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Diligent's soaring sales drive US$1.46m 2Q net profit

Wednesday 15th August 2012

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Software company Diligent Board Member Services' spectacular sales growth is making it increasingly profitable.

Diligent posted a US$1.46 million net profit for the three months ended June 30 compared with its year-earlier second quarter's US$1 million profit which was boosted by a US$1.2 million write-back of a share price-related debt.

At the operating level, second-quarter profit of US$2.16 million compared with a US$250,000 million loss in the same period a year earlier, the company said in a statement.

Net profit for the six months ended June 30 was US$3.36 million, up from US$820,000 in the previous first half.

"The company's dramatic growth in sales and revenues in the first half of 2012 is a reflection of the accelerating global market demand for the Diligent Boardbooks product," said chairman David Liptak.

As previously reported, Diligent's second-quarter sales nearly tripled to US$10.1 million compared with US$3.7 million in the same quarter last year.

That took first-half sales to US$18.3 million, up from US$6.6 million last year.

The software-as-a-service (Saas) company was also generated US$9.18 million in operating cash flow in the six months, taking cash at June 30 to US$17.16 million.

Liptak said the strong cash flow was "evidence of management's focus on cost control."

Diligent's operating margins continued to improve through the first half, "which is a clear indication that the company is generating new revenues efficiently," he said.

"Looking ahead, Diligent remains well positioned to continue to further expand its business operations as we believe that, increasingly, more companies throughout the world recognize the value of the Boardbooks product."

As the company grows, it will also work to improve operating efficiencies and increase profitability, Liptak said.

Diligent shares closed yesterday at $3.83, down from their record $4.03 after the second quarter sales announcement. That's a long way from the year low at $1.02 and as low as 7 cents in March 2009 when the company's future looked doubtful.

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