[0] eGain Exceeds Earnings Targets for the March Quarter 2001; Quarterly Revenues Increase More Than 300% over Year-Ago Quarter; Company on Track to Achieve Profitability this Calendar Year.Business Editors SUNNYVALE, Calif.--(BUSINESS WIRE)--May 2, 2001 eGain Communications Corporation (Nasdaq:EGAN EGAN ETSI Guide Access Network EGAN Ethernet Global Access Network ), a leading provider of eService solutions, today announced financial results for the quarter ended March 31, 2001, the third quarter of its fiscal year 2001. Revenue for the quarter was $13.4 million, representing an increase of more than 300% over revenue of $3.3 million in the same period a year ago. Net loss, excluding non-cash and restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. , decreased for the second consecutive quarter. Excluding non-cash and restructuring charges, net loss for the quarter was $14.9 million, or $0.42 per share, a decrease from a net loss of $15.7 million, or $0.45 per share, in the prior quarter. Non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. include amortization of goodwill, other intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. and deferred compensation as well as accreted dividends and other non-cash charges related to the company's cumulative convertible preferred stock Convertible Preferred Stock Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Also known as "convertible preferred shares". . On an earnings before depreciation and amortization basis (this calculation excludes depreciation expense in addition to non-cash and restructuring charges), the company recorded a loss of $13.3 million, or $0.38 per share, during the quarter versus a loss of $14.2 million, or $0.40 per share, in the prior quarter. "In the midst Adv. 1. in the midst - the middle or central part or point; "in the midst of the forest"; "could he walk out in the midst of his piece?" midmost of an uncertain economic environment, eGain stands out as one of the few companies that is consistently performing. Our focus on Global 2000 companies, and the tangible ROI (Return On Investment) The monetary benefits derived from having spent money on developing or revising a system. In the IT world, there are more ways to compute ROI than Carter has liver pills (and for those of you who never heard of that expression, it means a lot). benefits of our multi-channel solutions, have enhanced the size and quality of our customer engagements," said Ashutosh Roy, eGain's Chairman and Chief Executive Officer. "The achievements during this quarter reflect the traction Traction Definition Traction is the use of a pulling force to treat muscle and skeleton disorders. Purpose Traction is usually applied to the arms and legs, the neck, the backbone, or the pelvis. we have with larger enterprises and the value of our eService solutions, and solidify so·lid·i·fy v. so·lid·i·fied, so·lid·i·fy·ing, so·lid·i·fies v.tr. 1. To make solid, compact, or hard. 2. To make strong or united. v.intr. eGain's position as the de facto standard Hardware or software that is widely used, but not endorsed by a standards organization. Contrast with de jure standard. de facto standard - A widespread consensus on a particular product or protocol which has not been ratified by any official standards body, such as ISO, in the marketplace." "While we experienced a slight decline in sequential revenue, we believe that our results underscore The underscore character (_) is often used to make file, field and variable names more readable when blank spaces are not allowed. For example, NOVEL_1A.DOC, FIRST_NAME and Start_Routine. (character) underscore - _, ASCII 95. the overall strength of eGain's business, especially in light of the current economic climate," noted Harpreet Grewal, eGain's Chief Financial Officer. "The March quarter marked several important milestones for eGain," continued Mr. Grewal. "We secured our largest order to date -- approximately $3 million in bookings -- and also achieved a second sequential quarterly decrease in operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. . We exceeded EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. expectations for the seventh consecutive quarter. With our continued performance, and a strong cash position, the company is firmly on track to achieve profitability in the December quarter of 2001." Enterprise Sales Continue to Grow eGain's success in selling to Global 2000 customers continues to fuel the company's growth. During the March quarter, eGain's client base grew by almost 40 new accounts, bringing the company's total customer count to over 750 companies. International operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. accounted for more than 25% of total revenue during the quarter. Building upon eGain's considerable momentum in the global financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. market, new customers in the March quarter included ANZ ANZ Australia and New Zealand ANZ Australia and New Zealand Banking Group Limited ANZ Air New Zealand (NZ national airline) Banking Group, one of Australia's leading banks with total assets in excess of $85 billion; Bank of Hawaii Bank of Hawaii, a