Business Delivering on Strategic Plan and Service Delivery Cost Alignment
SAN MATEO, CA--(Marketwired - Nov 11, 2015) - Determine, Inc. - (
Q2 FY2016 GAAP Financial Highlights:
(in thousands, except per share amounts) | ||||||||||||||||||||||||||||||||
GAAP Financial Measures | Q2 | Q1 | Q2 | Change | Change | Six Months | ||||||||||||||||||||||||||
FY 2016 | FY 2016 | FY 2015 | Q/Q | Y/Y | FY 2016 | FY 2015 | Change Y/Y | |||||||||||||||||||||||||
Revenue - total | $ | 6,765 | $ | 6,215 | $ | 5,203 | 8.9 | % | 30.0 | % | $ | 12,980 | $ | 8,965 | 44.8 | % | ||||||||||||||||
Revenue - recurring | $ | 5,413 | $ | 5,095 | $ | 4,038 | 6.2 | % | 34.1 | % | $ | 10,508 | $ | 6,732 | 56.1 | % | ||||||||||||||||
Revenue - non-recurring | $ | 1,352 | $ | 1,120 | $ | 1,165 | 20.7 | % | 16.1 | % | $ | 2,472 | $ | 2,233 | 10.7 | % | ||||||||||||||||
Gross profit - total | $ | 3,505 | $ | 3,308 | $ | 1,352 | 6.0 | % | 159.3 | % | $ | 6,811 | $ | 2,715 | 150.9 | % | ||||||||||||||||
Gross profit - recurring | $ | 3,656 | $ | 3,665 | $ | 2,534 | (0.2 | %) | 44.3 | % | $ | 7,321 | $ | 4,289 | 70.7 | % | ||||||||||||||||
Gross loss - non-recurring | $ | (151 | ) | $ | (357 | ) | $ | (1,182 | ) | (57.6 | %) | (87.2 | %) | $ | (509 | ) | $ | (1,574 | ) | (67.6 | %) | |||||||||||
Gross margin - total | 51.8 | % | 53.2 | % | 26.0 | % | (1.4 pts | ) | 25.8 pts | 52.5 | % | 30.3 | % | 22.2 pts | ||||||||||||||||||
Gross margin - recurring | 67.5 | % | 71.9 | % | 62.8 | % | (4.4 pts | ) | 4.7 pts | 69.7 | % | 63.7 | % | 6.0 pts | ||||||||||||||||||
Gross margin - non recurring | (11.2 | %) | (31.9 | %) | (101.5 | %) | 20.7 pts | 90.3 pts | (20.6 | %) | (70.5 | %) | 49.9 pts | |||||||||||||||||||
Net loss | $ | (3,425 | ) | $ | (2,942 | ) | $ | (2,690 | ) | 16.4 | % | 27.3 | % | $ | (6,368 | ) | $ | (5,639 | ) | 12.9 | % | |||||||||||
EPS | $ | (0.32 | ) | $ | (0.33 | ) | $ | (0.35 | ) | $ | 0.01 | $ | 0.03 | $ | (0.66 | ) | $ | (0.85 | ) | $ | 0.19 | |||||||||||
Q2 FY2016 Non-GAAP Financial Highlights:
(in thousands, except per share amounts) | ||||||||||||||||||||||||||||||||
Non-GAAP Financial Measures | Q2 | Q1 | Q2 | Change | Change | Six Months | ||||||||||||||||||||||||||
FY 2016 | FY 2016 | FY 2015 | Q/Q | Y/Y | FY 2016 | FY 2015 | Change Y/Y | |||||||||||||||||||||||||
Revenue - total | $ | 6,843 | $ | 6,279 | $ | 6,167 | 9.0 | % | 11.0 | % | $ | 13,121 | $ | 9,929 | 32.2 | % | ||||||||||||||||
Revenue - recurring | $ | 5,463 | $ | 5,158 | $ | 4,756 | 5.9 | % | 14.9 | % | $ | 10,621 | $ | 7,450 | 42.6 | % | ||||||||||||||||
Revenue - non-recurring | $ | 1,380 | $ | 1,120 | $ | 1,411 | 23.2 | % | (2.2 | %) | $ | 2,500 | $ | 2,479 | 0.8 | % | ||||||||||||||||
Gross profit - total | $ | 3,934 | $ | 3,609 | $ | 2,618 | 9.0 | % | 50.3 | % | $ | 7,543 | $ | 4,117 | 83.2 | % | ||||||||||||||||
Gross profit - recurring | $ | 3,963 | $ | 3,915 | $ | 3,430 | 1.2 | % | 15.5 | % | $ | 7,878 | $ | 5,208 | 51.3 | % | ||||||||||||||||
Gross loss - non-recurring | $ | (29 | ) | $ | (306 | ) | $ | (812 | ) | (90.6 | %) | (96.5 | %) | $ | (334 | ) | $ | (1,091 | ) | (69.3 | %) | |||||||||||
Gross margin - total | 57.5 | % | 57.5 | % | 42.5 | % | 0.0 pts | 15.0 pts | 57.5 | % | 41.5 | % | 16.0 pts | |||||||||||||||||||
Gross margin - recurring | 72.5 | % | 75.9 | % | 72.1 | % | (3.4 pts | ) | 0.4 pts | 74.2 | % | 69.9 | % | 4.3 pts | ||||||||||||||||||
Gross margin - non recurring | (2.1 | %) | (27.3 | %) | (57.6 | %) | 25.2 pts | 55.5 pts | (13.4 | %) | (44.0 | %) | 30.6 pts | |||||||||||||||||||
Net loss | $ | (1,563 | ) | $ | (1,518 | ) | $ | (3,467 | ) | 3.0 | % | (54.9 | %) | $ | (3,082 | ) | $ | (5,606 | ) | (45.0 | %) | |||||||||||
