Attunity Reports Fourth Quarter and Full Year 2009 Results

Achieved $1.6 Million of Non-GAAP Operating Profit in FY 2009 and Posts a Record Quarterly Non-GAAP Operating Profit for 2009

Jan 27, 2010, 07:06 ET from Attunity Ltd

BURLINGTON, Massachusetts, January 27 /PRNewswire-FirstCall/ -- Attunity Ltd. (OTC Bulletin Board: ATTUF.OB), a leading provider of real-time data integration and event capture software, reported today its financial results for the fourth quarter and full year ended December 31, 2009.

Commenting on the results, Shimon Alon, Attunity's Chairman and CEO, stated, "We are pleased, as demonstrated by our financial results for the fourth quarter and for the full year 2009, that we turned into profitability and have generated a positive cash flow in 2009. During the year, we focused the turn-around on further developing our core leading products, introducing product lines for the real-time data integration market, extending our offerings into the operational data replication market, strengthening our partnerships with market leaders, and expanding our offering to the large open system market".

    Financial Highlights of Q4 2009 and FY 2009

    - A Non-GAAP operating profit of $1.6 million in 2009 compared to $1.4
      million loss in 2008.

    - A Non-GAAP operating profit of $0.7 million for Q4 2009, setting a
      quarterly record for 2009.

    - Continuous improvement of Non-GAAP operating profit
      quarter-over-quarter in 2009.

    - Record quarterly revenues in 2009 of $2.7 million, compared to $2.2
      million in Q4 2008

    - License revenues of $1.3 million in Q4 2009 compared to $0.9 million in
      Q4 2008

    Q4 2009 Financial Summary

    - Revenues: $2,685,000, compared to $2,200,000 in the fourth quarter of
      2008.

    - Net Operating Profit/Loss - (Non GAAP): $725,000 profit, compared to
      $970,000 net operating loss in the fourth quarter of 2008. Non-GAAP
      Operating profit (loss) excludes software development costs,
      capitalization and amortization (see footnote 1 at the end of this
      release) and equity based compensation expenses (see footnote 2).

    - Net Operating Profit/Loss - (GAAP): $79,000 profit, compared to
      $1,452,000 net operating loss in the fourth quarter of 2008.

    - Net Profit/Loss (Non-GAAP): $649,000 net profit compared to net loss of
      $1,000,000 in the fourth quarter of 2008. Non-GAAP net profit (loss)
      excludes software development costs, capitalization and amortization
      (see footnote 1), equity- based compensation expenses (see footnote 2)
      and revaluation of conversion features related to our convertible debt
      and outstanding warrants (in 2008, non-cash financial expenses such as
      amortization of beneficial conversion features related to the
      convertible debt and deferred charges related to warrants granted in
      connection with a long term loan) - see footnote 3.

    - Net Profit/Loss (GAAP): $41,000, compared to $1,705,000 net loss in the
      fourth quarter of 2008.

    - Net Profit/Loss per Diluted Share (Non-GAAP): $0.02 net profit per
      diluted share compared to net loss per diluted share of $0.04 in the
      fourth quarter of 2008.

    - Net Profit/Loss per Diluted Share (GAAP): $0.00 net profit per diluted
      share, compared to net loss per diluted share of $0.07 in the fourth
      quarter of 2008.

    FY 2009 Financial Summary

    - Revenues: $9,453,000, compared to $11,472,000 in 2008.

    - Net Operating Profit/Loss - (Non GAAP): $1,578,000 net operating
      profit, compared to $1,402,000 net operating loss in 2008. Non-GAAP
      operating profit (loss) excludes software development costs,
      capitalization and amortization (see footnote 1 at the end of this
      release), and equity-based compensation expenses (see footnote 2).

    - Net Operating Profit /Loss - (GAAP): $588,000 net operating loss,
      compared to $2,547,000 net operating loss in 2008.

    - Net Profit/Loss (Non-GAAP): $1,263,000 net profit compared to net loss
      of $2,040,000 in 2008. Non-GAAP net profit (loss) excludes software
      development costs, capitalization and amortization (see footnote 1),
      and equity-based compensation expenses (see footnote 2), and
      revaluation of conversion features related to its convertible debt and
      outstanding warrants and non-cash financial expenses such as
      amortization of beneficial conversion features related to the
      convertible debt and deferred charges related to warrants granted in
      connection with a long-term loan, (see footnote 3).

    - Net Loss (GAAP): $1,303,000, compared to $3,857,000 in 2008.

    - Net Profit/Loss per Diluted Share (Non-GAAP): $0.04 net profit per
      diluted share compared to net loss per diluted share of $0.09 in 2008.

    - Net Loss per Diluted Share (GAAP): $0.05 net loss per diluted share,
      compared to net loss per diluted share of $0.17 in 2008.

