Quarter Highlights
-- Total new license and hosting bookings(1) up 408% from the comparable
year-ago quarter
-- Hosting revenue up 21% from the comparable year-ago quarter
-- Professional services revenue up 18% from the comparable year-ago
quarter
Fiscal Year 2007 Highlights
-- Total new license and hosting bookings up 20% from the prior year
-- Hosting revenue up 19% from the prior year
-- Professional services revenue up 30% from the prior year
eGain Communications Corporation (
-- eGain selected as a leader in interaction-centric customer service
management for the third year in a row by Forrester (Source: "The Forrester
Wave™: Customer Service Management, Q2 2007"). The company was rated #1
in business-critical areas such as "customer service," "product
capabilities," "architecture and platform," "product strategy," "corporate
strategy," and "customer base"
-- eGain Service 7.6 selected a "Product of the Year" for 2006 by
Customer Interaction Solutions magazine
-- eGain named "One to Watch for 2007" by CRM magazine
-- eGain selected as one of KMWorld magazine's "100 Companies that Matter
in Knowledge Management"
-- eGain OnDemand™ selected by KMWorld magazine as a "Trendsetting
Product of the Year"
-- eGain's customer interaction hub deployment at ABN AMRO named an
"InfoWorld 100" award winner for transforming customer service operations
with technology
Partnerships
The company signed several partner relationships in fiscal year 2007. Among
partner highlights are:
-- Executed a worldwide OEM agreement with Cisco, where Cisco will
incorporate eGain's applications for email management, chat, and web
collaboration as part of the Cisco Unified Contact Center™ and Cisco
Unified Contact Center Express™ suites. The broad and deep integration
unifies capabilities, enabling a single agent to support multiple
interactions simultaneously regardless of which communication channel the
customer has chose. "The ability to effectively handle customer
interactions via email, chat, and the web is imperative to businesses that
want to differentiate themselves with quality customer service," said John
Hernandez, Senior Director of Product Management of Cisco's customer
contact business unit. "By leveraging eGain's leading eService solutions in
our Cisco Unified Contact Center offerings, we are helping our customers
create and manage a Customer Interaction Network that enables them to keep
pace with customers' needs for multiple points of access, while keeping
operational costs in check.
-- Expanded the eGain EcoNet™ Partner Program to include multi-tiered
sales, professional services, and support training for partners around the
company's award-winning customer service software, eGain Service™. The
program offers the eGain Certified™ logo designation and accreditation,
an endorsement of quality that enables eGain partners to provide trusted
services to their clients.
-- Signed new reseller and SI partnerships worldwide, including 4C
Consulting NV, Bizmatica, Bucher & Suter AG, Centric Consulting, Calence,
LLC, D+S solutions GmbH, IntelliSolutions S.A., Inter-Active Technologies
(Pty) Ltd., and Spanlink Communications, with other partnerships under
development. Furthermore, the company plans to train over a hundred
professionals in the VAR/SI network, many of them dual eGain-Cisco
partners, in the next twelve months.
-- Accredited for "designed for EMC Documentum™". eGain's integration
with EMC Documentum not only enables an end-to-end content and knowledge-
powered customer service processes, but also enables contact centers to
leverage the EMC Documentum storage infrastructure for customer
communications.
Customer momentum
The company acquired 23 new enterprise clients in fiscal year 2007,
including:
-- a leading European telecommunications operator
-- a leading NA provider of prescriptions and related healthcare services
-- a leading NA provider of financial electronic commerce services and
products
-- a global consulting and IT services company
-- a leading imaging company
-- a leading European clothing retailer.
Business Outlook and Guidance for Fiscal Year 2008
As a result of bigger and more complex new business transactions, an
increased amount of product license revenue is being deferred and
recognized in future periods. Furthermore, because the company offers a
hybrid delivery model, the mix of new license and hosting business in a
quarter could also have an impact on revenue in a particular quarter. Due
to effects that these trends have on eGain's short-term revenue and
profitability, the company believes that, in addition to the information
contained in the GAAP presentation of financial information, it is useful
to disclose New Hosting and License Bookings¹ detail in this and future
financial releases. The company internally uses this metric to focus
management on the productivity of the sales team and period-to-period
changes in the company's core business. Therefore, the company believes
that this information is meaningful and helpful in allowing individuals to
better assess the ongoing nature of eGain's core operations. The
presentation of this additional non-GAAP financial information is not
intended to be considered in isolation or as a substitute for the financial
information prepared and presented in accordance with GAAP.
