CORRECTING and REPLACING -- Determine Announces Second Quarter Fiscal 2019 Financial Results

| Source: Determine, Inc. Determine, Inc.

Determine Cloud Platform Technology Continues to Attract New Customers in US and Europe and Increase Customer Migration and Expansion

CARMEL, Ind., Nov. 16, 2018 (GLOBE NEWSWIRE) -- On November 13, 2018, the Company issued a press release reporting financial results for the second fiscal quarter ended September 14, 2018. On November 15, 2018, the Company issued a new version of the release to update the presentation of two items: 1) non-GAAP EPS for the six months ended September 20, 2018 and 2) Reconciliation of Cash for the six months ended September 30, 2017.

___________________________________________________________________

CARMEL, Ind. – November 13, 2018 – Determine, Inc. (NASDAQ: DTRM), a pioneering leader in global Source-to-Pay and Enterprise Contract Lifecycle Management (ECLM) Cloud Platform solutions, announced financial results for its second quarter ended September 30th, 2018.

Q2 FY2019 GAAP Financial Highlights:

  • GAAP Revenue was $5.7 million in Q2 FY2019, compared to $6.0 million in Q1 FY19, representing a 5.1% decrease quarter-over-quarter, and compared to $6.9 million in Q2 FY2018 GAAP Revenue, representing a 16.8% decrease year-over-year.
  • GAAP gross profit percentage was 48.1% in Q2 FY2019, compared to 43.5% in Q1 FY2019, representing a 4.6 point increase quarter-over-quarter, and compared to 49.8% in Q2 FY2018, representing a 1.7 point decrease year-over-year.
  • Deferred revenues decreased to $8.0 million from $9.3 million in Q1 FY2019.
  • GAAP net loss was $3.6 million, or $0.24 per share in Q2 FY2019, compared to $4.1 million or $0.27 per share in Q1 FY2019, representing a gain of $0.03 per share quarter-over-quarter; in Q2 FY2018, the GAAP net loss was $2.7 million or $0.18 per share.
        
  (in thousands, except per share amounts)   
 GAAP Financial Measures    Q2Q1Q2ChangeChange 
 FY 2019FY 2019FY 2018 Q/Q  Y/Y 
 Revenue - total$5,734 $6,040 $6,888  (5.1%) (16.8%) 
 Revenue - recurring$5,044 $5,251 $5,545  (3.9%) (9.0%) 
 Revenue - non-recurring$690 $789 $1,343  (12.5%) (48.6%) 
 Gross profit - total$2,759 $2,627 $3,432  5.0% (19.6%) 
 Gross profit - recurring$3,115 $3,145 $3,371  (1.0%) (7.6%) 
 Gross (loss)/profit - non-recurring$(356)$(518)$61  (31.3%) (683.6%) 
 Gross margin - total 48.1% 43.5% 49.8%4.6pts(1.7pts) 
 Gross margin - recurring 61.8% 59.9% 60.8%1.9pts1.0pts 
 Gross margin - non recurring (51.6%) (65.7%) 4.5%14.1pts(56.1pts) 
 Net loss$(3,583)$(4,069)$(2,671) (11.9%) 34.1% 
 EPS$(0.24)$(0.27)$(0.18)$0.03 $(0.06) 
        

Q2 FY2019 Non-GAAP Financial Highlights:

  • Non-GAAP revenue was $5.7 million in Q2 FY2019, compared to $6.0 million in Q1 FY2019, representing a 5.1% decrease quarter-over-quarter, and compared to $6.9 million in Q2 FY2018, representing a 16.8% decrease year-over-year.
  • Non-GAAP gross profit percentage was 52.8% in Q2 FY2019, compared to 48.5% in Q1 FY2019, representing a 4.4% increase quarter-over-quarter, and 54.9% in Q2 FY2018, representing a 2.1% decrease year-over-year.
  • Non-GAAP net loss was $2.6 million in Q2 FY2019, or $0.17 per share, compared to a net loss of $2.9 million in Q1 FY2019, or $0.20 per share, representing a $0.03 increase quarter-over-quarter.  Q2 FY2018 had a non-GAAP net loss of $1.5 million or $0.10 per share, representing a $0.07 decrease year-over-year.
  • Billings decreased 25.4% to $4.5 million in Q2 FY2019 from $6.0 million in Q2 FY2019.  Billings, a non-GAAP measure, are defined as revenue plus the change in deferred revenues.
  • Non-GAAP EBITDA was a $1.5 million loss in Q2 FY2019, compared to a loss of $0.6 million in Q2 FY2018, representing a decrease of $0.9 million year-over-year.
      
