8-K - EGAN - Equibles

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 and Exchange Act of 1934

Date of Report: September 2, 2020

(Date of earliest event reported)

eGain Corporation

(Exact name of registrant as specified in its charter)


Delaware	001-35314	77-0466366

(State or other jurisdiction	(Commission	(I.R.S. employer
of incorporation)	File Number)	Identification Number)

1252 Borregas Avenue, Sunnyvale, California 94089

(Address of principal executive offices, including zip code)

(Former Name or Former Address, if Changed Since Last Report)<br><br>
(408) 636-4500<br><br>(Registrant’s telephone number, including area code)<br><br>(Former Name or Former Address, if Changed Since Last Report)<br><br>

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:

◻ 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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ◻

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of exchange on which registered
Common Stock, par value $0.001 par value	EGAN	The Nasdaq Stock Market LLC

Item 2.02Results of Operations and Financial Condition.

The following information in this Item 2.02 is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

On September 2, 2020, eGain Corporation (“eGain” or the “Company”) issued a press release announcing results for its fiscal fourth quarter June 30, 2020. The press release contains forward-looking statements regarding eGain and includes cautionary statements identifying important factors that may cause actual results to differ materially from those anticipated. A copy of the press release is furnished herewith as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.


EXHIBIT NO.		DESCRIPTION
99.1		Press release, dated September 2, 2020, of eGain Corporation

SIGNATURE

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 thereunto duly authorized.

<br><br>		<br><br>
<br><br>Date: September 2, 2020		<br><br>eGain Corporation
		<br><br>
	By:	/s/ Eric N. Smit
		Eric N. Smit<br><br>Chief Financial Officer <br>(Duly Authorized Officer and<br><br>Principal Financial and Accounting Officer)

Exhibit 99.1

eGain Reports 34% Growth in SaaS Revenue for Fiscal 2020 Fourth Quarter

Sunnyvale, CA (September 2, 2020) – eGain (NASDAQ: EGAN), a leading provider of omnichannel customer engagement solutions, today announced financial results for its fiscal 2020 fourth quarter and full year ended June 30, 2020.

“We are pleased to report strong financial performance across the board for our fiscal 2020 fourth quarter and full year,” said Ashu Roy, eGain’s CEO. “While the short-term economic outlook is uncertain, given the COVID-19 pandemic, we are bullish thanks to accelerating demand for digital customer engagement and our product leadership.”

Fiscal 2020 Fourth Quarter Financial Highlights

●	SaaS revenue was $15.5 million, up 34% year over year.
●	SaaS and professional services revenue was $17.2 million, up 30% year over year and comprised 91% of total revenue.
---	---
●	Total revenue was $19.0 million, up 13% year over year.
---	---
●	GAAP net income was $2.2 million, or $0.07 per share on a diluted basis, compared to GAAP net income of $166,000, or $0.01 per share on a diluted basis, for Q4 2019.
---	---
●	Non-GAAP net income was $2.7 million, or $0.08 per share on a diluted basis, compared to non-GAAP net income of $659,000, or $0.02 per share on a diluted basis, for Q4 2019.
---	---
●	Cash provided by operations was $5.6 million, compared to cash used in operations of $1.0 million in Q4 2019.
---	---

Fiscal 2020 Full Year Financial Highlights

●	SaaS revenue was $56.8 million, up 27% year over year.
●	SaaS and professional services revenue was $63.4 million, up 22% year over year, and comprised 87% of total revenue.
---	---
●	Total revenue was $72.7 million, up 8% year over year.
---	---
●	GAAP net income was $7.2 million, or $0.23 per share on a diluted basis, compared to GAAP net income of $4.2 million, or $0.14 per share on a diluted basis, for fiscal 2019.
---	---
●	Non-GAAP net income was $9.3 million, or $0.29 per share on a diluted basis, compared to non-GAAP net income of $6.2 million, or $0.21 per share on a diluted basis, for fiscal 2019.
---	---
●	Cash provided by operations for the year was $14.1 million, up 100% from cash provided by operations of $7.0 million in fiscal 2019.
---	---
●	Total cash and cash equivalents, as of June 30, 2020, was $46.6 million, up 46% compared to $31.9 million as of June 30, 2019.
---	---

Fiscal 2021 First Quarter Financial Guidance

For the first quarter of fiscal 2021 ending September 30, 2020, eGain expects:

●	SaaS revenue of between $15.5 million to $16.0 million, which would represent growth between 25% and 29% year over year;
●	SaaS and professional services revenue of between $17.0 million and $17.6 million, which would represent growth of between 21% and 25% year over year;
---	---
●	Total revenue of $18.6 million to $19.3 million, which would represent growth between 8% and 12% year over year;
---	---
●	GAAP net income of $1.1 million to $2.1 million, or $0.03 to $0.06 per share on a diluted basis; and
---	---
●	Non-GAAP net income of $1.6 million to $2.6 million, or $0.05 to $0.08 per share on a diluted basis.
---	---

