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Exhibit 99.1

 

eGain Announces Fiscal 2015 Second Quarter Financial Results

 

·

Total quarterly revenue of $18.9 million, up 7% year over year. 

·

Six month total revenue of $39.6 million, up 19% year over year. 

·

Quarterly subscription and support revenue of $11.0 million, up 7% year over year. 

·

Six months subscription and support revenue of $21.4 million, up 9% year over year. 

 

Sunnyvale, Calif. (February 5, 2015) – eGain (NASDAQ: EGAN), the leading provider of cloud customer engagement solutions, today announced financial results for its fiscal 2015 second quarter ended December 31, 2014.

 

“The Exony integration is going well,” said Ashu Roy, eGain CEO. “Our innovative value proposition around omnichannel customer journeys, which leverages Exony capabilities, is resonating with clients driving digital transformation. I am encouraged by the progress AJ Berkeley has made in the short time he has been in charge of worldwide sales. Our company has rallied behind the plan of ‘Easy with eGain,’ simplifying our product and standardizing service options with the launch of eGain 14 in December. With increased scale, enhanced partner traction, unique value proposition, and agile operating adjustments, we are confident of delivering profitable growth in FY16.”

 

Operating Highlights:

 

·

For the first six months, gross booking increased 57% year over year

·

Significant progress on Exony integration with teams and technologies now integrated into the eGain platform

·

Launched eGain 14 with increased out of the box capabilities and enhanced APIs, significantly reducing deployment and upgrade effort 

·

Announced new partnership with Nuance Communications, Inc. to jointly market integrated customer experience solutions across voice and digital channels 

·

Launched Beta version of CJA (Customer Journey Analytics) Service at eGain World San Jose in November

·

Appointed ex-CTO of Avaya, Brett Shockley, to Board of Directors

·

Announced new $20 million credit facility with Wells Fargo Capital Finance

 

Financial Update:

 

Total GAAP revenue for the fiscal second quarter was $18.9 million, an increase of 7% on a year over year basis. Total GAAP revenue on a constant currency basis, reflecting the strengthening US dollar compared to foreign currencies, was $19.6 million, an increase of 9% year over year.    Subscription and support revenue for the fiscal second quarter was $11.0 million, an increase of 7% on a year over year basis. Subscription and support revenue on a constant currency basis, reflecting the strengthening US dollar compared to foreign currencies, was $11.3 million, up 9%.    License revenue for the fiscal second quarter was $3.6 million, an increase of 17% on a year over year basis. Professional services revenue for the fiscal second quarter was $4.4 million, flat on a year over year basis.

 

For the six months ended December 31, 2014, total GAAP revenue was $39.6 million, an increase of 19% from the same period last year. Subscription and support revenue was $21.4 million, an increase of 9% from the same period last year. License revenue was $10.3 million, an increase of 49% from the same period last year. Professional services revenue was $7.9 million, an increase of 17% from the same period last year.

 

Gross profit for the fiscal second quarter was $10.7 million, compared to $11.8 million for the second quarter of fiscal 2014. Gross margin for the fiscal second quarter was 56%, compared to 67% in the second quarter last year. The subscription and support revenue gross margin for the fiscal second quarter was 70%, compared to 81% in the second quarter last year.

 

For the six months ended December 31, 2014, gross profit was $24.4 million, compared to $22.0 million for the same period last year. Gross margin was 62%, compared to 66% for the same period last year. The subscription and support

1


 

revenue gross margin for the six months ended December 31, 2014 was 71%, compared to 80% for the same period last year.

 

Adjusted EBITDA for the fiscal second quarter was a loss of $2.4 million compared to a loss of $269,000 for the second quarter of fiscal 2014.

 

For the six months ended December 31, 2014, adjusted EBITDA was a loss of $1.5 million compared to a loss of $1.2 million for the same period last year.

 

GAAP net loss for the fiscal second quarter was $5.5 million, or a loss of $0.20 per share on a basic and diluted basis, compared to net loss of $1.2 million, or $0.05 per share on a basic and diluted basis, for the second quarter of last year.

 

For the six months ended December 31, 2014, GAAP net loss was $7.1 million, or a loss of $0.27 per share on a basic and diluted basis, compared to net loss of $3.2 million, or $0.13 per share on a basic and diluted basis, for the same period last year.

 

Total cash, cash equivalents and restricted cash increased to $9.3 million as of December 31, 2014, compared to $8.8 million as of June 30, 2014.

