Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - DETERMINE, INC. | dtrm20170810_8k.htm |
Exhibit 99.1
Determine Announces 1st Quarter Fiscal Year 2018 Financial Results
Year-over-Year revenue increases, plus capital raise positions Determine for continued growth.
CARMEL, IN - August 10, 2017 – Determine, Inc. (NASDAQ: DTRM), the pioneering leader in global Source-to-Pay and Enterprise Contract Lifecycle Management (ECLM) Cloud Platform solutions, announced financial results for its first quarter ended June 30, 2017.
Q1 FY18 GAAP Financial Highlights:
|
(in thousands, except per share amounts) |
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|
GAAP Financial Measures |
Q1 |
Q4 |
Q1 |
Change |
Change | |||||||||||||||
|
FY 2018 |
FY 2017 |
FY 2017 |
Q/Q |
Y/Y | ||||||||||||||||
|
Revenue - total |
$ | 6,988 | $ | 7,535 | $ | 6,492 | (7.3 | %) | 7.6 | % | ||||||||||
|
Revenue - recurring |
$ | 5,300 | $ | 5,628 | $ | 5,068 | (5.8 | %) | 4.6 | % | ||||||||||
|
Revenue - non-recurring |
$ | 1,688 | $ | 1,907 | $ | 1,424 | (11.5 | %) | 18.5 | % | ||||||||||
|
Gross profit - total |
$ | 3,685 | $ | 3,973 | $ | 3,385 | (7.2 | %) | 8.9 | % | ||||||||||
|
Gross profit - recurring |
$ | 3,514 | $ | 3,696 | $ | 3,462 | (4.9 | %) | 1.5 | % | ||||||||||
|
Gross profit/ (loss) - non-recurring
|
$ | 171 | $ | 277 | $ | (77 | ) | (38.3 | %) | 322.1 | % | |||||||||
|
Gross margin - total |
52.7 | % | 52.7 | % | 52.1 | % | 0.0 | pts | 0.6 | pts | ||||||||||
|
Gross margin - recurring |
66.3 | % | 65.7 | % | 68.3 | % | 0.6 | pts | (2.0 | pts) | ||||||||||
|
Gross margin - non recurring |
10.1 | % | 14.5 | % | (5.4 | %) | (4.4 | pts) | 15.5 | pts | ||||||||||
|
Net loss |
$ | (2,110 | ) | $ | (1,708 | ) | $ | (2,342 | ) | 23.5 | % | (9.9 | %) | |||||||
|
EPS |
$ | (0.17 | ) | $ | (0.14 | ) | $ | (0.21 | ) | $ | (0.03 | ) | $ | 0.04 | ||||||
|
● |
GAAP revenue was $7.0 million in Q1 FY2018, compared to $7.5 million in Q4 FY2017, representing a 7.3% decrease quarter-over-quarter, and compared to $6.5 million in Q1 FY2017 GAAP revenue, representing a 7.6% increase year-over-year. |
|
● |
GAAP gross profit percentage was 52.7% in Q1 FY2018, compared to 52.7% in Q4 FY2017, and 52.1% in Q1 FY2017, remaining consistent both quarter-over-quarter and year-over-year. |
|
● |
Deferred revenues decreased to $9.9 million in Q1 FY2018 from $10.1 million in Q4 FY2017. |
|
● |
GAAP net loss was $2.1 million or $0.17 per share in Q1 FY2018, compared to $1.7 million or $0.14 per share in Q4 FY2017, representing an additional loss of $0.03 per share quarter-over-quarter; in Q1 FY2017 the GAAP net loss was $2.3 million or $0.21 per share. |
Q1 FY18 Non-GAAP Financial Highlights:
|
(in thousands, except per share amounts) |
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|
Non-GAAP Financial Measures |
Q1 |
Q4 |
Q1 |
Change |
Change |
|||||||||||||||
|
FY 2018 |
FY 2017 |
FY 2017 |
Q/Q |
Y/Y |
