Business delivering on strategic plan and service delivery cost alignment
SAN MATEO, CA, November 11, 2015 – Determine, Inc. (NASDAQ: DTRM), a leading global provider of SaaS enterprise contract lifecycle management, strategic sourcing, supplier management, and procure-to-pay solutions, announced its Q2 FY2016 financial results.
- GAAP revenue for Q2 FY2016 was $6.8 million, compared to $5.2 million in Q2 FY2015, representing 30% year-over-year growth, and compared to $6.2M in Q1 FY2016 GAAP revenue, representing a 9% quarter-over-quarter increase.
- GAAP gross profit percentage was 52% in Q2 FY2016, compared to 26% in Q2 FY2015, representing a year-over-year 26 percentage point change, and compared to 53% in Q1 FY2016.
- GAAP net loss was ($3.4) million or ($0.32) per share in Q2 FY2016, compared to ($2.7) million or ($0.35) per share in Q2 FY2015, representing a $0.03 year-over-year improvement per share; in Q1 FY2016 the GAAP net loss was ($2.9M) or ($0.33) a $0.01 quarter-over-quarter improvement per share.
(in thousands, except
per share amounts)
|Six Months |
|FY 2015||Change |
|Revenue – total||$ 6,765||$ 6,215||$ 5,203||8.9%||30.0%||$ 12,980||$ 8,965||44.8%|
|Revenue – recurring||$ 5,413||$ 5,095||$ 4,038||6.2%||34.1%||$ 10,508||$ 6,732||56.1%|
|Revenue – non-recurring||$ 1,352||$ 1,120||$ 1,165||20.7%||16.1%||$ 2,472||$ 2,233||10.7%|
|Gross profit – total||$ 3,505||$ 3,308||$ 1,352||6.0%||159.3%||$ 6,811||$ 2,715||150.9%|
|Gross profit – recurring||$ 3,656||$ 3,665||$ 2,534||(0.2%)||44.3%||$ 7,321||$ 4,289||70.7%|
|Gross loss – non-recurring||$ (151)||$ (357)||$ (1,182)||(57.6%)||(87.2%)||$ (509)||$ (1,574)||(67.6%)|
|Gross margin – total||51.8%||53.2%||26.0%||(1.4 pts)||25.8 pts||52.5%||30.3%||22.2 pts|
|Gross margin – recurring||67.5%||71.9%||62.8%||(4.4 pts)||4.7 pts||69.7%||63.7%||6.0 pts|
|Gross margin – non recurring||(11.2%)||(31.9%)||(101.5%)||20.7 pts||90.3 pts||(20.6%)||(70.5%)||49.9 pts|
|Net loss||$ (3,425)||$ (2,942)||$ (2,690)||16.4%||27.3%||$ (6,368)||$ (5,639)||12.9%|
|EPS||$ (0.32)||$ (0.33)||$ (0.35)||$ 0.01||$ 0.03||$ (0.66)||$ (0.85)||$ 0.19|
Q2 FY2016 Non-GAAP Financial Highlights:
- Non-GAAP revenue was $6.8 million in Q2 FY2016, compared to $6.2 million in Q2 FY2015, representing an 11% year-over-year increase, and compared to $6.3M in Q1 FY2016, representing a 9% quarter over quarter increase.
- Non-GAAP gross profit percentage was 58% in Q2 FY2016, compared to 43% in Q2 FY2015, representing a 15 percentage-point year increase, and compared to 58% in Q1 FY2016.
- Non-GAAP net loss was ($1.56) million or ($0.15) per share in Q2 FY2016, compared to ($3.5) million or ($0.44) per share in Q2 FY2015, a $0.29 year-over year improvement per share, compared to ($1.52) million or ($0.17) per share in Q1 FY2016, representing a $0.02 quarter-over-quarter improvement per share.
(in thousands, except
per share amounts)
|Six Months |
|FY 2015||Change |
|Revenue – total||$ 6,843||$ 6,279||$ 6,167||9.0%||11.0%||$ 13,121||$ 9,929||32.2%|
|Revenue – recurring||$ 5,463||$ 5,158||$ 4,756||5.9%||14.9%||$ 10,621||$ 7,450||42.6%|
|Revenue – non-recurring||$ 1,380||$ 1,120||$ 1,411||23.2%||(2.2%)||$ 2,500||$ 2,479||0.8%|
|Gross profit – total||$ 3,934||$ 3,609||$ 2,618||9.0%||50.3%||$ 7,543||$ 4,117||83.2%|
|Gross profit – recurring||$ 3,963||$ 3,915||$ 3,430||1.2%||15.5%||$ 7,878||$ 5,208||51.3%|
|Gross loss – non-recurring||$ (29)||$ (306)||$ (812)||(90.6%)||(96.5%)||$ (334)||$ (1,091)||(69.3%)|
|Gross margin – total||57.5%||57.5%||42.5%||0.0 pts||15.0 pts||57.5%||41.5%||16.0 pts|
|Gross margin – recurring||72.5%||75.9%||72.1%||(3.4 pts)||0.4 pts||74.2%||69.9%||4.3 pts|
|Gross margin – non recurring||(2.1%)||(27.3%)||(57.6%)||25.2 pts||55.5 pts||(13.4%)||(44.0%)||30.6 pts|
|Net loss||$ (1,563)||$ (1,518)||$ (3,467)||3.0%||(54.9%)||$ (3,082)||$ (5,606)||(45.0%)|
|EPS||$ (0.15)||$ (0.17)||$ (0.44)||$ 0.02||$ 0.29||$ (0.32)||$ (0.85)||$ 0.53|
|Billings||$ 6,836||$ 6,032||$ 7,123||13.3%||(4.0%)||$ 12,867||$ 10,126||27.1%|
“I’m pleased to report that with the b-pack transaction closing in early fiscal Q2 that we have achieved the main strategic objective we put in place 18 months ago, to become a full spectrum supplier management and enterprise contract lifecycle management provider. Today we are truly a new, combined company, under a new brand, Determine and are making great strides to fully harmonize the team and technologies to our customers’ benefit,” said Patrick Stakenas, President and CEO of Determine. “On the operations side, I’m very excited to share that this quarter we are seeing a significant pay-off with respect to the work we have been doing for the past year on the re-alignment of our non-recurring costs across all lines of business. Going forward I anticipate continued quarterly improvement as we align our services under our one platform strategy.”
