eGain Announces Fiscal 2013 Second Quarter Financial Results

eGain Announces Fiscal 2013 Second Quarter Financial Results 
SUNNYVALE, CA -- (Marketwire) -- 02/05/13 --  eGain (NASDAQ: EGAN)  


 
--  Total quarterly revenue up 37% sequentially and 36% year-over-year
--  Quarterly cloud software revenue up 21% sequentially and 76%
    year-over-year
--  Deferred revenue of $22.4 million, up 339% year-over-year
--  Unbilled deferred revenue of $18.1 million, up 42% year-over-year
--  Net income of $641,000, or $0.03 per basic and $0.02 per diluted share
--  eGain reiterates guidance for fiscal year 2013 cloud revenue growth of
    at least 50%
--  eGain reiterates guidance for fiscal year 2013 revenue growth of
    between 20% and 25%

  
eGain (NASDAQ: EGAN), a leading provider of cloud customer engagement
solutions, today announced results for its fiscal 2013 second quarter
ended December 31, 2012. 
"We are very pleased with our financial performance this quarter,"
said Ashu Roy, eGain's CEO. "We booked record new business and thanks
to our growing cloud traction, we ended the quarter with twice the
backlog from a year ago."   
Mr. Roy continued, "We have generated approximately $10 million in
operating cash year to date, ending this quarter with nearly $20
million on our balance sheet. We intend to continue investing in
sales and marketing to capitalize on the global market opportunity,
favorable competitive dynamics, and our established product
leadership." 
Fiscal 2013 Second Quarter Results: 
Revenue: Total revenue for the fiscal second quarter was $14.7
million, an increase of 36% on a year-over-year basis. License
revenue for the fiscal second quarter was $3.4 million, an increase
of 13% on a year-over-year basis. Recurring revenue for the fiscal
second quarter was $7.8 million, an increase of 36% on a
year-over-year basis. The cloud portion of the recurring revenue was
$4.5 million, an increase of 76% on a year-over-year basis.
Professional services revenue for the fiscal second quarter was $3.5
million, an increase of 69% on a year-over-year basis.   
For the first six months ended December 31, 2012, total revenue was
$25.5 million, an increase of 20% on a year-over-year basis. License
revenue was $4.1 million, compared to $5.9 million for the same
period last year. Recurring revenue was $15.0 million, an increase of
30% on a year-over-year basis. The cloud portion of the recurring
revenue was $8.2 million, an increase of 59% on a year-over-year
basis. Professional services revenue was $6.3 million, an increase of
67% on a year-over-year basis.  
Gross Profit: Gross profit for the fiscal second quarter was $10.5
million, an increase of 38% compared to $7.6 million for the second
quarter of fiscal 2012. Gross margin for the fiscal second quarter
was 71%, compared to 70% in the second quarter last year. The
recurring revenue gross margin for the fiscal second quarter
increased to 85%, compared to 77% in the second quarter last year.  
For the six months ended December 31, 2012, gross profit was $16.9
million, an increase of 11% compared to $15.2 million for the same
period last year. Gross margin was 66%, compared to 71% in the same
period last year. The recurring revenue gross margin increased to
83%, compared to 78% in the same period last year.  
Earnings per Share: Net income for the fiscal second quarter was
$641,000, or $0.03 per share on a basic and $0.02 per share diluted
basis, compared to a net loss of $755,000, or a loss $0.03 per share
for the second quarter of last year. Net loss for the fiscal second
quarter included stock-based compensation expense of $281,000 and
interest and tax expense of $265,000, compared to stock-based
compensation expense of $135,000 and interest and tax expense of
$261,000 in the second quarter last year. 
For the six months ended December 31, 2012, net loss was $2.2
million, or a loss of $0.09 per share, compared to a net loss of
$239,000, or a loss of $0.01 per share, for the same period last
year. Net loss for the six month period ended December 31, 2012
included stock-based compensation expense of $585,000 and interest
and tax expense of $479,000, compared to stock-based compensation
expense of $265,000 and interest and tax expense of $466,000 in the
same period last year. 
Cash: Total cash, cash equivalents and restricted cash increased to
$19.9 million at December 31, 2012, up from $10.9 million at June 30,
2012. Cash provided by operations for the first six months ended
December 31, 2012 was $9.9 million, compared to cash provided by
operations of $1.3 million for the same period last year.  
Deferred Revenue:
 Total deferred revenue (which includes both
deferred revenue on the balance sheet and unbilled deferred revenue
that remains off balance sheet, collectively representing contractual
commitments that have not been recognized as revenue) was $40.5
million at December 31, 2012, compared to $17.9 million at December
31, 2011.  
Fiscal 2013 Guidance: eGain reiterates its previously provided
guidance for its business mix for fiscal 2013 to be 70% new cloud
contracts and 30% new license contracts. eGain reiterates it fiscal
2013 guidance of total revenue growth of between 20% and 25% and
annual cloud revenue growth of at least 50%.  
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 (866) 219-5268, or outside the U.S.
(703) 639-1120, at least five minutes prior to the start time. 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) 266-2081 (U.S. toll-free) or (703) 925-2533 (international).
The replay will be available starting two hours after the call and
remain in effect for one week. The required pass code is #1603984. An
archive of the webcast will also be available on the investors
section at www.egain.com. 
About eGain
 eGain (NASDAQ: EGAN) is a leading provider of cloud
customer engagement solutions. Trusted by leading brands, eGain
solutions help design and deliver smart, connected customer journeys
across social, mobile, web, and contact centers.  
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 
 All statements
in this release that involve eGain's forecasts (including the above
stated guidance), beliefs, projections, expectations, including but
not limited to our financial performance and guidance, the
anticipated growth of our business, market trends, plans to invest in
our business and expectations regarding the market acceptance of our
products, are forward-looking statements within the meaning of the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995. These forward-looking statements, which are based on
information available to eGain at the time of this release, are not
guarantees of future results; rather, they are subject to risks and
uncertainties that may cause actual results to differ materially from
those set forth in this release. These risks include, but are not
limited to, our guidance regarding revenue and mix of new license and
cloud contracts; our expectations related to our operations; our
ability to invest resources to improve our products and continue to
innovate; our ability to invest resources to expand our distribution;
our partnerships; our future markets; our international operations
involve various risks; 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 25,
2012, and eGain's quarterly reports on Form 10-Q. eGain 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 Communications Corporation                      
                   Condensed Consolidated Balance Sheets                    
                               (in thousands)                               
                                (unaudited)                                 
                                                                            