subsidiary of Bank of Hawaii Corporation (NYSE: BOH), is a regional commercial bank headquartered in Honolulu, Hawaii. It is Hawaii's second oldest bank and its largest locally owned bank in that majority of the voting stockholders reside within the state. , Hawaii's largest commercial bank; CNA/Continental Casualty, one of the largest U.S. insurers with revenues in excess of $14 billion; and HSBC HSBC Hongkong and Shanghai Banking Corporation HSBC Humane Society of Broward County (Florida) HSBC Humane Society of Bay County (Bay County, Michigan) Bank, one of the world's largest banking and financial services organizations with 6,500 offices in 79 countries. These firms join over 60 financial services customers that have previously chosen eGain to manage their eService needs. In addition to the financial services sector, eGain added new customers across a range of industries, including Aliant Telecom, one of Canada's leading high tech companies with revenues in excess of $1 billion; American Airlines American Airlines Major U.S. airline. American was created through a merger of several smaller U.S. airlines and incorporated in 1934. It continued to buy the routes of other airlines, becoming an international carrier in the 1970s; its routes include South America, the , the nation's second largest air carrier with revenues in excess of $19 billion; and Vodafone Group, the leading global mobile phone operator with over 59 million customers. Strong Traction with Existing Customers In the March quarter, more than 60% of eGain's bookings derived from selling additional products and services to existing customers. These customers included ABN AMRO ABN AMRO Algemene Bank Nederland-Amsterdam Roterdam Bank (Dutch bank) , Barclay's Bank, Charter Communications Charter Communications NASDAQ: CHTR is an American company providing cable television, high-speed Internet, and telephone services to more than 5.7 million customers in 29 states. It is the third-largest publicly traded cable operator in the U.S. , Daimler Chrysler, Fleet Boston, Marubeni Corporation, Staples staples U-shaped stainless steel or vitallium units with sharp points used for surgical fixation. epiphyseal staples used to staple epiphysis to metaphysis; have metal bracing at the corners. , and Verizon Communications
Verizon Communications, Inc. . Sales to existing customers also included the company's largest transaction to date -- valued at approximately $3 million -- with one of the world's largest media companies. With millions of customers worldwide, this company intends to use eGain Knowledge to enhance its global customer service operation, offering support in multiple languages and regions, using multiple platforms Refers to two or more operating environments, which typically include the CPU family and operating system. For example, if versions of a program run on Windows and the Macintosh, the software is said to support multiple platforms. . The order highlights the strength of eGain's relationship with its existing customer base and the scalability of eGain solutions. eGain's customer base now includes (as rated by Fortune Magazine): -- 24 of the 50 largest global companies -- 6 of the 10 largest telecommunications companies -- 3 of the 5 largest diversified financial services companies Growing Acceptance of eGain's Multi-Channel Solutions As a leading provider of Enterprise Interaction Management software, eGain is one of the few companies to offer solutions that span the three primary channels of online communication: email management, real-time collaboration and self-service. This multi-channel product strategy is reflected in eGain's sales. Of the total units sold during the March quarter, email management accounted for approximately 52%, real-time collaboration accounted for approximately 27%, and self-service accounted for approximately 21%. Over 40% of new customers in the March quarter chose to purchase more than one application. Given that the market for online customer communications is still in its infancy infancy, stage of human development lasting from birth to approximately two years of age. The hallmarks of infancy are physical growth, motor development, vocal development, and cognitive and social development. , eGain expects the number of multi-channel deployments to grow. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. a report from Forrester Research Forrester Research is an independent technology and market research company that provides its clients with advice about technology's impact on business and consumers. Corporate facts
