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Diligent produces second successive quarterly operating profit in December

Tuesday 28th February 2012 1 Comment

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Diligent Board Member Services, the New York-based software company, produced its second successive quarterly operating profit in the December period as annual sales surged 116 percent.

Diligent's fourth quarter operating profit of US$580,736 took its operating profit for calendar 2011 to US$900,000 from an operating loss of US$2.4 million in 2010.

The company’s bottom line annual net profit rose 4 percent to US$2.2 million, although both the 2011 and 2010 results were distorted by write-backs of previously written off debt owed by its former major shareholder, thanks to its surging share price.

It wrote back US$1.2 million in 2011, down from US$4.3 million in 2010.

Diligent shares jumped 6.7 percent to NZ$2.88 in early trading today, having closed yesterday at a record NZ$2.70. The stock has climbed from 77 cents in March last year and from as low as 7 cents in March 2009 when the company's future looked doubtful.

Its market capitalisation is now NZ$235.6 million.

“This has been an historic year for Diligent in many respects as we have dramatically increased our sales, revenues, operating margins, operating profit, cashflow and cashflow position,” the company said.

Net cash from operating activities soared to US$6.9 million in 2011 from just US$17,843 in 2010.

“Fiscal year 2011 has indeed been a watershed year” in which its “value proposition created by the Diligent Boardbooks product has continued to resonate with companies and various organisations in North America, Europe and the Asia Pacific region.”

Diligent said the results demonstrate senior management's ability to manage its “explosive growth” without sacrificing profitability as well as underscoring the financial leverage of the company's software-as-a-service model.

Sales climbed to US$18 million in 2011 from US$8.3 million in 2010 while ongoing annualised license fee income rose to US$25.7 million from US$10 million in 2010.

Diligent said it signed 570 net new client agreements in 2011 compared with 172 in 2010 and its clients include 53 listed companies on the New York Stock Exchange, 23 Nasdaq-listed companies and 163 of the Fortune 1000 companies.

“These outstanding milestones serve to highlight the dramatically heightened worldwide demand for the Diligent Boardbooks product and to solidify Diligent's position as the global leading provider of board portals.”

Client upgrades, “an important indicator of customer acceptance and satisfaction,” generated US$2.2 million in 2011, or 14 percent of total new sales, up from just US$0.7 million in 2010.

The company said it expects operating margins and cashflow position will continue to improve this year. It is “well-positioned to deliver another year of exceptional performance and outstanding value to our clients and shareholders.”

BusinessDesk.co.nz

Comments from our readers

On 29 February 2012 at 7:44 am Ian Waddell said:

Best performing stock for the last 3 years. 2010 25c to 65c 2011 65c to $1.95 2012 $1.95 to $2.80 So far Do you have it in your portfolio? What about a Dividend it is an FIF stock. Go the Mighty Diligent.

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