eGain Announces Fiscal 2014 First Quarter Financial Results

eGain Announces Fiscal 2014 First Quarter Financial Results 
SUNNYVALE, CA -- (Marketwired) -- 10/30/13 --  eGain (NASDAQ: EGAN) 


 
--  Total quarterly revenue of $15.7 million, up 46% year-over-year
--  Quarterly cloud software revenue up 61% year-over-year
--  First quarter operating loss of $1.6 million, compared to an operating
    loss of $2.6 million in the first quarter of fiscal 2013
--  eGain reiterates guidance for fiscal 2014 total annual cloud revenue
    growth of between 40% and 45% year-over-year
--  eGain reiterates guidance for fiscal 2014 total annual revenue growth
    of between 20% and 25% year-over-year

  
eGain (NASDAQ: EGAN), a leading provider of cloud customer engagement
solutions, today announced results for its fiscal 2014 first quarter
ended September 30, 2013. 
"We are off to a good start for fiscal 2014," said Ashu Roy, eGain's
CEO. "We secured two seven figure deals, one with a leading health
insurance provider and the other with a leading European BPO. We also
landed two quick pilot orders in the quarter through our Cisco
SolutionsPlus partnership.  
"Several health insurance clients recently went live with our
Superchat solution. They are using our platform to help sign up new
customers on state health exchanges." 
Mr. Roy continued, "Our services team experienced a shortfall in
recognized revenue, largely due to acceptance clauses and timing
issues in a few client engagements. We are tightening our internal
process to minimize such surprises. 
"Earlier this month, we announced eGain Mobile, a unique solution to
expand our rich platform into the mobile apps universe, allowing
clients to easily offer eGain powered engagement options to their
mobile app users on Android and iOS platforms. We see mobile
engagement as a significant opportunity as our clients increasingly
look to offer rich mobile experiences." 
Fiscal 2014 First Quarter Results: 
Revenue: Total revenue for the fiscal first quarter was $15.7
million, an increase of 46% on a year-over-year basis. License
revenue for the fiscal first quarter was $3.8 million, an increase of
438% on a year-over-year basis. Subscription and support revenue for
the fiscal first quarter was $9.5 million, an increase of 32% on a
year-over-year basis. The cloud portion of the subscription and
support revenue was $6.0 million, an increase of 61% on a
year-over-year basis. Professional services revenue for the fiscal
first quarter was $2.4 million, a decrease of 16% on a year-over-year
basis. 
Gross Profit: Gross profit for the fiscal first quarter was $10.1
million, compared to $6.4 million for the first quarter of fiscal
2013. Gross margin for the fiscal first quarter was 65%, compared to
59% in the first quarter last year. The subscription and support
revenue gross margin for the fiscal first quarter was 79%, compared
to 81% in the first quarter last year.  
Earnings per Share: Net loss for the fiscal first quarter was $2.0
million, or a loss of $0.08 per share on a basic and diluted basis,
compared to net loss of $2.9 million, or a loss of $0.12 per share on
a basic and diluted basis, for the first quarter of last year. Net
loss for the fiscal first quarter includes stock-based compensation
expense of $346,000 and interest and tax expense of $186,000,
compared to stock-based compensation expense of $304,000 and interest
and tax expense of $214,000 in the first quarter last year. 
Cash: Total cash, cash equivalents and restricted cash increased to
$15.7 million at September 30, 2013, from $11.3 million at September
30, 2012. Cash provided by operations was $2.3 million for the fiscal
first quarter, compared to cash provided by operations of $824,000
for the first quarter of last year. During the fiscal first quarter
the company paid off the outstanding related party debt balance of
$2.9 million.  
Deferred Revenue: Total deferred revenue (which includes both
deferred revenue on the balance sheet of $19.5 million and unbilled
deferred revenue that remains off balance sheet of $22.5 million,
collectively representing contractual commitments that have not been
recognized as revenue) was $42.0 million at September 30, 2013,
compared to $33.0 million at September 30, 2012. 
Fiscal 2014 Guidance: eGain reiterates its fiscal 2014 guidance of
annual total revenue growth of between 20% and 25% and annual cloud
revenue growth of between 40% and 45%. 
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 (877) 941-1429 (U.S. toll free) or
(480) 629-9857 (international), and request the "eGain" call. 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 (800) 406-7325 (U.S. toll-free) or (303) 590-3030 (international).
The replay will be available starting two hours after the call and
remain in effect for one week. The required pass code is #4646559. An
archive of the webcast will also be available on the investors
section at www.egain.com. 
About eGain
 eGain's customer engagement solutions power digital
transformation for leading brands. Our top-rated cloud applications
for social, mobile, web, and contact centers help clients deliver
connected customer journeys in a multichannel world. To find out more
about eGain Corporation visit http://www.egain.com/company/investors/ 
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. This press
release contains forward-looking statements within the meaning of the
safe harbor provisions of the U.S. Private Securities Litigation
Reform Act of 1995. These forward-looking statements include, among
other matters, our partnership with Cisco, statements about the
Company's market opportunities, statements about the Company's
expected financial results for the fiscal first quarter ended
September 30, 2013 with respect to total revenue, cloud revenue and
business mix, and statements regarding our fiscal 2014 guidance,
including sources of revenue and business mix. 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 that our hybrid revenue model and lengthy
sales cycles may negatively affect our operating results; risks
related to our reliance on a relatively small number of customers for
a substantial portion of our revenue; our ability to compete
successfully and manage growth; our ability to develop and expand
strategic and third party distribution channels; risks associated
with new product releases; risks related to our international
operations; our ability to invest resources to improve our products
and continue to innovate; 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 23,
2013, and eGain's quarterly reports on Form 10-Q, which are available
o
n the Securities and Exchange Commission's Web site at www.sec.gov.
These forward-looking statements are based on current expectations
and speak only as of the date hereof. The Company 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 Corporation                              
              Condensed Consolidated Statements of Operations               
                  (in thousands, except per share amounts)                  
                                (unaudited)                                 
                                                                            
