Form 6-K ATTUNITY LTD For: Feb 02

---

99.1	Press Release, February 2, 2017: ATTUNITY REPORTS FOURTH QUARTER AND FULL YEAR 2016 RESULTS

---

Exhibit 99.1

"The fourth quarter delivered solid financial results, including 22% increase of revenue, compared to the same period in 2015, and positive cash flow. This growth was driven by several new customer engagements closed during the quarter, including two that are valued at more than $1 million each. These agreements represent just a portion of the demand that we believe exists in the market for our data integration solutions supporting customers' Hadoop and data lake environments," said Shimon Alon, Chairman and CEO of Attunity.

"In 2016, license revenue contributed from larger customer deals more than tripled to approximately $8 million, compared with $2.5 million for 2015. Being consistently selected by new, large global customers demonstrates our leadership position and growing market share. In addition, we believe these customers represent significant expansion opportunities to further grow future revenues. Considering this trend, we believe our addressable market is larger than a year ago and will only continue to grow, as the need for real-time Big Data analytics continues to play an increasingly important role for our target customers across the globe."

Recent Operational Highlights

Financial Highlights for Q4 2016, compared with Q4 2015

Financial Highlights for FY 2016, compared with FY 2015

Total revenue for the fourth quarter of 2016 increased 22% to $15.6 million, compared with $12.8 million for the same period in 2015. This includes license revenue of $8.8 million, which increased 21% compared with $7.2 million for the same period in 2015, and maintenance and service revenue, which grew 22% to $6.8 million, compared with $5.6 million for the same period in 2015.

Non-GAAP operating income was $1.6 million for the fourth quarter of 2016, compared with operating income of $0.5 million for the fourth quarter of 2015. Non-GAAP operating income for the fourth quarter of 2016 excludes a total of $1.4 million in expenses and amortization associated with acquisitions and equity-based compensation expenses. This is compared with (1) $2.3 million in adjustments, expenses and amortization associated with acquisitions and equity-based compensation expenses, and (2) a one-time gain of $1.9 million for the previously accrued earn-out  payment to former Appfluent shareholders, as a result of Appfluent not meeting estimated earn-out milestones, for the same period in 2015.*

Net loss for the fourth quarter of 2016 was $0.2 million, or ($0.01) per diluted share, compared with a net income of $0.4 million, or $0.02 per diluted share, in the fourth quarter of 2015.

Operating expenses for 2016 increased 30% to $65.9 million, compared with $50.7 million in 2015. The increase in operating expenses is primarily due to (1) an approximately $4.1 million charge for partial impairment of acquired intangible assets associated with the Appfluent acquisition, (2) a one-time gain of $1.9 million recorded in 2015 for the previously accrued earn-out  payment to former Appfluent shareholders, (3) an increase of $5.7 million in selling and marketing expenses primarily as a result of (i) increased headcount in sales and marketing teams, including new hires of sales engineers to support the sales process of larger scale and enterprise-wide implementations, and (ii) increased commissions due to higher revenues, (4) an increase of $2.2 million in R&D costs primarily due to new hires and salary updates, and (5) an increase of $1.5 million in cost of revenues due to an increase in professional services and support personnel.

Non-GAAP operating expenses for 2016 increased 21% to $54.6 million, compared with $45.2 million for 2015. The Non-GAAP operating expenses for 2016 exclude an approximately a total of $11.2 million in expenses and amortization associated with acquisitions, impairment charges and equity-based compensation expenses, compared with (1) $7.5 million in expenses and amortization associated with acquisitions, equity-based compensation expenses, and (2) a one-time gain of $1.9 million for the previously accrued earn-out payment to former Appfluent shareholders in 2015.*

		From				To
GAAP Operating Loss Margin			(3	)%			0	%
Equity-based compensation			(6	)%			(6	)%
Amortization and other adjustments – related acquisitions			(2	)%			(2	)%
Non-GAAP Operating Profit margin (1)			5	%			8	%

(1) Non-GAAP Operating Profit Margin is calculated by dividing the non-GAAP Operating Profit by the total non-GAAP revenues for the period.

