UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549


FORM 8-K


CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934


Date of report (Date of earliest event reported)      April 23, 2013
 
 
 
Datawatch Corporation

(Exact Name of Registrant as Specified in Its Charter)

 
Delaware

(State or Other Jurisdiction of Incorporation)
 
 
000-19960
02-0405716
(Commission File Number)
(IRS Employer Identification No.) 
 
 
Quorum Office Park
271 Mill Road
Chelmsford, Massachusetts
01824
(Address of Principal Executive Offices) 
(Zip Code) 
 
 
(978) 441-2200

(Registrant’s Telephone Number, Including Area Code)
 

 
 
        Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see   General Instruction A.2. below):

o           Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o           Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 
 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

On April 23, 2013, the stockholders of Datawatch Corporation (“Datawatch”) approved the adoption of Datawatch’s Amended and Restated 2011 Equity Compensation and Incentive Plan (the “Amended 2011 Plan”), which amends the original 2011 Equity Compensation and Incentive Plan to increase the shares authorized for issuance under such plan by 700,000 shares to 1,489,161 shares. For a description of the material features of the Amended 2011 Plan, please refer to Datawatch’s Definitive Proxy Statement on Schedule 14A for the Annual Meeting of the Stockholders held on April 23, 2013, a copy of which was filed with the Securities and Exchange Commission on January 28, 2013 (File No. 000-19960) and is incorporated herein by reference.

 

Item 2.02. Results of Operations and Financial Condition

 

On April 25, 2013, Datawatch issued a press release reporting its financial results for its quarter ended March 31, 2013 . A copy of the press release is attached as Exhibit 99.1 to this report and is incorporated herein by reference.

 

The information contained in this Item 2.02, including in Exhibit 99.1 attached hereto and incorporated herein by reference, is intended to be furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained herein and in the accompanying exhibits shall not be incorporated by reference into any filing with the U.S. Securities and Exchange Commission made by Datawatch, whether made before or after the date hereof, regardless of any general incorporation language in such filings.

 

Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

 

Appointment of CFO

 

On April 23, 2013, James Eliason was appointed as Datawatch’s Chief Financial Officer, Treasurer, Secretary and Vice President of Finance. The selection of Mr. Eliason to serve in such capacities was not pursuant to any arrangement or understanding with respect to any other person. In addition, there are no family relationships between Mr. Eliason and any director or other executive officer of Datawatch and there are no related persons transactions between Datawatch and Mr. Eliason reportable under Item 404(a) of Regulation S-K.

 

Mr. Eliason, age 46, brings 20 years of financial and operational experience to the Datawatch leadership team, including corporate finance, investor relations, sales operations, mergers and acquisitions, human resources and information technology. Most recently, beginning in 2011, he served as CFO of Qvidian Corporation, a venture-backed software company that provides cloud-based sales enablement applications. From 2008 to 2011, he served as CFO of Desktone, Inc., a SaaS software company that provides a desktop cloud enablement platform. From 2004 to 2008, he served as CFO of Empirix, Inc., a high growth technology company that provides tools for voice and data applications. Earlier in his career, he held senior finance positions with Narad Networks, Inc. and Silverstream Software, Inc.

 

 
 

 

Pursuant to the terms of an offer letter made by Datawatch to Mr. Eliason, Mr. Eliason will be employed by Datawatch on an at-will basis and will receive an annualized salary of $275,000. In connection with his appointment on April 23, 2013, Datawatch’s Compensation and Stock Committee granted Mr. Eliason a one-time award of 75,000 restricted stock units for shares of Datawatch’s common stock (“RSUs”), such award to vest annually over a period of three years beginning April 23, 2013, subject to the further vesting condition that the price at which Datawatch’s common stock trades on a national stock exchange must exceed $17.50 per share for twenty consecutive days on or prior to April 23, 2016. Mr. Eliason will additionally be eligible for a target cash bonus of $75,000 under Datawatch’s fiscal 2013 Corporate Officers Compensation Plan, based on whether Datawatch fiscal 2013 financial plan goals for revenue and net income are met. As an employee of Datawatch, Mr. Eliason will also be eligible to participate in the benefits offered to Datawatch’s employees generally, including medical and dental coverage, life and long-term disability insurance, and Datawatch’s 401(k) profit sharing plan.

