Exa Reports Fourth Quarter and Fiscal 2013 Financial Results

Exa Reports Fourth Quarter and Fiscal 2013 Financial Results

Fiscal 2013 Revenue Increases 6% From Fiscal 2012 and 10% on a Constant
Currency Basis

BURLINGTON, Mass., March 27, 2013 (GLOBE NEWSWIRE) -- Exa^® Corporation
(Nasdaq:EXA), a global innovator of fluids simulation solutions for product
engineering, today announced financial results for the fourth quarter and
fiscal 2013, which ended January 31, 2013.

"Revenue of $13.1 million in the fourth quarter was level with the fourth
quarter last year," said Stephen Remondi, President and Chief Executive
Officer of Exa. "Customers slowed their discretionary spending slightly more
than we had anticipated at the end of the calendar year, resulting in revenue
that was at the lower end of our guidance for the fourth quarter. With
expenses that were higher than projected, primarily due to shifts in the
timing of expenses, we produced a net loss of ($0.3) million, or ($0.03) per
share, which corresponds to a non-GAAP net loss of ($0.1) million, or ($0.01)
per average weighted share. Over the course of the year, we made significant
investments in expanding our sales and field engineering teams to pursue and
generate new business in the broader ground transportation and closely
adjacent markets. While these investments did not yield the level of return we
expected in the fiscal year in terms of revenue growth, we firmly believe that
these additional investments position us strongly to improve revenue growth in
fiscal 2014 and beyond.

"Looking to fiscal 2014, the expected return of customer spending in the new
calendar year appears to be materializing. We saw strong renewal activity
among our top customers late in our fourth quarter, and have significantly
added to our total customer count. This combined with the highly visible
nature of our license model, adds to our confidence in our ability to
reaccelerate revenue growth in fiscal 2014. We are focused on generating the
return on the investments we made in fiscal year 2013. Our customers continue
to recognize significant value from our technology, and we believe we remain
firmly positioned to deliver healthy growth over the longer-term."

Fourth Quarter Fiscal 2013 Financial Highlights

Revenue

  *Total revenue for the fourth quarter of fiscal 2013, which ended January
    31, 2013, was $13.1 million, compared to $13.2 million in the comparable
    period in fiscal 2012.
  *Revenue in the fourth quarter grew by 1% on a constant currency basis,
    compared with the corresponding period in fiscal 2012.
  *License revenue for the fourth quarter of fiscal 2013 was $10.6 million, a
    5% increase from the comparable period in fiscal 2012 and 7% on a constant
    currency basis.
  *Project revenue was $2.5 million for the fourth quarter of fiscal 2013,
    compared to $3.1 million in the comparable period in fiscal 2012.

Profitability

  *GAAP loss from operations was ($0.2) million in the fourth quarter of
    fiscal 2013, compared to income from operations of $0.2 million in the
    comparable period in fiscal 2012, due primarily to planned increases in
    research and development expenditures, sales and marketing headcount, as
    well as public company costs.
  *Non-GAAP income from operations was $0.1 million in the fourth quarter of
    fiscal 2013, compared to $0.5 million in the comparable period in fiscal
    2012.
  *Adjusted EBITDA was $0.7 million in the fourth quarter of fiscal 2013,
    compared to $1.1 million in the comparable period in fiscal 2012.
  *GAAP net loss was ($0.3) million in the fourth quarter of fiscal 2013,
    compared to GAAP net income of $11.9 million for the comparable period in
    fiscal 2012 which included a release of our valuation allowance. GAAP net
    loss per share was ($0.03), based on 13.3 million weighted average shares
    outstanding, compared to GAAP net income per share of $1.14 for the
    comparable period in fiscal 2012, based on 10.4 million diluted weighted
    average shares outstanding.
  *Non-GAAP net loss was ($0.1) million, or ($0.01) per diluted share in the
    fourth quarter of fiscal 2013, compared to net income of $12.1 million, or
    $1.16 per diluted share, in the fourth quarter of fiscal 2012.