||||||||||||||||
|
Revenue - total |
$ | 6,988 | $ | 7,535 | $ | 6,500 | (7.3 | %) | 7.5 | % | ||||||||||
|
Revenue - recurring |
$ | 5,300 | $ | 5,628 | $ | 5,076 | (5.8 | %) | 4.4 | % | ||||||||||
|
Revenue - non-recurring |
$ | 1,688 | $ | 1,907 | $ | 1,424 | (11.5 | %) | 18.5 | % | ||||||||||
|
Gross profit - total |
$ | 4,003 | $ | 4,297 | $ | 3,710 | (6.8 | %) | 7.9 | % | ||||||||||
|
Gross profit - recurring |
$ | 3,813 | $ | 3,967 | $ | 3,737 | (3.9 | %) | 2.0 | % | ||||||||||
|
Gross profit/(loss) - non-recurring
|
$ | 190 | $ | 330 | $ | (27 | ) | (42.4 | %) | 803.7 | % | |||||||||
|
Gross margin - total |
57.3 | % | 57.0 | % | 57.1 | % | 0.3 | pts | 0.2 | pts | ||||||||||
|
Gross margin - recurring |
71.9 | % | 70.5 | % | 73.6 | % | 1.4 | pts | (1.7 | pts) | ||||||||||
|
Gross margin - non recurring |
11.3 | % | 17.3 | % | (1.9 | %) | (6.0 | pts) | 13.2 | pts | ||||||||||
|
Net loss |
$ | (952 | ) | $ | (428 | ) | $ | (1,285 | ) | 122.4 | % | (25.9 | %) | |||||||
|
EPS |
$ | (0.08 | ) | $ | (0.04 | ) | $ | (0.11 | ) | $ | (0.04 | ) | $ | 0.03 | ||||||
|
Billings |
$ | 6,772 | $ | 7,582 | $ | 6,280 | (10.7 | %) | 7.8 | % | ||||||||||
|
● |
Non-GAAP revenue was $7.0 million in Q1 FY2018, compared to $7.5 million in Q4 FY2017, representing a 7.3% decrease quarter-over-quarter, and compared to $6.5 million in Q1 FY2017, representing a 7.5% increase year-over-year. |
|
● |
Non-GAAP gross profit percentage was 57.3% in Q1 FY2018, compared to 57.0% in Q4 FY2017, and 57.1% in Q1 FY2017, remaining consistent both quarter-over-quarter and year-over-year. |
|
● |
Non-GAAP net loss was $1.0 million or $0.08 per share in Q1 FY2018, compared to a net loss of $0.4 million or $0.04 per share in Q4 FY2017, representing a $0.04 additional loss per share quarter-over-quarter. Q1 FY2017 had a non-GAAP net loss of $1.3 million or $0.11 per share, representing a $0.03 improvement per share year-over-year. |
|
● |
Billings increased 7.8% to $6.8 million in Q1 FY2018 from $6.3 million in Q1 FY2017. Billings, a non-GAAP measure, are defined as revenue plus the change in deferred revenues. |
|
● |
Non-GAAP EBITDA was a $0.2 million loss in Q1 FY2018, compared to a loss of $0.8 million in Q1 FY2017, representing an improvement of $0.6 million year-over-year. |
“The business is off to a solid start from a financial perspective, and I’m pleased to report we are in a good position across our key measures. As we move forward into Fiscal 2018, our focus and our charter are on new business growth. The additional resources we secured during our recently completed capital raise combined with the industry leading capabilities of the Determine Cloud Platform will power our efforts to meeting our growth charter. We intend to build a robust business with a long-term view — we have the right talent, resources, and solutions to make it happen.”
— Patrick Stakenas, President and CEO, Determine, Inc.
