Covisint Corporation
Jun 5, 2017

Covisint Corporation Announces Fourth Quarter and Full-Year Fiscal 2017 Financial Results

DETROIT, June 05, 2017 (GLOBE NEWSWIRE) -- Covisint Corporation (Nasdaq:COVS), the leading Cloud Platform for building Identity and Internet of Things (IoT) applications, today announced financial results for the fourth quarter and full fiscal year ended March 31, 2017.

Fiscal 2017 Financial Results

Revenue

Profitability

Fourth Quarter Fiscal 2017 Financial Highlights

Revenue

Profitability

Balance Sheet

Fourth Quarter Fiscal 2017 Business Highlights

Use of Non-GAAP Financial Measures

In addition to reporting financial results in accordance with generally accepted accounting principles in the United States ("GAAP"), Covisint monitors non-GAAP measures, including non-GAAP gross profit, non-GAAP gross margin, non-GAAP net income (loss), and non-GAAP net income (loss) per diluted share. Each of these financial measures excludes the impact of certain items (the impact of stock award compensation expense, the amortization and impairment of intangible assets and amounts incurred for capitalized internal software costs) and, therefore, has not been calculated in accordance with GAAP.

Covisint monitors these non-GAAP measures to evaluate its ongoing operational performance and enhance an overall understanding of its past financial performance. Covisint believes that these non-GAAP metrics help illustrate underlying trends in its business that could otherwise be masked by the effect of the expenses that are excluded in non-GAAP gross profit, non-GAAP gross margin, non-GAAP net income (loss), and non-GAAP net income (loss) per diluted share. Furthermore, Covisint uses these measures to establish budgets and operational goals for managing its business and evaluating its performance. Covisint also believes that these non-GAAP measures provide additional tools for investors to use in comparing its recurring core business operating results over multiple periods against other companies in its industry.

The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. A reconciliation of the non-GAAP financial measures discussed in this press release to the most directly comparable GAAP financial measures is included with the financial statements contained in this press release. Management uses both GAAP and non-GAAP information in evaluating and operating its business internally and as such has determined that it is important to provide this information to investors.

Conference Call and Webcast Information

Covisint management will hold a conference call at 5:00 p.m. (Eastern time) today to discuss these results. The U.S. toll free dial-in for the conference call is 1-877-407-4018, and the international dial-in number is 1-201-689-8471. No passcode is required. A live webcast of the conference call will also be available on the company's website at investors.covisint.com.

For those unable to participate in the conference call, a replay will be available after the conclusion of the earnings call on June 5, 2017, through June 12, 2017. The U.S. toll-free replay dial-in number is 1-844-512-2921 and the international replay dial-in number is 1-412-317-6671. The replay passcode is 13663623.

About Covisint Corporation

Covisint is the connected company — we securely connect ecosystems of people, systems and things to enable new service offerings, optimize operations, develop new business models and ultimately enable the connected economy. Today, we support more than 2,000 organizations and connect to more than 212,000 business partners and customers worldwide. Learn more at www.covisint.com.

Forward-looking Statements

This press release contains forward-looking statements, including statements regarding Covisint's future financial performance, market growth, the demand for Covisint's solutions, and general business conditions. Any forward-looking statements contained in this press release are based upon Covisint's historical performance and its current plans, estimates and expectations and are not a representation that such plans, estimates, or expectations will be achieved. These forward-looking statements represent Covisint's expectations as of the date of this press release. Subsequent events may cause these expectations to change, and Covisint disclaims any obligation to update the forward-looking statements in the future. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, our ability to attract new customers; the extent to which customers renew their contracts; the extent we are able to maintain pricing with our customers at renewal;  the continued growth of the market for our solutions; the success of our channel partner and certified partner strategies; competition from current competitors and new market entrants; unpredictable macro-economic conditions; the loss of any of our key employees; the length of the sales for our solutions; and other risks and uncertainties. Further information on potential factors that could affect actual results is included in Covisint's reports filed with the SEC.

