Revenue Growth and Return to non-GAAP Profitability in Fourth Quarter with Successful Introduction of New CQ5 Product Suite
Basel, Switzerland and Newport Beach, California – 25 February 2009 – Day Software Holding AG (SIX: DAYN, OTCQX: DYIHY), a leading supplier of Global Content Management Software and Content Infrastructure Software, today announced financial results for the second half and year ended December 31, 2008. Day’s announcement marks the completion of a 6-month operational restructuring by Day’s new executive team to refocus business operations and build strong sales momentum around Day’s new "Communique 5" (CQ5) product suite. Available since mid-November 2008, CQ5 was released to critical industry acclaim, including winning InfoWorld’s 2009 Technology of the Year Award in the category "Best Web CMS". More information on this and other CQ5 awards can be found on Day’s website.
Day reported total revenues of CHF 15.0M for the second half of 2008, an increase of 17% from total revenue of CHF 12.8M for the first half of 2008 and 10% from total revenue of CHF 13.7M in the second half of 2007. For the full year, Day reported total FY08 revenue of CHF 27.8M, an increase of 11% from total FY07 revenue of CHF 25.0M. License revenue grew 8% to CHF 11.3M in FY08 from CHF 10.5M in FY07 and year-end cash was up 12% to CHF 12.8M. Day took extra-ordinary non-cash accounting charges related to its Q4 2008 restructuring, including a CHF 4.6M charge related to the sale of its U.K. agency subsidiary, MarketingNet Ltd., and a total charge of CHF 5.4M related to cancellation of software capitalization, deferred tax accounting, and inter-company foreign-exchange liabilities. Excluding extra-ordinary non-cash charges, Day reported positive net income from continuing operations of CHF 106K on a non-GAAP basis in Q4 2008, marking an early return to profitability from its refocused core business operations after roll-out costs of CQ5 during Q2/Q3.
"Despite that it only went into delivery 6 weeks before the Fiscal Year ended, our new CQ5 release as expected became a catalyst for growth, resulting in over 17% revenue growth over the first half of 2008. Along with our new sales and marketing leadership, we got into more deals, improved our win rates, and took market share in our core Web Content Management (WCM) market," said Erik Hansen, CEO of Day Software. "With our new CQ5, we also managed to break into new high growth verticals like CPG/Retail and Higher Education, getting significant wins in December at Williams-Sonoma, Sephora, NuSkin, and the University of Phoenix. We are very pleased with the reception CQ5 has received, and already now see good opportunities ahead in the coming year."
Along with driving strong revenue growth, Day also completed a corporate restructuring to continue its strong momentum around CQ5. Said Hansen, "To support the momentum from CQ5 we put in place a solid and focused foundation for growth in 2009. We flattened our structure, reduced non-revenue generating overhead, invested in new sales capacity in key growth markets, and divested a loss-making subsidiary, MarketingNet Ltd, that was in conflict with our new channel-driven sales growth plan. I’m pleased to see some of the early results of our optimized operations, recent sales growth from our new CQ5 release and return to profitability from in Q4 from our core continuing operations."
Customer Success Highlights
- During the second half 2008, Day targeted key growth verticals, including CPG/Retail and Higher Education, and secured notable wins at Williams-Sonoma, Sephora, NuSkin, University of Phoenix, New York University, Villanova University, and City College of San Francisco. In addition, Day continued building on its strength in Automotive, winning Nissan North America and Nissan Europe along with notable reorders from Daimler and Volkswagen. Other customers added in the quarter include Fiducia and UBS in Financial Services, UNHCR, LaPoste, and Wisconsin Dept. of Transportation in Government, and PacifiCorp, BCHydro, BWK, Franke, and Intuit.
- In Q4, Day successfully hosted its annual Global Customer Summit, launching its award-winning CQ5 suite with Early Access customers Messe Frankfurt, City of Zurich, and Time, Inc. presenting their success stories with CQ5 to Day’s global installed base.
Product and Industry Leadership Highlights
- In Q4, Day won a series of awards for its new CQ5 release, including being named to both the EContent 100 and KMWorld 100 lists and taking the InfoWorld 2009 Technology of the Year Award in the category for “Best Web CMS”.
- Also during Q4, Day was named a “Visionary” in Gartner’s 2008 ECM Magic Quadrant and honored with the Swiss Open Source Award 2008 for its contributions to open source and open standards, including Apache Jackrabbit, Apache Sling, and JSR 170 and JSR 283.
Business Highlights
- Day added key new executive talent in Finance and Marketing, adding industry veterans Richard Francis as Day’s new Chief Financial Officer and Kevin Cochrane as Day’s new Chief Marketing Officer. In Q4 2008, Richard Francis oversaw Day’s operational restructuring, including the divestiture of U.K. agency subsidiary MarketingNet, Ltd., and Kevin Cochrane oversaw the successful market introduction and sales momentum behind Day’s new CQ5 product offering.
- Day expanded sales operations in key growth markets, opening new offices in Italy and adding new executive leadership in the U.K. and Northern Europe with the addition of Trevor Salmon as VP UK and Northern Europe.
- In Q4, Day announced sale of its loss-making, wholly-owned U.K. subsidiary, MarketingNet, Ltd. to exit the interactive agency services business and refocus operations on a channel-driven model to expand U.K. operations.
Commenting on Day’s second half 2008 performance, CEO Hansen stated: In the past 6 months, we have captured considerable momentum in a difficult market environment. At the same time, we’ve successfully concluded the operational restructuring plan put in motion when I joined as CEO: we’ve strengthened our executive team, expanded sales and marketing capacity, and aligned ourselves for a solid and more transparent 2009 by taking the necessary extra-ordinary non-cash charges needed to structure Day for growth and better support for our U.S. investor base.”
Hansen concludes: “With nervous financial markets and a tougher commercial market, we felt it would be of importance to send our Company into 2009 with solid and transparent financials and strengthened and focused operations to build on our momentum and success with CQ5. We feel we are very well prepared to capture additional market share in the year ahead.”
Summary financial schedules are available on the Investor Relations section of our web site.
A warning regarding forward-looking statements
This press release may contain forward-looking statements regarding future events or the future performance of Day Software Holding AG and its subsidiaries (the "Company"). Words such as “expects,” “plans,” “believes,” “may,” “will,” and variations of these words or similar expressions are intended to identify forward-looking statements. These statements speak only as of the date hereof. Such information is subject to change, and we will not necessarily inform you of such changes. Actual events or results, of course, could differ materially and adversely from those expressed in any forward-looking statement. The Company does not make filings (e.g., Forms 10-K and 10-Q) with the Securities and Exchange Commission under the Securities Exchange Act of 1934.