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Attunity Reports Second Quarter 2018; 86% License Growth

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Attunity Reports Second Quarter 2018; 86% License Growth

Increases Outlook for Full Year 2018

PR Newswire

BURLINGTON, Massachussets, July 25, 2018 /PRNewswire/ -- Attunity Ltd. (NasdaqCM: ATTU), a leading provider of data integration and Big Data management software solutions, today reported its unaudited financial results for the three-month period ended June 30, 2018.

"We are pleased to report record results for the second quarter of 2018. We continued to accelerate our business, and achieved license revenue growth of 86% year-over-year and total revenue growth of 47% year-over-year for the quarter. The momentum has been building over the past several quarters, driven by the shift in the analytics market to the next level of data lake adoption, the fast growth of the Cloud as an enterprise data platform, and our strong execution. With the combination of our innovative solutions and strategic partnerships with key industry leaders, we are strongly positioned to capitalize on this growing market opportunity," stated Shimon Alon, Chairman and CEO of Attunity.

"The introduction of our recurring revenue pricing model has quickly resulted in strong customer adoption, with the majority of Replicate direct license deals in the quarter being term-based. We anticipate this trend to continue in the second half of 2018 and beyond. As a result of our strong first half of 2018 and the momentum we see for the full year, we determined to raise our guidance," concluded Mr. Alon.

Recent Operational Highlights

  • Approximately 60% of the number of Replicate direct license deals in the second quarter were term-based, which represents approximately 70% of Replicate direct license revenue
  • Closed two large term-based deals, one for a total of $2.8 million and one for a total of $2.3 million
  • Closed first large GDPR solution sale for a total of $0.9 million
  • Introduced new Gold Client solution to enable GDPR compliance for SAP® environments
  • Conducted a strategic customer advisory board with representatives from 20 large companies
  • Hired a new EVP of North America Sales Operations, who previously served as a sales executive of Oracle's data integration business, including GoldenGate

Financial Highlights for the Second Quarter of 2018 compared with the Second Quarter of 2017

  • Total revenue was $19.8 million, compared with $13.5 million*
  • Operating profit was $0.9 million, compared with an operating loss of $2.5 million*
  • Non-GAAP operating profit was $2.1 million, compared with an operating loss of $1.4 million**
  • Net income was $0.3 million, compared with a net loss of $3.2 million*
  • Non-GAAP net income was $1.7 million, compared with a non-GAAP net loss of $2.0 million**
  • Generated cash flow from operations of $4.0 million, compared with cash used in operations of $1.7 million

Financial Results for Second Quarter of 2018

Total revenue for the second quarter of 2018 increased 47% to $19.8 million, compared with $13.5 million for the same period in 2017. This includes license revenue of $11.5 million, which grew 86% compared with $6.2 million for the same period in 2017, and maintenance and service revenue, which grew 14% to $8.3 million, compared with $7.3 million for the same period in 2017.*

Operating expenses for the second quarter of 2018 increased 18% to $18.9 million, compared with $16.0 million for the same period in 2017.*

Non-GAAP operating expenses for the second quarter of 2018 increased 19% to $17.7 million, compared with $14.9 million for the same period in 2017. Non-GAAP operating expenses exclude approximately $1.2 million in equity-based compensation expenses and amortization associated with acquisitions, similar to the same period in 2017.**

Operating profit for the second quarter of 2018 was $0.9 million, compared with an operating loss of $2.5 million for the same period in 2017.*

Non-GAAP operating profit was $2.1 million for the second quarter of 2018, compared with an operating loss of $1.4 million for the same period in 2017. Non-GAAP operating profit excludes approximately $1.2 million in equity-based compensation expenses and amortization associated with acquisitions, similar to the same period in 2017.**

Net income for the second quarter of 2018 was $0.3 million, or $0.01 per diluted share, compared with a net loss of $3.2 million, or ($0.19) per diluted share, in the same period in 2017.*

Non-GAAP net income for the second quarter of 2018 was $1.7 million, or $0.08 per diluted share, compared with a non-GAAP net loss of $2.0 million, or ($0.12) per diluted share, for the same period in 2017. Non-GAAP net income excludes approximately $1.4 million primarily in equity-based compensation expenses and amortization associated with acquisitions, compared with approximately $1.2 million of similar expenses for the same period in 2017.**

Cash flow from operations was $4.0 million, compared with cash used in operations of $1.7 million in the same period in 2017.

