Cindy Curtin Knezevich
770-352-1300
cindyk@jacada.com
Peter L. Seltzberg
Hayden Communications
646-415-8972
peter@haydenir.com
Press Release
Jacada Reports Profitable 2002 Fourth Quarter
Software License Revenues up 52% from the Third Quarter
Atlanta, Feb. 11, 2003 – Jacada Ltd. (Nasdaq: JCDA), the leading provider of legacy extension, integration and emulation solutions, today reported net income of $444,000, or $0.02 per share, on revenues of $5.6 million for the fourth quarter ended December 31, 2002.
In the 2001 fourth quarter, Jacada reported a net loss of $2.6 million, or $0.14 per share, after non-recurring charges, on revenues of $5.8 million. In the 2002 third quarter, Jacada reported a net loss of $1.3 million, or $0.07 per share, after non-recurring charges, on revenues of $4.6 million.
Gross profit for the 2002 fourth quarter was $4.7 million, or 84% of total revenues, compared to $4.1 million, or 72% of revenues, in the 2001 fourth quarter, and $3.6 million, or 78% of total revenues, in the 2002 third quarter. Software license revenues grew 52% to $2.8 million from $1.8 million in the 2002 third quarter. Service and maintenance revenues were $2.8 million, unchanged from the 2002 third quarter.
"Strength in all aspects of our business - notably the growth in higher-margin software license revenues - contributed to positive income from operations in the fourth quarter," said Gideon Hollander, CEO of Jacada. "This is the first quarter Jacada has realized income from operations, a fact that is even more exciting considering that we recognized the cost of acquired technology in the amount of $385,000 during the quarter. We are very pleased to see growing momentum as companies looking to leverage their existing systems continue to choose Jacada's solutions."
"In the fourth quarter, we acquired technology components that will supplement our internal research and development efforts and accelerate the delivery of planned solutions. We also expect to acquire and develop additional products and technologies in 2003 as we round out our product offering," said Hollander. "Our goal remains unchanged: to become the one-stop-shop for all legacy access and integration needs."
At the end of the 2002 fourth quarter, cash and investments remained relatively unchanged from the 2002 third quarter at $41.4 million.
"Jacada's cash position has remained relatively unchanged for the sixth consecutive quarter. We are delighted that we have been able to preserve a strong balance sheet, even after acquiring a business and technology for incorporation into our future products. We enter 2003 keenly focused on extending our technological leadership position while growing both license revenues and operating income," Hollander added.
For the full year ended December 31, 2002, Jacada reported a net loss of $2.9 million after $0.5 million in non-recurring restructuring-related charges, or $0.16 per share, on revenues of $21.5 million, compared to a net loss of $8.8 million after non-recurring charges of $2.8 million, or $0.48 per share, on revenues of $25.5 million in 2001. Gross profit for 2002 was $16.9 million, or 79% of revenues, compared to $18.5 million, or 72% of revenues, in 2001. Software license revenues were $9.8 million in 2002, compared to $10.9 million in 2001.
Jacada also announced today that Mike Potts, who has been with Jacada for over seven years, will step down as president of Jacada Ltd. effective May 31 of this year. Potts is stepping down as president of Jacada Ltd. for personal reasons, most important of which is to spend more time with his family. Potts will continue with Jacada in an advisory role through 2004, concentrating on supporting business development.
"After nearly 17 years in the fast-paced software business, I have decided to take advantage of this window of opportunity and spend more time with my family," said Potts. "With the company in a solid operating and financial position, I am comfortable that this is the right time for me to make this transition."
Fourth-Quarter Highlights
Jacada secured significant new and add-on business during the fourth quarter, experiencing strength in the European channel as well as many of the key vertical markets including, insurance, state and local government, financial services, manufacturing, retail and healthcare. In the fourth quarter, Jacada closed new and follow-on business with customers such as AdminaStar Federal, Banco Bilbao Vizcaya Argentaria (BBVA), Canadian National Railway Company, Farm Credit Canada, Farm Family Insurance, Fiserv, Kmart Corporation, Metals USA, Provident Bank, Qwest Communications, Parametric Technology Corporation (PTC), St. Paul Insurance, and Wausau Benefits.
