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Lyris Announces Fourth Quarter Fiscal 2013 Financial Results

Lyris Announces Fourth Quarter Fiscal 2013 Financial Results

Lyric HQ SaaS Revenue Up 7% in F2013 over F2012;

91% of F4Q13 Revenue Was Recurring;

79% of F4Q13 Revenue From Subscriptions

EMERYVILLE, Calif., Sept. 19, 2013 (GLOBE NEWSWIRE) -- Lyris, Inc. (OTCBB:
LYRI), a leading global provider of digital marketing solutions, today
announced financial results for the fourth quarter of fiscal 2013 and full
year ended June 30, 2013.

Highlights

  *Fiscal fourth quarter revenues were $8.7 million, down 2.7% from $8.9
    million in the prior quarter and down 6.8% from $9.3 million in the same
    period last year.
  *Recurring revenue was 91% of total revenue in the fiscal fourth quarter
    compared to 88% of total revenues in the same period a year ago and 90% of
    revenues in the prior quarter.
  *Lyris HQ Software-as-a-Service (SaaS) revenues were 61% of total revenues
    in the fiscal fourth quarter compared to 56% in the same period a year ago
    and 61% of total revenues in the prior quarter.
  *Fiscal fourth quarter gross profit was 63% compared to 63% for the same
    period last year.
  *Fiscal fourth quarter income from operations was $0.3 million, compared to
    income from operations of $0.6 million in the same period last year.
  *Fiscal fourth quarter net income was $0.3 million, or $0.03 per diluted
    share, compared to net income of $0.4 million, or $0.04 per share, in the
    same period last year.
  *Fiscal fourth quarter non-GAAP net income was $0.9 million, or $0.08 per
    diluted share, compared to a non-GAAP net income of $1.4 million, or $0.15
    per share, in the same period a year ago.
  *Fiscal fourth quarter adjusted EBITDA was $1.3 million, compared to
    adjusted EBITDA of $2.0 million in the same period a year ago.
  *At June 30, 2013, the Company had $2.3 million in cash. The Company also
    had $2.0 million available for borrowing on its $5 million loan facility
    with Silicon Valley Bank.

"We ended fiscal 2013 with another quarter of continued execution against plan
and investments in our SaaS-focused product, marketing and selling efforts,"
stated Roy Camblin, president and CEO of Lyris. "We already see these efforts
paying off, and we believe we have the most sophisticated digital marketing
solution available in the market today, as validated by customers and analysts
alike. As we enter fiscal 2014, I am confident that we have the right
strategy, the right team, and the right solutions in place to accelerate our
revenue growth over the next 12 months and beyond."

Fourth Quarter Fiscal 2013 Financial Results

Total revenues of the fourth quarter of fiscal 2013 were $8.7 million, down
2.7% from $8.9 million in the prior quarter and down 6.8% from $9.3 million in
the same period last year. Total subscription revenues were $6.8 million, or
79% of total revenues, in the fourth quarter of fiscal 2013, compared to $7.2
million, or 78% of total revenues, in the same period in fiscal 2012. Lyris HQ
SaaS revenues were $5.3 million, or 61% of total revenues, in the fourth
quarter of fiscal 2013, up slightly from $5.2 million, or 56% of total
revenues, in the same period a year ago.

Gross profit was $5.4 million, or 63% as a percentage of total revenues, in
the fourth quarter of fiscal 2013, compared to $5.9 million, or 63% of total
revenue, in the same period in fiscal 2012.

Income from operations was $0.3 million in the fourth quarter of fiscal 2013,
compared to income from operations of $0.6 million in the same period last
year. Net income in the fourth quarter of fiscal 2013 was $0.3 million, or
$0.03 per diluted share, compared to net income of $0.4 million, or $0.04 per
share, in the same period last year.

Conference Call Information

Lyris will hold a conference call and webcast to discuss its financial results
and operating activities open to all interested parties at 4:30 p.m. Eastern
Time (1:30 p.m. Pacific Time), September 19, 2013.

The teleconference can be accessed by calling 888-539-3612, passcode 7271806.
Please dial in 10-15 minutes prior to the beginning of the call. The webcast
will be available on the Internet at www.lyris.com.

A replay of the call will be available through September 26, 2013, at
877-870-5176, passcode 7271806, and on the company's website at www.lyris.com.