Non-GAAP Financial Measures

This press release includes non-GAAP operating income and non-GAAP net income as supplemental information relating to our operating results. Non-GAAP net income is defined as net income adjusted for stock-based compensation expense and amortization of acquired intangible assets. Non-GAAP results are presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with generally accepted accounting principles, and may be different from non-GAAP measures used by other companies. eGain’s management uses these non-GAAP measures to compare the Company’s performance to that of prior periods for trend analysis and for budgeting and planning purposes. eGain believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company’s financial measures with other software companies, many of which present similar non-GAAP financial measures to investors, and that it allows for greater transparency with respect to key metrics used by management in its financial and operational decision-making. Reconciliation tables of the most comparable GAAP financial measures to the non-GAAP financial measures used in this press release are included with the financial tables at the end of this release. eGain urges investors to review the reconciliation and not to rely on any single financial measure to evaluate the Company’s business.

Conference Call Information

eGain will discuss its fiscal 2020 fourth quarter and full year results today via teleconference at 2:00 p.m., Pacific Time. To access the live call, dial 800-367-2403 (US and Canada) or +1 334-777-6978 (international) and give the participant passcode 7989267. A live and archived webcast of the call will also be accessible on the “Investor relations” section of the Company’s website at www.egain.com. In addition, a phone replay will be available approximately two hours following the end of the call and will remain available for one week.

About eGain

eGain customer engagement solutions deliver digital transformation for leading brands – powered by virtual assistance, AI, knowledge, and analytics. Our comprehensive suite of applications helps clients deliver memorable, digital-first customer experiences in an omnichannel world. To find out more about eGain, visit http://www.egain.com.

Cautionary Note Regarding Forward-Looking Statements.

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations and include our beliefs regarding demand for our products and services, including, without limitation: our beliefs regarding solid business pipeline and our market opportunity; and our expectations with respect to revenue growth and non-GAAP net income for the first quarter of fiscal year 2021. The achievement or success of the matters covered by such forward-looking statements, including future financial guidance, involves risks, uncertainties and assumptions, many of which involve factors or circumstances that are beyond our control. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, the Company’s actual results could differ materially from the results expressed or implied by the forward-looking statements we make, including our ability to achieve our targets for the first quarter of fiscal year 2021. The risks and uncertainties referred to above include, but are not limited to: risks associated with current economic uncertainties tied to the COVID-19 pandemic, including but not limited to its effect on customer demand for the Company’s products and services and the impact of potential delays in customer payments; risks associated with the transition to a work-from-home environment; risks associated with new product releases and new services and products features; risks that customer demand may fluctuate or decrease; risks that we are unable to collect unbilled contractual commitments, particularly in the current economic environment; risks that our lengthy sales cycles may negatively affect our operating results; currency risks; our ability to capitalize on customer engagement; risks related to our reliance on a relatively small number of customers for a substantial portion of our revenue; our ability to compete successfully and manage growth; our ability to develop and expand strategic and third party distribution channels; risks related to our international operations; our ability to continue to innovate; our strategy of making investments in sales to drive growth; current general economic and market conditions associated with the COVID-19 pandemic and otherwise, which may adversely affect our industry; general political or destabilizing events, including war, conflict or acts of terrorism; the effect of evolving domestic and foreign government regulations, including those addressing data privacy and cross-border data transfers; and other risks detailed from time to time in eGain’s public filings, including eGain’s annual report on Form 10-K filed on September 12, 2019 and subsequent reports filed with the Securities and Exchange Commission, which are available on the Securities and Exchange Commission’s Web site at www.sec.gov. These forward-looking statements are based on current expectations and speak only as of the date hereof. The Company assumes no obligation and does not intend to update these forward-looking statements, except as required by law.

eGain, the eGain logo, and all other eGain product names and slogans are trademarks or registered trademarks of eGain Corp. in the United States and/or other countries. All other company names and products mentioned in this release may be trademarks or registered trademarks of the respective companies.

