Attunity Reports Second Quarter 2008 Results

Company Posts Second Quarter Non-GAAP Operational Profit

BURLINGTON, Massachusetts, July 23 /PRNewswire-FirstCall/ -- Attunity Ltd
(OTC: ATTUF), a leading provider of real-time event capture and data
integration software, reported today its unaudited financial results for the
second quarter ended June 30, 2008.
Key financial metrics for the second quarter of 2008:

- Revenues: $3,425,000 compared to $3,410,000 in the second quarter of
2007.

- Net Operating Profit (Non GAAP): $24,000 Non-GAAP net operating profit
compared to $721,000 Non-GAAP net operating loss in the second quarter
of 2007. Non-GAAP operating profit /loss excludes equity based
compensation expenses (see footnote 1), software development costs
capitalization and amortization (see footnote 2) and employment
termination and offices shutdown costs (see footnote 3).

- Net Operating Loss (GAAP): $566,000, compared to $1,081,000 in the
second quarter of 2007, an improvement of 48%.

- Net Loss (GAAP): $905,000, compared to $1,325,000 in the second quarter
of 2007, an improvement of 32%.

- Net Loss (Non-GAAP): $92,000, compared to $754,000 in the second
quarter of 2007, an improvement of 88%. Non-GAAP net loss excludes
equity based compensation expenses (see footnote 1), software
development costs capitalization and amortization (see footnote 2),
employment termination and offices shutdown costs (see footnote 3) and
amortization of debt discount and deferred charges (see footnote 4).

- Net Loss per Diluted Share (GAAP): $0.04, compared to $0.06 in the
second quarter of 2007.

- Net Loss per Diluted Share (Non-GAAP): $0.00, compared to $0.03 in the
second quarter of 2007. Non-GAAP loss per Diluted Share excludes equity
based compensation expenses (see footnote 1), software development
costs capitalization and Amortization (see footnote 2), employment
termination and offices shutdown costs (see footnote 3) and
amortization of debt discount and deferred charges (see footnote 4).

See "Use of Non-GAAP Financial Information" below for more information
regarding Attunity's use of Non-GAAP financial measures.
"We are pleased to report our operational profitability, on a non-GAAP
basis, for the second quarter", stated Shimon Alon, Attunity Chairman and
CEO. "This is a solid milestone for us, not least given the backdrop of my
transition in as CEO during the quarter. Some excellent new customer wins,
good repeat business, innovative and competitive products, and growing
interest in our core capabilities of real-time data integration and
event-capture, have all contributed to driving a good first half-year for us."
Highlights of the Quarter:

- Shimon Alon chairman of the board appointed Chief Executive Officer

- Major customer wins across the world such as Schretlen & Co. (a
subsidiary of Netherlands-based Rabobank), Greyhound Lines, The
Warranty Group, Sensient, and Turkey National Insurance

- Sungard announcement of their new compliance dashboard product based on
Attunity InFocus

- Sponsorship of the securities event SIFMA in NYC, and HP Technology
Forum & Expo, Las Vegas

- Announcement of the full availability of Attunity Integration Suite
(AIS) v5.1 across entire HP server range

