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 quarterFiscal 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 yeareGain 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 technologyPartnerships 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