MKR Investor Relations

Todd Kehrli or Jim Byers

Phone: 323-468-2300

Email: egan@mkr-group.com

eGain Corporation

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)


	June 30,		June 30,
	2020		2019
ASSETS
Current assets:
Cash and cash equivalents	$	46,609	$	31,860
Restricted cash		6		7
Accounts receivable, net		22,708		20,411
Costs capitalized to obtain revenue contracts, net		1,066		740
Prepaid expenses		2,514		2,517
Other current assets		617		1,054
Total current assets		73,520		56,589
Property and equipment, net		713		525
Operating lease right-of-use assets		2,962		—
Costs capitalized to obtain revenue contracts, net of current portion		2,380		1,777
Intangible assets, net		26		294
Goodwill		13,186		13,186
Other assets		918		1,383
Total assets	$	93,705	$	73,754


LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	2,429	$	4,173
Accrued compensation		7,916		5,480
Accrued liabilities		3,423		2,353
Operating lease liabilities		1,753		—
Deferred revenue		36,644		30,688
Total current liabilities		52,165		42,694
Deferred revenue, net of current portion		4,826		5,801
Operating lease liabilities, net of current portion		1,385		—
Other long term liabilities		688		952
Total liabilities		59,064		49,447
Stockholders' equity:
Common stock		31		31
Additional paid-in capital		374,399		371,099
Notes receivable from stockholders		(90)		(88)
Accumulated other comprehensive loss		(1,631)		(1,459)
Accumulated deficit		(338,068)		(345,276)
Total stockholders' equity		34,641		24,307
Total liabilities and stockholders' equity	$	93,705	$	73,754

eGain Corporation

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)


	Three Months Ended				Year Ended
	June 30,				June 30,
	2020		2019		2020		2019
Revenue:
Subscription	$	17,296	$	15,144	$	66,129	$	60,013
Professional services		1,734		1,679		6,600		7,219
Total revenue		19,030		16,823		72,729		67,232
Cost of revenue:
Cost of subscription		3,352		4,265		14,398		14,976
Cost of professional services		1,671		1,502		6,683		6,865
Total cost of revenue		5,023		5,767		21,081		21,841
Gross profit		14,007		11,056		51,648		45,391
Operating expenses:
Research and development		4,383		3,593		16,638		14,369
Sales and marketing		5,001		4,596		19,623		17,302
General and administrative		2,070		2,016		7,981		8,198
Total operating expenses		11,454		10,205		44,242		39,869
Income from operations		2,553		851		7,406		5,522
Interest income (expense), net		11		130		395		(319)
Other income (expense), net		141		(13)		185		(202)
Income before income tax provision		2,705		968		7,986		5,001
Income tax provision		(554)		(802)		(778)		(833)
Net income	$	2,151	$	166	$	7,208	$	4,168

Per share information:
Earnings income per share:
Basic	$	0.07	$	0.01	$	0.24	$	0.15
Diluted	$	0.07	$	0.01	$	0.23	$	0.14
Weighted average shares used in computation:
Basic		30,742		30,344		30,620		28,579
Diluted		32,159		31,915		31,956		30,363

Summary of stock-based compensation included in the costs and expenses above:
Cost of revenue	$	57	$	82	$	205	$	323
Research and development		158		132		706		519
Sales and marketing		129		132		551		313
General and administrative		125		80		399		468
Total stock-based compensation	$	469	$	426	$	1,861	$	1,623

Summary of amortization of purchased intangibles from business combinations in the costs and expenses above:
Cost of revenue	$	67	$	67	$	268	$	268
Research and development		—		—		—		170
Total amortization of intangible assets	$	67	$	67	$	268	$	438

eGain Corporation

GAAP to Non-GAAP Reconciliation Table

(in thousands, except per share data)

(unaudited)


	Three Months Ended					Year Ended
	June 30,					June 30,
	2020		****	2019		2020		****	2019
Income from operations	$	2,553		$	851	$	7,406		$	5,522
Add:
Stock-based compensation		469			426		1,861			1,623
Amortization of intangible assets		67			67		268			438
Non-GAAP income from operations	$	3,089		$	1,344	$	9,535		$	7,583

	Three Months Ended					Year Ended
	June 30,					June 30,
	2020		****	2019		2020		****	2019
Net income	$	2,151		$	166	$	7,208		$	4,168
Add:
Stock-based compensation		469			426		1,861			1,623
Amortization of intangible assets		67			67		268			438
Non-GAAP net income	$	2,687		$	659	$	9,337		$	6,229
Per share information:
Non-GAAP earnings per share:
Basic	$	0.09		$	0.02	$	0.30		$	0.22
Diluted	$	0.08		$	0.02	$	0.29		$	0.21
Weighted-average shares used in computation:
Basic		30,742			30,344		30,620			28,579
Diluted		32,159			31,915		31,956			30,363

eGain Corporation

Other GAAP to Non-GAAP Supplemental Financial Information

(in thousands)

(unaudited)


	Three Months EndedJune 30,				Growth Rates		Constant Currency Growth Rates [1]
	2020		2019
Revenue:
SaaS revenue	$	15,515	$	11,572		34%		35%
Legacy revenue		1,781		3,572		(50%)		(50%)
GAAP subscription		17,296		15,144		14%		15%
GAAP professional services		1,734		1,679		3%		4%
Total GAAP revenue	$	19,030	$	16,823		13%		14%