Enterprise-Level Scalability and a Measurable Return on Investment (ROI) eGain's success is based on the measurable improvements in ROI and customer satisfaction that its solutions provide in high-volume enterprise environments. In the March quarter, eGain brought numerous large-scale enterprise customer deployments to production. At McAfee.com, eGain Assistant enabled McAfee's virtual customer service representatives to support almost 30,000 self-service sessions in the first 10 days of use. In addition, one of the largest global financial services companies found that the productivity of its call center increased by 70% through the use of eGain Knowledge, enabling the division to support a customer base that had doubled, without increasing support headcount. Illustrating the value of eGain solutions, Stuart Rowe, e-commerce director at HMV HMV His Master's Voice HMV High Mobility Vehicle HMV High Mileage Vehicle HMV High Molecular Weight HMV Heavy Maintenance Visit HMV Hazardous Materials Vault (military vault for dangerous materials) HMV Heavy Military Vehicle UK, Ltd., notes: "I feel that we now have a competitive advantage through eGain. Our closed-loop service is the barometer for healthy, profitable, long-term customer service success." Through their use of eGain Mail and eGain Campaign, HMV recorded a 30% increase in service productivity at the same time their customer base doubled. Financial Guidance The company's operating performance in the March quarter keeps eGain on track for achieving profitability by December 2001. Given the current macro-economic environment, eGain is forecasting revenue for the June-quarter to be in the range of $15.0 million to $16.0 million. "We believe growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. in the range of 12% to 20% versus the March quarter appear prudent," said Harpreet Grewal, eGain's CFO See Chief Financial Officer. . "In addition, we will continue to focus on managing expenses, improving efficiency and driving margins. Our EPS targets remain consistent with those provided in January - calling for EBDA EBDA Extended BIOS Data Area EBDA Egyptian Biodynamic Association EBDA Earnings Before Depreciation and Amortization EBDA Edinburgh Ballroom Dancers Association (Scotland) (earnings before depreciation and amortization) profit breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations in the December quarter of 2001." Consistent with its strategy of expense management, the company announced that it has undertaken a reorganization and expects to take a charge of approximately $750,000 in the June quarter related to these initiatives. In light of the foregoing, eGain offers the following guidance for the June quarter. The company will provide four-quarter guidance for fiscal 2002 in its next earnings release.
(Dollars in millions, except per share data) Q4: FY01
June 2001
---------
Net revenue $15.0 - $16.0
Gross margin (a) 50% - 52%
Pro forma EPS EBA
(earnings before amortization expense)(a)(b) ($0.35) - ($0.38)
Depreciation expense (b) $1.8
Pro forma EPS EBDA
(earnings before depreciation and
amortization expense) (a)(b) ($0.30) - ($0.33)
(a) Excludes the impact of a one-time restructuring charge of approximately $750,000. (b) Depreciation and amortization are non-cash charges. About eGain Communications Corporation eGain (Nasdaq:EGAN) is a leading provider of Enterprise Interaction Management (EIM EIM Enterprise Incentive Management EIM Enterprise Information Management EIM Enterprise Identity Mapping (IBM) EIM Enterprise Instant Messaging EIM Employee Internet Management EIM European Institute for the Media ) software that enables Global 2000 companies to transform traditional customer call centers into multi-channel eService networks. To help businesses deliver a superior customer experience and establish profitable, long-term customer relationships, eGain offers best-of-breed applications for inbound in·bound 1 adj. Bound inward; incoming: inbound commuter traffic. Adj. 1. inbound and outbound out·bound adj. Outward bound; headed away: outbound trains. Adj. 1. outbound - that is going out or leaving; "the departing train"; "an outward journey"; "outward-bound ships" email management, real-time web collaboration, web-based self-service, and enterprise-wide knowledge management. Built using a Web-native architecture, eGain's comprehensive eService solutions provide robust scalability, global access, integration and rapid deployment. Based in Sunnyvale, California Sunnyvale ([sʌniveil]) is a city in Santa Clara County, California, United States. It is one of the major cities that make up the Silicon Valley. As of the 2000 census, the city population was 131,760. , eGain has more than 750 customers, including 24 of the 50 largest global companies. For information about eGain, please visit www.eGain.com or call the company's offices - US: (888) 603-4246; London: +44 (0) 1753 464646; Sydney: +612 9492 5400. Cautionary Note Regarding Forward-looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. : All statements in this release that involve eGain's plans, forecasts, beliefs, projections, expectations, strategies and intentions are forward-looking statements within the meaning of the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 and uncertainties include, but are not limited to, the uncertainty of demand for eGain products; the anticipated customer benefits from eGain products; increased competition and technological changes in the markets in which eGain competes; eGain's ability to manage growth; intense competition for qualified employees; 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. filed on September 28, 2000, and the company's quarterly reports on Form 10-Q Form 10-Q See 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.
