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):
September 10, 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 September 10, 2015, Daegis Inc. (the Company or Daegis) issued a press release announcing the Companys financial results for the first quarter ending July 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 September 10, 2015, titled Daegis Inc. Reports Fiscal 2016 First 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: September 10, 2015
DAEGIS INC. | |||
(Registrant) | |||
By: | /s/ | Susan K. Conner | |
Susan K. Conner | |||
Chief Financial Officer |
News Release | |
FOR IMMEDIATE RELEASE |
Daegis Inc. Reports Fiscal 2016 First Quarter Results
Company Continues Execution on Channel Strategy and Delivers New Product Releases
IRVING, Texas Sept. 10, 2015 Daegis Inc. (NASDAQ: DAEG), a global information governance, data migration and application development software company, today announced financial results for its first quarter ended July 31, 2015.
First Quarter Fiscal 2016 Financial Highlights
● | Total revenue of $5.2 million, compared to $6.7 million year over year. Approximately $1.3 million of the decrease is the result of the Companys strategic de-emphasis of its eDiscovery services business. Revenue also declined $200,000 from the strengthening dollar on certain of the Companys European maintenance renewals. |
● | GAAP net loss of $0.7 million or $0.04 loss per share, compared to GAAP net loss of $0.2 million or $0.02 loss per share for the same period last year. |
● | Adjusted EBITDA of $1,000, compared to $823,000 last year. (1) |
● | Non-GAAP net loss of $75,000 or $0.00 loss per share, compared to Non-GAAP Net Income of $240,000 or $0.01 per share last year. (1) |
● | Cash at July 31, 2015 was $2.5 million, compared to $5.4 million at April 30, 2015. The decrease reflects a $1.5 million elective debt payment made during the quarter. |
● | Total debt outstanding at July 31, 2015 was $9.8 million, a decrease of $2.0 million from April 30, 2015. |
Commenting on the results, Daegis CEO Tim Bacci said, Our first quarter results reflect the execution of our enterprise software strategy and the wind down of our eDiscovery services business. Excluding eDiscovery services revenue and the headwind from the strengthening dollar over last year, our revenue is slightly up year over year. There is stability in our core business with strong maintenance renewals and a backlog of approximately $1.2 million in professional services, which we expect to recognize over the remainder of this fiscal year. Our product roadmap is customer-focused with a major upgrade release of the archive planned for later this month as well as a recently released new version of our SQLBase product that delivers significant new functionality for our development and database customers.
Bacci continued, Were managing the business by investing in the areas that continue to advance our strategy while maintaining a disciplined cost structure in support of our long-term strategic objectives. Our focus is where it needs to be, which is developing sustainable global direct and channel programs and initiatives while delivering products that meet the needs of our customers. Consistent with what weve been anticipating, we expect to begin to see top line growth, with second quarter revenue sequentially increasing by a range of $250,000 to $750,000 over the first quarter of fiscal 2016.
Other Company Highlights
● | Released SQLBase 12.0 with significant new capabilities for scalability and multi-user performance. |
● | Completed development of Version 4.0 of the AXS-One Archive to meet the enterprise needs of global organizations for expanded search capabilities, as well as SharePoint connector enhancements. |
● | Achieved additional certification of the AXS-One Archive on Ciscos storage product lines, which allows for a more comprehensive go-to-market plan with Ciscos global sales force. |
● | Conducted training initiatives to support a broader global rollout of our Information Governance solutions with Oracles sales force. |
● | Added two seasoned enterprise software sales executives to the U.S. region. |
First Quarter 2016 Comparative Financial Summary
$ In Millions, except per share and % data | Q1 | Q1 | % or $ |
FY2016 | FY2015 | Change(2) | |
Total Revenue | $5.2 | $6.7 | ($1.4) |
Information Governance Revenue | $2.9 | $4.1 | ($1.2) |
Migration Revenue | $0.1 | $0.2 | ($0.1) |
Database & Development Tools Revenue | $2.2 | $2.4 | ($0.2) |
GAAP Net Loss | ($0.7) | ($0.2) | ($0.4) |
GAAP Net Income (Loss) Per Share Diluted | ($0.04) | ($0.02) | ($0.02) |
Adjusted EBITDA(1) | $0.0 | $0.8 | ($0.8) |
Adjusted EBITDA Margin(1) | 0% | 12% | (12%) |
Non-GAAP Net Income (Loss) (1) | ($0.1) | $0.2 | ($0.3) |
Non-GAAP Net Income
(Loss) Per Share - Diluted(1) |
($0.00) | $0.01 | ($0.01) |
(1) | See reconciliation table below regarding the presentation of Adjusted EBITDA and Non- GAAP net income. |
(2) | The calculation of percentage or dollar change is based on unrounded numbers. |