                                                   Three Months Ended       
                                                      September 30,         
                                             ------------------------------ 
                                                  2013            2012      
                                             --------------  -------------- 
Revenue:                                                                    
  Subscription and support                   $        9,466  $        7,174 
  License                                             3,838             713 
  Professional services                               2,378           2,836 
                                             --------------  -------------- 
    Total revenue                                    15,682          10,723 
                                             --------------  -------------- 
  Cost of subscription and support                    1,971           1,396 
  Cost of license                                        26              45 
  Cost of professional services                       3,536           2,903 
                                             --------------  -------------- 
  Total cost of revenue                               5,533           4,344 
                                             --------------  -------------- 
    Gross profit                                     10,149           6,379 
                                             --------------  -------------- 
Operating expenses:                                                         
  Research and development                            2,106           1,950 
  Sales and marketing                                 7,395           5,549 
  General and administrative                          2,206           1,507 
                                             --------------  -------------- 
    Total operating expenses                         11,707           9,006 
                                             --------------  -------------- 
Loss from operations                                 (1,558)         (2,627)
Interest expense, net                                   (92)           (141)
Other income (expense), net                            (260)            (43)
                                             --------------  -------------- 
Loss before income tax provision                     (1,910)         (2,811)
Income tax provision                                    (94)            (73)
                                             --------------  -------------- 
Net loss                                     $       (2,004) $       (2,884)
                                             ==============  ============== 
                                                                            
Per share information:                                                      
  Basic and diluted net loss per common                                     
   share                                     $        (0.08) $        (0.12)
  Weighted average shares used in computing                                 
   basic and diluted net loss per common                                    
   share                                             25,178          24,516 
                                                                            
Summary of stock-based compensation included                                
 in the costs and expenses above:                                           
Cost of revenue                              $           67  $           29 
Research and development                     $           47  $           77 
Sales and marketing                          $          133  $           96 
General and administrative                   $           99  $          102 
                                                                            
                                                                            
                                                                            
                             eGain Corporation                              
                   Condensed Consolidated Balance Sheets                    
                               (in thousands)                               
                                (unaudited)                                 
                                                                            
                                              September 30,     June 30,    
                                                  2013            2013      
                                             --------------  -------------- 
                                                                            
ASSETS                                                                      
Current assets:                                                             
  Cash and cash equivalents                  $       14,639  $       16,206 
  Restricted cash                                        29              29 
  Accounts receivable, net                            9,833          12,307 
  Deferred commissions                                1,658           1,745 
  Prepaid and other current assets                    1,667           2,377 
                                             --------------  -------------- 
    Total current assets                             27,826          32,664 
Property and equipment, net                           4,271           3,544 
Deferred commissions, net of current portion            537             776 
Goodwill                                              4,880           4,880 
Restricted cash, net of current portion               1,000           1,000 
Other assets                                            645             672 
                                             --------------  -------------- 
    Total assets                             $       39,159  $       43,536 
                                             ==============  ============== 
LIABILITIES AND STOCKHOLDERS' EQUITY                                        
Current liabilities:                                                        
  Accounts payable                           $        2,427  $        2,583 
  Accrued compensation                                4,667           4,339 
  Accrued liabilities                          
       2,630           2,478 
  Deferred revenue                                   17,416          15,679 
  Capital lease                                         176              -- 
  Bank borrowings                                     2,250           2,667 
  Related party notes payable                            --           2,897 
                                             --------------  -------------- 
    Total current liabilities                        29,566          30,643 
Deferred revenue, net of current portion              2,039           4,057 
Capital lease, net of current portion                   187              -- 
Bank borrowings, net of current portion               1,750           2,000 
Other long term liabilities                             848             848 
                                             --------------  -------------- 
    Total liabilities                                34,390          37,548 
                                             --------------  -------------- 
Stockholders' equity:                                                       
  Common stock                                           25              25 
  Additional paid-in capital                        329,218         328,552 
  Notes receivable from stockholders                    (88)            (87)
  Accumulated other comprehensive loss               (1,048)         (1,168)
  Accumulated deficit                              (323,338)       (321,334)
                                             --------------  -------------- 
    Total stockholders' equity                        4,769           5,988 
                                             --------------  -------------- 
    Total liabilities and stockholders'                                     
     equity                                  $       39,159  $       43,536 
                                             ==============  ============== 

  
eGain 
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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