EPS | $ | (0.15 | ) | $ | (0.17 | ) | $ | (0.44 | ) | $ | 0.02 | $ | 0.29 | $ | (0.32 | ) | $ | (0.85 | ) | $ | 0.53 | |||||||||||
Billings | $ | 6,836 | $ | 6,032 | $ | 7,123 | 13.3 | % | (4.0 | %) | $ | 12,867 | $ | 10,126 | 27.1 | % | ||||||||||||||||
"I'm pleased to report that with the b-pack transaction closing in early fiscal Q2 that we have achieved the main strategic objective we put in place 18 months ago, to become a full spectrum supplier management and enterprise contract lifecycle management provider. Today we are truly a new, combined company, under a new brand, Determine and are making great strides to fully harmonize the team and technologies to our customers' benefit," said Patrick Stakenas, President and CEO of Determine. "On the operations side, I'm very excited to share that this quarter we are seeing a significant pay-off with respect to the work we have been doing for the past year on the re-alignment of our non-recurring costs across all lines of business. Going forward I anticipate continued quarterly improvement as we align our services under our one platform strategy."
Q2 FY2016 Business Highlights:
November 11, 2015 Conference Call & Webcast
A conference call and webcast will be held today at 5:00 p.m. EST to review these results. Interested parties may participate via conference call and webcast:
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=117091
Replay Dial-in Info:
Toll-Free: 1-877-870-5176
Toll/International: 1-858-384-5517
From: 11/11/15 @ 8:00 pm Eastern Time
To: 11/25/15 @ 11:59 pm Eastern Time
Replay Pin Number: 13624253
Related: http://www.determine.com/investors
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About Determine, Inc.
Determine (
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. 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.
Determine, Inc. | ||||||||||||||||||
Condensed Consolidated Statements of Operations | ||||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||
September 30, | September 30, | |||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||
Revenues: | ||||||||||||||||||
Recurring revenues | $ | 5,413 | $ | 4,038 | $ | 10,508 | $ | 6,732 | ||||||||||
Non-recurring revenues | 1,352 | 1,165 | 2,472 | 2,233 | ||||||||||||||
Total revenues | 6,765 | 5,203 | 12,980 | 8,965 | ||||||||||||||
Cost of revenues: | ||||||||||||||||||
Cost of recurring revenues | 1,757 | 1,504 | 3,187 | 2,443 | ||||||||||||||
Cost of non-recurring revenues | 1,504 | 2,347 | 2,981 | 3,806 | ||||||||||||||
Total cost of revenues | 3,261 | 3,851 | 6,168 | 6,250 | ||||||||||||||
Gross profit: | ||||||||||||||||||
Recurring gross profit | 3,656 | 2,534 | 7,321 | 4,289 | ||||||||||||||
Non-recurring (loss) | (151 | ) | (1,182 | ) | (509 | ) | (1,574 | ) | ||||||||||
Total gross profit | 3,505 | 1,352 | 6,811 | 2,715 | ||||||||||||||
Operating expenses: | ||||||||||||||||||
Research and development | 894 | 997 | 1,481 | 1,439 | ||||||||||||||
Sales and marketing | 3,475 | 3,611 | 6,917 | 5,836 | ||||||||||||||
General and administrative | 1,757 | 2,211 | 3,592 | 3,636 | ||||||||||||||
Acquisition related costs | 537 | 145 | 774 | 363 | ||||||||||||||
Total operating expenses | 6,663 | 6,964 | 12,764 | 11,274 | ||||||||||||||
Loss from operations | (3,158 | ) | (5,612 | ) | (5,953 | ) | (8,559 | ) | ||||||||||
Interest and other income (expense), net | (251 | ) | (28 | ) | (399 | ) | (29 | ) | ||||||||||
Net loss before Income Tax | (3,409 | ) | (5,639 | ) | (6,352 | ) | (8,588 | ) | ||||||||||
Benefit (provision) for income taxes | (20 | ) | 2,950 | (20 | ) | 2,950 | ||||||||||||
Net loss | $ | (3,429 | ) | $ | (2,690 | ) | $ | (6,372 | ) | $ | (5,639 | ) | ||||||
