ClickSoftware Reports Financial Results for the Third Quarter Ended September 30, 2013 Quarterly cloud bookings more than doubled with 8 new cloud customer wins PR Newswire BURLINGTON, Mass., Oct. 23, 2013 BURLINGTON, Mass., Oct. 23, 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 third quarter ended September 30, 2013. Highlights oRevenues were $23.3 million oGAAP EPS $(0.11); Non-GAAP EPS $(0.10) oTotal cash and investments increased to $55.7 million oCash provided by operations was $3.3 million For the third quarter ended September 30, 2013, total revenues were $23.3 million, down 15% from $27.3 million in the third quarter of 2012. Net loss for the third quarter of 2013 was $3.6 million, or $(0.11) per fully diluted share, compared to net income of $2.8 million, or $0.09 per fully diluted share, for the same period last year. Non-GAAP net loss for the quarter was $3.3 million, or $(0.10) per fully diluted share, compared to Non-GAAP net income of $3.7 million, or $0.11 per fully diluted share, for the same period last year. Software license revenues for the third quarter of 2013 were $4.7 million, down 58% compared with software license revenues of $11.0 million for the same period last year. Servicesrevenues were $18.6 million, up 14% compared with servicesrevenues of $16.3 million in the same period last year. Gross profit in the third quarter of 2013 was $12.2 million, or 52% of revenues, compared to $17.5 million, or 64% of revenues, in the same period last year. Following a $1.6 million cash dividend payment, cash, cash equivalents and short and long-term investments at the end of the third quarter of 2013 were $55.7 million, an increase of $1.3 million compared to the end of the second quarter of 2013. Net cash provided by operating activities was $3.3 million during the third quarter of 2013. Management Commentary "During the third quarter we continued to experience a number of positive trends that will increase recurring revenues and improve the visibility and predictability of our business. With eight new cloud customers signed in the third quarter, the number of new cloud-based customers signed in the first nine months of 2013 has doubled year-over-year. Our pipeline for the nexttwelve months includes more than 100 large and mid-market prospects considering our cloud-based solutions," said Dr. Moshe BenBassat, ClickSoftware's Founder and CEO."Along with strong demand for cloud-based solutions, we also continue to see healthy demand for our on-premise offerings, and in the first nine months of 2013 we closed a higher number of on-premise deals compared to the same period last year. Furthermore, our services revenues, which consist of recurring support revenues and consulting revenues, bothincreased during the quarter compared to the same period last year." "Our ability to offer both cloud and on-premise solutions, while offering the industry's most dynamic and scalable solution, provide a solution that is highly differentiated from that of any of our competitors. Specifically, we see increasingtraction for our mobility products driven by general high demand for business mobility solutions. We remain an industry leader for field service optimization software as recently recognized by Gartner's Magic Quadrant for Field Service Management report, for the third consecutive year," concluded Dr. BenBassat. Financial Outlook The Company expects revenues for the fourth quarter of 2013 to be between $26 million to $28 million, which will bring 2013 annual revenues to be between $98.5 million to $100.5 million. Non-GAAP fully diluted earnings (loss) per share for the fourth quarter of 2013 is expected to be in the range of $(0.04) loss to $0.01 earnings, 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 $0.02, $0.00 and $0.00 per fully diluted share, respectively. GAAP fully diluted loss per share is expected to be in the range of $(0.06) to $(0.01). Dividend In light of the short-term challenges associated with our transition to the cloud, ClickSoftware's Board of Directors has decided to suspend its payment of dividends for the time being. The Company does not have a formal policy governing dividend payments, 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 +972-3-918-0610. 