Mattersight Announces Second Quarter 2012 Results
CHICAGO, IL, Aug 08, 2012 (Menafn - MARKETWIRE via COMTEX) --Mattersight Corporation MATR today announced financialresults for the second quarter ended June 30, 2012.
Mattersight's total services revenue was 7.9 million, including 6.6million of subscription revenues. The Company realized an "AdjustedEarnings(1)" loss of 1.8 million for the second quarter of 2012.Adjusted Earnings is a non-GAAP measure. For a reconciliation ofoperating loss to Adjusted Earnings, see the accompanying schedule.Mattersight's net loss was 3.6 million in the second quarter of 2012and its operating loss from continuing operations(2) was 3.5million.
Q2 Highlights
--Grew subscription revenues by 32%, year over year, to 6.6 million
--Increased total service revenues by 20%, year over year, to 7.9
million
--Recorded managed services bookings of 19.4 million
--Ended Q2 with a record managed services backlog(3) of 104.6 million
--Signed 5 new pilots, including 2 new logo customers
--Ended Q2 with a record 17 pilots
--Established a 10.0 million credit facility with Silicon Valley Bank
Q3 Guidance
Mattersight currently expects its total services revenues will bebetween 8.0 million and 8.3 million. Mattersight is currently 100%sold to 8.3 million.
Conference Call Information
Mattersight management will host a conference call at 5:00 p.m. ET onWednesday, August 8, 2012. The conference call and slide presentationwill be available at the Investment Community section ofMattersight's website at http://www.mattersight.com/investment/. Tolisten to the conference call via telephone, please call 800.952.4789(domestic) or 404.665.9579 (international), conference ID: 14562298.
For those who cannot access the live broadcast, a replay of theconference call will be available beginning approximately two hoursafter the live call is completed until September 8, 2012, by dialing855.859.2056 (domestic) or 404.537.3406 (international), conferenceID: 14562298.
Safe Harbor for Forward-Looking Statements
Statements in this press release that are not historical facts are"forward-looking statements" that are made pursuant to the safeharbor provisions of Section 27A of the Securities Act of 1933 andSection 21E of the Securities Exchange Act of 1934. Theseforward-looking statements, which may be identified by use of wordssuch as "plan," "may," "might," "believe," "expect," "intend,""could," "would," "should," and other words and terms of similarmeaning, involve risks and uncertainties that could cause actualresults to differ materially from those described in theforward-looking statements. In addition to other factors and matterscontained or incorporated in this document, important factors thatcould cause actual results or events to differ materially from thoseindicated by such forward-looking statements include, among otherthings, the risks detailed from time to time in Mattersight's SECfilings. You can locate these filings on the Investor Relations pageof Mattersight's website, www.mattersight.com. Statements included orincorporated by reference into this press release are based uponinformation known to Mattersight as of the date of this pressrelease, and the company assumes no obligation to publicly revise orupdate any forward-looking statement for any reason.
About Mattersight
Mattersight is a leader in enterprise analytics focused on customerand employee interactions and behaviors. Mattersight's BehavioralAnalytics service captures and analyzes customer and employeeinteractions, employee desktop data, and other contextual informationto improve operational performance and predict future customer andemployee outcomes. Mattersight's analytics are based on millions ofproprietary algorithms and the application of unique behavioralmodels. The company's SaaS delivery model combines analytics in thecloud with deep customer partnerships to drive significant businessvalue. Mattersight's applications are used by leading companies inHealthcare, Insurance, Financial Services, Telecommunications, Cable,Utilities and Government. See What Matters(TM) by visitingwww.Mattersight.com.
1 Mattersight presents Adjusted Earnings, a non-GAAP measure thatrepresents cash earnings performance, excluding the impact ofnon-cash expenses and expense reduction activities, becausemanagement believes that Adjusted Earnings provide investors with abetter understanding of the results of Mattersight's operations.Management believes that Adjusted Earnings reflect Mattersight'sresources available to invest in its business and strengthen itsbalance sheet. In addition, expense reduction activities can varysignificantly between periods on the basis of factors that managementdoes not believe reflect current-period operating performance.Although similar adjustments for expense reduction activities may berecorded in future periods, the size and frequency of theseadjustments cannot be predicted. The Adjusted Earnings measure shouldbe considered in addition to, not as a substitute for or superior to,operating income, cash flows or other measures of financialperformance prepared in accordance with GAAP.
2 On May 28, 2011, the company divested its Integrated ContactSolutions ("ICS") business unit and "eLoyalty" registered trademark /trade name to a subsidiary of TeleTech Holdings, Inc. As a result ofthis divestiture, the company has classified the ICS business unit asdiscontinued operations and the associated results of operations,financial position, and cash flows have been separately recorded asappropriate.