 

On April 23, 2013, Datawatch issued a press release regarding Mr. Eliason’s appointment as Chief Financial Officer. The press release is attached as Exhibit 99.2 to this report and is incorporated herein by reference.

 

On April 23, 2013, Datawatch entered into an executive severance agreement with Mr. Eliason (the “Agreement”). The Agreement provides that in the event Datawatch or a successor to Datawatch following a change of control terminates Mr. Eliason’s employment for reasons other than for “Cause” or Mr. Eliason elects to terminate his employment with Datawatch for “Good Reason,” Mr. Eliason is entitled to severance payments equal in the aggregate to his then current annual base salary, payable on a monthly basis for six months following his termination date. In addition, Mr. Eliason would be entitled to payments of monthly premiums for group medical and dental coverage for eighteen months following such a termination.

 

“Cause” is defined in the Agreement as (i) the willful and continuing failure or refusal to render services in accordance with his obligations, (ii) gross negligence, dishonesty, or breach of fiduciary duty, (iii) fraud, embezzlement or substantial disregard of the rules or policies of Datawatch, (iv) acts which have or could reasonably be expected to generate significant adverse publicity toward Datawatch, (v) conviction for, or plea of guilty or no contest to, the commission of a felony, or (vi) material breach of the terms of the Proprietary Information and Inventions Agreement between Datawatch and Mr. Eliason. “Good Reason” is defined in the Agreement as including a material diminution in the nature or scope of such officer’s responsibilities, duties or authority, a material diminution in annual salary rate or a material change in geographic location where Mr. Eliason is required to perform services or is principally employed. As a condition to the receipt by Mr. Eliason of any payment or benefit under the Agreement, Mr. Eliason must first execute a valid, binding and irrevocable general release in favor of Datawatch and in a form reasonably acceptable to Datawatch, and must be in compliance with the terms of his Proprietary Information, Inventions and Non-Competition Agreement with Datawatch.

 

A copy of the Agreement is attached hereto as Exhibit 10.1 and is incorporated herein by reference. The description of the Agreement contained in this Current Report on Form 8-K is qualified in its entirety by reference to such document.

 

 
 

 

Equity Awards

 

Effective upon stockholder approval of the Amended 2011 Plan on April 23, 2013, Datawatch granted under the Amended 2011 Plan to certain named executive officers of Datawatch, as follows:

 

An award of 30,000 RSUs was granted to Michael A. Morrison, such award to vest annually over a period of three years beginning January 17, 2015, subject to the further vesting condition that the price at which the Common Stock trades on a national stock exchange must exceed $17.50 per share for twenty consecutive days on or prior to January 17, 2018;

 

An award of options to purchase 75,000 shares of Datawatch common stock at an exercise price of $12.915 per share was granted to Mr. Morrison, such award to vest quarterly over a period of three years beginning January 17, 2013; and

 

An award 7,500 RSUs was granted to Daniel Incropera, such award to vest annually over a period of three years beginning January 17, 2013, subject to the further vesting condition that the price at which the Common Stock trades on a national stock exchange must exceed $17.50 per share for twenty consecutive days on or prior to January 17, 2016.

 

Item 5.07 Submission of Matters to a Vote of Security Holders

 

The Annual Meeting of Stockholders of Datawatch was held on April 23, 2013, at which the stockholders voted on the following matters :

 

1. The election of Richard de J. Osborne, James Wood, Thomas H. Kelly, Terry W. Potter, Christopher T. Cox, David C. Mahoney and Michael A. Morrison, constituting all of the directors of Datawatch, to the Board of Directors to serve for the ensuing year or until their respective successors are duly elected and qualified;

 

2. The approval of the Amended 2011 Plan;

 

3. The approval of the compensation of Datawatch’s named executive officers through an advisory vote (“Say on Pay”);

 

4. The approval of the frequency of further advisory votes on the compensation of Datawatch’s named executive officers through an advisory vote (“Say on Frequency”); and

 

5. The ratification of the appointment of Marcum LLP, Datawatch’s independent registered public accounting firm (“Auditor Ratification”).

