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8-K - FORM 8-K - EGAIN Corpd620986d8k.htm

Exhibit 99.1

eGain Announces Fiscal 2014 First Quarter Financial Results

 

    Total quarterly revenue of $15.7 million, up 46% year-over-year

 

    Quarterly cloud software revenue up 61% year-over-year

 

    First quarter operating loss of $1.6 million, compared to an operating loss of $2.6 million in the first quarter of fiscal 2013

 

    eGain reiterates guidance for fiscal 2014 total annual cloud revenue growth of between 40% and 45% year-over-year

 

    eGain reiterates guidance for fiscal 2014 total annual revenue growth of between 20% and 25% year-over-year

Sunnyvale, Calif. (October 30, 2013) – eGain (NASDAQ: EGAN), a leading provider of cloud customer engagement solutions, today announced results for its fiscal 2014 first quarter ended September 30, 2013.

“We are off to a good start for fiscal 2014,” said Ashu Roy, eGain’s CEO. “We secured two seven figure deals, one with a leading health insurance provider and the other with a leading European BPO. We also landed two quick pilot orders in the quarter through our Cisco SolutionsPlus partnership.

“Several health insurance clients recently went live with our Superchat solution. They are using our platform to help sign up new customers on state health exchanges.”

Mr. Roy continued, “Our services team experienced a shortfall in recognized revenue, largely due to acceptance clauses and timing issues in a few client engagements. We are tightening our internal process to minimize such surprises.

“Earlier this month, we announced eGain Mobile, a unique solution to expand our rich platform into the mobile apps universe, allowing clients to easily offer eGain powered engagement options to their mobile app users on Android and iOS platforms. We see mobile engagement as a significant opportunity as our clients increasingly look to offer rich mobile experiences.”

Fiscal 2014 First Quarter Results:

Revenue: Total revenue for the fiscal first quarter was $15.7 million, an increase of 46% on a year-over-year basis. License revenue for the fiscal first quarter was $3.8 million, an increase of 438% on a year-over-year basis. Subscription and support revenue for the fiscal first quarter was $9.5 million, an increase of 32% on a year-over-year basis. The cloud portion of the subscription and support revenue was $6.0 million, an increase of 61% on a year-over-year basis. Professional services revenue for the fiscal first quarter was $2.4 million, a decrease of 16% on a year-over-year basis.


Gross Profit: Gross profit for the fiscal first quarter was $10.1 million, compared to $6.4 million for the first quarter of fiscal 2013. Gross margin for the fiscal first quarter was 65%, compared to 59% in the first quarter last year. The subscription and support revenue gross margin for the fiscal first quarter was 79%, compared to 81% in the first quarter last year.

Earnings per Share: Net loss for the fiscal first quarter was $2.0 million, or a loss of $0.08 per share on a basic and diluted basis, compared to net loss of $2.9 million, or a loss of $0.12 per share on a basic and diluted basis, for the first quarter of last year. Net loss for the fiscal first quarter includes stock-based compensation expense of $346,000 and interest and tax expense of $186,000, compared to stock-based compensation expense of $304,000 and interest and tax expense of $214,000 in the first quarter last year.

Cash: Total cash, cash equivalents and restricted cash increased to $15.7 million at September 30, 2013, from $11.3 million at September 30, 2012. Cash provided by operations was $2.3 million for the fiscal first quarter, compared to cash provided by operations of $824,000 for the first quarter of last year. During the fiscal first quarter the company paid off the outstanding related party debt balance of $2.9 million.

Deferred Revenue: Total deferred revenue (which includes both deferred revenue on the balance sheet of $19.5 million and unbilled deferred revenue that remains off balance sheet of $22.5 million, collectively representing contractual commitments that have not been recognized as revenue) was $42.0 million at September 30, 2013, compared to $33.0 million at September 30, 2012.

Fiscal 2014 Guidance: eGain reiterates its fiscal 2014 guidance of annual total revenue growth of between 20% and 25% and annual cloud revenue growth of between 40% and 45%.

