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| 8-K - CURRENT REPORT - DAEGIS INC. | daegis_8k.htm |
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Daegis Inc. Reports Fiscal 2013
Fourth Quarter
and Full Year Financial Results
ROSEVILLE, Calif., – June 25, 2013 – Daegis (NASDAQ: DAEG), an eDiscovery and information management company, today announced financial results for its fiscal 2013 fourth quarter and full-year ended April 30, 2013.
Fourth Quarter Fiscal 2013 Financial and Business Highlights
- Fourth quarter total revenue of $9.8 million, a decrease of 0.4% year-over-year
- Fourth quarter GAAP net income of $188,000 or $0.01 per share, compared to a GAAP net loss of $15.7 million or $1.08 loss per share last year
- Fourth quarter Adjusted EBITDA of $1.5 million, compared to $331,000 last year (1)
- Non-GAAP net income of $610,000 or $0.04 per share, compared to a Non-GAAP net loss of $403,000, or $0.03 loss per share last year (1)
- Company announced new e-discovery partner program for resellers and OEM partners
- Company launched new trade-up program to migrate NearPoint archive customers to the AXS-One archive
- Gupta Technologies signed an alliance partnership with Fujitsu for the Composer migration software offerings
Full-Year Fiscal 2013 Financial and Business Highlights
- Full-year total revenue of $40.2 million, a decrease of 7.5% from the prior year
- Full-year GAAP net income of $532,000, compared to a loss of $16.7 million last year
- Full-year Adjusted EBITDA of $5.6 million, compared to $6.1 million last year (1)
- Full-year Non-GAAP net income of $2.3 million, a decrease compared to $2.6 million in the prior year (1)
- Cash and cash equivalents at April 30, 2013 totaled $5.5 million, an increase of $700,000 compared to the April 30, 2012 ending cash balance
- Total outstanding debt was $17.7 million at April 30, 2013, a decrease of $3.6 million from April 30, 2012
- Daegis eDiscovery, AXS-One and Gupta Technologies businesses each released major new versions of software
“Our AXS-One Archive business had a strong fourth quarter and year as a result of expansion with current customers as well as signing net new business. Our Gupta and Composer Technologies businesses had a solid year with new product releases and continued strong customer satisfaction. In the eDiscovery business, we continued to execute on our SaaS strategy and gained traction with our managed document review service. Additionally, we’re beginning to see the tangible results of aligning our cost structure with our current and expected revenue plans,” said Tim Bacci, CEO of Daegis. “While we’re not where we’d like to be from a revenue standpoint, we have the foundational elements in place and will be executing on our e-discovery and archiving integration strategy over the next several quarters to take advantage of the growth opportunities ahead of us.”
Mr. Bacci added, “As we evaluate the business and optimize our cost structure to accelerate on strategies where we see the most opportunity, we have decided to open an office in Dallas, Texas and relocate the Company’s headquarters there. Texas is a strong territory for our businesses and we view this move as an opportunity to increase the Company’s operational efficiencies and access an additional talent pool, as needed.”