New hosting and license bookings grew 408% year over year to $5.8 million
for the quarter, from $1.1 million in the year ago quarter. Approximately
33% of the new hosting and license bookings in the quarter was from new
hosting contracts and 67% from new license contracts. Over $2.1 million of
license revenue booked in the quarter is being deferred and will be
recognized in future periods. New hosting and license bookings grew 20%
year over year to $11.1 million for the fiscal year from $9.2 million in
fiscal year 2006. Approximately 39% of the new hosting and license
bookings was from new hosting contracts and 61% from new license contracts
in the fiscal year 2007.
New hosting and license bookings for fiscal year 2008 are expected to be in
the range of $13 million to $15 million. Hosting bookings are expected to
be in the range of 30% to 40% of total new hosting and license bookings.
Cash flow from operations for fiscal year 2008 is expected to be positive.
(1) New Hosting and License Bookings is a non-GAAP measure the company
defines 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 only for cause/breach of contract by the Company.
About eGain Communications Corporation
eGain (
eGain Communications Corporation
Condensed Consolidated Balance Sheets
(in thousands)
June 30, June 30,
2007 2006
----------- -----------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 6,195 $ 6,916
Restricted cash 13 12
Accounts receivable, net 1,790 2,151
Prepaid and other current assets 662 623
----------- -----------
Total current assets 8,660 9,702
Property and equipment, net 1,336 1,169
Goodwill, net 4,880 4,880
Other assets 486 354
----------- -----------
Total assets $ 15,362 $ 16,105
=========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 1,557 $ 989
Accrued compensation 1,884 1,254
Accrued liabilities 1,496 1,156
Deferred revenue 5,541 4,259
Current portion of bank borrowings 2,293 1,697
----------- -----------
Total current liabilities 12,771 9,355
Related party notes payable 11,653 8,652
Bank borrowings, net of current portion 167 77
Other long term liabilities 185 217
----------- -----------
Total liabilities 24,776 18,301
Stockholders' deficit:
Common stock $ 15 $ 15
Additional paid-in capital 316,202 315,736
Notes receivable from stockholders (77) (74)
Accumulated other comprehensive loss (438) (456)
Accumulated deficit (325,116) (317,417)
----------- -----------
Total stockholders' deficit $ (9,414) $ (2,196)
----------- -----------
$ 15,362 $ 16,105
=========== ===========
eGain Communications Corporation
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Twelve Months Ended
June 30, June 30,
-------------------- --------------------
2007 2006 2007 2006
--------- --------- --------- ---------
Revenue:
License 322 $ 718 $ 3,407 $ 5,967
Support and Services 5,073 4,480 19,066 16,597
--------- --------- --------- ---------
Total revenue 5,395 5,198 22,473 22,564
Cost of license 20 16 99 231
Cost of support and
services 2,613 1,855 9,132 6,985
--------- --------- --------- ---------
Gross profit 2,762 3,327 13,242 15,348
51% 64% 59% 68%
Operating costs and expenses:
Research and development 1,182 847 3,973 3,046
Sales and marketing 3,484 2,597 12,853 9,570
General and administrative 659 684 2,884 2,637
--------- --------- --------- ---------
Total operating costs and
expenses 5,325 4,128 19,710 15,253
--------- --------- --------- ---------
Income / (Loss) from
operations (2,563) (801) (6,468) 95
Interest expense, net (329) (260) (1,167) (1,040)
Other income 42 20 72 32
--------- --------- --------- ---------
Loss before income tax (2,850) (1,041) (7,563) (913)
Income tax (64) (55) (136) (146)
--------- --------- --------- ---------
Net loss $ (2,914) (1,096) (7,699) (1,059)
========= ========= ========= =========
Per share information:
Basic and diluted net loss
per common share $ (0.19) $ (0.07) $ (0.50) $ (0.07)
========= ========= ========= =========
Weighted average shares used
in computing basic and
diluted net loss per common
share 15,322 15,312 15,317 15,308
========= ========= ========= =========
Contact Information: Company Contact: Jamie Abayan 650-230-7532 PR@eGain.com Investor Contact: IRegain@eGain.com