About Lyris

Lyris, Inc. is a leading global provider of digital marketing solutions that
helps companies engage with customers in more meaningful ways. Lyris products
and services empower marketers to design, automate, and optimize data-driven
interactive marketing campaigns that facilitate superior engagement, increase
conversions, and deliver measurable business value. Lyris' high-performance,
secure and flexible digital marketing platforms improve marketing efficiency
by providing automated digital message delivery, robust segmentation, and
real-time social, mobile, and interaction analytics. The Lyris solutions
portfolio is comprised of both in-the-cloud and on-premises solutions – Lyris
HQ and Lyris LM - combined with customer-focused services and support.
www.lyris.com

Forward Looking Statements

This press release includes forward-looking statements, as defined in the
Private Securities Litigation Reform Act of 1995 (PSLRA), that reflect our
current views with respect to future events and financial performance, and
that are subject to many risks and uncertainties. These forward-looking
statements include material in quotations from management, including our
estimate of our addressable market. Statements that include word such as
"expects," "intends," "plan," "believe," "project," "estimate," "may,"
"should," "anticipate," "will" and similar statements identify many of our
forward-looking statements.

Many factors could cause actual results to differ materially from those
indicated in our forward-looking statements. For example, market acceptance of
our products, potential delays in product development, product offerings by
our competitors, and our ability to finance anticipated growth could affect
our future results. Other risk factors that could cause actual results to
differ significantly from our expectations are described in our annual and
quarterly reports filed with the Securities and Exchange Commission (available
at www.sec.gov). Unless otherwise required by law, we undertake no obligation
to publicly update or revise any forward-looking statements, whether as a
result of new information, future developments or otherwise.

If one or more of these risks or uncertainties materialize, or if our
underlying assumptions otherwise prove to be incorrect, our actual results may
vary materially from what we project. Any forward-looking statements you read
in this news release reflect our views as of the date of this press release
with respect to future events, and are subject to these and other risks,
uncertainties and assumptions relating to our operations, financial condition,
results of operations, growth strategy and liquidity. All subsequent written
and oral forward-looking statements attributable to us or individuals acting
on our behalf are expressly qualified in their entirety by this paragraph.

Non-GAAP Financial Measures

In this release we present certain non-GAAP financial measures. Generally, a
non-GAAP financial measure is a numerical measure of a company's performance,
financial position or cash flow that either excludes or includes amounts that
are not normally excluded or included in the most directly comparable measure
calculated and presented in accordance with United States generally accepted
accounting principles ("GAAP"). A reconciliation between non-GAAP and GAAP
measures can be found in the accompanying tables. Non-GAAP financial measures
should not be considered a substitute for, or superior to, measures of
financial performance prepared in accordance with GAAP. These non-GAAP
financial measures do not reflect a comprehensive system of accounting and may
differ from non-GAAP financial measures with the same or similar captions that
are used by other companies.

We believe the calculation of non-GAAP net income (loss), calculated without
giving effect to acquisition-related amortization charges, stock-based
compensation expense and certain other amounts that we do not consider to be
related to our ongoing core operating performance, provides a basis to compare
our operating results across periods and against other companies in our
industry. We also believe that adjusted EBITDA, which we calculate as GAAP net
income (loss) less interest, taxes, depreciation, amortization, non-cash stock
compensation expense and certain other financial measures, is an indicator of
our cash flows. This measure is commonly used by our lenders to assess our
leverage capacity, debt service ability and liquidity. These non-GAAP measures
have been reconciled to the nearest GAAP measure, as required under SEC rules
and regulations, in tables attached to this release.

Lyris, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except for per share data)
                                                               
                                                  Three Months Ended June 30,
                                                  2013          2012
                                                               
Revenues:                                                       
Subscription revenue                               $6,840      $7,241
Support and maintenance revenue                    1,010         950
Professional services revenue                      591          714
Software revenue                                   212           382
Total revenues                                     8,653        9,287
Cost of revenues:                                               
Subscription, software and other services          2,775        3,200
Amortization of developed technology               458          229
Total cost of revenues                             3,233        3,429
Gross profit                                       5,420        5,858
Operating expenses:                                             
Sales & marketing                                 2,434        1,974
General and administrative                        1,749        2,102
Research & development                             937          1,109
Amortization of customer relationship and trade    50           49
names
Total operating expenses                           5,170        5,233
Income from operations                             250          625
Interest expense                                   (42)         (100)
Interest income                                    --           2
Other income, net                                  15           2
Income from operations before income taxes         223          529
Income tax provision                               (111)        111
Net income                                         334          418
Less: income attributable to noncontrolling        --          3
interest
Net income attributable to Lyris, Inc.             $334        $415
Net income per share                                           
Basic                                             $0.03       $0.04
Diluted                                            $0.03        $0.04
Weighted average shares outstanding used in                     
calculating net income per share:
Basic                                             9,567        9,426
Diluted                                            11,610       9,426
                                                               


