ClickSoftware Reports Financial Results for the Second Quarter Ended June 30, 2013 Quarterly Revenues Increase 10% Year-Over-Year PR Newswire BURLINGTON, Mass., July 24, 2013 BURLINGTON, Mass., July 24, 2013 /PRNewswire/ --ClickSoftware Technologies Ltd. (NasdaqGS: CKSW), the leading provider of automated mobile workforce management and optimization solutions for the service industry, today announced results for the second quarter ended June 30, 2013. Highlights oRevenues were $24.7 million (10% year-over-year growth) oGAAP EPS $(0.09); Non-GAAP EPS $(0.07) oTotal cash and investments decreased to $54.4 million oCash used in operations was $2.5 million For the second quarter ended June 30, 2013, total revenues were $24.7 million, up 10% from $22.5 million in the second quarter of 2012. Net loss for the second quarter of 2013 was $2.9 million, or ($0.09) loss per fully diluted share, compared to net income of $0.1 million, or $0.00 per fully diluted share, for the same period last year. Non-GAAP net loss for the quarter was $2.3 million, or ($0.07) loss per fully diluted share, compared to $1.0 million, or $0.03 per fully diluted share, for the same period last year. Software license revenues for the second quarter of 2013 were $6.1 million, down 4% compared with software license revenues of $6.3 million for the same period last year. Service and maintenance revenues were $18.6 million, up 15% compared with service and maintenance revenues of $16.2 million in the same period last year. Gross profit in the second quarter of 2013 was $13.5 million, or 55% of revenues, compared to $12.7 million, or 57% of revenues, in the same period last year. Net cash used in operating activities was $2.5 million during the second quarter of 2013. Following a $2.5 million cash dividend payment, cash, cash equivalents and short and long-term investments at the end of the second quarter of 2013 were $54.4 million, a decrease of $5.9 million compared to the end of the first quarter of 2013. Management Commentary "We continue to implement our strategy focused on growing our mobile and cloud revenues and remain confident doing so will properly position us to extend our leadership in the workforce management space and secure profitable revenue growth over the long term. Revenues in the second quarter, while still representing 10% year-over-year growth, came in lower than expected. This is primarily due to a faster than expected shift in our revenues to cloud-based software-as-a-service (SaaS) sales, which also caused some delays in deal closing processes and smaller initial deal size. Still, the cloud trend is a positive development for ClickSoftware that will benefit us over the long-term," said Dr. Moshe BenBassat, ClickSoftware's CEO and Founder. "Additionally, we continue to establish winning teams in our growth territories – Latin America and Russia. In some countries, the macro economic conditions are challenging resulting in longer than expected closing processes." "Operationally, the number of new accounts we signed in the second quarter and the number of orders received from existing customers was considerably higher than our average. Some of these are mid-market customers which bought our cloud-based solutions that also include mobility components. This trend, together with our growing enterprise mobility apps and the new partnerships with Salesforce.com and others, will allow ClickSoftware to maintain our premium positioning and sustain competitive advantages over our competition," Dr. BenBassat added. Financial Outlook As communicated on July 8, 2013, full year 2013 revenues are expected to be between $110 million to $115 million, representing about 10% to 15% growth over 2012. Non-GAAP fully diluted earnings per share for 2013 is expected to be in the range of $0.10 to $0.18, which excludes share-based compensation, deferred taxes expense (net of tax payment for previous years retained earnings) and amortization of intangible assets costs of approximately $0.08, $0.01 and $0.00 per fully diluted share, respectively. GAAP fully diluted earnings per share is expected to be in the range of $0.02 to $0.10. Cash Dividend ClickSoftware also announced today that on July 22, 2013, its Board of Directors approved a $0.05 per share dividend to be paid on August 21, 2013 to all shareholders of record as of the close of business on August 7, 2013. The dividend will be paid net of any required tax. The Company does not have a formal