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TheStreet Open House

Daegis Reports Fiscal 2012 First Quarter Financial Results

Daegis (NASDAQ: DAEG), an eDiscovery company, today announced financial results for its fiscal 2012 first quarter, ended July 31, 2011.

First quarter total revenue rose 16% to $11.5 million, compared to $9.9 million in the first quarter last year. Electronic discovery revenue was $6.0 million, compared to $3.0 million, in the comparable period last year. Daegis merged with Unify on June 29, 2010 and as a result, approximately one month of eDiscovery revenue was included in the prior year comparison. Revenue for the Company’s other business segment, database, archive and migrations, was $5.5 million, compared to $6.9 million in the first quarter of fiscal 2011.

Operating income for the first quarter was $845,000, compared to a loss of $309,000 in the same quarter last year. Adjusted EBITDA rose 109% to $1.9 million, or 16% of revenue, compared to $893,000, or 9% of revenue, in the comparable quarter last year (see reconciliation table).

First quarter GAAP net loss was $1.8 million, or $0.12 loss per diluted share, compared to GAAP net loss of $475,000, or $0.04 loss per diluted share, in the first quarter of fiscal 2011. Non-GAAP net income was $779,000, or $0.05 per diluted share, compared to Non-GAAP net income of $1.5 million or $0.14 per diluted share last year (see reconciliation table). The Company generated cash from operations of $837,000 during the first quarter.

Cash and cash equivalents at July 31, 2011 were $3.7 million, compared to $4.6 million reported at April 30, 2011. Total outstanding debt decreased approximately $4.0 million to $23.4 million, compared to $27.5 million at April 30, 2011.

“During the first quarter, we achieved solid revenue and EBITDA growth, and gained eDiscovery sales momentum,” said Todd Wille, president and CEO of Daegis. “We improved the health of our balance sheet by completing a $4.0 million equity capital raise in conjunction with refinancing our debt with Wells Fargo. This new debt facility resulted in a lower interest rate and an improved covenant structure that we expect will enable us to save approximately $1.5 million in interest expense in fiscal 2012. The eDiscovery sales pipeline grew in excess of 75% during the quarter as a result of doubling our sales team in late Q4 and early Q1. Additionally, our product development initiative remained a focus during the quarter, leading to the new release of the Daegis eDiscovery Platform launched earlier this month. We continue to be confident about our ability to achieve revenue growth for the year.”

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