Exa Reports Fourth Quarter Fiscal 2014 Financial Results

BURLINGTON, Mass., March 24, 2014 (GLOBE NEWSWIRE) -- Exa^® Corporation EXA, a global innovator of fluids simulation solutions for product engineering, today announced financial results for the fourth quarter and full year fiscal 2014, which ended January 31, 2014.

"We are pleased to report increasing business momentum with fourth quarter revenue up 16% from a year ago, or 18% on a constant currency basis. This performance is the product of increasing demand for our simulation technology, combined with the results of investments in our growth across the organization," said Stephen Remondi, President and Chief Executive Officer of Exa. "We are also pleased that for the full year revenue increased 12%, or 14% on a constant currency basis, as we made progress toward reaching our target of 15% to 20% top-line growth. With the success of our strategy in fiscal 2014, we plan to step up investments that we believe are driving increasing revenue growth and strengthening our position in the market. We believe this is the right strategy to solidify a foundation for delivering continued healthy growth, and drive shareholder value over the longer-term."

Fourth Quarter Fiscal 2014 Financial Highlights

Revenue

• Total revenue for the fourth quarter of fiscal 2014, which ended January 31, 2014, was $15.2 million, an increase of 16% compared to $13.1 million in the comparable period in fiscal 2013. Revenue in the fourth quarter grew by 18% on a constant currency basis, compared with the corresponding period in fiscal 2013.
• License revenue was $12.0 million for the fourth quarter of fiscal 2014, compared to $10.6 million in the comparable period in fiscal 2013, representing an increase of 14%, or 15% on a constant currency basis.
• Project revenue was $3.2 million for the fourth quarter of fiscal 2014, compared to $2.5 million in the comparable period in fiscal 2013, representing an increase of 26%, or 30% on a constant currency basis.

Profitability

• GAAP loss from operations was $(0.2) million in the fourth quarter of fiscal 2014, compared to GAAP loss from operations of $(0.2) million in the comparable period in fiscal 2013.
• Non-GAAP income from operations was $0.3 million in the fourth quarter of fiscal 2014, compared to non-GAAP income from operations of $0.1 million in the comparable period in fiscal 2013.
• Adjusted EBITDA was $0.8 million in the fourth quarter of fiscal 2014, compared to $0.7 million in the comparable period in fiscal 2013.
• GAAP net income was $0.1 million in the fourth quarter of fiscal 2014, compared to GAAP net loss of $(0.3) million for the comparable period in fiscal 2013. GAAP net income per share was $0.01, based on 14.7 million diluted weighted average shares outstanding, compared to GAAP net loss per share of $(0.03) for the comparable period in fiscal 2013, based on 13.3 million diluted weighted average shares outstanding.
• Non-GAAP net income was $0.4 million, or $0.03 per diluted share in the fourth quarter of fiscal 2014, compared to non-GAAP net loss of $(0.1) million, or $(0.01) per diluted share, in the comparable period in fiscal 2013.

Full Year Fiscal 2014 Financial Highlights

Revenue

• Total revenue for the full year fiscal 2014, which ended January 31, 2014, was $54.5 million, an increase of 12% compared to $48.9 million in fiscal 2013. Revenue in fiscal 2014 grew by 14% on a constant currency basis, compared with fiscal 2013.   
• License revenue was $44.6 million in fiscal 2014, compared to $41.2 million in fiscal 2013, representing an increase of 8%, or 11% on a constant currency basis.
• Project revenue was $9.9 million in fiscal 2014, compared to $7.7 million in fiscal 2013, representing an increase of 29%, or 33% on a constant currency basis.

Profitability

• GAAP loss from operations was $(0.1) million in fiscal 2014, compared to GAAP income from operations of $2.0 million in fiscal 2013.
• Non-GAAP income from operations was $1.4 million in fiscal 2014, compared to non-GAAP income from operations of $3.3 million in fiscal 2013.
• Adjusted EBITDA was $3.3 million in fiscal 2014, compared to $4.9 million in fiscal 2013.
• GAAP net loss was $(0.7) million in fiscal 2014, compared to GAAP net income of $0.8 million in fiscal 2013. GAAP net loss per share was $(0.05), based on 13.3 million diluted weighted average shares outstanding, compared to GAAP net income per share of $0.06 in fiscal 2013, based on 12.9 million diluted weighted average shares outstanding.
• Non-GAAP net income was $0.3 million, or $0.02 per diluted share, in fiscal 2014, compared to non-GAAP net income of $1.6 million, or $0.13 per diluted share, in fiscal 2013.

Balance Sheet

• The company had $28.8 million in cash and cash equivalents at January 31, 2014, compared to $25.4 million at October 31, 2013 and $30.7 million at January 31, 2013.
• The company exited fiscal 2014 without any debt compared to $6.8 million of debt at January 31, 2013.

Business Outlook

Based on information available as of March 24, 2014, Exa is issuing guidance for the first quarter and full year fiscal 2015 as indicated below.

First Quarter Fiscal 2015:

• Total revenue is expected to be in the range of $13.8 million to $14.2 million.
• GAAP net loss is expected to be in the range of $(1.0) million to $(0.9) million.
• Non-GAAP net loss is expected to be in the range of $(0.7) million to $(0.5) million.
• Adjusted EBITDA is expected to be in the range of $(0.6) million to $(0.3) million.
• Basic share count for the first quarter is estimated to be 13.7 million shares.
• Diluted share count for the first quarter is estimated to be 14.8 million shares.

Full Year Fiscal 2015:

• Total revenue is expected to be in the range of $60.5 million to $63.0 million.
• GAAP net loss is expected to be in the range of $(1.6) million to $(1.2) million.
• Non-GAAP net (loss) income is expected to be in the range of $(0.2) to $0.3 million.
• Adjusted EBITDA is expected to be in the range of $2.4 million to $3.2 million.
• Basic share count for the full year is estimated to be 13.7 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 1.35 US dollars per Euro and 100.0 Japanese yen per US dollar for fiscal year 2015.

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

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 non-cash, stock-based compensation expense and the amortization of acquired intangibles. We define EBITDA as net income, excluding depreciation and amortization, interest expense, loss on extinguishment of debt, other income (expense), foreign exchange gain (loss) and provision for income taxes, and we define Adjusted EBITDA as EBITDA, excluding non-cash, stock-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. Exa's simulation solutions enable their customers to gain crucial insight into design performance early in the design cycle, thus reducing the likelihood of expensive redesigns and late-stage engineering changes. As a result, Exa's 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: BMW, Ford, Hyundai, Kenworth, MAN, Nissan, Peterbilt, Renault, Scania, Toyota, Volkswagen, and Volvo Trucks.

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 Annual Report on Form 10-K for the year ended January 31, 2013, and Form 10-Q for the quarter-ended October 31, 2013, 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.