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Attunity Ltd (ATTU)
Q1 2013 Earnings Conference Call
May 2, 2013 10:00 am ET
Garth Russell - MD, KCSA Strategic Communications
Shimon Alon - Chairman & CEO
Dror Harel-Elkayam - CFO
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Mr. Garth Russell
Before turning the call over to management, I would like to make the following remarks concerning forward looking statements. All statements in this conference call other than historical facts are forward looking statements. The words anticipate, believe, estimate, expect, intend, guidance, confidence, target project and other similar expressions typically used to identify forward-looking statements.
These forward looking statements are not guarantees of future performances and may involve and are subject to risks and uncertainties and other factors that may affect Attunity’s business, financial condition, another operating results which include but are not limited to the risk factors, another qualifications contained in Attunity’s Annual Report on Form 20-F, quarterly reports that are filed in a 6-K, and other reports filed by Attunity with the SEC which are Attunity’s directive. Therefore, actual outcomes and results may different materially from what is expressed or implied by these forward looking statements. Attunity’s express or disclaims any attempt or obligation to update this forward-looking statements.
During this call, we may also present certain non-GAAP financial measures such as non-GAAP net income and certain ratios are used with these measures. In our press release, the financial table issued earlier today which is located on our website at www.attunity.com, you’ll find our definitions of these non-GAAP financial measures, a reconciliation of these non-GAAP financial measures within closest GAAP financial measure as well as the discussion of why think this non-GAAP financial measures are relevant to our results. These financial measures are included for the benefit of investors and should not be considered instead of the GAAP measures.
At this time, it is now my pleasure to turn the call over to Shimon Alon, Chairman and Chief Executive Officer of Attunity. Shimon, the floor is yours.
Thank you, Garth and thank you everyone for joining our call today. After a strong fiscal year 2012, especially in the fourth quarter, we fell short of our all expectations in the first quarter of 2013. Today, I will outline the key reasons for the disappointing results this quarter and the relative steps we are taking to effectively achieve long-term goals. After our prepared remarks, Dror and I would happy to answer any questions you may have. With that said let’s get started.
During the first quarter of 2013, we faced some short-term challenges that caused decline in our revenues. We are continuing to see high demand for our solutions on the global scale and focusing on developing long-term goal opportunities. However, we needed to make certain changes in order to properly capitalize on these growth opportunities. The main causes for this decline in revenue is due to the overall performance of our sales and marketing team and lower than expected OEM’s revenues.
There are several environment that impacted sales and marketing execution, which we are in the process of addressing all of them. Most probably, we had made a shift to work inbound marketing efforts. We are a new media outlet and an increased focus on brand awareness for Attunity. Though these efforts have made relatively good, overall in the past few years, we now realize that there was not enough focus on traditional demand generation and sales tactics which had been the bread and butter for our historical performance.
This strategic shift in sales and marketing led an imbalance resulting a number of long-term new business mix that reduction in short-term sales opportunities. We seem to get our first quarter results. In order to address this imbalance, we have reorganized our marketing team and made a change in leadership. As part of this process, we have reintroduced a number of proven sales and marketing tactics for our solutions that help consistently deliver measurable results in the past. The combination of this traditional tactics in new media strategies is expected to possession Attunity for consistent performance and greater market share given current demands.
These activities will help us to support the expanded sales team in North America as well as other territories. As previously announced, we hired six new sales people through our direct sales team between Q4 2012 and Q1 2013. Many of these new additions to the team have gone through our training programs and now expect to achieve full capacity in the second half of 2014.
Considering all of the points I have described, it should be clear to everyone, why we are looking at the first quarter as an anomaly? And not reflective of the overall health of our business. Nothing could be more demonstrative of this positive outlook than the recent announcement earlier today of a multiyear agreement with leading Global Fortune 50 Technology Companies, and a new multi-million dollar agreement with a global provider of data analytics solutions, service in thousands of customers worldwide, I will touch more about this in few moments.
In addition, our (inaudible) events that were completely out of our control. In particular, one of our largest OEM partners which is one of the largest IT and services providers in the world, turning significantly lower unusual royalty revenues for the fourth quarter which is typically the strongest sales period. These results recognized in our third quarter, (inaudible) into the quarter and are completely unexpected.