Q1 FY2018 Determine Business Highlights:
|
● |
Determine Announces Pricing of Registered Direct Offering of Common Stock: |
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Determine joins Russell Microcap® Index: |
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Annualized Bookings: The sales team delivered $700,000 in Annualized Bookings for the quarter, with 100% of new customers selecting the Determine Cloud Platform for their Source-to-Pay or Enterprise Contract Lifecycle Management needs. |
|
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Top 50 Providers to Know: Determine was recognized for the third year in a row in Top 50 Providers to Know by Spend Matters. The ranking highlights firms that continue to lead the charge on new procurement technologies and services driving innovation and changing the way companies do business. |
|
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Determine Cloud Platform Named as an E-Procurement Leader in the Spend Matters SolutionMap |
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● |
Q1 FY2018 Customer Announcements: During Q1 FY2018, Determine announced numerous customer accounts in the US and Europe across its Determine Cloud Platform Source-to-Pay and Enterprise Contract Lifecycle Management solutions. Determine announced customers in its portfolio across key verticals including financial, web hosting, transportation, pharmaceutical and real estate, among others. |
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○ |
Pharmaceutical leader Orion Corporation selects Determine to optimize their global Source-to-Contract effectiveness: |
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○ |
Determine, Inc. Drives the Future with New Customer Scania (Great Britain) Limited. Scania (Great Britain) Limited, one of the leading suppliers in the UK of trucks, buses, coaches and engines, has selected the Determine Cloud Platform to drive its efficiency and future growth in Purchasing. |
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○ |
U.K. Train Operator c2c is All Aboard on the Determine Cloud Platform: |
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● |
New Global Alliance Leadership: On May 2, 2017, Determine appointed Sean Regan as Vice President of Global Alliances. Sean brings over a decade of strategic alliance, business development and sales management experience in the technology and SaaS sector to Determine. He most recently held senior positions at SciQuest (now JAGGAER), Spend Radar (acquired by SciQuest) and CDW, a multi-brand technology solutions provider. |
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● |
Determine Expands Platformance Footprint with Determine Cloud Platform 17.6 Release: |
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Determine Continues Thought Leadership: In Q1 FY2018, Determine continued to provide meaningful educational resources to inform our customers and prospects on the ever-changing Source-to-Pay and Enterprise Contract Lifecycle Management landscape: |
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Determine, Inc. Sponsors Webinar With Spend Matters: Solving the Procurement-Finance Alignment Problem – It’s Doable!: |
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Determine and Ardent Partners Co-Host Webinar – CPO Rising 2017: Tools of the Trade: |
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Determine Hosts Webinar featuring Independent Research Firm |
Conference Call and Webcast Thursday, August 10, 2017 at 5:00 PM (Eastern Time)
Participant Conference Call Numbers:
Toll-Free: 1-877-407-0789
Toll/International: 1-201-689-8562
Participant Webcast Link: http://public.viavid.com/index.php?id=125745
Replay Dial-in Information:
Toll-Free: 1-844-512-2921
Toll/International: 1-412-317-6671
From: 08/10/17 @ 8:00 pm Eastern Time
To: 08/17/17 @ 11:59 pm Eastern Time
Replay Pin Number: 13667846
Related: http://investor.determine.com
Non-GAAP Financial Measures
To supplement our financial results presented in accordance with Generally Accepted Accounting Principles (GAAP), this press release and the accompanying tables contain certain non-GAAP financial measures, including non-GAAP revenue, non-GAAP gross profit, non-GAAP net income and non-GAAP earnings per share, which we believe are helpful in understanding our past financial performance and future results. For reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled, “GAAP to Non-GAAP Reconciliations”. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read in conjunction with our consolidated financial statements prepared in accordance with GAAP.
The difference between GAAP and non-GAAP revenue is due to the impact of revaluing the deferred revenue balances acquired from primarily b-pack as required by GAAP purchase accounting.
The difference between GAAP and non-GAAP gross profit is the difference in GAAP versus non-GAAP revenues as well as the elimination of the amortization of acquisition related intangibles, stock based compensation and severance expense from the costs of revenue. Non-GAAP net loss excludes the non-GAAP gross profit items as well as acquisition related costs.
Our management regularly uses our supplemental non-GAAP financial measures internally to understand and manage our business and forecast future periods; as such, we believe it is useful for investors to understand the effects of these items on our total operations. Further, please note that our non-GAAP revenue is intended to reflect the full amount of revenues that would have been otherwise recorded by the acquired entities of Iasta and b-pack, while our non-GAAP gross profit also excludes the amortization of intangibles that occurred due to the acquisition of the entities of Iasta and b-pack.
