EXHIBIT 99.1
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DATAWATCH CORPORATION REPORTS RESULTS FOR SECOND QUARTER FISCAL 2005
REVENUE DECLINES 2% FOR SECOND QUARTER, BUT GROWS 6% FOR THE
SIX MONTHS; EARNINGS RETURN TO MODEST PROFIT.
LOWELL, MA - APRIL 25, 2005 -- Datawatch Corporation (NASDAQ: DWCH), a leading
provider of business intelligence, data transformation and IT support solutions,
today announced results for its second fiscal quarter of 2005.
Revenues for the quarter ended March 31, 2005 were $5,109,000, compared to
$5,195,000 for the quarter ended March 31, 2004. Net income for the second
quarter fiscal 2005 was $6,700 or $0.00 per diluted share, compared to net
income of $396,000, or $0.07 per diluted share, for the second quarter fiscal
2004.
Revenues for the six months ended March 31, 2005 were $10,196,000, up by 6%
when compared to $9,602,000 for the six months ended March 31, 2004. Net loss
for the six months ended March 31, 2005 was $(147,000) or $(0.03) per diluted
share, compared to net income of $719,000, or $0.13 per diluted share, a year
ago.
Commenting on the second quarter's results, president and CEO Robert Hagger
said, "Revenue was slightly lower in the second quarter compared to the same
quarter last year, mainly due to a single large order, of which approximately
$348,000 was recognized in the corresponding period last year. We believe that
the year-to-date revenue growth of 6% is a better indicator of the business
trend. While there was no net increase in the number of subscription customers
in the quarter, year-to-date subscription revenue grew to $177,000 compared to
$7,000 for the first six months of fiscal year 2004. This growth in subscription
revenue improves the stability of our future revenue stream."
"As we noted in the last quarter, we have increased our investment this
year, in sales and marketing, to drive top line growth. Despite this increased
expense level we were able to return the Company to a modest profit and generate
positive cash flow. At March 31, 2005 our cash and marketable securities balance
was $3.5 million, an increase of $99,000 from the first quarter ended December
31, 2004. The Balance Sheet remains strong with no debt."
"Our investments in research and development continue to extend the
functionality of our existing solutions and create new products. In late March
we released a new version of Monarch. Monarch V8 now provides PC users with the
ability to quickly and easily extract, analyse and export data from PDF files,
HTML files, reports, databases and spreadsheets. Monarch is the industry-leading
analytics tool that allows PC users to export data from any existing
computer-generated report and other data sources without
programming. The increased functionality of working with PDF files now broadens
the potential customer base for Monarch."
Datawatch previously announced that the Company will present and discuss
its second quarter of fiscal 2005 results today at 2 p.m. (EST) in a live
conference call broadcast via the Internet at
http://www.vcall.com/CEPage.asp?ID=91184. 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, 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. More information on
Datawatch and its solutions can be found at http://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 the Company's
recently introduced subscription sales model; risks associated with
international sales; risks associated with distributor sales; risks associated
with acquisitions; 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, 2004. Any forward- looking statements should be
considered in light of those factors.
Datawatch Contact:
Larry Bouchie, (978) 275-8264
larry_bouchie@datawatch.com
DATAWATCH CORPORATION
Condensed Consolidated Statements of Operations
Amounts in Thousands (except per share data)
Quarter Ended Quarter Ended Six Months Ended Six Months Ended
March 31, 2005 March 31, 2004 March 31, 2005 March 31, 2004
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Revenue:
Software licenses .................... $ 3,307 $ 3,484 $ 6,524 $ 6,438
Maintenance and services ............. 1,802 1,711 3,672 3,164
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Total Revenue ............................. 5,109 5,195 10,196 9,602
Costs and expenses:
Cost of software licenses ............ 566 760 1,160 1,390
Cost of maintenance and services ..... 841 661 1,756 1,273
Sales and marketing expenses ......... 2,183 1,955 4,362 3,494
Product development expenses ......... 548 342 1,098 621
General and administration expenses .. 987 1,067 2,016 2,103
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(Loss) income from operations ............. (16) 410 (196) 721
Other income (expense), net ............... 23 (14) 49 4
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Income (loss) before income taxes ......... 7 396 (147) 725
Provision for income taxes ................ -- -- -- 6
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Net income (loss) ......................... $ 7 $ 396 $ (147) $ 719
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Net income (loss) per share - basic ....... $ 0.00 $ 0.08 $ (0.03) $ 0.14
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Net income (loss) per share - diluted ..... $ 0.00 $ 0.07 $ (0.03) $ 0.13
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Weighted average basic shares outstanding . 5,307 5,244 5,304 5,238
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Weighted average diluted shares outstanding 5,848 5,779 5,304 5,739
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DATAWATCH CORPORATION
Condensed Consolidated Balance Sheets
Amounts in Thousands
March 31, September 30,
2005 2004
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ASSETS:
Cash and investments..................... $ 3,540 $ 4,261
Accounts receivable, net................. 4,153 3,672
Inventories.............................. 81 68
Prepaid expenses......................... 776 614
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Total Current Assets........................... 8,550 8,615
Property and equipment, net.................... 461 434
Other assets................................... 3,360 3,580
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Total Assets................................... $ 12,371 $ 12,629
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LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable and accrued expenses.... $ 2,873 $ 3,165
Deferred revenue......................... 3,058 2,903
Escrow for Mergence acquisition.......... 126 -
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Total Current Liabilities...................... 6,057 6,068
Escrow for Mergence acquisition................ - 125
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Total Liabilities.............................. 6,057 6,193
Stockholders' equity........................... 6,314 6,436
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Total Liabilities and Stockholders' Equity..... $ 12,371 $ 12,629
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