Disruptive New 'Source to Pay and Enterprise Contract Lifecycle Management' Cloud Platform on Track for Fall Delivery
CARMEL, IN--(Marketwired - Aug 10, 2016) - Determine, Inc. (
Q1 FY2017 GAAP Financial Highlights:
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GAAP Financial Measures | Q1 FY 2017 |
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Q4 FY 2016 |
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Q1 FY 2016 |
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Change Q/Q |
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Change Y/Y |
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Revenue - total | $ | 6,492 | $ | 6,680 | $ | 6,215 | (2.8 | %) | 4.5 | % | ||||||||||
Revenue - recurring | $ | 5,068 | $ | 4,981 | $ | 5,095 | 1.7 | % | -0.5 | % | ||||||||||
Revenue - non-recurring | $ | 1,424 | $ | 1,699 | $ | 1,120 | (16.2 | %) | 27.2 | % | ||||||||||
Gross profit - total | $ | 3,385 | $ | 3,296 | $ | 3,308 | 2.7 | % | 2.3 | % | ||||||||||
Gross profit - recurring | $ | 3,462 | $ | 3,137 | $ | 3,665 | 10.4 | % | -5.6 | % | ||||||||||
Gross profit/ (loss) - non-recurring | $ | (77 | ) | $ | 159 | $ | (357 | ) | (148.2 | %) | -78.5 | % | ||||||||
Gross margin - total | 52.1 | % | 49.3 | % | 53.2 | % | 2.8 pts | (1.1 pts | ) | |||||||||||
Gross margin - recurring | 68.3 | % | 63.0 | % | 71.9 | % | 5.3 pts | (3.6 pts | ) | |||||||||||
Gross margin - non recurring | (5.4 | %) | 9.4 | % | (31.9 | %) | (14.9 pts | ) | 26.5 pts | |||||||||||
Net loss | $ | (2,342 | ) | $ | (4,810 | ) | $ | (2,942 | ) | (51.3 | %) | (20.4 | %) | |||||||
EPS | $ | (0.21 | ) | $ | (0.42 | ) | $ | (0.32 | ) | $ | 0.22 | $ | 0.12 | |||||||
Q1 FY2017 Non-GAAP Financial Highlights:
(in thousands, except per share amounts) | |||||||||||||||||||
Non-GAAP Financial Measures | Q1 FY 2017 |
Q4 FY 2016 |
Q1 FY 2016 |
Change Q/Q |
Change Y/Y |
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Revenue - total | $ | 6,500 | $ | 6,696 | $ | 6,277 | (2.9 | %) | 3.5 | % | |||||||||
Revenue - recurring | $ | 5,076 | $ | 4,997 | $ | 5,157 | 1.6 | % | (1.6 | %) | |||||||||
Revenue - non-recurring | $ | 1,424 | $ | 1,699 | $ | 1,120 | (16.2 | %) | 27.1 | % | |||||||||
Gross profit - total | $ | 3,710 | $ | 3,660 | $ | 3,609 | 1.4 | % | 2.8 | % | |||||||||
Gross profit - recurring | $ | 3,737 | $ | 3,419 | $ | 3,915 | 9.3 | % | (4.5 | %) | |||||||||
Gross profit/( loss) - non-recurring | $ | (27 | ) | $ | 241 | $ | (306 | ) | (111.1 | %) | (91.3 | %) | |||||||
Gross margin - total | 57.1 | % | 54.7 | % | 57.5 | % | 2.4 pts | (0.4 pts | ) | ||||||||||
Gross margin - recurring | 73.6 | % | 68.4 | % | 75.9 | % | 5.2 pts | (2.3 pts | ) | ||||||||||
Gross margin - non recurring | (1.9 | %) | 14.1 | % | (27.3 | %) | (16.0 pts | ) | 25.4 pts | ||||||||||
Net loss | $ | (1,284 | ) | $ | (2,245 | ) | $ | (1,715 | ) | (42.8 | %) | (25.1 | %) | ||||||
EPS | $ | (0.11 | ) | $ | (0.20 | ) | $ | (0.19 | ) | 0.09 | $ | 0.07 | |||||||
Billings | $ | 6,280 | $ | 8,027 | $ | 6,031 | (21.8 | %) | 4.1 | % | |||||||||
"Coming out of this quarter, our momentum is strong as we are on track to release our integrated Source to Pay and Enterprise Contract Lifecycle Management unified suite offering on the Determine Cloud Platform. Market analysts, customers and prospects alike continue to share their enthusiasm for our new combined offering," said Patrick Stakenas, President and CEO of Determine. "As expected, our new ARR bookings were a bit lighter than in prior quarters, which we believe is a temporary change reflecting our pivot to the new platform. Our sales pipeline continues to build in a promising manner as prospects and current customers begin to become educated about the new integrated offering. From an operational perspective, we saw the meaningful results from the expense actions taken in the last quarter to manage and streamline the business, and we are committed to continue to efficiently drive the business towards profitability. As we continue to deliver through this critical product inflection point, I am optimistic about our upcoming quarter."
