Attunity Reports Second Quarter 2014 Financial Results Total non-GAAP revenue grew 37% to a record $8.4 million Total license revenue grew 34% to $4.4 million PR Newswire BURLINGTON, Mass., July 24, 2014 BURLINGTON, Mass., July 24, 2014 /PRNewswire/ --Attunity, Ltd. (NASDAQ CM: ATTU), a leading provider of information availability software solutions, today reported its unaudited financial results for the three-month period ended June 30, 2014. Recent Operational Highlights: oAttunity Replicate is the largest revenue contributor making up 58% of total license revenue oIncreased size and volume of Attunity Replicate deals, which include: o$0.7 million deal with one of the largest European insurance companies o$0.6 million deal with an American communication company oClosed first deal of Attunity Maestro, a new Big Data management platform launched in early Q2 2014, for composing, conducting, and monitoring information flow across global enterprises oIntroduced new Attunity Gold Client solution to accelerate SAP HANA® adoption and deployment oGrew Cloud business with the availability of Attunity CloudBeam in AWS Marketplace, allowing a broader base of customers to easily access securedeployment of scalable Big Data loading and replication in the AWS Cloud Financial Highlights for the Second Quarter of 2014, compared with the Second Quarter of 2013: oTotal non-GAAP revenue grew 37% to $8.4 million, a record quarter of total revenue* oTotal GAAP revenue grew 36% to $8.3 million oTotal license revenue grew 34% to $4.4 million oTotal non-GAAP maintenance and service revenue grew 41% to $3.9 million* oCash and cash equivalents of $18.1 million as of June 30, 2014 compared with $16.5 million as of December 31, 2013 "Our accelerated revenue growth in the second quarter demonstrates the efficiency in which we are executing upon our strategy," stated Shimon Alon, Chairman and CEO of Attunity. "Attunity Replicate continues to be a major contributor of revenue with Replicate license revenue increasing 66% for the quarter, and representing 58% of our total license revenue. Other significant accomplishments included the closing of our first deal for Attunity Maestro, which was just launched in early Q2 2014. Given the product's rapid progress, we expect Attunity Maestro sales to ramp up in the second half of 2014." "We are benefiting from the swift onboarding of newly hired salespeople, who are already contributing to our growth. We have added key hires in certain geographic territories, who are dedicating focused attention to further cultivating our partnerships with Teradata, Microsoft, HP Vertica and Pivotal. These expanded sales teams contributed to the influx in effective referrals from our go-to-market partners, during the quarter. We continue to strengthen our relationship with Amazon as demonstrated by the new direct availability of Attunity CloudBeam, through AWS marketplace, providing easy, fast and secure data integration and replication solutions within the Cloud," continued Mr. Alon. Sales Attunity continues to develop its sales force in order to take advantage of growing global demand, achieving record quarterly sales in the EMEA and Asia Pacific regions. The majority of new sales recruits since the beginning of 2014, have already contributed to our revenue. The Company also bolstered the Inside Sales team, allowing the Company to convert incoming leads to closed deals more efficiently. Marketing As market awareness for Attunity solutions increases, the Company has seen a substantial rise in customer leads. Marketing activity has expanded significantly since the beginning of 2014, as the Company participated in over a dozen conferences, tradeshows and customer appreciation events. The team has also increased its production of thought-leadership content such as whitepapers, webinars, and e-books to help educate the market about Attunity's technology as well as important industry trends. Products The Company experienced significant interest in its newest data distribution and management solution, Attunity Maestro. The launch has immediately generated interest, including demos and proof-of-concepts, one of which already resulted in the closing of a deal within the quarter. During the quarter, Attunity Gold Client introduced support for SAP HANA®, allowing SAP users to accelerate data flow within SAP HANA and enable rapid deployment of SAP applications in the data center or in the Cloud. Recently, Colmobil Corporation, a large international distributor of commercial vehicles, has selected Gold Client, to enable their business-critical data initiative within its SAP environment. The new release of Attunity CloudBeam was made available inAWS Marketplace during the quarter. CloudBeam