Datawatch Announces Third Quarter 2014 Financial Results

           Datawatch Announces Third Quarter 2014 Financial Results

Total Revenue Reaches Record High in Quarter

PR Newswire

CHELMSFORD, Mass., July 23, 2014

CHELMSFORD, Mass., July 23, 2014 /PRNewswire/ -- Datawatch Corporation
(NASDAQ-CM: DWCH), a leading global provider of visual data discovery
solutions, today announced that total revenue for its third fiscal quarter
ended June 30, 2014 was an all-time high of $9.23 million, an increase of 18%
from revenue of $7.83 million in the third quarter a year ago. License
revenue for the third quarter of fiscal 2014 was $5.58 million, an increase of
11% from the $5.01 million recorded in the comparable quarter a year ago. Net
loss for the third quarter of fiscal 2014 was ($5.20) million, or ($0.48) per
diluted share, compared to a net loss of ($666,000), or ($0.10) per diluted
share, for the year ago period. Excluding the effects of the non-cash
amortization associated with the purchase of certain intellectual property and
other intangible assets and non-cash stock compensation costs, the Company's
non–GAAP net loss for its third fiscal quarter of 2014 was ($2.61) million, or
($0.24) per diluted share, compared to non-GAAP net income of $617,000, or
$0.09 per diluted share in the third fiscal quarter of 2013.

Datawatch logo.

"We focused our energies on sales execution in the third fiscal quarter, and
this will remain an area of emphasis as we build our business and go-to-market
model for the long-term," said Michael A. Morrison, president and chief
executive officer of Datawatch. "During the third quarter, we made important
progress increasing awareness in the market for our highly differentiated
visual data discovery solution. Last quarter, we introduced an entirely
re-designed website to better engage our customers, prospects, and partners.
In tandem with the launch of the new website, we also unveiled a new online
Datawatch Community, a social network platform designed to help customers,
prospects and partners experience the full value of Datawatch software."

Mr. Morrison continued, "As we build broader awareness for our visual data
discovery solutions in the market, we are seeing particular traction in the
emerging area of Big Data related to 'fast data' – that is, data in motion, or
streaming real-time data. Our unique ability to extend the value of real-time
streaming platforms such as IBM Streams, Informatica Vibe and EMC Pivotal
GemFire, with our real-time visual data discovery solution, has opened up a
wide range of high value applications for us. And, since Datawatch is the
only company in the next generation analytics market that can deliver visual
data discovery solutions using real-time, streaming data in motion, we intend
to continue to invest in this fast-developing area of the market where our
solution is uniquely differentiated."

Third Quarter Business Highlights

  oDatawatch announced a global relationship with Informatica Corporation,
    the world's leading independent provider of data integration software, to
    deliver a real-time streaming data connector to Informatica Vibe Data
    Stream, Informatica RulePoint Complex Event Processing and Informatica
    Ultra Messaging, enabling organizations to realize the full value of
    operational intelligence through visual data discovery of real-time,
    streaming data.
  oThe NASDAQ OMX Group, the world's leading provider of market technology,
    announced the launch of MiQ, a new advanced analytics solution for global
    capital market operators based upon Datawatch's visual data discovery
    technology, which provides exchanges, clearinghouses, central security
    depositories, and other financial market operators a centralized data
    management solution tailor-made for supporting the trade lifecycle,
    reducing the challenges associated with data volumes, processing, storing
    and retrieval, and speed of extraction.
  oDatawatch and GTA Information Technology Co., Ltd. of Shenzen, China
    entered into a strategic alliance for GTA to resell Datawatch's visual
    data discovery solution throughout the higher education market in China,
    covering more than 3,000 institutions of higher learning.
  oDatawatch announced the latest release of its award-winning visual data
    discovery solution, which includes a high performance in-memory
    intelligent cache, built-in support for predictive and advanced analytics
    through Map R and Python support, expanded Big Data connectivity to
    sources such as Hadoop Hive and Cassandra, geospatial analysis and
    enhanced support for additional IBM data management products, including
    Cognos TM1.
  oDatawatch announced its newest solution, developed in cooperation with
    First Florida Credit Union, which provides financial institutions governed
    by the National Credit Union Association with a fast, accurate and
    efficient way to manage their quarterly '5300' submission filings,
    enabling credit unions to eliminate many manual aggregation,
    reconciliation and formatting processes by consolidating call report data
    in a single, auditable environment.
  oDatawatch launched a new corporate website, focused on offering customers,
    partners and prospects access to more visual data discovery resources,
    including the new Datawatch Community, which includes discussion forums,
    demos, videos, blogs, product documentation and white papers to help users
    of Datawatch solutions be more productive.