These estimates for 2017 reflect the Company's current and preliminary views, which is subject to change (see below under "Safe Harbor Statement"). The Company clarified that it does not expect to provide or update guidance more often than on an annual basis.

 

 

 

 

This press release contains forward-looking statements, including statements regarding the anticipated features and benefits of Replicate Solutions, within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and other Federal Securities laws. Statements preceded by, followed by, or that otherwise include the words "believes", "expects", "anticipates", "intends", "estimates", "plans", and similar expressions or future or conditional verbs such as "will", "should", "would", "may" and "could" are generally forward-looking in nature and not historical facts. For example, when we say that we are on the right path towards driving solid long-term growth or when we provide our outlook for 2017, we are using forward-looking statements. In addition, announced results for the fourth quarter and full year ended December 31, 2016 are preliminary, unaudited and subject to audit adjustment. Because such statements deal with future events, they are subject to various risks and uncertainties and actual results, expressed or implied by such forward-looking statements, could differ materially from Attunity's current expectations. Factors that could cause or contribute to such differences include, but are not limited to, risks and uncertainties relating to: our history of operating losses and ability to achieve profitability; our reliance on strategic relationships with our distributors, OEM, VAR and "go-to-market" and other business partners, and on our other significant customers; our ability to manage our growth effectively; acquisitions, including costs and difficulties related to integration of acquired businesses and possible impairment charges; our ability to expand our business into the SAP market and the success of our Gold Client offering; timely availability and customer acceptance of Attunity's new and existing products, including Attunity Compose and Attunity Visibility; fluctuations in our quarterly operating results, which may not necessarily be indicative of future periods; changes in the competitive landscape, including new competitors or the impact of competitive pricing and products; a shift in demand for products such as Attunity's products; the impact on revenues of economic and political uncertainties and weaknesses in various regions of the world, including the commencement or escalation of hostilities or acts of terrorism as well as cyber-attacks; and other factors and risks on which Attunity may have little or no control. This list is intended to identify only certain of the principal factors that could cause actual results to differ. For a more detailed description of the risks and uncertainties affecting Attunity, reference is made to Attunity's latest Annual Report on Form 20-F which is on file with the Securities and Exchange Commission (SEC) and the other risk factors discussed from time to time by Attunity in reports filed with, or furnished to, the SEC. Except as otherwise required by law, Attunity undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

 

	Page
Condensed Consolidated Balance Sheets	2-3
Condensed Consolidated Statements of Operations	4
Consolidated Statements of Cash Flows	5
Reconciliation of Supplemental Non-GAAP financial Information	6-7

CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
		December 31,				December 31,
		2016				2015
		Unaudited				Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	9,166			$	12,522
Trade receivables (net of allowance for doubtful accounts of $15 at December 31, 2016 and December 31, 2015 )			7,031				4,524
Other accounts receivable and prepaid expenses			663				639
Total current assets			16,860				17,685
LONG-TERM ASSETS:
Other assets			2,403				584
Severance pay fund			3,770				3,513
Property and equipment, net			1,214				1,260
Intangible assets, net			2,778				9,272
Goodwill			30,929				30,844
Total long-term assets			41,094				45,473
Total assets		$	57,954			$	63,158

CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands, except share and per share data
		December 31,				December 31,
		2016				2015
		Unaudited				Unaudited
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables		$	375			$	664
Payment obligation related to acquisitions			271				2,204
Deferred revenues			10,676				9,354
Employees and payroll accruals			4,741				4,012
Accrued expenses and other current liabilities			2,021				1,248
Total current liabilities			18,084				17,482
LONG-TERM LIABILITIES:
Other liabilities			277				318
Deferred revenues			1,438				1,348
Liability presented at fair value			512				719
Payment obligation related to acquisitions			-				254
Accrued severance pay			5,027				4,746
Total long-term liabilities			7,254				7,385
SHAREHOLDERS' EQUITY:
Share capital - Ordinary shares of NIS 0.4 par value -			1,921				1,876
Authorized: 32,500,000 shares at December 31, 2016 and December 31, 2015; Issued and outstanding: 16,841,238 shares at December 31, 2016 and 16,406,243 shares at December 31, 2015
Additional paid-in capital			149,685				144,836
Accumulated other comprehensive loss			(1,013	)			(1,137	)
Accumulated deficit			(117,977	)			(107,284	)
Total shareholders' equity			32,616				38,291
Total liabilities and shareholders' equity		$	57,954			$	63,158

CONDENSED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except share and per share data
		Three months ended								Year ended
		December 31,								December 31,
		2016				2015				2016				2015
		Unaudited								Unaudited
Revenues:
Software licenses			8,791				7,240				28,653				26,568
Maintenance and services			6,779				5,574				25,841				21,600
Total revenue			15,570				12,814				54,494				48,168
Operating expenses:
Cost of revenues			2,109				2,123				8,780				7,278
Research and development			3,207				3,156				13,283				11,139
Selling and marketing			9,065				6,235				35,089				27,381
General and administrative			993				1,070				4,594				4,857
Impairment of acquisition-related intangible assets			-				-				4,122				-
Total operating expenses			15,374				12,584				65,868				50,655
Operating (loss) income			196				230				(11,374	)			(2,487	)
Financial (expenses) income, net			(59	)			168				(54	)			(576	)
Income (loss) before income taxes			137				398				(11,428	)			(3,063	)
Income tax benefit (taxes on income)			(382	)			25				735				(546	)
Net (loss) profit			(245	)			423				(10,693	)			(3,609	)
Basic and diluted net (loss) income per share			(0.01	)			0.03				(0.64	)			(0.22	)
Weighted average number of shares used in computing basic net (loss) income per share			16,818				16,503				16,739				16,183
Diluted net income (loss) income per share			(0.01	)			0.02				(0.64	)			(0.22	)
Weighted average number of shares used in computing diluted net (loss) income per share			16,818				17,123				16,739				16,183

CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
		Year ended December 31,
		2016				2015
		Unaudited
Cash  flows  activities:
Net loss			(10,693	)			(3,609	)
Adjustments required to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation			493				411
Stock based compensation			4,250				3,329
Impairment of intangible assets			4,122				-
Amortization of  intangible assets			2,372				2,862
Accretion of payment obligation			(8	)			477
Changes in fair value of payment obligation			35				(2,067	)
Change in:
Accrued severance pay, net			24				184
Trade receivables			(2,544	)			1,512
Other accounts receivable and prepaid expenses			(29	)			(364	)
Other long term assets			14				(174	)
Trade payables			(279	)			343
Deferred revenues			1,570				2,533
Employees and payroll accruals			1,101				635
Accrued expenses and other current liabilities			594				(202	)
Liabilities presented at fair value and other long term liabilities			(185	)			(91	)
Tax benefit related to exercise of stock options			171				(218	)
Change in deferred taxes, net			(1,833	)			(641	)
Net cash provided by (used in) operating activities			(825	)			4,920
Cash flows from investing activities:
Purchase of property and equipment			(456	)			(625	)
Decrease of restricted cash			-				430
Cash paid in connection with acquisition, net of acquired cash			-				(10,402	)
Net cash used in investing activities			(456	)			(10,597	)
Cash flows from financing activities:
Proceeds from exercise of warrants and options			289				1,164
Payment of contingent consideration			(1,990	)			(2,054	)
Tax benefit related to exercise of stock options			(171	)			218
Net used in financing activities			(1,872	)			(672	)
Foreign currency translation adjustments on cash and cash equivalents			(203	)			(88	)
Decrease in cash and cash equivalents			(3,356	)			(6,437	)
Cash and cash equivalents at the beginning of the year			12,522				18,959
Cash and cash equivalents at the end of the year			9,166			$	12,522
Supplemental disclosure of cash flow activities:
Cash paid during the year for taxes			653				1,558
Supplemental disclosure of non-cash investing and financing activities:
Issuance of shares related to acquisition			224				6,600