 
COVISINT CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)
 
 March 31, 2017 March 31, 2016
ASSETS   
CURRENT ASSETS:   
Cash and cash equivalents$33,227  $39,681 
Accounts receivable, net of allowance for doubtful accounts of $36 and $39 as of March 31, 2017 and 2016, respectively 8,066   12,836 
Prepaid expenses 1,992   2,167 
Other current assets 878   1,603 
Total current assets 44,163   56,287 
PROPERTY AND EQUIPMENT, NET 5,103   7,847 
CAPITALIZED SOFTWARE AND OTHER INTANGIBLE ASSETS, NET 10,031   11,486 
OTHER:   
Goodwill 25,385   25,385 
Deferred costs 56   580 
Deferred tax asset, net 172   171 
Other assets 156   289 
Total other assets 25,769   26,425 
TOTAL ASSETS$85,066  $102,045 
LIABILITIES AND SHAREHOLDERS' EQUITY   
CURRENT LIABILITIES:   
Accounts payable$2,427  $5,061 
Accrued commissions and bonuses 1,423   1,071 
Deferred revenue 14,595   15,952 
Accrued expenses 1,432   2,377 
Total current liabilities 19,877   24,461 
DEFERRED REVENUE 2,115   3,595 
ACCRUED LIABILITIES 2,265   2,327 
DEFERRED TAX LIABILITY, NET 327   353 
Total liabilities 24,584   30,736 
COMMITMENTS AND CONTINGENCIES   
SHAREHOLDERS' EQUITY:   
Preferred stock, no par value - authorized 5,000,000 shares; none issued and outstanding     
Common stock, no par value - authorized 50,000,000 shares; issued and outstanding 40,865,897 and 40,490,928 as of March 31, 2017 and 2016, respectively     
Additional paid-in capital 164,120   161,997 
Accumulated deficit (103,253)  (90,527)
Accumulated other comprehensive loss (385)  (161)
Total shareholders' equity 60,482   71,309 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$85,066  $102,045 

See notes to consolidated financial statements.

 
COVISINT CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In Thousands, Except Per Share Data)
 
 YEAR ENDED MARCH 31,
  2017
  2016
  2015
REVENUE$70,243  $76,024  $88,534 
COST OF REVENUE 33,279   34,953   66,404 
GROSS PROFIT 36,964   41,071   22,130 
OPERATING EXPENSES:     
Research and development 11,381   13,019   10,416 
Sales and marketing 26,804   29,448   32,593 
General and administrative 11,497   13,286   17,640 
Total operating expenses 49,682   55,753   60,649 
OPERATING LOSS (12,718)  (14,682)  (38,519)
Other (expense) income 61   (23)  69 
LOSS BEFORE INCOME TAX PROVISION (12,657)  (14,705)  (38,450)
INCOME TAX PROVISION 69   189   112 
NET LOSS($12,726) ($14,894) ($38,562)
Basic and diluted loss per share($0.31) ($0.38) ($1.01)
Weighted average shares used to compute net loss per share attributable to common stockholders - basic and diluted 40,719  39,658  38,217
OTHER COMPREHENSIVE LOSS, NET OF TAX     
Foreign currency translation adjustments (224)  (137)  (12)
OTHER COMPREHENSIVE LOSS, NET OF TAX (224)  (137)  (12)
COMPREHENSIVE LOSS($12,950) ($15,031) ($38,574)

See notes to consolidated financial statements.

 
COVISINT CORPORATION
RECONCILIATION OF U.S. GAAP TO NON-U.S. GAAP
(In Thousands, Except Per Share Data)
(Unaudited)
 
  Three Months Ended
March 31,
 Twelve Months Ended
March 31,
   2017
 2016 2017 2016
Gross profit $11,296  $12,102  $36,964  $41,071 
Gross margin  60%  61%  53%  54%
Adjustments:        
Stock compensation expense  16   3   53   71 
Amortization of capitalized software  1,128   787   4,274   3,398 
Non-U.S. GAAP gross profit $12,440  $12,892  $41,291  $44,540 
Non-U.S. GAAP gross margin  66%  65%  59%  59%


  Three Months Ended
March 31,
 Twelve Months Ended
March 31,
   2017
  2016
  2017
  2016
Cost of revenue $7,685  $7,885  $33,279  $34,953 
Adjustments:        
Stock compensation expense  16   3   53   71 
Amortization of capitalized software  1,128   787   4,274   3,398 
Non-U.S. GAAP cost of revenue $6,541  $7,095  $28,952  $31,484 


