Daegis Inc. Reports Fiscal 2013 Fourth Quarter and Full Year Financial Results Business Wire 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 Q4 Q4 % or $ share and % data FY2013 FY2012 Change Total Revenue $ 9.8 $ 9.8 (0.4 %) Total eDiscovery Revenue $ 4.1 $ 4.3 (4.5 %) Total Database, Archive, and $ 5.7 $ 5.5 2.7 % Migration Revenue GAAP Net Income (Loss) $ 0.2 ($15.7 ) $ 15.9 GAAP Net Income (Loss) Per $ 0.01 ($1.08 ) $ 1.09 Share - Diluted Adjusted EBITDA^(1) $ 1.5 $ 0.3 $ 1.2 Adjusted EBITDA Margin^(1) 16 % 3 % 13 % Non-GAAP Net Income (Loss) ^ $ 0.6 ($0.4 ) $ 1.0 (1) Non-GAAP Net Income (Loss) Per $ 0.04 ($0.03 ) $ 0.07 Share - Diluted^(1) 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 $ 0.01 ($1.16 ) $ 1.17 Share - Diluted 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 $ 0.14 $ 0.16 ($0.02 ) Share – Diluted^(1) Cash and cash equivalents $ 5.5 $ 4.8 $ 0.7 ^(2) 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 throughDaegis Edge, an end-to-end platform to manage the entire litigation lifecycle,and Acumen, our revolutionary predictive coding software.OurAXS-Onearchiving software helps corporations to preserve and manage electronic information for legal discovery and regulatory compliance. OurGupta TechnologiesandComposer Technologiesbusinesses 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 5,696 5,544 23,912 23,488 migration Total revenues 9,770 9,811 40,193 43,469 Operating expenses: Direct costs of eDiscovery 1,318 2,279 7,374 9,402 revenue Direct costs of database, archive, and 1,483 1,443 5,432 5,398 migration revenue Product 2,067 1,992 7,478 7,661 development Selling, general and 4,140 4,756 18,594 19,020 administrative Sale of intangible trade — — (1,000 ) — name Impairment of goodwill and — 15,047 — 15,047 intangible assets Total operating 9,008 25,517 37,878 56,528 expenses Income (loss) 762 (15,706 ) 2,315 (13,059 ) from operations Other income (expense): Loss on extinguishment — — — (2,166 ) of debt Gain from change in fair value of common stock 62 418 365 1,054 warrant liability Interest expense (383 ) (438 ) (1,632 ) (2,270 ) Other, net (145 ) (2 ) (234 ) (68 ) Total other (466 ) (22 ) (1,501 ) (3,450 ) income (expense) Income (loss) before income 296 (15,728 ) 814 (16,509 ) taxes Provision for 108 4 282 153 income taxes Net income $ 188 $ (15,732 ) $ 532 $ (16,662 ) (loss) 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) $ 762 $ (15,706 ) $ 2,315 $ (13,059 ) from operations Amortization of 384 483 1,538 2,115 intangible assets Stock based compensation 100 217 593 921 expenses Depreciation 281 290 1,123 1,086 Impairment of goodwill and — 15,047 — 15,047 intangible assets Total adjustments to GAAP income 765 16,037 3,254 19,169 (loss) from operations 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 $ 188 $ (15,732 ) $ 532 $ (16,662 ) income (loss) Amortization of intangible assets and 384 483 1,538 2,158 warrant discount Stock based compensation 100 217 593 921 expenses Gain from change in fair value of (62 ) (418 ) (365 ) (1,054 ) common stock warrant liability Loss on extinguishment — — — 2,166 of debt Impairment of goodwill and — 15,047 — 15,047 intangible assets Total adjustments to 422 15,329 1,766 19,238 GAAP net income (loss) Non-GAAP net $ 610 $ (403 ) $ 2,298 $ 2,576 income (loss) Non-GAAP diluted income $ 0.04 $ (0.03 ) $ 0.14 $ 0.16 (loss) per share Weighted average shares used in computing income (loss) per share: Dilutive 16,403 14,718 16,395 16,131 Contact: Daegis Investor Relations Deb Thornton, 916-218-4779 email@example.com
Daegis Inc. Reports Fiscal 2013 Fourth Quarter and Full Year Financial Results
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