Third Quarter Financial Highlights

  oCash and short-term investments were $50.17 million at June 30, 2014, down
    7% from $53.92 million at March 31, 2014 and up 387% from $10.31 million
    at September 30, 2013.
  oGross margin (excluding IP amortization expense) for the third fiscal
    quarter of 2014 was 86%, compared to 88% for the second fiscal quarter of
    2014 and 91% for the third fiscal quarter of 2013.
  oDays sales outstanding were 61 days at June 30, 2014, compared to 57 days
    at March 31, 2014 and 60 days at June 30, 2013.
  oThe percentage of license revenue from partners in the third fiscal
    quarter of 2014 was 7%, as compared to 14% in the second fiscal quarter of
    2014.
  oThere were 8 six-figure revenue deals in the third fiscal quarter of 2014,
    as compared to 5 six-figure revenue deals in the second fiscal quarter of
    2014 and 3 six-figure revenue deals in the third fiscal quarter of 2013.

Investor Conference Call and Webcast

The senior management ofDatawatchwill host a conference call and webcast to
discuss the third quarter results tomorrow, Thursday, July 24, 2014at8:30 am
ET. To access the call, please dial 1-877-407-0782. Internationally, the
call may be accessed by dialing 1-201-689-8567. The conference call will be
broadcast live on the Internet at:
http://www.investorcalendar.com/IC/CEPage.asp?ID=172913. It is recommended
that listeners register to participate and download any necessary audio
software from the website 15 minutes prior to the scheduled call. The webcast
will be available as a replay starting one hour after the call is completed at
the same location.

ABOUT DATAWATCH CORPORATION
Datawatch Corporation (NASDAQ-CM: DWCH) provides visual data discovery
software that optimizes any data –regardless of its variety, volume, or
velocity – delivering next generation analytics to reveal valuable insights
for improving business.Its unique ability to integrate structured,
unstructured, and semi-structured sources like reports, PDF files and EDI
streams with real-time streaming data into visually rich analytic applications
allows users to dynamically discover key factors that impact any operational
aspect of their business. This ability to perform visual discovery against any
data sets Datawatch apart in the big data and visualization markets.
Organizations of every size, worldwide use Datawatch products, including 99 of
the Fortune 100. Datawatch is headquartered in Chelmsford, Massachusetts with
offices in New York, London, Munich, Stockholm, Singapore, Sydney and Manila,
and with partners and customers in more than 100 countries worldwide. See the
Whole Story for yourself by downloading the free trial at
www.datawatch.com/trial.

Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995
Any statements contained in this press release that do not describe historical
facts may constitute forward-looking statements as that term is defined in the
Private Securities Litigation Reform Act of 1995. Any such statements,
including but not limited to those relating to results of operations,
contained herein are based on current expectations, but are subject to a
number of risks and uncertainties that may cause actual results to differ
materially from expectations. The factors that could cause actual future
results to differ materially from current expectations include the following:
risks associated with the continuing weak global economy; risks associated
with fluctuations in quarterly operating results due, among other factors, to
the size and timing of large customer orders; risks associated with
acquisitions, including the acquisition of intellectual property from Math
Strategies and the acquisition of Panopticon; the volatility of Datawatch's
stock price; limitations on the effectiveness of internal controls; rapid
technological change; Datawatch's dependence on the introduction of new
products and possible delays in those introductions; competition in the
software industry generally, and in the markets for next generation analytics
in particular; Datawatch's dependence on its principal products, proprietary
software technology and software licensed from third parties; risks associated
with international sales and operations; risks associated with indirect
distribution channels and co-marketing arrangements, many of which were only
recently established; the adequacy of Datawatch's sales returns reserve; risks
associated with a subscription sales model; Datawatch's dependence on its
ability to hire and retain skilled personnel; disruption or failure of
Datawatch's technology systems that may result from a natural disaster,
cyber-attack or other catastrophic event; and uncertainty and additional costs
that may result from evolving regulation of corporate governance and public
disclosure. Further information on factors that could cause actual results to
differ from those anticipated is detailed in various publicly-available
documents, which include, but are not limited to, filings made by Datawatch
from time to time with the Securities and Exchange Commission, including but
not limited to, those appearing in the Company's Annual Report on Form 10-K
for the year ended September 30, 2013 and quarterly report on Form-10Q for the
quarters ended December 31, 2013 and March 31, 2014. Any forward-looking
statements should be considered in light of those factors.