RECONCILIATION OF SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION
U.S. dollars in thousands, except share and per share data
		Three months ended December 31,								Year ended December 31,
		2016				2015				2016				2015
		Unaudited								Unaudited
GAAP revenues			15,570				12,814				54,494				48,168
Valuation adjustment on acquired deferred service revenue			8				155				43				741
Non-GAAP revenues			15,578				12,969				54,537				48,909
GAAP cost of revenue			2,109				2,123				8,780				7,278
Amortization of acquired intangible assets			385				696				2,143				2,518
Cost of revenue adjustment (1)			26				-				148				-
Non-GAAP cost of revenue			1,698				1,427				6,489				4,760
GAAP operating expenses			15,374				12,584				65,868				50,655
Cost of revenues (1)			26				-				148				-
Research and development (1) (2)			266				362				1,210				1,028
Sales and marketing (1) (2)			448				(1,252	)			2,379				269
General and administrative (1) (2)			254				220				993				1,282
Amortization of acquired intangible assets			424				789				2,372				2,862
Impairment of acquisition-related intangible assets			-				-				4,122				-
Non-GAAP operating expenses			13,956				12,465				54,644				45,214
GAAP Financial (expense) income net			(59	)			168				(54	)			(576	)
Revaluation of liabilities presented at fair value			6				(362	)			(207	)			(187	)
Accretion of payment obligations			(6	)			96				(8	)			474
Non-GAAP Financial expense net			(59	)			(98	)			(269	)			(289	)
GAAP income tax benefit (taxes on income)			(382	)			25				735				(546	)
Tax benefits related to non-GAAP adjustments			(84	)			(449	)			(2,587	)			(1,416	)
Non-GAAP taxes on income			(466	)			(424	)			(1,852	)			(1,962	)
GAAP net (loss) profit			(245	)			423				(10,693	)			(3,609	)
Valuation adjustment on acquired deferred revenue			8				155				43				741
Amortization of acquired intangible assets			424				789				2,372				2,862
Impairment of acquisition-related intangible assets			-				-				4,122				-
Acquisition related expenses			-				(1,665	)			779				(248	)
Stock-based compensation			994				995				3,951				2,827
Revaluation of liabilities presented at fair value			6				(362	)			(207	)			(187	)
Accretion of payment obligations			(6	)			96				(8	)			474
Tax benefits related to non-GAAP adjustments			(84	)			(449	)			(2,587	)			(1,416	)
Non-GAAP net (loss) profit			1,097				(18	)			(2,228	)			1,444
GAAP diluted net income (loss) per share			(0.01	)			0.02				(0.64	)			(0.22	)
Non-GAAP diluted net income (loss) per share			0.06				(0.00	)			(0.13	)			0.09
shares used in computing GAAP diluted net income (loss) per share			16,818				17,123				16,739				16,183
shares used in computing Non-GAAP diluted net income (loss) per share			17,438				16,503				16,739				16,982

RECONCILIATION OF SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION (Cont.)

(1) Stock-based compensation expenses (*):
		Three months ended December 31,								Year Ended December 31,
		2016				2015				2016				2015
		Unaudited								Unaudited
Cost of revenues			26				-				148				-
Research and development			266				262				1,024				714
Sales and marketing			448				513				1,786				1,392
General and administrative			254				220				993				721
			994				995				3,951				2,827
(*) Retention bonus paid in Attunity shares constitute part of (2) below
(2) Acquisition related expenses:
Research and development			-				100				186				314
Sales and marketing			-				(1,765	)			593				(1,123	)
General and administrative			-				-				-				561
			-				(1,665	)			779				(248	)