UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C.
20549
_______________
Form
8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF
1934
Date of report (date of earliest event
reported):
November 29, 2012
Daegis Inc.
(Exact name of registrant as specified in its charter)
Delaware | 001-11807 | 94-2710559 |
(State or other jurisdiction | (Commission File No.) | (I.R.S. Employer |
of incorporation) | Identification No.) |
1420 Rocky Ridge Drive
Roseville,
California 95661
(Address of principal executive
offices)
Registrants telephone number, including area
code:
(916) 865-3300
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On November 29, 2012, Daegis Inc. (the Company or Daegis) issued a press release regarding the Companys financial results for its fiscal 2013 second quarter. The full text of the Companys press release is attached hereto as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(d) |
Exhibits | ||
99.1 | Press Release dated November 29, 2012, announcing financial results for fiscal 2013 second quarter. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: November 29, 2012
By: | /s/ Steven Bonham |
Steven Bonham |
FOR IMMEDIATE RELEASE
For more information,
contact:
Deb Thornton
Daegis
(916) 218-4779
dthornton@daegis.com
Daegis Reports Fiscal 2013 Second Quarter Financial Results
ROSEVILLE, Calif. November 29, 2012 Daegis Inc. (NASDAQ: DAEG), an eDiscovery and information management company, today announced financial results for its fiscal 2013 second quarter ended October 31, 2012.
Second quarter total revenue was $10.3 million, compared to $11.1 million in the second quarter last year. Electronic discovery revenue was $4.0 million, compared to $5.5 million in the comparable quarter last year. Total revenue for the database, archive and migration business segment was $6.3 million, compared to $5.5 million in the second quarter of fiscal 2012. Adjusted EBITDA was $1.7 million or 17% of revenue, compared to $2.3 million or 21% of revenue, in the comparable quarter last year (see reconciliation table below regarding the presentation of Adjusted EBITDA and Non-GAAP net income).
Second quarter GAAP net income was $252,000 or $0.01 per share, compared to net income of $795,000 or $0.05 per share in the second quarter of fiscal 2012. Non-GAAP net income was $978,000 or $0.07 per share, compared to $1.4 million or $0.10 per share in the same quarter last year (see reconciliation table). The Company generated cash from operations of $687,000 during the second quarter, compared to $2.1 million during the second quarter last year.
Cash and cash equivalents at October 31, 2012 were $4.0 million, compared to $4.8 million reported at April 30, 2012. Total outstanding debt at October 31, 2012 was $18.6 million, a decrease of $2.7 million, compared to $21.3 million at April 30, 2012.
For the six-month period of fiscal 2013, total revenue was $20.0 million, compared to $22.6 million for the same period of the prior year. GAAP net income was $409,000 or $0.01 per share, compared to GAAP net loss of $983,000 or $0.08 loss per share last year. Non-GAAP net income was $1.2 million or $0.08 per share, compared to $2.2 million or $0.14 per share for the first six months of last year. Adjusted EBITDA was $2.8 million, compared to $4.1 million in the same period last year. Cash generated from operations was $1.3 million, compared to $3.1 million in the comparable period last year.
Commenting on results, Chief Executive Officer Todd Wille said, During the first two quarters of the fiscal year, we rebuilt the eDiscovery executive team, significantly enhanced our cloud-based eDiscovery Platform, and added experienced sales professionals. We delivered a major new release of the Daegis eDiscovery Platform with enhanced self-service usability and our innovative technology assisted review solution known as Acumen. In addition, we right sized our cost structure to deliver profitability as we implement our plans to grow. We are extremely focused on execution and expect to see improved results in the second half of the year. In our database, archive and migration business segment, we saw stronger than anticipated performance with 14% growth quarter over quarter and 13% sequentially. We launched a major release of our AXS-One archive product, achieved significant archive and migration wins, and continued our trend of strong maintenance renewals.
Investor Conference
Call
Management will host a conference call today, November 29, 2012, at 2:00
p.m. PT (5:00 p.m. ET) to review the second quarter 2013 financial results. The
call can be accessed by dialing (877) 941-1427 or (480) 629-9664 for
international callers and providing the company name. Participants are asked to
call the assigned number approximately 10 minutes before the conference call
begins. In addition, the conference call will be available over the Internet at
www.daegis.com. A
replay of the call will be available approximately two hours following the end
of the call through 11:59 p.m. ET on December 9, 2012 by dialing (800) 406-7325
or (303) 590-3030 for international callers and using the following passcode:
4576354#.