Q1 FY2017 Business Highlights:
Conference Call and Webcast; Wednesday, August 10, 2016 at 5:00 PM Eastern
Participant Conference Call Numbers:
Toll-Free: 1-877-407-0789
Toll/International: 1-201-689-8562
Participant Webcast Link: http://public.viavid.com/index.php?id=120646
Replay Dial-in Information:
Toll-Free: 1-877-870-5176
Toll/International: 1-858-384-5517
From: 08/10/16 @ 8:00 pm Eastern Time
To: 08/17/16 @ 11:59 pm Eastern Time
Replay Pin Number: 13642532
Related: http://investor.determine.com
Supporting Resources
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Non-GAAP Financial Measures
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, including non-GAAP revenue, non-GAAP gross profit, non-GAAP net income and non-GAAP earnings per share, which we believe are helpful in understanding our past financial performance and future results. For reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled, "GAAP to Non-GAAP Reconciliations." 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.
The difference between GAAP and non-GAAP revenue is due to the impact of revaluing the deferred revenue balances acquired from primarily b-pack as required by GAAP purchase accounting.
The difference between GAAP and non-GAAP gross profit is the difference in GAAP versus non-GAAP revenues as well as the elimination of the amortization of acquisition related intangibles, stock based compensation and severance expense from the costs of revenue. Non-GAAP net loss excludes the non-GAAP gross profit items as well as acquisition related costs.
Our management regularly uses our supplemental non-GAAP financial measures internally to understand and manage our business and forecast future periods; as such, we believe it is useful for investors to understand the effects of these items on our total operations. Further, please note that our non-GAAP revenue is intended to reflect the full amount of revenues that would have been otherwise recorded by the acquired entities of Iasta and b-pack, while our non-GAAP gross profit also excludes the amortization of intangibles that occurred due to the acquisition of the entities of Iasta and b-pack.
Bookings are an operating measure not derived from the company's revenues or any other amounts presented in accordance with GAAP in the company's statement of income, balance sheet or statement of cash flows or other equivalent statements.
Forward-looking Statements
Certain statements in this release and elsewhere by Determine are forward-looking statements within the meaning of the federal securities laws and the Private Securities Litigation Reform Act of 1995. Such statements may include, without limitation, statements regarding business outlook, assessment of market conditions, anticipated financial and operating results, strategies, product and channel development, future plans, contingencies and contemplated transactions of the company. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors which may cause or contribute to actual results of company operations, or the performance or achievements of the company or industry results, to differ materially from those expressed, or implied by the forward-looking statements. In addition to any such risks, uncertainties and other factors discussed elsewhere herein, risks, uncertainties and other factors that could cause or contribute to actual results differing materially from those expressed or implied for the forward-looking statements include, but are not limited to fluctuations in demand for Determine's products and services, risks of losing key personnel or customers, protection of the company's intellectual property and government policies and regulations, including, but not limited to those affecting the company's industry. Determine undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. Additional risk factors concerning the company can be found in the company's most recent Form 10-K as filed by the company with the Securities and Exchange Commission.
About Determine, Inc.
Determine, Inc. (
The Determine Cloud Platform gives procurement, finance and legal professionals the ability to deliver profound insights through analysis of their supplier relationships and contractual requirements. Our customers leverage the Determine Cloud Platform to discover previously unseen supplier and spend data; make more informed and smarter business decisions; drive new revenue; control costs; improve workflow efficiencies; and mitigate risk.
Our customers benefit from the Determine Cloud Platform's robust suite of integrated applications. Whether they start with a full-suite implementation or choose to implement just one application and build over time, each additional application allows for the automatic sharing of data already in place on the Determine Cloud Platform.
For more information, please visit: www.determine.com.
