Diligent shares surge 11% on improving sales, first-half profit

Aug. 10 (BusinessDesk) - Diligent Board Member Services Inc., the governance software company, shares surged 11% after the company reported a strong cash flow on a near-doubling in second quarter sales and it reported a bottom-line profit on a debt write-back.

The company's bottom line rose to US$822,308 in the six months ended June 30 from US$1,844,251 in the same six months last year. The result was boosted by a US$1.2 million debt write-back on a loan to the company's founders secured by Diligent shares. In the previous first-half, the debt write-back was US$3.2 million. Cash flow positive to the tune of US$1.24 million compared with a cash outflow of US$0.9 million in the previous first half.

Diligent, which had already reported a 91% rise second quarter sales, said it recorded “a remarkable six months of record growth” and now services 104 of the Fortune 1000 companies. It now has more than 650 companies worldwide under contract and services more than 1,000 boards with 16,500 users.

Diligent shares jumped 11% to $1.22. They soared as high as $1.44 after the second quarter sales report in mid-July and have risen from as low as 7 cents in March 2009 when the company's future looked doubtful.

Still, the company made a US$452,736 operating loss for the six months, less than a third of the US$1.45 million operating loss in the first half last year and was

The increasing acceptance of the iPad in executive suites and the increasing acceptance of boards of receiving information online is helping fuel demand for Diligent's software for which customers pay annual renewable subscriptions.

The company said gross profit (before expenses such as marketing, administration and research and development) for the six months rose to US$4.7 million from US$2.4 million and its gross profit margin rose to 71% from 65%.

Chairman David Liptak said Diligent “remains well positioned to continue to further expand its client base as its sales pipeline remains strong and more companies and institutions see the value of the Boardbooks product.”

(BusinessDesk)

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