EXHIBIT 99.1
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DATAWATCH ANNOUNCES THIRD FISCAL QUARTER RESULTS
COMPANY REPORTS RECORD OPERATING PROFITS
LOWELL, MA - JULY 23, 2003 -- Datawatch Corporation (NASDAQ: DWCH), a leading
provider of business intelligence, IT Service Management and Help Desk
solutions, today announced results for its third fiscal quarter.
Revenues from continuing operations for the quarter ended June 30, 2003
were $5,101,000 down 1% from $5,144,000 in the same period of fiscal 2002. Net
income from continuing operations for the fiscal 2003 third quarter was
$698,000, or $0.26 per diluted share, compared to $295,000, or $0.11 per diluted
share, a year ago.
Revenues from continuing operations for the nine months ended June 30,
2003 were $13,710,000 down 6% from $14,557,000 in the same period of fiscal
2002. Net income from continuing operations for the first nine months of fiscal
2003 was $665,000, or $0.25 per diluted share, compared to $640,000, or $0.24
per diluted share, a year ago.
Commenting on the quarter's results, president and CEO Robert Hagger
said, "The fundamental improvements that we have made to the business over the
last two years are paying off. Year to date net income of $665,000 is a good
result. The slow spending environment during the winter months appears to have
eased and at the end of our third fiscal quarter we have improved on last fiscal
year's nine month results. Also, over the past twelve months, our net cash
position improved to $4.3 million from $2.5 million, a 73% increase.
Although not an indication of future financial results, sales pipelines
increased again in the third quarter as did deferred revenue. This gives us
confidence moving forward into our fourth fiscal quarter.
We are especially pleased with the improvement in license revenue over
our second quarter which is largely due to the successful launch of Monarch
Version 7. Monarch is one of the most popular report mining tools for legacy
data in the world. The new version was launched at our user conference in Las
Vegas and received an enthusiastic reception from our customers. Our
Enterprise-scale products for Report Management and Service Management also did
well in the quarter with license revenue 36% higher than the previous quarter.
In summary, we are very pleased by the results for the quarter and
satisfied with our year-to-date position. We now have a very low break-even
point, new product versions, continuing investment in development projects, good
cash reserves, and no debt."
Datawatch previously announced that the company will present and
discuss its third quarter and year to date results on July 24th at 2 p.m. (ET)
in a live conference call broadcast via the Internet at
http://www.vcall.com/ClientPage.asp?ID=84161. Listeners are recommended to go to
the website at least 15 minutes early to register and download any necessary
audio software. An archived replay of the broadcast will be available for 30
days at the same location.
ABOUT DATAWATCH CORPORATION
Datawatch Corporation is a leader in business intelligence and IT support
solutions that help organizations increase productivity, reduce costs and gain
competitive advantage. Datawatch products are used in more than 20,000
companies, institutions and government agencies worldwide.
Datawatch works with VARs, integrators, consultants and independent
software vendors who sell and support Datawatch products. In addition, Datawatch
works with OEM customers who embed Datawatch components and technologies in
their own solutions. The corporate address for Datawatch is 175 Cabot Street,
Suite 503, Lowell, MA 01854-3633; telephone (978) 441-2200. News, shareholder
information and other corporate information may be found on the company's web
site at www.datawatch.com.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Any statements contained in this press release that do not describe historical
facts may constitute forward-looking statements as that term is defined in the
Private Securities Litigation Reform Act of 1995. Any such statements contained
herein are based on current expectations, but are subject to a number of risks
and uncertainties that may cause actual results to differ materially from
expectations. The factors that could cause actual future results to differ
materially from current expectations include the following: Datawatch's ability
to successfully integrate its recent acquisition of Auxilor Inc.; risks
associated with the uncertainty of the current economic climate; risks
associated with fluctuations in quarterly operating results; Datawatch's
dependence on its principal products; risks associated with international sales;
risks associated with distributor sales; an unfavorable result in any
litigation; market acceptance of the new products; dependence on the
introduction of new products and possible delays in those introductions. Further
information on factors that could cause actual results to differ from those
anticipated is detailed in various publicly-available documents, which include,
but are not limited to, filings made by Datawatch from
time to time with the Securities and Exchange Commission, including but not
limited to, those appearing in Datawatch's Form 10-K for the year ended
September 30, 2002. Any forward-looking statements should be considered in light
of those factors.
# # # #
Datawatch Contact:
Alan R. MacDougall, Vice President of Finance & CFO
amacdougall@datawatch.com
Phone (978) 441-2200, ext. 8207; Fax: (978) 441-1114
DATAWATCH CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
Amounts in Thousands (except per share data)
Three Months Ended Nine Months Ended
06/30/03 06/30/02 06/30/03 06/30/02
-------- -------- -------- --------
Revenue:
Software licenses ...................... $ 3,604 $ 3,684 $ 9,524 $ 10,347
Maintenance and services ............... 1,497 1,460 4,186 4,210
-------- -------- -------- --------
Total Revenue .................................... 5,101 5,144 13,710 14,557
Costs and expenses:
Cost of software licenses .................... 775 687 1,919 2,131
Cost of maintenance and services ............. 563 687 1,794 2,103
Sales and marketing expenses ................. 1,664 1,862 4,626 4,978
Product development expenses ................. 390 311 1,205 972
General and administration expenses .......... 1,013 1,288 3,321 3,563
Restructuring costs .......................... -- -- 181 88
-------- -------- -------- --------
Income from operations ........................... 696 309 664 722
Other income (expense) ........................... 2 (14) 1 (82)
-------- -------- -------- --------
Income from continuing operations ................ $ 698 $ 295 $ 665 $ 640
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Discontinued operations:
Gain on sale of Guildsoft, net ............... -- -- -- 17
-------- -------- -------- --------
Income from discontinued operations .............. $ -- $ -- $ -- $ 17
======== ======== ======== ========
Net income ....................................... $ 698 $ 295 $ 665 $ 657
======== ======== ======== ========
Net Income Per Share - Basic and Diluted:
Continuing operations - Basic ................ $ 0.27 $ 0.11 $ 0.26 $ 0.25
Continuing operations - Diluted .............. $ 0.26 $ 0.11 $ 0.25 $ 0.24
Discontinued operations - Basic & Diluted .... -- -- -- $ 0.01
-------- -------- -------- --------
Net Income Per Share - Basic ..................... $ 0.27 $ 0.11 $ 0.26 $ 0.26
======== ======== ======== ========
Net Income Per Share - Diluted ................... $ 0.26 $ 0.11 $ 0.25 $ 0.25
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DATAWATCH CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
Amounts in Thousands
June 30, September 30,
2003 2002
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ASSETS:
Cash and investments ..................... $ 4,321 $ 3,605
Accounts receivable, net ................. 3,576 3,057
Inventories .............................. 117 171
Prepaid expenses ......................... 547 571
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Total Current Assets .......................... 8,561 7,404
Property and equipment, net ................... 494 732
Other assets .................................. 1,358 1,318
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Total Assets .................................. $10,413 $ 9,454
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LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable and accrued expenses .... $ 2,700 $ 3,153
Deferred revenue ......................... 2,828 2,228
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Total Current Liabilities ..................... 5,528 5,381
Accrued Severance, less current portion ....... 6 13
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Total Liabilities ............................. 5,534 5,394
Stockholders' equity .......................... 4,879 4,060
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Total Liabilities and Stockholders' Equity .... $10,413 $ 9,454
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