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 as that term is defined in the Private Securities Litigation Reform Act of 1995. 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 expectations and assumptions and information currently available to management and are subject to a number of factors and uncertainties that may cause the actual results, performance or achievements of the Company to differ materially from those described herein. Although the Company believes the expectations in this press release to be reasonable, there can be no assurance that such expectations will prove to be correct. Examples of forward-looking statements in this 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 Companys 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)
July 31, | April 30, | |||||||
2015 | 2015 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash | $ | 2,460 | $ | 5,426 | ||||
Accounts receivable, net | 2,654 | 3,918 | ||||||
Prepaid expenses | 510 | 765 | ||||||
Other current assets | 217 | 203 | ||||||
Total current assets | 5,841 | 10,312 | ||||||
Property and equipment, net | 872 | 864 | ||||||
Goodwill | 11,706 | 11,706 | ||||||
Intangibles, net | 3,767 | 4,102 | ||||||
Other assets | 427 | 422 | ||||||
Total assets | $ | 22,613 | $ | 27,406 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 465 | $ | 616 | ||||
Current portion of long-term debt | 755 | 1,029 | ||||||
Accrued compensation and related expenses | 879 | 869 | ||||||
Other accrued liabilities | 785 | 881 | ||||||
Deferred revenue | 5,984 | 7,584 | ||||||
Total current liabilities | 8,868 | 10,979 | ||||||
Long-term debt, net of current portion | 9,058 | 10,810 | ||||||
Deferred tax liabilities, net | 955 | 1,119 | ||||||
Common stock warrant liability | 125 | 195 | ||||||
Other long-term liabilities | 578 | 623 | ||||||
Total liabilities | 19,584 | 23,726 | ||||||
Commitments and contingencies | ||||||||
Stockholders equity: | ||||||||
Common stock | 17 | 17 | ||||||
Additional paid-in capital | 100,338 | 100,293 | ||||||
Accumulated other comprehensive income | 280 | 280 | ||||||
Accumulated deficit | (97,606 | ) | (96,910 | ) | ||||
Total stockholders equity | 3,029 | 3,680 | ||||||
Total liabilities and stockholders equity | $ | 22,613 | $ | 27,406 |
DAEGIS
INC.
UNAUDITED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended | |||||||
July 31, | |||||||
2015 | 2014 | ||||||
Revenues: | |||||||
Information Governance | $ | 2,922 | $ | 4,104 | |||
Migration | 97 | 197 | |||||
Database & Development Tools | 2,201 | 2,361 | |||||
Total revenues | 5,220 | 6,662 | |||||
Operating expenses: | |||||||
Direct costs of revenue | 1,880 | 2,061 | |||||
Product development | 1,291 | 1,173 | |||||
Selling, general and administrative | 2,859 | 3,370 | |||||
Total operating expenses | 6,030 | 6,604 | |||||
Income (loss) from operations | (810 | ) | 58 | ||||
Other income (expense): | |||||||
Gain from change in fair value of common stock warrant liability | 70 | 95 | |||||
Interest expense | (210 | ) | (303 | ) | |||
Other, net | (3 | ) | (100 | ) | |||
Total other income (expense) | (143 | ) | (308 | ) | |||
Loss before income taxes | (953 | ) | (250 | ) | |||
Benefit from income taxes | (257 | ) | (3 | ) | |||
Net loss | $ | (696 | ) | $ | (247 | ) | |
Loss per share: | |||||||
Basic | $ | (0.04 | ) | $ | (0.02 | ) | |
Diluted | $ | (0.04 | ) | $ | (0.02 | ) | |
Weighted-average shares used in computing loss per share | |||||||
Basic | 16,389 | 16,384 | |||||
Diluted | 16,389 | 16,384 |
DAEGIS
INC.
RECONCILIATION OF GAAP
OPERATING INCOME (LOSS) TO ADJUSTED EBITDA
(In thousands, except per share
data)
Three Months Ended | |||||||
July 31, | |||||||
2015 | 2014 | ||||||
GAAP income (loss) from operations | $ | (810 | ) | $ | 58 | ||
Amortization of intangible assets | 336 | 384 | |||||
Stock based compensation expenses | 45 | 27 | |||||
Depreciation | 120 | 183 | |||||
Charges related to alignment of business units | 310 | 171 | |||||
Total adjustments to GAAP income (loss) from operations | 811 | 765 | |||||
Adjusted EBITDA | $ | 1 | $ | 823 | |||
RECONCILIATION OF
GAAP TO NON-GAAP NET LOSS | |||||||
GAAP net loss | $ | (696 | ) | $ | (247 | ) | |
Amortization of intangible assets | 336 | 384 | |||||
Stock based compensation expenses | 45 | 27 | |||||
Gain loss from change in fair value of common stock warrant liability | (70 | ) | (95 | ) | |||
Charges related to alignment of business units | 310 | 171 | |||||
Total adjustments to GAAP net loss | 621 | 487 | |||||
Non-GAAP net income (loss) | $ | (75 | ) | $ | 240 | ||
Non-GAAP diluted income (loss) per share | $ | (0.00 | ) | $ | 0.01 | ||
Weighted average shares used in computing income (loss) per share: | |||||||
Dilutive | 16,389 | 16,384 |
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 (Loss) and Reconciliation of GAAP Operating Income (Loss) to Adjusted EBITDA which includes a reconciliation of the GAAP results to Non-GAAP and Adjusted EBITDA results.