Full Year Fiscal 2013 Financial Highlights

Revenue

  *Total revenue for the full fiscal year 2013, which ended January 31, 2013,
    was $48.9 million, an increase of 6% from fiscal 2012.
  *Revenue in fiscal 2013 grew by 10% on a constant currency basis, compared
    with fiscal 2012.
  *License revenue for fiscal 2013 was $41.2 million, an increase of 6% from
    fiscal 2012 and 9% on a constant currency basis.
  *Project revenue was $7.7 million for fiscal 2013, an increase of 8% from
    fiscal 2012 and 12% on a constant currency basis.

Profitability

  *GAAP income from operations was $2.0 million in fiscal 2013, compared to
    $5.0 million in fiscal 2012, due primarily to planned increases in
    research and development expenditures, sales and marketing headcount, as
    well as public company costs.
  *Non-GAAP income from operations was $3.3 million in fiscal 2013, compared
    to $5.7 million in fiscal 2012.
  *Adjusted EBITDA was $4.9 million in fiscal 2013, compared to $7.2 million
    in fiscal 2012.
  *GAAP net income was $0.8 million in fiscal 2013, compared to $14.1 million
    in fiscal 2012. GAAP net income per share was $0.06 in fiscal 2013, based
    on 12.9 million diluted weighted average shares outstanding, compared to
    $1.37 in fiscal 2012, based on 10.3 million diluted weighted average
    shares outstanding.
  *Non-GAAP net income was $1.6 million, or $0.13 per diluted share, in
    fiscal 2013, compared to $14.6 million, or $1.41 per diluted share, in
    fiscal 2012.

Balance Sheet

  *The company had $30.7 million in cash and cash equivalents at January 31,
    2013, compared to $36.6 million at October 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

Based on information available as of March 27, 2013, Exa is issuing guidance
for the first quarter and full year fiscal 2014 as follows:

First Quarter Fiscal 2014:

  *Total revenue is expected to be in the range of $12.1 million to $12.5
    million, an increase of 7% to 11% compared to the year ago period or 10%
    to 14% on a constant currency basis.
  *GAAP net loss is expected to be in the range of ($0.7) million to ($0.9)
    million.
  *Non-GAAP net loss is expected to be in the range of ($0.4) million to
    ($0.6) million.
  *Adjusted EBITDA is expected to be in the range of ($0.2) million to $0.1
    million.
  *Basic share count for the first quarter is estimated to be 13.3 million
    shares.
  *Diluted share count for the first quarter is estimated to be 14.6 million
    shares.

Full Year Fiscal 2014:

  *Total revenue is expected to be in the range of $55.0 million to $58.0
    million, an increase of 12% to 19% compared to the prior year or 14% to
    20% on a constant currency basis.
  *GAAP net (loss) income is expected to be in the range of ($0.3) million to
    $0.5 million.
  *Non-GAAP net income is expected to be in the range of $0.7 million to $1.5
    million.
  *Adjusted EBITDA is expected to be in the range of $5.0 million to $6.5
    million.
  *Basic share count for the full year is estimated to be 13.5 million
    shares.
  *Diluted share count for the full year is estimated to be 14.8 million
    shares.

The above guidance assumes an exchange rate of 1.3 US dollars per Euro and
95.0 Japanese yen per US dollar for the balance of fiscal year 2014.

An explanation and reconciliation of historical and forward-looking non-GAAP
measures presented above, including revenue on a constant currency basis,
adjusted EBITDA, non-GAAP income (loss) from operations and non-GAAP net
income (loss), to the comparable GAAP measures is provided below and in the
attachments to this press release.

Conference Call Information
          
What:      Exa's fourth quarter and fiscal 2013 financial results conference
           call
When:      Wednesday, March 27, 2013
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) 859-2056, Passcode 23400566, Domestic
          (404) 537-3406, Passcode 23400566, 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 won. 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
Quarterly Report on Form 10-Q for the three months ended October 31, 2012, 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.