Jacada experienced definite momentum in its partner channel during the fourth quarter. Computer Associates named Jacada their preferred vendor for mainframe integration and extension, partnering with Jacada to provide enhanced Web-to-host integration to complement CA's offerings in data integration and data management. This new agreement also positions Jacada as a powerful solution for customers leveraging other CA solutions that require mainframe application access such as CleverPath Portal.
In addition, Jacada teamed with PeopleSoft and received certification of the integration between PeopleSoft® AppConnect and Jacada® Integrator. Jacada Integrator enables PeopleSoft customers to achieve real-time access to their legacy applications from PeopleSoft 8 applications.
"We are extremely proud to have been selected by Computer Associates and PeopleSoft as primary integration partners," said Potts. "These opportunities offer us extensive field relationships that will further help us grow our global business as we expand Jacada's reach."
Jacada expanded its operations in Latin America with the opening of offices in Mexico City and Sao Paulo, Brazil. The expansion is targeted at providing sales and technical support to multi-national customers and partners and to filling a growing need for the legacy computing market in Latin America.
Jacada will host a conference call to review this announcement at 10:30 a.m. Eastern Standard Time. A Webcast of the conference call may be accessed by visiting the Investors section of the Jacada Website, or via CCBN at www.streetevents.com.
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to future financial results and plans for future business development activities, and are prospective. These statements include all statements that are not statements of historical fact and consists of those regarding intent, belief or current expectations of the Company, its directors or its officers with respect to, among other things: (i) the Company's financing plans; (ii) trends affecting the Company's financial condition or results of operations; and (iii) the Company's growth strategy and operating strategy (including the development of its products and services). The words "may," "could," "would," "will," "believe," "anticipate," "estimate," "expect," "intend," "plan," and similar expressions or variations thereof are intended to identify forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of the future performance and involve risks and uncertainties, many of which are beyond the Company's ability to control. Actual results may differ materially from those projected in the forward-looking statements as a result of various factors including the performance and continued acceptance of our products, general economic conditions and other Risk Factors specifically identified in our reports filed with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any forward-looking statement for events or circumstances after the date on which such statement is made. The Company cannot assess the impact of or the extent to which any single factor or risk, or combination of them, may cause. For a more complete discussion of risk factors, please see the Company's Form 20-F and other Statements filed with the Securities and Exchange Commission.
Jacada is a trademark of Jacada Inc. All other brands or product names are trademarks of their respective owners.
| JACADA LTD. CONSOLIDATED BALANCE SHEETS U.S. Dollars in thousands |
||
| December 31, | ||
| 2002 | 2001 | |
| ASSETS | ||||||
| CURRENT ASSETS: | ||||||
| Cash and cash equivalents | $ | 15,319 | $ | 5,982 | ||
| Marketable securities | 22,326 | 35,660 | ||||
| Trade receivables (net of allowance for doubtful accounts of $398 and $1,022 at December 31, 2002 and 2001, respectively) | 2,661 | 4,261 | ||||
| Other current assets | 645 | 626 | ||||
