8/10..eGain Reports 90% Revenue Growth versus Prior Quarter
9 out of the 20 Largest Global Companies Have Selected eGain Solutions
SUNNYVALE, Calif.--(BUSINESS WIRE)--Aug. 10, 2000--eGain Communications Corp. (Nasdaq:EGAN - news), a leader in customer service software for the internet, today announced record revenues for its fourth fiscal quarter, and for twelve months of the fiscal year ended June 30, 2000.
The June quarter was the single largest quarter in eGain's history. The company reported revenues of $6.3 million, compared to $3.3 million for the prior quarter - representing a 90% increase and more than double the 39 percent sequential growth of the March quarter over the December quarter. Fourth quarter revenues reflected a 900% increase over the $686,000 of revenues for the same period last year.
``eGain clearly executed against its strategy in the June quarter. Today, the company is a clear leader in the large and growing eCommerce customer service market,'' said Ashutosh Roy, eGain's Chairman and Chief Executive Officer. ``We are succeeding because no other company has the ability to deliver an integrated set of software solutions across all the primary channels of communication. The competitive environment today is very simple. The company that has the best platform wins, and we believe eGain has the best platform.''
``With these strengths, we are winning at increasingly higher rates, particularly when the customer wants a truly integrated solution and proven architecture for integrating future functionality,'' said Mr. Roy. ``In addition, the option of purchasing either our license or hosted delivery system, offers a flexible implementation strategy for our customers.''
``Our execution continues to exceed expectations. In the June quarter, our revenues increased by 90 percent sequentially, we achieved positive gross margins one quarter ahead of schedule, and operating margins improved significantly. With the addition of the $88.5 million in new capital we announced yesterday, the company has the financial flexibility to execute to its strategic plan,'' concluded Roy.
Net loss for the quarter, excluding ``non-cash charges'', was $17.4 million, compared to a net loss of $12.2 million in the prior quarter. Including ``non-cash charges'', net loss was $24.2 million, compared to a loss of $17.7 million in the prior quarter. ``Non-cash charges'' include amortization of goodwill, deferred compensation, other intangible assets and write-off of acquisition related in-process R&D.
Net loss per share for the quarter, excluding ``non-cash charges'' was $0.61, compared to a net loss per share of $0.43 in the prior quarter. Including the ``non-cash charges'', net loss was $0.85 per share, compared to a loss of $0.63 per share in the prior quarter.
Revenues for the twelve months ended June 30, 2000 were $13.4 million compared to $1.0 million in the same period a year ago. Net loss for the twelve months ended June 30, 2000, excluding ``non-cash charges'', was $46.5 million, compared to a net loss of $8.3 million for the same period a year ago. Including ``non-cash charges'', net loss was $68.4 million, compared to a loss of $11.3 million a year ago.
``No one should lose sight of how far and how fast eGain has come in just 12 months. Over the course of the fiscal year, eGain acquired 3 companies, expanded its product offerings from 2 to 8, increased the number of employees from 125 to over 650, saw its customer base grow from 75 to over 600, and increased its quarterly revenue run rate from less than one million to over $12 million when the results of eGain and Inference are combined on a pro forma basis for the quarter ended June 30th,'' said Gunjan Sinha, President of eGain. ``The most recent quarter highlights the company's strategic approach -- securing larger customers, selling them more products and services, and generating higher revenues per customer.''
Record Adoption of eGain by World's Largest Companies
More than 600 companies worldwide now comprise eGain's customer base, and more than 55 percent of those being established ``brick and mortar'' companies. New customers in the fiscal fourth quarter represent many of the world's largest corporations, including AT&T, GE Capital, The Associated Press, Novartis Pharmaceuticals, BMW, Earthlink, ABN AMRO Bank, Verizon (the national telecommunications company formed by the merger of Bell Atlantic and GTE), and Otis Elevator (a business unit of United Technologies). eGain is now the leading customer services software company in a number of industries - financial services, telecommunications, Internet service providers and media. The company currently counts as customers:
-- 3 of the 5 largest global companies as rated by Fortune Magazine
-- 9 of the 20 largest global companies as rated by Fortune Magazine
-- 19 of the 50 largest global companies as rated by Fortune Magazine
-- 6 of Fortune Magazine's top 10 "Most Admired Companies"
Strong Platform Adoption Across all Channels
Companies are adopting eGain because of the strength of the overall eGain platform. While most of its competitors continue to depend heavily on revenues from products covering a single channel of customer service, eGain sells across the entire spectrum of online customer service. Taking into consideration Inference for the three months ended June 30th, 35% of eGain's unit sales came from self-service solutions, 20% from real-time (``live'') interaction solutions, and 45% from inbound and outbound email management solutions.
