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TheStreet Open House

Daegis Reports Fiscal 2012 Second Quarter Financial Results

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

Second quarter total revenue was $11.1 million, compared to $12.9 million in the second quarter last year. Electronic discovery revenue was $5.5 million, compared to $7.1 million in the comparable period last year. Revenue for the Company’s database, archive and migration business segment was $5.5 million, compared to $5.8 million in the second quarter of fiscal 2011.

Operating income for the second quarter was $1.2 million, compared to $782,000 in the same quarter last year. Adjusted EBITDA was $2.3 million, or 21% of revenue, compared to $2.4 million, or 19% of revenue, in the comparable quarter last year (see reconciliation table).

Second quarter GAAP net income was $795,000, or $0.04 per diluted share, compared to GAAP net loss of $113,000, or $0.01 loss per diluted share, in the second quarter of fiscal 2011. Non-GAAP net income was $1.4 million, or $0.09 per diluted share, compared to Non-GAAP net income of $1.0 million, or $0.07 per diluted share, last year (see reconciliation table). The Company generated cash from operations of $2.1 million during the second quarter.

Cash and cash equivalents at Oct. 31, 2011 were $5.5 million, compared to $4.6 million reported at April 30, 2011. Total outstanding debt decreased to $23.3 million, compared to $27.5 million at April 30, 2011.

“During the second quarter, we delivered our eighth consecutive quarter of positive Adjusted EBITDA and Non-GAAP net income,” said Todd Wille, president and CEO of Daegis. “We delivered the next major release of the Daegis eDiscovery Platform, our fully-integrated solution with industry-unique capabilities that enable clients to keep data in one system and repurpose attorney work product across matters. Since the second quarter of last year, which benefited from a couple of major project wins prior to our June 2010 merger with Daegis, our quarterly eDiscovery revenue has ranged from $5.5 million to $6.5 million. To date, the significant investments made in sales, marketing and the technology over the last six months have not produced the anticipated revenue growth; however our sales pipeline grew 50 percent and our new and existing clients continue to validate our business and product strategies. We believe we are well-positioned for calendar 2012 with our end-to-end eDiscovery solution and growing sales traction.”

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