Cash and cash equivalents and short-term deposits were $33.1 million as of June 30, 2018, compared with $28.8 million as of March 31, 2018.

Updated Outlook for Full Year 2018

The Company increased its outlook for the full year 2018 as follows:

  • Total revenue is estimated to grow to between $78 and $81 million, compared with prior (updated) guidance of $75 to $78 million.
  •  Non-GAAP operating margin is estimated to be between 7% and 10%, compared with prior (updated) guidance of 6% to 10%.

Financial Reconciliation to non-GAAP figures for the updated 2018 outlook:


From

To

GAAP Operating Profit (Loss) Margin

0%

4%

Equity-based compensation

(6%)

(5%)

Amortization associated with acquisitions

(1%)

(1%)

Non-GAAP Operating Profit Margin (1)

7%

10%

(1) Non-GAAP Operating Profit Margin is calculated by dividing the non-GAAP Operating Profit by the total non-GAAP revenues for the period.

These estimates for 2018 reflect the Company's current and preliminary views, which are subject to change (see below under "Safe Harbor Statement") and are based on various assumptions, including the continued expanded adoption of the Cloud as a leading data platform, the continued adoption of modern analytics and the improved execution capabilities of our expanded sales team.

The Company clarified that it does not expect to provide or update guidance more often than on an annual basis.

** See "Use of Non-GAAP Financial Information" below for more information regarding Attunity's use of Non-GAAP financial measures.

Conference Call and Webcast Information

The Company will host a conference call with the investment community on Wednesday, July 25th at 8:30 a.m. Eastern Time featuring remarks by Shimon Alon, Chairman and CEO, Dror Harel-Elkayam, CFO, and Itamar Ankorion, CMO of Attunity. The dial-in numbers for the conference call are +1-877-407-9039 (U.S. Toll Free), +1 809 406 247 (Israel), or +1-201-689-8470 (International). All dial-in participants must use the following code to access the call: 13681053.

Please call at least five minutes before the scheduled start time.  The conference call will also be available via webcast, which can be accessed through the Investor Relations section of Attunity's website, ir.attunity.com.  Please allow extra time prior to the call to visit the site and download any necessary software to listen to the live broadcast.

For interested individuals unable to join the conference call, a replay of the call will be available through August 8, 2018, at +1-844-512-2921 (U.S. Toll Free) or +1-412-317-6671 (International). Participants must use the following code to access the replay of the call: 13681053. The online archive of the webcast will be available on ir.attunity.com/events for 30 days following the call.

About Attunity

Attunity is a leading provider of data integration and Big Data management software solutions that enable availability, delivery and management of data across heterogeneous enterprise platforms, organizations and the cloud. Our software solutions include data replication and distribution, test data management, change data capture (CDC), data connectivity, enterprise file replication (EFR), managed file transfer (MFT), data warehouse automation, data usage analytics and cloud data delivery.

Attunity has supplied innovative software solutions to its enterprise-class customers for over 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 Hewlett Packard Enterprise. 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 www.attunity.com or our blog and join our community on TwitterFacebookLinkedIn and YouTube.

(*) New Revenue Accounting Standard

Effective January 1, 2018, Attunity adopted the FASB-issued ASU, No. 2014-09, "Revenue from Contracts with Customers (Topic 606)", or ASC 606, a new accounting standard related to revenue recognition. Attunity adopted ASC 606 using the modified retrospective method, which means that the comparative financial information for the three and six month periods ended June 30, 2017 has not been restated in the current financial statements under the new accounting standard. Accordingly, the percentage changes from the 2017 to 2018 periods differ from what they would have been had the same accounting standards been in effect for both periods. In the interest of comparability during the transition year to ASC 606, the company has provided revenue, operating expenses, operating income (loss), financial income, taxes on income, net income (loss) and earnings per share information in accordance with both ASC 606 and revenue recognition rules in effect prior to the adoption of ASC 606 (ASC No. 985-605, or ASC 605). For further details, see the Impact of the Adoption of ASC 606 table later in this press release and the note thereto. 

