Ann: FLLYR: DIL: Diligent Q4 and FY15 Financial Results

• Release Date: 29/02/16 08:30
• Summary: FLLYR: DIL: Diligent Q4 and FY15 Financial Results
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					DIL
29/02/2016 08:30
FLLYR
PRICE SENSITIVE
REL: 0830 HRS Diligent Corporation (NS)

FLLYR: DIL: Diligent Q4 and FY15 Financial Results

Diligent Corporation Fourth Quarter and Fiscal Year 2015 Financial Results

Fourth Quarter total revenue of $US 27.5 million, up 24% year-over-year
Fiscal Year 2015 total revenue of $US 99.3 million, up 20% year-over-year

February 29, 2016 --Diligent Corporation (NZX: DIL) (www.diligent.com), the
leading provider of secure online collaboration and document sharing
solutions for boards, committees and leadership teams, today announced
financial results for the fourth quarter and fiscal year ended December 31,
2015.

Fourth Quarter 2015 Financial Highlights

o Revenue: For the quarter ended December 31, 2015, total revenue was $US
27.5 million, an increase of 24% compared with $US 22.2 million in the fourth
quarter of 2014. Fourth quarter 2015 revenue was negatively impacted by $US
0.5 million due to the strengthening of the U.S. dollar as compared to most
non-U.S. currencies in which Diligent operates. On a constant currency basis,
revenue in the fourth quarter increased 26% compared to the fourth quarter of
2014.

o Americas: For the quarter ended December 31, 2015, revenue from the
Americas region was $19.2 million, an increase of 22% compared with $15.7
million in the prior year period. The Americas represented 70% of total
revenue in the fourth quarter.
o EMEA: Revenue from the EMEA region was $5.7 million in the fourth quarter
of 2015, an increase of 27% compared with $4.5 million in the prior year
period. EMEA represented 21% of total revenue in the fourth quarter.
o Asia Pacific: The Asia Pacific region contributed $2.6 million of revenue
in the fourth quarter, representing an increase of 30% compared with $2.0
million in the prior year period. Asia Pacific represented 9% of total
revenue in the quarter.
o Gross Profit: Gross profit for the fourth quarter was $US 20.5 million, an
increase of 18% compared with $US 17.4 million in the fourth quarter of 2014.
Gross margin was 74.6% compared with 78.4% in the fourth quarter of 2014.

o EBITDA: For the quarter ended December 31, 2015, EBITDA was $US 2.8 million
compared with $US 4.2 million in the fourth quarter of 2014.

o Adjusted EBITDA: For the quarter ended December 31, 2015, Adjusted EBITDA
was $US 5.6 million compared with $US 5.5 million in the fourth quarter of
2014. Adjusted EBITDA margin was 20.6% compared with 24.6% in the fourth
quarter of 2014.

o Net Income: For the quarter ended December 31, 2015, net income was $US 1.5
million compared with $US 1.8 million in the fourth quarter of 2014. Diluted
earnings per share were $US 0.01, compared with $US 0.01 in the fourth
quarter of 2014.

o Adjusted Net Income: Adjusted Net Income in the fourth quarter of 2015 was
$US 3.5 million, or $0.03 per diluted share, compared with $US 2.5 million,
or $0.02 per diluted share, in the prior year period.

Fourth Quarter and Recent Business Highlights

o Customer Agreements and Diligent Boards Users: At December 31, 2015, total
customer agreements were approximately 3,900 (net of cancellations) compared
with approximately 3,000 at December 31, 2014. At December 31, 2015, the
number of contracted Diligent Boards users was over 120,000 users compared to
over 92,000 users at December 31, 2014.

o Revenue Retention Rate: In the fourth quarter, Diligent's annual revenue
retention rate, excluding upsells into the existing customer base, continued
to exceed 95%. Diligent's annual revenue retention rate, including upsells
into the existing customer base, exceeded 100% .  Customers being acquired,
where there was a resultant dissolution of the Board of Directors, was the
most significant driver of customer attrition in the fourth quarter of 2015.

