EX-99.1 2 d719718dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

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Mattersight Announces First Quarter 2014 Results

CHICAGO, IL, May 7, 2014 – Mattersight Corporation (Nasdaq: MATR) today announced financial results for the first quarter ended March 31, 2014.

Mattersight’s total services revenue was $7.0 million, including $5.9 million of subscription revenue. The Company realized an “Adjusted Earnings¹” loss of $1.6 million for the first quarter of 2014. Adjusted Earnings is a non-GAAP measure. For a reconciliation of operating loss to Adjusted Earnings, see the accompanying schedule. Mattersight’s net loss was $4.0 million in the first quarter of 2014.

Q1 Highlights

 

    Q1 performance in line with forecast, which reflected the previously announced loss of a contract

 

    Booked contracts with incremental ACV of $3.4 million

 

    Increased rolling four quarter incremental ACV bookings by 98%

 

    Achieved a 9% sequential increase in our book of business

 

    Converted three pilots to subscription contracts

 

    Added a record 29 new pilots, including 22 routing pilots; 18 of these pilots are with new logo customers

 

    Ended the quarter with a record 66 pilots having a record follow-on ACV of ~$34 million

 

    Signed a paid pilot with a Fortune 50 company for our performance management application, with large follow-on potential

 

    Closed significant add-on orders at several existing large customers

Conference Call Information

Mattersight management will host a conference call at 5:00 p.m. ET on Wednesday, May 7, 2014. The conference call and slide presentation will be available at the Investment Community section of Mattersight’s website at http://www.mattersight.com/investment/. To listen to the conference call via telephone, please call 800.952.4789 (domestic) or 404.665.9579 (international), conference ID: 33606370.

For those who cannot access the live broadcast, a replay of the conference call will be available beginning approximately two hours after the live call is completed until June 7, 2014, by dialing 855.859.2056 (domestic) or 404.537.3406 (international), conference ID: 33606370.

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 safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements, which may be identified by use of words such as “plan,” “may,” “might,” “believe,” “expect,” “intend,” “could,” “would,” “should,” and other words and terms of similar meaning, involve risks and uncertainties that could cause actual results to

 

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differ materially from those described in the forward-looking statements. In addition to other factors and matters contained or incorporated in this document, important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements include, among other things, the risks detailed from time to time in Mattersight’s SEC filings. You can locate these filings on the Investor Relations page of Mattersight’s website, www.mattersight.com. Statements included or incorporated by reference into this press release are based upon information known to Mattersight as of the date of this press release, and the company assumes no obligation to publicly revise or update any forward-looking statement for any reason.

About Mattersight

Mattersight is a leader in enterprise analytics focused on customer and employee interactions and behaviors. Mattersight® Behavioral Analytics captures and analyzes customer and employee interactions, employee desktop data, and other contextual information to optimally route customers to the best available employee, improve operational performance, and predict future customer and employee outcomes. Mattersight’s analytics are based on millions of proprietary algorithms and the application of unique behavioral models. The company’s SaaS+ delivery model combines analytics in the cloud with deep customer partnerships to drive significant business value. Mattersight’s solutions are used by leading companies in Healthcare, Insurance, Financial Services, Telecommunications, Cable, Utilities, Education, Hospitality, and Government. See What Matters™ by visiting www.Mattersight.com.

 

  1. Mattersight presents Adjusted Earnings, a non-GAAP measure that represents cash earnings performance, excluding the impact of non-cash expenses and expense reduction activities, because management believes that Adjusted Earnings provide investors with a better understanding of the results of Mattersight’s operations. Management believes that Adjusted Earnings reflect Mattersight’s resources available to invest in its business and strengthen its balance sheet. In addition, expense reduction activities can vary significantly between periods on the basis of factors that management does not believe reflect current-period operating performance. Although similar adjustments for expense reduction activities may be recorded in future periods, the size and frequency of these adjustments cannot be predicted. The Adjusted Earnings measure should be considered in addition to, not as a substitute for or superior to, operating income, cash flows or other measures of financial performance prepared in accordance with GAAP.

