Ann: QUARTER: DIL: Diligent Announces First Quarter 2014...

• Release Date: 20/06/14 08:30
• Summary: QUARTER: DIL: Diligent Announces First Quarter 2014 Financial Results
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					DIL
20/06/2014 08:30
QUARTER

REL: 0830 HRS Diligent Board Member Services INC (NS)

QUARTER: DIL: Diligent Announces First Quarter 2014 Financial Results

June 20, 2014

Diligent Board Member Services, Inc. Announces First Quarter 2014 Financial
Results

Total revenue of $US 19.1 million, up 40% year-over-year
Adjusted EBITDA of $US 6.4 million, representing a 33.5% Adjusted EBITDA
margin
Adjusted Net Income of $US 4.6 million, or $0.04 per share, up 45%
year-over-year

June 20, 2014 --Diligent Board Member Services, Inc. ("Diligent" or the
"Company") (NZX: DIL) (www.boardbooks.com), provider of the world's most
widely used secure board portal, today announced financial results for its
first quarter ended March 31, 2014.

Alessandro Sodi, President and Chief Executive Officer of Diligent, commented
on the quarter: "The first quarter was a solid start to 2014, and it was
highlighted by the combination of 40% total revenue growth year-over-year and
a 33.5% adjusted EBITDA margin. Our performance reflects continued global
demand for our Boardbooks product and solid execution by our entire team.
Looking forward, we remain optimistic about our outlook based on a leading
market share position and breadth of growth opportunities, including
penetrating new markets and expanding the functionality and related use cases
of our best-in-class SaaS offering."

First-Quarter 2014 Financial Highlights
o Revenue: For the quarter ended March 31, 2014, total revenue was $US 19.1
million, an increase of 40% compared with $US 13.7 million in the prior year.
The Americas represented 71% or $US 13.6 million of total revenue in the
first quarter, EMEA accounted for 21% or $US 4.1 million, and Asia/Pacific
was 7% or $US 1.4 million.

o Gross Profit: Gross profit for the first quarter was $US 15.4 million, an
increase of 41% compared with $US 10.9 million in the prior year. Gross
margin was 80.5%, an increase of 70 basis points compared with 79.8% in the
first quarter of 2013.

o Adjusted EBITDA: For the quarter ended March 31, 2014, Adjusted EBITDA was
$US 6.4 million, an increase of 47% compared with $US 4.4 million in the
prior year. Adjusted EBITDA margin was 33.5%, an increase of 160 basis points
compared with 31.9% in the prior year.

o Net Income: For the quarter ended March 31, 2014, net income was $US 1.9
million, an increase of 58% compared with $US 1.2 million in the prior year.
Net income per diluted share was $US 0.02, compared with $US 0.01 in the
prior year.

Adjusted Net Income for first quarter was $US 4.6 million, an increase of 45%
compared with $US 3.2 million in the prior year. Adjusted Net Income per
diluted share was $US 0.04, compared with $US 0.03 in the prior year.

o Balance Sheet and Cash Flow: As of March 31, 2014, Diligent had $US 60.6
million in cash balances and short-term investments and no bank debt, an
increase of $US 4.5 million as compared to the cash and short-term
investments on December 31, 2013.

The Company generated $US 6.9 million in cash from operations and invested
$US 1.6 million in capital expenditures, yielding free cash flow of $US 5.4
million in the first quarter. Free cash flow was $US 3.2 million for the
first quarter of 2013.

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."

First Quarter and Other Recent Business Highlights

o Users and Client Agreements: During the first quarter of 2014, the number
of Diligent Boardbooks users increased by approximately 4,500, to over 77,100
users. In addition, total client agreements exceeded 2,500 at the end of the
first quarter. The Company's client base is now comprised of 54% public
companies and 46% private entities.

o Revenue Retention Rate: In the first quarter, Diligent's annual revenue
retention rate (excluding upsells into the existing customer base) exceeded
95%; we believe this places us among the best-in-class for SaaS companies.