Quarterly Conference Call

eGain will discuss its quarterly results today via teleconference at 5:00 p.m. Eastern Daylight Time. To access the live call, please dial (877) 941-1429 (U.S. toll free) or (480) 629-9857 (international), and request the “eGain” call. 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 (800) 406-7325 (U.S. toll-free) or (303) 590-3030 (international). The replay will be available starting two hours after the call and remain in effect for one week. The required pass code is #4646559. 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 the company’s 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, our partnership with Cisco, statements about the Company’s market opportunities, statements about the Company’s expected financial results for the fiscal first quarter ended September 30, 2013 with respect to total revenue, cloud revenue and business mix, and statements regarding our fiscal 2014 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 compete successfully and manage growth; our ability to develop and expand strategic and third party distribution channels; risks associated with new product releases; 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 23, 2013, 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: iregain@egain.com   Email: egan@mkr-group.com


eGain Corporation

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

 

     Three Months Ended
September 30,
 
     2013     2012  

Revenue:

    

Subscription and support

   $ 9,466      $ 7,174   

License

     3,838        713   

Professional services

     2,378        2,836   
  

 

 

   

 

 

 

Total revenue

     15,682        10,723   
  

 

 

   

 

 

 

Cost of subscription and support

     1,971        1,396   

Cost of license

     26        45   

Cost of professional services

     3,536        2,903   
  

 

 

   

 

 

 

Total cost of revenue

     5,533        4,344   
  

 

 

   

 

 

 

Gross profit

     10,149        6,379   
  

 

 

   

 

 

 

Operating expenses:

    

Research and development

     2,106        1,950   

Sales and marketing

     7,395        5,549   

General and administrative

     2,206        1,507   
  

 

 

   

 

 

 

Total operating expenses

     11,707        9,006   
  

 

 

   

 

 

 

Loss from operations

     (1,558     (2,627

Interest expense, net

     (92     (141

Other income (expense), net

     (260     (43
  

 

 

   

 

 

 

Loss before income tax provision

     (1,910     (2,811

Income tax provision

     (94     (73
  

 

 

   

 

 

 

Net loss

   $ (2,004   $ (2,884
  

 

 

   

 

 

 

Per share information:

    

Basic and diluted net loss per common share

   $ (0.08   $ (0.12

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

     25,178        24,516   

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

    

Cost of revenue

   $ 67      $ 29   

Research and development

   $ 47      $ 77   

Sales and marketing

   $ 133      $ 96   

General and administrative

   $ 99      $ 102   


eGain Corporation

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

     September 30,
2013
    June 30,
2013
 

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $ 14,639      $ 16,206   

Restricted cash

     29        29   

Accounts receivable, net

     9,833        12,307   

Deferred commissions

     1,658        1,745   

Prepaid and other current assets

     1,667        2,377   
  

 

 

   

 

 

 

Total current assets

     27,826        32,664   

Property and equipment, net

     4,271        3,544   

Deferred commissions, net of current portion

     537        776   

Goodwill

     4,880        4,880   

Restricted cash, net of current portion

     1,000        1,000   

Other assets

     645        672   
  

 

 

   

 

 

 

Total assets

   $ 39,159      $ 43,536   
  

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

    

Current liabilities:

    

Accounts payable

   $ 2,427      $ 2,583   

Accrued compensation

     4,667        4,339   

Accrued liabilities

     2,630        2,478   

Deferred revenue

     17,416        15,679   

Capital lease

     176        —     

Bank borrowings

     2,250        2,667   

Related party notes payable

     —          2,897   
  

 

 

   

 

 

 

Total current liabilities

     29,566        30,643   

Deferred revenue, net of current portion

     2,039        4,057   

Capital lease, net of current portion

     187        —     

Bank borrowings, net of current portion

     1,750        2,000   

Other long term liabilities

     848        848   
  

 

 

   

 

 

 

Total liabilities

     34,390        37,548   
  

 

 

   

 

 

 

Stockholders’ equity:

    

Common stock

     25        25   

Additional paid-in capital

     329,218        328,552   

Notes receivable from stockholders

     (88     (87

Accumulated other comprehensive loss

     (1,048     (1,168

Accumulated deficit

     (323,338     (321,334
  

 

 

   

 

 

 

Total stockholders’ equity

     4,769        5,988   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 39,159      $ 43,536