nowallows a broader base of customers to easily access the seamless and secure deployment of scalable Big Data loading and replication in the AWS Cloud. Partnership Activity The continued focus and investments in partnering activity, which includes support from an expanded global sales presence within key regions, has resulted in more referrals and larger deals. This is evident in the progress of our relationships with partners such as Microsoft and Teradata, collectively generating a substantial amount of new customer opportunities during the quarter. We have also enhanced our relationship with Amazon Web Services as we recently announced a 30-day free trial of Attunity CloudBeam for Amazon Redshift, on AWS Marketplace. This free trial is expected to fuel adoption of CloudBeam, providing an easy-to-use data loading and replication experience for Redshift users. "We are committed to investing in our growth strategy with the hiring of additional sales people to service high demand areas like the EMEA region, further expanding upon key marketing efforts, strengthening our partner channels and enhancing our product portfolio," concluded Mr. Alon. Financial Results for Q2 2014 Total revenue for the second quarter of 2014 increased 36% to $8.3 million compared with $6.1 million last year. Total non-GAAP revenue for the second quarter of 2014 increased 37% to $8.4 million, compared with revenue of $6.1 million for the same period of 2013. This included license revenue which increased 34% to $4.4 million, compared with $3.3 million for the same period of 2013 and non-GAAP maintenance and service revenue which grew 41% to $3.9 million, compared with $2.8 million for the same period of 2013. Non-GAAP maintenance and service revenue includes approximately$0.1 millionof acquired maintenance revenue from Hayes that was not recognized due to business combination accounting rules.* Operating loss for the second quarter of 2014 was $1.0 million, compared with an operating income of $0.1 million for the same period of 2013. This decline was primarily due to an increase in sales and marketing activities, research and development, amortization expenses associated with the acquisition of Hayes, general and administrative costs associated with the Company's growth strategy. Non-GAAP operating loss was $0.2 million for the second quarter of 2014, compared with a non-GAAP operating income of $0.4 million for the second quarter of 2013. Non-GAAP operating loss for the second quarter of 2014 excludes $0.8 million in expenses and amortizations associated with acquisitions and equity based compensation expenses. This is compared with a $0.3 million of similar expenses, for the same period last year.* Net loss for the second quarter of 2014 was $1.2 million, or $0.08 per diluted share, compared with a net income of $0.2 million, or $0.02 per diluted share in the second quarter of 2013. Non-GAAP net loss for the second quarter of 2014 was $0.4 million, compared with a non-GAAP net income of $0.4 million for the same period last year. Non-GAAP net loss for the second quarter of 2014 excludes a total of $0.7 million in expenses mostly attributable to expenses and amortization associated with acquisitions and equity based compensation expenses. This is compared with $0.2 million in similar expenses, for the same period in 2013.* Cash and cash equivalents were $18.1 million as of June 30, 2014, compared with $16.5 million asof December 31, 2013. Shareholders' equity was $29.5 million as of June 30, 2014, compared with $30.1 million as of December 31, 2013. * See "Use of Non-GAAP Financial Information" below for more information regarding Attunity's use of Non-GAAP financial measures. Conference Call Information The Company's management will host a conference call today, July 24, 2014, at 10:00 a.m. Eastern Time. The dial-in numbers for the conference call are +1 877-879-6209 (U.S. Toll Free), +1-719-325-4891 (International), or 180-925-8243 (Israel). All dial-in participants must use the following code to access the call: 6003397. Please call at least five minutes before the scheduled start time. The conference call will be available via webcast and can be accessed through the Events section of Attunity's website,http://www.attunity.com/events, the contents of which are not part of this press release. Please allow extra time prior to the call to visit the site and download any necessary software to listen to the Internet broadcast. For interested individuals unable to join the live conference call, a replay will be available through August 7, 2014 at +1-877-870-5176 (U.S. Toll Free) or 1-858-384-5517 (international). Participants must use the following code to access the replay of the call: 6003397. The