  (in thousands, except per share amounts)    
 Non-GAAP Financial Measures Q2Q1Q2ChangeChange 
  FY 2019 FY 2019 FY 2018 Q/Q Y/Y 
 Revenue - total$5,734 $6,040 $6,888  (5.1%) (16.8%) 
 Revenue - recurring$5,044 $5,251 $5,545  (3.9%) (9.0%) 
 Revenue - non-recurring$690 $789 $1,343  (12.5%) (48.6%) 
 Gross profit - total$3,030 $2,929 $3,784  3.5% (19.9%) 
 Gross profit - recurring$3,372 $3,434 $3,675  (1.8%) (8.2%) 
 Gross (loss)/profit - non-recurring$(342)$(505)$109  32.3% (413.8%) 
 Gross margin - total 52.8% 48.5% 54.9% 4.4pts (2.1pts) 
 Gross margin - recurring 66.9% 65.4% 66.3% 1.5pts 0.6pts 
 Gross margin - non recurring (49.6%) (64.0%) 8.1% 14.4pts (57.7pts) 
 Net loss$(2,557)$(2,944)$(1,506) 13.2% (69.8%) 
 EPS$(0.17)$(0.20)$(0.10)$0.03 $(0.07) 
 Billings$4,468 $5,743 $5,991  (22.2%) (25.4%) 
        

“Helping companies - and entire industries - work smarter and more efficiently is the guiding principle on which Determine was founded. We are now aggressively expanding the application of those two concepts across the company as we position for increased success, most notably in our customer acquisition and management teams.

Recently, Determine announced that Gérard Dahan has taken over leadership of worldwide marketing, sales and customer management as Determine’s newly named Global Chief Revenue and Marketing Officer. This is one part of our diligence in reshaping and streamlining our ecosystem of stakeholders, roles, responsibilities, KPIs and compensation. While it’s still early in the process, the entire company is rallying around the new Sales, Marketing and Customer Management structure to support its success.

In terms of fiscal efficiency, Determine has been vigorously eliminating costs, including over $2 million in annual expenses across the board since mid-year. The company will continue to make additional cost management adjustments opportunistically.

We are continuing to efficiently and effectively deliver the Determine message to prospects and customers who seek to derive bottom-line value from our best-in-class modular Source-to-Pay and Enterprise Contract Management Solutions.”

— Patrick Stakenas, President and CEO and Director, Determine, Inc.

Determine Business Highlights:

Conference Call and Webcast: Tuesday, November 13, 2018 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=132114 
 
Replay Dial-in Information:
 
Toll-Free: 1-844-512-2921
 
Toll/International: 1-412-317-6671
 
From: 11/13/18 at 8:00 pm Eastern Time
 
To: 11/20/18 at 11:59 pm Eastern Time
 
Replay Pin Number: 13684754
 
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 gross profit is 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 is 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

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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: determine.com.

Contact

Media Relations:
Mike Mitchell
Determine, Inc.
+1.650.532.1590
pr@determine.com

  
  
Determine, Inc. 
Condensed Consolidated Statements of Operations and Comprehensive Loss 
(In thousands, except per share amounts) 
(Unaudited) 
   Three Months Ended Six Months Ended  
   9/30/2018 9/30/2017 9/30/2018 9/30/2017  
            
Revenues:          
 Recurring revenues$5,044  $5,545  $10,295  $10,845   
 Non-recurring revenues 690   1,343   1,479   3,031   
 Total revenues 5,734   6,888   11,774   13,876   
                    
Cost of revenues:                 
 Cost of recurring revenues 1,929   2,174   4,035   3,960   
 Cost of non-recurring revenues 1,046   1,282   2,353   2,799   
 Total cost of revenues 2,975   3,456   6,388   6,759   
                    