(**) 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 net income (loss), operating expenses, operating profit (loss), and diluted net income (loss) per share, which are adjusted from results based on GAAP to exclude amortization associated with acquisitions, equity-based compensation expenses, non-cash financial expenses, such as the effect of a revaluation of liabilities presented at fair value, and the effect of changes in deferred taxes related to non-GAAP adjustments. 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 Supplemental Non-GAAP Financial Information 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 applicable 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 discuss our ability to capitalize on the growing market opportunity, the continued trend of demand for our recurring revenue pricing model and our updated outlook for 2018, we are using forward-looking statements. In addition, announced results for the second quarter of 2018 are preliminary, unaudited and subject to year-end audit adjustment. 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, risks and uncertainties relating to: our history of operating losses and ability to achieve or sustain profitability; our business and operating results dependency on the successful and timely implementation of our third party partner solutions; the lengthy sales cycle of our products; competition; acquisitions, including costs and difficulties related to integration of acquired businesses and impairment charges; global economic conditions; the potential loss of one or more of our significant customers or a decline in demand from one or more of these customers; timely availability and customer acceptance of Attunity's new and existing products; risks relating to proprietary rights and risks of infringement; loss of the services of our key personnel; international operations; 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.

The contents of any website or hyperlinks mentioned in this press release are for informational purposes and the contents thereof are not part of this press release.

© Attunity 2018. All Rights Reserved. Attunity is a registered trademark of Attunity Inc. All other product and company names herein may be trademarks of their respective owners.

For more information, please contact:

Investor Contact:
Todd Fromer / Allison Soss
KCSA Strategic Communications
Tel. +1-212-896-1267
Attunity@kcsa.com    

Company Contact:
Dror Harel-Elkayam, CFO
Attunity Ltd.
Tel. +972-9-899-3000
Dror.elkayam@attunity.com

 

CONDENSED CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands



 June 30,


December 31,



2018


2017



Unaudited


Audited

ASSETS





CURRENT ASSETS:





Cash and cash equivalents

$

14,999

$

29,087

Short term deposits


18,111


-

Trade receivables (net of allowance for doubtful accounts of $65
and $15 at June 30, 2018 and December 31, 2017)


13,119


10,609

Deferred commissions costs


1,066


-

Other accounts receivable and prepaid expenses


1,577


1,074

Total current assets


48,872


40,770






LONG-TERM ASSETS:





Other assets


250


152

Deferred commissions costs


4,675


-

Deferred taxes


5


1,209

Severance pay fund


4,438


4,378

Property and equipment, net


1,409


1,287

Intangible assets, net


960


1,431

Goodwill


30,929


30,929

Total long-term assets


42,666


39,386

Total assets

$

91,538

$

80,156


 

CONDENSED CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands, except share and per share data


 June 30,


 December 31,


2018


2017






Unaudited


Audited

LIABILITIES AND SHAREHOLDERS' EQUITY





CURRENT LIABILITIES:










Trade payables

$

1,024

$

666

Deferred revenues


13,984


11,066

Employees and payroll accruals


5,080


5,730

Accrued expenses and other current liabilities


1,851


3,066

Total current liabilities


21,939


20,528






LONG-TERM LIABILITIES:





Other liabilities


418


321

Deferred revenues


2,647


2,163

Accrued severance pay


5,996


5,941

Total long-term liabilities


9,061


8,425






SHAREHOLDERS' EQUITY:





Share capital – Ordinary shares of NIS 0.4 par value -
Authorized: 32,500,000 shares at June 30, 2018 and
December 31, 2017 ; Issued and outstanding: 21,090,695 shares
at June 30, 2018 and 20,718,468 shares at December 31, 2017


