Exa Reports Third Quarter Fiscal 2013 Financial Results Revenue Increases 9% From Third Quarter of 2012 and 13% on a Constant Currency Basis BURLINGTON, Mass., Dec. 3, 2012 (GLOBE NEWSWIRE) -- Exa^® Corporation (Nasdaq:EXA), a global innovator of fluids simulation solutions for product engineering, today announced financial results for the third quarter of fiscal 2013, which ended October 31, 2012. "Revenue in the third quarter grew by 9%, from Q3 a year ago, and 13% on a constant currency basis, which was slightly below the low end of our guidance due to what we believe are near-term budget constraints at many of our customers, delaying new project and license activity," said Stephen Remondi, President and Chief Executive Officer of Exa. "Lower than anticipated revenue was a primary factor affecting profitability in the third quarter that was also below our guidance. We believe customers became incrementally more cautious with expenses going into calendar year-end due to increased macroeconomic uncertainty, particularly in the manufacturing markets we serve. This revenue shortfall is not the result of lost opportunities due to competitive issues or cancellation of significant customer programs. With new budgets opening up in the New Year and short-term deliverables which still must be met at many customers, we are optimistic that these delays will be short-lived. Furthermore, we are confident that the long-term drivers of our growth remain firmly intact and that Exa is well positioned to lead our customers' efforts in simulation-based design in order to meet their increasingly stringent requirements for fuel efficiency, noise, and thermal management." Third Quarter Fiscal 2013 Financial Highlights Revenue *Total revenue for the third quarter of fiscal 2013, which ended October 31, 2012, was $12.7 million, an increase of 9% from the comparable period in fiscal 2012. *Taking into account the negative $0.5 million impact of changes in average currency exchange rates during the third quarter of fiscal year 2013, compared with the corresponding period in fiscal year 2012, revenue in the third quarter grew by 13% on a constant currency basis. *License revenue for the third quarter of fiscal 2013 was $10.4 million, up 5% from the year ago period. *Project revenue was $2.3 million, up 32% from the year ago period. Profitability *GAAP income from operations was $0.8 million for the third quarter of fiscal 2013, compared to $2.0 million in the comparable period in fiscal 2012, due primarily to planned increases in research and development, sales and marketing headcount, and public company costs. *Non-GAAP income from operations was $1.2 million for the third quarter of fiscal 2013, compared to $2.3 million in the comparable period in fiscal 2012. *Adjusted EBITDA was $1.6 million for the third quarter of fiscal 2013, compared to $2.6 million in the comparable period in fiscal 2012. *GAAP net loss was $36,000 for the third quarter of fiscal 2013, compared to GAAP net income of $1.4 million for the comparable period in fiscal 2012. GAAP net loss per share was $(0.00), based on diluted weighted average shares outstanding of 13.3 million, compared to GAAP net income of $0.13 for the comparable period in fiscal 2012, based on diluted weighted average shares outstanding of 10.4 million. *Non-GAAP net income was $181,000 for the third quarter of fiscal 2013, compared to $1.5 million in the third quarter of 2012. Non-GAAP net income per diluted share was $0.02, compared to $0.14 for the third quarter of fiscal 2012. Balance Sheet *The company had $36.6 million in cash and cash equivalents at October 31, 2012, compared to $43.3 million at July 31, 2012. This expected decrease in cash and equivalents was primarily due to a reduction in working capital, consistent with typical patterns of strong cash collections early in the calendar year followed by the recognition of deferred revenue throughout the year. Business Outlook "We remain optimistic about Exa's prospects over the longer-term and believe we are strongly positioned to capitalize on the opportunities ahead of us," continued Remondi. "We expect that our customers will continue to experience some short-term budgetary pressure and may delay some activity in response. We're optimistic that as new budget cycles open up in the New Year, customers will resume much of the delayed activity as they address pent up demand to meet their ever more challenging design and regulatory requirements." Based on information available as of December 3, 2012, Exa is issuing guidance for the fourth quarter