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):
February 24,
2015
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.) |
600 E. Las Colinas Blvd,
Suite 1500
Irving, Texas 75039
(Address of principal executive offices)
Registrants telephone number,
including area code:
(214)
584-6400
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 February 24, 2015, Daegis Inc. (the Company or Daegis) issued a press release announcing the Companys financial results for the third quarter ending January 31, 2015. A copy of the press release is attached hereto as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
99.1 Press Release dated February 24, 2015, titled Daegis Inc. Reports Fiscal 2015 Third Quarter Results.
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: February 25, 2015
DAEGIS INC. | ||
(Registrant) | ||
By: |
/s/ |
Susan K. Conner |
Susan K. Conner | ||
Chief Financial Officer |
News Release
FOR IMMEDIATE RELEASE
Daegis Inc. Reports Fiscal 2015 Third Quarter Results
Company Expands its Global Channel Strategy to Include Complete Product Portfolio
IRVING, Texas February 24, 2015 Daegis Inc. (NASDAQ: DAEG), a global information governance, migration solutions and development tools company, today announced financial results for its fiscal 2015 third quarter ended January 31, 2015.
Third Quarter Fiscal 2015 Financial Highlights
● | Total revenue of $5.7 million, compared to $7.9 million year over year. Revenue reflects a $0.9 million decline related to the completion of an eDiscovery matter with the Company’s largest customer and two large product sales totaling $1.1 million in the prior year. |
● |
GAAP net loss of $923,000 or $0.06 loss per share, compared to GAAP net loss of $878,000 or $0.05 loss per share for the same period last year. |
● |
Adjusted EBITDA of $225,000, compared to $1.0 million last year. (1) |
● |
Non-GAAP net loss of $577,000 or $0.04 loss per share, compared to Non-GAAP net income of $374,000 or $0.02 per share last year. (1) |
● |
Cash at January 31, 2015 was $4.3 million, compared to $7.2 million at April 30, 2014 and $4.0 million at January 31, 2014. |
● |
Total debt outstanding at January 31, 2015 was $11.8 million, a decrease of $3.1 million from April 30, 2014. |
Nine Months Ended Fiscal 2015 Financial Highlights | |
● |
Total revenue of $19.0 million, compared to $23.6 million year over year. |
● |
GAAP net loss of $1.1 million or $0.07 loss per share, compared to GAAP net loss of $1.7 million or $0.11 loss per share for the same period last year. |
● |
Adjusted EBITDA of $2.0 million, compared to $2.7 million last year. (1) |
● |
Non-GAAP net income of $121,000 or $0.01 per share, compared to $580,000 or $0.03 per share last year. (1) |
A decline in top line revenue is always disappointing but not surprising in light of our largest matter coming to an end and as we transition from pure eDiscovery matter-based revenue to more sustaining software license and hosting fees for our Information Governance product line, said Tim Bacci, CEO of Daegis. “Our strategy of selling a combined enterprise product portfolio directly and through channel partners is taking shape. During the quarter we retooled our global sales force to enable the seamless cross-selling of all of our products and services. We expanded our global channel sales team to focus on executing strategic reseller, integrator and OEM partnerships that will be critical to our success in growing top line revenue.”
Third Quarter Fiscal 2015 Comparative Financial Summary
$ In Millions, except per share and % data | Q3 | Q3 | % or $ |
FY2015 | FY2014 | Change(3) | |
Total Revenue(1) | $5.7 | $7.9 | ($2.2) |
Information Governance Revenue | $3.1 | $4.8 | ($1.6) |
Migration and Development Tools Revenue | $2.6 | $3.1 | ($0.6) |
GAAP Net Loss | ($0.9) | ($0.9) | $0.0 |
GAAP Net Loss Per Share Diluted | ($0.06) | ($0.05) | ($0.01) |
Adjusted EBITDA(2) | $0.2 | $1.0 | (78%) |
Adjusted EBITDA Margin(2) | 4% | 13% | (70%) |
Non-GAAP Net Income (Loss) (2) | ($0.6) | $0.4 | ($1.0) |
Non-GAAP Net Income (Loss) Per Share - | |||
Diluted(2) | ($0.04) | $0.02 | ($0.06) |
(1) | Revenue reflects a $0.9 million decline related to the completion of an eDiscovery matter with the Companys largest customer and two large product sales totaling $1.1 million in the prior year. |
(2) | See reconciliation table below regarding the presentation of Adjusted EBITDA and Non- GAAP net income. |
(3) | The calculation of percentage or dollar change is based on unrounded numbers. |
Investor Conference
Call
Management will host
a conference call February 24, 2015, at 4:00 p.m. CT (5:00 p.m. ET) to review
the third quarter fiscal 2015 financial results. The call can be accessed by
dialing (800) 768-6490 or (785) 830-7987 for international callers.