Annualized Bookings are an operating measure not derived from the company’s revenues or any other amounts presented in accordance with GAAP in the company’s statement of income, balance sheet or statement of cash flows or other equivalent statements.
Forward-looking Statements
Certain statements in this release and elsewhere by Determine are forward-looking statements within the meaning of the federal securities laws and the Private Securities Litigation Reform Act of 1995. Such statements may include, without limitation, statements regarding business outlook, assessment of market conditions, anticipated financial and operating results, strategies, product and channel development, future plans, contingencies and contemplated transactions of the company. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors which may cause or contribute to actual results of company operations, or the performance or achievements of the company or industry results, to differ materially from those expressed, or implied by the forward-looking statements. In addition to any such risks, uncertainties and other factors discussed elsewhere herein, risks, uncertainties and other factors that could cause or contribute to actual results differing materially from those expressed or implied for the forward-looking statements include, but are not limited to fluctuations in demand for Determine’s products and services, risks of losing key personnel or customers, protection of the company’s intellectual property and government policies and regulations, including, but not limited to those affecting the company’s industry. Determine undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. Additional risk factors concerning the company can be found in the company’s most recent Form 10-K as filed by the company with the Securities and Exchange Commission.
Supporting Resources
Determine blog
Determine on LinkedIn
Determine on Twitter
Determine Resources
About Determine, Inc.
Determine, Inc. (NASDAQ: DTRM) is a leading global provider of SaaS Source-to-Pay and Enterprise Contract Lifecycle Management (ECLM) solutions. The Determine Cloud Platform provides procurement, legal and finance professionals analytics of their supplier, contract and financial performance. Our technologies empower customers to drive new revenue, identify savings, improve compliance and mitigate risk.
The Determine Cloud Platform seamlessly integrates with major ERP or third-party systems such as SAP, Oracle, Sage, QAD and Microsoft. Modular solutions can be configured to add more as needed to provide additional value beyond spend management. Our unified master database and business process approach empower users at every level to make more informed and smarter decisions.
For more information, please visit: www.determine.com.
Media Relations Contacts:
Rose Lee
Determine Inc.
+1.650.532.1590
pr@determine.com
Determine, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
|
Three Months Ended |
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June 30, |
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|
2017 |
2016 |
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Revenues: |
||||||||
|
Recurring revenues |
$ | 5,300 | $ | 5,068 | ||||
|
Non-recurring revenues |
1,688 | 1,424 | ||||||
|
Total revenues |
6,988 | 6,492 | ||||||
|
Cost of revenues: |
||||||||
|
Cost of recurring revenues |
1,786 | 1,606 | ||||||
|
Cost of non-recurring revenues |
1,517 | 1,501 | ||||||
|
Total cost of revenues |
3,303 | 3,107 | ||||||
|
Gross profit: |
||||||||
|
Recurring gross profit |
3,514 | 3,462 | ||||||
|
Non-recurring profit (loss) |
171 | (77 | ) | |||||
|
Total gross profit |
3,685 | 3,385 | ||||||
|
Operating expenses: |
||||||||
|
Research and development |
1,066 | 947 | ||||||
|
Sales and marketing |
2,496 | 2,803 | ||||||
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General and administrative |
2,072 | 1,756 | ||||||
|
Total operating expenses |
5,634 | 5,506 | ||||||
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Loss from operations |
(1,949 | ) | (2,121 | ) | ||||
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Other expense, net |
(178 | ) | (291 | ) | ||||
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Net loss before income tax |
(2,127 | ) | (2,412 | ) | ||||
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Benefit from income taxes |
17 | 70 | ||||||
|
Net loss |
$ | (2,110 | ) | $ | (2,342 | ) | ||
|
Basic and diluted net loss per share |
$ | (0.17 | ) | $ | (0.21 | ) | ||
Determine, Inc.
