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Press Release

Jacada Reports First-Quarter 2003 Results

Met Expectations; Generated positive cash flow of $1.3 million

ATLANTA, May 1, 2003 – Jacada Ltd. (Nasdaq: JCDA), the leading provider of legacy integration and Web-to-host solutions, today reported first-quarter 2003 results, which are in line with analysts' expectations.

Total revenue for the 2003 first quarter was $5.1 million, compared to $5.6 million in the 2002 fourth quarter. Software license revenue was $2.2 million in the 2003 first quarter, compared to $2.8 million in the 2002 fourth quarter. Service and maintenance revenues were $2.9 million in the 2003 first quarter, compared to $2.8 in the 2002 fourth quarter. In the comparable period a year ago, Jacada reported software license revenue of $2.9 million, service and maintenance revenues of $3.1 million, and total revenue of $6.0 million.

Gross profit for the 2003 first quarter was $4.1 million, or 81% of total revenues, compared to $4.7 million, or 84% of total revenues, in the 2002 fourth quarter. Net loss for the quarter was $631,000, or $0.03 per share, compared to net income of $444,000, or $0.02 per share, in the 2002 fourth quarter. In the comparable period a year ago, Jacada reported gross profit of $4.6 million, or 76% of total revenues, and a net loss of $786,000, or $0.04 per share.

At the end of the first quarter, Jacada's cash and investments totaled $42.6 million, an increase of approximately $1.3 million over year-end 2002.

"Jacada generated financial performance in line with analysts' expectations and the seasonal business pattern typically associated with the first quarter. We are pleased with these results in light of a continuing soft economy and the related impact on demand for software products and services. We were also able to increase our overall cash and investments position during the quarter by $1.3 million, mainly as a result of strong maintenance renewals and the related increase in deferred revenues," said Gideon Hollander, CEO of Jacada.

First-Quarter Highlights

During the quarter, Jacada closed new and follow-on business with customers such as BISYS, Indiana Farm Bureau Insurance, Jockey International, Qwest Information Technologies, Raytheon, Russell Corporation, the State of Tennessee, and RDC Datacentrum, the license and emission control board in the Netherlands.

Partnerships that were solidified in the fourth quarter of 2002 led to increased field-level sales activity in the first quarter of 2003. Computer Associates (CA) named Jacada its 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. Jacada is engaged in and has already closed CA-related business during the first quarter.

In addition, the certification of Jacada Integrator by PeopleSoft is now resulting in active prospects. Jacada Integrator enables PeopleSoft customers to achieve real-time access to their legacy applications from PeopleSoft 8 applications.

"We are optimistic that our integration partners will significantly contribute to our business going forward," said Hollander. "These affiliations bring us extensive field relationships that will help expand Jacada's global reach."

In the first quarter of 2003, Jacada was again positioned as a leader on both Gartner Inc.'s Programmatic Integration Server Magic Quadrant and Presentation Integration Server Magic Quadrant¹. Gartner evaluates vendors and determines leaders based on a company's completeness of vision and its ability to execute in the marketplace.

According to Gartner, the programmatic integration server market is one of the few it covers that has strong growth potential. And despite the continued economic downturn, there is still significant interest in noninvasive solutions to Web-enabling legacy systems. Gartner expects a trend toward composite applications, service-oriented architectures, and packaged software to continue to drive growth opportunities in this market.

"Jacada is extremely pleased to maintain our leadership position in both the programmatic and presentation integration quadrants," said Hollander. "With significant business data still being housed in legacy systems, providing exposure to this data through sophisticated programmatic integration - as well as through a more simplified Web-enablement approach - allows our customers to tailor the appropriate solution to meet the needs of their enterprise."

The complete Gartner reports are available on Jacada's Web site at www.jacada.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 Ltd. All other brands or product names are trademarks of their respective owners.

(1) The Programmatic Integration Server Magic Quadrant for 2003 and The Presentation Integration Server Magic Quadrant – Update for 2003, both by Dale Vecchio are copyrighted March 2003 by Gartner, Inc.

JACADA LTD. CONSOLIDATED BALANCE SHEETS U.S. Dollars in thousands

		March 31,		December 31,
		2003		2002
ASSETS		Unaudited		Audited
CURRENT ASSETS:
Cash and cash equivalents	$	10,928	$	15,319
Marketable securities		15,059		22,326
Trade receivables (net of allowance for doubtful     accounts of $ 497 and $ 398 at March 31, 2003      and December 31, 2002, respectively)		2,956		2,661
Other current assets		719		645
Total current assets		29,662		40,951
LONG-TERM INVESTMENTS:
Marketable securities		16,653		3,737
Severance pay fund		628		576
Long-term other assets		68		79
Total long-term investments		17,349		4,392
PROPERTY AND EQUIPMENT, NET		2,510		2,804
OTHER ASSETS, NET: Technology (net of accumulated amortization      of $ 460 and $ 381 at March 31, 2003     and December 31, 2002, respectively)		1,098		1,177
Other intangibles, net (net of accumulated     amortization of $ 36 and $ 23 at March 31, 2003     and December 31, 2002, respectively)		127		140
Goodwill		4,554		4,554
Total other assets		5,779		5,871
	$	55,300	$	54,018

 

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JACADA LTD. CONSOLIDATED BALANCE SHEETS U.S. Dollars in thousands, except share data

		March 31,		December 31,
		2003		2002
		Unaudited		Audited
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables	$	777	$	760
Deferred revenues		3,949		2,144
Accrued expenses and other liabilities		3,592		3,599
Total current liabilities		8,318		6,503
LONG TERM LIABILITIES:
Accrued severance pay		992		927
Accrued expenses		108		124
Total long-term liabilities		1,100		1,051
SHAREHOLDERS' EQUITY:
Share capital:
Ordinary shares of NIS 0.01 par value:
Authorized: 30,000,000 shares as of        March 31, 2003 and December 31, 2002; Issued        and outstanding: 19,002,403 and        18,935,903 shares as of March 31, 2003       and December 31, 2002, respectively		55		55
Additional paid-in capital		69,208		69,143
Deferred stock compensation		(24)		(25)
Accumulated other comprehensive gain		64		81
Accumulated deficit		(23,421)		(22,790)
Total shareholders' equity		45,882		46,464
	$	55,300	$	54,018

 

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JACADA LTD. CONSOLIDATED STATEMENTS OF OPERATIONS U.S. Dollars in thousands, except share and per share data
		Three months ended  March 31,				Year ended December 31,
		2003		2002		2002
		Unaudited				Audited

Revenues:
Software licenses		$	2,209		$	2,921		$	9,783
Services			965			1,461			4,518
Maintenance			1,885			1,647			7,235
Total revenues			5,059			6,029			21,536
Cost of revenues:
Software licenses			110			117			248
Services			557			1,018			3,115
Maintenance			276			332			1,247
Total cost of revenues			943			1,467			4,610
Gross profit			4,116			4,562			16,926
Operating expenses:
Research and     development			1,309			1,503			6,191
Sales and marketing			2,442			2,693			9,450
General and     administrative			1,227			1,332			4,602
Restructuring and other     non-recurring charges			-			-			501
Total operating   expenses			4,978			5,528			20,744
Operating loss			(862)			(966)			(3,818)
Financial income, net			231			180			909
Net loss		$	(631)		$	(786)		$	(2,909)
Basic and diluted net    loss per share		$	(0.03)		$	(0.04)		$	(0.16)
Weighted average    number of shares    used in computing    basic and diluted    net loss per share			18,988,313			18,544,290			18,710,105