 

 
 

 

Votes were cast as follows:

 

Director Nominee Total Votes For Total Votes Withheld Broker Non-Votes
Richard de J. Osborne 3,941,942 2,371 2,107,469
James Wood 3,941,622 2,691 2,107,469
Thomas H. Kelly 3,941,642 2,671 2,107,469
Terry W. Potter 3,941,642 2,671 2,107,469
Christopher T. Cox 3,941,642 2,671 2,107,469
David C. Mahoney 3,938,155 6,158 2,107,469
Michael A. Morrison 3,937,875 6,438 2,107,469

 

 

Proposal Total Votes For Total Votes Against Abstentions Broker Non-Votes
Amended 2011 Plan 3,386,665 537,488 20,160 2,107,469
Say on Pay 3,875,763 44,908 23,642 2,107,469
Auditor Ratification 6,045,990 1,884 3,908 0

 

Proposal One Year Two Years Three Years: Abstentions Broker Non-Votes
Say on Frequency 661,012 41,357 3,216,931 25,013 2,107,469

 

Consistent with the preference expressed by a majority of Datawatch’s stockholders in the Say on Frequency vote, the Board of Directors determined that it will hold a Say on Pay vote every three years until the next Say on Frequency vote, which will occur no later than Datawatch’s annual meeting of stockholders in 2019.

 

Item 9.01 Financial Statements and Exhibits

 

(d)    Exhibits

 

The following Exhibit is furnished as part of this report:

 

Exhibit No.       Description

 

10.1 Letter Agreement by and between the Company and James Eliason, dated April 23, 2013.

 

99.1 Press release issued by Datawatch Corporation, dated April 25, 2013.

 

99.2 Press release issued by Datawatch Corporation, dated April 23, 2013.

 

 
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

DATAWATCH CORPORATION

 

 

 

 

By: /s/ James Eliason                         

Name: James Eliason

Title: Chief Financial Officer

 

 

Date: April 25, 2013

 

 
 

 

EXHIBIT INDEX

 

Exhibit No.       Description

 

10.1 Letter Agreement by and between the Company and James Eliason, dated April 23, 2013.

 

99.1 Press release issued by Datawatch Corporation, dated April 25, 2013.

 

99.2 Press release issued by Datawatch Corporation, dated April 23, 2013.

 

 

April 23, 2013

 

 

Mr. James Eliason

3 Karen Drive

Bedford, MA 01730

 

Dear James:

 

The purpose of this letter is to memorialize the terms of your eligibility for severance with Datawatch Corporation (“the Company”) in the event that you are involuntarily terminated by the Company or a successor to the Company after a Change of Control as defined in the March 6, 2013 offer letter (“Offer Letter”), in either case without Cause (as defined in Paragraph 3) or if you terminate your employment with the Company for Good Reason (as defined in Paragraph 2).

 

1.         As an at-will employee, either you or the Company may terminate your employment at any time for any or no reason with or without notice. Neither this letter nor its terms constitute a contract for continued employment or a contract for a specific term of employment. Instead, this letter sets forth the terms of our agreement with respect to your eligibility for severance.

 

2.         In the event that you voluntarily terminate your employment with the Company at your own election and without Good Reason, you shall be entitled to no severance. For the purpose of this Agreement, “Good Reason” is defined as (a) a material diminution in the nature or scope of your responsibilities, duties or authority; provided, however, that the transfer of certain job responsibilities, or the assignment to others of your duties and responsibilities while you are out of work due to a disability or on a leave of absence for any reason, shall not constitute a material diminution in the nature or scope of the your responsibilities, duties or authority as set forth in this Section; (b) a material diminution in your annual salary rate; or (c) a material change in the geographic location where you are required to perform services or at which are principally employed.

 

3.         In the event that the Company terminates your employment for “Cause,” you shall be entitled to no severance. Termination by the Company shall constitute a termination for Cause under this Paragraph 3 if such termination is for one or more of the following reasons:

 

(a) the willful and continuing failure or refusal by you to render services to the Company in accordance with your obligations to the Company within thirty (30) days after receipt by you of written notice from the Company of such failure or refusal by you to render services in accordance with your obligations to the Company;

 

 
 

 

 

(b) gross negligence, dishonesty, breach of fiduciary duty or material breach of the terms of any other agreements executed in connection herewith;

 

(c) the commission by you of an act of fraud, embezzlement or substantial disregard of the rules or policies of the Company;

 

(d) acts which, in the judgment of the Board of Directors, have generated or could reasonably be expected to generate significant adverse publicity toward the Company;

 

(e) your conviction for the commission of a felony, or any plea by you of guilty or nolo contendere , to the charge of a felony; or

 

(f) a material breach by you of the terms of the Proprietary Information, Inventions and Non-Competition Agreement executed by you.