  Three Months Ended
March 31,
 Twelve Months Ended
March 31,
   2017
  2016
  2017
  2016
Research and development $2,065  $3,129  $11,381  $13,019 
Adjustments:        
Capitalized internal software costs  (644)  (1,673)  (2,819)  (4,238)
Stock compensation expense  11   2   37   78 
Non-U.S. GAAP research and development $2,698  $4,800  $14,163  $17,179 


  Three Months Ended
March 31,
 Twelve Months Ended
March 31,
   2017
  2016
  2017
  2016
Sales and marketing $5,412  $6,225  $26,804  $29,448 
Adjustments:        
Stock compensation expense  85   91   296   501 
Non-U.S. GAAP sales and marketing $5,327  $6,134  $26,508  $28,947 


  Three Months Ended
March 31,
 Twelve Months Ended
March 31,
   2017
  2016
  2017
  2016
General and administrative $2,290  $2,770  $11,497  $13,286 
Adjustments:        
Stock compensation expense  369   381   1,513   2,166 
Non-U.S. GAAP general and administrative $1,921  $2,389  $9,984  $11,120 


  Three Months Ended
March 31,
 Twelve Months Ended
March 31,
   2017
  2016
  2017
  2016
Net income (loss) $1,589  ($110) ($12,726) ($14,894)
Adjustments:        
Capitalized internal software costs  (644)  (1,673)  (2,819)  (4,238)
Stock compensation expense  480   478   1,899   2,817 
Amortization of capitalized software  1,128   787   4,274   3,398 
Non-U.S. GAAP net income (loss) $2,553  ($518) ($9,372) ($12,917)


  Three Months Ended
March 31,
 Twelve Months Ended
March 31,
   2017
  2016
 2017 2016
Diluted EPS $0.04 $0.00 ($0.31) ($0.38)
Adjustments:        
Capitalized internal software costs  (0.02)  (0.04)  (0.07)  (0.11)
Stock compensation expense  0.01   0.01   0.05   0.07 
Amortization of capitalized software  0.03   0.02   0.10   0.09 
Non-U.S. GAAP Diluted EPS $0.06  ($0.01) ($0.23) ($0.33)


COVISINT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
 
 YEAR ENDED MARCH 31,
  2017
  2016
  2015
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES:     
Net loss($12,726) ($14,894) ($38,562)
Adjustments to reconcile net loss to cash provided by (used in) operations:     
Depreciation and amortization 7,210   6,772   9,574 
Capitalized software and other intangible asset impairment       8,751 
Deferred income taxes (8)  148   11 
Stock award compensation 1,899   2,817   6,232 
Other 1   18   307 
Net change in assets and liabilities:     
Accounts receivable 4,705   2,474   6,377 
Other assets 1,532   5,397   3,306 
Accounts payable and accrued expenses (1) (2,751)  (4,157)  4,919 
Deferred revenue (2,799)  (2,441)  (5,610)
Net cash used in operating activities (2,937)  (3,866)  (4,695)
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:     
Purchase of:     
Property and equipment (1) (229)  (3,817)  (3,953)
Capitalized software (2,819)  (4,238)  (3,509)
Proceeds from asset disposals 2   33    
Net cash used in investing activities (3,046)  (8,022)  (7,462)
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:     
Cash payments from former parent company       23,999 
Cash payments to former parent company       (13,879)
Vendor financing payments (614)  (728)   
Net proceeds from exercise of stock awards 239   2,191   2,865 
Net cash provided by (used in) financing activities (375)  1,463   12,985 
EFFECT OF EXCHANGE RATE CHANGES ON CASH (96)  29   (287)
NET CHANGE IN CASH (6,454)  (10,396)  541 
CASH AT BEGINNING OF YEAR 39,681   50,077   49,536 
CASH AT END OF YEAR$33,227  $39,681  $50,077 

(1)   Accounts payable and accrued expenses in the balance sheet as of March 31, 2015 include $3.0 million associated with purchases of property and equipment, which are non-cash acquisitions of fixed assets as of March 31, 2015.

See notes to consolidated financial statements.

 

Investor Relations Contact
866-319-7659
investors@covisint.com

Media Contact
Brad Schechter, Vice President, Corporate Marketing
248-483-2097
bschecht@covisint.com

For Sales and Marketing Information
Covisint Corporation, 26533 Evergreen Road, Suite 500, Southfield, MI 48076, 800-229-4125
http://www.covisint.com