SUNNYVALE, Calif.--(BUSINESS WIRE)--July 26, 2001--
Eighth Consecutive Quarter of Exceeding Earnings Expectations
eGain Communications Corporation (NASDAQ:EGAN), a leading provider of eService software for Global 2000 companies, today announced financial results for its fourth quarter and fiscal year ended June 30, 2001.
Revenue for the quarter was $14.1 million, representing an increase of 125% over revenue of $6.3 million in the same period a year ago and a sequential increase of 5.2% from the prior quarter. For the fiscal year ended June 30, 2001, revenue was $53.4 million, an approximately four-fold increase compared to revenue of $13.4 million in fiscal 2000.
Excluding non-cash and restructuring charges, net loss for the quarter was $9.9 million, a $5.0 million, or better than 33%, decrease from a net loss of $14.9 million in the prior quarter. Excluding non-cash and restructuring charges, net loss per share for the quarter was $0.28, a decrease from a net loss per share of $0.42 in the prior quarter. Non-cash charges include amortization of goodwill, other intangible assets and deferred compensation, as well as accreted dividends and other non-cash charges related to the company's cumulative convertible preferred stock.
On an earnings before depreciation and amortization basis ("EBDA"), the company recorded a loss of $8.3 million, or $0.23 per share, during the quarter versus a loss of $13.3 million, or $0.38 per share, in the prior quarter.
"eGain has delivered solid results in a tough market. Revenues increased both on a year-to-year and sequential basis and we exceeded earnings expectations for the eighth consecutive quarter since becoming a public company," said Ashutosh Roy, eGain's Chairman and Chief Executive Officer. "This quarter's results reflect eGain's momentum in helping Global 2000 customers transform their call centers into multi-channel contact centers. Our growing revenue momentum in this market reflects the compelling and demonstrable ROI that our customers derive from our eService software suite. We continue to consolidate our leadership in the eService software marketplace based on consistent strategy and rapid execution."
"Our achievements this past quarter demonstrate eGain's resilience," added Harpreet Grewal, eGain's Chief Financial Officer. "Despite a very challenging market environment, we generated sequential revenue growth and significantly higher license revenue. At the same time we improved our gross margins, dramatically decreased our losses, lowered our cash burn rate, improved our DSO, and increased our average selling price. With a strong cash position, we remain on track to achieve our EBDA breakeven target in the December quarter of 2001."
Enterprise Sales Drive Million Dollar Accounts
eGain's success in selling to Global 2000 customers continues to fuel the company's growth. In the June Quarter, the company closed its largest number of million dollar accounts for a single quarter, with both new and existing customers.
The company's largest account, a global media company, purchased additional applications for its global customer service operations bringing the lifetime value of that account to well over $5 million. eGain solution's superior integration, proven scalability, global language functionality and worldwide support capability helped this strategic customer expand its relationship with eGain.
Enterprise Sales Strengthen Customer Base
The company added over 30 new accounts, bringing the company's total customer count to over 800 companies. In the June quarter, new customers accounted for more than 50% of bookings, with existing customers contributing the balance.
New eGain customers secured in the June quarter included Brookstone, a leading specialty retailer with over $300 million in annual revenues, as well as CP Orange, one of the largest wireless operators in Asia-Pacific, representing a million dollar account in that region. eGain continued to successfully penetrate the financial services vertical by signing contracts with Friends Provident, one of the UK's most successful financial services group, American Family Insurance, a leading provider of supplemental insurance with over $9 billion in assets, and Zurich Scudder Investments, one of the largest global investment management companies with $370 billion in assets. These customers further strengthen eGain's franchise in financial services - a vertical market in which eGain has more than 60 of the world's largest financial institutions as customers.
eGain continued to develop the breadth of its relationships with existing customers. Customers making additional purchases in the June quarter included ABN AMRO, Cegetel, Charter Communications, Daimler Chrysler, Ford Motor Co., Honeywell, HSBC Bank, McAfee.com, Microsoft UK, Verizon and Vodafone Group.
eGain's customer base now includes (as rated by Fortune Magazine):
-- 24 of the 50 largest global companies
-- 8 of the 10 largest telecommunications companies
-- 3 of the 5 largest diversified financial services companies.
