EXHIBIT 99.1
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DATAWATCH CORPORATION REPORTS EARNINGS FOR ITS FOURTH
QUARTER AND FISCAL 2003
DATAWATCH ANNOUNCES LOWER SALES, A STRENGTHENED BALANCE SHEET, EARNINGS OF
$847,000, AND $1.7 MILLION OF NET CASH PROVIDED BY OPERATIONS;
CASH RESERVES GROW TO OVER $5 MILLION WITH NO LONG OR SHORT-TERM DEBT
LOWELL, MA - NOVEMBER 19, 2003 -- Datawatch Corporation (NASDAQ: DWCH), a
leading provider of business intelligence, data transformation and IT support
solutions, today announced results for its fourth quarter and fiscal year which
ended September 30, 2003.
Revenues for fiscal 2003 were $17,712,000, down 9% from revenues
from continuing operations of $19,441,000 for fiscal 2002. Net income from
continuing operations for fiscal 2003 was $847,000 or $0.31 per diluted share,
compared to net income from continuing operations of $846,000 or $0.31 per
diluted share a year ago.
Revenues for the quarter ended September 30, 2003 were $4,002,000,
down 18% from revenues from continuing operations of $4,884,000 in the same
period of fiscal 2002. Net income for the quarter ended September 30, 2003 was
$182,000 or $0.06 per diluted share, compared to net income of $206,000 or $0.08
per diluted share a year ago.
Commenting on the fiscal 2003 results, president and CEO Robert
Hagger said, "During this past year, we have focused on consolidating the
positive results from our company turnaround in fiscal 2002 and building a
strong balance sheet to provide a platform for future growth. Datawatch has
achieved a great deal over the period in spite of a tough economic climate.
During 2003 we made profitability and cash flow a higher priority than revenue
growth; I believe this was the right decision and proven by the fact that we now
have a much stronger company than a year ago. With $1.7 million in cash provided
by operations during the year, we ended fiscal 2003 with over $5 million in cash
reserves. I am pleased with the solid progress our company has made, creating a
platform for potential revenue expansion in the future.
In addition to the continued earnings trend and building our net
cash position in fiscal 2003, deferred revenue increased to $2.9 million in the
year, up by over $700,000 from September 2002. However, our quarterly revenues
have been volatile throughout the year and we are working on a number of
initiatives to improve predictability, including the introduction of a new
subscription model for customers of our report management and service management
products. The new pricing model lowers the initial cost of software acquisition
and makes it easier for new customers to get started using our products. For a
simple monthly fee, users can now have access to large-scale systems that
improve productivity in the workplace by better information and
business process management. This is a key new initiative that is designed to
grow our enterprise business quarter-on-quarter, reducing dependency on
short-term sales and building a recurring revenue stream over the next few
years.
Our continued investment in research and development of report
management technologies has resulted in Datawatch becoming a leader in
report-based business intelligence software. From individual desktop
applications through to full enterprise-wide report access and distribution
systems, Datawatch is providing easy to implement and use solutions that deliver
a strong return on investment for our customers. Moving into 2004 Datawatch will
be adding to the capabilities of its report based data mining by providing the
ability to mine data at its source giving our customers the means to more easily
access and join data from disparate systems into new reports.
Based on industry analyst Merrill Lynch, the market place for
business intelligence/decision support and analytics applications will grow to
over $17 billion in 2004. Datawatch is now well placed to take advantage of its
position. Our customer base of over 20,000 customers, including a significant
number of Fortune 500 companies, is an excellent entree to this market
opportunity. The next stage for Datawatch is to grow revenues and achieve
greater market share. We are focused on the task and have recently increased the
size of our sales force by 20% in preparation for fiscal 2004.
In addition to extending our business intelligence offerings, we
also expanded our technology capabilities and customer base in the service
management space by the acquisition of the Visual Help Desk product. Offerings
now range from an easy to deploy web based Visual Help Desk On-Line model,
through to a full business process management (BPM) suite, Visual|SM, which was
formerly known as Q|SM.
