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Diligent boosts earnings 8% in third quarter, lifts full-year outlook

Friday 7th November 2014

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Diligent Board Member Services, the governance app developer, boosted earnings growth 8 percent in the September quarter, beating guidance, and lifted its full-year profit forecast. 

Net income rose to US$2.7 million in the three months ended Sept. 30, from US$2.5 million a year earlier, the New York based, NZX listed company said in a statement. Sales increased 37 percent in the quarter to US$21.4 million, beating its expected range of US$20.7 million to US$21 million. 

Diligent expects full-year sales to rise as much as 28 percent to between US$82.5 million and US$83 million, up from an earlier sales range of between US$81.5 million and US$82.5 million. It expects fourth quarter sales to be between US$21.6 million and US$22.1 million.

"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 and infrastructure and product development," said chief executive Alessandro Sodi. "We will continue to build on our accomplishments with a focus on creating long term value."

Today's quarterly update comes after Diligent, which was beset with administrative mis steps last year, was censured by the stock market operator for the second time in September after failing to file three earnings reports on time as a result of its incorrect revenue recognition, which in turn prompted the firm to restate accounts for the 2010 through 2013 financial years. It reached a settlement with NZ Markets Disciplinary Tribunal, to pay $100,000 to the discipline fund and costs to the stock market watchdog, as well as being publicly censured.

It was the second public telling off for the software developer which reached another settlement with the watchdog, paying $15,000 over a series of listing rule breaches by failing to file required information, failing to seek authorisation for director payments and incorrectly issuing shares and options to employees.

At Sept. 30, Diligent held US$66.8 million in cash and cash equivalents and had no debt, increasing its cash 8.4 percent from June 30. Earnings before interest, tax, depreciation and amortisation rose 15 percent to US$6.8 million in the three month period. Its gross margin was 81 percent, little changed from the prior quarter.

On an annual basis, the governance app developer boosted net income 25 percent in the third quarter, from the same period a year earlier, while revenue rose 24 percent compared to the same period last year. Ebitda increased 6 percent. 

Shares of Diligent last traded at $4.83 and have gained 27 percent since the start of the year. 


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