• Subscription revenue of $15.3 million
  • Total revenue of $18.4 million
  • Updates progress of strategic initiatives to reposition business for growth
  • Adds new capabilities to accelerate development and deployment of Internet of Things applications and solutions

DETROIT, Nov. 10, 2015 (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 second quarter of its fiscal year 2016 ended September 30, 2015.

"Covisint continues to make significant progress towards the execution of the four key initiatives that we had outlined as core to our year of execution. We are focused on building out our direct sales organization, developing additional strategic partners, refining our brand and platform positioning, and enhancing our platform to meet market demands," said Covisint Chairman and CEO, Sam Inman. "In September, we further enhanced our platform with important functions that our customers and the market need in IoT. These enhancements provide a complete solution, incorporating real-time messaging, data modeling, and a new concept of 'life-cycle management' which greatly simplifies the challenge of configuring, managing, and monitoring secure IoT solutions."

Second Quarter 2016 Financial Results
  • Revenues: Subscription revenue decreased 9% year-over-year to $15.3 million.  Services revenue decreased 37% year-over-year to $3.1 million.  Total revenues decreased by 15% year-over-year to $18.4 million.
  • Gross Profit: GAAP gross profit was $9.9 million.  GAAP gross margin was 54%.  Non-GAAP gross profit was $10.9 million.  Non-GAAP gross margin was 59%.
  • Earnings: GAAP diluted loss per share was ($0.10) compared to ($0.19) in the same quarter last year.  Non-GAAP diluted loss per share was ($0.09) compared to ($0.13) in the same quarter last year.

Second Quarter Fiscal 2016 Business Highlights

In the second quarter, Covisint:
  • Announced the addition of IoT Messaging and IoT Lifecycle Management Services to the Covisint Cloud Platform - new capabilities unlock the business value from complex, connected product ecosystems that require sharing trusted information securely, and at scale with the ecosystem of related people, systems and things around the connected asset.
  • Launched innovative visibility network for tracking in-transit inventory with FreightVerify.  Initiative enables real-time data for manufacturing operations to accelerate decision-making, proactively manage freight exceptions and increase efficiency in freight operations.
  • Chief Security Officer, Dave Miller, presented at IoT Evolution Conference & Expo 2015 on the proliferation of connected transportation and how new business models are taking connectivity to new levels in the automotive world - and the impact those models will have on the industry.
  • Spoke at TU-Automotive's Insurance Telematics USA Conference, discussing how the connected car is changing the face of mobility, weighing the differing needs of aging populations and millennial generation in terms of vehicle ownership, including emerging mobility models such as car sharing and ridesharing, and how these factor into usage-based insurance policies.

Use of Non-GAAP Financial Measures

In addition to reporting financial results in accordance with generally accepted accounting principles ("GAAP"), Covisint monitors non-GAAP measures, including non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income (loss), non-GAAP net income (loss) per diluted share and adjusted EBITDA. 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 income or expenses, as well as the related tax effects, that are excluded in non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income (loss), non-GAAP net income (loss) per diluted share and adjusted EBITDA. 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 November 10, 2015, through November 17, 2015. The U.S. toll-free replay dial-in number is 1-877-870-5176 and the international replay dial-in number is 1-858-384-5517. The replay passcode is 13622381.

About Covisint Corporation

Covisint is the leading Cloud Platform for building Identity and Internet of Things (IoT) applications, and enables the identification, authorization and connection of complex networks of people, processes, systems and things.

Covisint's open, developer-friendly, enterprise-class Cloud Platform facilitates the rapid development and deployment of the Internet of Things (IoT), Identity Management (IdM) and Connected Supply Chain solutions - enabling customers to securely identify, authenticate and connect users, devices, applications and information. Covisint has been successfully operating globally at enterprise scale for more than 12 years. Today, the Covisint Platform enables more than 3,000 organizations to connect with more than 212,000 business partners and customers, and supports more than $4 billion in ecommerce transactions annually. Learn more at http://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 risk 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)
(Unaudited)
 