With an improving economic climate, Datawatch is well positioned to
take advantage of the recovery as it unfolds, and we eagerly look forward to an
exciting fiscal 2004."
Datawatch previously announced that the company will present and
discuss its fiscal 2003 results on November 20th at 2 p.m. (EST) in a live
conference call broadcast via the Internet at
http://www.vcall.com/EventPage.asp?ID=85155. 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
Datawatch Corporation is a leader in business intelligence, data transformation,
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; 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: 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 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 the Company'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, Sr. Vice President of Finance & CFO
amacdougall@datawatch.com
Phone (978) 441-2200, ext. 8207; Fax: (978) 441-1114; www.datawatch.com
DATAWATCH CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
Amounts in Thousands (except per share data)
Quarters Ended September 30, Years Ended September 30,
------------------------- -------------------------
2003 2002 2003 2002
-------- -------- -------- --------
Revenue:
Software licenses ............................... $ 2,686 $ 3,468 $ 12,210 $ 13,814
Maintenance and services ........................ 1,316 1,416 5,502 5,627
-------- -------- -------- --------
Total Revenue ........................................ 4,002 4,884 17,712 19,441
Costs and expenses:
Cost of software licenses ....................... 644 664 2,563 2,795
Cost of maintenance and services ................ 575 576 2,369 2,679
Sales and marketing expenses .................... 1,503 1,920 6,129 6,897
Product development expenses .................... 301 304 1,507 1,276
General and administration expenses ............. 816 1,201 4,137 4,764
Restructuring costs ............................. -- -- 181 88
-------- -------- -------- --------
Income from operations ............................... 163 219 826 942
Other Income (Expense) ............................... 24 (13) 26 (96)
Provision for income tax ............................. (5) -- (5) --
-------- -------- -------- --------
Income from continuing operations .................... $ 182 $ 206 $ 847 $ 846
======== ======== ======== ========
Discontinued operations:
Gain on sale of Guildsoft, net .................. -- -- -- 17
-------- -------- -------- --------
Income from discontinued operations .................. $ -- $ -- $ -- $ 17
======== ======== ======== ========
Net income ........................................... $ 182 $ 206 $ 847 $ 863
======== ======== ======== ========
Net Income Per Share - Basic and Diluted:
Continuing operations - Basic ................... $ 0.07 $ 0.08 $ 0.33 $ 0.33
Continuing operations - Diluted ................. $ 0.06 $ 0.08 $ 0.31 $ 0.31
Discontinued operations - Basic & Diluted ....... -- -- -- $ 0.01
-------- -------- -------- --------
Net Income Per Share - Basic ......................... $ 0.07 $ 0.08 $ 0.33 $ 0.34
======== ======== ======== ========
Net Income Per Share - Diluted ....................... $ 0.06 $ 0.08 $ 0.31 $ 0.32
======== ======== ======== ========
DATAWATCH CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
Amounts in Thousands
September 30, 2003 September 30, 2002
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ASSETS:
Cash and investments ....................... $ 5,071 $ 3,605
Accounts receivable, net ................... 3,041 3,057
Inventories ................................ 105 171
Prepaid expenses ........................... 553 571
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Total Current Assets ............................. 8,770 7,404
Property and equipment, net ...................... 461 732
Other assets ..................................... 1,273 1,318
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Total Assets ..................................... $ 10,504 $ 9,454
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LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable and accrued expenses ...... $ 2,422 $ 3,153
Borrowings under credit lines .............. -- --
Deferred revenue ........................... 2,941 2,228
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Total Current Liabilities ........................ 5,363 5,381
Accrued Severance, less current portion .......... 3 13
------------------ ------------------
Total Liabilities ................................ 5,366 5,394
Stockholders' equity ............................. 5,138 4,060
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Total Liabilities and Stockholders' Equity ....... $ 10,504 $ 9,454
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