                                              December 31,      June 30,    
                                                  2012            2012      
                                             --------------  -------------- 
                                                               As Adjusted  
ASSETS                                                                      
                                                                            
Current assets:                                                             
  Cash and cash equivalents                  $       18,839  $        9,911 
  Restricted cash                                        37              35 
  Accounts receivable, net                            8,308           6,535 
  Deferred commissions                                1,629             955 
  Prepaid and other current assets                    1,038             795 
                                             --------------  -------------- 
    Total current assets                             29,851          18,231 
                                                                            
Property and equipment, net                           2,481           2,295 
Deferred commissions, net of current portion          1,071             643 
Goodwill, net                                         4,880           4,880 
Restricted cash, net of current portion               1,000           1,000 
Other assets                                            793             894 
                                             --------------  -------------- 
    Total assets                             $       40,076  $       27,943 
                                             ==============  ============== 
                                                                            
LIABILITIES AND STOCKHOLDERS' EQUITY                                        
                                                                            
Current liabilities:                                                        
  Accounts payable                           $        1,111  $        1,875 
  Accrued compensation                                3,745           3,385 
  Accrued liabilities                                 1,785           1,549 
  Current portion of deferred revenue                19,398           6,896 
  Current portion of bank borrowings                  2,167           1,666 
  Related party notes payable                         2,786              -- 
                                             --------------  -------------- 
    Total current liabilities                        30,992          15,371 
                                                                            
Deferred revenue, net of current portion              2,982           1,187 
Bank borrowings, net of current portion               3,333           1,667 
Related party notes payable                               -           5,563 
Other long term liabilities                             289             242 
                                             --------------  -------------- 
    Total liabilities                                37,596          24,030 
                                                                            