In line with the company's success of selling on a platform basis, a growing number of companies are deploying multiple solutions. For the quarter, eGain sold multiple applications to about 30 percent of it's over 80 new customers. eGain is winning in these and other Global 2000 accounts, because companies recognize the need to offer service through all channels of communication and need to invest in a proven platform with the depth, breadth, and product functionality to handle their long term needs.
eGain Delivers New Customer Service Solutions
eGain strengthened its powerful eGain Commerce platform during the quarter with the successful release of eGain Campaign(TM) (proactive digital marketing), eGain Inform(TM) (Web FAQ self-service) and eGain Voice(TM) (voice over the Internet). eGain further expanded its product offerings by completing the acquisition of Inference Corporation, a leading provider of software and services for personalized one-to-one self-service and knowledge management. Through these additions, eGain provides the only platform available today that delivers integrated multi-channel customer communications via in-bound and out-bound email, text chat, Web collaboration, voice-over-Internet, intelligent self-help and interactive virtual agents.
Partners and System Integrators Make Strong Contribution
Partners and resellers continue to make a significant contribution to the number of new customers, as well as to revenues and bookings. Significant new partnerships in recent months include eLoyalty, Organic, iSeva, Blue Pumpkin, Witness Systems, and eProfile as well as NTT Communicationware Corp. and Marubeni Corp. in Japan. Over 25% of eGain's new customers in the June quarter were ``partner-influenced'' customer additions.
eGain Strengthens Competitive Position with Acquisition of
Inference and Nitman
eGain completed its acquisition of Inference Corporation on June 29, 2000. The combination of the companies creates the critical mass required to acquire and service large customers. The combined company, with over 600 customers, a sales and service presence in over 18 countries, and with over 650 employees, including over 60 quota-carrying sales force and over 200 engineers in product development, is positioned as a leader in the eCommerce Customer Service market.
The company also continued investing in research and development by announcing an agreement to acquire India-based Nitman Software Pvt. Ltd. and merging it into its own research and development center. In doing so, eGain assures its ability to remain the premier innovator in this dynamic segment of the market. eGain anticipates increasing its employee base in India as a means to enhance the company's development capabilities with maximum efficiencies.
Financing Secured to Fund Growth - Moving Towards Profitablity
On August 9, 2000, eGain announced that it has signed definitive agreements to raise $88.5 million in a private placement of securities to existing and new investors. The investors include Oak Hill Capital Partners and its affiliates, and eGain's co-founder and President, Gunjan Sinha, as well as new investors Deutsche Bank; Societe Generale; Elliott Associates, and the Palladin Group. With an aggregate capital base of over $115 million, the company has secured the financial flexibility to execute to its strategic plan.
eGain is in on track to achieve profitability, as demonstrated by the 90 percent sequential increase in revenue, positive gross margins ahead of expectations, and narrowed operating margin losses by 30%.
Webcast Information
A live simulcast and replay of the conference call will be available on eGain's website at www.egain.com, and through Vcall at www.vcall.com. Additionally, investors may listen to a replay of the conference call by dialing 888-203-1112 (Pass Code: 478415). The replay will be available for one week.
About eGain Communications
eGain (Nasdaq:EGAN - news) is the leading provider of customer service software for the Internet. To help businesses deliver a superior customer experience and establish profitable, long-term customer relationships, eGain offers licensed and hosted applications for email management, interactive Web and voice collaboration, intelligent self-help agents, and proactive online marketing. Built using a Web-native architecture, the eGain platform provides robust scalability, global access, diverse integration, and rapid deployment. Based in Sunnyvale, California, with offices worldwide, eGain has more than 600 customers, including AOL, 3COM, and AT&T. For information about eGain, please visit www.eGain.com or call the company's offices - US: (888) 603-4246; London: +44 (0) 118 988 0266; Sydney: +612 9492 5400
Note: eGain, eGain Commerce, eGain Assistant, eGain Campaign, eGain Inform, eGain Live, eGain Mail, eGain Voice, and eGain k-Commerce Support are trademarks of eGain Communications Corp. All other company or product names are trademarks or registered trademarks of their respective owners.