Additionally, the conference call will be webcast on the Daegis website at
www.daegis.com. A replay of the call will be available through
March 6, 2015 by dialing (888) 203-1112 or (719) 457-0820 for international
callers and using the following passcode: 7761867.
About Daegis
Inc.
Daegis Inc. (NASDAQ: DAEG) is a global enterprise software company with
comprehensive offerings for information governance, application migration, data
management and application development. Our products include leading-edge
enterprise archive and eDiscovery technology, mobile application development
technology, application migration and data management software. Approximately
20% of Fortune 100 companies use our solutions. We are headquartered in Irving,
Texas and serve our worldwide customer base through our offices in California,
New Jersey, Australia, Canada, France, Germany and the UK.
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. Bacci. 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 customer and the costs associated with providing services to that customer, the date during the course of a fiscal year that a new customer is acquired, the length of the integration cycle for new customers and the timing of revenues and costs associated therewith, our customer concentration given that the Company is currently dependent on a few large customer 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 customers and control expenses, the possibility of the discontinuation of some customer relationships, the financial condition of our customers' business and other factors detailed in the Company's filings with the Securities and Exchange Commission.
Contact:
Daegis
Susan K.
Conner
(214) 584-6427
sconner@daegis.com
# # #
DAEGIS
INC.
UNAUDITED CONSOLIDATED
BALANCE SHEETS
(In thousands)
January 31, | April 30, | ||||||
2015 | 2014 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash | $ | 4,288 | $ | 7,178 | |||
Accounts receivable, net | 5,005 | 6,657 | |||||
Prepaid expenses | 558 | 617 | |||||
Other current assets | 242 | 358 | |||||
Total current assets | 10,093 | 14,810 | |||||
Property and equipment, net | 903 | 1,053 | |||||
Goodwill | 11,706 | 11,706 | |||||
Intangibles, net | 4,479 | 5,614 | |||||
Other assets | 437 | 470 | |||||
Total assets | $ | 27,618 | $ | 33,653 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 729 | $ | 308 | |||
Current portion of long-term debt | 808 | 3,123 | |||||
Accrued compensation and related expenses | 802 | 1,185 | |||||
Other accrued liabilities | 1,235 | 971 | |||||
Deferred revenue | 6,846 | 8,590 | |||||
Total current liabilities | 10,420 | 14,177 | |||||
Long-term debt, net of current portion | 11,062 | 11,848 | |||||
Deferred tax liabilities, net | 1,166 | 1,032 | |||||
Common stock warrant liability | 146 | 276 | |||||
Other long-term liabilities | 654 | 1,095 | |||||
Total liabilities | 23,448 | 28,428 | |||||
Commitments and contingencies | |||||||
Stockholders equity: | |||||||
Common stock | 17 | 17 | |||||
Additional paid-in capital | 100,243 | 100,152 | |||||
Accumulated other comprehensive income | 280 | 280 | |||||
Accumulated deficit | (96,370 | ) | (95,224 | ) | |||
Total stockholders equity | 4,170 | 5,225 | |||||
Total liabilities and stockholders equity | $ | 27,618 | $ | 33,653 |
DAEGIS
INC.