EXA CORPORATION
Consolidated Balance Sheets
(Unaudited)
(in thousands, except share and per share data)
                                                                   
                                                          January 31,
                                                          2013      2012
ASSETS                                                              
Current assets:                                                     
Cash and cash equivalents                                  $30,716 $11,468
Accounts receivable                                        27,840   19,205
Deferred tax assets                                        970      225
Prepaid expenses and other current assets                  1,938    1,314
Total current assets                                       61,464   32,212
Property and equipment, net                                6,176    3,364
Intangible assets, net                                     3,096    3,479
Deferred tax assets                                        12,274   12,252
Other assets                                               1,060    3,259
Total assets                                               $84,070 $54,566
                                                                   
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS'          
EQUITY (DEFICIT)
Current liabilities:                                                
Accounts payable                                           $1,743  $2,507
Accrued expenses                                           7,284    8,712
Line of credit                                             --      7,000
Current portion of long-term debt, net of discount (1)     1,747    795
Current portion of deferred revenue                        26,013   28,394
Current maturities of capital lease obligation             2,051    823
Total current liabilities                                  38,838   48,231
Long-term debt, net of current portion and discount (1)    5,024    3,221
Preferred stock warrant liability                          --      1,552
Deferred revenue                                           128      207
Capital lease obligations                                  2,818    1,285
Other long-term liabilities                                1,009    1,262
Deferred rent                                              1,482    1,753
Total liabilities                                          49,299   57,511
                                                                   
Commitments and contingencies                                       
                                                                   
Convertible preferred stock, $0.001 par value; 5,000,000
and 77,835,000 shares authorized, respectively; 0 and      --      32,678
55,383,239 shares issued and outstanding, respectively
                                                                   
Stockholders' equity (deficit):                                     
Common stock, $0.001 par value; 195,000,000 and 92,165,000
shares authorized, respectively; 13,319,715 and 529,630    13       1
shares issued, respectively; 13,287,213 and 497,128 shares
outstanding, respectively
Additional paid-in capital                                 83,786   14,204
Accumulated deficit                                        (49,012) (49,775)
Treasury stock (32,502 common shares, at cost)             --      --
Accumulated other comprehensive loss                       (16)     (53)
Total stockholders' equity (deficit)                       34,771   (35,623)
Total liabilities and stockholders' equity (deficit)       $84,070 $54,566
                                                                   
(1) Includes amounts due to a related party, as follows:            
                                                          January 31,
                                                          2013      2012
                                                                   
Current portion of long-term debt                          $274    $227
Long-term debt, net of current portion                     $499    $722




EXA CORPORATION
Consolidated Statements of Operations and Statements of
Comprehensive (Loss) Income
(Unaudited)
(in thousands, except share and per share data)
                                               
                                               
              Three Months Ended      Years Ended January 31,
               January 31,
              2013        2012        2013        2012
                                               
Revenue:                                        
License        $10,606   $10,084   $41,151   $38,754
revenue
Project        2,523      3,125      7,717      7,176
revenue
                                               
Total revenues 13,129     13,209     48,868     45,930
Operating                                       
expenses (1):
Cost of        4,175      3,590      14,154     12,075
revenues
Sales and      2,277      2,308      7,115      6,233
marketing
Research and   4,277      4,029      16,687     14,449
development
General and
administrative 2,591      3,110      8,952      8,138
(2)
                                               
Total
operating      13,320     13,037     46,908     40,895
expenses
                                               
(Loss) income
from           (191)      172        1,960      5,035
operations
Other expense,                                  
net:
Foreign
exchange       (194)      217        17         (106)
(loss) gain
Interest       (408)      (487)      (1,631)    (1,284)
expense, net
Other income   16         11         529        (213)
(expense), net
                                               
Total other    (586)      (259)      (1,085)    (1,603)
expense, net
                                               
(Loss) income
before income  (777)      (87)       875        3,432
taxes
Benefit
(provision)    437        11,981     (112)      10,706
for income
taxes
                                               
