-- Total revenue up 24% from the comparable year-ago quarter
-- License revenue up 124% from the comparable year-ago quarter
-- Professional services revenue up 35% from the comparable year-ago
quarter
-- Hosting revenue up 24% from the comparable year-ago quarter
Fiscal Year 2008 Highlights
-- Total revenue up 34% from the prior year
-- License revenue up 93% from the prior year
-- Professional services revenue up 40% from the prior year
-- Hosting revenue up 34% from the prior year
eGain Communications Corporation (
-- eGain marked its tenth anniversary of delivering on-demand customer
service software for the enterprise. eGain is the only company in the
market to have offered both on-demand and on-premise deployment of customer
service software to enterprises for over a decade.
-- The company conducted a unique "state of customer service" study that
included a holistic measurement of single-channel and cross-channel
customer service offered by leading North American companies. The study
strongly validated the need for robust customer service solutions such as
eGain's.
-- The company introduced powerful multilingual capabilities to the eGain
Service suite including user interface and content support for Dutch,
German, French, Italian and Spanish.
-- eGain® Service™ was ranked the #1 customer service software in
the annual survey of the top 500 US-based web retailers, conducted by
Internet Retailer magazine in 2007.
-- eGain® Service™ was selected as a "Product of the Year" for 2007
by Customer Interaction Solutions magazine.
-- eGain was named to the "Software 500" list for the fifth year in a
row. The Software 500 is the Software magazine list of the world's premier
software and services providers.
-- eGain was included in the 2008 list of "100 Companies that Matter in
Knowledge Management" by KMWorld magazine.
-- The company was named as the "One to Watch" for 2008 by CRM magazine
in the web interaction management category in recognition of its
comprehensive, innovative, and unified solution for multichannel
interaction management.
Partnerships
-- eGain delivered the second phase of its multi-phase OEM product
delivery agreement with Cisco in December 2007. Early customer response to
Cisco's multichannel offering based on eGain technology is encouraging.
Based on strong customer feedback and demand for specific industry-leading
capabilities, Cisco and eGain have expanded the scope of the integrated
product capabilities -- resulting in a delay in the third and final
deliverable that is now targeted for the second half of fiscal year 2009
(as opposed to the earlier target of the end of fiscal year 2008).
-- eGain signed up several new reseller and systems integrator
partnerships worldwide, including Cystelcom in Spain, CUBE in Poland, and
PlanNet21 in Ireland. The company trained solution implementation
professionals from 23 partners in its partner ecosystem during the fiscal
year.
-- The company also expanded its Partner EcoNet™ portal to provide
comprehensive sales, support and services information for channel partners,
while enabling them to collaborate with one another through an online
forum.
Customer Momentum
eGain continued its focus on acquiring marquee enterprise customers through
its direct and partner channels in fiscal year 2008. Notable acquisitions
included:
-- A leading fortune 50 pharmaceutical company
-- A leading fortune 500 consumer electronics company
-- An international financial services organization
-- One of the leading global services providers in insurance, banking and
asset management
-- A global leader in benefits outsourcing
-- A leading European catalogue retailer
-- One of the UK's largest online fashion and beauty stores.
Market and Business Outlook
Leading market analysts believe that the customer interaction hub market
continues to be a viable one within the larger enterprise business
application space.
-- In an economic slowdown, efficiencies generated by self-service and
agent productivity solutions are increasingly in demand
-- Moreover, much of the arbitrage benefit from off-shoring and
outsourcing is being eroded by wage inflation in emerging economies,
leading businesses to rotate their investments into technology
-- Finally, the business case for retaining existing customers through
differentiated service is even more compelling in a slow economy as
businesses struggle to acquire new customers.
The Company plans to balance growth and profitability goals in fiscal year
2009. 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 promises to deliver meaningful
bookings impact for us in fiscal year 2009.
-- We are systematically investing in developing our partner ecosystem.
It 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. This
investment will help us further strengthen our customer loyalty.
As a result of these targeted investments, we expect to steadily grow our
top-line in a tough environment by successfully acquiring and serving new
global enterprise clients who trust eGain as a long-term supplier of
top-rated, innovative customer interaction hub solutions.
