Exa Reports Third Quarter Fiscal 2013 Financial Results

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
         michelle@exa.com
        
         Investor Relations Contact:
         Garo Toomajanian, ICR
         +1 (781) 564-0337
         investor@exa.com

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