1,386
     
1,537
 
                                 
GAAP net loss
   
(3,999
)
   
(1,907
)
   
(10,448
)
   
(4,032
)
Valuation adjustment on acquired deferred revenue
   
9
     
240
     
35
     
586
 
Amortization of acquired intangible assets
   
555
     
789
     
1,948
     
2,073
 
Impairment of acquisition-related intangible assets
   
1,990
     
-
     
4,122
     
-
 
Acquisition related expenses
   
-
     
400
     
779
     
1,418
 
Stock-based compensation
   
1,035
     
861
     
2,957
     
1,832
 
Revaluation of liabilities presented at fair value
   
(127
)
   
116
     
(213
)
   
175
 
Accretion of payment obligations
   
10
     
246
     
(2
)
   
379
 
Tax benefits related to non-GAAP adjustments
   
(1,189
)
   
(584
)
   
(2,503
)
   
(966
)
Non-GAAP net income (loss)
   
(1,716
)
   
161
     
(3,325
)
   
1,465
 
                                 
GAAP diluted net loss per share
   
(0.24
)
   
(0.12
)
   
(0.63
)
   
(0.25
)
Non-GAAP diluted net income (loss) per share
   
(0.10
)
   
0.01
     
(0.20
)
   
0.09
 
Shares used in computing GAAP diluted net loss per share
   
16,790
     
16,421
     
16,711
     
16,075
 
Shares used in computing Non-GAAP diluted net income (loss) per share
   
16,790
     
17,278
     
16,711
     
16,834
 

6

 
RECONCILIATION OF SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION (Cont.)
U.S. dollars in thousands, except share and per share data
 
   
Three months ended September 30,
   
Nine months ended September 30,
 
(1) Stock-based compensation expenses (*):
 
2016
   
2015
   
2016
   
2015
 
Cost of revenues
   
42
     
-
     
122
     
-
 
Research and development
   
265
     
233
     
758
     
453
 
Sales and marketing
   
473
     
432
     
1,338
     
878
 
General and administrative
   
255
     
196
     
739
     
501
 
     
1,035
     
861
     
2,957
     
1,832
 
(*) Retention bonus paid in Attunity shares constitute part of (2) below
                 
                                 
(2) Acquisition related expenses:
                               
Research and development
   
-
     
100
     
186
     
214
 
Sales and marketing
   
-
     
300
     
593
     
643
 
General and administrative
   
-
     
-
     
-
     
561
 
     
-
     
400
     
779
     
1,418
 
 
7