Gross profit:                 
 Recurring gross profit 3,115   3,371   6,260   6,885   
 Non-recurring gross (loss) profit (356)  61   (874)  232   
 Total gross profit 2,759   3,432   5,386   7,117   
                    
Operating expenses:                 
 Research and development 1,195   1,008   2,371   2,074   
 Sales and marketing 2,491   2,694   5,582   5,190   
 General and administrative 2,225   1,805   4,230   3,877   
 Total operating expenses 5,911   5,507   12,183   11,141   
                    
Loss from operations (3,152)  (2,075)  (6,797)  (4,024)  
                    
Other expense, net (419)  (568)  (755)  (746)  
Net loss before income tax (3,571)  (2,643)  (7,552)  (4,770)  
                    
Provision for benefit from income taxes (12)  (28)  (100)  (11)  
Net loss $(3,583) $(2,671) $(7,652) $(4,781)  
                    
Basic and diluted net loss per share$(0.24) $(0.18) $(0.50) $(0.35)  
                    
            
Determine, Inc.      
GAAP to Non-GAAP Reconciliations      
(In thousands)      
(Unaudited)      
   Three Months Ended Six Months Ended  
   9/30/2018 9/30/2017 9/30/2018 9/30/2017  
Reconciliation of total revenue:         
 U.S. GAAP as reported$5,734  $6,888  $11,774  $13,876   
Non-GAAP revenue$5,734  $6,888  $11,774  $13,876   
            
Reconciliation of gross profit:         
 U.S. GAAP as reported$2,759  $3,432  $5,386  $7,117   
 Adjustments:         
 Amortization of acquisition 250   260   503   511   
 Stock based compensation 17   92   58   121   
 Severance 4   -   12   38   
Non-GAAP gross profit$3,030  $3,784  $5,959  $7,787   
            
Reconciliation to non-GAAP net loss:         
Net loss $(3,583) $(2,671) $(7,652) $(4,781)  
Stock-based compensation expense 534   621   1,071   1,206   
Amortization on intangibles 457   542   1,000   1,074   
Severance costs 35   2   80   43   
Non-GAAP net loss$(2,557) $(1,506) $(5,501) $(2,458)  
            
Non-GAAP basic and diluted net loss per share$(0.17) $(0.10) $(0.36) $(0.18)  
            
Weighted-average shares of common stock used in computing basic and diluted net loss per share attributable to common shareholders 15,101   14,784   15,154   13,545   
            
            
Determine, Inc. 
Condensed Consolidated Statements of Operations and Comprehensive Loss 
(In thousands) 
(Unaudited) 
            
   Three Months Ended Six Months Ended  
   September 30, September 30, September 30, September 30,  
    2018   2017   2018   2017   
Statements of comprehensive loss:         
Consolidated net loss$(3,583) $(2,671) $(7,652) $(4,781)  
Foreign currency translation adjustments, net (60)  460   (457)  771   
Other comprehensive income -   103   -   (11)  
Comprehensive loss$(3,643) $(2,108) $(8,109) $(4,021)  
            
            
Determine, Inc. 
 Condensed Consolidated Balance Sheets 
(In thousands) 
            
   September 30, March 31,      
   2018 2018      
   (Unaudited) (Audited)      
 ASSETS         
 Current assets         
  Cash and cash equivalents$7,532  $9,928       
  Accounts receivable, net of allowance for doubtful accounts 3,880   6,605       
  Restricted cash 26   28       
  Prepaid expenses and other current assets 2,185   1,542       
  Total current assets 13,623   18,103       
            
 Property and equipment, net 120   90       
 Capitalized software development costs, net 3,343   2,994       
 Goodwill 15,026   15,458       
 Other intangibles, net 2,824   3,952       
 Other assets 1,646   1,467       
  Total assets$36,582  $42,064       
            
            
 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)         
 Current liabilities         
  Credit facility$13,805  $12,128       
  Accounts payable 2,453   2,371       
  Accrued payroll and related liabilities 1,950   1,986       
  Other accrued liabilities 2,749   2,239       
  Deferred revenue 7,957   9,487       
  Income tax payable 52   48       
  Total current liabilities 28,966   28,259       
            
