Jacada
Jacada

Press Release

Jacada Reports Second Quarter 2007 Results

ATLANTA, August 7, 2007 – Jacada Ltd. (Nasdaq: JCDA), a leading provider of unified desktop and process optimization solutions for customer service operations, today reported financial results for the second quarter of 2007.

Total revenues were $5.1 million compared to $4.8 million in the second quarter of 2006. Non-GAAP gross profit was $3.9 million, or 77% gross margin, compared to $3.8 million, and 80%, respectively, in the second quarter last year. Total GAAP gross profit was $3.8 million, or 74% gross margin, compared to $3.7 million, and 77%, respectively, in last year's second quarter.

Non-GAAP net loss for the second quarter of 2007 was ($385,000), or ($0.02) per basic and diluted share, compared to a non-GAAP net loss of ($861,000), or ($0.04) per basic and diluted share, in last year's second quarter. GAAP net loss, for the quarter was ($681,000), or ($0.03) per basic and diluted share compared to a GAAP net loss of ($1.1 million), or ($0.06) per basic and diluted share in the second quarter last year.

Total revenues for the first half of 2007 grew 15.8% to $11.6 million from $10 million in the first half of 2006.

Non-GAAP gross profit for first half of 2007 was $9.0 million, or 78% gross margin, compared to $7.9 million, and 79%, respectively, for the first half of last year. Total GAAP gross profit was $8.8 million, or 76% gross margin, compared to $7.7 million, and 77%, respectively, in last year's first half.

Non-GAAP net income for the first half of 2007 was $367,000, or $0.02 per diluted share, compared to a non-GAAP net loss of ($1.3 million), or ($0.07) per basic and diluted share, in the first half of 2006. On a GAAP basis, net loss for the first half of 2007 was ($213,000), or ($0.01) per basic and diluted share, compared to a net loss of ($1.8 million), or ($0.09) per basic and diluted share, in the first half of 2006.

At the end of the second quarter of 2007 cash and investments were $36.0 million, which was relatively flat compared to the amount reported on December 31, 2006.

"As expected, revenue for the second quarter of 2007 showed moderate growth over the same period last year," commented Gideon Hollander, chief executive officer of Jacada.

"We had many important customers achieve key milestones with their contact center projects during the second quarter of 2007," continued Mr. Hollander. "We continue to see demand build for our innovative contact center solutions. We are also seeing an increase in the size and complexity of certain deals, which often results in longer sales cycles and can affect the timing of revenue recognition."

Other Second Quarter Highlights:

The second quarter of 2007 resulted in notable customer activity. During the quarter:

  • Jacada signed a material contract with Harrah's Operating Company, Inc. Using the Jacada unified service desktop, Harrah's customer service agents will be able to provide customers an enhanced service experience by providing a more comprehensive and timely view of available properties and services. Using the non-invasive application integration capabilities of the Jacada solution, the new unified service desktop will be delivered without having to modify or replace any of the existing business systems.
  • Jacada customers achieved key project milestones:
    • Quelle.Contact, Germany's third largest contact center outsourcer, went live in 2 contact centers with 1,000 agents.
    • A large telecommunications company in Hungary went live with 3,500 agents.
    • Lillian Vernon, one of the leading catalogue and online retailers in North America went into production with the Jacada unified desktop less than 6 months after signing contracts.
    • West Corporation, a premier provider of outsourced communication solutions, reached a significant milestone by deploying Jacada WorkSpace to 4,700 agents.

"During the past quarter, we have achieved major milestones in the evolution of our business strategy with the delivery of production quality contact center solutions to some of the highest profile organizations in the world," added Paul O'Callaghan, president of Jacada. "The rapid and successful adoption and deployment of our contact center solutions continues to strengthen our position in this market."

"Our strategy to partner with the world's leading IT systems integrators continues to deliver results," added O'Callaghan. "These partners are now championing our products and have contributed to recent wins and are actively engaged in implementation projects."

"Given our backlog and visibility in our sales pipeline for both our legacy and call center products for the remainder of the year, we are reiterating our annual revenue guidance growth of 23%-27%, with that growth occurring predominantly in the fourth quarter," concluded Mr. Hollander.