3 Mattersight uses the term "backlog" to reflect the estimated futureamount of Managed services revenue related to its Managed servicescontracts. The value of these contracts is based on anticipated usagevolumes over the anticipated term of the agreement. The anticipatedterm of the agreement is based on the contractually agreed fixed termof the contract, plus agreed upon, but optional, extension periods.Anticipated volumes may be greater or less than anticipated. Inaddition, these contracts typically are cancellable without causebased on the customer making a substantial early termination paymentor forfeiture of prepaid contract amounts. The reported backlog isexpected to be recognized as follows: 17.0m in 2012; 31.5m in 2013;23.6m in 2014; 17.3m in 2015; and 15.2m in 2016 and thereafter.
MATTERSIGHT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited and in thousands, except per share data)
For theFor the
----------------------------------------
Three Months EndedSix Months Ended
----------------------------------------
June 30,July 2,June 30,July 2,
2012201120122011
------------------------------------
Revenue:
Behavioral Analytics revenue7,5576,28816,11312,255
Other revenue376339721919
------------------------------------
Total services revenue7,9336,62716,83413,174
Reimbursed expenses10276200153
------------------------------------
Total revenue8,0356,70317,03413,327
Operating expenses:
Cost of Behavioral Analytics
revenue2,9472,8946,1355,656
Cost of other revenue187254391596
------------------------------------
Cost of services3,1343,1486,5266,252
Reimbursed expenses10276200153
------------------------------------
Total cost of revenue, exclusive
of depreciation and
amortization:3,2363,2246,7266,405
Sales, marketing and
development5,4474,76410,6319,630
General and administrative2,0072,6143,9635,369
Severance and related costs14(434)693(430)
Depreciation and amortization7558201,6221,595
------------------------------------
Total operating expenses11,45910,98823,63522,569
------------------------------------
Operating loss(3,424)(4,285)(6,601)(9,242)
Interest and other (expense)
income, net(113)(53)(215)78
------------------------------------
Loss from continuing operations
before income taxes(3,537)(4,338)(6,816)(9,164)
Income tax (provision) benefit(11)3,563(21)3,628
------------------------------------
Loss from continuing operations(3,548)(775)(6,837)(5,536)
(Loss) income from discontinued
operations, net of tax(23)28,065(104)28,187
------------------------------------
Net (loss) income(3,571)27,290(6,941)22,651
Dividends related to Series B
Stock(148)(317)(297)(634)
------------------------------------
Net (loss) income available to
common stockholders(3,719) 26,973(7,238) 22,017
====================================
Per common share:
Basic loss from continuing
operations(0.23) (0.08) (0.45) (0.44)
====================================
Basic (loss) income from
discontinued operations(0.00) 1.99(0.01) 2.01
====================================
Basic net (loss) income
available to common
stockholders(0.23) 1.91(0.46) 1.57
====================================
Per common share:
Diluted loss from continuing
operations(0.23) (0.08) (0.45) (0.44)
====================================
Diluted (loss) income from
discontinued operations(0.00) 1.99(0.01) 2.01
====================================
Diluted net (loss) income
available to common
stockholders(0.23) 1.91(0.46) 1.57
====================================
Shares used to calculate basic
net loss per share15,96614,11115,85814,032
====================================
Shares used to calculate diluted
net loss per share15,96614,11115,85814,032
====================================
Stock-based compensation,
primarily restricted stock, is
included in individual line
items above:
Cost of Behavioral Analytics
revenue571114
Sales, marketing and
development5578991,2541,771
General and administrative3146807141,230
Severance and related costs----268--
Discontinued operations--1,491--1,568
MATTERSIGHT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited and in thousands)
For theFor the
----------------------------------------
Three Months EndedSix Months Ended
----------------------------------------
June 30,July 2,June 30,July 2,
2012201120122011
------------------------------------
Net (loss) income(3,571) 27,290(6,941) 22,651
Other comprehensive loss:
Effect of currency translation(7)(24)(2)(116)
------------------------------------
Comprehensive net (loss) income(3,578) 27,266(6,943) 22,535
====================================
MATTERSIGHT CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited and in thousands, except share and per share data)
June 30,December 31,
20122011
------------------------
ASSETS:
Current Assets:
Cash and cash equivalents20,47429,408
Restricted cash--1,500
Receivables (net of allowances of 10 and 13)1,8222,540
Prepaid expenses6,7395,302
Other current assets548288
------------------------
Total current assets29,58339,038
Equipment and leasehold improvements, net4,5354,271
Goodwill972972
Intangibles, net239238
Other long-term assets4,3284,746
------------------------
Total assets39,65749,265
========================
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
Short-term debt3,6913,567