and full year fiscal 2013 as follows: Fourth Quarter Fiscal 2013: *Total revenue is expected to be in the range of $13.0 million to $14.0 million. *GAAP net income is expected to range from a breakeven to income of $0.3 million. *Non-GAAP net income is expected to be in the range of $0.2 million to $0.6 million. *Adjusted EBITDA is expected to be in the range of $1.3 million to $2.0 million. *Fully diluted share count for the fourth quarter is estimated to be 14.7 million shares. Full Year Fiscal 2013: *Total revenue is expected to be in the range of $48.8 million to $49.8 million. *GAAP net income is expected to be in the range of $0.9 million to $1.2 million. *Non-GAAP net income is expected to be in the range of $1.7 million to $2.1 million. *Adjusted EBITDA is expected to be in the range of $5.5 million to $6.2 million. *Fully diluted share count for the full year is estimated to be 12.9 million shares. The above guidance assumes an exchange rate of 1.3 US dollars per Euro and 80.9 Japanese Yen per US dollar for the balance of fiscal year 2013. A reconciliation of forward-looking adjusted EBITDA and non-GAAP net income to GAAP net income is provided in the attachments to this press release. Conference Call Information What: Exa's third quarter 2013 financial results conference call When: Monday, December 3, 2012 Time: 5:00 p.m. ET Webcast: http://investor.exa.com (live and replay) Live Call: (877) 878-2664, Domestic (970) 315-0423, International Replay: (855) 859-0256, Passcode 73378512, Domestic (404) 537-3406, Passcode 73378512, International Non-GAAP Financial Measures To supplement our condensed consolidated financial statements, which are presented on a GAAP basis, we disclose revenue on a constant currency basis, Non-GAAP Income from Operations, Non-GAAP Net Income, Non-GAAP Net Income per Diluted Share and Adjusted EBITDA. These non-GAAP measures are not in accordance with, or an alternative for, amounts determined in accordance with generally accepted accounting principles in the United States. The GAAP measure most comparable to revenue on a constant currency basis is GAAP revenue. The GAAP measure most comparable to Non-GAAP Income from Operations is GAAP income from operations, The GAAP measure most comparable to Non-GAAP Net Income and Adjusted EBITDA is GAAP net income.The GAAP measure most comparable to Non-GAAP Net Income per Diluted Share is GAAP Net Income per Diluted Share. A reconciliation of these non-GAAP financial measures to the corresponding GAAP measure is included below. We define revenue on a constant currency basis as GAAP revenue, adjusted to reverse the impact of changes in the average exchange rates of currencies in which our international operations generated revenue and incurred expenses. We define Non-GAAP Net Income as net income, excluding the after tax impact of stock-based compensation expense and the amortization of acquired intangibles. We define EBITDA as net income, excluding depreciation and amortization, interest expense, other income (expense), foreign exchange gain (loss) and provision for income taxes, and we define Adjusted EBITDA as EBITDA, excluding non-cash share-based compensation expense. Our management uses these non-GAAP measures when evaluating our operating performance and for internal planning and forecasting purposes. We believe that these measures help indicate underlying trends in our business, are important in comparing current results with prior period results, and are useful to investors and financial analysts in assessing our operating performance. For example, our international operations generate revenue and incur expenses that are denominated in foreign currencies. These amounts could be materially affected by currency fluctuations. Our principal exposures are to fluctuations in exchange rates for the United States dollar versus the Euro, British pound, Japanese yen, Chinese yuan and Korean dollar. Changes in currency exchange rates that are beyond our control can significantly affect our consolidated results of operations. We believe that disclosure of our revenue on a constant currency basis is useful as an indicator of demand for our solutions independent of the influence of currency exchange fluctuations. Management considers Adjusted EBITDA to be an important indicator of our operational strength and the performance of our business and a good measure of our historical operating trends. The non-GAAP financial information presented here should be considered in conjunction with, and not as a substitute for, or superior to, the financial information