o Diligent D&O solution: As of December 31, 2015, Diligent had 80 customers
signed to its Diligent D&O premium add-on solution, almost all who were
signed in the fourth quarter.  Diligent began offering the Diligent D&O
solution to customers in early September 2015.

o Diligent Teams: As expected, in the fourth quarter Diligent continued to
make the Diligent Teams product available to customers on a limited basis.
Diligent continues to add feature enhancements to the solution based on
feedback from early adopters.

o Proposed Acquisition of Diligent by Insight Venture Partners: On February
15, 2016 Diligent entered into a definitive agreement to be acquired by
affiliates of funds managed by Insight Venture Partners. On the terms and
subject to the conditions set forth in the agreement, Diligent common
stockholders will receive $US 4.90 in cash for each share of Diligent common
stock. The transaction is subject to the approval of a majority of the
outstanding shares of Diligent common stock and preference shares, voting as
one class; the approval of at least 60% of the outstanding Diligent
preference shares, voting separately; regulatory approvals and other
customary closing conditions, including that the existing directors will
resign upon closing. The holders of Diligent's preference shares, including
Spring Street Partners, L.P., Diligent's largest shareholder, have entered
into voting agreements in support of the transaction.

Fiscal Year 2015 Financial Highlights

o Revenue: For the year ended December 31, 2015, total revenue was $US 99.3
million, an increase of 20% compared with $US 83.1 million in fiscal 2014. On
a constant currency basis, fiscal year 2015 revenue increased 23% over the
prior year.

o Americas: For the year ended December 31, 2015, revenue from the Americas
region was $69.4 million, an increase of 18% compared with $58.9 million in
the prior year. The Americas represented 70% of total revenue in fiscal 2015.

o EMEA: Revenue from the EMEA region was $20.8 million in fiscal 2015, an
increase of 22% compared with $17.1 million in the prior year. EMEA
represented 21% of total revenue in fiscal 2015.
o Asia Pacific: Revenue from the Asia Pacific region was $9.1 million in
fiscal 2015, an increase of 28% compared with $7.1 million in the prior year.
Asia Pacific represented 9% of total revenue in fiscal 2015.
o Gross Profit: Gross profit for the year ended December 31, 2015, was $US
77.9 million, an increase of 19% compared with $US 65.4 million in the prior
year. Gross margin was 78.5% compared with 78.8% in fiscal 2014.

o EBITDA: For the year ended December 31, 2015, EBITDA was $US 15.8 million
compared with $US 17.9 million in the prior year.

o Adjusted EBITDA: For the year ended December 31, 2015, Adjusted EBITDA was
$US 24.3 million compared with $US 24.6 million in the prior year. Adjusted
EBITDA margin was 24.5% for fiscal year 2015, compared with 29.6% in the
prior year.

o Net Income: For the year ended December 31, 2015, net income was $US 8.1
million compared with $US 8.9 million in prior year. Diluted earnings per
share were $US 0.06, compared with $US 0.07 in the prior year.

o Adjusted Net Income: Adjusted Net Income the year ended December 31, 2015,
was $US 14.2 million, compared with $US 12.9 million in the prior year.
Adjusted Net Income per diluted share was $US 0.12, compared with $0.11 in
fiscal 2014.

o Balance Sheet and Cash Flow: As of December 31, 2015, Diligent had $US 70.2
million in cash and cash equivalents and no external debt, an increase of
approximately $US 1.4 million compared with cash and cash equivalents on
September 30, 2015, and a decrease of approximately $US 0.6 million compared
with cash and cash equivalents as of December 31, 2014.

The Company generated $US 21.2 million in cash from operations and invested
$US 19.3 million in capital expenditures including $US 10.0 million for the
acquisition of BoardLink.

A reconciliation of GAAP to non-GAAP financial measures has been provided in
the financial statement tables included in this press release. An explanation
of these measures is also included below under the heading "Non-GAAP
Financial Measures."

