/EINPresswire.com/ -- CHICAGO, IL -- (Marketwired) -- 02/10/16 -- Mattersight Corporation (NASDAQ: MATR), the pioneer in personality-based software applications, today announced financial results for the fourth quarter ending December 31, 2015.

"In the fourth quarter, we sustained the strong across-the-board momentum that marked this record-breaking year," said President and CEO Kelly Conway. "Routing continued to drive new logo growth and we saw significant expansion in several existing client relationships. The market for software applications that help companies deliver more emotionally-connected customer experiences is growing in 2016 and we are scaling our sales, service and delivery teams to meet this demand."

Fourth Quarter 2015 Financial Highlights

• Record Bookings: Annual Contract Value (ACV) bookings for the fourth quarter were $7.0 million. ACV bookings for the last four quarters were $22.7 million, a 30% year-over-year increase.
• Record Book of Business: Annualized Book of Business was $56.6 million for the fourth quarter, up 32% on a year-over-year basis.
• Record Subscription Revenues: Total subscription revenues were a record $9.6 million, up 30% on a year-over-year basis.
• Revenues: Total revenues for the fourth quarter were $10.4 million, representing a 25% increase on a year-over-year basis.
• Record Revenue in Deployment: Annualized revenue in deployment was a record $15.1 million, a 55% increase on a year-over-year basis.
• Gross Margin: Gross margin was 72.1% in the fourth quarter and 73.3% for the last four quarters.

Fourth Quarter 2015 Business Highlights

• Record Routing Performance: Drove ~70% of fourth quarter bookings with Predictive Behavioral Routing, coming from three new logos and totaling in excess of 5,000 new seats sold.
• Record Bookings from New Customers: Generated 50% of bookings from new customers over the last four quarters.
• First Third-Party Cloud Deal: Signed the first deal to implement Predictive Behavioral Routing with a third-party cloud telephony provider.
• Call to Loyalty: Hosted Call to Loyalty, Mattersight's first annual customer summit, which was attended by over 150 customers and prospects from 60 unique companies.
• Expanded Sales Engine: Expanded the reach and effectiveness of the sales and customer delivery organizations with the addition of three quota carriers, a VP of Product Marketing, SVP of Sales for the Eastern Region and Chief Customer Officer.
• New Routing Algorithm: Launched Version 3.3 of Mattersight's flagship Predictive Behavioral Routing algorithm, the fourth new version of the routing algorithm released in 2015.
• Patents: Added two new patents, bringing Mattersight's total U.S. patent portfolio to 22 and bolstering the protection of Mattersight's innovative solutions.
• Workplace Recognition: Named one of the nation's Best and Brightest Companies to Work For®by the National Association of Business Resources.

Non-GAAP Financial Measures

The Company realized an "Adjusted Earnings(1)" loss of $1.7 million for the fourth quarter of 2015. 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 $4.4 million in the fourth quarter of 2015.

Conference Call Information

Mattersight management will host a conference call at 5:00 p.m. ET on Wednesday, February 10, 2016. The conference call and slide presentation will be available at the Investor Relations section of Mattersight's website at http://www.mattersight.com/about-us/investor-relations. To listen to the conference call via telephone, please call 800.952.4789 (domestic) or 404.665.9579 (international), conference ID: 41027725.

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 March 9, 2016, by dialing 855.859.2056 (domestic) or 404.537.3406 (international), conference ID: 41027725.

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 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. In light of Regulation FD, it is our policy not to comment on earnings, financial guidance or operations other than through press releases, publicly announced conference calls, or other means that will constitute public disclosure for purposes of Regulation FD. Mattersight uses its website at www.mattersight.com as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

About Mattersight

Mattersight's mission is to help brands have more effective and effortless conversations with their customers. Using a suite of innovative personality-based software applications, Mattersight can analyze and predict customer behavior based on the language exchanged during service and sales interactions. This insight can then facilitate real-time connections between customers and the agents best capable of handling their needs. Mattersight's patented stack of SaaS applications has influenced hundreds of millions of shorter, more satisfying customer interactions. Organizations across the Financial Services, Healthcare, Technology and Telco industries rely on Mattersight to drive customer retention, employee engagement and operating efficiency. An independent research study documents the average return on investment for these organizations is 344%. To learn more about how Mattersight can help your company, please visit 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.