Financial guidance for Fiscal Year 2009
-- The company currently expects new hosting and license bookings for
fiscal year 2009 to be in the range of $12.1 million to $14.2 million, or a
50% to 75% increase over fiscal year 2008.
-- The company currently expects total revenue for fiscal year 2009 to be
in the range of $33.1 million to $34.6 million, or a 10% to 15% increase
over fiscal year 2008.
-- The company currently expects to be profitable on an operating basis
and generate positive cash flows from operations in fiscal year 2009.
(1) New Hosting and License Bookings is a non-GAAP measure we define 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, in addition to the information
contained in the GAAP presentation of financial information, 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. 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.
About eGain Communications Corporation
eGain (
eGain Communications Corporation
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
June 30, June 30,
2008 2007
-------- --------
ASSETS
Current assets:
Cash and cash equivalents $ 3,790 $ 6,195
Restricted cash 13 13
Accounts receivable, net 2,749 1,790
Prepaid and other current assets 818 662
-------- --------
Total current assets 7,370 8,660
Property and equipment, net 1,230 1,336
Goodwill, net 4,880 4,880
Other assets 434 486
-------- --------
Total assets $ 13,914 $ 15,362
======== ========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 1,669 $ 1,557
Accrued compensation 1,712 1,884
Accrued liabilities 1,632 1,496
Current portion of deferred revenue 4,871 5,541
Current portion of capital lease obligation 52 --
Current portion of related party notes payable 13,283 --
Current portion of bank borrowings 3,100 2,293
-------- --------
Total current liabilities 26,319 12,771
Deferred revenue, net of current portion 293 --
Capital lease obligation, net of current portion 78 --
Related party notes payable, net of current portion -- 11,653
Bank borrowings, net of current portion 192 167
Other long term liabilities 321 185
-------- --------
Total liabilities 27,203 24,776
Stockholders' deficit:
Common stock $ 15 $ 15
Additional paid-in capital 316,527 316,202
Notes receivable from stockholders (74) (77)
Accumulated other comprehensive loss (494) (438)
Accumulated deficit (329,263) (325,116)
-------- --------
Total stockholders' deficit (13,289) (9,414)
-------- --------
$ 13,914 $ 15,362
======== ========
eGain Communications Corporation
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
Three Months Twelve Months
Ended Ended
June 30, June 30,
------------------ ------------------
2008 2007 2008 2007
-------- -------- -------- --------
Revenue:
License $ 721 $ 322 $ 6,570 $ 3,407
Support and Services 5,971 5,073 23,537 19,066
-------- -------- -------- --------
Total revenue 6,692 5,395 30,107 22,473
Cost of license 20 20 80 99
Cost of support and services 2,874 2,613 11,556 9,132
-------- -------- -------- --------
Gross profit 3,798 2,762 18,471 13,242
Operating costs and expenses:
Research and development 1,433 1,182 5,098 3,973
Sales and marketing 2,843 3,484 11,747 12,853
General and administrative 912 659 4,240 2,884
-------- -------- -------- --------
Total operating costs and
expenses 5,188 5,325 21,085 19,710
-------- -------- -------- --------
Loss from operations (1,390) (2,563) (2,614) (6,468)
Interest expense, net (432) (329) (1,659) (1,167)
Other income 75 42 332 72
-------- -------- -------- --------
Loss before income tax (1,747) (2,850) (3,941) (7,563)
Income tax (110) (64) (206) (136)
-------- -------- -------- --------
Net loss $ (1,857) $ (2,914) $ (4,147) $ (7,699)
======== ======== ======== ========
Per share information:
Basic and diluted net loss per
common share $ (0.12) $ (0.19) $ (0.27) $ (0.50)
======== ======== ======== ========
Weighted average shares used in
computing basic and diluted
net loss per common share 15,333 15,322 15,330 15,317
======== ======== ======== ========
Contact Information: Company Contact: Jamie Abayan 650-230-7532 PR@eGain.com Investor Contact: IRegain@eGain.com