Cautionary Note Regarding Forward-looking Statements under the
Private Securities Litigation Reform Act of 1995 ("PLSRA"):
Statements in this press release that involve eGain's expectations, hopes, plans, intentions, or strategies regarding the future are forward-looking statements within the meaning of the PSLRA. These forward-looking statements are based on current management expectations, and are therefore subject to risks and uncertainties that may cause actual results to differ materially. These risks and uncertainties include but are not limited to: our limited operating history; the continued need for online customer communications; the continued acceptance of the hosted applications model; competitive threats; the overall volatility of Internet-related technology companies; the possibility that Inference may not be successfully integrated into our business, and other risks detailed from time to time in the Company's SEC filings, including the proxy statement/prospectus filed on Form S-4 with the SEC in connection with the Inference acquisition.
SOURCE: eGain
eGain Communications Corporation
Condensed Consolidated Statement of Operations
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Twelve Months Ended
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
-------- -------- -------- --------
Revenue
Hosting $ 1,604 $ 116 $ 3,534 $ 137
License fees 2,565 193 5,053 473
Service 2,118 310 4,775 409
-------- -------- -------- --------
Total
revenue 6,287 619 13,362 1,019
Cost of revenue 5,206 873 14,653 1,772
-------- -------- -------- --------
Gross profit 1,081 (254) (1,291) (753)
Operating expenses
Research and
development 4,737 943 11,788 2,096
Sales and marketing 11,915 1,667 27,915 4,182
General and
administrative 2,433 509 7,217 1,235
Amortization of
goodwill 4,616 1,217 10,881 1,217
Amortization of
deferred
compensation 1,703 1,151 10,553 1,817
Restructuring Costs 71 -- 71 --
-------- -------- -------- --------
Total operating
expenses 25,475 5,487 68,425 10,547
-------- -------- -------- --------
Loss from
operations (24,394) (5,741) (69,716) (11,300)
Non-operating income
(expense), net 197 (13) 1,285 (5)
-------- -------- -------- --------
Net loss $(24,197) $ (5,754) $(68,431) $(11,305)
======== ======== ======== ========
Net loss per share
Pro forma excluding
amortization of
goodwill, deferred
compensation and
other non-cash
charges (i) $ (0.23) $ (1.80)(ii) $ (0.68)
======== ======== ======== ========
Pro forma including
amortization of
goodwill,
deferred
compensation and
other non-cash
charges(i) $ (0.39) $ (2.64) $ (0.93)
======== ======== ======== ========
Basic and diluted
excluding
amortization
of goodwill,
deferred
compensation and
other non-cash
charge $(0.61)(ii) $ (0.58) $ (1.98)(ii) $(1.56)
======== ======== ======== ========
Basic and diluted
including
amortization
of goodwill,
deferred
compensation and
other non-cash
charge $ (0.85) $ (0.98) $ (2.92) $ (2.14)
======== ======== ======== ========
Weighted-average
shares outstanding
used in per share
calculation
Pro forma (i) 14,914 25,888 12,153
======== ======== ======== ========
Basic and
diluted 28,409 5,878 23,440 5,295
======== ======== ======== ========
(i) Pro forma shares outstanding include convertible stock using the
if-converted method from the original date of issuance
(ii) For quarter and for the year ended June 30, 2000, other non-cash
charges consist of amortization of other intangible assets ($167)
and write-off of in-process r&d ($346)
eGain Communications Corporation
Condensed Consolidated Balance Sheets
(in thousands)
June 30, 2000 June 30, 1999
(unaudited)
--------------- ---------------
Assets
Current assets:
Cash and short-term investments $ 30,192 $ 1,265
Accounts receivable 8,589 705
Prepaid and other current assets 4,456 513
--------------- ---------------
Total current assets 43,237 2,483
Property and equipment, net 11,690 1,133
Goodwill and other intangibles, net 119,629 20,195
Other assets 1,344 154
--------------- ---------------
Total assets $ 175,900 $ 23,965
=============== ===============
Liabilities and stockholders' equity
Current liabilities:
Bank borrowings - line of credit $ 1,000 $ 1,000
Current portion of notes
payable and capital leases 1,298 435
Accounts payable 5,305 684
Deferred revenue 7,286 302
Accrued expenses 16,439 818
--------------- ---------------
Total current liabilities $ 31,328 $ 3,239
Long-terms liabilities 1,201 243
Total stockholders' equity 143,371 20,483
--------------- ---------------
Total liabilities and
stockholders' equity $ 175,900 $ 23,965
=============== ===============
--------------------------------------------------------------------------------
Contact:
eGain Communications Corp.
Anne Dingler, 408/212-3448 (Investor Relations Manager)
or
Financial Relations Board |
