-- Revenue up 26% from the comparable year-ago quarter and up 22%
sequentially from last quarter
-- Rated as "Leader" by two premier industry market analysts
-- Agreement with promissory note holders to convert a portion of the
outstanding debt into common stock and extend the maturity date of the
remaining debt to March 31, 2012
eGain Communications Corporation (
-- New hosting and license bookings(1) in the quarter of $4.6 million, an
increase of 47% from the comparable year-ago quarter.
-- Cisco OEM royalties bookings for the last six months increased 91%
when compared to the bookings in the prior six months.
Leadership Ratings by Independent Research Analyst Firms
-- Selected by Forrester as a leader in interaction-centric customer
service software solutions in the October 2008 report "The Forrester
Wave™: Customer Service Software Solutions, Q4 2008." eGain received the
highest score in the category of "current offering," as well as in the sub-
categories of "customer service," "architecture and platform," "cost,"
"product strategy" and "employees" in interaction-centric customer service
management software.
-- Positioned in the Leaders Quadrant by Gartner, Inc. in the "Magic
Quadrant for E-Service Suites 2008" report, authored by Johan Jacobs and
Michael Maoz, October 14, 2008.
Agreement with Promissory Note Holders to:
-- Converted approximately $6.5 million of the outstanding indebtedness
of approximately $13.8 million of principal and interest at September 24,
2008, into shares of eGain's common stock at a price per share of $0.95, an
82% premium to the closing price of the common stock on that day.
-- Extended the maturity date of the remaining outstanding indebtedness
to March 31, 2012, as well as the period for which interest accrues (the
"Note Extension").
-- Issued warrants to purchase an aggregate of 1,525,515 shares of
eGain's common stock at a price per share equal to $0.95 as consideration
for the Note Extension.
Market and Business Outlook
Given the macroeconomic slowdown, we believe that it is prudent to focus on
specific, well-developed opportunities this year.
We plan to continue to invest in our Cisco OEM partnership to expand our
global market reach. This channel is anticipated to deliver meaningful
bookings impact for us in fiscal year 2009, based on the increase in
bookings we have seen in recent quarters.
We are systematically investing in developing our partner ecosystem which
is already showing good promise in our international business.
Finally, we plan to invest in our global customer care infrastructure as
our enterprise clients increasingly want us to offer responsive 7x24
support for their global, mission-critical eGain deployments.
As a result of these targeted investments, we expect to steadily grow our
business in a challenging environment by targeting to acquire and serve new
global enterprise clients who trust eGain as a long-term supplier of
top-rated, innovative customer interaction hub solutions. However, given
the recent foreign currency fluctuations, we are unsure what impact the
volatility of the U.K. pound and the Euro against the US dollar will have
on our revenues and bookings in fiscal year 2009.
(1) We define New Hosting and License Bookings as new contractual
commitments (excluding renewals) received by the company for the purchase
of product licenses and hosting services. Such contracts are not
cancelable for convenience but may be subject to termination by our
customers for cause or breach of contract by us. Furthermore, because we
offer a hybrid delivery model, the mix of new license and hosting business
in a quarter could also have an impact on our revenue in a particular
quarter. Due to effects that these trends have on our short-term revenue
and profitability, we believe that it is useful to disclose New Hosting and
License Bookings detail in this and future financial releases. We
internally use this metric to focus management on the productivity of the
sales team and period-to-period changes in our core business. Therefore, we
believe that this information is meaningful and helpful in allowing
individuals to better assess the ongoing nature of our core operations.
About eGain Communications Corporation
eGain (
eGain Communications Corporation
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
September 30, June 30,
2008 2008
------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 2,244 $ 3,790
Restricted cash 13 13
Accounts receivable, net 4,013 2,749
Prepaid and other current assets 639 818
------------- -------------
Total current assets 6,909 7,370
Property and equipment, net 1,135 1,230
Goodwill, net 4,880 4,880
Other assets 421 434
------------- -------------
Total assets $ 13,345 $ 13,914
============= =============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 1,638 $ 1,669
Accrued compensation 1,787 1,712
Accrued liabilities 1,579 1,632
Current portion of deferred revenue 4,175 4,871
Current portion of capital lease obligation 48 52
Current portion of bank borrowings 138 100
------------- -------------
Total current liabilities 9,365 10,036
Deferred revenue, net of current portion 407 293
Capital lease obligation, net of current
portion 56 78
Related party notes payable 6,914 13,283
Bank borrowings, net of current portion 3,192 3,192
Other long term liabilities 309 321
------------- -------------
Total liabilities 20,243 27,203
Stockholders' deficit:
Common stock $ 22 $ 15
Additional paid-in capital 323,392 316,527
Notes receivable from stockholders (74) (74)
Accumulated other comprehensive loss (453) (494)
Accumulated deficit (329,785) (329,263)
------------- -------------
Total stockholders' deficit (6,898) (13,289)
------------- -------------
$ 13,345 $ 13,914
============= =============
eGain Communications Corporation
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
Three Months Ended
September 30,
--------------------
2008 2007
--------- ---------
Revenue:
License $ 1,599 $ 1,423
Support and Services 6,540 5,048
--------- ---------
Total revenue 8,139 6,471
Cost of license 19 20
Cost of support and services 2,841 2,675
--------- ---------
Gross profit 5,279 3,776
65% 58%
Operating costs and expenses:
Research and development 1,525 1,144
Sales and marketing 2,782 3,141
General and administrative 1,047 1,423
--------- ---------
Total operating costs and expenses 5,354 5,708
--------- ---------
Loss from operations (75) (1,932)
Interest expense, net (485) (404)
Other income 24 42
--------- ---------
Loss before income tax (536) (2,294)
Income tax 14 (106)
--------- ---------
Net loss $ (522) $ (2,400)
========= =========
Per share information:
Basic and diluted net loss per common share $ (0.03) $ (0.16)
========= =========
Weighted average shares used in computing basic and
diluted net loss per common share 15,857 15,323
========= =========
Contact Information: Company Contact: Jamie Abayan 650-230-7532 PR@eGain.com Investor Contact: IRegain@eGain.com