Achievements in Globalization and Scalability
In the June Quarter, eGain shipped and deployed the UNIX version of eGain Mail to multiple customers. This version is based on industry standard open platform J2EE architecture and adds to the company's existing UNIX offerings. eGain has continued to reinforce its leadership in globalization, with new product offerings that support Asian and Western languages within a single system, as well as automatic language detection and routing to simplify the administration and management of global customer service operations in multi-national organizations. Multi-national customers such as Global English, HSBC Bank and Otis, are leveraging eGain's globalization capabilities to deliver consistent service to their worldwide customers. According to TechRankings, the industry benchmark from Forrester Research, eGain is a "globalization leader".
"The eGain platform continues to meet and exceed the growing needs of our most demanding customers. Our solutions have been deployed by leading companies, like Charles Schwab, to thousands of agents servicing millions of customers across the call center and the web," said Gunjan Sinha, eGain's President. "We lead the market in delivering integrated eService solutions based on industry standard open platform J2EE architecture. Our multi-channel application suite is widely adopted by our customers who benefit from its escalation capabilities, global language handling and enterprise scalability. We will continue to accelerate our momentum in product innovation and market expansion in the new fiscal year."
Momentum Strengthens Market Position
In the June quarter, eGain increased its momentum in product sales, international sales and in new partnerships. While aggregate revenue grew 5% sequentially, licensed product sales increased by over 25%, reflecting the continued adoption of eGain solutions.
Multi-channel deployments continue to drive eGain sales. Of total units sold in the June quarter, email management accounted for approximately 44%, self-service accounted for approximately 39% and real-time collaboration accounted for approximately 17%. eGain's competitive strength remains in selling one of the most integrated and scalable solutions to address the growing customer service demands of Global 2000 customers.
Based on the unique multi-language capabilities of eGain solutions, international operations contributed approximately 35% of total revenue in the June quarter, compared to about 25% in the prior quarter. During the quarter, eGain secured one of its largest accounts in the Asia-Pacific region, with CP Orange.
Strengthening Partnerships
The company established new partnerships during the quarter to provide a more complete solution to Global 2000 customers. In the analytics space, the company entered into partnerships with Business Objects S.A., a leading provider of e-business intelligence solutions as well as MicroStrategy, Inc., a worldwide provider of business intelligence software and services. eGain also strengthened its relationship with Vignette Corp., a leading provider of customer driven internet applications, to deliver rich web portals integrated with eService capabilities to enterprise customers. In addition, the company continues to build on existing relationships with leading system integrators such as Accenture, Arthur Andersen and KPMG. eGain's partner program continues to gain momentum with over 30% of bookings being partner influenced.
Financial Guidance
eGain's operating performance in the June quarter keeps it on track for achieving profitability by December 2001. "We have consistently focused and executed to plan. The most significant challenge facing us at the moment is not any competitive factor, it is the current economic environment," said Harpreet Grewal, eGain's CFO. "Based on the compelling ROI of our solutions and the global need for eService, we expect improvements in revenue and operations to continue."
In its March quarter earnings release, the company indicated that it would provide four-quarter guidance in the June quarter earnings release; however, due to the current economic environment and the general lack of visibility in the market, the company is prepared to provide only one-quarter guidance at this time. eGain offers the following guidance for the September quarter.
(Dollars in millions, except per share Q1: FY02
data) September 2001
--------------
Net revenue $14.5 - $16.0
Gross margin (a) 60% - 65%
Pro forma EPS EBA
(earnings before amortization expense)
(a)(b) ($0.18) - ($0.21)
Depreciation expense(b) $1.6
Pro forma EPS EBDA
(earnings before depreciation and
amortization expense) (a) (b) ($0.14) - ($0.17)
(a) Excludes the impact of one-time restructuring charges of
approximately $1 million.
(b) Depreciation and amortization are non-cash charges.
About eGain Communications Corporation
eGain (NASDAQ:EGAN) is a leading provider of Enterprise Interaction Management (EIM) 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 and outbound 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, eGain has more than 800 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. |