Conference Call Details

Any investor or interested individual can listen to the teleconference, which is scheduled to begin at 10:30 a.m. Eastern Time on August 7, 2007. To participate in the teleconference, please call toll-free 866-356-4279 or 617-597-5394 for international callers and provide passcode 59328490, approximately 10 minutes prior to the start time. The teleconference will also be available via Webcast at www.jacada.com (under "About Us" then "Investors") or www.earnings.com. A telephonic playback of the teleconference will be available for three days beginning at 12:30 p.m. ET on August 8, 2007. To access the replay, dial toll-free 888-286-8010, or for international callers dial 617-801-6888, and provide Access Code 78657804.

Use of Non-GAAP Financial Information

In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Jacada uses non-GAAP measures of operating income (loss), net income (loss) and income (loss) per share, which are adjustments from results based on GAAP to exclude non-cash stock-based compensation expenses in accordance with SFAS 123R and amortization of acquired intangible assets related to acquisitions effected by Jacada in previous years. Jacada's management believes the non-GAAP financial information provided in this release is useful to investors' understanding and assessment of Jacada's on-going core operations and prospects for the future. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. Management 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.

About Jacada

Jacada is a leading global provider of unified service desktop and process optimization solutions that simplify and automate customer service processes. By bridging disconnected systems into a single, "intelligent" WorkSpace, Jacada solutions create greater operational efficiency and increase agent and customer satisfaction. Founded in 1990, Jacada has more than 1200 customers and operates globally with offices in Atlanta, Georgia; Herzliya, Israel; London, England and Munich, Germany. Jacada can be reached at www.jacada.com.

Forward Looking Statement

This news release may contain forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. 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. Jacada is a trademark of Jacada Inc. All other brands or product names are trademarks of their respective owners.

Jacada is a trademark of Jacada Ltd. All other brands or product names are trademarks of their respective owners.

CONTACT:
Tzvia Broida
Chief Financial Officer
Jacada
972 9 9525927
Tzvia@jacada.com

Or

Peter Seltzberg
Hayden Communications
(646) 415-8972
peter@haydenir.com

JACADA LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except per share data
  Six months ended
June 30,		     Three months ended
June 30,
2007 2006

2007

 2006
       Unaudited

Revenues:
  Software licenses $ 3,514 $ 3,857 $ 999 $ 1,354
  Services  3,222 1,401 1,610 990
  Maintenance 4,819 4,716 2,513 2,427

Total revenues 		11,555 9,974 5,122 4,771

Cost of revenues:
  Software licenses 242 241 113 125
  Services  2,065 1,610 971 730
  Maintenance 460 444 236 221

Total cost of revenues 		2,767 2,295 1,320 1,076

Gross profit 		8,788 7,679 3,802 3,695

Operating expenses:
  Research and development 2,264 1,931 1,062 928
  Sales and marketing 5,049 5,398 2,601 2,777
 General and administrative 2,383 2,689 1,136 1,423
 
Total operating expenses 9,696 10,018 4,799 5,128
 
Operating income (loss) (908) (2,339) (997) (1,433)
Financial income, net 828 635 392 357
 
Pretax income (loss) (80) (1,704) (605) (1,076)
Taxes 133 53 76 7
 
Net income (loss) $ (213) $ (1,757) $ (681) $ (1,083)

Basic net income (loss) 
  per share 		$ (0.01) $ (0.09) $ (0.03) $ (0.06)

Diluted net income (loss)
  per share 		$ (0.01) $ (0.09) $ (0.03) $ (0.06)

Weighted average
  number of shares
  used in computing
  basic net income (loss) per share 		20,212,254 19,637,106 20,278,789 19,655,063

Weighted average
  number of shares
  used in computing
  diluted net income (loss) per share 		20,212,254 19,637,106 20,278,789 19,655,063
                   

 

 

JACADA LTD.
NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except per share data
  Six months ended
June 30,		     Three months ended
June 30,
2007 2006

2007

 2006
       Unaudited

Revenues:
  Software licenses $ 3,514 $ 3,857 $ 999 $ 1,354
  Services  3,222 1,401 1,610 990
  Maintenance 4,819 4,716 2,513 2,427