Lyris, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except for per share data)
                                                              
                                                 Twelve Months Ended June 30,
                                                 2013          2012
                                                              
Revenues:                                                      
Subscription revenue                              $28,338     $29,205
Support and maintenance revenue                   3,923        3,778
Professional services revenue                     2,436        4,059
Software revenue                                  1,487         1,737
Total revenues                                    36,184       38,779
Cost of revenues:                                              
Subscription, software and other services         12,345       13,345
Amortization of developed technology              1,665        825
Total cost of revenues                            14,010       14,170
Gross profit                                      22,174       24,609
Operating expenses:                                            
Sales & marketing                                9,858        8,999
General and administrative                       8,114        8,916
Research & development                            3,845        5,893
Amortization of customer relationship and trade   202          1,336
names
Impairment of goodwill                            --           9,000
Impairment of capitalized software                --           385
Total operating expenses                          22,019       34,529
Loss from operations                              155          (9,920)
Interest expense                                  (222)        (396)
Interest income                                   3            13
Other income (expense), net                       (236)        (16)
Loss from operations before income taxes          (300)        (10,319)
Income tax provision                              (12)         164
Net loss                                          $(288)      $(10,483)
Less: income attributable to noncontrolling       29           (6)
interest
Net loss attributable to Lyris, Inc.              $(317)      $(10,477)
Net loss per share basic and diluted              $(0.03)     $(1.18)
Weighted average shares outstanding used in                    
calculating net loss per share:
Basic and diluted                                 9,537        8,910
                                                              


Lyris, Inc.
Reconciliation of Net Income to Non-GAAP Net Income
(Unaudited)
(in thousands, except for per share data)
                                                         
                                            Three Months Ended June 30,
                                            2013          2012
                                                         
Net income                                   $334        $418
Stock-based compensation expense             104          213
Amortization of intangible assets            508          278
Write-off of financing fees                  --          517
Other (income) expense, net                  (15)         (2)
                                                         
Non-GAAP net income                          $931        $1,424
                                                         
Net income per share                                      
Basic                                       $0.10       $0.15
Diluted                                      $0.08       $0.15
Shares used to compute net income per share:              
Basic                                       9,567        9,426
Diluted                                      11,610       9,426
                                                         

Non-GAAP net income excludes stock-based compensation expense, amortization of
intangibles
and certain other financial measures. Management believes that non-GAAP net
income provides
useful, supplemental information to management and investors regarding the
performance of the
company's business operations. Non-GAAP net income is not a measure determined
in accordance
with United States Generally Accepted Accounting Principles ("GAAP") and is
thus susceptible to
varying calculations. As presented, this measure may not be comparable to
similarly titled measures
that other companies may disclose. Non-GAAP net income should not be
considered in isolation or
construed as a substitute for other measures of profitability prepared in
accordance with GAAP for
purposes of analyzing our financial performance or profitability. Non-GAAP net
income should be
considered in addition to, and not as a substitute or as superior measure to,
net income, earnings
per share or other measures of financial performance prepared in accordance
with GAAP.


Lyris, Inc.
Reconciliation of Net Income to Non-GAAP Net Income
(Unaudited)
(in thousands, except for per share data)
                                                        
                                            Twelve Months Ended June 30,
                                            2013         2012
                                                        
Net loss                                     $(288)     $(10,483)
Stock-based compensation expense             779         684
Amortization of intangible assets            1,867       2,161
Impairment of goodwill                       --         9,000
Impairment of capitalized software           --         385
Write-off of financing fees                  --         517
Other (income) expense, net                  236         16
                                                        
Non-GAAP net income                          $2,594     $2,280
                                                        
Net income per share basic and diluted       $0.27      $0.26
                                                        
Shares used to compute net income per share:             
Basic and diluted                            9,537        8,910
                                                        

Non-GAAP net income excludes stock-based compensation expense, amortization of
intangibles
and certain other financial measures. Management believes that non-GAAP net
income provides
useful, supplemental information to management and investors regarding the
performance of the
company's business operations. Non-GAAP net income is not a measure determined
in accordance
with United States Generally Accepted Accounting Principles ("GAAP") and is
thus susceptible to
varying calculations. As presented, this measure may not be comparable to
similarly titled measures
that other companies may disclose. Non-GAAP net income should not be
considered in isolation or
construed as a substitute for other measures of profitability prepared in
accordance with GAAP for
purposes of analyzing our financial performance or profitability. Non-GAAP net
income should be
considered in addition to, and not as a substitute or as superior measure to,
net income, earnings
per share or other measures of financial performance prepared in accordance
with GAAP.