2,403


2,361

Additional paid-in capital


177,087


174,693

Accumulated other comprehensive loss


(1,411)


(1,222)

Accumulated deficit


(117,541)


(124,629)






Total shareholders' equity


60,538


51,203

Total liabilities and shareholders' equity

$

91,538

$

80,156

 

 

CONSOLIDATED STATEMENTS OF OPERATIONS

U.S. dollars and shares in thousands, except per share data



Three months ended


Six months ended



June 30,  


June 30,



2018


2017


2018


2017



Unaudited


Unaudited

Revenues:









Software licenses

$

11,489

$

6,194

$

21,623

$

13,164

Maintenance and services 


8,328


7,314


16,424


14,180

Total revenues


19,817


13,508


38,047


27,344

Operating expenses:









Cost of revenues 


2,728


2,446


5,406


4,525

Research and development


4,102


3,507


7,931


6,799

Selling and marketing


10,697


8,754


20,075


16,655

General and administrative


1,371


1,317


2,964


2,501

Total operating expenses


18,898


16,024


36,376


30,480










Operating profit (loss)


919


(2,516)


1,671


(3,136)










Financial  income (expenses), net


38


62


88


(58)










Income (loss) before taxes on income


957


(2,454)


1,759


(3,194)










Taxes on income


(700)


(739)


(1,298)


(1,472)










Net profit (loss)

$

257

$

(3,193)

$

461

$

(4,666)










Basic and diluted net profit (loss) per share

$

0.01

$

(0.19)

$

0.02

$

(0.28)

Weighted average number of shares used in computing
basic net income (loss) per share


20,982


17,023


20,859


16,951

Weighted average number of shares used in computing
diluted net income (loss) per share


21,412


17,023


21,104


16,951

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands



Six months ended June 30,



2018


2017





Unaudited

Operating activities:





Net profit (loss)

$

461

$

(4,666)

Adjustments required to reconcile net profit (loss) 
 to net cash provided by operating activities:




Depreciation


266


239

Stock based compensation


1,990


1,650

Amortization of intangible assets


471


673

Accrued interest on short term deposits


(111)


-

Change in:





   Accrued severance pay, net


(5)


318

   Trade receivables


(274)


1,207

   Other accounts receivable and prepaid expenses


(542)


(527)

   Other long-term assets


(25)


(1)

   Trade payables


350


434

   Deferred revenues


4,107


2,166

   Employees and payroll accruals


(658)


(315)

   Accrued expenses and other current liabilities


(1,273)


(181)

   Liabilities presented at fair value


-


(219)

   Change in deferred taxes, net


439


406

   Deferred Commissions costs


(1,253)


-

Net cash provided by operating activities


3,943


1,184






Investing activities:





Deposits


(18,000)


-

Purchase of property and equipment


(390)


(320)

Net cash used in investing activities


(18,390)


(320)






Financing activities:





Proceeds from exercise of options


446


213

Payment of contingent consideration


-


(271)

Net cash provided by (used in) financing activities


446


(58)

Foreign currency translation adjustments
on cash and cash equivalents


(87)


22






Increase (decrease) in cash and cash equivalents


(14,088)


828

Cash and cash equivalents at the beginning of the year


29,087


9,166






Cash and cash equivalents at the end of the period

$

14,999

$

9,994






Supplemental disclosure of cash flow activities:





Cash paid during the year for taxes

$

2,074

$

1,204

Supplemental disclosure of non-cash financing activities:





Receivables on account of shares

$

311

$

-


RECONCILIATION OF SUPPLEMENTAL, NON-GAAP FINANCIAL INFORMATION

U.S. dollars  in thousands, except per share data


Three months ended


Six months ended


June 30,


June 30,


2018


2017


2018


2017


Unaudited


Unaudited









GAAP and Non-GAAP revenues

$    19,817


$ 13,508


$38,047


$27,344

GAAP operating expenses

18,898


16,024


36,376


30,480

Cost of revenues (1)

(48)


(41)


(102)


(64)

Research and development (1)

(132)


(164)


(335)