GAAP to Non-GAAP Reconciliations
(In thousands)
(Unaudited)
|
Three Months Ended |
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June 30, |
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2017 |
2016 |
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Reconciliation of total revenue: |
||||||||
|
U.S. GAAP as reported |
$ | 6,988 | $ | 6,492 | ||||
|
Adjustments: |
||||||||
|
Deferred revenue adjustment |
- | 8 | ||||||
|
Non-GAAP revenue |
$ | 6,988 | $ | 6,500 | ||||
|
Reconciliation of gross profit: |
||||||||
|
U.S. GAAP as reported |
$ | 3,685 | $ | 3,385 | ||||
|
Adjustments: |
||||||||
|
Deferred revenue adjustment |
- | 8 | ||||||
|
Amortizaton of acquisition |
252 | 254 | ||||||
|
Stock based compensation |
28 | 63 | ||||||
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Severance |
38 | - | ||||||
|
Non-GAAP gross profit |
$ | 4,003 | $ | 3,710 | ||||
|
Reconciliation to non-GAAP net loss: |
||||||||
|
Net loss attributable to Determine, Inc. |
$ | (2,110 | ) | $ | (2,342 | ) | ||
|
Stock-based compensation expense |
586 | 528 | ||||||
|
Deferred revenue adjustment |
- | 8 | ||||||
|
Amortization on intangibles |
531 | 534 | ||||||
|
Benefit for income taxes |
- | (13 | ) | |||||
|
Severance costs |
41 | - | ||||||
|
Non-GAAP net loss |
$ | (952 | ) | $ | (1,285 | ) | ||
|
Non-GAAP basic and diluted net loss per share |
$ | (0.08 | ) | $ | (0.11 | ) | ||
|
Weighted average shares outstanding for basic and diluted net loss per share |
12,249 | 11,413 | ||||||
Determine, Inc.
Condensed Consolidated Statements of Comprehensive Loss
(In thousands)
(Unaudited)
|
Three Months Ended |
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|
June 30, |
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|
2017 |
2016 |
|||||||
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Net loss |
$ | (2,110 | ) | $ | (2,342 | ) | ||
|
Foreign currency translation adjustments, net |
311 | (26 | ) | |||||
|
Other comprehensive loss |
(114 | ) | - | |||||
|
Comprehensive loss |
$ | (1,913 | ) | $ | (2,368 | ) | ||
Determine, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
|
June 30, |
March 31, |
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|
2017 |
2017 |
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(Unaudited) |
(Audited) |
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ASSETS |
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Current assets |
||||||||
|
Cash and cash equivalents |
$ | 13,656 | $ | 9,429 | ||||
|
Accounts receivable, net |
6,688 | 7,042 | ||||||
|
Restricted cash |
26 | 34 | ||||||
|
Prepaid expenses and other current assets |
1,443 | 1,553 | ||||||
|
Total current assets |
21,813 | 18,058 | ||||||
|
Property and equipment, net |
84 | 85 | ||||||
|
Capitalized software, net |
2,578 | 2,341 | ||||||
|
Goodwill |
14,904 | 14,448 | ||||||
|
Other intangibles, net |
5,441 | 5,860 | ||||||
|
Other assets |
1,531 | 1,599 | ||||||
|
Total assets |
$ | 46,351 | $ | 42,391 | ||||
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||
|
Current liabilities |
||||||||
|
Credit facility |
$ | 11,861 | $ | 11,861 | ||||
|
Accounts payable |
1,996 | 2,478 | ||||||
|
Accrued payroll and related liabilities |
1,972 | 1,729 | ||||||
|
Other accrued liabilities |
2,423 | 2,042 | ||||||
|
Deferred revenue |
9,828 | 10,070 | ||||||
|
Income tax payable |
120 | 23 | ||||||
|
COFACE loan |
130 | 174 | ||||||
|
Total current liabilities |
28,330 | 28,377 | ||||||
|
Long-term deferred revenue |
36 | 10 | ||||||
|
Convertible note, net of debt discount |
6,845 | 7,599 | ||||||
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Other long-term liabilities |
1,306 | 1,306 | ||||||
|
Total liabilities |
