ROSEVILLE, Calif., – July 1, 2010 – Unify Corp. (NASDAQ: UNFY), an information management and eDiscovery company, today announced financial results for its fourth quarter and fiscal year 2010, ended April 30, 2010.

Fiscal 2010 Fourth Quarter Financial Results

The Company reported fourth quarter total revenues of $8.4 million, an 84% increase compared to $4.6 million in the fourth quarter of fiscal 2009. Included in the quarter’s total revenue was $2.5 million of AXS-One archiving revenue, which was not in the prior year period as the acquisition of AXS-One closed earlier in the fiscal year. Software licenses revenue increased to $1.2 million, a 5% increase compared to $1.1 million for the fiscal fourth quarter in 2009. Services revenue increased to $4.7 million, a 68% increase compared to $2.8 million in the year ago quarter. Migration solutions revenue was $2.4 million, a 313% increase compared to $586,000 in the same quarter last year.

Gross margin was 73%, compared to 89% for the fourth quarter of last year. Fourth quarter income from operations was $731,000, compared to income from operations of $139,000 for the fourth quarter of fiscal 2009. Net income was $790,000, or $0.07 per diluted share for the fourth quarter, compared to net income of $189,000, or $0.03 per diluted share in the fourth quarter of fiscal 2009.

Non-GAAP net income for the quarter was $1.5 million or $0.14 per diluted share, compared to non-GAAP net income of $507,000 or $0.07 per diluted share in the same quarter of last year. The Company achieved positive cash flow from operations of $1.8 million in the fourth quarter.

Unify ended the fourth quarter with cash and cash equivalents of $3.1 million at April 30, 2010, compared to $6.1 million reported at April 30, 2009. This decrease was due primarily to the significant accounts payable and accrued expenses assumed from the AXS-One acquisition that were paid subsequent to the acquisition. The Company’s account receivables increased to $6.2 million, compared to $4.5 million as of April 30, 2009. Deferred revenue increased to $9.7 million, compared to $5.6 million as of April 30, 2009. The increase in account receivables and deferred revenue is primarily due to the AXS-One acquisition.

Fiscal 2010 Financial Results

Total revenue for fiscal 2010 was $28.6 million, a 39% increase compared to $20.6 million for fiscal 2009. Included in the year’s total revenue was $8.6 million of AXS-One archiving revenue, which was not in the prior year period as the acquisition of AXS-One closed earlier in the fiscal year. Software licenses revenue was $7.4 million, an increase of 15%, compared to $6.4 million in fiscal 2009. Services revenue was up 35% to $15.8 million, compared to $11.7 million last year. Revenue for migration solutions was $5.4 million up 119%, compared to $2.5 million last year.

Net loss for fiscal 2010 was $1.8 million, or $0.18 per diluted share, compared to net income of $2.4 million, or $0.32 per diluted share last year.

Non-GAAP net income for fiscal 2010 was $2.7 million or $0.27 per diluted share, compared to $3.7 million, or $0.49 per diluted share last year.

Business Discussion

“We achieved solid revenue growth and non-GAAP net income in fiscal 2010 as a result of our continued business momentum and execution on our acquisition strategy,” said Todd Wille, chief executive officer of Unify. “After significantly resurrecting the archiving business in the last couple of quarters, we were pleased to generate $1.8 million in cash flow from operations for the fourth quarter, more in line with our historical profitability and cash flow generation capabilities. We added 29 new tools and database customers during the quarter, and 106 for the fiscal year. Maintenance renewals remained consistent and we continue to see 50% contribution margins from this business.

“We saw significant fourth quarter and fiscal 2010 revenue growth in our migration solutions business, primarily as a result of our government modernization practice. We ended the year with a backlog of $400,000 and expect to see continued momentum for our modernization business in fiscal 2011.

“In the 10 months we owned the archive business, we closed six new accounts, grew the sales pipeline 6X, and successfully restructured the business model such that quarterly maintenance and professional services revenues were more than the quarterly expenses. We continue to be very excited and optimistic about our growth prospects and with our recent merger with Daegis, we believe we will be able to deliver industry-first solutions that combine our market leading information archive with Daegis’ eDiscovery solutions to bring organizations increased flexibility, scalability and predictability across the entire litigation lifecycle. Looking forward, we are extremely excited about fiscal 2011 and the opportunities for significant growth,” concluded Wille.

Fiscal 2011 Financial Guidance

In consideration of its recent merger with Daegis, Unify is providing the following combined company guidance for its fiscal year 2011, which will end April 30, 2011.

Unify expects GAAP revenue for fiscal 2011 to be in the range of $52 to $58 million. The Company expects Adjusted EBITDA for fiscal 2011 to be a minimum of $9 million. Adjusted EBITDA represents the traditional EBITDA plus an additional add back for stock option compensation expense.

Investor Conference Call

Unify management will host a conference call today, July 1, 2010, at 2:00 p.m. PT (5:00 p.m. ET) to review the fourth quarter and fiscal 2010 financial results. The call can be accessed by dialing (877) 941-4774 or (480) 629-9760 for international callers and providing the company name. Participants are asked to call the assigned number approximately 10 minutes before the conference call begins. In addition, the conference call will be available over the Internet at www.unify.com in the Investor Relations section. A replay of the call will be available approximately two hours following the end of the call through 11:59 p.m. EST on July 8, 2010 by dialing (800) 406-7325 or (303) 590-3030 for international callers and using the following passcode: 4320361#.

About Unify

Unify is an information management software company with industry-leading solutions for archiving, eDiscovery, application development and migration, and data management. Over 10,000 of the world’s most demanding companies trust Unify to help them modernize and preserve the information assets necessary to run their business. Unify is headquartered in Roseville, CA, with offices in Rutherford NJ, London, Munich, Calgary, Paris, Sao Paulo and Sydney. Visit www.unify.com or email info@unify.com.

Use of Non-GAAP Financial Information

To supplement the Company's unaudited condensed consolidated financial statements presented in accordance with GAAP, Unify uses certain non-GAAP measures of financial performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP. For more information on these non-GAAP financial measures including how they are calculated, please see the table in this release captioned "Reconciliation of GAAP to Non-GAAP" which includes a reconciliation of the GAAP results to non-GAAP results.

Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of the Company. We wish to caution you that these statements involve risks and uncertainties and actual events or results may differ materially. Among the important factors which could cause actual results to differ materially from those in the forward-looking statements are general market and economic conditions, our ability to execute our business strategy and integrate acquired businesses, the effectiveness of our sales team and approach, our ability to target, analyze and forecast the revenue to be derived from a client and the costs associated with providing services to that client, the date during the course of a fiscal year that a new client is acquired, the length of the integration cycle for new clients and the timing of revenues and costs associated therewith, our client concentration given that the Company is currently dependent on a few large client relationships, potential competition in the marketplace, the ability to retain and attract employees, market acceptance of our service programs and pricing options, our ability to maintain our existing technology platform and to deploy new technology, our ability to sign new clients and control expenses, the possibility of the discontinuation of some client relationships, the financial condition of our clients' business and other factors detailed in the Company's filings with the Securities and Exchange Commission, including our recent filings on Forms 10-K and 10-Q.

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