Net income attributed to non-controlling interest | 4 | - | 4 | - | ||||||||||||||
Net loss attributed to Determine, Inc | (3,425 | ) | (2,690 | ) | (6,368 | ) | (5,639 | ) | ||||||||||
Redeemable preferred stock accretion | - | 2,744 | 1,000 | 2,744 | ||||||||||||||
Net loss applicable to common stockholders | $ | (3,425 | ) | $ | (5,434 | ) | $ | (7,368 | ) | $ | (8,383 | ) | ||||||
Basic and diluted net loss per share | $ | (0.32 | ) | $ | (0.35 | ) | $ | (0.66 | ) | $ | (0.85 | ) | ||||||
GAAP to Non-GAAP Reconciliations: | ||||||||||||||||||
Reconciliation of Total revenue: | ||||||||||||||||||
U.S. GAAP as reported | $ | 6,765 | $ | 5,203 | $ | 12,980 | $ | 8,965 | ||||||||||
Adjustments: | ||||||||||||||||||
Deferred revenue adjustment | 78 | 964 | 141 | 964 | ||||||||||||||
As adjusted | $ | 6,843 | $ | 6,167 | $ | 13,121 | $ | 9,929 | ||||||||||
Reconciliation to non-GAAP net loss: | ||||||||||||||||||
Net loss | $ | (3,425 | ) | $ | (2,690 | ) | $ | (6,368 | ) | $ | (5,639 | ) | ||||||
Stock-based compensation expense | 636 | 705 | 1,214 | 1,289 | ||||||||||||||
Deferred revenue adjustment | 78 | 964 | 141 | 964 | ||||||||||||||
Acquisition related costs | 537 | 145 | 774 | 363 | ||||||||||||||
Amortization on Intangibles | 482 | 349 | 831 | 349 | ||||||||||||||
Benefit for income taxes | - | (2,950 | ) | - | (2,950 | ) | ||||||||||||
Severance costs | 129 | 10 | 326 | 18 | ||||||||||||||
Non-GAAP net loss | $ | (1,563 | ) | $ | (3,467 | ) | $ | (3,082 | ) | $ | (5,606 | ) | ||||||
Non-GAAP basic and diluted net loss per share | $ | (0.15 | ) | $ | (0.44 | ) | $ | (0.32 | ) | $ | (0.85 | ) | ||||||
Weighted average shares outstanding for basic and diluted net loss per share | 10,594 | 7,795 | 9,694 | 6,617 | ||||||||||||||
Determine, Inc. | |||||||||||||||||
Condensed Consolidated Statements of Comprehensive Loss | |||||||||||||||||
(In thousands) | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
Net loss | $ | (3,425 | ) | $ | (2,690 | ) | $ | (6,368 | ) | $ | (5,639 | ) | |||||
Other comprehensive income (loss): | |||||||||||||||||
Foreign currency translation adjustments | (57 | ) | - | (57 | ) | 0 | |||||||||||
Other comprehensive income (loss) | (57 | ) | - | (57 | ) | 0 | |||||||||||
Comprehensive income (loss) | $ | (3,482 | ) | $ | (2,690 | ) | $ | (6,425 | ) | $ | (5,639 | ) | |||||
Determine, Inc. | ||||||||
Condensed Consolidated Balance Sheets | ||||||||
(In thousands) | ||||||||
September 30, | March 31, | |||||||
2015 | 2015 | |||||||
(Unaudited) | (Audited) | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 7,978 | $ | 13,178 | ||||
Accounts receivable | 6,437 | 5,203 | ||||||
Restricted cash | 34 | 34 | ||||||
Prepaid expenses and other current assets | 1,479 | 1,647 | ||||||
Total current assets | 15,928 | 20,062 | ||||||
Property and equipment, net | 187 | 290 | ||||||
Capitalized software | 2,827 | 2,258 | ||||||
Goodwill | 14,628 | 7,702 | ||||||
Other intangibles, net | 9,130 | 6,453 | ||||||
Other assets | 1,003 | 521 | ||||||
Total assets | $ | 43,703 | $ | 37,286 | ||||
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities | ||||||||
Credit facility | $ | 7,100 | $ | 7,447 | ||||
Accounts payable | 1,769 | 1,535 | ||||||
Accrued payroll and related liabilities | 2,489 | 910 | ||||||
Other accrued liabilities | 2,069 | 1,877 | ||||||
Deferred revenue | 8,300 | 8,410 | ||||||
COFACE loan | 437 | - | ||||||
Deferred tax liability | 1,186 | - | ||||||
Total current liabilities | 23,350 | 20,179 | ||||||
Long-term deferred revenue | 19 | 22 | ||||||
Convertible note, net of debt discount | 2,910 | 2,900 | ||||||
Other long-term liabilities | 158 | 167 | ||||||