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

Mr. Alon concluded, "We are looking forward to 2010, as we plan to focus on growth of revenues. Responding to market demand, we intend to continue to introduce new products for the real-time data integration market to meet the requirements of our users and partners. We will also continue our focus on the large markets of Oracle, Microsoft, IBM, SAP and HP as well as other leading Business Intelligence (BI) solutions, while strengthening our partnerships with these leading market players."

About Attunity

Attunity is a leading provider of real-time data integration and event capture software. Using our software solutions such as Attunity Connect, a real-time connectivity software, or Attunity Stream, our log-based, real-time change-data-capture software, Attunity's customers enjoy dramatic business benefits by driving down the cost of managing their operational systems, creating flexible, service-based architectures for increased business agility, and by detecting critical actionable business events, as they happen, for faster business execution.

Attunity has supplied innovative software solutions to its enterprise-class customers for nearly 20 years and has successful deployments at thousands of organizations worldwide. Attunity provides software directly and indirectly through a number of strategic and OEM agreements with partners such as Microsoft, Oracle, IBM, HP and SAP/Business Objects. 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 http://www.attunity.com.

Use of Non-GAAP Financial Information

In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Attunity uses Non-GAAP measures of net profit (loss), net operating profit (loss) and net profit (loss) per share, which are adjustments from results based on GAAP to exclude non-cash equity based compensation charges in accordance with SFAS 123(R), non-cash capitalization and amortization of software development costs in accordance with SFAS 86 and non-cash financial expenses such as revaluation of conversion features related to its convertible debt and outstanding warrants in accordance with EITF 07-5 (affected, among other factors, by changes in Attunity 's share price). 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 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.

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 Federal 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 future introduction of new real-time data integration products, we are using a forward-looking statement. Because such statements deal with future events, they are subject to various risks and uncertainties and actual results could differ materially from Attunity's current expectations. Factors that could cause or contribute to such differences include, but are not limited to: the impact on revenues of economic and political uncertainties and weaknesses in various regions of the world, including the commencement or escalation of hostilities or acts of terrorism; our liquidity challenges and the need to raise additional capital in the near future; any unforeseen developmental or technological difficulties with regard to Attunity's products; changes in the competitive landscape, including new competitors or the impact of competitive pricing and products; a shift in demand for products such as Attunity's; unknown factors affecting third parties with which Attunity has formed business alliances; timely availability and customer acceptance of Attunity's new and existing products; 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 Annual Report on Form 20-F for the year ended December 31, 2008, 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 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.

    (c) 2010 Attunity Ltd. All rights reserved. Attunity is a trademark of
Attunity Inc.

                           CONSOLIDATED BALANCE SHEETS
                            U.S. dollars in thousands

                                               December 31,     December 31,
                                                   2009             2008
    ASSETS                                      ----------       ----------

    CURRENT ASSETS:
    Cash and cash equivalents                      1,428              480
    Restricted cash                                  208              206
    Trade receivables and unbilled revenues
    (net of allowance for doubtful accounts
    of $15 at both December 31 , 2009 and
    December 31, 2008)                               761              502
    Other accounts receivable and prepaid
    expenses                                         145              221
                                                ----------       ----------
    Total current assets                           2,542            1,409
                                                ----------       ----------
    LONG-TERM ASSETS:
    Long-term prepaid expenses                        86              106
    Severance pay fund                             1,098            1,121
    Property and equipment, net                      241              371
    Software development costs, net                1,615            3,585
    Goodwill                                       6,313            6,234
    Deferred charges, net                                             204
                                                ----------       ----------
    Total long-term assets                         9,353           11,621
                                                ----------       ----------
    Total assets                                  11,895           13,030
                                                ==========       ==========



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

                                                December 31,     December 31,
                                                    2009             2008
                                                ----------       ----------
    LIABILITIES AND SHAREHOLDERS' EQUITY

    CURRENT LIABILITIES:
    Current maturities of long-term debt and
    short term loans                                 917              412
    Current maturities of long-term
    convertible debt                                 333            1,781
    Trade payables                                   204              389
    Deferred revenues                              1,991            2,220
    Employees and payroll accruals                   819            1,079
    Accrued expenses and other liabilities           988            1,008
                                                ----------       ----------
    Total current liabilities                      5,252            6,889
                                                ----------       ----------
    LONG-TERM LIABILITIES:
    Long-term convertible debt                     1,667
    Long-term debt                                 1,083            2,063
    Revaluation of Liabilities presented at
    fair value                                       303
    Accrued severance pay                          1,548            1,546
                                                ----------       ----------
    Total long-term liabilities                    4,601            3,609
                                                ----------       ----------
    SHAREHOLDERS' EQUITY:
    Share capital - Ordinary shares of NIS
    0.1 par value -                                  920              720
    Authorized: 130,000,000 shares at
    December 31 , 2009 and December 31,
    2008. Issued and outstanding: 31,571,150
    shares at December 31, 2009 and
    23,196,236 at December 31, 2008
    Additional paid-in capital                   102,095          104,279
    Accumulated other comprehensive loss            (453)            (455)
    Accumulated deficit                         (100,520)        (102,012)
                                                ----------       ----------
    Total shareholders' equity                     2,042            2,532
                                                ----------       ----------
    Total liabilities and shareholders'
    equity                                        11,895           13,030
                                                ==========       ==========