Investor Contact:
Datawatch Investor Relations
investor@datawatch.com
Phone: (978) 441-2200 ext. 8323

Media Contact:
Sarah Bernardi
Datawatch Corporation
Sarah_Bernardi@datawatch.com
Phone: (978) 441-2200 ext. 8387
Twitter: @datawatch

© 2014 Datawatch Corporation. Datawatch and the Datawatch logo are trademarks
or registered trademarks of Datawatch Corporation in the United States and/or
other countries. All other names are trademarks or registered trademarks of
their respective companies.



DATAWATCH CORPORATION
Condensed Consolidated Statements of Operations
Amounts in Thousands (except per share data)
(Unaudited)
                            Three Months Ended      Nine Months Ended
                            June 30,               June 30,
                            2014         2013       2014           2013
REVENUE:
  Software licenses       $  5,580   $ 5,007    $  15,387    $ 13,634
  Maintenance              3,236        2,409      9,357          7,042
  Professional services    412          411        1,293          803
   Total revenue  9,228        7,827      26,037         21,479
COSTS AND EXPENSES:
  Cost of software         999          549        3,013          1,602
  licenses
  Cost of maintenance and  979          602        2,462          1,697
  services
  Sales and marketing      8,241        4,398      23,198         12,391
  Engineering and product  1,942        759        6,830          2,361
  development
  General and              2,185        2,038      7,000          4,475
  administrative
   Total costs    14,346       8,346      42,503         22,526
  and expenses
LOSS FROM OPERATIONS      (5,118)      (519)      (16,466)       (1,047)
Other expense              14           (148)      (1,313)        (466)
LOSS BEFORE INCOME TAXES   (5,104)      (667)      (17,779)       (1,513)
Income tax (benefit)       53           (1)        (270)          1
provision
NET LOSS                   $ (5,157)   $ (666)   $ (17,509)    $ (1,514)
Net loss per share -       $  (0.48)  $ (0.10)  $           $  (0.24)
Basic                                               (1.81)
Net loss per share -       $  (0.48)  $ (0.10)  $           $  (0.24)
Diluted                                             (1.81)
Weighted Average Shares    10,826       6,495      9,654          6,434
Outstanding - Basic
Weighted Average Shares    10,826       6,495      9,654          6,434
Outstanding - Diluted
Non-GAAP Disclosure - Reconciliation of Net Loss to Net Loss Excluding the
Effects of Certain Items:
GAAP Net Loss              $ (5,157)    $ (666)   $  (17,509)   $ (1,514)
 Add-back Amortization   870          474        2,609          1423
of Intangibles & IP
 Add-back Share-Based    1,680        760        6,497          1,922
Compensation
 Add-back Severance &    -            49         273            127
unamortized debt discount
  Subtotal of additions    2,550        1,283      9,379          3,472
Net (Loss) Income          $ (2,607)   $  617   $  (8,130)   $ 1,958
(non-GAAP)
Net (loss) income per      $  (0.24)  $  0.09   $   (0.84)  $  0.30
share - Basic
Net (loss) income per      $  (0.24)  $  0.09   $   (0.84)  $  0.28
share - Diluted
Weighted Average Shares    10,826       6,495      9,654          6,434
Outstanding - Basic
Weighted Average Shares    10,826       6,915      9,654          6,895
Outstanding - Diluted







DATAWATCH CORPORATION
Condensed Consolidated Balance Sheets
Amounts in Thousands
(Unaudited)
                                      June 30,            September 30,
                                      2014                 2013
Cash and cash equivalents            $      50,168   $      10,312
Accounts receivable, net             7,191                6,622
Prepaid expenses and other current   1,234                984
assets
 Total current assets       58,593               17,918
Property and equipment, net          339                  289
Intangible and other assets, net     48,023               51,114
                                      $     106,955    $      69,321
Current portion of long-term debt    $           $        900
                                       -
Current portion of note payable      -                    977
Accounts payable and accrued         4,060                4,914
expenses
Deferred revenue - current portion   7,205                6,997
 Total current liabilities  11,265               13,788
Long-term debt                       -                    2,108
Other long-term liabilities          1,576                2,050
 Total long-term            1,576                4,158
liabilities
 Total shareholders'        94,114               51,375
equity
                                      $     106,955    $     69,321



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SOURCE Datawatch Corporation

Website: http://www.datawatch.com
 
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