 

4.         In the event that the Company terminates your employment for any reason other than those stated in Paragraph 3 above or if you terminate your employment for Good Reason as defined in Paragraph 2, and you sign a comprehensive release in the form, and of a scope, acceptable to the Company (the “Release”), the Company will pay you severance payments in equal monthly installments at your then monthly base salary for six months following your termination (the “Severance Period”). Such payments shall be made in accordance with the Company’s customary payroll practices and shall be subject to all applicable federal and state withholding, payroll and other taxes.

 

For the duration of the Severance Period and for a period of twelve (12) months thereafter, the Company shall also pay to you a taxable monthly payment (the “Taxable Payments”) in an amount equal to the Company’s share of your monthly premium for group medical and dental coverage that is in effect immediately prior to termination of your employment. For the avoidance of doubt, the Taxable Payments may be used by you for any purpose, including, but not limited to continuation of your medical and dental coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), for which you shall be eligible immediately following termination of your employment, subject to the terms and conditions applicable to COBRA coverage.

 

If you breach your post-employment obligations under your Proprietary Information Inventions and Non-Competition Agreement, the Company may immediately cease payment of all severance and/or benefits described in this Agreement. This cessation of severance and/or benefits shall be in addition to, and not as an alternative to, any other remedies in law or in equity available to the Company, including the right to seek specific performance or an injunction.

 

5.         The terms of this agreement, along with the Offer Letter constitute the entire understanding relating to your employment and supersede and cancel all agreements, written or oral, made prior to the date hereof between you and the Company relating to your employment with the Company; provided, however, that nothing herein shall be deemed to limit or terminate the provisions of Proprietary Information, Inventions and Non-Competition Agreement executed by you or in any manner alter the terms of any Restricted Stock Unit Agreement entered into between you and the Company.

 

 
 

 

6.         This Agreement, the employment relationship contemplated herein and any claim arising from such relationship, whether or not arising under this Agreement, shall be governed by and construed in accordance with the internal laws of Massachusetts, without giving effect to the principles of choice of law or conflicts of law of Massachusetts and this Agreement shall be deemed to be performable in Massachusetts. Any claims or legal actions by one party against the other arising out of the relationship between the parties contemplated herein (whether or not arising under this Agreement) shall be commenced or maintained in any state or federal court located in Massachusetts, and Executive hereby submits to the jurisdiction and venue of any such court.

 

7.         No waiver by either party of any breach by the other or any provision hereof shall be deemed to be a waiver of any later or other breach thereof or as a waiver of any other provision of this Agreement. This Agreement and its terms may not be waived, changed, discharged or terminated orally or by any course of dealing between the parties, but only by an instrument in writing signed by the party against whom any waiver, change, discharge or termination is sought. No modification or waiver by the Company shall be effective without the consent of the Board of Directors then in office at the time of such modification or waiver.

 

8.      You acknowledge that the services to be rendered by you to the Company are unique and personal in nature. Accordingly, you may not assign any of your rights or delegate any of your duties or obligations under this Agreement. The rights and obligations of the Company under this Agreement may be assigned by the Company and shall inure to the benefit of, and shall be binding upon, the successors and assigns of the Company.

 

[ Remainder of page intentionally left blank. ]

 

 
 

 

 

If this letter correctly states the understanding we have reached, please indicate your acceptance by countersigning the enclosed copy and returning it to me.

 

 

Very truly yours,

 

DATAWATCH CORPORATION

 

 

 

/s/ Michael A. Morrison

Michael A. Morrison

Chief Executive Officer

 

 

YOU REPRESENT THAT YOU HAVE READ THE FOREGOING AGREEMENT, THAT YOU FULLY UNDERSTAND THE TERMS AND CONDITIONS OF SUCH AGREEMENT AND THAT YOU ARE VOLUNTARILY EXECUTING THE SAME.