presented in accordance with GAAP and, in particular, should not be considered a measure of our liquidity. There are significant limitations associated with the use of non-GAAP financial measures. Further, these measures may differ from the non-GAAP information, even where similarly titled, used by other companies and therefore should not be used to compare our performance to that of other companies. Investors should carefully consider the attached reconciliation of these non-GAAP financial measures to the comparable GAAP financial measures. About Exa Corporation Exa Corporation develops, sells and supports simulation software and services to enhance product performance, reduce product development costs and improve the efficiency of design and engineering processes. Our simulation solutions enable our customers to gain crucial insights about design performance early in the design cycle, thus reducing the likelihood of expensive redesigns and late-stage engineering changes. As a result, our customers realize significant cost savings and fundamental improvements in their engineering development process. Our products include, PowerFLOW^®, PowerDELTA^®, PowerCLAY^®, PowerVIZ^®, PowerSPECTRUM^®, PowerACOUSTICS^®, PowerINSIGHT^®, PowerCASE™, PowerCOOL^® and PowerTHERM^® along with professional engineering consulting services. A partial customer list includes: AGCO, BMW, Ford, Hyundai, Kenworth, MAN, Nissan, Peterbilt, Renault, Scania, Toyota, Volkswagen, and Volvo Trucks. The Exa Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=13489 Safe Harbor Statement This press release, including the section entitled "Business Outlook," contains forward-looking statements describing our expectations concerning future events and our future financial performance. These statements are only predictions and may be inaccurate. Actual events or results may differ materially. In evaluating these statements, you should specifically consider various factors, including the risks outlined under "Risk Factors" in our Registration Statement on Form S-1, file number 333-176019, and in our other SEC filings. These factors may cause our actual results to differ materially from those described in our forward-looking statements.Although we believe that the expectations reflected in the forward-looking statements are reasonable, our future results, levels of activity, performance or achievements may differ from our expectations. Other than as required by law, we do not undertake a responsibility to update any of the forward-looking statements after the date of this press release, even though our situation may change in the future. UNAUDITED FINANCIAL INFORMATION FINANCIAL STATEMENTS Exa Corporation Consolidated Balance Sheets (Unaudited) As of As of October31, January31, 2012 2012 (in thousands, except per share data) ASSETS Current assets: Cash and cash equivalents $ 36,580 $ 11,468 Accounts receivable, net of allowance for doubtful accounts of $19 and $0, 3,479 19,205 respectively Deferred tax assets 222 225 Prepaid expenses and other current assets 1,133 1,313 Total current assets 41,414 32,211 Property and equipment, net 4,522 3,224 Intangible assets, net 3,187 3,479 Deferred tax assets 12,319 12,573 Other assets 1,167 3,253 Total assets $ 62,609 $ 54,740 LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDER'S EQUITY (DEFICIT) Current liabilities: Accounts payable $ 791 $ 2,507 Accrued expenses 5,157 9,528 Line of credit 0 7,000 Current portion of long-term debt, net of 1,464 795 discount (1) Current portion of deferred revenue 8,653 28,424 Current maturities of capital lease 1,532 823 obligation Total current liabilities 17,597 49,077 Long-term debt, net of current portion and 5,517 3,221 discount (1) Preferred stock warrant liability 0 1,552 Deferred revenues 954 207 Capital lease obligations, net of current 2,017 1,285 portion Other long-term liabilities 212 401 Deferred rent 1,526 1,753 Total liabilities 27,823 57,496 Commitments and contingencies Convertible preferred stock, $0.001 par value; 5,00,000 and 77,835,000 shares authorized as of October 31, 2012 and January 31, 2012, respectively; 0 and 0 32,678 55,383,239 shares issued and outstanding as of October 31, 2012 and January 31, 2012, respectively Stockholders' deficit: Common stock, $0.001 par value; 195,000,000 and 92,165,000 shares authorized as of October 31, 2012 and January 31, 2012, 13 1 respectively; 13,267,765 and 529,630 shares issued as of October 31, 2012 and January 31, 2012, respectively Additional paid-in capital 83,526 14,204 Accumulated deficit (48,714) (49,586) Treasury