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) 326-9310 (international callers can dial +972-3-925-5901). 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.com and 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 revenue growth, prospects, contribution of cloud-based sales, pipeline, demand for our solutions and our outlook for the fourth quarter and full year 2013 revenues and GAAP and Non-GAAP earnings/loss per share. 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, 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 gross margins 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. 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 firstname.lastname@example.org Note: Financial Schedules Attached ClickSoftware Technologies Ltd. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited. In thousands, except share and per share amounts) Three Months Ended September 30, 2013 September 30, 2012 % of % of $ $ Revenues Revenues Revenues: Software license $ 4,650 20% $ 10,969 40% Services 18,638 80% 16,348 60% Total revenues 23,288 100% 27,317 100% Cost of revenues: Software license 971 4% 967 4% Services 10,101 43% 8,858 32% Total cost of 11,072 48% 9,825 36% revenues Gross Profit 12,216 52% 17,492 64% Operating expenses: Research and development 3,848 17% 3,625 13% costs, net Selling and marketing 10,088 43% 8,515 31% expenses General and administrative 2,298 10% 2,247 8% expenses Total operating 16,234 70% 14,387 53% expenses Operating (loss) income (4,018) (17%) 3,105 11% Interest income (expense), net 55 0% (16) 0% Net (loss) income before taxes $ (3,963) (17%) $ 3,089 11% Tax income (expense), net 377 2% (281) (1%) Net (loss) income $ (3,586) (15%) $ 2,808 10% Net (loss) earnings per ordinary share: Basic $ (0.11) $ 0.09 Diluted $ (0.11) $ 0.09 Shares used in computing basic 32,238,308 31,597,918 net (loss) income per share Shares used in computing diluted 33,025,833 32,740,287 net (loss) income per share ClickSoftware Technologies Ltd. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited. In thousands, except share and per share amounts) Nine Months Ended September 30, 2013 September 30, 2012 % of % of $ $ Revenues Revenues Revenues: Software license $ 17,765 25% $ 23,694 33% Services 54,723 75% 47,953 67% Total revenues 72,488 100% 71,647 100% Cost of revenues: Software license 3,032 4% 2,532 4% Services 29,552 41% 26,457 37% Total cost of 32,584 45% 28,989 40% revenues Gross Profit 39,904 55% 42,658 60% Operating expenses: Research and development 11,572 16% 9,275 13% costs, net Selling and marketing 28,813 40% 23,252 32% expenses General and administrative 6,643 9% 6,444 9% expenses Total operating 47,028 65% 38,971 54% expenses Operating (loss) income (7,124) (10%) 3,687 5% Interest income, net 618 1% 210 0% Net (loss) income before taxes $ (6,506) (9%) $ 3,897 5% Tax income (expense), net 90 0% (315) (0%) Net (loss) income $ (6,416) (9%) $ 3,582 5% Net (loss) earnings per ordinary share: Basic $ (0.20) $ 0.11 Diluted $ (0.19) $ 0.11 Shares used in computing basic 31,954,737 31,520,923 net (loss) income per share Shares used in computing diluted 32,964,007 32,869,186 net (loss) income per share ClickSoftware Technologies Ltd. CONSOLIDATED BALANCE SHEETS (In thousands, except share data) September 30, 2013 December 31, 2012 (Unaudited) (Audited) ASSETS CURRENT ASSETS Cash and cash equivalents $ 23,782 $ 12,793 Deposits 9,841 30,310 Marketable securities 21,032 15,635 Trade receivables, net 20,376 21,792 Deferred taxes 1,020 220 Other receivables and prepaid expenses 4,009 3,398 Total current assets 80,060 84,148 LONG TERM ASSETS Property and equipment, net 5,156 4,206 Deposits 1,075 621 Other receivables and prepaid expenses 152 275 Deferred taxes 1,730 1,230 Intangible assets, net 223 452 Goodwill 1,572 1,572 Severance pay funds 2,183 1,965 Total long term assets 12,091 10,321 Total Assets $ 92,151 $ 94,469 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and accrued expenses $ 14,995 $ 16,536 Deferred revenues 14,836 9,047 Total current liabilities 29,831 25,583 LONG TERM LIABILITIES Accrued severance pay 5,004 4,465 Deferred revenues 4,374 1,503 Total long term liabilities 9,378 5,968 Total liabilities 39,209 31,551 SHAREHOLDERS' EQUITY Ordinary shares of NIS 0.02 par value 135 132 Additional paid-in capital 90,655 87,566 Accumulated deficit (38,435) (25,296) Accumulated other comprehensive income 630 559 Treasury stock, at cost: 39,000 shares (43) (43) Total shareholders' equity 52,942 62,918 Total Liabilities and shareholders' $ 92,151 $ 94,469 equity ClickSoftware Technologies Ltd. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited. In thousands) Nine Months Ended September 30, September 30, 2013 2012 CASH FLOWS FROM OPERATING ACTIVITIES Net (loss) income $ (6,416) $ 3,582 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Income and expense items not involving cash flows: Depreciation 1,881 1,572 Amortization of deferred 1,925 1,882 compensation Amortization of acquired 229 565 intangible assets Severance pay, net 321 325 Gain on marketable securities (336) (123) Other 75 4 Changes in operating assets and liabilities: Trade receivables 1,416 (3,562) Deferred taxes (1,300) (70) Other receivables (417) 203 Accounts payable and accrued (1,541) 841 expenses Deferred revenues 8,660 322 Net cash provided by operating activities $ 4,497 $ 5,541 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of equipment (2,906) (1,998) Increase in deposits 20,015 9,704 Investments in marketable securities (12,278) (1,075) Proceeds from sale of marketable 7,217 1,948 securities Net cash provided by investment activities $ 12,048 $ 8,579 CASH FLOWS FROM FINANCING ACTIVITIES Dividend paid (6,723) (7,590) Employee options exercised 1,167 558 Net cash used in financing activities $ (5,556) $ (7,032) INCREASE IN CASH AND CASH EQUIVALENTS 10,989 7,088 CASH AND CASH EQUIVALENTS AT BEGINNING OF 12,793 14,683 PERIOD CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 23,782 $ 21,771 ClickSoftware Technologies Ltd. SUPPLEMENTAL RECONCILIATIONS OF GAAP TO NON-GAAP RESULTS (Unaudited. In thousands, except per share amounts) Three Months Ended September 30, 2013 September 30, 2012 % of % of $ $ Revenues Revenues GAAP Net (loss) income $ (3,586) (15%) $ 10% 2,808 Share-based compensation (1) 736 650 Amortization of intangible 48 150 assets (2) Deferred taxes (510) 50 Non-GAAP Net (loss) income $ (3,312) (14%) $ 13% 3,658 GAAP (loss) Earnings per share $ $ (diluted) (0.11) 0.09 Share-based compensation 0.02 0.02 Amortization of intangible 0.00 0.00 assets Deferred taxes (0.01) 0.00 Non-GAAP (loss) Earnings per share $ $ (0.10) 0.11 (diluted) (1) Share-based compensation: Cost of services $ $ 92 86 Research and development 76 72 costs, net Selling and marketing 176 165 expenses General and administrative 392 327 expenses $ $ 736 650 (2) Amortization of intangible assets: Cost of revenues $ $ 48 121 Research and development - 29 costs, net $ $ 48 150 ClickSoftware Technologies Ltd. SUPPLEMENTAL RECONCILIATIONS OF GAAP TO NON-GAAP RESULTS (Unaudited. In thousands, except per share amounts) Nine Months Ended September 30, 2013 September 30, 2012 % of % of $ $ Revenues Revenues GAAP Net (loss) income $ (9%) $ 5% (6,416) 3,582 Share-based compensation (1) 1,925 1,882 Amortization of intangible assets 229 565 (2) Tax payment for previous years retained 744 - earnings* Deferred taxes (1,300) (70) Non-GAAP Net (loss) income $ (7%) $ 8% (4,818) 5,959 GAAP (loss) Earnings per share $ $ (diluted) (0.19) 0.11 Share-based compensation 0.06 0.06 Amortization of intangible assets 0.00 0.01 Tax payment for previous years retained 0.02 0.00 earnings* Deferred taxes (0.04) 0.00 Non-GAAP (loss) Earnings per share $ $ (0.15) 0.18 (diluted) (1) Share-based compensation: Cost of services $ $ 262 227 Research and development 212 185 costs, net Selling and marketing 505 438 expenses General and administrative 946 1,032 expenses $ $ 1,925 1,882 (2) Amortization of intangible assets: Cost of revenues $ $ 200 476 Research and development 29 89 costs, net $ $ 229 565 * 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 SOURCE ClickSoftware Technologies Ltd. Website: http://www.clicksoftware.com
ClickSoftware Reports Financial Results for the Third Quarter Ended September 30, 2013
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