Net (loss)     $(340)    $11,894   $763      $14,138
income
                                               
Net (loss)
income per                                      
share:
Basic          $(0.03)   $23.97    $0.10     $28.63
Diluted        $(0.03)   $1.14     $0.06     $1.37
Weighted
average shares
outstanding
used in                                         
computing
(loss) income
per share:
Basic          13,276,463 496,147    7,929,364  493,763
Diluted        13,276,463 10,420,780 12,896,487 10,324,811
                                               
                                               
Comprehensive                                   
(loss) income:
Net (loss)     $(340)    $11,894   $763      $14,138
income
Foreign
currency       24         211        37         (111)
translation
adjustments
Comprehensive  $(316)    $12,105   $800      $14,027
(loss) income
                                               
                                               
(1) Includes stock-based compensation expense as follows:                        
              Three Months Ended      Years Ended January 31,
               January 31,
              2013        2012        2013        2012
                                               
Cost of        29         28         111        79
revenues
Sales and      48         48         190        119
marketing
Research and   75         83         308        227
development
General and    62         91         315        211
administrative
                                               
Total          $214      $250      $924      $636
                                               
(2) Includes amortization expense related to intangible assets as follows:        
              Three Months Ended      Years Ended January 31,
               January 31,
              2013        2012        2013        2012
                                               
General and    91         65         383        65
administrative
                                               
Total          $91       $65       $383      $65




EXA CORPORATION
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
                                                                 
                                                      Years Ended January 31,
                                                      2013        2012
Cash flows (used in) provided by operating activities:            
Net income                                             $763      $14,138
Adjustments to reconcile net income to net cash (used  
in) provided by operating activities:
Depreciation and amortization                          2,009      1,502
Stock-based compensation expense                       924        636
Deferred rent expense                                  (148)      (232)
Non-cash interest                                      579        404
Mark-to-market adjustment of preferred stock warrant   (228)      503
liability
Mark-to-market adjustment of equity participation      (276)      (276)
right
Deferred income taxes                                  (767)      (12,254)
Net change in operating assets and liabilities:                   
Accounts receivable                                    (8,648)    4,186
Prepaid expenses and other current assets              (728)      (721)
Other assets                                           2,117      (2,355)
Accounts payable                                       (773)      1,910
Accrued expenses                                       (1,609)    (232)
Other liabilities                                      (65)       488
Deferred revenue                                       (2,575)    1,336
Net cash (used in) provided by operating activities    (9,425)    9,033
                                                                 
Cash flows used in investing activities:                          
Purchases of property and equipment                    (419)      (120)
Acquisitions                                           --        (3,543)
Net cash used in investing activities                  (419)      (3,663)
                                                                 
Cash flows provided by (used in) financing activities:            
Net (decrease) increase in line of credit              (7,000)    4,005
Proceeds from borrowings under long-term debt          3,500      --
Proceeds from stock option and warrant exercises       92         37
Payments of long-term debt                             (1,135)    --
Payments of capital lease obligations                  (1,060)    (598)
Proceeds from initial public offering, net of $4,174   34,576     --
issuance costs
Payment of debt and line of credit issuance costs      (100)      (111)
Net cash provided by financing activities              28,873     3,333
                                                                 
Effect of exchange rate changes on cash                219        (15)
                                                                 
Net increase in cash and cash equivalents              19,248     8,688
                                                                 
Cash and cash equivalents, beginning of period         11,468     2,780
Cash and cash equivalents, end of period               $30,716   $11,468
                                                                 
Supplemental cash flow disclosures:                               
Cash paid for interest                                 $1,036    $868
Cash paid for income taxes                             $1,609    $739
Supplemental disclosure of non-cash investing and                 
financing activities:
Acquisition of equipment through capital lease         $3,821    $2,443
Conversion of preferred stock into common stock        $32,685   $--
Conversion of preferred stock warrants into common     $1,324    $--
stock warrants




EXA CORPORATION
Reconciliation of historical Non-GAAP to GAAP measures
(Unaudited)
(in thousands, except per share data)
                                                              
Adjusted EBITDA:                                               
                        Three Months Ended          Years Ended
                        January 31,                 January 31,
                        2013          2012          2013         2012
                                                              