Stockholders' equity:                                                       
  Common stock                                           25              24 
  Additional paid-in capital                        327,589         326,742 
  Notes receivable from stockholders                    (86)            (85)
  Accumulated other comprehensive loss                 (787)           (750)
  Accumulated deficit                              (324,261)       (322,018)
                                             --------------  -------------- 
    Total stockholders' equity                        2,480           3,913 
                                             --------------  -------------- 
    Total liabilities and stockholders'                                     
     equity                                  $       40,076  $       27,943 
                                             ==============  ============== 
                                                                            
                                                                            
                                                                            
                eGain Communications Corporation                            
        Condensed Consolidated Statements of Operations                     
            (in thousands, except per share amounts)                        
                          (unaudited)                                       
                                                                            
                                                                            
                               Three Months Ended       Six Months Ended    
                                  December 31,            December 31,      
                             ----------------------  ---------------------- 
                                2012        2011        2012        2011    
                             ----------  ----------  ----------  ---------- 
                                             As                      As     
                                          Adjusted                Adjusted  
Revenue:                                                                    
  License                    $    3,426  $    3,033  $    4,139  $    5,918 
  Recurring revenue               7,806       5,725      14,980      11,506 
  Professional services           3,505       2,078       6,341       3,796 
                             ----------  ----------  ----------  ---------- 
    Total revenue                14,737      10,836      25,460      21,220 
  Cost of license                    46          (1)         91         (11)
  Cost of recurring revenue       1,208       1,291       2,604       2,557 
  Cost of professional                                                      
   services                       
3,012       1,961       5,915       3,510 
                             ----------  ----------  ----------  ---------- 
    Total cost of revenue         4,266       3,251       8,610       6,056 
                             ----------  ----------  ----------  ---------- 
    Gross profit                 10,471       7,585      16,850      15,164 
                             ----------  ----------  ----------  ---------- 
                                                                            
Operating expenses:                                                         
  Research and development        2,142       1,377       4,092       2,807 
  Sales and marketing             5,946       4,923      11,495       9,027 
  General and administrative      1,570       1,728       3,077       2,841 
                             ----------  ----------  ----------  ---------- 
    Total operating expenses      9,658       8,028      18,664      14,675 
                             ----------  ----------  ----------  ---------- 
Income / (loss) from                                                        
 operations                         813        (443)     (1,814)        489 
Interest expense, net              (136)       (214)       (277)       (389)
Other income (expense), net          93         (51)         50        (262)
                             ----------  ----------  ----------  ---------- 
Income / (loss) before                                                      
 income tax                         770        (708)     (2,041)       (162)
Income tax provision               (129)        (47)       (202)        (77)
                             ----------  ----------  ----------  ---------- 
Net Income / (loss)          $      641  $     (755) $   (2,243) $     (239)
                             ==========  ==========  ==========  ========== 
Per share information:                                                      
                                                                            
  Basic net income / (loss)                                                 
   per common share          $     0.03  $    (0.03) $    (0.09) $    (0.01)
                             ==========  ==========  ==========  ========== 
  Diluted net income /                                                      
   (loss) per common share   $     0.02  $    (0.03) $    (0.09) $    (0.01)
                             ==========  ==========  ==========  ========== 
                                                                            
  Weighted average shares                                                   
   used in computing basic                                                  
   net income / (loss) per                                                  
   common share                  24,670      24,351      24,593      24,246 
                             ==========  ==========  ==========  ========== 
  Weighted average shares                                                   
   used in computing diluted                                                
   net income / (loss) per                                                  
   common share                  26,099      24,351      24,593      24,246 
                             ==========  ==========  ==========  ========== 
                                                                            
                                                                            
    Summary of stock-based compensation included in                         
     the costs and expense above:                                           
    Cost of professional                                                    
     services and recurring                                                 
     revenue                 $       30  $       13  $       59  $       31 
    Research and development         78          18         155          41 
    Sales and marketing              90          63         186         106 
    General and                                                             
     administrative                  83          41         185          87 

  
eGain:   
Eric Smit
CFO   
Phone: 408-636-4500  
Email: iregain@egain.com  
MKR Group Investor Relations:
Charles Messman or Todd Kehrli
Phone: 323-468-2300
Email: egan@mkr-group.com 
 
 
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