"Since coming on board as Chief Executive Officer I have been encouraged
by what I have seen," continued Shimon Alon. "We have an excellent base of
loyal customers, partners who trust us as a strategic enabler of their goals,
a solid and field-proven product-offering, and a motivated and very
experienced Attunity team. With renewed vigor, and a refined focus on our
corporate goals, I believe that this combination will be a winning formula,
helping drive additional customers, partnerships and growth over the coming
quarters."
About Attunity
Attunity is a leading provider of real-time event capture and data
integration software. Using our software solutions, Attunity's customers
enjoy dramatic business benefits by driving down the cost of managing their
operational systems, creating flexible, service-based architectures for
increased business agility, and by detecting critical actionable business
events, as they happen, for faster business execution.
Attunity has supplied innovative software solutions to its
enterprise-class customers for nearly 20 years and has successful deployments
at thousands of organizations worldwide. Attunity provides software directly
and indirectly through a number of strategic and OEM agreements with partners
such as Microsoft, Oracle, IBM, HP and SAP/Business Objects. Headquartered in
Boston, Attunity serves its customers via offices in North America, Europe,
and Asia Pacific and through a network of local partners. For more
information, please visit us at http://www.attunity.com, the content of which
is not part of this press release.
Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with generally
accepted accounting principles, or GAAP, Attunity uses non-GAAP measures of
net loss, net operating profit (loss) and net loss per share, which are
adjustments from results based on GAAP to exclude non-cash equity based
compensation charges in accordance with SFAS 123(R), non-cash capitalization
and amortization of software development costs in accordance with SFAS 86,
expenses related to employment termination and offices shutdown costs, and
non cash financial expenses such as amortization of beneficial conversion
features related to the convertible debt and deferred charges related to
warrants granted in connection with a long term loan. Attunity's management
believes the non-GAAP financial information provided in this release is
useful to investors' understanding and assessment of Attunity's on-going core
operations and prospects for the future. Management uses both GAAP and
non-GAAP information in evaluating and operating business internally and as
such has determined that it is important to provide this information to
investors. 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.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning
of the "safe harbor" provisions of the Private Securities Litigation Reform
Act of 1995 and other Federal Securities laws. For example, when we discuss
our expectation that the combination of our excellent base of loyal
customers, partners who trust us as a strategic enabler of their goals, a
solid and field-proven product-offering, and a motivated and very experienced
Attunity team together with a refined focus on our corporate goals, will be a
winning formula, helping drive additional customers, partnerships and growth
over the coming quarters, we are using a forward looking statement. Because
such statements deal with future events, they are subject to various risks
and uncertainties and actual results could differ materially from Attunity's
current expectations. Factors that could cause or contribute to such
differences include, but are not limited to: the impact on revenues of
economic and political uncertainties and weaknesses in various regions of the
world, including the commencement or escalation of hostilities or acts of
terrorism; any unforeseen developmental or technological difficulties with
regard to Attunity's products; changes in the competitive landscape,
including new competitors or the impact of competitive pricing and products;
a shift in demand for products such as Attunity's; unknown factors affecting
third parties with which Attunity has formed business alliances; timely
availability and customer acceptance of Attunity's new and existing products;
and other factors and risks on which Attunity may have little or no control.
This list is intended to identify only certain of the principal factors that
could cause actual results to differ. For a more detailed description of the
risks and uncertainties affecting Attunity, reference is made to Attunity's
Annual Report on Form 20-F for the year ended December 31, 2007, which is on
file with the Securities and Exchange Commission. Except as otherwise
required by law, Attunity undertakes no obligation to publicly release any
revisions to these forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
(c) 2008 Attunity Ltd. All rights reserved. Attunity is a trademark of
Attunity Inc.
CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands

June 30, December 31,
2008 2007
Unaudited
ASSETS

CURRENT ASSETS:
Cash and cash equivalents $ 1,285 $ 1,321
Restricted cash 232 159
Trade receivables and unbilled revenues (net of
allowance for doubtful accounts of $ 25 and $ 78
at June 30, 2008 and December 31, 2007,
respectively) 1,304 912
Other accounts receivable and prepaid expenses 465 484

Total current assets 3,286 2,876

LONG-TERM ASSETS:
Long-term prepaid expenses 113 72
Severance pay fund 1,215 972
Property and equipment, net 460 579
Software development costs, net 4,094 4,374
Goodwill 6,524 6,361
Deferred charges, net 314 423

Total long-term assets 12,720 12,781

Total assets $ 16,006 $ 15,657

CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands, except share and per share data

June 30, December 31,
2008 2007
Unaudited
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
Current maturities of long-term debt $ 1,022 $ 18
Current maturities of long-term convertible debt 1,440 -
Trade payables 535 457
Deferred revenues 2,983 2,344
Employees and payroll accruals 967 876
Accrued expenses and other liabilities 959 901

Total current liabilities 7,906 4,596

LONG-TERM LIABILITIES:
Convertible debt - 1,099
Long-term debt 1,000 2,009
Accrued severance pay 1,562 1,287

Total long-term liabilities 2,562 4,395

SHAREHOLDERS' EQUITY:
Share capital - Ordinary shares of NIS 0.1 par
value -

Authorized: 70,000,000 shares at June 30, 2008
and December 31, 2007; Issued and outstanding:
23,196,236 shares at June 30, 2008 and December
31, 2007 720 720
Additional paid-in capital 104,132 103,924
Accumulated other comprehensive loss (309) (431)
Accumulated deficit (99,005) (97,547)