  Long-term deferred revenue 51   84       
  Convertible note, net of debt discount 7,922   7,475       
  Other long-term liabilities 1,739   1,306       
  Total liabilities 38,678   37,124       
                
 Total stockholders' equity (deficit) (2,096)  4,940       
  Total liabilities and stockholders' equity (deficit)$36,582  $42,064       
                
                
Determine, Inc. 
 Condensed Consolidated Statements of Cash Flows 
(In thousands) 
(Unaudited) 
            
   Six Months Ended    
   September 30, 2018 September 30, 2017      
                
Operating activities             
Net loss $  (7,652) $  (4,781)      
Adjustments to reconcile net loss to net cash used in operating activities:             
             
                
 Depreciation and amortization   2,142     1,993       
 Stock-based compensation expense   1,000     1,206       
 Interest expense paid in kind as convertible note debt   447     394       
 Income tax expense (benefit)   101     13       
 Unrealized currency translation losses (gains)   199     (357)      
 Changes in assets and liabilities:             
 Accounts receivable, net   1,952     438       
 Prepaid expenses and other current assets   128     (51)      
 Other assets   60     571       
 Accounts payable   82     (272)      
 Accrued payroll and related liabilities   (36)    220       
 Other accrued liabilities and other long-term liabilities   584     187       
 Deferred revenue   (1,563)    (1,113)      
Net cash used in operating activities   (2,556)    (1,552)      
                
Investing activities             
 Purchase of property and equipment   (58)    (17)      
 Capitalized software development costs, net   (1,379)    (1,162)      
Net cash used in investing activities   (1,437)    (1,179)      
                
Financing activities             
 Credit facility borrowing   21,822     17,002       
 Credit facility payment   (20,156)    (16,893)      
 Proceeds from issuance of stock, net of issuance costs   -      4,909       
 Issuance of stock under employee stock purchase plan   72     73       
 Net employee withholding taxes paid in connection to issuance of restricted stock   (7)    (41)      
 Repayment of loan   -      (97)      
 Proceeds from exercise of stock options   -      1       
Net cash provided by financing activities   1,731     4,954       
                
 Effect of exchange rate changes on cash   (136)    102       
                
Net (decrease) increase in cash, cash equivalents and restricted cash (2,398)  2,325       
Cash, cash equivalents and restricted cash at beginning of the period   9,956     9,463       
Cash, cash equivalents and restricted cash at end of the period$  7,558  $  11,788       
                
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets:             
Cash and cash equivalents$  7,532  $  11,761       
Restricted cash   26     27       
Total cash, cash equivalents and restricted cash$  7,558  $  11,788       
                
                
Determine, Inc. 
Billings Reconciliation 
(In thousands) 
(Unaudited) 
            
   Three Months Ended Six Months Ended  
   9/30/2018 9/30/2017 9/30/2018 9/30/2017  
            
Total revenues$  5,734  $  6,888  $  11,774  $  13,876   
Deferred revenue:         
End of period   8,008     8,967     8,008     8,967   
Beginning of period   9,274     9,864     9,571     10,080   
Change in deferred revenue   (1,266)    (897)    (1,563)    (1,113)  
Total billings (total revenues plus the change in deferred revenue)$  4,468  $  5,991  $  10,211  $  12,763   
            
            
Determine, Inc. 
Non-GAAP EBITDA Reconciliation 
(In thousands) 
(unaudited) 
            
   Three Months Ended Six Months Ended  
   9/30/2018 9/30/2017 9/30/2018 9/30/2017  
Reconciliation to non-GAAP EBITDA net loss:         
Non-GAAP net loss$  (2,557) $  (1,506) $  (5,501) $  (2,458)  
Interest    459   453     794   893   
Depreciation   538   424     1,043   771   
Income tax expense (benefit)   11   27     100   10   
Non-GAAP EBITDA net loss$  (1,549) $  (602) $  (3,564) $  (784)  
            

Mot-clé

Determine DTRM enterprise contract management Patrick Stakenas Source-to-Pay Quarterly earnings