Ann: QUARTER: DIL: Diligent Announces Third Quarter 2014 Results

• Release Date: 07/11/14 08:30
• Summary: QUARTER: DIL: Diligent Announces Third Quarter 2014 Results
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					DIL
07/11/2014 08:30
QUARTER

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

QUARTER: DIL: Diligent Announces Third Quarter 2014 Results

November 7, 2014

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

Total revenue of $US 21.4 million, up 24% year-over-year
Adjusted EBITDA of $US 6.8 million, representing a 31.9% Adjusted EBITDA
margin
Adjusted Net Income of $US 3.4 million, or $0.03 per share

November 7, 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 the
third quarter ended September 30, 2014.

Alessandro Sodi, President and Chief Executive Officer of Diligent, said,
"Our solid financial and operating results in the third quarter reflect
continued strong demand for our Boardbooks product and superior execution by
the entire Diligent team. Looking forward, we are well positioned to continue
to grow our market share worldwide due to our industry leading product
offering and strategies to invest in our global sales infrastructure and
product development. We will continue to build on our accomplishments with a
focus on creating long-term value."

Third Quarter 2014 Financial Highlights

- Revenue: For the quarter ended September 30, 2014, total revenue was $US
21.4 million, an increase of 24% compared with $US 17.2 million in the prior
year.

- Gross Profit: Gross profit for the third quarter was $US 17.3 million, an
increase of 24% compared with $US 14.0 million in the prior year. Gross
margin was 80.7% compared with 81.2% in the third quarter of 2013.

- Adjusted EBITDA: For the quarter ended September 30, 2014, Adjusted EBITDA
was $US 6.8 million, an increase of 6% compared with $US 6.4 million in the
prior year. Adjusted EBITDA margin was 31.9% compared with 37.2% in the prior
year.

- Net Income: For the quarter ended September 30, 2014, net income was $US
2.7 million, an increase of 25% compared with $US 2.2 million in the prior
year. Diluted earnings per share were $US 0.02, compared with $US 0.02 in the
prior year.

Adjusted Net Income for the third quarter was $US 3.4 million, a decrease of
8% compared with $US 3.7 million in the prior year. Adjusted Net Income per
diluted share was $US 0.03, compared with $US 0.03 in the prior year.

- Balance Sheet: As of September 30, 2014, Diligent had $US 66.8 million in
cash and cash equivalents and no bank debt, an increase of $US 5.2 million as
compared to the cash and cash equivalents on June 30, 2014.

Third Quarter Business Highlights

- Boardbooks Users: During the third quarter of 2014, the number of Diligent
Boardbooks(R) users increased by approximately 5,100 to over 87,700 users.

- Revenue Retention Rate: In the third quarter, Diligent's annual revenue
retention rate (excluding upsells into the existing customer base) continued
to exceed 95%; which the Company believes places it among the best-in-class
for SaaS companies.

- Industry Awards: In September, Diligent was named a category finalist in
The Independent's UK 2014 Peer Awards for Excellence, achieving a top three
placing in the customer service category of the Customer Engagement Peer
Awards. In August, Diligent was ranked fifth in the 'New Zealand EY Ten
Companies to Watch' list, which is made up of the highest dollar value growth
companies in the TIN100 (Technology Investment Network).

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."

Revenue Outlook

As of November 6, 2014, Diligent is initiating revenue guidance for the
fourth quarter 2014 and increasing guidance for the full year 2014, as
follows:
- Fourth Quarter 2014: The Company expects revenue to be between $US 21.6
million and $US 22.1 million, or an increase of 19% to 21% year-over-year.
- Full Year 2014: The Company is increasing its annual revenue guidance to
between $US 82.5 million and $US 83 million, or an increase of 27% to 28%
over full year 2013, compared with the prior outlook for revenue of between
$US 81.5 million and $US 82.5 million.

Quarterly Conference Call

Diligent will host a conference call today at 9:30 a.m. NZDT (3:30 p.m. US
ET) to review the Company's financial results for the third quarter ended
September 30, 2014. To access this call participants should dial 0800 452 092
(New Zealand), 1-855-327-6837 (U.S.) or +1-778-327-3988 (international). 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/events-presentations/. A replay of
this conference call can also be accessed through November 14, 2014 at 9:00
a.m. USET, by dialing 0800 452 092 (New Zealand), 1-800-319-6413 (U.S.). The
replay pass code is 78523.

About Diligent

Over 87,700 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 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:

- 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.

- 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.

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 fourth 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:00257352 For:DIL    Type:QUARTER    Time:2014-11-07 08:30:07