Daegis Inc. Reports Fiscal 2014 First Quarter Results Business Wire ROSEVILLE, Calif. -- August 27, 2013 Daegis (NASDAQ:DAEG), an eDiscovery and information management company, today announced financial results for its fiscal 2014 first quarter ended July 31, 2013. First Quarter Fiscal 2014 Financial Highlights *First quarter total revenue of $8.0 million, a decrease of 17% year-over-year. *First quarter GAAP net loss of $633,000 or $0.05 per share, compared to GAAP net income of $157,000 or $0.00 per share for the same period last year. *First quarter Adjusted EBITDA of $679,000, compared to $1.1 million last year. ^(1) *Non-GAAP net loss of $96,000 or $0.01 per share, compared to Non-GAAP net income of $257,000, or $0.01 per share last year. ^(1) *Cash at July 31, 2013 was $5.0 million, compared to $5.5 million at April 30, 2013. *Total debt outstanding at July 31, 2013 was $16.0 million, a decrease of $1.7 million from April 30, 2013. Commenting on results, Daegis Inc. Chief Executive Officer Tim Bacci said, “Daegis had a challenging first quarter from a revenue standpoint across both our segments. We’re taking decisive steps to improve performance. Our strategy to align our businesses to deliver a comprehensive approach to archiving and eDiscovery is on course and we believe we have the products, the talent and the market opportunity to grow the business over the long-term.” Business Highlights for the First Quarter Fiscal 2014 *Company announced Susan K. Conner as Chief Financial Officer *Daegis released new version of Daegis Edge with high performance document viewer to speed the review process *Gupta Technologies launched Team Developer 6.2 *Daegis eDiscovery achieved its fourth straight year of ISO 27001 information security certification for protection of client data First Quarter Comparative Financial Summary $ In Millions, except per share Q1 Q1 % or $ and % data FY 2014 FY 2013 Change ^(3) Total Revenue $8.0 $9.6 (17%) Total eDiscovery Revenue $3.3 $4.1 (18%) Total Database, Archive, and $4.6 $5.6 (17%) Migration Revenue GAAP Net Income (Loss) ($0.6) $0.2 ($0.8) GAAP Net Income (Loss) Per Share ($0.05) $0.00 ($0.04) - Diluted Adjusted EBITDA ^(1) $0.7 $1.1 ($0.4) Adjusted EBITDA Margin ^(1) 8.5% 11.6% (3.1%) Non-GAAP Net Income (Loss) ^ (1) ($0.1) $0.3 ($0.4) Non-GAAP Net Income (Loss) Per ($0.01) $0.01 $(0.02) Share – Diluted ^(1) Cash from Operations $0.9 $0.6 $0.3 Cash ^(2) $5.0 $5.5 ($0.4) Total Debt Outstanding ^(2) $16.0 $17.7 ($1.7) ^(1) See reconciliation table below regarding the presentation of Adjusted EBITDA and Non-GAAP net income. ^(2) Results as of July 31, 2013 and 2012. ^(3) The calculation of percentage or dollar change is based on whole dollars. Investor Conference Call Management will host a conference call today, August 27, 2013, at 2:00 p.m. PT (5:00 p.m. ET) to review the first quarter 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 Sept. 6, 2013 by dialing (800) 406-7325 or (303) 590-3030 for international callers and using the following passcode: 4634828#. About Daegis Inc. Daegis Inc. (NASDAQ: DAEG) is an eDiscovery and information management company, delivering eDiscovery, archiving software, data management tools, and migration solutions. Daegis delivers leading-edge eDiscovery and archiving software throughDaegis Edge, an end-to-end platform for managing the eDiscovery life cycle,Daegis Acumen technology assisted review and AXS-One enterprise information archiving. Daegis also offers specialized services including data collection, analytics consulting, project management and managed document review. TheGupta 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. UNAUDITED CONSOLIDATED BALANCE SHEETS (In thousands) July 31, April 30, 2013 2013 ASSETS Current assets: Cash $ 5,044 $ 5,459 Accounts receivable, net 8,100 10,594 Prepaid expenses and other current assets 662 1,203 Assets held for sale - 926 Total current assets 13,806 18,182 Property and equipment, net 1,672 1,934 Goodwill 11,706 11,706 Intangibles, net 6,767 7,152 Other assets 686 733 Total assets $ 34,637 $ 39,707 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 455 $ 243 Current portion of long-term debt 1,348 2,519 Accrued compensation and related expenses 1,640 2,697 Common stock warrant liability 303 204 Other accrued liabilities 915 863 Deferred revenue 7,059 8,449 Liabilities held for sale - 526 Total current liabilities 11,720 15,501 Long-term debt, net of current portion 14,644 15,170 Deferred tax liabilities, net 883 923 Other long-term liabilities 1,352 1,429 Total liabilities 28,599 33,023 Commitments and contingencies — — Stockholders’ equity: Preferred stock — 2 Common stock 17 15 Additional paid-in capital 100,040 100,053 Accumulated other comprehensive income 280 280 Accumulated deficit (94,299 ) (93,666 ) Total stockholders’ equity 6,038 6,684 Total liabilities and stockholders’ $ 34,637 $ 39,707 equity DAEGIS INC. UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Three Months Ended July 31, 2013 2012 Revenues: eDiscovery $ 3,328 $ 4,073 Database, archive, and migration 4,636 5,565 Total revenues 7,964 9,638 Operating expenses: Direct costs of eDiscovery revenue 1,623 2,155 Direct costs of database, archive, and migration 916 1,282 revenue Product development 1,671 1,884 Selling, general and administrative 3,778 5,033 Sale of intangible trade name — (1,000 ) Total operating expenses 7,988 9,354 Income (loss) from operations (24 ) 284 Other income (expense): Gain (loss) from change in fair value of common (99 ) 460 stock warrant liability Interest expense (415 ) (442 ) Other, net (31 ) (93 ) Total other income (expense) (545 ) (75 ) Income (loss) before income taxes (569 ) 209 Provision for income taxes 64 52 Net income (loss) $ (633 ) $ 157 Income (loss) per share: Basic $ (0.05 ) $ 0.00 Diluted $ (0.05 ) $ 0.00 Weighted-average shares used in computing income (loss) per share: Basic 15,297 14,718 Diluted 15,297 14,718 DAEGIS INC. RECONCILIATION OF GAAP OPERATING INCOME TO ADJUSTED EBITDA (In thousands, except per share data) Three Months Ended July 31, 2013 2012 GAAP income (loss) from operations $ (24 ) $ 284 Amortization of intangible assets 385 384 Stock based compensation expenses 53 176 Depreciation 265 278 Total adjustments to GAAP income (loss) from 703 838 operations Adjusted EBITDA $ 679 $ 1,122 RECONCILIATION OF GAAP TO NON-GAAP NET INCOME (In thousands, except per share data) GAAP net income (loss) $ (633 ) $ 157 Amortization of intangible assets and warrant 385 384 discount Stock based compensation expenses 53 176 Gain from change in fair value of common stock 99 (460 ) warrant liability Total adjustments to GAAP net income (loss) 537 100 Non-GAAP net income (loss) $ (96 ) $ 257 Non-GAAP diluted income per share $ (0.01 ) $ 0.01 Weighted average shares used in computing income (loss) per share: Dilutive 15,297 14,718 Contact: Daegis Investor Relations Deb Thornton, 916-218-4779 email@example.com
Daegis Inc. Reports Fiscal 2014 First Quarter Results
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