(365)

Sales and marketing (1)

(548)


(403)


(1,097)


(782)

General and administrative (1)

(222)


(214)


(456)


(439)

Amortization of acquired intangible assets

(236)


(336)


(471)


(673)

Non-GAAP operating expenses

17,712


14,866


33,915


28,157

GAAP operating income (loss)

919


(2,516)


1,671


(3,136)

Operating adjustments

(1,186)


(1,158)


(2,461)


(2,323)

Non-GAAP operating income (loss)

2,105


(1,358)


4,132


(813)

GAAP financial income (expenses), net

38


62


88


(58)

Revaluation of liabilities presented at fair value

-


(155)


-


(212)

Non -GAAP financial  income (expenses), net

38


(93)


88


(270)









Taxes on income

(700)


(739)


(1,298)


(1,472)

Tax benefits related to non-GAAP adjustments

246


215


246


183

Non-GAAP taxes on income

(454)


(524)


(1,052)


(1,289)

GAAP net income (loss)

257


(3,193)


461


(4,666)

Amortization of acquired intangible assets

236


336


471


673

Stock-based compensation

950


822


1,990


1,650

Revaluation of liabilities presented at fair value

-


(155)


-


(212)

Tax benefits related to non-GAAP adjustments

246


215


246


183

Non-GAAP net income (loss)

$  1,689


$ (1,975)


$ 3,168


$(2,372)









GAAP basic and diluted net income (loss) per share

$    0.01


$   (0.19)


$   0.02


$  (0.28)

Non-GAAP basic and diluted net income (loss) per share

$    0.08


$   (0.12)


$   0.15


$  (0.14)









(1) Stock-based compensation expenses:









Three months ended


Six months ended


June 30,


June 30,


2018


2017


2018


2017

Cost of revenues

$         48


$       41


$      102


$       64

Research and development

132


164


335


365

Sales and marketing

548


403


1,097


782

General and administrative

222


214


456


439


$      950


$     822


$   1,990


$  1,650













 

IMPACT OF THE ADOPTION OF ASC 606

U.S. dollars in thousands, except per share data


Three months ended June 30, 2018

(Unaudited)


Six months ended June 30, 2018

(Unaudited)


 

As
reported
(ASC 606)

 

Adjustments

 

ASC 605 (excluding

impact of

ASC 606) *


As
reported
(ASC 606)

Adjustments

 

ASC 605 (excluding

impact of

ASC 606) *

Revenues

$   19,817

$     (5,346)

$      14,471


$      38,047

$      (6,784)

$         31,263

Operating expenses

18,898

294

19,192


36,376

1,254

37,630

Operating income (loss)

919

(5,640)

(4,721)


1,671

(8,038)

(6,367)

Financial income

38

-

38


88

-

88

Taxes on income

(700)

51

(649)


(1,298)

200

(1,098)

Net income (loss)

$        257

$      (5,589)

$     (5,332)


$          461

$      (7,838)

$        (7,377)









Basic and diluted net
income (loss) per share

$       0.01

$        (0.26)

$       (0.25)


$        0.02

$        (0.37)

$          (0.35)

 

(*) Effective January 1, 2018, the Company adopted the Financial Accounting Standard Board-issued Accounting Standards Update No. 2014-09, "Revenue from Contracts with Customers (Topic 606)", or ASC 606, a new accounting standard related to revenue recognition, using the modified retrospective method. In order to provide comparable figures during 2018, the transition year to ASC 606, the Company has provided the above summary of adjustments in financial information for the three and the six months ended June 30, 2018 in accordance with both ASC 606 and previous accounting literature, ASC No. 985-605, or ASC 605. The table above also shows the adjustments made to reconcile the ASC 606 presentation to ASC 605. The ASC 605 information should be considered in addition to, not as a substitute for, nor superior to or in isolation from, the financial information prepared and reported in accordance with ASC 606.

 

Cision View original content:http://www.prnewswire.com/news-releases/attunity-reports-second-quarter-2018-86-license-growth-300686289.html

SOURCE Attunity Ltd.

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