                          MATTERSIGHT CORPORATION
                   CONSOLIDATED STATEMENTS OF OPERATIONS
            (Unaudited and in thousands, except per share data)

                                                          For the Twelve
                                 For the Three Months         Months
                                 --------------------  --------------------
                                         Ended                 Ended
                                 --------------------  --------------------
                                  Dec. 31,   Dec. 31,   Dec. 31,   Dec. 31,
                                    2015       2014       2015       2014
                                 ---------  ---------  ---------  ---------
Revenue:
  Subscription revenue           $   9,572  $   7,376  $  36,091  $  26,372
  Other revenue                        800        910      3,821      3,947
                                 ---------  ---------  ---------  ---------
Total revenue                       10,372      8,286     39,912     30,319
Operating expenses:
  Cost of Subscription revenue       2,219      1,657      8,072      6,820
  Cost of Other revenue                674        849      2,604      2,579
                                 ---------  ---------  ---------  ---------
Total cost of revenue, exclusive
 of depreciation and
 amortization shown below:           2,893      2,506     10,676      9,399
  Research and development           3,706      2,932     13,891     12,545
  Sales and marketing                3,738      2,409     13,754      9,102
  General and administrative         2,894      2,289     11,705      9,140
  Depreciation and amortization      1,335        856      4,682      3,128
                                 ---------  ---------  ---------  ---------
Total operating expenses            14,566     10,992     54,708     43,314
                                 ---------  ---------  ---------  ---------

Operating loss                      (4,194)    (2,706)   (14,796)   (12,995)
Interest and other expense, net       (160)       (69)      (850)    (1,090)
Change in fair value of warrant
 liability                               -        (33)         3       (124)
                                 ---------  ---------  ---------  ---------
Loss before income taxes            (4,354)    (2,808)   (15,643)   (14,209)
Income tax (provision) benefit          (7)         1        (38)       (23)
                                 ---------  ---------  ---------  ---------
Net loss                            (4,361)    (2,807)   (15,681)   (14,232)
Dividends related to Series B
 Stock                                (147)      (148)      (588)      (589)
                                 ---------  ---------  ---------  ---------
Net loss available to Common
 Stock holders                   $  (4,508) $  (2,955) $ (16,269) $ (14,821)
                                 =========  =========  =========  =========

Per share of Common Stock:
Basic net loss available to
 Common Stock holders            $   (0.18) $   (0.14) $   (0.70) $   (0.74)
                                 =========  =========  =========  =========
Diluted net loss available to
 Common Stock holders            $   (0.18) $   (0.14) $   (0.70) $   (0.74)
                                 =========  =========  =========  =========

Shares used to calculate basic
 net loss per share                 24,963     21,722     23,264     19,923
                                 =========  =========  =========  =========
Shares used to calculate diluted
 net loss per share                 24,963     21,722     23,264     19,923
                                 =========  =========  =========  =========

Stock-based compensation,
 primarily restricted stock, is
 included in individual line
 items above:
  Total cost of revenue          $      68  $      39  $     255  $     181
  Research and development             262        199      1,075      1,326
  Sales and marketing                  218         33      1,330        696
  General and administrative           596        503      2,742      1,975



                          MATTERSIGHT CORPORATION
               CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
                        (Unaudited and in thousands)

                                                          For the Twelve
                                 For the Three Months         Months
                                 --------------------  --------------------
                                         Ended                 Ended
                                 --------------------  --------------------
                                  Dec. 31,   Dec. 31,   Dec. 31,   Dec. 31,
                                    2015       2014       2015       2014
                                 ---------  ---------  ---------  ---------
Net loss                         $  (4,361) $  (2,807) $ (15,681) $ (14,232)
Other comprehensive loss:
Effect of currency translation          (1)         2         (1)         7
                                 ---------  ---------  ---------  ---------
Comprehensive net loss           $  (4,362) $  (2,805) $ (15,682) $ (14,225)
                                 =========  =========  =========  =========



                          MATTERSIGHT CORPORATION
                        CONSOLIDATED BALANCE SHEETS
       (Unaudited and in thousands, except share and per share data)

                                                December 31,   December 31,
                                                    2015           2014
                                               -------------  -------------
                    ASSETS:
Current Assets:
  Cash and cash equivalents                    $      15,407  $      14,238
  Receivables (net of allowances of $24 and
   $17, respectively)                                  4,863          3,460
  Prepaid expenses                                     4,582          4,449
  Other current assets                                   235            236
                                               -------------  -------------
    Total current assets                              25,087         22,383
Equipment and leasehold improvements, net              8,523          4,657
Goodwill                                                 972            972
Intangibles, net                                       3,353            571
Other long-term assets                                 2,467          3,495
                                               -------------  -------------
    Total assets                               $      40,402  $      32,078
                                               =============  =============

     LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
  Accounts payable                             $       1,223  $       1,183
  Accrued compensation and related costs               2,761          2,241
  Unearned revenue                                     6,378          7,859
  Capital leases                                       1,819          1,637
  Other current liabilities                            1,796          2,549
                                               -------------  -------------
    Total current liabilities                         13,977         15,469
Long-term unearned revenue                             1,597          2,532
Long-term capital leases                               1,614          1,176
Other long-term liabilities                            5,689            282
                                               -------------  -------------
    Total liabilities                                 22,877         19,459
                                               -------------  -------------