 

Total deferred revenue (which includes both deferred revenue on the balance sheet of $12.6 million and unbilled deferred revenue that remains off balance sheet of $29.1 million, collectively representing contractual commitments that have not been recognized as revenue) was $41.7 million as of December 31, 2014, compared to $36.3 million as of June 30, 2014.

 

Fiscal 2015 Guidance:

 

eGain is revising its total annual revenue guidance for fiscal 2015, ending June 30, 2015, to between $80 million and $85 million. Based on recent cost adjustments, the company currently expects to exit fiscal 2015 with an adjusted EBITDA run rate of at least 5%.

 

The three primary reasons for the revised annual revenue guidance are:

 

·

A reduction in expected annual revenue contribution from Exony.

·

A reduction in expected annual professional services revenue as a result of  a simplified product set, best practice implementations, and increased partner leverage.    

·

The strengthening of the U.S. dollar compared to foreign currencies.  

 

Non-GAAP Financial Measures:

 

The reported results include adjusted EBITDA, a non-GAAP financial measure, defined as net income (loss), adjusted for the impact of purchase accounting adjustments to deferred revenue related to acquisitions, depreciation and amortization, stock-based compensation expense, interest expense, net, income tax (benefit) provision, amortization of acquired intangible assets, acquisition-related expenses and severance and related charges. Non-GAAP results are presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with generally accepted accounting principles, and may be different from non-GAAP measures used by other companies. eGain’s management uses these non-GAAP measures to compare the company’s performance to that of prior periods for trend analyses, and for budgeting and planning purposes. eGain believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the company’s financial measures with other software companies, many of which present similar non-GAAP financial measures to investors, and that it allows for greater transparency with respect to key metrics used by management in its financial and operational decision-making.  Reconciliation tables of the most comparable GAAP financial measures to the non-GAAP financial measures used in this press release are included with the financial tables at the end of this release. eGain urges investors to review the reconciliation and not to rely on any single financial measure to evaluate the company’s business.  

 

2


 

Quarterly Conference Call

eGain will discuss its quarterly results today via teleconference at 2:00 p.m. Pacific Time. To access the live call, please dial (888) 510-1785 (U.S. toll free) or (719) 325-2432 (international), and give the participant pass code 5395297. A live webcast of the call can be accessed from the investors section at www.egain.com. An audio replay of the conference call can be accessed at (888) 203-1112 (U.S. toll-free) or (719) 457-0820 (international). The replay will be available starting two hours after the call and remain in effect for one week. The required pass code is 5395297. An archive of the webcast will also be available on the investors section at www.egain.com.

 

About eGain

eGain’s customer engagement solutions power digital transformation for leading brands. Our top-rated cloud applications for social, mobile, web, and contact centers help clients deliver connected customer journeys in a multichannel world. To find out more about eGain Corporation, visit http://www.egain.com/company/investors/

 

Headquartered in Sunnyvale, California, eGain has operating presence in North America, EMEA, and APAC. To learn more about us, visit www.eGain.com or call our offices: +1-800-821-4358 (US), +44-(0)-1753-464646 (EMEA), or +91-(0)-20-6608-9200 (APAC).

 

Cautionary Note Regarding Forward-Looking Statements. This press release contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among other matters, statements about the Company’s market opportunities, statements pertaining to Company’s integration of Exony, statements referring to organizational changes, statements about the Company’s financial results for the fiscal second quarter and the six months ended December 31, 2014, statements with respect to total revenue, statements regarding deferred revenue, subscription and support revenue, license revenue and statements regarding our fiscal 2015 guidance, including sources of revenue and business mix. The achievement or success of the matters covered by such forward-looking statements involves risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, the Company’s results could differ materially from the results expressed or implied by the forward-looking statements we make. The risks and uncertainties referred to above include, but are not limited to; risks that our hybrid revenue model and lengthy sales cycles may negatively affect our operating results; risks related to our reliance on a relatively small number of customers for a substantial portion of our revenue; our ability to successfully integrate Exony; our ability to compete successfully and manage growth; our ability to develop and expand strategic and third party distribution channels; risks associated with new product releases; our ability to comply with the covenants of the Wells Fargo Credit Agreement; risks related to our international operations; our ability to invest resources to improve our products and continue to innovate; and other risks detailed from time to time in eGain’s filings with the Securities and Exchange Commission, including eGain’s annual report on Form 10-K filed on September 12, 2014, and eGain’s quarterly reports on Form 10-Q, which are available on the Securities and Exchange Commission’s Web site at www.sec.gov. These forward-looking statements are based on current expectations and speak only as of the date hereof. The Company assumes no obligation to update these forward-looking statements.

