Ann: GENERAL: DIL: Diligent Board Member Services

• Release Date: 12/07/13 10:31
• Summary: GENERAL: DIL: Diligent Board Member Services Announcement
• Price Sensitive: No
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DIL
12/07/2013 08:31
GENERAL

REL: 0831 HRS Diligent Board Member Services INC (NS)

GENERAL: DIL: Diligent Board Member Services Announcement

Diligent Board Member Services, Inc. (Diligent)

On July 12, 2013 New Zealand time, Diligent Board Member Services, Inc. (the
"Company") announced that the Company is delaying its Second Quarter 2013
Update, due to the need to complete its previously disclosed review of
revenue recognition practices. The Company is working to provide its Second
Quarter 2013 Update within the next thirty (30) days.  The Second Quarter
2013 Update is not a required submission in New Zealand or the United States
and, as such, there is no adverse regulatory consequence relating to the
delay in the Company releasing the Update.

Until its revenue recognition review is complete, the Company is not able to
reconcile its New Sales or Cumulative Sales results to revenue as required by
U.S. securities laws, or release any revenue information. The revenue
recognition errors identified by the Company and the other related items
described below do not affect the total revenues ultimately earned or to be
earned, the amount or timing of cash received or to be received from
individual customer agreements, or the Company's liquidity or overall cash
flow.

Specifically, U.S. disclosure rule Regulation G requires U.S. public
companies that disclose or release certain non-GAAP financial measures to
include, in that same disclosure or release, a presentation of the most
directly comparable GAAP financial measure and a reconciliation of the
disclosed non-GAAP financial measure to the most directly comparable GAAP
financial measure.  In order to comply with U.S. disclosure rules the Company
cannot present New Sales or Cumulative Sales at this time.

The Company is continuing to evaluate the financial impact of issues
identified in its revenue recognition review, which include the previously
disclosed error relating to the recognition of revenue from the beginning of
a month rather than from the date of contract signing, and the Company's
failure to defer revenue recognition until customers are provided access to
the Company's hosting environment, as required by U.S. GAAP.  There are
certain other items that may be affected by any change in revenue
recognition, such as deferred revenue, deferred commissions, the income tax
provision and deferred tax balances, which must also be evaluated prior to
making a conclusion as to whether the errors are material for the purpose of
requiring a restatement in the Company's historical financial statements for
any fiscal period.  Additionally, the Company is evaluating the effect of
properly capitalizing certain costs associated with software developed for
internal use.  These costs were previously expensed.

The Company is working to complete its analysis of such issues in order to
determine whether they have a material impact on the Company's financial
statements for any previously reported fiscal period.  The Company will
update investors when it is able to make such determination.

Investor inquiries:
Sonya Joyce
Phone: +64 4 894 6912

Media inquiries:
Geoff Senescall
Phone: +64 21 481 234
End CA:00238521 For:DIL    Type:GENERAL    Time:2013-07-12 08:31:17