Total liabilities | 26,437 | 23,268 | ||||||
Redeemable convertible preferred stock | - | 4,895 | ||||||
Total Determine, Inc. stockholders' equity controlling interest | 17,151 | 9,123 | ||||||
Non-controlling interest | 115 | - | ||||||
Total stockholders' deficit | 17,266 | 14,018 | ||||||
Total liabilities, redeemable convertible preferred stock and stockholders' equity | $ | 43,703 | $ | 37,286 | ||||
Determine, Inc. | |||||||||
Condensed Consolidated Statements of Cash Flows | |||||||||
(In thousands) | |||||||||
(Unudited) | |||||||||
Six Months Ended | |||||||||
September 30, | September 30, | ||||||||
2015 | 2014 | ||||||||
Operating activities | |||||||||
Net loss | $ | (6,372 | ) | $ | (5,639 | ) | |||
Adjustments to reconcile net loss to net cash used in | |||||||||
operating activities: | |||||||||
Depreciation and Amortization | 1,168 | 589 | |||||||
Loss on disposition of property and equipment | 14 | - | |||||||
Stock-based compensation expense | 1,213 | 1,289 | |||||||
Non-controlling interest | 4 | - | |||||||
Changes in assets and liabilities: | |||||||||
Accounts receivable (net) | 440 | 1,178 | |||||||
Prepaid expenses and other current assets | 273 | (286 | ) | ||||||
Other assets | 54 | 97 | |||||||
Accounts payable | (55 | ) | 5 | ||||||
Accrued payroll and related liabilities | 548 | (462 | ) | ||||||
Other accrued liabilities and long term liabilities | (505 | ) | 87 | ||||||
Deferred tax liability | 7 | (2,989 | ) | ||||||
Deferred revenue | (981 | ) | (839 | ) | |||||
Net cash used in operating activities | (4,192 | ) | (6,970 | ) | |||||
Investing activities | |||||||||
Purchase of property and equipment | (7 | ) | (52 | ) | |||||
Capitalized Software | (809 | ) | (1,040 | ) | |||||
Purchase of business, net of cash | (402 | ) | (5,003 | ) | |||||
Net cash used in investing activities | (1,218 | ) | (6,095 | ) | |||||
Financing activities | |||||||||
Proceeds from sale of common stock, preferred stock and warrants, net of issuance costs | 310 | 7,078 | |||||||
Employee taxes paid in exchange for restricted stock awards forefeited | 227 | - | |||||||
Issuance of common stock under employee stock plan | 87 | 93 | |||||||
Credit facility borrowing, net | (347 | ) | 51 | ||||||
Credit facility payment | - | (655 | ) | ||||||
Repayment of a loan | (25 | ) | (277 | ) | |||||
Conversion of Preferred Stock to Common Stock | (17 | ) | - | ||||||
Repayment of minority shareholder | (133 | ) | - | ||||||
Issuance of debt, net of costs | 162 | - | |||||||
Net cash provided by financing activities | 264 | 6,290 | |||||||
Effect of exchange rate changes on cash | (54 | ) | - | ||||||
Net decrease in cash and cash equivalents | (5,201 | ) | (6,775 | ) | |||||
Cash and cash equivalents at beginning of the period | 13,178 | 16,907 | |||||||
Cash and cash equivalents at end of the period | $ | 7,977 | $ | 10,132 | |||||
Determine, Inc. | |||||||||||||
Billings Reconciliation | |||||||||||||
(In thousands) | |||||||||||||
(Unaudited) | |||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||
Total revenues | $ | 6,765 | $ | 5,203 | $ | 12,980 | $ | 8,965 | |||||
Deferred revenue: | |||||||||||||
End of period | 8,319 | 6,909 | 8,319 | 6,909 | |||||||||
Beginning of period | 8,248 | 4,989 | 8,432 | 5,748 | |||||||||
Change in deferred revenue | 71 | 1,920 | (113 | ) | 1,161 | ||||||||
Total billings (total revenues plus the change in deferred revenue) | $ | 6,836 | $ | 7,123 | $ | 12,867 | $ | 10,126 | |||||
Contact Information:
Contacts
Investor Relations:
Budd Zukerman
+1.303.415.0200
bzuckerman@genesisselect.com
Media Relations:
Rose Lee
Determine
+1.650.532.1590
pr@determine.com