Total shareholders' equity 5,538 6,666

Total liabilities and shareholders' equity $ 16,006 $ 15,657

CONSOLIDATED STATEMENTS OF OPERATIONS

U.S. dollars in thousands, except share and per share data

Three months
Six months ended ended

June 30, June 30,
2008 2007 2008 2007
Unaudited
Revenues:
Software licenses $ 3,500 $ 3,369 $ 1,846 $ 1,683
Maintenance and services 3,201 3,361 1,579 1,727

6,701 6,730 3,425 3,410
Operating expenses:
Cost of revenues 1,285 1,352 653 693
Research and development, net 1,449 1,974 739 1,030
Selling and marketing 3,476 4,366 1,775 1,978
General and administrative 1,279 1,408 824 740
Employment termination and
offices shutdown costs - 761 - 50

Total operating expenses 7,489 9,861 3,991 4,491

Operating loss (788) (3,131) (566) (1,081)

Financial expenses, net (647) (455) (337) (230)
Other income 3 40 3 -

Loss before income taxes (1,432) (3,546) (900) (1,311)
Taxes on income 26 35 5 14

$ $ $
Net loss (1,458) (3,581) $ (905) (1,325)

Basic and diluted net loss per $ $ $ $
share (0.06) (0.15) (0.04) (0.06)
Weighted average number of
shares used in computing basic
and diluted net loss per share 23,196 23,173 23,196 23,176

RECONCILIATION OF SUPPLEMENTAL FINANCIAL INFORMATION

U.S. dollars in thousands, except per share data

Three months
Six months ended ended

June 30, June 30,
2008 2007 2008 2007
Unaudited

$ $
GAAP operating loss $ (788) (3,131) $ (566) (1,081)
Stock based compensation (1) 185 390 94 191
Software development costs
capitalization and amortization
(2) 303 123 133 119
Employment termination and
offices shutdown costs (3) 363 761 363 50

$
Non-GAAP operating profit (loss) $ 63 (1,857) $ 24 $ (721)

$ $ $
GAAP net loss (1,458) (3,581) $ (905) (1,325)
Stock based compensation (1) 185 390 94 191
Software development costs
capitalization and amortization
(2) 303 123 133 119
Employment termination and
offices shutdown costs (3) 363 761 363 50
Financial expenses (4) 446 408 223 211

$
Non-GAAP net loss $ (161) (1,899) $ (92) $ (754)

GAAP basic and diluted net loss $ $ $ $
per share (0.06) (0.15) (0.04) (0.06)
Stock based compensation (1) 0.01 0.02 *) 0.01
Software development costs
capitalization and amortization
(2) 0.01 0.01 *) 0.01
Employment termination and
offices shutdown costs (3) 0.01 0.03 0.02 *)
Financial expenses (4) 0.02 0.02 0.01 0.01

Non-GAAP basic and diluted net $ $ $ $
loss per share (0.01) (0.07) (0.00) (0.03)
Weighted average number of
shares used in computing basic
and diluted net loss per share 23,196 23,173 23,196 23,176

*) Less than $0.01 per share

(1) Equity-based compensation**
expenses resulting under SFAS
123(R):
Equity-based compensation
expense included in "Research
and development" $ 63 $ 84 $ 32 $ 45
Equity-based compensation
expense included in "Selling and
marketing" 93 107 46 41
Equity-based compensation
expense included in "General and
administrative" 29 199 16 105

$ 185 $ 390 $ 94 $ 191

** "Equity based compensation expenses" refer to the amortized fair value
of all equity based awards granted to employees.
(2) Software development costs
capitalization and amortization
resulting under SFAS 86:
Capitalization $ 755 $ 674 $ 374 $ 336
Amortization 452 551 241 217

$ 303 $ 123 $ 133 $ 119

(3) The Company terminated its entire workforce in France and Australia
in March 2007. The company's former CEO retired in May 2008.
(4) Financial expenses:
Amortization of debt discount $ 340 $ 339 $ 170 $ 170
Amortization of deferred charges 106 69 53 41

$ 446 $ 408 $ 223 $ 211

For more information:

Andy Bailey, VP Marketing Dror Elkayam, VP Finance
Attunity Attunity
+1-781-213-5204 +972-9-899-3000
andy.bailey@attunity.com dror.elkayam@attunity.com

SOURCE Attunity Ltd

Andy Bailey, VP Marketing, Attunity, +1-781-213-5204,
andy.bailey@attunity.com; Dror Elkayam, VP Finance, Attunity, +972-9-899-3000,
dror.elkayam@attunity.com