o ISO 27001 Security Certification: During the first quarter of 2014,
Diligent achieved ISO 27001 certification for the security of its Diligent
Boardbooks software. Diligent believes it is currently the only SaaS-based
board portal provider to achieve ISO 27001 certification. ISO Certification
provides all Diligent Boardbooks users with independent assurance that
Diligent's board portal passes the rigors of an ISO 27001 audit. With this
achievement, Diligent is continuing its commitment to provide further
assurance of our security controls and practices through third-party
certifications and audits such as ISO 27001 and SSAE 16 Type 2 (SOC 1).
Diligent believes such third-party certifications remove potential barriers
to new customer adoption related to security concerns and the substantial
cost associated with performing security audits internally.

o Release of Diligent Boardbooks for Windows 8.1: As previously announced,
Diligent released its app for Windows 8.1. With Diligent Boardbooks for
Windows 8.1, directors can easily sync and view board materials by board or
committee, readily access annotation and voting items, and have the control
to manage their own materials or annotations after meetings. Diligent
Boardbooks app for Windows 8.1 enables users to access the Diligent
Boardbooks app on any device running Windows 8.1. These new devices could
include new generation touch screen computers, laptops, windows tablets and
tablets produced by other manufacturers. Diligent Boardbooks users familiar
with the iPad app will find a parallel intuitive experience on Windows
devices, giving directors the option to move towards Windows-supported
tablets.

Revenue Outlook

Based on information as of today, June 20, 2014, Diligent is issuing the
following revenue guidance:
o Second Quarter 2014: The Company expects revenue to be between $US 19.7
million and $US 20.0 million, or an increase of 26% to 28% year-over-year.
o Full Year 2014: The Company expects revenue to be between $US 80.5 million
and $US 82.0 million, or an increase of 24% to 27% in comparison to full year
2013.

Quarterly Conference Call

Diligent will host a conference call today at 9:30 a.m. NZST (5:30 p.m. ET)
to review the Company's financial results for the first-quarter 2014. To
access this call, dial 0800 453 055 (New Zealand), 1 855 881 1339 (U.S.) or
(+64) 9 929 1687 (international) with conference ID 223901. A live webcast of
the conference call will be accessible from the investor relations section of
Diligent's website at http://boardbooks.com/investor-relations.  A replay of
this conference call can also be accessed through July 4, 2014, by dialing
0800 886 078 (New Zealand) or (+61) 7 3041 7001 (international). The replay
pass code is 9423.

About Diligent

Over 77,000 individual directors, executives and board teams worldwide rely
on Diligent Board Member Services, Inc. (NZX: DIL) to speed and simplify how
board materials are produced, delivered, reviewed and voted on. Providing the
world's most widely used secure board portal via iPad, Windows devices and
browsers - Diligent has pioneered ease of use, stringent security, and
superior training and support since 2001. Diligent Boardbooks provides
directors and management with immediate access to their most time sensitive
and confidential information along with the tools to review, discuss and
collaborate on it. It also helps administrative staff accelerate production
and delivery, and corporate executives streamline board communications and
decisions.

Diligent uses the Software-as-a-Service (SaaS) model to distribute its
Diligent Boardbooks application to the market and maintain the security and
integrity of its clients' data. Under this model, Diligent offers annual
renewable subscriptions for customer access to its Diligent Boardbooks
product which is hosted on Diligent's secure servers, and offers a complete
suite of related services including training, support, data migration and
data security/backup.

Non-GAAP Financial Measures

This earnings release presents Adjusted EBITDA, Adjusted Net Income, Adjusted
Net Income per share, and Free Cash Flow 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, and
other costs, such as the CEO's replacement 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, and other costs, such as the CEO's
replacement awards and restatement bonuses, net of tax.

o Free Cash Flow: cash flows provided by operating activities minus capital
expenditures.

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 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, including without limitation Diligent's
revenue outlook for the second quarter and full year 2014. 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 Boardbooks 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 Board Member Services, Inc.'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/A filed with the SEC on May 20,
2014.

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

Media inquiries:
Geoff Senescall
Ph: + 64 21 481 234
End CA:00251804 For:DIL    Type:QUARTER    Time:2014-06-20 08:30:04