Determine, Inc. | ||||||||||
Condensed Consolidated Statements of Operations | ||||||||||
(In thousands, except per share amounts) | ||||||||||
(Unaudited) | ||||||||||
Three Months Ended | ||||||||||
June 30, | ||||||||||
2016 | 2015 | |||||||||
Revenues: | ||||||||||
Recurring revenues | $ | 5,068 | $ | 5,095 | ||||||
Non-recurring revenues | 1,424 | 1,120 | ||||||||
Total revenues | 6,492 | 6,215 | ||||||||
Cost of revenues: | ||||||||||
Cost of recurring revenues | 1,606 | 1,430 | ||||||||
Cost of non-recurring revenues | 1,501 | 1,477 | ||||||||
Total cost of revenues | 3,107 | 2,907 | ||||||||
Gross profit: | ||||||||||
Recurring gross profit | 3,462 | 3,665 | ||||||||
Non-recurring profit/(loss) | (77 | ) | (357 | ) | ||||||
Total gross profit | 3,385 | 3,308 | ||||||||
Operating expenses: | ||||||||||
Research and development | 947 | 588 | ||||||||
Sales and marketing | 2,803 | 3,442 | ||||||||
General and administrative | 1,756 | 1,835 | ||||||||
Acquisition related costs | - | 237 | ||||||||
Total operating expenses | 5,506 | 6,102 | ||||||||
Loss from operations | (2,121 | ) | (2,794 | ) | ||||||
Interest and other income (expense), net | (291 | ) | (148 | ) | ||||||
Net loss before income tax | (2,412 | ) | (2,942 | ) | ||||||
Benefit from income taxes | 70 | - | ||||||||
Net loss | (2,342 | ) | (2,942 | ) | ||||||
Net income attributed to non-controlling interest | (0 | ) | - | |||||||
Net loss attributable to Determine, Inc | (2,342 | ) | - | |||||||
Redeemable preferred stock accretion | - | 1,000 | ||||||||
Net loss attributable to common stockholders | (2,342 | ) | (3,942 | ) | ||||||
Basic and diluted net loss per share | (0.21 | ) | (0.32 | ) | ||||||
GAAP to Non-GAAP Reconciliations: | ||||||||||
Reconciliation of Total revenue: | ||||||||||
U.S. GAAP as reported | $ | 6,492 | $ | 6,215 | ||||||
Adjustments: | ||||||||||
Deferred revenue adjustment | 8 | 62 | ||||||||
Non-GAAP Revenue | $ | 6,500 | $ | 6,277 | ||||||
Reconciliation to non-GAAP net loss: | ||||||||||
Net loss | $ | (2,342 | ) | $ | (2,942 | ) | ||||
Stock-based compensation expense | 528 | 578 | ||||||||
Deferred revenue adjustment | 8 | 63 | ||||||||
Acquisition related costs | - | 237 | ||||||||
Amortization on intangibles | 535 | 349 | ||||||||
Benefit from income taxes | (13 | ) | - | |||||||
Non-GAAP net loss | $ | (1,284 | ) | $ | (1,715 | ) | ||||
Non-GAAP basic and diluted net loss per share | $ | (0.11 | ) | $ | (0.19 | ) | ||||
Weighted average shares outstanding for basic and diluted net loss per share | 11,413 | 9,182 | ||||||||
Determine, Inc. | ||||||||
Condensed Consolidated Statements of Comprehensive Loss | ||||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
Three Months Ended | ||||||||
June 30, | ||||||||
2016 | 2015 | |||||||
Net loss | $ | (2,342 | ) | $ | - | |||
Other comprehensive income (loss): | ||||||||
Foreign currency translation adjustments | (26 | ) | - | |||||
Other comprehensive income (loss) | (26 | ) | - | |||||
Comprehensive income (loss) | $ | (2,368 | ) | $ | - | |||
Determine, Inc. | ||||||||
Condensed Consolidated Balance Sheets | ||||||||
(In thousands) | ||||||||
June 30 | March 31, | |||||||
2016 | 2016 | |||||||
(Unaudited) | (Audited) | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 9,651 | $ | 9,418 | ||||
Accounts receivable | 6,185 | 7,031 | ||||||
Restricted cash | 34 | 34 | ||||||
Prepaid expenses and other current assets | 1,488 | 1,551 | ||||||
Total current assets | 17,358 | 18,034 | ||||||
Property and equipment, net | 130 | 136 | ||||||
Capitalized software | 1,827 | 1,699 | ||||||
Goodwill | 14,490 | 14,490 | ||||||
Other intangibles, net | 7,479 | 8,011 | ||||||
Other assets | 1,947 | 1,843 | ||||||
Total assets | $ | 43,231 | $ | 44,213 | ||||
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities | ||||||||
Credit facility | $ | 5,961 | $ | 7,100 | ||||
Accounts payable | 1,286 | 1,973 | ||||||
Accrued payroll and related liabilities | 1,858 | 1,655 | ||||||
