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November 16, 2018

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

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

CARMEL, IN – November 15, 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, IN – 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 $0.18 per share.
(in thousands, except per share amounts)
GAAPQ2Q1Q2ChangeChange
Financial MeasuresFY 2019FY 2019FY 2018Q/QY/Y
Revenue – total$ 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$ 3,4325.0%(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 – total48.1%43.5%49.8%4.6 pts(1.7 pts)
Gross margin – recurring61.8%59.9%60.8%1.9 pts1.0 pts
Gross margin – non recurring(51.6%)(65.7%)4.5%14.1 pts(56.1 pts)
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 Q2FY2018, 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 $0.9 million year-over-year.
(in thousands, except per share amounts)
Non-GAAPQ2Q1Q2ChangeChange
Financial MeasuresFY 2019FY 2019FY 2018Q/QY/Y
Revenue – total$ 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$ 3,7843.5%(19.9%)
Gross profit – recurring$ 3,372$ 3,434$ 3,675(1.8%)(8.2%)
Gross (loss)/profit – non-recurring$ (342)$ (505)$ 10932.3%(413.8%)
Gross margin – total52.8%48.5%54.9%4.4 pts(2.1 pts)
Gross margin – recurring66.9%65.4%66.3%1.5 pts0.6 pts
Gross margin – non recurring(49.6%)(64.0%)8.1%14.4 pts(57.7 pts)
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 our goal 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, 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
Determine on LinkedIn
Determine on Twitter
Determine Resources

About Determine, Inc.

Determine, Inc. (NASDAQ: DTRM) is a leading global provider of SaaS Source-to-Pay and Enterprise Contract Lifecycle Management (ECLM) solutions. The Determine Cloud Platform provides procurement, legal and finance professionals analytics of their supplier, contract and financial performance. Our technologies empower customers to drive new revenue, identify savings, improve compliance and mitigate risk.

The Determine Cloud Platform seamlessly integrates with major ERP or third-party systems such as SAP, Oracle, Sage, QAD and Microsoft. Modular solutions can be configured to add more as needed to provide additional value beyond spend management. Our unified master database and business process approach empower users at every level to make more informed and smarter decisions.

For more information, please visit: www.determine.com.

Contact

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

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