Contact

Mark Iserloth

Vice President and Chief Financial Officer

312.454.3613

ir@mattersight.com

 

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MATTERSIGHT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited and in thousands, except per share data)

 

     For the  
     Three Months Ended  
     March 31,
2014
    March 31,
2013
 

Revenue:

    

Behavioral Analytics revenue

   $ 6,749      $ 8,194   

Other revenue

     232        322   
  

 

 

   

 

 

 

Total services revenue

     6,981        8,516   

Reimbursed expenses

     32        82   
  

 

 

   

 

 

 

Total revenue

     7,013        8,598   

Operating expenses:

    

Cost of Behavioral Analytics revenue

     2,098        2,723   

Cost of Other revenue

     103        156   
  

 

 

   

 

 

 

Cost of services

     2,201        2,879   

Reimbursed expenses

     32        82   
  

 

 

   

 

 

 

Total cost of revenue, exclusive of depreciation and amortization shown below:

     2,233        2,961   

Sales, marketing and development

     5,221        6,230   

General and administrative

     2,250        2,271   

Depreciation and amortization

     743        966   
  

 

 

   

 

 

 

Total operating expenses

     10,447        12,428   
  

 

 

   

 

 

 

Operating loss

     (3,434     (3,830

Interest and other expense, net

     (150     (91

Change in fair value of warrant liability

     (370     —     
  

 

 

   

 

 

 

Loss before income taxes

     (3,954     (3,921

Income tax (provision) benefit

     (9     248   
  

 

 

   

 

 

 

Net loss

     (3,963     (3,673

Dividends related to Series B Stock

     (147     (147
  

 

 

   

 

 

 

Net loss available to Common Stock holders

   $ (4,110   $ (3,820
  

 

 

   

 

 

 

Per share of Common Stock:

    

Basic net loss available to Common Stock holders

   $ (0.22   $ (0.23
  

 

 

   

 

 

 

Diluted net loss available to Common Stock holders

   $ (0.22   $ (0.23
  

 

 

   

 

 

 

Shares used to calculate basic net loss per share

     18,503        16,320   
  

 

 

   

 

 

 

Shares used to calculate diluted net loss per share

     18,503        16,320   
  

 

 

   

 

 

 

Stock-based compensation, primarily restricted stock, is included in individual line items above:

    

Cost of Behavioral Analytics revenue

   $ 56      $ 4   

Sales, marketing and development

     590        849   

General and administrative

     442        518   

 

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MATTERSIGHT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited and in thousands)

 

     For the  
     Three Months Ended  
     March 31,
2014
    March 31,
2013
 

Net loss

   $ (3,963   $ (3,673

Other comprehensive loss:

    

Effect of currency translation

     5        (8
  

 

 

   

 

 

 

Comprehensive net loss

   $ (3,958   $ (3,681
  

 

 

   

 

 

 

 

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MATTERSIGHT CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited and in thousands, except share and per share data)

 

     March 31,
2014
    December 31,
2013
 
ASSETS:     

Current Assets:

    

Cash and cash equivalents

   $ 8,101      $ 13,392   

Receivables (net of allowances of $12 as of March 31, 2014 and $12 as of December 31, 2013)

     2,435        2,384   

Prepaid expenses

     4,309        3,576   

Other current assets

     362        427   
  

 

 

   

 

 

 

Total current assets

     15,207        19,779   

Equipment and leasehold improvements, net

     4,922        5,158   

Goodwill

     972        972   

Intangibles, net

     453        409   

Other long-term assets

     4,328        4,431   
  

 

 

   

 

 

 

Total assets

   $ 25,882      $ 30,749   
  

 

 

   

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY:     

Current Liabilities:

    

Accounts payable

   $ 779      $ 752   

Accrued compensation and related costs

     1,424        1,844   

Unearned revenue

     5,390        7,215   

Other current liabilities

     4,694        4,098   
  

 