 

ACCEPTED:

 

 

 

/s/ James Eliason                        April 23, 2013

James Eliason                                   Date

 

 

 

DATAWATCH ANNOUNCES FISCAL SECOND QUARTER 2013 FINANCIAL RESULTS

 

Seventh Consecutive Quarter of Year-Over-Year Growth

 

Chelmsford, Mass.—April 25, 2013— Datawatch Corporation (NASDAQ-CM: DWCH), the leading global provider of information optimization solutions, today announced that total revenue for its second quarter ended March 31, 2013 was $6.83 million, an increase of 4% from revenue of $6.55 million in the second quarter a year ago. License revenue for the second quarter of fiscal 2013 was $4.30 million, an increase of 1% from the $4.27 million recorded in the comparable quarter a year ago. Net loss for the second quarter of fiscal 2013 was $626,000, or ($0.10) per diluted share, compared to net income of $160,000, or $0.02 per diluted share, for the year ago period. Excluding the effects of the non-cash amortization associated with the purchase of the Monarch intellectual property in March 2012 as well as non-cash stock compensation costs, the Company’s non–GAAP net income for its second fiscal quarter of 2013 was $390,000, or $0.06 per diluted share, compared to $354,000, or $0.05 per diluted share in the second fiscal quarter of 2012.

“In the second quarter we continued to see proof that the strategic initiatives and operational changes we put in place over the past year are having a positive impact on our market credibility and our pipelines,” said Michael A. Morrison, President and Chief Executive Officer of Datawatch. “The market acceptance of our industry changing Information Optimization solutions coupled with the expanding marketing alliances has resulted in a steady growth of larger enterprise-wide opportunities. While we are pleased to be engaged in these types of opportunities, they are more complex and often have longer sales cycles. However, looking forward, we are fully prepared to execute on these opportunities and we anticipate a steady improvement in both close rates and deal sizes throughout the remainder of the year.”

 

Mr. Morrison added, “Of particular note is the level of activity we are seeing in our partner recruitment and enablement initiatives. We added eighteen new partners this quarter, once again expanding our domain and channel capacity globally. Even more importantly, we began to see our partners make a meaningful contribution to our pipeline and to the growth of our solutions strategy. We executed coordinated marketing programs with several of our new partners this past quarter, and these programs have yielded some very interesting opportunities. We are encouraged by the progress we are making here and believe our expanding partner ecosystem will be a catalyst for our growth over the remainder of the year and well into the future.”

 

Second Quarter Business Highlights

Datawatch expanded its partner channel by adding 18 new partners globally, including new partnerships with MarkLogic, the enterprise NoSQL platform for Big Data applications; BI Inform, a business intelligence service provider specializing in IBM Cognos solutions; John Daniels Associates, a performance management solution provider specializing in QlikTech and IBM Cognos solutions; ASTA Systems LTD, a Big Data service provider in Hong Kong; and PT Mitrasoft, an IT solution provider in Indonesia.

 

 
 

 

Datawatch replaced ASG DocuAnalyzer at three Fortune 100 companies, two major global financial institutions and one health insurance provider, resulting in three significant six-figure transactions.
Datawatch released Datawatch Data Pump 11.6, which features support for Hadoop and Hive to deliver Big Data support.
Datawatch launched the Datawatch Unstructured Data Connector for QlikView on the QlikTech QlikMarket, further solidifying the partnership announced in late 2012.

Second Quarter Financial Highlights

Cash and short-term investments were $9.68 million at March 31, 2013, up 8% from $8.94 million at December 31, 2012 and up 37% from $7.06 million at March 31, 2012.
Gross margin for the second fiscal quarter of 2013 was 84.0%, compared to 84.6% for the first fiscal quarter of 2013 and 79.5% for the second fiscal quarter of 2012.
Days sales outstanding were 57 days at March 31, 2013, compared to 61 days at December 31, 2012 and 61 days at March 31, 2012.
There were 5 six-figure deals in the second fiscal quarter, as compared to 4 six-figure deals in the second fiscal quarter of 2012.
The average deal size in the second fiscal quarter was $86,000, as compared to $70,000 in the second fiscal quarter of 2012.

Subsequent to the conclusion of the second quarter of 2012, Datawatch announced that James Eliason has joined the company as Chief Financial Officer effective April 23, 2013.