Series B Stock, $0.01 par value; 5,000,000
 shares authorized and designated; 1,644,768
 and 1,648,185 shares issued and outstanding,
 with a liquidation preference of $10,443 and
 $9,877 at December 31, 2015 and December 31,
 2014, respectively                                    8,388          8,406

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; 27,636,853 and 24,046,977
   shares issued and 25,849,876 and 22,324,093
   outstanding at December 31, 2015 and
   December 31, 2014, respectively                       276            240
  Additional paid-in capital                         264,212        243,282
  Accumulated deficit                               (242,085)      (226,404)
  Treasury stock, at cost, 1,786,977 and
   1,722,884 shares at December 31, 2015 and
   December 31, 2014, respectively                    (9,239)        (8,879)
  Accumulated other comprehensive loss                (4,027)        (4,026)
                                               -------------  -------------
    Total stockholders' equity                         9,137          4,213
                                               -------------  -------------
    Total liabilities and stockholders' equity $      40,402  $      32,078
                                               =============  =============



                          MATTERSIGHT CORPORATION
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                        (Unaudited and in thousands)

                                                For the Twelve Months Ended
                                               ----------------------------
                                                December 31,   December 31,
                                                    2015           2014
                                               -------------  -------------
Cash Flows from Operating Activities:
  Net loss                                     $     (15,681) $     (14,232)
  Adjustments to reconcile net loss to net
   cash used in operating activities:
    Depreciation and amortization                      4,682          3,128
    Stock-based compensation                           5,402          4,178
    Change in fair value of warrant liability             (3)           124
  Changes in assets and liabilities:
    Receivables                                       (1,403)        (1,076)
    Prepaid expenses                                    (623)           (85)
    Other assets                                       1,170            192
    Accounts payable                                     (29)           352
    Accrued compensation and related costs               520            397
    Unearned revenue                                  (2,416)           310
    Other liabilities                                  1,992           (222)
                                               -------------  -------------
      Total Adjustments                                9,292          7,298
                                               -------------  -------------
        Net cash used in operating activities         (6,389)        (6,934)
                                               -------------  -------------
Cash Flows from Investing Activities:
  Capital expenditures and other                      (4,917)          (766)
  Intangible assets                                     (921)          (251)
                                               -------------  -------------
        Net cash used in investing activities         (5,838)        (1,017)
                                               -------------  -------------
Cash Flows from Financing Activities:
  Proceeds from issuance of Common Stock, net         15,942         11,138
  Proceeds from line of credit                        15,000          7,000
  Repayments from line of credit                     (15,000)        (7,000)
  Principal payments under capital lease
   obligations                                        (2,116)        (1,701)
  Acquisition of treasury stock                         (874)          (797)
  Proceeds from stock compensation and
   employee stock purchase plans, net                    453            165
                                               -------------  -------------
        Net cash provided by financing
         activities                                   13,405          8,805
                                               -------------  -------------
Effect of exchange rate changes on cash and
 cash equivalents                                         (9)            (8)
                                               -------------  -------------
Increase in cash and cash equivalents                  1,169            846
Cash and cash equivalents, beginning of period        14,238         13,392
                                               -------------  -------------
Cash and cash equivalents, end of period       $      15,407  $      14,238
                                               =============  =============

Non-Cash Investing and Financing Transactions:
  Capital lease obligations incurred           $       2,737  $       1,692
  Capital equipment purchased on credit                2,737          1,692
  Fair value of warrants classified as
   liability                                               -            380
  Fair value of intellectual property purchase
   liability                                           1,958              -
Supplemental Disclosures of Cash Flow
 Information:
  Interest paid                                $         314  $         266



                          MATTERSIGHT CORPORATION
                  CALCULATION OF ADJUSTED EARNINGS MEASURE
                        (Unaudited and in thousands)

                                                          For the Twelve
                                 For the Three Months         Months
                                 --------------------  --------------------
                                         Ended                 Ended
                                 --------------------  --------------------
                                  Dec. 31,   Dec. 31,   Dec. 31,   Dec. 31,
                                    2015       2014       2015       2014
                                 ---------  ---------  ---------  ---------
GAAP - Operating loss            $  (4,194) $  (2,706) $ (14,796) $ (12,995)
Add back (reduce) the effect of:
Stock-based compensation             1,144        774      5,402      4,178
Depreciation and amortization        1,335        856      4,682      3,128
                                 ---------  ---------  ---------  ---------
Adjusted earnings measure - loss $  (1,715) $  (1,076) $  (4,712) $  (5,689)
                                 =========  =========  =========  =========

Contact

Sheau-ming Ross
Chief Financial Officer
312.454.3594
Sheau-ming.Ross@Mattersight.com