online archive of the webcast will be available on http://www.attunity.com/eventsfor 30 days following the call. About Attunity Attunity is a leading provider of information availability software solutions that enable access, management, sharing and distribution of data, including Big Data, across heterogeneous enterprise platforms, organizations, and the cloud. Our software solutions include data replication, change data capture (CDC), data connectivity, enterprise file replication (EFR) and managed-file-transfer (MFT). Using Attunity's software solutions, our customers enjoy significant business benefits by enabling real-time access and availability of data and files where and when needed, across the maze of heterogeneous systems making up today's IT environment. Attunity has supplied innovative software solutions to its enterprise-class customers for nearly 20 years and has successful deployments at thousands of organizations worldwide. Attunity provides software directly and indirectly through a number of partners such as Microsoft, Oracle, IBM and HP. Headquartered in Boston, Attunity serves its customers via offices in North America, Europe, and Asia Pacific and through a network of local partners. For more information, visit http://www.attunity.com or our In Tune blog and join our community on Twitter, Facebook, LinkedIn and YouTube, the content of which is not part of this press release. Use of Non-GAAP Financial Information In addition to reporting financial results in accordance with U.S. generally accepted accounting principles, or GAAP, Attunity uses Non-GAAP measures of revenue, net income, operating income, operating profit margin and net income per share, which are adjustments from results based on GAAP to exclude expenses and amortization associated with the acquisitions of RepliWeb and Hayes, net of related tax, stock-based compensation expenses in accordance with ASC 718, and non-cash financial expenses such as the effect of a revaluation of liabilities presented at fair value. Attunity's management believes the non-GAAP financial information provided in this release is useful to investors' understanding and assessment of Attunity's on-going core operations and prospects for the future. Management uses both GAAP and non-GAAP information in evaluating and operating its business internally and as such has determined that it is important to provide this information to investors. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. For further details, see the Reconciliation of Selected GAAP Measures to Non-GAAP Measures table later in this press release. Safe Harbor Statement This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and other Federal Securities laws. Statements preceded by, followed by, or that otherwise include the words "believes", "expects", "anticipates", "intends", "estimates", "plans", and similar expressions or future or conditional verbs such as "will", "should", "would", "may" and "could" are generally forward-looking in nature and not historical facts. For example, when we say that we expect Attunity Maestro sales to ramp up in the second half of 2014, we use a forward-looking statement. Because such statements deal with future events, they are subject to various risks and uncertainties and actual results, expressed or implied by such forward-looking statements, could differ materially from Attunity's current expectations. Factors that could cause or contribute to such differences include, but are not limited to: our reliance on strategic relationships with our distributors, OEM, VAR and "go-to-market" and other business partners, and on our other significant customers; our ability to expand our business into the SAP market and the success of our Gold Client offering; risks and uncertainties relating to acquisitions, including costs and difficulties related to integration of acquired businesses; timely availability and customer acceptance of Attunity's new and existing products, including Attunity Maestro; changes in the competitive landscape, including new competitors or the impact of competitive pricing and products; a shift in demand for products such as Attunity's products; the impact on revenue of economic and political uncertainties and weaknesses in various regions of the world, including the commencement or escalation of hostilities or acts of terrorism; and other factors and risks on which Attunity may have little or no control. This list is intended to identify only certain of the principal factors that could cause actual results to differ. For a more detailed description of the risks and uncertainties affecting Attunity, reference is made to Attunity's latest Annual Report on Form 20-F which is on file with the Securities