                      CONSOLIDATED STATEMENTS OF OPERATIONS
            U.S. dollars in thousands, except share and per share data

                                12 months ended            3 months ended
                                  December 31,               December 31,
                                  ----------                  ----------
                               2009           2008        2009          2008
                           --------------------------------------------------
                           --------------------------------------------------
    Software licenses         4,126          5,373       1,311           889
    Maintenance and
    services                  5,327          6,099       1,374         1,311
                           ----------     ----------  ----------   ----------
                              9,453         11,472       2,685         2,200
                           ----------     ----------  ----------   ----------
    Operating expenses:
    Cost of revenues          3,070          2,624         814           748
    Research and
    development, net          1,894          2,916         489           763
    Selling and marketing     3,469          6,341         957         1,470
    General and
    administrative            1,608          2,138         346           671


    Total operating        ----------     ----------  ----------   ----------
    expenses                 10,041         14,019       2,605         3,652
                           ----------     ----------  ----------   ----------
    Operating profit
    (loss)                     (588)        (2,547)         79        (1,452)

    Financial expenses,
    net                         697          1,250          42           263
    Other expense
    (income)                    (10)                         -
                           ----------     ----------  ----------   ----------
    Profit (Loss) before
    income taxes             (1,275)        (3,797)         37        (1,716)
    Taxes on income              28             60          (4)          (11)
                           ----------     ----------  ----------   ----------
    Net profit (loss)        (1,303)        (3,857)         41        (1,705)
                           ==========     ==========  ==========   ==========
    Basic net and diluted
    loss per share          $ (0.05)       $ (0.17)     $ 0.00       $ (0.07)
                           ==========     ==========  ==========   ==========
    (**) The above items
    are inclusive of the
    following
    equity-based
    compensation expenses
    resulting under SFAS
    123(R):
    Equity-based
    compensation expense
    included in "Research
    and development"             40             94          21            11
    Equity-based
    compensation expense
    included in "Selling
    and marketing"               83            149          18            26
    Equity-based
    compensation expense
    included in "General
    and administrative"          74             79          21            29
                           ----------     ----------  ----------   ----------
                                196            322          60            66
                           ==========     ==========  ==========   ==========
    Net basic and diluted
    equity-based
    compensation expense,
    per share               $ (0.05)       $ (0.17)     $ 0.00       $ (0.07)
                           ==========     ==========  ==========   ==========





                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                        U.S. dollars in thousands

                                                          12 months ended
                                                            December 31,
                                                        --------------------
                                                          2009        2008
                                                        --------    --------
                                                        --------------------
    Cash flows from operating activities:
    Net loss from continued operations                  (1,303)     (3,857)
    Adjustments required to reconcile net
     loss to net cash provided by (used
     in) operating activities:
    Decrease (increase) in restricted cash                  (2)
    Depreciation                                           149         243
    Stock based compensation                               196         322
    Amortization of deferred expenses                       25         219
    Amortization of debt discount                          126         682
    Amortization of software development costs           2,348       1,658
    Increase (decrease) in accrued
     severance pay, net                                     25         110
    Decrease (increase) in trade receivables              (255)        373
    Decrease ( increase) in other accounts
     receivable and prepaid expenses                        79         255
    Increase (decrease) in long-term
     prepaid expenses                                       20         (34)
    Increase (decrease) in trade payables                 (186)        (64)
    Increase (decrease) in deferred revenues              (327)         (2)
    Increase (decrease) in employees
     and payroll accruals                                 (265)       (142)
    Decrease(increase) in accrued expenses
     and other liabilities                                 (77)        (83)
    Increase (decrease) in Long term liabilities           (20)         63
    Increase (decrease) in revaluation of
     Liabilities presented at fair value                   253           -
                                                        --------    --------
    Net cash provided by (used in) operating
     activities from continued operations
     (reconciled from continuing operations)               787        (257)
    Net cash provided by operating activities           --------    --------
     from discontinued operations
     (reconciled from discontinued operations)

    Net cash provided (used) by operating activating       787        (257)
                                                        --------    --------
    Cash flows from investing activities:
    Restricted cash, net                                     -         (47)
    Purchase of property and equipment                     (19)        (38)
    Capitalization of software development costs          (378)       (837)