 

Note: eGain is a registered trademark, and the other eGain product and service names appearing in this release are trademarks or service marks, of eGain. All other company names and products are trademarks or registered trademarks of their respective companies.

 

 

 

eGain

MKR Group Investor Relations

Charles Messman, VP Finance

Todd Kehrli or Jim Byers

Phone: 408-636-4500

Phone: 323-468-2300

Email: ir@egain.com

Email: egan@mkr-group.com

3


 

eGain Corporation

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

 

 

 

 

 

 

 

 

 

    

December 31, 2014

    

June 30, 2014

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

8,296 

 

$

8,785 

Restricted cash

 

 

1,017 

 

 

30 

Accounts receivable, net

 

 

10,736 

 

 

11,163 

Deferred commissions

 

 

533 

 

 

865 

Prepaid and other current assets

 

 

1,867 

 

 

1,348 

Total current assets

 

 

22,449 

 

 

22,191 

Property and equipment, net

 

 

3,941 

 

 

4,489 

Deferred commissions, net of current portion

 

 

178 

 

 

337 

Intangible assets

 

 

9,010 

 

 

 —

Goodwill

 

 

13,230 

 

 

4,880 

Other assets

 

 

1,193 

 

 

750 

Total assets

 

$

50,001 

 

$

32,647 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

2,555 

 

$

2,162 

Accrued compensation

 

 

7,159 

 

 

5,729 

Accrued liabilities

 

 

2,894 

 

 

1,456 

Deferred revenue

 

 

11,473 

 

 

12,920 

Capital lease obligation

 

 

437 

 

 

392 

Bank borrowings

 

 

500 

 

 

1,417 

Total current liabilities

 

 

25,018 

 

 

24,076 

Deferred revenue, net of current portion

 

 

1,157 

 

 

793 

Capital lease obligations, net of current portion

 

 

386 

 

 

625 

Bank borrowings, net of current portion

 

 

16,500 

 

 

3,583 

Other long term liabilities

 

 

2,043 

 

 

521 

Total liabilities

 

 

45,104 

 

 

29,598 

Stockholders' equity:

 

 

 

 

 

 

Common stock

 

 

27 

 

 

25 

Additional paid-in capital

 

 

339,779 

 

 

330,657 

Notes receivable from stockholders

 

 

(76)

 

 

(83)

Accumulated other comprehensive loss

 

 

(1,156)

 

 

(970)

Accumulated deficit

 

 

(333,677)

 

 

(326,580)

Total stockholders' equity

 

 

4,897 

 

 

3,049 

Total liabilities and stockholders' equity

 

$

50,001 

 

$

32,647 

 

4


 

eGain Corporation

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

December 31, 

 

December 31, 

 

 

    

2014

    

2013

    

2014

    

2013

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

Subscription and support

 

$

10,956 

 

$

10,246 

 

$

21,401 

 

$

19,712 

 

License

 

 

3,583 

 

 

3,065 

 

 

10,311 

 

 

6,903 

 

Professional services

 

 

4,364 

 

 

4,354 

 

 

7,895 

 

 

6,732 

 

Total revenue

 

 

18,903 

 

 

17,665 

 

 

39,607 

 

 

33,347 

 

Cost of subscription and support

 

 

3,264 

 

 

1,951 

 

 

6,143 

 

 

3,922 

 

Cost of license

 

 

26 

 

 

26 

 

 

54 

 

 

52 

 

Cost of professional services

 

 

4,951 

 

 

3,859 

 

 

9,031 

 

 

7,395 

 

Total cost of revenue

 

 

8,241 

 

 

5,836 

 

 

15,228 

 

 

11,369 

 

Gross profit

 

 

10,662 

 

 

11,829 

 

 

24,379 

 

 

21,978 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

4,160 

 

 

2,390 

 

 

7,901 

 

 

4,496 

 

Sales and marketing

 

 

9,599 

 

 

8,617 

 

 

18,104 

 

 

16,012 

 

General and administrative

 

 

2,573 

 

 

1,930 

 

 

5,515 

 

 

4,136 

 

Total operating expenses

 

 

16,332 

 