Additional Information and Where to Find It

This press release does not constitute an offer to buy or sell or the
solicitation of an offer to buy or sell any securities or a solicitation of
any vote or approval. This communications relates to Diligent's Fourth
Quarter and Fiscal Year 2015 financial results.

In connection with the Merger, Diligent intends to file relevant materials
with the SEC, including a preliminary proxy statement on Schedule 14A.
Following the filing of a definitive proxy statement with the SEC, Diligent
will mail the definitive proxy statement and a proxy card to each stockholder
entitled to vote at the special meeting of stockholders relating to the
Merger. STOCKHOLDERS ARE URGED TO CAREFULLY READ THESE MATERIALS IN THEIR
ENTIRETY (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER
RELEVANT DOCUMENTS THAT DILIGENT WILL FILE WITH THE SEC AND NZX WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
MERGER. The proxy statement and other relevant materials (when available),
and any and all documents filed by Diligent with the SEC, may also be
obtained for free at the SEC's website at www.sec.gov and documents filed
with NZX, may also be obtained for free at the NZX's website
www.nzx.com/markets/NZSX/securities/DIL. In addition, stockholders may obtain
free copies of the documents filed with the SEC by Diligent at the Investor
Relations section of Diligent's website at www.diligent.com or by contacting
Diligent's Investor Relations Department at 0800 995 082 (NZ toll free) or
+64 4 894 6912 (International).

Diligent and its directors and executive officers may be deemed to be
participants in the solicitation of proxies in respect of the transactions
contemplated by the Merger Agreement. Information regarding Diligent's
directors and executive officers is contained in Diligent's proxy statement
for its 2015 Annual Meeting of Stockholders, which was filed with the SEC on
March 19, 2015, and supplemented on April 10, 2015. Stockholders may obtain
more detailed information regarding the direct and indirect interests of
Diligent and its executive officers and directors in the Merger by reading
the preliminary and definitive proxy statements regarding the Merger, which
will be filed with the SEC.

About Diligent

Diligent is the leading provider of secure corporate governance and
collaboration solutions for boards and senior executives. Approximately 3,900
clients in more than 60 countries and on all seven continents rely on
Diligent to provide secure, intuitive access to their most time-sensitive and
confidential information, ultimately helping them make better decisions. The
Diligent Boards (formerly Diligent Boardbooks) solution speeds and simplifies
how board materials are produced, delivered and collaborated on via any
device, removing the security concerns of doing this by courier, email and
file sharing. Diligent is a publicly listed company (NZX: DIL). Visit
www.diligent.com to learn more.

Non-GAAP Financial Measures

This earnings release presents EBITDA, Adjusted EBITDA, Adjusted Net Income
and Adjusted Net Income per share information, which are provided to
investors to supplement the results of operations reported in accordance with
accounting principles generally accepted in the United States of America
("GAAP"). We define these terms as follows:

o Adjusted EBITDA: operating income before depreciation and amortization
expense, stock based compensation expense, costs associated with the
investigation and restatement of our historical financial statements,
acquisition related costs and non-recurring costs related to our former CEO's
performance cash awards and restatement bonuses.

o Adjusted Net Income: net income before costs relating to non-cash stock
based compensation, costs associated with the investigation and restatement
of our historical financial statements, costs associated with acquisitions
and non-recurring costs related to our former CEO's performance cash awards
and restatement bonuses, net of tax.

These supplemental measures of the Company's performance are not required by,
or presented in accordance with GAAP. The Company's management uses these
non-GAAP financial measures internally in analyzing its financial results and
believes they are useful to investors, as a supplement to the corresponding
GAAP measures, in evaluating the Company's ongoing operational performance
and trends and in comparing its financial measures with other companies in
the same industry, many of which present similar non-GAAP financial measures
to help investors understand the operational performance of their businesses.
However, it is important to note that the particular items the Company
excludes from, or includes in, its non-GAAP financial measures may differ
from the items excluded from, or included in, similar non-GAAP financial
measures used by other companies in the same industry. Non-GAAP financial
measures should not be considered in isolation from, or a substitute for,
financial information prepared in accordance with GAAP. For a quantitative
reconciliation of EBITDA, Adjusted EBITDA and Adjusted Net Income to the most
directly comparable GAAP financial performance measure see Schedule 4:
Reconciliation of GAAP to Non-GAAP Operating Results in this earnings
release.