SaaS and professional services revenue:
SaaS revenue	$	15,515	$	11,572		34%		35%
Professional Services		1,734		1,679		3%		4%
Total SaaS and professional services revenue	$	17,249	$	13,251		30%		31%

Cost of Revenue:
GAAP subscription	$	3,352	$	4,265
Add back:
Amortization of intangible assets		(67)		(67)
Non-GAAP subscription	$	3,285	$	4,198

GAAP professional services	$	1,671	$	1,502
Add back:
Stock-based compensation		(57)		(82)
Non-GAAP professional services	$	1,614	$	1,420

GAAP total cost of revenue	$	5,023	$	5,767
Add back:
Stock-based compensation		(57)		(82)
Amortization of intangible assets		(67)		(67)
Non-GAAP total cost of revenue	$	4,899	$	5,618		(13%)		(11%)

Gross Profit:
Non-GAAP subscription	$	14,011	$	10,946
Non-GAAP professional services		120		259
Non-GAAP gross profit	$	14,131	$	11,205		26%		27%

Operating expenses:
GAAP research and development	$	4,383	$	3,593
Add back:
Stock-based compensation expense		(158)		(132)
Amortization of acquired intangible assets		-		-
Non-GAAP research and development	$	4,225	$	3,461		22%		24%

GAAP sales and marketing	$	5,001	$	4,596
Add back:
Stock-based compensation expense		(129)		(132)
Amortization of acquired intangible assets		—		-
Non-GAAP sales and marketing	$	4,872	$	4,464		9%		15%

GAAP general and administrative	$	2,070	$	2,016
Add back:
Stock-based compensation expense		(125)		(80)
Amortization of acquired intangible assets		—		—
Non-GAAP general and administrative	$	1,945	$	1,936		0%		1%

GAAP operating expenses	$	11,454	$	10,205
Add back:
Stock-based compensation expense		(412)		(344)
Amortization of acquired intangible assets		—		—
Non-GAAP operating expenses	$	11,042	$	9,861		12%		16%

[1] Constant currency growth rates presented are derived from converting the current period results for entities reporting in currencies other than U.S. Dollars into U.S. Dollars at the exchange rates in effect during the prior period presented rather than the actual exchange rates in effect during the current period. 7

eGain Corporation

Other GAAP to Non-GAAP Supplemental Financial Information

(in thousands)

(unaudited)


	Twelve Months EndedJune 30,				Growth Rates		Constant Currency Growth Rates [1]
	2020		2019
Revenue:
SaaS revenue	$	56,793	$	44,788		27%		28%
Legacy revenue		9,336		15,225		(39%)		(38%)
GAAP subscription		66,129		60,013		10%		11%
GAAP professional services		6,600		7,219		(9%)		(8%)
Total GAAP revenue	$	72,729	$	67,232		8%		9%

SaaS and professional services revenue:
SaaS revenue	$	56,793	$	44,788		27%		28%
Professional Services		6,600		7,219		(9%)		(8%)
Total SaaS and professional services revenue	$	63,393	$	52,007		22%		23%

Cost of Revenue:
GAAP subscription	$	14,398	$	14,976
Add back:
Amortization of intangible assets		(268)		(268)
Non-GAAP subscription	$	14,130	$	14,708

GAAP professional services	$	6,683	$	6,865
Add back:
Stock-based compensation		(205)		(323)
Non-GAAP professional services	$	6,478	$	6,542

GAAP total cost of revenue	$	21,081	$	21,841
Add back:
Stock-based compensation		(205)		(323)
Amortization of intangible assets		(268)		(268)
Non-GAAP total cost of revenue	$	20,608	$	21,250		(3%)		(2%)

Gross Profit:
Non-GAAP subscription	$	51,999	$	45,305
Non-GAAP professional services		122		678
Non-GAAP gross profit	$	52,121	$	45,983		13%		14%

Operating expenses:
GAAP research and development	$	16,638	$	14,369
Add back:
Stock-based compensation expense		(706)		(519)
Amortization of acquired intangible assets		-		(170)
Non-GAAP research and development	$	15,932	$	13,680		16%		17%

GAAP sales and marketing	$	19,623	$	17,302
Add back:
Stock-based compensation expense		(551)		(313)
Amortization of acquired intangible assets		—		—
Non-GAAP sales and marketing	$	19,072	$	16,989		12%		14%

GAAP general and administrative	$	7,981	$	8,198
Add back:
Stock-based compensation expense		(399)		(468)
Amortization of acquired intangible assets		—		—
Non-GAAP general and administrative	$	7,582	$	7,730		(2%)		(1%)

GAAP operating expenses	$	44,242	$	39,869
Add back:
Stock-based compensation expense		(1,656)		(1,300)
Amortization of acquired intangible assets		—		(170)
Non-GAAP operating expenses	$	42,586	$	38,399		11%		12%