About Daegis
Inc.
Daegis delivers eDiscovery and
information management solutions. Daegis eDiscovery Platform combines
technology and on-demand services to deliver end-to-end and cost-effective
solutions for corporations and law firms. The Companys information management
business delivers solutions for developing, managing, modernizing, and archiving
applications and business data. For additional information, visit www.daegis.com.
Use of Non-GAAP Financial Information
To supplement the Company's unaudited condensed consolidated financial statements presented in accordance with GAAP, Daegis uses certain Non-GAAP measures of financial performance. The presentation of these Non-GAAP financial measures is not intended to be considered in isolation from, as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and may be different from Non-GAAP financial measures used by other companies. In addition, these Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP. For more information on these Non-GAAP financial measures and the Companys Adjusted EBITDA, including how these measures are calculated, please see the tables in this release captioned "Reconciliation of GAAP to Non-GAAP Net Income" which includes a reconciliation of the GAAP results to Non-GAAP results as well as Reconciliation of GAAP Operating Income to Adjusted EBITDA.
Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of the Company. We wish to caution you that these statements involve risks and uncertainties and actual events or results may differ materially. When the words believes, expects, plans, projects, estimates and similar expressions are used, they identify forward-looking statements. These forward-looking statements are based on managements current beliefs and assumptions and information currently available to management and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Examples of forward-looking statements in the press release include the statements made by Mr. Wille. Among the important factors which could cause actual results to differ materially from those in the forward-looking statements are general market and economic conditions, our ability to execute our business strategy and integrate acquired businesses, the effectiveness of our sales team and approach, our ability to target, analyze and forecast the revenue to be derived from a client and the costs associated with providing services to that client, the date during the course of a fiscal year that a new client is acquired, the length of the integration cycle for new clients and the timing of revenues and costs associated therewith, our client concentration given that the Company is currently dependent on a few large client relationships, potential competition in the marketplace, the ability to retain and attract employees, market acceptance of our service programs and pricing options, our ability to maintain our existing technology platform and to deploy new technology, our ability to sign new clients and control expenses, the possibility of the discontinuation of some client relationships, the financial condition of our clients' business and other factors detailed in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise the information in this press release, whether as a result of new information, future events, circumstances or otherwise.
# # #
DAEGIS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except
per share data)
Three Months Ended | Six Months Ended | |||||||||||||||
October 31, | October 31, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Revenues: | ||||||||||||||||
eDiscovery | $ | 4,043 | $ | 5,529 | $ | 8,116 | $ | 11,555 | ||||||||
Database, archive, and migration | 6,302 | 5,546 | 11,867 | 11,034 | ||||||||||||
Total revenues | 10,345 | 11,075 | 19,983 | 22,589 | ||||||||||||
Operating Expenses: | ||||||||||||||||
Direct costs of eDiscovery revenue | 2,222 | 2,234 | 4,377 | 4,632 | ||||||||||||
Direct costs of database, archive, and migration revenue | 1,273 | 1,352 | 2,555 | 2,700 | ||||||||||||
Product development | 1,802 | 1,863 | 3,686 | 3,838 | ||||||||||||
Selling, general and administrative | 4,146 | 4,428 | 9,179 | 9,376 | ||||||||||||
Gain on sale of intangible assets | | | (1,000 | ) | | |||||||||||
Total operating expenses | 9,443 | 9,877 | 18,797 | 20,546 | ||||||||||||