eGain Communications Corporation
Pro Forma Condensed Consolidated Statement of Operations
(excluding amortization of goodwill, intangible assets, deferred
compensation, other non-cash items, and restructuring charges)
(in thousands, except per share amounts)
(unaudited)
Nine months ended
Quarter ended March 31, March 31,
2001 2000 2001 2000
--------- --------- --------- ---------
Revenue:
Hosting $ 2,539 $ 988 $ 8,056 $ 1,930
License 5,930 1,268 16,809 2,487
Services 4,951 1,047 14,450 2,657
--------- --------- --------- ---------
Total revenue 13,420 3,303 39,315 7,074
Cost of revenue 7,580 4,138 24,087 9,447
--------- --------- --------- ---------
Gross profit (loss) 5,840 (835) 15,228 (2,373)
Operating costs
and expenses:
Research and development 5,615 3,005 17,560 7,051
Sales and marketing 11,599 7,013 37,061 15,998
General and
administrative 4,221 1,779 12,739 4,785
--------- --------- --------- ---------
Total operating
costs and expenses 21,435 11,797 67,360 27,834
--------- --------- --------- ---------
Loss from operations (15,595) (12,632) (52,132) (30,207)
Non-operating
income (expense) 745 461 2,344 1,089
--------- --------- --------- ---------
Net loss $(14,850) $(12,171) $(49,788) $(29,118)
========= ========= ========= =========
Per share information:
Basic and diluted net
loss per common share $ (0.42) $ (0.43) $ (1.42) $ (1.34)
========= ========= ========= =========
Shares used in computing
basic and diluted net
loss per common share 35,353 27,986 34,958 21,783
========= ========= ========= =========
eGain Communications Corporation
Condensed Consolidated Statement of Operations
(in thousands, except per share amounts)
(unaudited)
Nine months ended
Quarter ended March 31, March 31,
2001 2000 2001 2000
--------- --------- --------- ---------
Revenue:
Hosting $ 2,539 $ 988 $ 8,056 $ 1,930
License 5,930 1,268 16,809 2,487
Services 4,951 1,047 14,450 2,657
--------- --------- --------- ---------
Total revenue 13,420 3,303 39,315 7,074
Cost of revenue -
direct 7,580 4,138 24,087 9,447
Cost of revenue -
acquisition related 362 -- 1,086 --
--------- --------- --------- ---------
Gross profit (loss) 5,478 (835) 14,142 (2,373)
Operating costs
and expenses:
Research
and development 5,615 3,005 17,560 7,051
Sales and marketing 11,599 7,013 37,061 15,998
General and
administrative 4,221 1,779 12,739 4,785
Amortization of
goodwill and other
intangible assets 9,200 2,614 27,600 6,265
Amortization of
deferred compensation 750 2,944 2,725 8,851
Restructuring 388 -- 388 --
--------- --------- --------- ---------
Total operating
costs and expenses 31,773 17,355 98,073 42,950
--------- --------- --------- ---------
Loss from operations (26,295) (18,190) (83,931) (45,323)
Non-operating
income (expense) 745 461 2,344 1,089
--------- --------- --------- ---------
Net loss $ (25,550) $ (17,729) $ (81,587) $ (44,234)
Dividends on
preferred stock (1,513) -- (3,903) --
Beneficial conversion
feature on
preferred stock -- -- (19,335) --
--------- --------- --------- ---------
Net loss applicable
to common stockholders $ (27,063) $ (17,729) $ (104,825) $ (44,234)
========= ========= ========= =========
Per share information:
Basic and diluted net
loss per common share $ (0.77) $ (0.63) $ (3.00) $ (2.03)
========= ========= ========= =========
Shares used in
computing basic and
diluted net loss
per common share 35,353 27,986 34,958 21,783
========= ========= ========= =========
eGain Communications Corporation
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
March 31, June 30,
2001 2000
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 53,198 $ 27,201
Short-term investments,
held as available for sale -- 2,991
Accounts receivable, net 14,826 8,589
Prepaid and other current assets 4,331 4,456
--------- ---------
Total current assets 72,355 43,237
Property and equipment, net 12,741 11,690
Goodwill and other intangible assets, net 90,943 119,629
Other assets 1,291 1,344
--------- ---------
$177,330 $175,900
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank borrowings - line of credit $ 1,980 $ 1,000
Current portion of notes
payable and capital leases 1,320 1,298
Accounts payable 5,746 5,305
Deferred revenue 5,918 7,286
Accrued expenses 11,577 16,439
--------- ---------
Total current liabilities 26,541 31,328
Long-term liabilities 1,214 1,201
Total shareholders' equity 149,575 143,371
--------- ---------
$177,330 $175,900
========= =========
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