Lyris, Inc.
Reconciliation of Net Income to Adjusted EBITDA
(Unaudited, in thousands)
                                             
                                Three Months Ended June 30,
                                2013          2012
Net income                      $334        $418
Interest (income) / expense, net 42           98
Income tax (benefit) / provision (111)        111
Depreciation and amortization    899          645
                                             
Total EBITDA                     1,164        1,272
                                             
Stock-based compensation expense 104          213
Write-off of financing fees      --          517
Other (income) expense, net      (15)         (2)
                                             
Total Adjusted EBITDA            $1,253      $2,000
                                             

Adjusted EBITDA is calculated as earnings before net interest expense, taxes,
depreciation
and amortization expense, stock-based compensation expense and certain other
financial
measures. Adjusted EBITDA is commonly used by our lenders to assess leverage
capacity,
debt service ability and liquidity, and the company uses adjusted EBITDA to
evaluate
financial performance and to award incentive compensation for certain
employees, including
our chief executive officer. We believe that adjusted EBITDA also provides
useful measurements
of liquidity and financial performance for our investors.


Lyris, Inc.
Reconciliation of Net Income to Adjusted EBITDA
(Unaudited, in thousands)
                                              
                                  Twelve Months Ended June 30,
                                  2013         2012
Net loss                           $(288)     $(10,483)
Interest (income) / expense, net   219         383
Income tax (benefit) / provision   (12)        164
Depreciation and amortization      3,326       3,445
                                              
Total EBITDA                       3,245       (6,491)
                                              
Stock-based compensation expense   779         684
Impairment of goodwill             --         9,000
Impairment of capitalized software --         385
Write-off of financing fees        --         517
Other (income) expense, net        236         16
                                              
Total Adjusted EBITDA              $4,260     $4,111
                                              

Adjusted EBITDA is calculated as earnings before net interest expense, taxes,
depreciation
and amortization expense, stock-based compensation expense and certain other
financial
measures. Adjusted EBITDA is commonly used by our lenders to assess leverage
capacity,
debt service ability and liquidity, and the company uses adjusted EBITDA to
evaluate
financial performance and to award incentive compensation for certain
employees, including
our chief executive officer. We believe that adjusted EBITDA also provides
useful measurements
of liquidity and financial performance for our investors.


Lyris, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except for per share data)
                                                                  
                                                        June 30,  June 30,
                                                        2013       2012
ASSETS                                                             
Current assets:                                                    
Cash and cash equivalents                                $2,318   $1,602
Accounts receivable, less allowances of $510 and $686,  4,103     4,934
respectively
Prepaid expenses and other current assets                722       795
Deferred income taxes                                    942       882
Total current assets                                     8,085     8,213
Property and equipment, net                              9,355     7,044
Intangible assets, net                                   5,014     5,266
Goodwill                                                 9,791     9,791
Other long-term assets                                   663       901
TOTAL ASSETS                                            $32,907  $31,215
                                                                  
LIABILITIES AND STOCKHOLDERS' EQUITY                               
Current liabilities:                                               
Accounts payable and accrued expenses                    $3,458   $4,222
Revolving line of credit                                 2,260     5,005
Capital lease obligations - short-term                   827       631
Income taxes payable                                     203       108
Deferred revenue                                         3,220     3,593
Total current liabilities                                9,968     13,559
Other long-term liabilities                              436       543
Capital lease obligations - long-term                    504       662
TOTAL LIABILITIES                                      10,908    14,764
Commitments and contingencies (Note 14)                            
Stockholders' equity:                                              
Redeemable Series A convertible preferred stock; $0.01
par value per share, 2,000 shares authorized, issued and 5,000     --
outstanding, liquidation preferrence $5,000 as of June
30, 2013, no undeclared dividends
Common stock, $0.01 par value; 40,000 shares authorized;
9,579 and 9,568 and 9,447 and 9,435 shares issued and    1,415     1,414
outstanding shares as of June 30, 2013 and June 30,
2012, respectively
Additional paid-in capital                               268,209   267,447
Accumulated deficit                                      (252,608) (252,291)
Treasury stock, at cost 11 shares held as of June 30,    (56)      (56)
2012 and June 30, 2012
Accumulated other comprehensive income                   39        115
Total stockholders' equity                              16,999    16,629
Noncontrolling interest                                  --       (178)
Total stockholders' equity                               16,999    16,451
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY               $32,907  $31,215
                                                                  

CONTACT: Investor Relations Contact:
         Rich McDonald
         Director, Investor Relations
         (610) 688-3305
         rmcdonald@lyris.com