| Total current assets | 40,951 | 46,529 | ||||
| LONG-TERM INVESTMENTS: | ||||||
| Marketable securities | 3,737 | - | ||||
| Severance pay fund | 576 | 567 | ||||
| Long-term other assets | 79 | 203 | ||||
| Total long-term investments | 4,392 | 770 | ||||
| PROPERTY AND EQUIPMENT, NET | 2,804 | 3,632 | ||||
OTHER ASSETS, NET: Technology (net of accumulated amortization of $ 381 and $ 95 at December 31, 2002 and 2001, respectively) | 1,177 | 1,245 | ||||
| Other intangible, net (net of accumulated amortization of $ 23 and $ 0 at December 31, 2002 and 2001, respectively) | 140 | - | ||||
| Goodwill | 4,554 | 4,283 | ||||
| Total other assets | 5,871 | 5,528 | ||||
| $ | 54,018 | $ | 56,459 |
| JACADA LTD. CONSOLIDATED BALANCE SHEETS U.S. Dollars in thousands, except share and per share data |
||
| December 31, | ||
| 2002 | 2001 | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
| CURRENT LIABILITIES: | ||||
| Trade payables | $ | 760 | $ | 750 |
| Deferred revenues | 2,144 | 2,065 | ||
| Accrued expenses and other liabilities | 3,599 | 4,089 | ||
| Total current liabilities | 6,503 | 6,904 | ||
| LONG TERM LIABILITIES: | ||||
| Accrued severance pay | 927 | 967 | ||
| Accrued expenses | 124 | - | ||
| Total long-term liabilities | 1,051 | 967 | ||
| SHAREHOLDERS' EQUITY: | ||||
| Share capital: | ||||
| Ordinary shares of NIS 0.01 par value: | ||||
| Authorized: 30,000,000 shares as of December 31, 2002 and 2001; Issued and outstanding: 18,935,903 and 18,537,704 shares as of December 31, 2002 and 2001, respectively | 55 | 54 | ||
| Additional paid-in capital | 69,143 | 68,486 | ||
| Deferred stock compensation | (25) | (71) | ||
| Accumulated other comprehensive gain | 81 | - | ||
| Accumulated deficit | (22,790) | (19,881) | ||
| Total shareholders' equity | 46,464 | 48,588 | ||
| $ | 54,018 | $ | 56,459 |
| JACADA LTD. CONSOLIDATED STATEMENTS OF OPERATIONS U.S. Dollars in thousands, except per share data |
|||||
|
Three months ended December 31, |
Year ended December 31, |
||||
| 2002 | 2001 | 2002 | 2001 | ||
| Revenues: | ||||||||||||
| Software licenses | $ | 2,784 | $ | 2,219 | $ | 9,783 | $ | 10,930 | ||||
| Services | 857 | 1,973 | 4,518 | 8,986 | ||||||||
| Maintenance | 1,918 | 1,608 | 7,235 | 5,630 | ||||||||
| Total revenues | 5,559 | 5,800 | 21,536 | 25,546 | ||||||||
| Cost of revenues: | ||||||||||||
| Software licenses | 69 | 134 | 248 | 520 | ||||||||
| Services | 539 | 1,105 | 3,115 | 4,859 | ||||||||
| Maintenance | 297 | 414 | 1,247 | 1,705 | ||||||||
| Total cost of revenues | 905 | 1,653 | 4,610 | 7,084 | ||||||||
| Gross profit | 4,654 | 4,147 | 16,926 | 18,462 | ||||||||
| Operating expenses: | ||||||||||||
| Research and development | 1,785 | 1,657 | 6,191 | 6,446 | ||||||||
| Sales and marketing | 1,785 | 2,686 | 9,450 | 14,619 | ||||||||
| General and administrative | 1,151 | 1,513 | 4,602 | 5,679 | ||||||||
| Non-recurring charges | (200) | 1,241 | 501 | 2,846 | ||||||||
| Total operating expenses | 4,521 | 7,097 | 20,744 | 29,590 | ||||||||
| Operating profit (loss) | 133 | (2,950) | (3,818) | (11,128) | ||||||||
| Financial income, net | 311 | 326 | 909 | 2,330 | ||||||||
| Income (loss) before taxes on income | 444 | (2,624) | (2,909) | (8,798) | ||||||||
| Taxes on income (benefit) | - | (7) | - | (7) | ||||||||
| Net income (loss) | $ | 444 | $ | (2,617) | $ | (2,909) | $ | (8,791) | ||||
| Basic net earnings (loss) per share |
$ | 0.02 | $ | (0.14) | $ | (0.16) | $ | (0.48) | ||||
| Weighted average number of shares used in computing basic net earnings (loss) per share |
18,930,207 | 18,482,615 | 18,710,105 | 118,465,127 | ||||||||
| Diluted net earnings (loss) per share |
$ | 0.02 | $ | (0.14) | $ | (0.16) | $ | (0.48) | ||||
| Weighted average number of shares used in computing diluted net earnings (loss) per share |
19,070,098 | 18,482,615 | 18,710,105 | 18,465,127 |