eGain Announces Fiscal 2013 Third Quarter Financial Results

eGain Announces Fiscal 2013 Third Quarter Financial Results 
SUNNYVALE, CA -- (Marketwired) -- 05/07/13 --  eGain (NASDAQ: EGAN) 


 
--  Total quarterly revenue was $15.5 million up 5% sequentially and 34%
    year-over-year
--  Quarterly cloud software revenue up 15% sequentially and 89%
    year-over-year
--  Quarterly operating income of $911,000, up from operating loss of
    $358,000 year-over-year
--  eGain raises its guidance for fiscal year 2013 cloud revenue growth to
    at least 65%
--  eGain raises its guidance for fiscal year 2013 total revenue growth to
    between 25% and 30%

  
eGain (NASDAQ: EGAN), a leading provider of cloud customer engagement
solutions, today announced results for its fiscal 2013 third quarter
ended March 31, 2013. 
"Thanks to our sustained year-to-date financial performance, we are
comfortable raising our fiscal 2013 guidance," said Ashu Roy, eGain's
CEO. 
"Further, for the fifth straight year we have been rated a leader by
Gartner in its Magic Quadrant for CRM Web Customer Service published
this quarter. Even more impressive was the fact that for the first
time eGain was rated best on both vision and execution axes of the
Magic Quadrant. This is a milestone that we have worked hard for and
are proud of." 
Fiscal 2013 Third Quarter Results: 
Revenue: Total revenue for the fiscal third quarter was $15.5
million, an increase of 34% on a year-over-year basis. License
revenue for the fiscal third quarter was $4.1 million, an increase of
44% on a year-over-year basis. Recurring revenue for the fiscal third
quarter was $8.3 million, an increase of 44% on a year-over-year
basis. The cloud portion of the recurring revenue was $5.2 million,
an increase of 89% on a year-over-year basis. Professional services
revenue for the fiscal third quarter was $3.0 million, an increase of
5% on a year-over-year basis.  
For the first nine months ended March 31, 2013, total revenue was
$40.9 million, an increase of 25% on a year-over-year basis. License
revenue was $8.2 million, compared to $8.8 million for the same
period last year. Recurring revenue was $23.3 million, an increase of
35% on a year-over-year basis. The cloud portion of the recurring
revenue was $13.4 million, an increase of 69% on a year-over-year
basis. Professiona
l services revenue was $9.4 million, an increase of
40% on a year-over-year basis.  
Gross Profit: Gross profit for the fiscal third quarter was $10.9
million, an increase of 35% compared to $8.0 million for the third
quarter of fiscal 2012. Gross margin for the fiscal third quarter was
70%, compared to 70% in the third quarter last year. The recurring
revenue gross margin for the fiscal third quarter increased to 84%,
compared to 77% in the third quarter last year.  
For the nine months ended March 31, 2013, gross profit was $27.7
million, an increase of 20% compared to $23.2 million for the same
period last year. Gross margin was 68%, compared to 71% in the same
period last year. The recurring revenue gross margin increased to
83%, compared to 77% in the same period last year.  
Earnings per Share: Net income for the fiscal third quarter was $1.0
million, or $0.04 per share on a basic and diluted basis, compared to
a net loss of $655,000, or a loss of $0.03 per share for the third
quarter of last year. Net income for the fiscal third quarter
included stock-based compensation expense of $225,000 and interest
and tax expense of $137,000, compared to stock-based compensation
expense of $255,000 and interest and tax expense of $253,000 in the
third quarter last year. 
For the nine months ended March 31, 2013, net loss was $1.2 million,
or a loss of $0.05 per share on a basic and diluted basis, compared
to a net loss of $894,000, or a loss of $0.04 per share, for the same
period last year. Net loss for the nine month period ended March 31,
2013 included stock-based compensation expense of $810,000 and
interest and tax expense of $616,000 million, compared to stock-based
compensation expense of $520,000 and interest and tax expense of
$720,000 in the same period last year. 
Cash: Total cash, cash equivalents and restricted cash increased to
$17.8 million at March 31, 2013, up from $12.2 million at March 31,
2012. Cash provided by operations for the first nine months ended
March 31, 2013 was $9.0 million, compared to cash provided by
operations of $1.8 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 $40.8
million at March 31, 2013, compared to $20.4 million at March 31,
2012.  
Fiscal 2013 Guidance: eGain is raising its fiscal 2013 guidance for
annual total revenue growth from between 20% and 25% to between 25%
and 30% and for annual cloud revenue growth from at least 50% to at
least 65%.  
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) 802-4355, or outside the U.S.
(703) 639-1323, 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 #1612064. 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
 "Safe harbor"
statement under the Private Securities Litigation Reform Act of 1995:
This press release contains forward-looking statements (including the
above stated guidance) about expected GAAP and non-GAAP financial
results for the fiscal third quarter ended March 31, 2013. 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 associated with 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 as
sumes 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 Corporation                              
                        Consolidated Balance Sheets                         
                               (in thousands)                               
                                (unaudited)                                 
                                                                            
                                                March 31,       June 30,    
                                                  2013            2012      
                                             --------------  -------------- 
                                                               As Adjusted  
ASSETS                                                                      
                                                                            
Current assets:                                                             
  Cash and cash equivalents                  $       16,758  $        9,911 
  Current portion of restricted cash                     30              35 
  Accounts receivable, net                           10,271           6,535 
  Deferred commissions                                1,674             955 
  Prepaid and other current assets                    2,299             795 
                                             --------------  -------------- 
    Total current assets                             31,032          18,231 
                                                                            