36,517 | 37,292 | ||||||
|
Total stockholders' equity |
9,834 | 5,099 | ||||||
|
Total liabilities and stockholders' equity |
$ | 46,351 | $ | 42,391 | ||||
Determine, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
|
Three Months Ended |
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|
June 30, |
June 30, |
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|
2017 |
2016 |
|||||||
|
Operating activities |
||||||||
|
Net loss |
$ | (2,110 | ) | $ | (2,342 | ) | ||
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
||||||||
|
Depreciation and amortization |
971 | 772 | ||||||
|
Stock-based compensation expense |
586 | 528 | ||||||
|
Interest expense paid in kind as convertible note debt |
219 | - | ||||||
|
Accrued restructuring costs |
- | (403 | ) | |||||
|
Income tax benefit |
(17 | ) | (70 | ) | ||||
|
Unrealized currency translation gains |
(252 | ) | - | |||||
|
Changes in assets and liabilities: |
||||||||
|
Accounts receivable, net |
354 | 840 | ||||||
|
Prepaid expenses and other current assets |
103 | 63 | ||||||
|
Other assets |
228 | (104 | ) | |||||
|
Accounts payable |
(482 | ) | (687 | ) | ||||
|
Accrued payroll and related liabilities |
243 | 203 | ||||||
|
Other accrued liabilities and other long-term liabilities |
383 | 91 | ||||||
|
Deferred revenue |
(216 | ) | (212 | ) | ||||
|
Net cash provided by (used in) operating activities |
10 | (1,321 | ) | |||||
|
Investing activities |
||||||||
|
Purchase of property and equipment |
(7 | ) | (22 | ) | ||||
|
Capitalized software development costs, net |
(569 | ) | (329 | ) | ||||
|
Net cash used in investing activities |
(576 | ) | (351 | ) | ||||
|
Financing activities |
||||||||
|
Proceeds from issuance of stock, net of issuance costs |
4,939 | - | ||||||
|
Net employee withholding taxes paid in connection to issuance of restricted stock |
(24 | ) | (20 | ) | ||||
|
Issuance of common stock under employee stock purchase plan |
- | 4 | ||||||
|
Credit facility borrowing |
- | 3,000 | ||||||
|
Credit facility payment |
- | (1,139 | ) | |||||
|
Repayment of loan |
(44 | ) | (58 | ) | ||||
|
Proceeds from exercise of stock options |
1 | - | ||||||
|
Issuance of debt, net of costs |
- | 144 | ||||||
|
Net cash provided by financing activities |
4,872 | 1,931 | ||||||
|
Effect of exchange rate changes on cash |
(79 | ) | (26 | ) | ||||
|
Net increase in cash and cash equivalents |
4,227 | 233 | ||||||
|
Cash and cash equivalents at beginning of the period |
9,429 | 9,418 | ||||||
|
Cash and cash equivalents at end of the period |
$ | 13,656 | $ | 9,651 | ||||
Determine, Inc.
Billings Reconciliation
(In thousands)
(Unaudited)
|
Three Months Ended |
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|
June 30, |
June 30, |
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|
2017 |
2016 |
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|
Total revenues |
$ | 6,988 | $ | 6,492 | ||||
|
Deferred revenue: |
||||||||
|
End of period |
9,864 | 10,154 | ||||||
|
Beginning of period |
10,080 | 10,366 | ||||||
|
Change in deferred revenue |
(216 | ) | (212 | ) | ||||
|
Total billings (total revenues plus the change in deferred revenue) |
$ | 6,772 | $ | 6,280 | ||||
Determine, Inc.
Non-GAAP EBITDA Reconciliation
(In thousands)
(unaudited)
|
Three Months Ended |
||||||||
|
June 30, |
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|
2017 |
2016 |
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|
Reconciliation to non-GAAP EBITDA net loss: |
||||||||
|
Non-GAAP net loss |
$ | (952 | ) | $ | (1,285 | ) | ||
|
Interest |
439 | 366 | ||||||
|
Depreciation |
348 | 230 | ||||||
|
Income tax benefit |
(17 | ) | (70 | ) | ||||
|
Non-GAAP EBITDA net loss |
$ | (182 | ) | $ | (759 | ) | ||