Income from operations | 902 | 1,198 | 1,186 | 2,043 | ||||||||||||
Other income (expense): | ||||||||||||||||
Loss on extinguishment of debt | | | | (2,166 | ) | |||||||||||
Gain (loss) from change in
fair value of common
stock warrant liability |
(188 | ) | 158 | 271 | 602 | |||||||||||
Interest expense | (400 | ) | (469 | ) | (842 | ) | (1,369 | ) | ||||||||
Other, net | (16 | ) | (24 | ) | (108 | ) | 26 | |||||||||
Total other income (expense) | (604 | ) | (335 | ) | (679 | ) | (2,907 | ) | ||||||||
Income (loss) before income taxes | 298 | 863 | 507 | (864 | ) | |||||||||||
Provision for income taxes | 46 | 68 | 98 | 119 | ||||||||||||
Net income (loss) | $ | 252 | $ | 795 | $ | 409 | $ | (983 | ) | |||||||
Income (loss) per share: | ||||||||||||||||
Basic | $ | 0.01 | $ | 0.05 | $ | 0.01 | $ | (0.08 | ) | |||||||
Diluted | $ | 0.01 | $ | 0.05 | $ | 0.01 | $ | (0.08 | ) | |||||||
Weighted-average shares used in computing income (loss) per share | ||||||||||||||||
Basic | 14,718 | 14,657 | 14,718 | 14,629 | ||||||||||||
Diluted | 14,729 | 14,809 | 14,723 | 14,629 |
DAEGIS INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
October 31, | April 30, | |||||||
2012 | 2012 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 4,037 | $ | 4,752 | ||||
Accounts receivable, net | 8,956 | 10,968 | ||||||
Prepaid expenses and other current assets | 1,327 | 1,805 | ||||||
Total current assets | 14,320 | 17,525 | ||||||
Property and equipment, net | 2,438 | 2,827 | ||||||
Goodwill | 11,706 | 11,706 | ||||||
Intangibles, net | 7,921 | 8,690 | ||||||
Other assets, net | 1,010 | 1,121 | ||||||
Total assets | $ | 37,395 | $ | 41,869 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 398 | $ | 450 | ||||
Current portion of long term debt | 1,190 | 2,945 | ||||||
Accrued compensation and related expenses | 2,032 | 2,465 | ||||||
Common stock warrant liability | 298 | 569 | ||||||
Other accrued liabilities | 999 | 819 | ||||||
Deferred revenue | 6,602 | 8,412 | ||||||
Total current liabilities | 11,519 | 15,660 | ||||||
Long term debt, net of current portion | 17,364 | 18,306 | ||||||
Deferred tax liabilities | 841 | 734 | ||||||
Other long term liabilities | 1,165 | 1,148 | ||||||
Total liabilities | 30,889 | 35,848 | ||||||
Commitments and contingencies | | | ||||||
Stockholders equity: | ||||||||
Preferred Stock | 2 | 2 | ||||||
Common stock | 15 | 15 | ||||||
Additional paid-in capital | 99,989 | 99,860 | ||||||
Accumulated other comprehensive income | 289 | 341 | ||||||
Accumulated deficit | (93,789 | ) | (94,197 | ) | ||||
Total stockholders equity | 6,506 | 6,021 | ||||||
Total liabilities and stockholders equity | $ | 37,395 | $ | 41,869 |
DAEGIS INC.
RECONCILIATION OF GAAP OPERATING INCOME TO ADJUSTED
EBITDA
(In thousands, except per share data)
Three Months Ended | Six Months Ended | ||||||||||||||
October 31, | October 31, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
GAAP income from operations | $ | 902 | $ | 1,198 | $ | 1,186 | $ | 2,043 | |||||||
Amortization of intangible assets | 384 | 558 | 769 | 1,123 | |||||||||||
Stock based compensation expenses | 154 | 245 | 330 | 473 | |||||||||||
Depreciation | 277 | 279 | 555 | 509 | |||||||||||
Total adjustments to GAAP income from operations | 815 | 1,082 | 1,654 | 2,105 | |||||||||||
Adjusted EBITDA | $ | 1,717 | $ | 2,280 | $ | 2,840 | $ | 4,148 | |||||||
RECONCILIATION OF
GAAP TO NON-GAAP NET INCOME |
|||||||||||||||
GAAP net income (loss) | $ | 252 | $ | 795 | $ | 409 | $ | (983 | ) | ||||||
Amortization of intangible assets and warrant discount | 384 | 558 | 769 | 1,166 | |||||||||||
Stock based compensation expenses | 154 | 245 | 330 | 473 | |||||||||||
Gain from change in fair value of common stock warrant liability | 188 | (158 | ) | (271 | ) | (602 | ) | ||||||||
Loss on extinguishment of debt | | | | 2,166 | |||||||||||
Total adjustments to GAAP net loss | 726 | 645 | 828 | 3,203 | |||||||||||
Non-GAAP net income | $ | 978 | $ | 1,440 | $ | 1,237 | $ | 2,220 | |||||||
Non-GAAP diluted earnings per share | $ | 0.07 | $ | 0.10 | $ | 0.08 | $ | 0.14 | |||||||
Weighted average shares used in computing earnings per share: | |||||||||||||||
Diluted | 14,729 | 14,809 | 14,723 | 15,933 |
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