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Daegis Reports Fourth Quarter And Fiscal 2012 Year-End Financial Results

Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of the Company. 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 management’s current beliefs and assumptions and information currently available to management and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Examples of forward-looking statements in the press release include the statements made by Mr. Wille. 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 client and the costs associated with providing services to that client, the date during the course of a fiscal year that a new client is acquired, the length of the integration cycle for new clients and the timing of revenues and costs associated therewith, our client concentration given that the Company is currently dependent on a few large client 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 clients and control expenses, the possibility of the discontinuation of some client relationships, the financial condition of our clients' business and other factors detailed in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise the information in this press release, whether as a result of new information, future events, circumstances or otherwise.

       
DAEGIS INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
 
April 30, April 30,
  2012     2011  
ASSETS
Current assets:
Cash and cash equivalents $ 4,752 $ 4,577
Accounts receivable, net 10,968 15,670
Prepaid expenses and other current assets   1,805     1,166  
Total current assets 17,525 21,413
 
Property and equipment, net 2,827 2,240
Goodwill 11,706 25,161
Intangibles, net 8,690 12,396
Other assets, net   1,121     1,524  
Total assets $ 41,869   $ 62,734  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
Current liabilities:
Accounts payable $ 450 $ 1,433
Current portion of long term debt 2,945 1,869
Accrued compensation and related expenses 2,465 2,894
Common stock warrant liability 569 1,623
Other accrued liabilities 819 2,131
Deferred revenue   8,412     7,951  
Total current liabilities 15,660 17,901
 
Long term debt, net of current portion 18,306 24,731
Deferred tax liabilities 734 555
Other long term liabilities   1,148     1,513  
Total liabilities   35,848     44,700  
 
Commitments and contingencies
 
Stockholders’ equity:
Preferred Stock 2
Common stock 15 15
Additional paid-in capital 99,860 95,111
Accumulated other comprehensive income 341 443
Accumulated deficit   (94,197 )   (77,535 )
Total stockholders’ equity   6,021     18,034  
Total liabilities and stockholders’ equity $ 41,869   $ 62,734  
           
DAEGIS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
 
Three Months Ended Twelve Months Ended
April 30, April 30,
  2012     2011     2012     2011  
 
Revenues:
eDiscovery $ 4,267 $ 6,495 $ 19,981 $ 23,112
Database, archive, and migrations   5,544     5,314     23,488     23,881  
Total revenues   9,811     11,809     43,469     46,993  
 
Operating Expenses:
Direct costs of eDiscovery revenue 2,279 2,113 9,402 6,838
Direct costs of database, archive, and migrations revenue 1,443 1,323 5,398 5,632
Product development 1,992 1,998 7,661 7,736
Selling, general and administrative 4,756 5,753 19,020 24,718
Impairment of goodwill and intangible assets 15,047 15,964 15,047 15,964
Change in fair value of contingent consideration               (164 )
Total operating expenses   25,517     27,151     56,528     60,724  
Loss from operations   (15,706 )   (15,342 )   (13,059 )   (13,731 )
 
Other income (expense):
Loss on extinguishment of debt (2,166 )
Gain from change in fair value of common stock warrant liability 418 92 1,054 519
Interest expense (438 ) (956 ) (2,270 ) (3,406 )
Other, net   (2 )   171     (68 )   8  
Total other income (expense)   (22 )   (693 )   (3,450 )   (2,879 )
 
Loss before income taxes (15,728 ) (16,035 ) (16,509 ) (16,610 )
Provision (benefit) for income taxes   4     (164 )   153     55  
Net loss $ (15,732 ) $ (15,871 ) $ (16,662 ) $ (16,665 )
 
Net loss per share:
Basic $ (1.08 ) $ (1.09 ) $ (1.16 ) $ (1.23 )
Dilutive $ (1.08 ) $ (1.09 ) $ (1.16 ) $ (1.23 )
 
Shares used in computing net loss per share:
Basic 14,718 14,578 14,672 13,552
Dilutive 14,718 14,578 14,672 13,552
         
DAEGIS INC.
RECONCILIATION OF GAAP OPERATING INCOME TO ADJUSTED EBITDA
(In thousands, except per share data)
 
Three Months Ended Twelve Months Ended
April 30, April 30,
  2012     2011     2012     2011  
 
 
GAAP loss from operations $ (15,706 ) $ (15,342 ) $ (13,059 ) $ (13,731 )
 
Amortization of intangible assets 483 910 2,115 3,589
Stock based compensation expenses 217 234 921 960
Depreciation 290 202 1,086 830
Impairment of goodwill and intangible assets   15,047     15,964     15,047     15,964  
Total adjustments to GAAP loss from operations   16,037     17,310     19,169     21,343  
 
Adjusted EBITDA $ 331   $ 1,968   $ 6,110   $ 7,612  
 
 
 
 
 
RECONCILIATION OF GAAP TO NON-GAAP NET INCOME
(In thousands, except per share data)
 
GAAP net loss $ (15,732 ) $ (15,871 ) $ (16,662 ) $ (16,665 )
 
Amortization of intangible assets and warrant discount 483 975 2,158 3,808
Stock based compensation expenses 217 234 921 960
Professional fees related to mergers 1,423
Change in fair value of contingent consideration (164 )
Gain from change in fair value of common stock warrant liability (418 ) (92 ) (1,054 ) (519 )
Loss on extinguishment of debt 2,166
Impairment of goodwill and intangible assets   15,047     15,964     15,047     15,964  
Total adjustments to GAAP net loss   15,329     17,081     19,238     21,472  
 
Non-GAAP net income (loss) $ (403 ) $ 1,210   $ 2,576   $ 4,807  
 
Non-GAAP diluted earnings (loss) per share $ (0.03 ) $ 0.08   $ 0.16   $ 0.34  
 
Weighted average shares used in computing earnings per share:
Dilutive 14,718 14,992 16,131 14,037

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