and Exchange Commission (SEC) and the other risk factors discussed from time to time by Attunity in reports filed with, or furnished to, the SEC. Except as otherwise required by law, Attunity undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. © 2014 Attunity Ltd. All rights reserved. Attunity is a trademark of Attunity Inc. For more information, please contact: Garth Russell / Diane Imas KCSA Strategic Communications P: + 1 212-682-6300 email@example.com / firstname.lastname@example.org Dror Harel-Elkayam, CFO Attunity Ltd. Tel. +972 9-899-3000 email@example.com CONDENSED CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands, except share and per share data June 30, December 31, 2014 2013 Unaudited Audited ASSETS CURRENT ASSETS: Cash and cash equivalents $ 18,119 $ 16,481 Trade receivables (net of allowance for doubtful accounts of $15 at 5,097 5,224 June30, 2014 and December 31, 2013) Other accounts receivable and prepaid expenses 857 685 Total current assets 24,073 22,390 Other long-term assets 440 385 Severance pay fund 3,436 3,233 Property and equipment, net 1,030 879 Intangible assets, net 4,754 5,345 Goodwill 17,728 17,748 Total long-term assets 27,388 27,590 Total assets $ 51,461 $ 49,980 CONDENSED CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands, except share and per share data June 30, December 31, 2014 2013 Unaudited Audited LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Trade payables $ 356 $ 458 Contingent purchase consideration 1,912 - Deferred revenues 6,876 5,175 Employees and payroll accruals 3,559 3,210 Accrued expenses and other current liabilities 1,220 1,365 Total current liabilities 13,923 10,208 LONG-TERM LIABILITIES: Long-term deferred revenue 632 847 Liabilities presented at fair value and other 968 1,219 long-term liabilities Contingent purchase consideration 1,709 3,280 Accrued severance pay 4,705 4,328 Total long-term liabilities 8,014 9,674 SHAREHOLDERS' EQUITY: Share capital - Ordinary shares of NIS 0.4 par value - Authorized: 32,500,000 shares at June 30, 2014 and December 31, 2013; Issued and outstanding: 15,179,196 shares at 1,752 1,677 June 30, 2014 and 14,527,292 shares at December 31, 2013 Additional paid-in capital 132,322 130,944 Receipt on account of shares - 81 Accumulated other comprehensive loss (653) (621) Accumulated deficit (103,897) (101,983) Total shareholders' equity 29,524 30,098 Total liabilities and shareholders' equity $ 51,461 $ 49,980 CONSOLIDATED STATEMENTS OF OPERATIONS U.S. dollars in thousands, except per share data Six months ended Three months ended June 30, June 30, 2014 2013 2014 2013 Unaudited Unaudited Software licenses $ 7,929 $ 5,043 $ 4,442 $ 3,313 Maintenance and services 7,446 5,644 3,850 2,789 Total revenue 15,375 10,687 8,292 6,102 Operating expenses: Cost of revenues 1,472 1,046 776 512 Research and development 4,837 3,869 2,542 1,884 Selling and marketing 8,861 5,456 4,892 2,805 General and 1,888 1,511 1,076 793 administrative Total operating expenses 17,058 11,882 9,286 5,994 Operating income (loss) (1,683) (1,195) (994) 108 Financial income 189 (85) 109 28 (expenses), net Income (loss) before (1,872) (1,280) (1,103) 136 taxes on income Taxes on income 42 (105) 55 (44) (benefit) Net income (loss) $ (1,914) $ (1,175) $ (1,158) $ 180 Basic net income (loss) (0.13) (0.11) (0.08) 0.02 per share Weighted average number of shares used in 14,834 10,994 14,970 11,026 computing basic net income (loss) per share Diluted net income (0.13) (0.11) (0.08) 0.01 (loss) per share Weighted average number of shares used in 14,834 10,994 14,970 12,397 computing diluted net loss per share CONSOLIDATED STATEMENTS OF CASH FLOWS U.S. dollars in thousands Six months ended June 30, 2014 2013 Unaudited Cash flows activities: Net loss $ (1,914) $ (1,175) Adjustments required to reconcile net loss to net cash provided by operating activities: Depreciation 163 114 Stock based compensation 677 306 Amortization of intangible assets 591 373 Accretion of payment obligation 341 66 Change in operating assets and liabilities: Accrued severance pay, net 174 120 Trade receivables 127 430 Other accounts receivable and prepaid (50) (118) expenses Other assets (12) 3 Trade payables (102) 44 Deferred revenues 1,486 977 Employees and payroll accruals 349 (322) Accrued expenses and other liabilities (145) (413) Liabilities presented at fair value and other (251) (69) long-term liabilities Change in deferred taxes, net (165) (174) Net cash provided by operating activities 1,269 162 Cash flows from investing activities: Purchase of property and equipment (314) (484) Net cash used in investing activities (314) (484) Cash flows from financing activities: Proceeds from exercise of stock options, 695 151 warrants and rights