Other accrued liabilities | 2,336 | 2,396 | ||||||
Deferred revenue | 10,097 | 10,299 | ||||||
COFACE loan | 349 | 407 | ||||||
Deferred tax liability | 24 | 14 | ||||||
Accrued restructuring | - | 403 | ||||||
Total current liabilities | 21,911 | 24,247 | ||||||
Long-term deferred revenue | 57 | 67 | ||||||
Convertible note, net of debt discount | 5,425 | 5,420 | ||||||
Other long-term liabilities | 6,403 | 3,282 | ||||||
Deferred tax liability non current | 210 | 290 | ||||||
Total liabilities | 34,006 | 33,306 | ||||||
Redeemable convertible preferred stock | - | - | ||||||
Total Determine, Inc. stockholders' equity controlling interest | 9,112 | 10,794 | ||||||
Non-controlling interest | 113 | 113 | ||||||
Total stockholders' equity | 9,225 | 10,907 | ||||||
Total liabilities, redeemable convertible preferred stock and stockholders' equity | $ | 43,231 | $ | 44,213 | ||||
Determine, Inc. | |||||||||
Condensed Consolidated Statements of Cash Flows | |||||||||
(In thousands) | |||||||||
(Unudited) | |||||||||
Three Months Ended | |||||||||
June 30, | June 30, | ||||||||
2016 | 2015 | ||||||||
Operating activities | |||||||||
Net loss | $ | (2,342 | ) | $ | (2,942 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||
Depreciation and amortization | 571 | 517 | |||||||
Loss on disposition of property and equipment | - | 17 | |||||||
Accrued restructuring costs | (403 | ) | - | ||||||
Stock-based compensation expense | 528 | 578 | |||||||
Deferred tax liability | (80 | ) | - | ||||||
Changes in assets and liabilities: | |||||||||
Accounts receivable (net) | 840 | 341 | |||||||
Prepaid expenses and other current assets | 63 | 87 | |||||||
Other assets | (104 | ) | 27 | ||||||
Accounts payable | (687 | ) | 58 | ||||||
Accrued payroll and related liabilities | 203 | 103 | |||||||
Other accrued liabilities and other long-term liabilities | (22 | ) | (171 | ) | |||||
Deferred revenue | (212 | ) | (187 | ) | |||||
Net cash used in operating activities | (1,645 | ) | (1,572 | ) | |||||
Investing activities | |||||||||
Purchase of property and equipment | (22 | ) | - | ||||||
Capitalized software | (128 | ) | (355 | ) | |||||
Net cash used in investing activities | (150 | ) | (355 | ) | |||||
Financing activities | |||||||||
Proceeds from sale of common stock, preferred stock and warrants, net of issuance costs | - | 310 | |||||||
Employee taxes paid in exchange for restricted stock awards forefeited | 68 | 227 | |||||||
Issuance of common stock under employee stock plan | 4 | - | |||||||
Issuance of common stock under legal settlement | 35 | - | |||||||
Credit facility payment | (1,139 | ) | (590 | ) | |||||
Repayment of loan | (58 | ) | - | ||||||
Conversion of preferred stock to common stock | - | (17 | ) | ||||||
Repayment of minority shareholder | - | - | |||||||
Issuance of convertible note, net of costs | 3,144 | 81 | |||||||
Issuance of cost associated with promissory note | - | ||||||||
Net cash provided by financing activities | 2,054 | 11 | |||||||
Effect of exchange rate changes on cash | (26 | ) | - | ||||||
Net increase (decrease) in cash and cash equivalents | 233 | (1,916 | ) | ||||||
Cash and cash equivalents at beginning of the period | 9,418 | 13,178 | |||||||
Cash and cash equivalents at end of the period | $ | 9,651 | $ | 11,262 | |||||
Determine, Inc. | ||||||||
Billings Reconciliation | ||||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
Three Months Ended | ||||||||
June 30, | June 30, | |||||||
2016 | 2015 | |||||||
Total revenues | $ | 6,492 | $ | 6,215 | ||||
Deferred revenue: | ||||||||
End of period | 10,154 | 8,248 | ||||||
Beginning of period | 10,366 | 8,432 | ||||||
Change in deferred revenue | (212 | ) | (184 | ) | ||||
Total billings (total revenues plus the change in deferred revenue) | $ | 6,280 | $ | 6,031 | ||||
Contact Information:
Contact
Media Relations
Rose Lee
Determine, Inc.
+1.877.806.1932
+1.650.532.1590
pr@determine.com