 

12,937 

 

 

31,520 

 

 

24,644 

 

Loss from operations

 

 

(5,670)

 

 

(1,108)

 

 

(7,141)

 

 

(2,666)

 

Interest expense, net

 

 

(145)

 

 

(37)

 

 

(268)

 

 

(129)

 

Other income (expense), net

 

 

163 

 

 

(18)

 

 

153 

 

 

(278)

 

Loss before income tax benefit (provision)

 

 

(5,652)

 

 

(1,163)

 

 

(7,256)

 

 

(3,073)

 

Income tax benefit (provision)

 

 

191 

 

 

(54)

 

 

159 

 

 

(148)

 

Net loss

 

$

(5,461)

 

$

(1,217)

 

$

(7,097)

 

$

(3,221)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per share information:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per common share

 

$

(0.20)

 

$

(0.05)

 

$

(0.27)

 

$

(0.13)

 

Weighted average shares used in computing basic and diluted net loss per common share

 

 

26,657 

 

 

25,356 

 

 

26,422 

 

 

25,267 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary of  amortization of purchased intangibles from business combinations in the costs and expenses above:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

$

67 

 

$

 —

 

$

108 

 

$

 —

 

Research and development

 

$

437 

 

$

 —

 

$

704 

 

$

 —

 

Sales and marketing

 

$

172 

 

$

 —

 

$

278 

 

$

 —

 

General and administrative

 

$

19 

 

$

 —

 

$

30 

 

$

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary of stock-based compensation included in the costs and expenses above:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

$

174 

 

$

85 

 

$

303 

 

$

152 

 

Research and development

 

$

217 

 

$

52 

 

$

410 

 

$

99 

 

Sales and marketing

 

$

195 

 

$

160 

 

$

319 

 

$

293 

 

General and administrative

 

$

164 

 

$

97 

 

$

276 

 

$

196 

 

 

5


 

eGain Corporation

GAAP to Non-GAAP Reconciliation Table

(in thousands)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

December 31, 

 

December 31, 

 

 

    

2014

    

2013

    

2014

    

2013

 

Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(5,461)

 

$

(1,217)

 

$

(7,097)

 

$

(3,221)

 

Add: Purchase accounting adjustments to deferred revenue related to acquisitions

 

 

162 

 

 

 —

 

 

248 

 

 

 —

 

Depreciation and amortization

 

 

623 

 

 

463 

 

 

1,291 

 

 

984 

 

Stock-based compensation expenses

 

 

750 

 

 

394 

 

 

1,308 

 

 

740 

 

Interest expense, net

 

 

145 

 

 

37 

 

 

268 

 

 

129 

 

Income tax (benefit) provision

 

 

(191)

 

 

54 

 

 

(159)

 

 

148 

 

Amortization of acquired intangible assets

 

 

695 

 

 

 —

 

 

1,120 

 

 

 —

 

Acquisition-related expenses

 

 

229 

 

 

 —

 

 

844 

 

 

 —

 

Severance and related charges

 

 

644 

 

 

 —

 

 

704 

 

 

 —

 

Adjusted EBITDA

 

$

(2,404)

 

$

(269)

 

$

(1,473)

 

$

(1,220)

 

 

 

6


 

eGain Corporation

Supplemental Financial Information

(in thousands)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

December 31,

 

December 31,

 

 

 

 

Percent Change

 

 

 

 

 

 

 

Percent Change

 

 

 

 

2014

 

Actual

 

Constant

 

2013

 

2014

 

Actual

 

Constant

 

2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

$

18,903 

 

%

 

%

 

$

17,665 

 

$

39,607 

 

19 

%

 

19 

%

 

$

33,347 

Gross profit

$

10,662 

 

(10)

%

 

(8)

%

 

$

11,829 

 

$

24,379 

 

11 

%

 

11 

%

 

$

21,978 

Total operating expenses

$

16,332 

 

26 

%

 

29 

%

 

$

12,937 

 

$

31,520 

 

28 

%

 

28 

%

 

$

24,644 

Loss from operations

$

(5,670)

 

NM

 

 

NM

 

 

$

(1,108)

 

$

(7,141)

 

NM

 

 

NM

 

 

$

(2,666)

Net loss

$

(5,461)

 

NM

 

 

NM

 

 

$

(1,217)

 

$

(7,097)

 

NM

 

 

NM

 

 

$

(3,221)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* NM - Not Meaningful

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7