Fourth Quarter Fiscal 2013 Financial Summary
| $ In Millions, except per share and % data | Q4 FY2013 |
Q4 FY2012 |
% or $ Change |
| Total Revenue | $9.8 | $9.8 | (0.4%) |
| Total eDiscovery Revenue | $4.1 | $4.3 | (4.5%) |
| Total Database, Archive, and Migration Revenue | $5.7 | $5.5 | 2.7% |
| GAAP Net Income (Loss) | $0.2 | ($15.7) | $15.9 |
| GAAP Net Income (Loss) Per Share - Diluted | $0.01 | ($1.08) | $1.09 |
| Adjusted EBITDA(1) | $1.5 | $0.3 | $1.2 |
| Adjusted EBITDA Margin(1) | 16% | 3% | 13% |
| Non-GAAP Net Income (Loss) (1) | $0.6 | ($0.4) | $1.0 |
| Non-GAAP Net Income (Loss) Per Share - Diluted(1) | $0.04 | ($0.03) | $0.07 |
Full Year Fiscal 2013 Financial Results Summary
| $ In Millions, except per share and % data | FY2013 | FY2012 | % or $ Change |
| Total Revenue | $40.2 | $43.5 | (7.5%) |
| GAAP Net Income (Loss) | $0.5 | ($16.7) | $17.2 |
| GAAP Net Income (Loss) Per Share - Diluted | $0.01 | ($1.16) | $1.17 |
| Adjusted EBITDA(1) | $5.6 | $6.1 | (8.9%) |
| Adjusted EBITDA Margin(1) | 14% | 14% | 0% |
| Non-GAAP Net Income(1) | $2.3 | $2.6 | (10.8%) |
| Non-GAAP Net Income Per Share – Diluted(1) | $0.14 | $0.16 | ($0.02) |
| Cash and cash equivalents (2) | $5.5 | $4.8 | $0.7 |
| Long Term Debt (2) | $17.7 | $21.3 | ($3.6) |
(1) See reconciliation table below regarding the presentation of Adjusted EBITDA and Non-GAAP net income.
(2) Results as of April 30, 2013 and 2012.
Investor Conference Call
Management will host a conference call today, June 25, 2013, at 2:00 p.m. PT (5:00 p.m. ET) to review the fourth quarter and full year fiscal 2013 financial results. The call can be accessed by dialing (877) 941-1427 or (480) 629-9664 for international callers. Additionally, the conference call will be broadcast live on Daegis’ website at www.daegisinc.com. A replay of the call will be available through July 5, 2013 by dialing (800) 406-7325 or (303) 590-3030 for international callers and using the following passcode: 4623464#.
About Daegis Inc.
Daegis Inc. (NASDAQ: DAEG) is an eDiscovery and information management company, delivering eDiscovery, archiving software, data management tools, and migration solutions. The Daegis eDiscovery division delivers market-leading eDiscovery software through Daegis Edge, an end-to-end platform to manage the entire litigation lifecycle, and Acumen, our revolutionary predictive coding software. Our AXS-One archiving software helps corporations to preserve and manage electronic information for legal discovery and regulatory compliance. Our Gupta Technologies and Composer Technologies businesses serve customers around the globe with development tools, databases and application migration software. Visit our websites to learn more.
Use of Non-GAAP Financial Information
To supplement the Company's unaudited condensed consolidated financial statements presented in accordance with GAAP, Daegis uses certain Non-GAAP measures of financial performance. The presentation of these Non-GAAP financial measures is not intended to be considered in isolation from, as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and may be different from Non-GAAP financial measures used by other companies. In addition, these Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP. For more information on these Non-GAAP financial measures including how they are calculated, please see the tables in this release captioned “Reconciliation of GAAP to Non-GAAP Net Income” and “Reconciliation of GAAP Operating Income to Adjusted EBITDA” which includes a reconciliation of the GAAP results to Non-GAAP and Adjusted EBITDA results.
Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of the Company. We wish to caution you that these statements involve risks and uncertainties and actual events or results may differ materially. When the words “believes,” “expects,” “plans,” “projects,” “estimates” and similar expressions are used, they identify forward-looking statements. These forward-looking statements are based on management’s current beliefs and assumptions and information currently available to management and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Examples of forward-looking statements in the press release include the statements made by Mr. Bacci. Among the important factors which could cause actual results to differ materially from those in the forward-looking statements are general market and economic conditions, our ability to execute our business strategy and integrate acquired businesses, the effectiveness of our sales team and approach, our ability to target, analyze and forecast the revenue to be derived from a client and the costs associated with providing services to that client, the date during the course of a fiscal year that a new client is acquired, the length of the integration cycle for new clients and the timing of revenues and costs associated therewith, our client concentration given that the Company is currently dependent on a few large client relationships, potential competition in the marketplace, the ability to retain and attract employees, market acceptance of our service programs and pricing options, our ability to maintain our existing technology platform and to deploy new technology, our ability to sign new clients and control expenses, the possibility of the discontinuation of some client relationships, the financial condition of our clients' business and other factors detailed in the Company's filings with the Securities and Exchange Commission.