Q2 FY2016 Business Highlights:
- Non-Recurring Revenue Expense Containment: Due to the significant efforts by the professional services delivery teams, in the current quarter the company reported a Non-GAAP gross profit on non-recurring revenue of a negative $29K and a (2.1%) margin, as compared to a negative $812,000 gross profit and a (57.6%) margin on non-recurring revenue in Q2 FY2015 and a negative $306,000 gross profit and a (27.3%) margin on non-recurring revenue in the prior quarter. This area will continue to be a focus of constant improvement.
- Completed the b-pack acquisition: On July 31, 2015 the company completed the acquisition of b-pack for approximately $1.1 million in cash and 1,841,244 shares of our common stock. b-pack, a pioneer and global leader in the delivery of enterprise procure-to-Pay solutions, is focused on providing rich, end-to-end procurement capabilities, including: eProcurement, Purchase-to-Pay, Asset Management, Budget Management, Invoice Management, and Expense Management. b-pack is a recognized Gartner ‘visionary’ in the 2015 Magic Quadrant for procure-to-pay Suites for Indirect Procurement and serves global customers across many business sectors including such leading companies as Yves Saint Laurent/Gucci, Aon, Telehouse, BNP Paribas, Buccaneer Energy and United Drug. For the past 15 years, b-pack has empowered finance and procurement enterprise professionals with flexible, innovative and critical risk mitigation solutions.
- New Customers and Customer Expansions: In Q2 FY2016, the company closed numerous new customer accounts as well as expanded the value of current customers across its suite of strategic sourcing, supplier management and enterprise contract lifecycle management solutions. New accounts included sales in key verticals: healthcare, transportation, electronics, banking, hospital/healthcare, telecommunications, manufacturing, and agriculture industries. The company signed $1.04 million in new customer bookings during the second fiscal quarter, up 34% vs. the year-ago quarter.
- New Partnerships:
- On September 17th, the company entered into an agreement with Tradeshift, the fast growing, next generation, supplier collaboration platform. In the future, Determine will deploy an app on the Tradeshift platform integrating the company’s strategic sourcing capabilities such as RFx, bidding, reverse auctions and contract awarding to networks of suppliers and buyers for increased simplicity and visibility across all interactions. The ‘app’ movement represents a new direction for the sourcing and procurement technology market; the company sees this partnership as an important step towards true business interoperability between providers.
- Determine has also entered into a new strategic partnership with Velositi, an Australian based consulting and managed services firm focused on the mining sector. This new relationship is based on an innovative vision for how procure-to-pay capabilities can impact organizations previously unable to access these solutions. The approach we are taking together is designed to significantly disrupt the way the combination of procurement services and software are delivered to this market.
- Thought Leadership: During Q2 FY2016, the company continued to support its customers and prospects by providing meaningful educational resources designed to help decision-makers make more money, save more money or reduce risk by leveraging Strategic Sourcing or Enterprise Lifecycle Contract Management solutions. The company held a highly effective webinar addressing The Evolution from Savings focused to Supplier-Centric Strategic Sourcing with Andrew Bartolini, Chief Research Officer at Ardent Partners. In addition, the company published two co-authored Gartner Newsletters: Maximizing the Value from Investments in Strategic Sourcing Suites and Gartner Market Guide for Contract Lifecycle Management.
November 11, 2015 Conference Call & Webcast
A conference call and webcast will be held today at 5:00 pm EDT to review these results. Interested parties may participate via conference call and webcast:
Participant Conference Call Numbers
Participant Webcast Link: http://public.viavid.com/index.php?id=117091
Replay Dial-in Info:
Available from 11/11/15 @ 8:00 pm EDT
to 11/25/15 @ 11:59 pm EDT
Replay Pin Number: 13624253
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. 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.
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.
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.
About Determine, Inc.
Determine (NASDAQ: DTRM) is a provider of leading enterprise cloud software solutions with over four decades of collective technical and process knowledge in the areas of strategic sourcing, enterprise contract lifecycle management, and procure to pay solutions. We provide the next generation of agile, enterprise cloud solutions for managing the needs of modern business. Using our intuitive applications, organizations can effectively manage the full scope of source to pay and enterprise contract lifecycle management requirements using the Determine platform.
The Determine platform is an open technology infrastructure based on smart process application models. The goal of our platform is to establish awareness of relevant data, manage business documents, embed analytical tools, create a means for collaboration, and provide advanced process management tools for fully integrating business processes through an open API infrastructure. Built on a unified and highly scalable platform, we deliver deep and innovative capabilities in strategic sourcing, supplier management, enterprise contract lifecycle management, e-procurement, invoicing, and other business operation areas.
In addition to our source to pay and enterprise contract lifecycle management solutions suite, we also provide a powerful, patented configuration engine solution, which Global 1000 companies use to increase revenue by facilitating the right combination of products, services, and price.
For more information, please visit: www.determine.com.