Receipts on account of shares - 133 Payment of contingent consideration - (2,000) Net cash provided by (used in) financing 695 (1,716) activities Foreign currency translation adjustments on (12) 32 cash and cash equivalents Increase (decrease) in cash and cash 1,638 (2,006) equivalents Cash and cash equivalents at the beginning of 16,481 3,778 the period Cash and cash equivalents at the end of the 18,119 1,772 period Supplemental disclosure of cash flow activities: Cash paid during the period for taxes $ 382 $ 389 Non cash activities: Purchase of property and equipment - $ 36 RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES U.S. dollars in thousands, except share and per share data Three months ended June 30, Three months ended June 30, 2014 2013 Unaudited Unaudited GAAP Adj. NON- GAAP Adj. NON- GAAP GAAP Software licenses 4,442 4,442 3,313 3,313 Maintenance and 3,850 95 (a) 3,945 2,789 - 2,789 services Total revenue 8,292 8,387 6,102 6,102 Operating expenses: Cost of revenues 776 215 (b) 561 512 128 (b) 384 Research and 2,542 108 (c) 2,434 1,884 64 (c) 1,820 development Selling and marketing 4,892 271 (b), 4,621 2,805 93 (b), 2,712 (c) (c) General and 1,076 104 (c) 972 793 41 (c) 752 administrative Total operating 9,286 8,588 5,994 5,668 expenses Operating income (994) (201) 108 434 (loss) Financial expenses, 109 45 (d) 64 (28) (63) (d) 35 net Income (loss) before taxes on income (1,103) (265) 136 399 (benefit) Taxes on income 55 (98) (e) 153 (44) (72) (e) 28 (benefit) Net income (loss) (1,158) (418) 180 371 Basic net income (0.08) (0.03) 0.02 0.03 (loss) per share Weighted average number of shares used in computing basic 14,970 14,970 11,026 11,026 net income (loss) per share Diluted net income (0.08) (0.03) 0.01 0.03 (loss) per share Weighted average number of shares used in computing diluted 14,970 14,970 12,397 12,507 net income (loss) per share (a) Valuation adjustment on acquired deferred services revenue (b) Operating acquisition-related expenses and amortization: Three months ended June June 30, 30, 2014 2013 Cost of revenues - amortization of 215 128 technology Selling and marketing - amortization of customers 81 58 relationship 296 186 (c) Stock-based compensation expenses under ASC 718 included in: Three months ended, June June 30, 30, 2014 2013 Research and 108 64 development Selling and marketing 190 35 General and 104 41 administrative 402 140 (d) Acquisition-related financial expenses and revaluation of liabilities presented at fair value: Three months ended, June June 30, 30, 2014 2013 Revaluation of liabilities (126) (63) presented at fair value Acquisition-related financial 171 - expenses 45 (63) (e) Taxes related to acquisitions RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES U.S. dollars in thousands, except share and per share data Six months ended June 30, 2014 Six months ended June 30, 2013 Unaudited Unaudited GAAP Adj. NON- GAAP Adj. NON- GAAP GAAP Software licenses 7,929 7,929 5,043 5,043 Maintenance and 7,446 190 (a) 7,636 5,644 - 5,644 services Total revenue 15,375 15,565 10,687 10,687 Operating expenses: Cost of revenues 1,472 429 (b) 1,043 1,046 257 (b) 789 Research and 4,837 191 (c) 4,646 3,869 132 (c) 3,737 development Selling and 8,861 460 (b), 8,401 5,456 203 (b), 5,253 marketing (c) (c) General and 1,888 188 (c) 1,700 1,511 87 (c) 1,424 administrative Total operating 17,058 15,790 11,882 11,203 expenses Operating loss (1,683) (225) (1,195) (516) Financial expenses, 189 88 (d) 101 85 3 (d) 82 net Loss before taxes on (1,872) (326) (1,280) (598) income Taxes on income 42 (178) (e) 220 (105) (144) (e) 39 (benefit) Net loss (1,914) (546) (1,175) (637) Basic and diluted (0.13) (0.04) (0.11) (0.06) net loss per share Weighted average number of shares used in computing 14,834 14,834 10,994 10,994 basic and diluted net loss per share (a) Valuation adjustment on acquired deferred services revenue (b) Operating acquisition-related expenses and amortization: Six months ended June June 30, 30, 2014 2013 Cost of revenues - 429 257 amortization of technology Selling and marketing - amortization of customers 162 116 relationship 591 373 (c) Stock-based compensation expenses under ASC 718 included in: Six months ended June June 30, 30, 2014 2013 Research and 191 132 development Selling and 298 88 marketing General and 188 86 administrative 677 306 (d) Acquisition-related financial expenses and revaluation of liabilities presented at fair value: Six months ended June June 30, 30, 2014 2013 Revaluation of liabilities presented at fair (253) (63) value Acquisition-related financial 341 66 expenses 88 3 (e) Taxes related to acquisitions SOURCE Attunity, Ltd. Website: http://www.attunity.com
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