# # #
DAEGIS INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
| April 30, | April 30, | |||||||
| 2013 | 2012 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 5,459 | $ | 4,752 | ||||
| Accounts receivable, net | 10,594 | 10,968 | ||||||
| Prepaid expenses and other current assets | 1,203 | 1,805 | ||||||
| Assets held for sale | 926 | — | ||||||
| Total current assets | 18,182 | 17,525 | ||||||
| Property and equipment, net | 1,934 | 2,827 | ||||||
| Goodwill | 11,706 | 11,706 | ||||||
| Intangibles, net | 7,152 | 8,690 | ||||||
| Other assets, net | 733 | 1,121 | ||||||
| Total assets | $ | 39,707 | $ | 41,869 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 243 | $ | 450 | ||||
| Current portion of long term debt | 2,519 | 2,945 | ||||||
| Accrued compensation and related expenses | 2,697 | 2,465 | ||||||
| Common stock warrant liability | 204 | 569 | ||||||
| Other accrued liabilities | 863 | 819 | ||||||
| Deferred revenue | 8,449 | 8,412 | ||||||
| Liabilities held for sale | 526 | — | ||||||
| Total current liabilities | 15,501 | 15,660 | ||||||
| Long term debt, net of current portion | 15,170 | 18,306 | ||||||
| Deferred tax liabilities | 923 | 734 | ||||||
| Other long term liabilities | 1,429 | 1,148 | ||||||
| Total liabilities | 33,023 | 35,848 | ||||||
| Commitments and contingencies | — | — | ||||||
| Stockholders’ equity: | ||||||||
| Preferred stock | 2 | 2 | ||||||
| Common stock | 15 | 15 | ||||||
| Additional paid-in capital | 100,053 | 99,860 | ||||||
| Accumulated other comprehensive income | 280 | 341 | ||||||
| Accumulated deficit | (93,666 | ) | (94,197 | ) | ||||
| Total stockholders’ equity | 6,684 | 6,021 | ||||||
| Total liabilities and stockholders’ equity | $ | 39,707 | $ | 41,869 | ||||
DAEGIS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands,
except per share data)
| Three Months Ended | Twelve Months Ended | ||||||||||||||
| April 30, | April 30, | ||||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||||
| Revenues: | |||||||||||||||
| eDiscovery | $ | 4,074 | $ | 4,267 | $ | 16,281 | $ | 19,981 | |||||||
| Database, archive, and migration | 5,696 | 5,544 | 23,912 | 23,488 | |||||||||||
| Total revenues | 9,770 | 9,811 | 40,193 | 43,469 | |||||||||||
| Operating expenses: | |||||||||||||||
| Direct costs of eDiscovery revenue | 1,318 | 2,279 | 7,374 | 9,402 | |||||||||||
| Direct costs of database, archive, and migration revenue | 1,483 | 1,443 | 5,432 | 5,398 | |||||||||||
| Product development | 2,067 | 1,992 | 7,478 | 7,661 | |||||||||||
| Selling, general and administrative | 4,140 | 4,756 | 18,594 | 19,020 | |||||||||||
| Sale of intangible trade name | — | — | (1,000 | ) | — | ||||||||||
| Impairment of goodwill and intangible assets | — | 15,047 | — | 15,047 | |||||||||||
| Total operating expenses | 9,008 | 25,517 | 37,878 | 56,528 | |||||||||||
| Income (loss) from operations | 762 | (15,706 | ) | 2,315 | (13,059 | ) | |||||||||