policy governing the amounts and payment of dividends, and the declaration and payment of future dividends, if any, is at the discretion of the Company's Board of Directors. Investors Conference Call ClickSoftware will host a conference call today at 9:00 a.m. EDT to discuss its financial results and other matters discussed in this press release, as well as answer questions from the investment community. To participate, please call (888) 668-9141 and ask for the ClickSoftware conference call. International participants, please call +972-3-918-0609. The call will be broadcasted by live webcast on the internet (in listen mode only) at http://ir.clicksoftware.com. A replay of this webcast will be available on the ClickSoftware website and on the Investor Relations App. Alternatively, a telephone replay of the call will be available for a week by calling (888) 782-4291 (international callers can dial +972-3-925-5927). About ClickSoftware ClickSoftware (NasdaqGS: CKSW) is the leading provider of automated mobile workforce management and service optimization solutions for the enterprise, both for mobile and in-house resources. As pioneers of the "Service chain optimization" and "The real-time service enterprise" concepts, our solutions provide organizations with end-to-end visibility and control of the entire service management chain by optimizing forecasting, planning, shift and task scheduling, mobility and real-time management of resource and customer communication. Available via the cloud or on-premise, our products incorporate best business practices and advanced decision-making algorithms to manage service operations more efficiently, in a scalable, integrated manner. Our solutions have become the backbone for many leading organizations worldwide by addressing the fundamental question of job fulfillment: Who does What, for Whom, With what, Where and When. ClickSoftware is the premier choice for delivering superb business performance to service sector organizations of all sizes. The Company is headquartered in the United States and Israel, with offices across Europe, Latin America and Asia Pacific. For more information, please visit www.clicksoftware.comand follow us on Twitter, the content of which is not a part of this press release. To download ClickSoftware's investor relations app, which offers access to SEC documents, press releases, videos, audiocasts and more, please visit https://itunes.apple.com/us/app/cksw-ir/id530880886?mt=8 to download on your iPhone and iPad, or https://play.google.com/store/apps/details?id=com.theirapp.ckswir&hl=en for your Android mobile device. Use of Non-GAAP Financial Results In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles (GAAP), the Company's earnings release contains Non-GAAP financial measures of net income and net income per share that exclude the effects of share-based compensation, tax benefit related to the update of deferred tax asset, previous years retained earnings tax and the amortization of acquired intangible assets. The Company's management believes the Non-GAAP financial information provided in this release is useful to investors' understanding and assessment of the Company's on-going core operations and prospects for the future. Management also uses both GAAP and Non-GAAP information in evaluating and operating business internally and as such deemed it important to provide all this information to investors. The Non-GAAP financial measures disclosed by the Company should not be considered in isolation or as a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. Reconciliations between GAAP measures and Non-GAAP measures are provided later in this press release. Safe Harbor for Forward Looking Statements This press release contains express or implied forward-looking statements within the Private Securities Litigation Reform Act of 1995 and other U.S Federal securities laws. These forward-looking statements include, but are not limited to, those statements regarding future results of operations, including expected increase in market share and revenue growth, contribution of cloud-based sales, our outlook for full year 2013 revenues and GAAP and non-GAAP earnings per share, and expectations of future dividends. Such "forward-looking statements" involve known and unknown risks, uncertainties and other factors that may cause actual results or performance to differ materially from those projected. Achievement of these results by ClickSoftware may