Safe Harbor Statement

Statements made in this press release that state Diligent's or management's
intentions, beliefs, expectations, or predictions for the future are
forward-looking statements within the meaning of The Private Securities
Litigation Reform Act of 1995. Readers are cautioned that these statements
are only predictions and may differ materially from actual future events or
results. All forward looking-statements are only as of the date of this press
release and Diligent undertakes no obligation to update or revise them. Such
forward-looking statements are subject to a number of risks, assumptions and
uncertainties that could cause Diligent's actual results to differ materially
from those projected in such forward-looking statements. For example, if we
do not successfully develop or introduce new product offerings, or
enhancements to our existing Diligent Boards offerings, or keep pace with
technological changes that impact the use of our product offerings, or suffer
security breaches or service interruptions, we may lose existing customers or
fail to attract new customers and our financial performance and revenue
growth may suffer. Factors which could cause our actual results to differ
materially from those projected in forward-looking statements include,
without limitation, economic, competitive, regulatory and technological
factors affecting Diligent Corporation's operations, markets, products,
services and other factors set forth in the Company's Risk Factors included
in its Annual Report on Form 10-K filed with the SEC on March 16, 2015, its
Quarterly Report on Form 10-Q for the quarterly period ended September 30,
2015, filed with the SEC on November 9, 2015, and other filings with the SEC
which are available at www.sec.gov for an extended discussion of the risks
confronting our business.

On February 12, 2016 we entered into a definitive agreement and plan of
merger to be acquired by affiliates of funds managed by Insight Venture
Management LLC ("Insight").  On the terms and subject to the conditions set
forth in the merger agreement, Diligent stockholders will receive US $4.90
per share in cash for each share of Diligent common stock upon consummation
of the acquisition.  Diligent's entry into the merger agreement, its
obligations thereunder, and the conditions to completion of the acquisition
give rise to risks and uncertainties that could cause actual results and the
timing of events to differ materially from those anticipated by the forward
looking statements in this press release, including:
o The effect of the announcement or pendency of the merger on our business
relationships, employee retention and recruitment, operating results and
business generally;
o Risks that the merger could divert management's or employees' attention
from our ongoing business operations;
o The outcome of or expenses relating to any legal proceedings that may be
instituted against Diligent and others related to the merger agreement;
o The amount of the costs, fees, expenses and charges related to the merger
agreement or the merger;
o The risk that the merger agreement may be terminated in circumstances that
require Diligent to pay Insight a termination fee of US$19,463,000;
o The failure by Insight to obtain the necessary equity and debt financing
set forth in the commitments entered into in connection with the merger;
o Despite Insight's obligation to use reasonable best efforts to obtain the
financing contemplated by its debt commitment letter, there is a risk that
the debt financing might not be obtained and that, in certain instances,
Diligent's only viable recourse would be the USD$33,365,000 termination fee
payable by Insight to Diligent;
o The merger may not be consummated within the expected time period or at all
because of a number of factors, including the failure to obtain stockholder
approval; the occurrence of any event, change or other circumstance that
could give rise to the termination of the merger agreement; or the failure to
satisfy closing conditions to the merger, including clearance under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary
closing conditions; and
o Diligent's stock price may decline significantly if the merger is not
completed.

Investor inquiries:
Sonya Fynmore
NZ toll free: 0800 995 082
International: +64 4 894 6912
[email protected]

Media inquiries:
Geoff Senescall
Ph: + 64 21 481 234
End CA:00278456 For:DIL    Type:FLLYR      Time:2016-02-29 08:30:32