| Other income (expense): | |||||||||||||||
| Loss on extinguishment of debt | — | — | — | (2,166 | ) | ||||||||||
| Gain from change in fair value of common stock warrant liability | 62 | 418 | 365 | 1,054 | |||||||||||
| Interest expense | (383 | ) | (438 | ) | (1,632 | ) | (2,270 | ) | |||||||
| Other, net | (145 | ) | (2 | ) | (234 | ) | (68 | ) | |||||||
| Total other income (expense) | (466 | ) | (22 | ) | (1,501 | ) | (3,450 | ) | |||||||
| Income (loss) before income taxes | 296 | (15,728 | ) | 814 | (16,509 | ) | |||||||||
| Provision for income taxes | 108 | 4 | 282 | 153 | |||||||||||
| Net income (loss) | $ | 188 | $ | (15,732 | ) | $ | 532 | $ | (16,662 | ) | |||||
| Income (loss) per share: | |||||||||||||||
| Basic | $ | 0.01 | $ | (1.08 | ) | $ | 0.01 | $ | (1.16 | ) | |||||
| Diluted | $ | 0.01 | $ | (1.08 | ) | $ | 0.01 | $ | (1.16 | ) | |||||
| Weighted-average shares used in computing income (loss) per share | |||||||||||||||
| Basic | 14,718 | 14,718 | 14,718 | 14,672 | |||||||||||
| Diluted | 14,736 | 14,718 | 14,728 | 14,672 | |||||||||||
DAEGIS INC.
RECONCILIATION OF GAAP OPERATING INCOME TO ADJUSTED
EBITDA
(In thousands, except per share data)
| Three Months Ended | Twelve Months Ended | |||||||||||||
| April 30, | April 30, | |||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||
| GAAP income (loss) from operations | $ | 762 | $ | (15,706 | ) | $ | 2,315 | $ | (13,059 | ) | ||||
| Amortization of intangible assets | 384 | 483 | 1,538 | 2,115 | ||||||||||
| Stock based compensation expenses | 100 | 217 | 593 | 921 | ||||||||||
| Depreciation | 281 | 290 | 1,123 | 1,086 | ||||||||||
| Impairment of goodwill and intangible assets | — | 15,047 |
— |
15,047 | ||||||||||
| Total adjustments to GAAP income (loss) from operations | 765 | 16,037 | 3,254 | 19,169 | ||||||||||
| Adjusted EBITDA | $ | 1,527 | $ | 331 | $ | 5,569 | $ | 6,110 | ||||||
RECONCILIATION OF GAAP TO NON-GAAP
NET INCOME
(In thousands, except per share data)
| GAAP net income (loss) | $ | 188 | $ | (15,732 | ) | $ | 532 | $ | (16,662 | ) | ||||||
| Amortization of intangible assets and warrant discount | 384 | 483 | 1,538 | 2,158 | ||||||||||||
| Stock based compensation expenses | 100 | 217 | 593 | 921 | ||||||||||||
| Gain from change in fair value of common stock warrant liability | (62 | ) | (418 | ) | (365 | ) | (1,054 | ) | ||||||||
| Loss on extinguishment of debt | — | — | — | 2,166 | ||||||||||||
| Impairment of goodwill and intangible assets | — | 15,047 | — | 15,047 | ||||||||||||
| Total adjustments to GAAP net income (loss) | 422 | 15,329 | 1,766 | 19,238 | ||||||||||||
| Non-GAAP net income (loss) | $ | 610 | $ | (403 | ) | $ | 2,298 | $ | 2,576 | |||||||
| Non-GAAP diluted income (loss) per share | $ | 0.04 | $ | (0.03 | ) | $ | 0.14 | $ | 0.16 | |||||||
| Weighted average shares used in computing income (loss) per share: | ||||||||||||||||
| Dilutive | 16,403 | 14,718 | 16,395 | 16,131 | ||||||||||||