Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - Covisint Corp | exhibit991q42017.htm |
| 8-K - 8-K - Covisint Corp | a8-kcovsq42017earningsrele.htm |
6/5/2017 1
Covisint Corporation
Fourth Quarter and Full Year Fiscal 2017 Results
June 5, 2017
This presentation contains “forward-looking” statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the
assumptions prove incorrect, our results may differ materially from those expressed or implied by such forward-looking statements. All statements other than
statements of historical fact could be deemed forward-looking, including, but not limited to, any projections of financial information; any statements about
historical results that may suggest trends for our business and results of operations; any statements of the plans, strategies and objectives of management for
future operations; any statements of expectation or belief regarding future events, potential markets or market size, technology developments, or enforceability
of our intellectual property rights; and any statements of assumptions underlying any of the foregoing.
These statements are based on estimates and information available to us at the time of this presentation and are not guarantees of future performance. Actual
results could differ materially from our current expectations as a result of many factors, including but not limited to: our ability to attract new customers; the
extent to which customers renew their contracts for our solutions; the extent we are able to maintain pricing with our customers at renewal; the seasonality of our
business; our ability to manage our growth; the continued growth of the market for our solutions; the success of our channel partner and certified partner
strategies; competition from current competitors and new market entrants; our ability to penetrate new vertical markets; unpredictable macro-economic
conditions; the loss of any of our key employees; the length of the sales and implementation cycles for our solutions; increased demands on our infrastructure
and costs associated with operating as a public company; failure to protect our intellectual property; the occurrence of any event, change or other circumstances
that could give rise to the termination of the merger agreement; the failure to obtain the requisite approval of Covisint’s shareholders or the failure to satisfy other
closing conditions; risks related to disruption of management’s attention from Covisnt’s on-going business operations due to the pending transaction; and the
effect of the announcement of the pending transaction on the ability of Covisint to retain and hire key personnel, maintain relationships with its customers and
suppliers, and maintain its operating results and business generally. These and other risks and uncertainties associated with our business are described in Item
1A “Risk Factors” in our Quarterly Report on Form 10-K for the period ended March 31, 2017. We assume no obligation and do not intend to update these
forward-looking statements.
In addition to U.S. GAAP financials, this presentation includes certain non-GAAP financial measures. These historical and forward-looking non-GAAP measures
are in addition to, not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. A reconciliation between GAAP and
non-GAAP measures is included in the appendix to this presentation.
Covisint is a registered trademark of Covisint Corporation. This presentation also contains additional trademarks and service marks of ours and of other
companies. We do not intend our use or display of other companies’ trademarks or service marks to imply a relationship with, or endorsement or sponsorship of
us by, these other companies.
Forward Looking Statements
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Fiscal 2017: Financial Overview
Key Metrics ($ in thousands)
* Excludes the impact of stock compensation and the expensing of certain R&D costs (rather than capitalizing such costs), refer to the reconciliation of quarterly results
on slide 6
Highlights
• Cash at $33 million
• Non-GAAP Gross Margin at plan levels
• Cash Flow better than expectations
Q4 FY 17 Y/Y Q/Q FY 17 Y/Y
Subscription Revenue $ 16,788 (2%) 14% $ 60,727 (4%)
Services Revenue $ 2,194 (21%) 15% $ 9,516 (25%)
Total Revenue $ 18,982 (5%) 14% $ 70,243 (8%)
Q4 FY 17 Y/Y Q/Q FY 17 Y/Y
Gross Profit $ 11,296 (7%) 39% $ 36,964 (10%)
Gross Margin 60% 53%
Stock Compensation Expense $ 16 $ 53
Amortization of Capitalized Software $ 1,128 $ 4,274
Non-GAAP Gross Profit* $ 12,440 (4%) 34% $ 41,291 (7%)
Non-GAAP Gross Margin 66% 59%
Net Income/(Loss) $ 1,589 $ (12,726)
Stock Compensation Expense $ 480 $ 1,899
Capitalized internal software costs $ (644) $ (2,819)
Amortization of Capitalized Software $ 1,128 $ 4,274
Non-GAAP Net Income/( Loss)* $ 2,553 $ (9,372)
Net Change in Cash $ 2,786 $ (6,454)
Net proceeds from exercise of stock awards $ - $ (239)
Vendor Financing Payment $ - $ 614
Effect of Exchange Rate Changes on Cash $ (42) $ 96
Free Cash Flow $ 2,744 $ (5,983)
Executive Commentary and Perspective
• Covisint Enters Definitive Agreement to be Acquired by OpenText
• $2.45 per share, or approximately $103 million
• 23% premium to the prior closing price on June 2, 2017
• 27% premium to the 30-day volume-weighted average price
• 46% cash-adjusted premium to the 30-day volume-weighted average price*
• All-cash transaction with no financial contingencies
• Approved by the Board of Directors at both Covisint and OpenText
• Expected to close in the third quarter of calendar 2017, subject to a shareholder vote and customary
closing conditions
• Expected Benefits for Covisint's Employees and Customers
• Enhanced financial scale and greater development and support resources to reach our growth potential
• Shared values, commitment to customer success, passion for engineering solutions, and disciplined
execution
* The cash-adjusted calculation deducts the Company’s cash and cash equivalents of $33 million or $0.79 per share as of March 31, 2017 from both its current share
price and from the total Merger Consideration implied by the offer in order to better measure the premium being offered
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Appendix
Fiscal 2017: Non-GAAP Reconciliation
($ in thousands, except per share)
Q4'FY17 FY17
Cost of revenue 7,685 33,279
Adjustments:
Stock compensation expense 16 53
Amortization of capitalized software and other intangibles 1,128 4,274
Cost of revenue, non-GAAP 6,541 28,952
Q4'FY17 FY17
Research and development 2,065 11,381
Adjustments:
Capitalized internal software costs (644) (2,819)
Stock compensation expense 11 37
Research and development, non-GAAP 2,698 14,163
Q4'FY17 FY17
Sales and marketing 5,412 26,804
Adjustments:
Stock compensation expense 85 296
Sales and marketing, non-GAAP 5,327 26,508
Net Change in Cash $ 2,786 $ (6,454)
Net proceeds from exercise of stock awards $ - $ (239)
Vendor Financing Payment $ - $ 614
Effect of Exchange Rate Changes on Cash $ (42) $ 96
Free Cash Flow $ 2,744 $ (5,983)
Q4'FY17 FY17
General and administrative 2,290 11,497
Adjustments:
Stock compensation expens 369 1,513
General and administrative, non-GAAP 1,921 9,984
Q4'FY17 FY17
Net loss 1,589 (12,726)
Adjustments:
Capitalized internal software costs (644) (2,819)
Stock comp nsation expense 480 1,899
Amortization of capitalized software and other intangibles 1,128 4,274
Net loss, non-GAAP 2,553 (9,372)
Q4'FY17 FY17
Diluted EPS 0.04 (0.31)
Adjustments:
Capitalized internal software costs (0.02) (0.07)
Stock compensation expense 0.01 0.05
Amortization of capitalized software and other intangibles 0.03 0.10
Diluted EPS, non-GAAP 0.06 (0.23)
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