KANA Software Reports Third Quarter 2006 Financial Results
Company Positioned for Growth and Profitability, Continued Leadership in the Multi-Channel Customer Service Market
MENLO PARK, Calif. – October 31, 2006, KANA Software, Inc. (Pinksheets: KANA.PK), a world leader in multi-channel customer service, today announced financial results for the third quarter ended September 30, 2006.
KANA’s total revenues for the quarter ended September 30, 2006 were $13.1 million, including license revenues of $4.4 million. This represents increases of 20% in total revenues and 174% in license revenues over the third quarter of 2005. The Company ended the quarter with cash net of our bank line of $4.6 million on September 30, 2006, up from $1.6 million at the end of the prior quarter.
KANA’s total revenues for the nine months ended September 30, 2006 were $39.1 million, including license revenues of $13.1 million. This represents increases of 23% in total revenues and 139% in license revenue over the nine months ended September 30, 2005.
The Company reported a net loss in accordance with generally accepted accounting principles in the United States (GAAP) of $582,000, or a loss of $0.02 per share, for the quarter ended September 30, 2006 versus a GAAP net loss of $1.3 million, or a loss of $0.04 per share, for the quarter ended September 30, 2005. The Company reported a GAAP net loss of $2.0 million, or a loss of $0.06 per share, for the nine months ended September 30, 2006 versus a GAAP net loss of $16.9 million, or a loss of $0.57 per share, for the nine months ended September 30, 2005. KANA’s third quarter 2006 non-GAAP net profit of $1.2 million, or $0.03 per diluted share, was calculated by adjusting KANA’s GAAP net loss by adding back two non-cash accounting charges in stock based compensation expense measured in accordance with SFAS 123R and the value of the final registration rights penalty which was paid in common stock.
KANA’s nine month 2006 non-GAAP net profit of $3.3 million, or $0.09 per diluted share, was calculated by adjusting the Company’s GAAP net loss by adding back three non-cash accounting charges - stock-based compensation expense measured in accordance with SFAS 123R plus the value of a registration rights penalty paid in common stock and warrant liability expense (both of the non-cash expenses are related to missing the registration dates from the two common stock PIPEs in 2005).
”We are pleased with our third quarter results, as they reflect the significant demand KANA is experiencing for its multi-channel customer service solutions,” said Michael Fields, chief executive officer of KANA. “With a series of new hires and promotions, including the creation of a financial services vertical sales team and continued technical innovation with the release of the KANA Suite 9, we continue to execute on our mission of developing the best people and technology in the industry. With strong orders in the quarter coupled with the sales pipeline and opportunities with our partners, the Company is well positioned for profitability and continued leadership in the multi-channel customer service market.”
“Based on the demand the Company is seeing and anticipating for its multi-channel customer service solutions with both new and existing customers and our integrator partners, KANA is reaffirming the guidance given at the end of the second quarter, when it announced that it expects that total revenues for 2006 will range between $56 million and $58 million. This represents a growth of 30% to 35% percent over 2005 total revenues.”
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