Net (loss) income        $(340)      $11,894     $763       $14,138
Depreciation and         688          643          2,009       1,502
amortization
Interest expense, net    408          487          1,631       1,284
Other (income) expense,  (16)         (11)         (529)       213
net
Foreign exchange loss    194          (217)        (17)        106
(gain)
(Benefit) provision for  (437)        (11,981)     112         (10,706)
income taxes
EBITDA                   497          815          3,969       6,537
Add back:                                                      
Stock-based compensation 214          250          924         636
expense
Adjusted EBITDA          $711        $1,065      $4,893     $7,173
                                                              
Non-GAAP operating                                             
income:
                        Three Months Ended          Years Ended
                        January 31,                 January 31,
                        2013          2012          2013         2012
                                                              
Operating (loss) income  $(191)      $172        $1,960     $5,035
Add back:                                                      
Stock-based compensation $214        $250        924         636
expense
Amortization of acquired 91           65           383         65
intangible assets
Non-GAAP operating       $114        $487        $3,267     $5,736
income
                                                              
Non-GAAP net (loss)                                            
income:
                        Three Months Ended          Years Ended
                        January 31,                 January 31,
                        2013          2012          2013         2012
                                                              
Net (loss) income        $(340)      $11,894     $763       $14,138
Add back:                                                      
Stock-based compensation 214          250          924         636
expense
Amortization of acquired 91           65           383         65
intangible assets
Income tax effect (1)    (106)        (109)        (454)       (244)
Non-GAAP net (loss)      $(141)      $12,100     $1,616     $14,595
income
                                                              
Non-GAAP net (loss)
income, per diluted                                            
share:
                        Three Months Ended          Years Ended
                        January 31,                 January 31,
                        2013          2012          2013         2012
                                                              
Net (loss) income        $(0.03)     $1.14       $0.06      $1.37
Add back:                                                      
Stock-based compensation 0.02         0.02         0.07        0.06
expense
Amortization of acquired 0.01         0.01         0.03        0.01
intangible assets
Income tax effect (1)    (0.01)       (0.01)       (0.04)      (0.02)
Non-GAAP net (loss)
income, per diluted      $(0.01)     $1.16       $0.13      $1.41
share (2)(3):
                                                              
(1)The tax effect of non-cash stock based compensation expense and non-cash
amortization of acquired intangibles is estimated using a blended 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, 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 on a diluted basis were approximately 13.3 million
and 10.4 million for the three months ended January 31, 2013 and 2012,
respectively, and 12.9 million and 10.3 million for the fiscal years ended
January 31, 2013 and 2012, respectively.
                                                              
(3)Due to rounding, totals may not equal the sum of line items in the table
above.




EXA CORPORATION
Reconciliation of forward looking Non-GAAP to GAAP measures
                                                    
EBITDA and Adjusted EBITDA:                          
                                                    
(in millions)                    Three Months Ended   Year Ended January 31,
                                 April 30, 2013       2014
                                                    
Net (loss) income                $ (0.7) - (0.9)      $ (0.3) - 0.5
Depreciation and amortization    0.7                  3.0
Interest expense, net            0.4                  1.5
Other (income) expense, net      0                    0
Foreign exchange (gain) loss     0                    0
Provision (benefit) for income   (0.6) - (0.7)        (0.3) - 0.4
taxes
EBITDA                           (0.2) - (0.5)        3.9 - 5.4
Stock-based compensation expense 0.4                  1.1
Adjusted EBITDA                  $ (0.2) - 0.1        $ 5.0 - 6.5
                                                    
                                                    
Non-GAAP net (loss) income:                          
                                                    
(in millions)                    Three Months Ended   Year Ended January 31,
                                 April 30, 2013       2014
                                                    
Net (loss) income                $ (0.7) - (0.9)      $ (0.3) - 0.5
Add back:                                            
Stock-based compensation expense 0.4                  1.1
Non-cash amortization of         0.1                  0.4
acquired intangibles
Income tax effect (1)            (0.1)                (0.5)
Non-GAAP net (loss) income       $ (0.4) - (0.6)      $ 0.7 - 1.5
                                                    
(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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