    Proceeds from sale of property equipment                 -           -
                                                        --------    --------
    Net cash used in investing activities                 (397)       (922)
                                                        --------    --------
    Cash flows from financing activities:
    Proceeds from exercise of employee stock options         -           -
    Issuance of shares
    Receipt of Short term debt, net -
     converted to Capital                                  543         402
    Repayment of long-term debt                            (10)        (17)

    Net cash provided by (used in)                      --------    --------
     financing activities                                  533         385
                                                        --------    --------
    Foreign currency translation adjustments
     on cash and cash equivalents                           25         (47)
                                                        --------    --------
    Decrease (increase) in
     cash and cash equivalents                             948        (841)
    Cash and cash equivalents at
     the beginning of the period                           480       1,321
                                                        --------    --------
    Cash and cash equivalents at
     the end of the period                               1,428         480
                                                       =========    ========
    Supplemental disclosure of
     cash flow activities:
    Cash paid during the period for:
    Interest                                               153         175
    Supplemental disclosure of non-cash                =========    ========
     investing and financing activities:
    Stock-based compensation that was
     capitalized as part of capitalization
     of software development costs                           6          35
    Issuance of warrant and extension of               =========    ========
     contractual period of warrants in
     consideration of long-term loan                         -           -
                                                       =========    ========



             RECONCILIATION OF SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION
                   U.S. dollars in thousands, except per share data

                              12 months ended            3 months ended
                               December 31,                December 31,
                        ---------------------------------------------------
                           2009          2008          2009          2008
                        ----------   ----------    ----------    ----------
                        ---------------------------------------------------
    GAAP operating
    profit (loss)          (588)       (2,547)           79        (1,452)

    Software
    development
    costs
    capitalization
    and
    amortization
    (1)                   1,970           823           586           416
    Stock based
    compensation
    (2)                     196           322            60            66

    Non-GAAP
    operating           ----------   ----------    ----------    ----------
    profit (loss)         1,578        (1,402)          725          (970)
                        ==========   ==========    ==========    ==========
    GAAP net profit
    (loss)               (1,303)       (3,857)           41        (1,705)

    Software
    development
    costs
    capitalization
    and
    amortization
    (1)                   1,970           823           586           416
    Stock based
    compensation
    (2)                     196           322            60            66
    Financial
    expenses (3)            400           672           (38)          223

    Non-GAAP net        ----------   ----------    ----------    ----------
    profit (loss)         1,263        (2,040)          649        (1,000)
                        ==========   ==========    ==========    ==========
    GAAP basic and
    diluted net
    profit (loss)
    per share             (0.05)        (0.17)         0.00         (0.07)

    Software
    development
    costs
    capitalization
    and
    amortization
    (1)                    0.07          0.04          0.02          0.02
    Stock based
    compensation
    (2)                    0.01          0.01          0.00          0.00

    Financial
    expenses (3)           0.01          0.03         (0.00)         0.01

    Non-GAAP and
    diluted net
    profit (loss)       ----------   ----------    ----------    ----------
    per share              0.04         (0.09)         0.02         (0.04)
                        ==========   ==========    ==========    ==========
    (1) Software
    development
    costs
    capitalization
    and
    amortization
    resulting under
    SFAS 86:
    Capitalization         (378)         (836)          (32)         (148)
    Amortization          2,348         1,659           618           564
                        ----------   ----------    ----------    ----------
                          1,970           823           586           416
                        ==========   ==========    ==========    ==========
    (2)
    Equity-based
    compensation
    expenses
    resulting under
    SFAS 123(R):
    Equity-based
    compensation
    expense
    included in
    "Research and
    development"             40            94            21            11
    Equity-based
    compensation
    expense
    included in
    "Selling and
    marketing"               83           149            18            26
    Equity-based
    compensation
    expense
    included in
    "General and
    administrative"          74            79            21            29
                        ----------   ----------    ----------    ----------
                            196           322            60            66
                        ==========   ==========    ==========    ==========
    "Equity based
    compensation
    expenses" refer
    to the
    amortized fair
    value of all
    equity based
    awards granted
    to employees.

    `
    (3) Financial
    expenses:
    Amortization of
    debt discount           125           513                         170
    Revaluation of
    warrants and
    conversion
    features of
    long term debt          255                         (38)
    Amortization of
    deferred
    charges                  20           159                          53
                        ----------   ----------    ----------    ----------
                            400           672           (38)          223
                        ==========   ==========    ==========    ==========


    For more information, please contact:

    Dror Elkayam, VP Finance
    Attunity Ltd.
    Tel. +972-9-899-3000
    dror.elkayam@attunity.com


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