Stock (32,502 common shares, at cost) at October 31, 2012 and January 31, 0 0 2012 Accumulated other comprehensive loss (39) (53) Total stockholders' equity(deficit) 34,786 (35,434) Total liabilities and stockholders' equity $ 62,609 $ 54,740 As of As of October 31, 2012 January 31, 2012 (1) Includes amounts due to a related party , as follows: Current portion of long-term debt $267 $227 Long-term debt, net of current portion 699 722 Exa Corporation Consolidated Statements of Operations and Comprehensive Income Statement (Unaudited) Three Months Ended October Nine Months Ended October 31, 31, 2012 2011 2012 2011 (in thousands, except per share data) License revenue $ 10,402 $ 9,942 $ 30,575 $ 28,671 Project revenue 2,295 1,742 5,194 4,050 Total revenues 12,697 11,684 35,769 32,721 Operating expenses: Cost of revenues 3,644 2,910 9,979 8,486 Sales and marketing 1,529 1,341 4,837 3,925 Research and development 4,113 3,655 12,410 10,419 General and 2,570 1,732 6,510 5,249 administrative Total operating expenses 11,856 9,638 33,736 28,079 Income from operations 841 2,046 2,033 4,642 Other expense, net: Foreign exchange gain (115) 50 211 (322) (loss) Interest expense (403) (269) (1,227) (802) Interest income 1 2 3 4 Other income (expense), 2 14 513 (224) net Total other expense, net (515) (203) (500) (1,344) Income before income 326 1,843 1,533 3,298 taxes Provision for income 362 488 661 1,223 taxes Net income $ (36) $ 1,355 $ 872 $ 2,075 Net income per share: Basic $ (0.00) $ 2.74 $ 0.14 $ 4.21 Diluted $ (0.00) $ 0.13 $ 0.07 $ 0.20 Weighted average shares outstanding used in computing per income (loss) per share: Basic 13,264,018 493,820 6,133,987 492,976 Diluted 13,264,018 10,386,820 12,303,723 10,293,969 Comprehensive income (loss): Net income $ (36) $ 1,355 $ 872 $ 2,075 Foreign currency 10 50 14 (322) translation adjustments Comprehensive income $ (26) $ 1,405 $ 886 $ 1,753 (loss) Exa Corporation Consolidated Statements of Cash Flows (Unaudited) NineMonthsEndedOctober31, 2012 2011 (in thousands) Cash flows provided by (used) for operating activities Net income $ 872 $ 2,075 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,475 1,014 Stock-based compensation expense 710 387 Deferred rent expense (142) (173) Noncash interest 444 251 Mark to market adjustment of the preferred (228) 503 stock warrant liability Mark to market adjustment of the equity (276) (276) participation right Deferred taxes 257 (10) Changes in assets and liabilities Accounts receivable 15,780 20,804 Prepaid expenses and other current assets 104 (759) Other assets 2,048 (2,947) Accounts payable (1,722) 1,243 Accrued expenses (4,368) (1,414) Other liabilities 0 125 Deferred revenue (19,092) (15,740) Net cash (used in) provided by for operating (4,138) 5,083 activities Cash flows from investing activities Purchases of property and equipment (348) (99) Net cash used in investing activities (348) (99) Cash flows from financing activities Net decrease in line of credit (7,000) (2,995) Proceeds from borrowings under long-term debt 3,500 -- Proceeds from stock option exercises 31 15 Payments of long-term debt (816) -- Payments of capital lease obligations (675) (499) Proceeds from initial public offering, net of 34,592 -- $4,109 issuance costs Payment of debt and line of credit issuance (100) (112) costs Net cash provided by (used in) financing 29,532 (3,591) activities Effect of exchange rate changes on cash 66 (102) Net increase (decrease) in cash 25,112 1,291 Cash at beginning of period 11,468 2,780 Cash at end of period $ 36,580 $ 4,071 Supplemental disclosure of cash flow information Cash paid for interest $751 $520 Cash paid for income taxes $773 $583 Supplemental disclosure of non-cash, investing and financing activities Acquisition of equipment pursuant to capital $2,116 $1,751 lease obligation Cashless exercise of warrants $67,268 -- Exa Corporation Reconciliation of historical Non-GAAP to GAAP measures Non-GAAP operating income reconciliation: Three Months Ended October Nine Months Ended October 31, 31, 2012 2011 2012 2011 (in thousands) Operating income $ 841 $ 2,046 $ 2,033 $ 4,642 Add back: Non-cash stock based 235 244 710 386 compensation expense Non-cash amortization of acquired intangible 97 -- 292 -- assets Non-GAAP operating $ 1,173 $ 2,290 $ 3,035 $ 5,028 income Non-GAAP net income reconciliation: Three Months Ended October Nine Months Ended October 31, 31, 2012 2011 2012 2011 (in thousands) Net income (loss) $ (36) $ 1,355 $ 872 $ 2,075 Add back: Non-cash stock based 235 244 710 386 compensation expense Non-cash amortization 97 -- 292 -- of acquired intangibles Income tax effect (1) (115) (85) (348) (134) Non-GAAP net income $ 181 $ 1,514 $ 1,526 $ 2,327 Non-GAAP net income, per diluted share reconciliation: Three Months Ended October Nine Months Ended October 31, 31, 2012 2011 2012 2011 Net income (loss) per $ 0.00 $ 0.13 $ 0.07 $ 0.20 diluted share Add back: Non-cash stock based 0.02 0.02 0.06 0.03 compensation expense Non-cash amortization 0.01 0.00 0.02 0.00 of acquired intangibles Income tax effect (1) (0.01) (0.01) (0.03) (0.01) Non-GAAP net income, $ 0.02 $ 0.14 $ 0.12 $ 0.22 per diluted share (2) (1)Non-GAAP financial information for the quarter is adjusted using a blended tax rate equivalent to our annual estimated United States federal tax rate and our State tax rate, exclusive of our net federal benefit. This rate is based on our estimated annual GAAP income tax rate forecast.Our estimated tax rate on non-GAAP income is determined annually and may be adjusted during the year to take into account events or trends that we believe materially impact the estimated annual rate including, but not limited to, significant changes resulting from tax legislation, material changes in the geographic mix of revenues and expenses and other significant events. Due to the differences in the tax treatment of items excluded from non-GAAP earnings, as well as the methodology applied to our estimated annual tax rates as described above, our estimated tax rate on non-GAAP income may differ from our GAAP tax rate and from our actual tax liabilities. (2) Share amounts utilized were 14.6 million shares on a fully diluted basis for the three months ended October 31, 2012 as compared to 10.4 million shares for the three months ended October 31, 2011. For the nine months ended October 31, 2012 and 2011, the share amounts were 12.3 million and 10.3 million, respectively. Adjusted EBITDA: Three Months Ended Nine Months Ended October 31, October 31, 2012 2011 2012 2011 (in thousands) Net income (loss) $ (36) $ 1,355 $ 872 $ 2,075 Depreciation and amortization 541 313 1,475 1,014 Interest expense, net 403 267 1,224 798 Other (income) expense, net (2) (14) (513) 224 Foreign exchange (gain) loss 115 (50) (211) 322 Provision (benefit) for income taxes 362 488 661 1,223 EBITDA 1,383 2,359 3,508 5,656 Non-cash, stock based compensation 235 244 710 386 expense Adjusted EBITDA $ 1,618 $ 2,603 $ 4,218 $ 6,042 Exa Corporation Reconciliation of forward looking Non-GAAP financial measures: Reconciliation ofEBITDA and Adjusted EBITDA to net income: Three Months Ending Twelve Months Ending January 31, 2013 January 31, 2013 (in millions) Net income $ 0 - 0.3 $ 0.9 - 1.2 Depreciation and amortization 0.7 2.1 Interest expense, net 0.4 1.6 Other (income) expense, net 0 (0.5) Foreign exchange (gain) loss 0 (0.2) Provision (benefit) for income 0 - 0.3 0.6 - 1.0 taxes EBITDA 1.0 - 1.7 4.5 - 5.2 Non-cash, stock based 0.3 1.0 compensation expense Adjusted EBITDA $ 1.3 - 2.0 $ 5.5 - 6.2 Reconciliation of Non-GAAP net income to net income: Three Months Ending Twelve Months Ending January 31, 2013 January 31, 2013 (in millions) Net income $ 0 - 0.3 $ 0.9 - 1.2 Add back: Non-cash stock based 0.3 1.0 compensation expense Non-cash amortization of 0.1 0.4 acquired intangibles Income tax effect (1) (0.1) (0.5) Non-GAAP net income $ 0.2 - 0.6 $ 1.7 - 2.1 (1)Non-GAAP financial information for the quarter is adjusted using a blended tax rate equivalent to our annual estimated United States federal tax rate and our State tax rate, exclusive of our net federal benefit. This rate is based on our estimated annual GAAP income tax rate forecast. Our estimated tax rate on non-GAAP income is determined annually and may be adjusted during the year to take into account events or trends that we believe materially impact the estimated annual rate including, but not limited to, significant changes resulting from tax legislation, material changes in the geographic mix of revenues and expenses and other significant events. Due to the differences in the tax treatment of items excluded from non-GAAP earnings, as well as the methodology applied to our estimated annual tax rates as described above, our estimated tax rate on non-GAAP income may differ from our GAAP tax rate and from our actual tax liabilities. CONTACT: Media Contact: Michelle Murray-Ross, Exa Corporation +1 (781) 564-0251 email@example.com Investor Relations Contact: Garo Toomajanian, ICR +1 (781) 564-0337 firstname.lastname@example.org company logo
Exa Reports Third Quarter Fiscal 2013 Financial Results
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