“Datawatch continues to execute on the business model that was implemented last year, with disciplined investment targeted to accelerate revenue growth and strong cash management. In the fiscal second quarter of 2013, we added nearly $800,000 to Datawatch’s cash balances through this balanced approach. We believe we are in a solid financial position as we enter the second half of our fiscal 2013,” said Mr. Morrison.

Investor Conference Call and Webcast

The senior management of Datawatch will host a conference call and webcast to discuss the second quarter results this afternoon, Thursday, April 25, 2013 at 4:30 pm ET. To access the call, please dial 1-877-407-0782. Internationally, the call may be accessed by dialing 1-201-689-8567. The conference call will be broadcast live on the Internet at: http://www.investorcalendar.com/IC/CEPage.asp?ID=170724. It is recommended that listeners register to participate and download any necessary audio software from the website 15 minutes prior to the scheduled call. The webcast will be available as a replay starting one hour after the call is completed at the same location.

ABOUT DATAWATCH CORPORATION

Datawatch Corporation (NASDAQ-CM: DWCH) is a leader in providing information optimization products and solutions that allow organizations to deliver the greatest data variety possible into their big data and analytic applications. Datawatch provides organizations the ability to integrate structured, unstructured, and semi-structured sources like reports, PDF files, and EDI streams into these applications to provide a 360 degree perspective of the issues and opportunities that exist in their businesses. More than 40,000 organizations worldwide use Datawatch’s products and services, including 99 of the Fortune 100, and businesses of every type can benefit from the power and flexibility of Datawatch’s industry leading solutions. Datawatch is headquartered in Chelmsford, Massachusetts with offices in London, Munich, Singapore, Sydney and Manila, and with partners and customers in more than 100 countries worldwide. For more information, visit 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, including but not limited to those relating to results of operations, 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 continuing weak global economy; risks associated with fluctuations in quarterly operating results due, among other factors, to the size and timing of large customer orders; the volatility of Datawatch’s stock price; limitations on the effectiveness of internal controls; rapid technological change; Datawatch’s dependence on the introduction of new products and possible delays in those introductions; competition in the software industry generally, and in the markets for information optimization in particular; Datawatch's dependence on its principal products, proprietary software technology and software licensed from third parties; risks associated with international sales; risks associated with indirect distribution channels; the adequacy of Datawatch’s sales returns reserve; risks associated with a subscription sales model; risks associated with acquisitions, including the recent acquisition of intellectual property from Math Strategies; Datawatch’s dependence on its ability to hire and retain skilled personnel; disruption or failure of Datawatch’s technology systems that may result from a natural disaster, cyber-attack or other catastrophic event; and uncertainty and additional costs that may result from evolving regulation of corporate governance and public disclosure. 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 Annual Report on Form 10-K for the year ended September 30, 2012 and Form 10-Q for the quarter ended December 31, 2012. Any forward-looking statements should be considered in light of those factors.

 

 

# # #

Investor Contact:

Datawatch Investor Relations

investor@datawatch.com

Phone: (978) 441-2200 ext. 8323

 

Media Contact:

Sarah Bernardi

Datawatch Corporation

Sarah_Bernardi@datawatch.com

Phone: (978) 441-2200 ext. 8387

Twitter: @datawatch

 

© 2013 Datawatch Corporation. Datawatch, Monarch and their respective logos are trademarks or registered trademarks of Datawatch Corporation in the United States and/or other countries. All other names are trademarks or registered trademarks of their respective companies.

 

 
 

 

Use of Non-GAAP Financial Information

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 that we believe are helpful in understanding our past financial performance and future results. 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. Our management regularly uses our supplemental non-GAAP financial measures internally to understand and manage our business and make operating decisions. Our non-GAAP financial measures include adjustments based on the following items, as well as the related income tax effects and adjustments to the valuation allowance:

Amortization of purchased software : We have excluded the effect of amortization of the Monarch software and related intellectual property that we acquired from Math Strategies on March 30, 2012 from our non-GAAP operating expenses and net income measures. Amortization of this purchased software resulted from a material transaction that is not likely to occur in the foreseeable future. Investors should note that the use of the purchased software will contribute to future period revenues. Amortization of the purchased software will recur in future periods.

Share-based compensation expenses : We have excluded the effect of share-based compensation expenses from our non-GAAP operating expenses and net income measures. Although share-based compensation is a key incentive offered to our employees, we continue to evaluate our business performance excluding share-based compensation expenses. Share-based compensation expenses will recur in future periods.