be affected by many factors, including, but not limited to, risks and uncertainties regarding the general economic outlook, more attractive investments than dividends that may become available, the length of or changes in ClickSoftware's sales cycle, ClickSoftware's ability to close sales to potential customers in a timely manner and maintain or strengthen relationships with strategic partners, the timing of revenue recognition, foreign currency exchange rate fluctuations, the impact of the Cloud model on initial transaction size and ClickSoftware's ability to maintain or increase its sales pipeline. The forward-looking statements contained in this press release are subject to other risks and uncertainties, including those discussed in the "Risk Factors" section and elsewhere in ClickSoftware's annual report on Form 20-F for the year ended December 31, 2012 and in subsequent filings with the Securities and Exchange Commission. Except as otherwise required by law, ClickSoftware is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise. Note: Financial Schedules Attached ClickSoftware Technologies Ltd. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited. In thousands, except share and per share amounts) Three Months Ended June 30, 2013 June 30, 2012 $ % of $ % of Revenues Revenues Revenues: Software license $ 6,076 25% $ 6,307 28% Services 18,584 75% 16,175 72% Total revenues 24,660 100% 22,482 100% Cost of revenues: Software license 1,004 4% 640 3% Services 10,181 41% 9,115 41% Total cost of revenues 11,185 45% 9,755 43% Gross Profit 13,475 55% 12,727 57% Operating expenses: Research and development costs, 4,019 16% 2,979 13% net Selling and marketing expenses 10,269 42% 7,403 33% General and administrative 2,292 9% 2,255 10% expenses Total operating expenses 16,580 67% 12,637 56% Operating (loss) income (3,105) (13%) 90 0% Interest income, net 290 1% 27 0% Net (loss) income before taxes $ (2,815) (11%) $ 117 1% Tax expense, net 100 0% 44 0% Net (loss) income $ (2,915) (12%) $ 0% 73 Net (loss) earnings per ordinary share: Basic $ $ 0.00 (0.09) Diluted $ $ 0.00 (0.09) Shares used in computing basic 31,926,052 31,545,346 net (loss) income per share Shares used in computing diluted 32,955,793 32,867,492 net (loss) income per share ClickSoftware Technologies Ltd. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited. In thousands, except share and per share amounts) Six Months Ended June 30, 2013 June 30, 2012 $ % of $ % of Revenues Revenues Revenues: Software license $ 13,115 27% $ 12,725 29% Services 36,085 73% 31,605 71% Total revenues 49,200 100% 44,330 100% Cost of revenues: Software license 2,061 4% 1,565 4% Services 19,451 40% 17,599 40% Total cost of revenues 21,512 44% 19,164 43% Gross Profit 27,688 56% 25,166 57% Operating expenses: Research and development 7,724 16% 5,650 13% costs, net Selling and marketing expenses 18,725 38% 14,737 33% General and administrative 4,345 9% 4,197 9% expenses Total operating expenses 30,794 63% 24,584 55% Operating (loss) income (3,106) (6%) 582 1% Interest income, net 563 1% 226 1% Net (loss) income before taxes $ (2,543) (5%) $ 808 2% Tax expense, net 287 1% 34 0% Net (loss) income $ (2,830) (6%) $ 2% 774 Net (loss) earnings per ordinary share: Basic $ $ 0.02 (0.09) Diluted $ $ 0.02 (0.09) Shares used in computing basic 31,807,389 31,479,942 net (loss) income per share Shares used in computing diluted 32,927,531 32,925,309 net (loss) income per share ClickSoftware Technologies Ltd. CONSOLIDATED BALANCE SHEETS (In thousands, except share data) June 30, 2013 December 31, 2012 (Unaudited) (Audited) ASSETS CURRENT ASSETS Cash and cash equivalents $ 19,231 $ 12,793 Deposits 13,475 30,310 Marketable securities 20,770 15,635 Trade receivables, net 21,011 21,792 Deferred taxes 890 220 Other receivables and prepaid expenses 4,622 3,398 Total current assets 79,999 84,148 LONG TERM ASSETS Property and equipment, net 5,356 4,206 Deposits 897 621 Other receivables and prepaid expenses 204 275 Deferred taxes 1,350 1,230 Intangible assets, net 271 452 Goodwill 1,572 1,572 Severance pay funds 2,171 1,965 Total long term assets 11,821 10,321 Total Assets $ 91,820 $ 94,469 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and accrued expenses $ 15,256 $ 16,536 Deferred revenues 13,361 9,047 Total current liabilities 28,617 25,583 LONG TERM LIABILITIES Accrued severance pay 4,818 4,465 Deferred revenues 821 1,503 Total long term liabilities 5,639 5,968 Total liabilities 34,256 31,551 SHAREHOLDERS' EQUITY Ordinary shares of NIS 0.02 par value 135 132 Additional paid-in capital 89,881 87,566 Accumulated deficit (33,237) (25,296) Accumulated other comprehensive income 828 559 Treasury stock, at cost: 39,000 shares (43) (43) Total shareholders' equity 57,564 62,918 Total Liabilities and shareholders' $ 91,820 $ 94,469 equity ClickSoftware Technologies Ltd. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Six Months Ended June 30, 2013 June 30, 2012 (Unaudited) (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES Net (loss) income $ $ (2,830) 774 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Income and expense items not involving cash flows: Depreciation 1,206 1,008 Amortization of deferred 1,189 1,232 compensation Amortization of acquired 181 415 intangible assets Severance pay, net 147 285 Gain on marketable securities (172) (71) Other 46 3 Changes in operating assets and liabilities: Trade receivables 781 1,747 Deferred taxes (790) (120) Other receivables (884) (42) Accounts payable and accrued (1,280) (1,883) expenses Deferred revenues 3,632 (2,347) Net cash provided by operating activities $ 1,226 $ 1,001 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of equipment (2,402) (1,600) Increase in deposits 16,559 4,303 Investments in marketable securities (9,034) (725) Proceeds from sale of marketable 4,071 845 securities Net cash provided by investment activities $ 9,194 $ 2,823 CASH FLOWS FROM FINANCING ACTIVITIES Dividend paid (5,111) (5,061) Employee options exercised 1,129 477 Net cash used in financing activities $ (3,982) $ (4,584) INCREASE (DECREASE) IN CASH AND CASH 6,438 (760) EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF 12,793 14,683 PERIOD CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 19,231 $ 13,923 ClickSoftware Technologies Ltd. SUPPLEMENTAL RECONCILIATIONS OF GAAP TO NON-GAAP RESULTS (Unaudited. In thousands, except per share amounts) Three Months Ended June 30, 2013 June 30, 2012 $ % of $ % of Revenues Revenues GAAP Net (loss) income $ (12%) $ 0% (2,915) 73 Share-based compensation (1) 620 684 Amortization of intangible assets 51 174 (2) Deferred taxes (70) 40 Non-GAAP Net (loss) income $ (9%) $ 4% (2,314) 971 GAAP (loss) Earnings per share $ $ (diluted) (0.09) 0.00 Share-based compensation 0.02 0.02 Amortization of intangible assets 0.00 0.01 Deferred taxes 0.00 0.00 Non-GAAP (loss) Earnings per share $ $ (diluted) (0.07) 0.03 (1) Share-based compensation: Cost of services $ $ 91 82 Research and development costs, 75 64 net Selling and marketing expenses 177 156 General and administrative 277 382 expenses $ $ 620 684 (2) Amortization of intangible assets: Cost of revenues $ $ 51 144 Research and development costs, - 30 net $ $ 51 174 ClickSoftware Technologies Ltd. SUPPLEMENTAL RECONCILIATIONS OF GAAP TO NON-GAAP RESULTS (Unaudited. In thousands, except per share amounts) Six Months Ended June 30, 2013 June 30, 2012 $ % of $ % of Revenues Revenues GAAP Net (loss) income $ (6%) $ 2% (2,830) 774 Share-based compensation (1) 1,189 1,232 Amortization of intangible assets 181 415 (2) Tax payment for previous years 744 - retained earnings* Deferred taxes (790) (120) Non-GAAP Net (loss) income $ (3%) $ 5% (1,506) 2,301 GAAP (loss) Earnings per share $ $ (diluted) (0.09) 0.02 Share-based compensation 0.04 0.04 Amortization of intangible assets 0.00 0.01 Tax payment for previous years 0.02 0.00 retained earnings* Deferred taxes (0.02) 0.00 Non-GAAP (loss) Earnings per share $ $ (diluted) (0.05) 0.07 (1) Share-based compensation: Cost of services $ $ 170 141 Research and development costs, 136 113 net Selling and marketing expenses 329 273 General and administrative 554 705 expenses $ $ 1,189 1,232 (2) Amortization of intangible assets: Cost of revenues $ $ 152 355 Research and development costs, 29 60 net $ $ 181 415 * See Note 14.A to our consolidated financial statements for the year ended December 31, 2012 included in our Annual Report on Form 20-F, regarding November 2012 law ClickSoftware Contact: Investor Relations Contact: Noa Schuman Rob Fink Investor Relations KCSA Strategic Communications +972-3-7659-467 212-896-1206 Noa.Schuman@clicksoftware.com email@example.com SOURCE ClickSoftware Technologies Ltd. Website: http://www.clicksoftware.com
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ClickSoftware Reports Financial Results for the Second Quarter Ended June 30, 2013
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