  September 30, 2015   March 31, 2015
ASSETS      
CURRENT ASSETS:      
Cash $ 41,695       $ 50,077    
Accounts receivable, net   12,595         15,348    
Deferred tax asset, net   13         16    
Prepaid expenses   2,710         3,160    
Other current assets   2,345         4,209    
Total current assets   59,358         72,810    
PROPERTY AND EQUIPMENT, LESS ACCUMULATED DEPRECIATION AND AMORTIZATION   9,190         8,809    
CAPITALIZED SOFTWARE AND OTHER INTANGIBLE ASSETS, NET   10,363         10,646    
OTHER:      
Goodwill   25,385         25,385    
Deferred costs   889         1,736    
Deferred tax asset, net   1,457         1,528    
Other assets   434         928    
Total other assets   28,165         29,577    
TOTAL ASSETS $ 107,076       $ 121,842    
LIABILITIES AND SHAREHOLDERS' EQUITY      
CURRENT LIABILITIES:      
Accounts payable $ 6,118       $ 7,703    
Accrued commissions   1,907         3,286    
Deferred revenue   16,770         18,029    
Accrued expenses   2,987         3,344    
Deferred tax liability, net   1,564         1,597    
Total current liabilities   29,346         33,959    
DEFERRED REVENUE   2,190         3,914    
ACCRUED LIABILITIES AND OTHER   2,687         2,622    
Total liabilities   34,223         40,495    
COMMITMENTS AND CONTINGENCIES      
SHAREHOLDERS' EQUITY:      
Common Stock              
Additional paid-in capital   159,304         157,004    
Retained deficit   (86,345       (75,633  
Accumulated other comprehensive loss   (106 )       (24  
Total shareholders' equity   72,853         81,347    
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 107,076       $ 121,842    

COVISINT CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In Thousands, Except Per Share Data)
(Unaudited)
       
  THREE MONTHSENDED SEPTEMBER 30,   SIX MONTHSENDED SEPTEMBER 30,
  2015   2014   2015   2014
REVENUE $ 18,393     $ 21,735     $ 36,875     $ 43,322  
COST OF REVENUE   8,469       14,326       18,246       29,592  
GROSS PROFIT   9,924       7,409       18,629       13,730  
    54     34     51     32
OPERATING EXPENSES:              
Research and development   3,127       2,583       6,790       5,699  
Sales and marketing   7,183       8,003       14,659       17,775  
General and administrative   3,730       4,111       7,817       9,657  
Total operating expenses   14,040       14,697       29,266       33,131  
OPERATING LOSS   (4,116     (7,288     (10,637     (19,401
Other income (expense)   (33     17       (31     39  
LOSS BEFORE INCOME TAXES   (4,149     (7,271     (10,668     (19,362
INCOME TAX PROVISION (BENEFIT)   (23     33       44       58  
NET LOSS $ (4,126   $ (7,304   $ (10,712   $ (19,420
               
DILUTED EPS COMPUTATION              
Numerator:  Net loss $ (4,126   $ (7,304   $ (10,712   $ (19,420
Denominator:              
Weighted-average common shares outstanding   39,346       37,972       39,203       37,730  
Dilutive effect of stock awards                      
Total shares   39,346       37,972       39,203       37,730  
Diluted EPS $ (0.10   $ (0.19   $ (0.27   $ (0.51
               

COVISINT CORPORATION
NON-GAAP CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In Thousands, Except Per Share Data)
(Unaudited)
       
  THREE MONTHSENDED SEPTEMBER 30,   SIX MONTHSENDED SEPTEMBER 30,
  2015   2014   2015   2014
REVENUE $ 18,393     $ 21,735     $ 36,875     $ 43,322  
COST OF REVENUE   7,542       12,526       16,385       25,633  
GROSS PROFIT   10,851       9,209       20,490       17,689  
    59     42     56     41
OPERATING EXPENSES:              
Research and development   4,225       3,194       8,262       7,034  
Sales and marketing   6,951       7,585       14,318       16,612  
General and administrative   3,339       3,294       6,442       7,408  
Total operating expenses   14,515       14,073       29,022       31,054  
OPERATING LOSS   (3,664     (4,864     (8,532     (13,365
Other income (expense)   (33     17       (31     39  
LOSS BEFORE INCOME TAXES   (3,697     (4,847     (8,563     (13,326
INCOME TAX PROVISION (BENEFIT)   (23     33       44       58  
NET LOSS $ (3,674   $ (4,880   $ (8,607   $ (13,384
               
DILUTED EPS COMPUTATION              
Numerator:  Net loss $ (3,674 )   $ (4,880 )   $ (8,607 )   $ (13,384 )
Denominator:              
Weighted-average common shares outstanding   39,346       37,972       39,203       37,730  
Dilutive effect of stock awards              
Total shares   39,346       37,972       39,203       37,730  
Diluted EPS $ (0.09   $ (0.13   $ (0.22   $ (0.35

COVISINT CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP
(In Thousands, Except Per Share Data)
(Unaudited)
       
  THREE MONTHSENDED SEPTEMBER 30,   SIX MONTHSENDED SEPTEMBER 30,
  2015   2014   2015   2014
Gross profit $ 9,924     $ 7,409     $ 18,629     $ 13,730  
Gross profit %   54     34     51     32
Adjustments:              
Stock compensation expense—cost of revenue   22       69       52       584  
% of total revenue   %     %     %     1
Cost of revenue—amortization of capitalized software   905       1,731       1,809       3,375  
% of total revenue   5     8 %     5     8
Adjusted gross profit $ 10,851     $ 9,209     $ 20,490     $ 17,689  
Adjusted gross profit %   59     42     56     41
               
               
       