UNAUDITED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended | Nine Months Ended | ||||||||||||||
January 31, | January 31, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Revenues: | |||||||||||||||
Information Governance | $ | 3,142 | $ | 4,779 | $ | 11,100 | $ | 14,936 | |||||||
Migration and Development Tools | 2,552 | 3,109 | 7,908 | 8,652 | |||||||||||
Total revenues | 5,694 | 7,888 | 19,008 | 23,588 | |||||||||||
Operating expenses: | |||||||||||||||
Direct costs of Information Governance revenue | 1,626 | 2,044 | 4,765 | 6,311 | |||||||||||
Direct costs of Migration and Development Tools revenue | 452 | 494 | 1,481 | 1,357 | |||||||||||
Product development | 1,160 | 1,395 | 3,550 | 4,683 | |||||||||||
Selling, general and administrative | 2,817 | 4,233 | 9,146 | 11,573 | |||||||||||
Total operating expenses | 6,055 | 8,166 | 18,942 | 23,924 | |||||||||||
(Loss) income from operations | (361 | ) | (278 | ) | 66 | (336 | ) | ||||||||
Other (expense) income | |||||||||||||||
Gain (loss) from change in fair value of common stock warrant liability | 69 | (163 | ) | 130 | (51 | ) | |||||||||
Interest expense | (170 | ) | (312 | ) | (656 | ) | (1,039 | ) | |||||||
Other, net | (159 | ) | (54 | ) | (400 | ) | (51 | ) | |||||||
Total other (expense) income | (260 | ) | (529 | ) | (926 | ) | (1,141 | ) | |||||||
Loss before income taxes | (621 | ) | (807 | ) | (860 | ) | (1,477 | ) | |||||||
Provision for income taxes | 302 | 71 | 286 | 244 | |||||||||||
Net loss | $ | (923 | ) | $ | (878 | ) | $ | (1,146 | ) | $ | (1,721 | ) | |||
Loss per share: | |||||||||||||||
Basic | $ | (0.06 | ) | $ | (0.05 | ) | $ | (0.07 | ) | $ | (0.11 | ) | |||
Diluted | $ | (0.06 | ) | $ | (0.05 | ) | $ | (0.07 | ) | $ | (0.11 | ) | |||
Weighted-average shares used in computing loss per share | |||||||||||||||
Basic | 16,384 | 16,384 | 16,384 | 16,022 | |||||||||||
Diluted | 16,384 | 16,384 | 16,384 | 16,022 |
DAEGIS
INC.
RECONCILIATION OF GAAP
OPERATING INCOME (LOSS) TO ADJUSTED EBITDA
(In thousands, except per share
data)
Three Months Ended | Nine Months Ended | ||||||||||||||
January 31, | January 31, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
GAAP (loss) income from operations | $ | (361 | ) | $ | (278 | ) | $ | 66 | $ | (336 | ) | ||||
Amortization of intangible assets | 376 | 384 | 1,135 | 1,154 | |||||||||||
Stock based compensation expenses | 39 | 38 | 91 | 130 | |||||||||||
Depreciation | 171 | 225 | 525 | 740 | |||||||||||
Charges related to alignment of business units(1) | - | 667 | 171 | 966 | |||||||||||
Total adjustments to GAAP income from operations | 586 | 1,314 | 1,922 | 2,990 | |||||||||||
Adjusted EBITDA | $ | 225 | $ | 1,036 | $ | 1,988 | $ | 2,654 | |||||||
RECONCILIATION
OF GAAP TO NON-GAAP NET INCOME (LOSS) | |||||||||||||||
GAAP net loss | $ | (923 | ) | $ | (878 | ) | $ | (1,146 | ) | $ | (1,721 | ) | |||
Amortization of intangible assets | 376 | 384 | 1,135 | 1,154 | |||||||||||
Stock based compensation expenses | 39 | 38 | 91 | 130 | |||||||||||
(Gain) loss from change in fair value of common stock warrant liability | (69 | ) | 163 | (130 | ) | 51 | |||||||||
Charges related to alignment of business units(1) | - | 667 | 171 | 966 | |||||||||||
Total adjustments to GAAP net loss | 346 | 1,252 | 1,267 | 2,301 | |||||||||||
Non-GAAP net (loss) income | $ | (577 | ) | $ | 374 | $ | 121 | $ | 580 | ||||||
Non-GAAP diluted (loss) income per share | $ | (0.04 | ) | $ | 0.02 | $ | 0.01 | $ | 0.03 | ||||||
Weighted average shares used in computing income per share | |||||||||||||||
Dilutive | 16,384 | 16,384 | 16,384 | 16,022 |
(1) Prior year alignment costs have been reported to conform with the current year presentation
Our Non-GAAP measures adjust GAAP income (loss) from operations and GAAP net income (loss) for non-cash stock based compensation expenses, amortization of intangible assets, depreciation and non-recurring charges. For more information on these Non-GAAP financial measures including how they are calculated, please see the tables in this release captioned Reconciliation of GAAP to Non-GAAP Net Income and Reconciliation of GAAP Operating Income to Adjusted EBITDA which includes a reconciliation of the GAAP results to Non-GAAP and Adjusted EBITDA results.