Accounts payable1,520812
Accrued compensation and related costs1,2011,382
Unearned revenue6,3819,783
Other current liabilities3,8483,673
------------------------
Total current liabilities16,64119,217
Long-term unearned revenue2,3503,036
Other long-term liabilities8601,401
------------------------
Total liabilities19,85123,654
------------------------
Series B Stock, 0.01 par value; 5,000,000
shares authorized and designated; 1,650,875 and
1,670,696 shares issued and outstanding at June
30, 2012 and December 31, 2011, respectively,
with a liquidation preference of 8,714 and
8,819 at June 30, 2012 and December 31, 2011,
respectively8,4198,521
Stockholders' Equity:
Preferred stock, 0.01 par value; 35,000,000
shares authorized; none issued and
outstanding----
Common stock, 0.01 par value; 50,000,000
shares authorized; 18,174,618 and 18,037,552
shares issued at June 30, 2012, and at
December 31, 2011, respectively; and
16,945,330 and 16,935,204 outstanding at June
30, 2012 and December 31, 2011, respectively182180
Additional paid-in capital214,653212,618
Accumulated deficit(192,720)(185,779)
Treasury stock, at cost, 1,229,288 and
1,102,348 shares at June 30, 2012 and
December 31, 2011, respectively(6,688)(5,891)
Accumulated other comprehensive loss(4,040)(4,038)
------------------------
Total stockholders' equity11,38717,090
------------------------
Total liabilities and stockholders' equity39,65749,265
========================
MATTERSIGHT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited and in thousands)
For the Six Months Ended
--------------------------
June 30,July 2,
20122011
------------------------
Cash Flows from Operating Activities:
Net (loss) income(6,941) 22,651
Less: net (loss) income from discontinued
operations(104)28,187
------------------------
Net loss from continuing operations(6,837)(5,536)
Adjustments to reconcile net loss from
continuing operations to net cash used in
operating activities:
Depreciation and amortization1,6221,595
Stock-based compensation1,9793,015
Severance and related costs268--
Other(2)12
Changes in assets and liabilities:
Receivables720(234)
Prepaid expenses(1,035)(2,186)
Other assets(276)97
Accounts payable708731
Accrued compensation and related costs(181)(169)
Unearned revenue(4,088)435
Other liabilities(195)(4,227)
------------------------
Total adjustments(480)(931)
------------------------
Net cash used in continuing operations(7,317)(6,467)
Net cash used in discontinued operations(179)(4,685)
------------------------
Net cash used in operating activities(7,496)(11,152)
------------------------
Cash Flows from Investing Activities:
Capital expenditures and other(900)(605)
------------------------
Net cash used in continuing investing
activities(900)(605)
Net cash (used in) provided by
discontinued investing activities--33,939
------------------------
Net cash (used in) provided by investing
activities(900)33,334
------------------------
Cash Flows from Financing Activities:
Proceeds from line of credit3,691--
Decrease (increase) in restricted cash1,500(17,140)
Purchase of shares of Series B Stock(3,743)--
Principal payments under capital lease
obligations(1,070)(989)
Acquisition of treasury stock(797)(513)
Payment of Series B Stock dividends(300)(1,901)
Fees from issuance of common stock(49)--
Proceeds from stock compensation and employee
stock purchase plans, net23362
------------------------
Net cash used in continuing financing
activities(535)(20,481)
Net cash used in discontinued financing
activities--(678)
------------------------
Net cash used in financing activities(535)(21,159)
------------------------
Effect of exchange rate changes on cash and cash
equivalents by continuing operations(3)(69)
Effect of exchange rate changes on cash and cash
equivalents by discontinued operations--(233)
------------------------
Effect of exchange rate changes on cash and cash
equivalents(3)(302)
------------------------
(Decrease) increase in cash and cash equivalents(8,934)721
Cash and cash equivalents, beginning of period29,40820,872
------------------------
Cash and cash equivalents of continuing
operations, end of period20,47421,593
========================
Non-Cash Investing and Financing Transactions:
Capital lease obligations incurred9872,081
Capital equipment purchased on credit9872,081
Supplemental Disclosures of Cash Flow
Information:
Interest paid21487
MATTERSIGHT CORPORATION
CALCULATION OF ADJUSTED EARNINGS MEASURE
(Unaudited and in thousands)
For theFor the
----------------------------------------
Three Months EndedSix Months Ended
----------------------------------------
June 30,July 2,June 30,July 2,
2012201120122011
------------------------------------
GAAP -- Operating loss(3,424) (4,285) (6,601) (9,242)
Add back (reduce) the effect of:
Stock-based compensation8761,5861,9793,015
Severance and related costs14(434)693(430)
Depreciation and amortization7558201,6221,595
------------------------------------
Adjusted earnings measure --
(loss)(1,779) (2,313) (2,307) (5,062)
====================================
Contact
Mark Iserloth
Vice President and Chief Financial Officer
312.454.3613
ir@mattersight.com
SOURCE: Mattersight Corporation
mailto:ir@mattersight.com
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