Mountain View, Calif. (November 11, 2009) – eGain Communications (OTC BB: EGAN.OB), a leading provider of customer service and contact center software, today announced financial results for the first fiscal quarter ended September 30, 2009.
Total revenue for the first quarter of fiscal year 2010 was $8.0 million, a decrease of 2% from the comparable year-ago quarter. License revenue was $2.0 million, an increase of 22% from the comparable year-ago quarter. Recurring services revenue was $4.0 million, a decrease of 3% from the comparable year-ago quarter. Professional services revenue was $2.0 million, a decrease of 16% from the comparable year-ago quarter.
Gross margin for the first quarter of fiscal year 2010 was 68%, compared to 65% in the comparable year-ago quarter. Total operating costs and expenses for the first quarter of fiscal year 2010 were $4.4 million, a decrease of 18% from the comparable year-ago quarter.
Net income for the first quarter of fiscal year 2010 was $787,000, or $0.04 per share on a basic and diluted basis, compared to a net loss of $522,000, or $(0.03) per share for the comparable year-ago quarter. Net income for the first quarter of fiscal year 2010 included stock-based compensation of $55,000 and interest expense of $277,000, compared to stock-based compensation expense of $83,000 and a net of interest expense and tax benefit of $471,000 for the comparable year-ago quarter.
Total cash and cash equivalents were $4.7 million at September 30, 2009, compared to $7.5 million at June 30, 2009. The decrease in cash was primarily due to a $3.0 million repayment of existing bank borrowings. Cash provided by operations was $462,000 for the first quarter of fiscal year 2010, compared to cash used in operations of $1.4 million in the comparable year-ago quarter. Days sales outstanding in receivables for the first quarter of fiscal year 2010 were 52 days, compared to 44 days for the comparable year-ago quarter. Deferred revenues totaled $5.5 million at September 30, 2009 unchanged from June 30, 2009.
eGain’s revenues for the first quarter of fiscal year 2010 were negatively impacted by the reduced value of foreign currencies when compared to U.S. dollars. On a constant currency basis, using the exchange rates in effect on June 30, 2009, revenues for the first quarter of fiscal year 2010 would have been up approximately 4%, rather than down 2% when compared to the first quarter of fiscal year 2009.
“We are pleased with our bookings to jumpstart fiscal 2010,” said Ashu Roy, eGain’s CEO. “Our earnings and cash flow improved significantly quarter-over-quarter. And we released eGain Service 9, our innovative Customer Interaction Hub suite, at our North America Customer Summit in Las Vegas.”
New Hosting and License Bookings¹
¹We 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 use this metric internally 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.
²Gartner defines Magic Quadrant leaders as companies that “demonstrate market-defining vision and the ability to execute against that vision through products, services, demonstrable sales figures and solid new references for multiple geographies and vertical industries. Leaders provide functionally diverse and rich e-service suites that can be deployed and supported globally, and have at least five of the six e-service components supported by OEMs. They are suitable for all sizes and complexities of enterprises, and have broad industry coverage. Revenue is strong, and new references are readily available. When asked, their clients reply that this product has affected the organization’s competitive position in the market.”
eGain (OTCBB: EGAN.OB) is the leading provider of multichannel customer service and knowledge management software for on-site or on-demand deployment. For over a decade, hundreds of the world’s largest companies have relied on eGain to transform their traditional call centers, help desks, and web customer service operations into multichannel customer interaction hubs (CIHs). Based on the Power of One™, the concept of one unified platform for multichannel customer interaction and knowledge management, eGain solutions improve customer experience, optimize service processes end to end, increase sales, and enhance contact center performance.
Headquartered in Mountain View, California, eGain has operating presence in North America, EMEA and APAC. To learn more about us, visit www.eGain.com or call our offices: +1-800-821-4358 (US), +44-(0)-1753-464646 (EMEA), or +91-(0)-20-6608-9200 (APAC). Also, follow us on Twitter at @eGain (http://twitter.com/egain) and Facebook at (http://facebook.com/egain).
Cautionary Note Regarding Forward-looking Statements
All statements in this release that involve eGain’s plans, forecasts (including the above stated guidance), beliefs, projections, expectations, strategies and intentions, including but not limited to our enterprise-focused business model’s effect on our bookings and the effect of global currency exchange rates on our business are forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which are based on information available to eGain at the time of this release, are not guarantees of future results; rather, they are subject to risks and uncertainties that may cause actual results to differ materially from those set forth in this release. These risks include, but are not limited to, the uncertainty of demand for eGain products, including our guidance regarding bookings and revenue; the actual mix in new business between hosting and license transactions when compared with management’s projections; volatility of the value of certain currencies in relation to the US dollar, particularly the U.K. pound, Indian rupee and Euro; the increased complexity of certain transactions and the timing of revenue recognition on such transactions; and other risks detailed from time to time in the Company’s filings with the Securities and Exchange Commission, including the Company’s annual report on Form 10-K filed on September 28, 2009, and the Company’s quarterly reports on Form 10-Q. eGain 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 Communications Corp. All other company names and products are trademarks or registered trademarks of their respective companies.