 

   

 

 

 

Total current liabilities

     12,287        13,909   

Long-term unearned revenue

     3,210        2,866   

Other long-term liabilities

     1,584        1,607   
  

 

 

   

 

 

 

Total liabilities

     17,081        18,382   
  

 

 

   

 

 

 

Series B Stock, $0.01 par value; 5,000,000 shares authorized and designated; 1,649,122 shares issued and outstanding at March 31, 2014 and December 31, 2013, with a liquidation preference of $9,441 and $9,294 at March 31, 2014 and December 31, 2013, respectively

     8,411        8,411   

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; 20,750,724 and 20,465,984 shares issued at March 31, 2014, and December 31, 2013, respectively; and 19,074,434 and 18,886,966 outstanding at March 31, 2014 and December 31, 2013, respectively

     208        205   

Additional paid-in capital

     228,976        228,038   

Accumulated deficit

     (216,135     (212,172

Treasury stock, at cost, 1,676,290 and 1,579,018 shares at March 31, 2014 and December 31, 2013, respectively

     (8,631     (8,082

Accumulated other comprehensive loss

     (4,028     (4,033
  

 

 

   

 

 

 

Total stockholders’ equity

     390        3,956   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 25,882      $ 30,749   
  

 

 

   

 

 

 

 

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MATTERSIGHT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited and in thousands)

 

     For the  
     Three Months Ended  
     March 31,
2014
    March 31,
2013
 

Cash Flows from Operating Activities:

    

Net loss

   $ (3,963   $ (3,673

Adjustments to reconcile net loss to net cash used in operating activities:

    

Depreciation and amortization

     743        966   

Stock-based compensation

     1,088        1,371   

Change in fair value of warrant liability

     370        —     

Changes in assets and liabilities:

    

Receivables

     (51     (614

Prepaid expenses

     (664     30   

Other assets

     66        (38

Accounts payable

     27        489   

Accrued compensation and related costs

     (420     (147

Unearned revenue

     (1,481     964   

Other liabilities

     62        (215
  

 

 

   

 

 

 

Total adjustments

     (260     2,806   
  

 

 

   

 

 

 

Net cash used in operating activities

     (4,223     (867
  

 

 

   

 

 

 

Cash Flows from Investing Activities:

    

Capital expenditures and other

     (66     (219

Patents and trademarks

     (65     (53
  

 

 

   

 

 

 

Net cash used in investing activities

     (131     (272
  

 

 

   

 

 

 

Cash Flows from Financing Activities:

    

Principal payments under capital lease obligations

     (422     (629

Acquisition of treasury stock

     (549     (195

Proceeds from stock compensation and employee stock purchase plans, net

     36        36   

Fees from issuance of Common Stock

     (2     —     
  

 

 

   

 

 

 

Net cash used in financing activities

     (937     (788
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     —          (12
  

 

 

   

 

 

 

Decrease in cash and cash equivalents

     (5,291     (1,939

Cash and cash equivalents, beginning of period

     13,392        14,419   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 8,101      $ 12,480   
  

 

 

   

 

 

 

Non-Cash Investing and Financing Transactions:

    

Capital lease obligations incurred

   $ 420      $ 785   

Capital equipment purchased on credit

     420        785   

Fair value of warrants classified as liability

     1,155        —     

Supplemental Disclosures of Cash Flow Information:

    

Interest paid

   $ 76      $ 71   

 

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MATTERSIGHT CORPORATION

CALCULATION OF ADJUSTED EARNINGS MEASURE

(Unaudited and in thousands)

 

     For the  
     Three Months Ended  
     March 31,
2014
    March 31,
2013
 

GAAP — Operating loss

   $ (3,434   $ (3,830

Add back (reduce) the effect of:

    

Stock-based compensation

     1,088        1,371   

Depreciation and amortization

     743        966   
  

 

 

   

 

 

 

Adjusted earnings measure — loss

   $ (1,603   $ (1,493
  

 

 

   

 

 

 

 

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