 

 
 

 

 DATAWATCH CORPORATION 
 Condensed Consolidated Statements of Operations 
 Amounts in Thousands (except per share data) 
 (Unaudited) 
                   
      Three Months Ended   Six Months Ended
       March 31,     March 31, 
      2013   2012   2013   2012
                   
 REVENUE:                 
   Software licenses     $      4,297    $      4,274    $      8,627    $      8,483 
   Maintenance    2,300    1,861    4,633    3,577 
   Professional services    234    412    392    758 
             Total revenue    6,831    6,547    13,652    12,818 
                   
 COSTS AND EXPENSES:                 
   Cost of software licenses     531    659    1,052    1,234 
   Cost of maintenance and services    565    684    1,095    1,352 
   Sales and marketing    4,218    2,996    7,994    5,797 
   Engineering and product development    749    690    1,602    1,318 
   General and administrative    1,246    1,213    2,437    2,180 
             Total costs and expenses    7,309    6,242    14,180    11,881 
                   
 (LOSS) INCOME FROM OPERATIONS    (478)   305    (528)   937 
 Other expense    (154)   (118)   (317)   (109)
                   
 (LOSS) INCOME BEFORE INCOME TAXES    (632)   187    (845)   828 
 Income tax (benefit) provision    (6)   27      65 
                   
 NET (LOSS) INCOME    $        (626)   $         160    $        (848)   $         763 
                   
                   
 Net (loss) income per share - Basic    $       (0.10)   $        0.03    $       (0.13)   $        0.12 
                   
 Net (loss) income per share - Diluted    $       (0.10)   $        0.02    $       (0.13)   $        0.12 
                   
 Weighted Average Shares Outstanding - Basic    6,428    6,221    6,403    6,192 
                   
 Weighted Average Shares Outstanding - Diluted    6,428    6,677    6,403    6,555 
                   
                   
 Non-GAAP Disclosure - Reconciliation of Net (Loss) Income to Net Income Excluding the Effects of Certain Items: 
                   
 GAAP Net (Loss) Income    $         (626)   $            160    $         (848)   $            763 
    Add-back Amortization of Monarch IP     431      862   
    Add-back Share-Based Compensation    585    185    1,162    333 
                   
 Net income (non-GAAP)    $        390    $        354    $     1,176    $     1,105 
                   
 Net income per share - Basic    $       0.06    $       0.06    $       0.18    $       0.18 
                   
 Net income per share - Diluted    $       0.06    $       0.05    $       0.17    $       0.17 
                   
 Weighted Average Shares Outstanding - Basic    6,428    6,221    6,403    6,192 
                   
 Weighted Average Shares Outstanding - Diluted    6,841    6,677    6,869    6,555 

 

 
 

 

 

DATAWATCH CORPORATION
 Condensed Consolidated Balance Sheets 
 Amounts in Thousands  
 (Unaudited) 
           
           
   March 31,     September 30, 
  2013   2012
           
 Cash and cash equivalents   $  9,680    $  8,722
 Accounts receivable, net    4,142     4,391
 Prepaid expenses and other current assets    988     591
           Total current assets    14,810     13,704
           
 Property and equipment, net    288     281
 Intangible and other assets, net    7,899     8,820
           
   $  22,997    $  22,805
           
           
 Current portion of long-term debt   $  900    $  900
 Accounts payable and accrued expenses    2,358     2,468
 Deferred revenue - current portion    6,114     6,295
           Total current liabilities    9,372     9,663
           
 Note payable    3,062     2,983
 Other long-term liabilities    441     465
           Total long-term liabilities    3,503     3,448
           
           Total shareholders' equity    10,122     9,694
           
   $  22,997    $  22,805

 

 

 

 

DATAWATCH NAMES JAMES ELIASON CHIEF FINANCIAL OFFICER

 

Appointment Rounds Out Executive Management Team

 

Chelmsford, Mass.—April 23, 2013— Datawatch Corporation (NASDAQ-CM: DWCH), the leading global provider of information optimization solutions, today announced the appointment of James Eliason as Chief Financial Officer and Treasurer. In his new role, Mr. Eliason will lead all aspects of the company’s financial strategy and operations.