  THREE MONTHSENDED SEPTEMBER 30,   SIX MONTHSENDED SEPTEMBER 30,
  2015   2014   2015   2014
Cost of revenue $ 8,469     $ 14,326     $ 18,246     $ 29,592  
Adjustments:              
Stock compensation expense   22       69       52       584  
Cost of revenue - amortization of capitalized software   905       1,731       1,809       3,375  
               
Cost of revenue, non-GAAP $ 7,542     $ 12,526     $ 16,385     $ 25,633  
               
               
  THREE MONTHSENDED SEPTEMBER 30,   SIX MONTHSENDED SEPTEMBER 30,
  2015   2014   2015   2014
Research and  development $ 3,127     $ 2,583     $ 6,790     $ 5,699  
Adjustments:              
Capitalized internal software costs   (1,126     (639     (1,526     (1,429
Stock compensation expense   28       28       54       94  
               
Research and  development, non-GAAP $ 4,225     $ 3,194     $ 8,262     $ 7,034  
               
               
               
               
               
               
  THREE MONTHSENDED SEPTEMBER 30,   SIX MONTHSENDED SEPTEMBER 30,
  2015   2014   2015   2014
Sales and marketing $ 7,183     $ 8,003     $ 14,659     $ 17,775  
Adjustments:              
Stock compensation expense   232       341       341       946  
Amortization of customer relationship agreements         77             217  
               
Sales and marketing, non-GAAP $ 6,951     $ 7,585     $ 14,318     $ 16,612  
               
               
  THREE MONTHSENDED SEPTEMBER 30,   SIX MONTHSENDED SEPTEMBER 30,
  2015   2014   2015   2014
General and administrative $ 3,730     $ 4,111     $ 7,817     $ 9,657  
Adjustments:              
Stock compensation expense   391       817       1,375       2,249  
               
General and administrative, non-GAAP $ 3,339     $ 3,294     $ 6,442     $ 7,408  
               
               
  THREE MONTHSENDED SEPTEMBER 30,   SIX MONTHSENDED SEPTEMBER 30,
  2015   2014   2015   2014
Net loss $ (4,126   $ (7,304   $ (10,712   $ (19,420
Adjustments:              
Capitalized internal software costs   (1,126     (639     (1,526     (1,429
Stock compensation expense   673       1,255       1,822       3,873  
Amortization of capitalized software and other intangibles   905       1,808       1,809       3,592  
Net loss, non-GAAP $ (3,674   $ (4,880   $ (8,607   $ (13,384
               
               
  THREE MONTHSENDED SEPTEMBER 30,   SIX MONTHSENDED SEPTEMBER 30,
  2015   2014   2015   2014
Diluted EPS $ (0.10   $ (0.19   $ (0.27   $ (0.51
Adjustments:              
Capitalized internal software costs   (0.03     (0.02     (0.04     (0.04
Stock compensation expense   0.02       0.03       0.05       0.10  
Amortization of capitalized software and other intangibles   0.02       0.05       0.04       0.10  
Diluted EPS, non-GAAP $ (0.09   $ (0.13   $ (0.22   $ (0.35

COVISINT CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In Thousands)
(Unaudited)
   
  SIX MONTHSENDED SEPTEMBER 30,
  2015   2014
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES:      
Net loss $ (10,712   $ (19,420
Adjustments to reconcile net loss to cash provided by (used in) operations:      
Depreciation and amortization   3,497       4,687  
Deferred income taxes   48       (56
Stock award compensation   1,822       3,874  
Other   5        
Net change in assets and liabilities, net of effects from currency fluctuations:      
Accounts receivable   2,723       2,168  
Other assets   3,658       1,984  
Accounts payable and accrued expenses   (1,625     2,207  
Deferred revenue   (2,986     (5,747
Net cash (used in) operating activities $ (3,570   $ (10,303
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:      
Purchase of:      
Property and equipment   (3,451     (1,873
Capitalized software   (1,526     (1,429
Proceeds from asset disposals   29        
Net cash (used in) investing activities $ (4,948   $ (3,302
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:      
Cash payments from former parent company         16,347  
Cash payments to former parent company         (9,247
Vendor financing payments   (369      
Net proceeds from exercise of stock awards   486       1,184  
Net cash provided by financing activities $ 117     $ 8,284  
EFFECT OF EXCHANGE RATE CHANGES ON CASH   19       (47
NET CHANGE IN CASH   (8,382     (5,368
CASH AT BEGINNING OF PERIOD   50,077       49,536  
CASH AT END OF PERIOD $ 41,695     $ 44,168  

 
Investor Relations Contact866.319.7659investors@covisint.comMedia ContactBrad SchechterVice President, Marketing, Covisint248.483.2097bschecht@covisint.comFor Sales and Marketing InformationCovisint Corporation, 26533 Evergreen Road, Suite 500, Southfield, MI 48076, 800-229-4125http://www.covisint.com

Primary Logo