Company Reports 25% year-over-year Revenue Growth; License Revenue Doubles
MENLO PARK, Calif. March 1, 2007 â€“ KANA Software, Inc. (OTCBB: KANA.OB), a world leader in multi-channel customer service, today announced financial results for the fourth quarter and year ended December 31, 2006.
Q4 and 2006 Financial Highlights:
â€¢ KANA’s total revenues for the fourth quarter of 2006 were $14.9 million, an increase of 30% from the fourth quarter of 2005.
â€¢ License revenue for the fourth quarter of 2006 was $6.0 million, an increase of 131% from the fourth quarter of 2005.
â€¢ The Company ended the quarter with cash of $5.7 million on December 31, 2006, up 23% from $4.6 million on September 30, 2006.
â€¢ KANA’s total revenues for the year ended December 31, 2006 were $54.0 million, an increase of 25% over the prior year.
â€¢ 2006 license revenue rose to $19.1 million, an increase of 136% year-over-year.
â€œWe are extremely pleased with our fourth quarter and year-end results, as they reflect our focus on business fundamentals and meeting customer demand,â€ said Michael Fields, chief executive officer of KANA. â€œKANA operated profitably for 2006 on a non-GAAP basis. Moreover, the fourth quarter was the largest license revenue quarter that the Company has had since 2003. Looking forward to 2007, we continue to be optimistic about the market demand for multi-channel customer service solutions as well as the strong sales pipeline and team we are building here at KANA. We believe that the Company is well positioned for continued growth fueled by market leadership, financial discipline and successful execution.â€
The Company reported a net loss in accordance with accounting principles generally accepted in the United States (GAAP) of $1.4 million, or $(0.04) per share, for the quarter ended December 31, 2006 versus a GAAP net loss of $1.0 million, or $(0.03) per share, for the quarter ended December 31, 2005. The Company reported a GAAP net loss of $1.8 million, or $(0.05) per share, for the year ended December 31, 2006 versus a GAAP net loss of $18.0 million, or $(0.58) per share, for the year ended December 31, 2005.
For the fourth quarter 2006, KANA reported non-GAAP net loss of $60,000, or $0.00 per share, as compared to a non-GAAP net loss of $1.0 million, or $ (0.03) per share, for the quarter ended December 31, 2005. KANAâ€™s fourth quarter 2006 non-GAAP net loss of $60,000 was calculated by adjusting KANA’s GAAP net loss of $1.4 million by adding back accounting charges for stock-based compensation expense measured in accordance with SFAS 123R, and restructuring expense.
KANAâ€™s non-GAAP net income for the year ended December 31, 2006 was $3.6 million, or $0.10 per diluted share, as compared to a net loss of $11.5 million, or $(0.37) per share, for the year ended December 31, 2005. KANAâ€™s year ended 2006 and 2005 non-GAAP net income (loss) were calculated by adjusting the Companyâ€™s GAAP net loss by adding back certain accounting charges: impairment of internal-use software, stock-based compensation expense measured in accordance with SFAS 123R, registration rights penalty paid in common stock, warrant liability expense (income) and restructuring expense.
â€¢ In Q4, the Company closed 60 license transactions â€“ the largest number reported in three years. New and existing customers that purchased KANA solutions in 2006 include AT&T-Cingular, British Sky Broadcasting, Federated Stores, HSBC, KLM, Priceline, Shurgard,TD Waterhouse, Verizon Wireless, and Xerox.
â€¢ KANA received 11 industry awards in 2006, including the coveted leadership position in the 2006 Forrester Wave report for eService.
â€¢ In 2006, KANA established vertical sales teams to focus on global Financial Services and the Federal Government. These sales teams will work closely with the companyâ€™s strategic alliance partners to further penetrate these markets.
â€¢ In Q4, KANA added seasoned sales managers to the strong team that it had been building throughout the year, increasing the companyâ€™s sales force by 25%.
â€¢ During the year, KANA exceeded its annual IBM quota by 183%, achieving the number one position within its alliances category.
â€¢ In Q4, KANAâ€™s shares of common stock began trading on the OTC Bulletin Board (OTCBB) under the ticker symbol KANA.OB. The upgrade to the OTC Bulletin Board reflected the resumption of current reporting requirements, as well as related operational efficiencies resulting from the Companyâ€™s efforts to streamline the organization.
Investor Conference Call Information:
KANAâ€™s management team will host a conference call today at 4:30PM EST (1:30PM PST) where they will discuss the Company’s reported financial results and financial outlook. The live webcast can be accessed by visiting the investor relations section of KANA’s website at www.kana.com.