Unedited news and product information from vendors.
Datawatch Reports Strong Second Quarter Results
Apr 26, 2012 (04:04 PM EDT)
Total Revenue Up 47% and License Revenue Up 67% Over Second Quarter of 2011
Monarch Intellectual Property Purchase Completed in the Quarter
CHELMSFORD, Mass., April 26, 2012 /PRNewswire/ -- Datawatch Corporation (NASDAQ-CM: DWCH), the leading global provider of report analytics software and services, today announced that total revenue for its second quarter ended March 31, 2012 was $6.55 million, an increase of 47% from revenue of $4.45 million in the second quarter a year ago. License revenue for the second quarter of fiscal 2012 was $4.27 million, a 67% increase over the $2.55 million recorded in the comparable quarter a year ago. Net income for the second quarter of fiscal 2012 was $160,000, or $0.02 per diluted share, compared to a net loss of $511,000, or ($0.09) per diluted share, for the year ago period. The 2011 second quarter included a charge of $641,000, or $0.11 per diluted share, related to a restructuring of sales and marketing operations. Revenue for the six months ended March 31, 2012 was $12.82 million, a 49% increase from revenue of $8.63 million in the first six months of last fiscal year. License revenue for the first six months of fiscal 2012 was $8.48 million, an 82% increase compared to $4.66 million for the comparable period a year ago. Net income for the first six months of the Company's fiscal year 2012 was $763,000 or $0.12 per diluted share, as compared to a net loss of $282,000, or ($0.05) per diluted share, for the comparable period a year ago.
Excluding the effects of the non-cash amortization associated with the purchase of the Monarch intellectual property as well as non-cash stock compensation costs, the Company's non–GAAP net income for its second fiscal quarter was $354,000, or $0.05 per diluted share, and the Company's non-GAAP net income for the first six months of fiscal 2012 was $1,105,000, or $0.17 per diluted share.
Michael A. Morrison, president and CEO of Datawatch, said, "Datawatch's business transformation remains on track, as demonstrated by these solid second quarter results. We are seeing organizations of all sizes accelerate their investments in addressing big data analytics challenges, as they struggle with the explosion of a wide range of diverse and complex data sources and formats. These companies are recognizing the significant ROI that can be achieved with the Datawatch report analytics platform by leveraging their investments in existing semi-structured documents, reports and machine data, and transforming these silos of static big data sources into dynamic information assets for business analytics. This is especially true when these companies need to gain business insights not just from the reports they generate internally, but also from key information sources that are increasingly coming from outside the four walls of the enterprise. Datawatch's unique ability to unlock the value of the data contained in diverse report sources and formats is truly a catalyst for our business growth. The opportunity has never been stronger for Datawatch to help organizations access and present less-structured information content in a variety of analytic frameworks to help drive business decisions based on a comprehensive view of the enterprise. As we enter the second half of our fiscal year, we continue to concentrate our attention on sales and marketing execution and building on our technology platform to drive revenue growth and shareholder value. We also continue to focus on making demonstrable progress against our key operating metrics."
He continued, "We achieved a significant milestone in the second quarter with the purchase of the intellectual property underlying the Monarch Report Analytics platform. This transaction provides us with the financial flexibility to continue to execute on our high growth business strategy. It also removes the uncertainty around intellectual property ownership as we pursue growth through strategic alliance initiatives. We are pleased that the core Monarch development team has joined Datawatch to continue the extraordinary innovation that has made Monarch the leading solution to harvest the analytic value that is trapped in reports, business documents and machine data. As a result of the intellectual property purchase, we will incur non-cash costs related to the amortization of the purchased intellectual property. While these costs in the second quarter are not material, we have decided to begin reporting non-GAAP net income adjusting for this item as well as for non-cash stock compensation, as we believe that presenting our results on both a GAAP and non-GAAP basis affords our investors optimal transparency into our business."
Second Quarter Business Highlights
Second Quarter Financial Highlights
Murray Fish, chief financial officer of Datawatch, commented, "The Monarch intellectual property purchase in Q2 was an important step forward for the Company, and provides us with additional flexibility to invest in our operations to pursue our growth strategy. It is worth noting, however, that our Q2 net income was negatively impacted by a currency loss of $123,000, or $0.02 per share, related to the intellectual property purchase, as we were required to repatriate funds to the U.S. from our U.K. subsidiary to conform to certain restrictions in our financing facilities."
Investor Conference Call and Webcast
The senior management of Datawatch will host a conference call and webcast to discuss the first quarter results this afternoon, Thursday, April 26, 2012 at 4:30 pm 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=167968. 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
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
Datawatch Investor Relations
Murray Fish, CFO
Use of Non-GAAP Financial Information
To supplement our financial results presented in accordance with Generally Accepted Accounting Principles (GAAP), this press release and the accompanying tables contain certain non-GAAP financial measures that we believe are helpful in understanding our past financial performance and future results. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management regularly uses our supplemental non-GAAP financial measures internally to understand and manage our business and make operating decisions. Our non-GAAP financial measures include adjustments based on the following items, as well as the related income tax effects and adjustments to the valuation allowance:
Amortization of purchased software: We have excluded the effect of amortization of the Monarch software and related intellectual property that we acquired from Math Strategies on March 30, 2012 from our non-GAAP operating expenses and net income measures. Amortization of this purchased software resulted from a material transaction that is not likely to occur in the foreseeable future. Investors should note that the use of the purchased software will contribute to future period revenues. Amortization of the purchased software will recur in future periods.
Stock-based compensation expenses: We have excluded the effect of stock-based compensation expenses from our non-GAAP operating expenses and net income measures. Although stock-based compensation is a key incentive offered to our employees, we continue to evaluate our business performance excluding stock-based compensation expenses. Stock-based compensation expenses will recur in future periods.
Restructuring: We incurred significant expenses in connection with a restructuring of our sales and marketing operations in fiscal 2011, principally related to selected headcount reductions. We believe it is useful for investors to understand the effects of these items on our total operating expenses and net income.
SOURCE Datawatch Corporation