Property and equipment, net                           2,639           2,295 
Deferred commissions, net of current portion            754             643 
Goodwill, net                                         4,880           4,880 
Restricted cash, net of current portion               1,000           1,000 
Other assets                                            785             894 
                                             --------------  -------------- 
    Total assets                             $       41,090  $       27,943 
                                             ==============  ============== 
                                                                            
LIABILITIES AND STOCKHOLDERS' EQUITY                                        
                                                                            
Current liabilities:                                                        
  Accounts payable                           $        1,829  $        1,875 
  Accrued compensation                                3,681           3,385 
  Accrued liabilities                                 2,961           1,549 
  Current portion of deferred revenue                16,450           6,896 
  Current portion of bank borrowings                  2,417           1,666 
  Current portion of related party notes                                    
   payable                                            2,841               - 
                                             --------------  -------------- 
    Total current liabilities                        30,179          15,371 
                                                                            
Deferred revenue, net of current portion              4,188           1,187 
Related party notes payable, net of current                                 
 portion                                                  -           5,563 
Bank borrowings, net of current portion               2,667           1,667 
Other long term liabilities                             293             242 
                                             --------------  -------------- 
    Total liabilities                                37,327          24,030 
                                                                            
Stockholders' equity:                                                       
  Common stock                                           25              24 
  Additional paid-in capital                        328,085         326,742 
  Notes receivable from stockholders                    (87)            (85)
  Accumulated other comprehensive loss               (1,029)           (750)
  Accumulated deficit                              (323,231)       (322,018)
                                             --------------  -------------- 
    Total stockholders' equity                        3,763           3,913 
                                             --------------  -------------- 
    Total liabilities and stockholders'                                     
     equity                                  $       41,090  $       27,943 
                                             ==============  ============== 
                                                                            
                                                                            
                                                                            
                                                                            
                             eGain Corporation                              
              Condensed Consolidated Statements of Operations               
                  (in thousands, except per share amounts)                  
                                (unaudited)                                 
                                                                            
                                                                            
                            Three Months Ended         Nine Months Ended    
                                 March 31,                 March 31,        
                         ------------------------  ------------------------ 
                             2013         2012         2013         2012    
                         -----------  -----------  -----------  ----------- 
                                      As Adjusted               As Adjusted 
Revenue:                                                                    
 License                 $     4,098  $     2,849  $     8,237  $     8,767 
 Recurring                     8,346        5,785       23,326       17,292 
 Professional services         3,016        2,873        9,357        6,669 
                         -----------  -----------  -----------  ----------- 
  Total revenue               15,460       11,507       40,920       32,728 
 Cost of license                  34           10          125           (1)
 Cost of recurring             1,355        1,339        3,959        3,896 
 Cost of professional                                                       
  services                     3,180        2,116        9,095        5,626 
                         -----------  -----------  -----------  ----------- 
  Total cost of revenue        4,569        3,465       13,179        9,521 
                         -----------  -----------  -----------  ----------- 
  Gross profit                10,891        8,042       27,741       23,207 
 
                                                                           
Operating costs and                                                         
 expenses:                                                                  
 Research and                                                               
  development                  2,101        1,566        6,193        4,372 
 Sales and marketing           6,027        5,389       17,522       14,417 
 General and                                                                
  administrative               1,852        1,445        4,929        4,286 
                         -----------  -----------  -----------  ----------- 
  Total operating costs                                                     
   and expenses                9,980        8,400       28,644       23,075 
Income (loss) from                                                          
 operations                      911         (358)        (903)         132 
Interest expense, net            (99)        (199)        (376)        (588)
Other income (expense),                                                     
 net                             256          (44)         306         (306)
                         -----------  -----------  -----------  ----------- 
Income (loss) before                                                        
 income tax                    1,068         (601)        (973)        (762)
Income tax expense               (38)         (54)        (240)        (132)
                         -----------  -----------  -----------  ----------- 
Net Income (loss)        $     1,030  $      (655) $    (1,213) $      (894)
                         ===========  ===========  ===========  =========== 
Per share information:                                                      
 Basic                   $      0.04  $     (0.03) $     (0.05) $     (0.04)
 Diluted                 $      0.04  $     (0.03) $     (0.05) $     (0.04)
                                                                            
                                                                            
 Weighted average shares                                                    
  used in computing                                                         
  basic net income                                                          
  (loss) per common                                                         
  share                       24,889       24,376       24,690       24,289 
                         ===========  ===========  ===========  =========== 
                                                                            
 Weighted average shares                                                    
  used in computing                                                         
  diluted net income                                                        
  (loss) per common                                                         
  share                       26,373       24,376       24,690       24,289 
                         ===========  ===========  ===========  =========== 
                                                                            
                                                                            
  Summary of stock-based                                                    
   compensation included                                                    
   in the costs and                                                         
   expense above:                                                           
  Cost of professional                                                      
   services              $        28  $        21  $        87  $        53 
  Research and                                                              
   development                    57           64          212          105 
  Sales and marketing             70           76          256          181 
  General and                                                               
   administrative                 70           94          255          181 
                         -----------  -----------  -----------  ----------- 
                         $       225  $       255  $       810  $       520 
                         -----------  -----------  -----------  ----------- 

  
eGain Corporation:
Charles Messman
VP Finance
Phone: 408-636-4500
Email: iregain@egain.com 
MKR Group Investor Relations:
Todd Kehrli or Jim Byers
Phone: 323-468-2300
Email: egan@mkr-group.com 
 
 
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