 

“Jim’s financial management and operational expertise with high-growth software companies is a pivotal asset for Datawatch at a time when we are focused upon driving continued top line growth in front of a huge market opportunity,” said Michael A. Morrison, President and Chief Executive Officer of Datawatch. “Jim shares not only our passion for performance-driven success but also our commitment to help our clients through the deployment of innovative information optimization solutions. His appointment solidifies Datawatch’s executive management team and we are confident that his contributions will enable us to accelerate our strategic growth initiatives in the years ahead.”

 

Jim brings 20 years of financial and operational experience to the Datawatch leadership team, including corporate finance, investor relations, sales operations, mergers and acquisitions, human resources and information technology. Most recently he served as CFO of Qvidian Corporation, an enterprise software company that provides cloud-based sales enablement and analytics applications. From 2008 to 2011, he served as CFO of Desktone, Inc., a SaaS software company that provides a desktop cloud enablement platform. From 2004 to 2008, he served as CFO of Empirix, Inc., a high growth technology company that provides analytic tools for voice and data applications. Earlier in his career, he held senior finance positions with Narad Networks, Inc. and Silverstream Software, Inc. Jim spent four years at Arthur Anderson & Company in the audit practice and has been a certified public accountant.

 

“Datawatch is in a tremendous position in a rapidly expanding marketplace as a result of its business transition over the past two years, and it has already achieved impressive growth in the most recent fiscal year," said Mr. Eliason. “As CFO, I look forward to helping the team reach for greater success by providing the operational structure to enable us to take full advantage of our unique information optimization solution, to strengthen our financial foundation and to enhance the company’s long-term value.”

 

Jim holds a B.S. in Accounting from Providence College and an M.B.A. in Finance from Bentley College.

 

 

ABOUT DATAWATCH CORPORATION

Datawatch Corporation (NASDAQCM: DWCH) is a leader in providing information optimization products and solutions that allow organizations to deliver the greatest data variety possible into their big data and analytic applications. Datawatch provides organizations the ability to integrate structured, unstructured, and semi-structured sources like reports, PDF files, and EDI streams into

 

 
 

 

these applications to provide a 360 degree perspective of the issues and opportunities that exist in their businesses. More than 40,000 organizations worldwide use Datawatch’s products and services, including 99 of the Fortune 100, and businesses of every type can benefit from the power and flexibility of Datawatch’s industry leading solutions. Datawatch is headquartered in Chelmsford, Massachusetts with offices in London, Munich, Singapore, Sydney and Manila, and with partners and customers in more than 100 countries worldwide. For more information, visit 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, including but not limited to those relating to results of operations, 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 continuing weak global economy; risks associated with fluctuations in quarterly operating results due, among other factors, to the size and timing of large customer orders; the volatility of Datawatch’s stock price; limitations on the effectiveness of internal controls; rapid technological change; Datawatch’s dependence on the introduction of new products and possible delays in those introductions; competition in the software industry generally, and in the markets for information optimization in particular; Datawatch's dependence on its principal products, proprietary software technology and software licensed from third parties; risks associated with international sales; risks associated with indirect distribution channels; the adequacy of Datawatch’s sales returns reserve; risks associated with a subscription sales model; risks associated with acquisitions, including the recent acquisition of intellectual property from Math Strategies; Datawatch’s dependence on its ability to hire and retain skilled personnel; disruption or failure of Datawatch’s technology systems that may result from a natural disaster, cyber-attack or other catastrophic event; and uncertainty and additional costs that may result from evolving regulation of corporate governance and public disclosure. 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 Annual Report on Form 10-K for the year ended September 30, 2012 and Form 10-Q for the quarter ending December 31, 2012. Any forward-looking statements should be considered in light of those factors.

 

# # #

 

Investor Contact:

Datawatch Investor Relations

investor@datawatch.com

Phone: (978) 441-2200 ext. 8323

 

Media Contact:

Sarah Bernardi

Datawatch Corporation

Sarah_Bernardi@datawatch.com

Phone: (978) 441-2200 ext. 8387

Twitter: @datawatch

 

 

© 2013 Datawatch Corporation. Datawatch, Monarch and their respective logos are trademarks or registered trademarks of Datawatch Corporation in the United States and/or other countries. All other names are trademarks or registered trademarks of their respective companies.