Total revenues 		11,555 9,974 5,122 4,771

Cost of revenues:
  Software licenses 36 35 9 21
  Services  2,021 1,584 946 718
  Maintenance 458 438 235 218

Total cost of revenues 		2,515 2,057 1,190 957

Gross profit 		9,040 7,917 3,932 3,814

Operating expenses:
  Research and development 2,231 1,885 1,044 907
  Sales and marketing 4,955 5,346 2,549 2,765
 General and administrative 2,182 2,600 1,040 1,353
 
Total operating expenses 9,368 9,831 4,633 5,025
 
Operating loss (328) (1,914) (701) (1,211)
Financial income, net 828 635 392 357
 
Pretax income (loss) 500 (1,279) (309) (854)
Taxes 133 53 76 7
 
Net income (loss) $ 367 $ (1,332) $ (385) $ (861)

Basic net income (loss) 
  per share 		$ 0.02 $ (0.07) $ (0.02) $ (0.04)

Diluted net income (loss)
  per share 		$ 0.02 $ (0.07) $ (0.02) $ (0.04)

Weighted average
  number of shares
  used in computing
  basic net income (loss) per share 		20,212,254 19,637,106 20,278,789 19,655,063

Weighted average
  number of shares
  used in computing
  diluted net income (loss) per share 		20,546,534 19,637,106 20,278,789 19,655,063
                   

 

 

RECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except per share data
 
 

Six months ended June 30, 2007 (unaudited)
 

GAAP

   

Adjustments

     Non-GAAP
           

Amortization of acquired intangible assets

    

Stock based compensation expenses

      
Revenues:  
  Software licenses $ 3,514 $   $   $ 3,514
  Services  3,222 3,222
  Maintenance   4,819           4,819

Total revenues 		  11,555           11,555

Cost of revenues: 		 
  Software licenses 242 (206)   36
  Services  2,065 (44) 2,021
  Maintenance   460       (2)     458

Total cost of revenues 		  2,767   (206)   (46)   2,515

Gross profit 		  8,788   206   46   9,040
 

Operating expenses: 		 
  Research and development 2,264   (33)   2,231
  Sales and marketing 5,049   (94)   4,955
  General and administrative   2,383         (201)     2,182
 
 Total operating expenses   9,696       (328)   9,368
   
Operating loss (908) 206 374   (328)
Financial income, net 828             828
   
Pretax income (loss) (80) 206 374   500
Taxes 133             133
   
Net income (loss) $ (213) $ 206 $ 374   $ 367

Basic net income (loss) 
  per share 		  $ (0.01)               $ 0.02

Diluted net income (loss)
  per share 		  $ (0.01)               $ 0.02

Weighted average
  number of shares
  used in computing
  basic net income (loss) per share 		  20,212,254         20,212,254

Weighted average
  number of shares
  used in computing
  diluted net income (loss) per   share 		  20,212,254         20,546,534
         
                         

 

 

RECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except per share data
 
 

Three months ended June 30, 2007 (unaudited)
 

GAAP

   

Adjustments

     Non-GAAP
           

Amortization of acquired intangible assets

    

Stock based compensation expenses

      
Revenues:  
  Software licenses $ 999 $   $   $ 999
  Services  1,610 1,610
  Maintenance   2,513           2,513

Total revenues 		  5,122           5,122

Cost of revenues: 		 
  Software licenses 113 (104)   9
  Services  971 (25) 946
  Maintenance   236       (1)     235

Total cost of revenues 		  1,320   (104)   (26)   1,190

Gross profit 		  3,802   104   26   3,932
 

Operating expenses: 		 
  Research and development 1,062   (18)   1,044
  Sales and marketing 2,601   (52)   2,549
  General and administrative   1,136         (96)     1,040
 
 Total operating expenses   4,799       (166)   4,633
   
Operating loss (997) 104 192   (701)
Financial income, net 392             392
   
Pretax income (loss) (605) 104 192   (309)
Taxes 76             76
   
Net income (loss) $ (681) $ 104 $ 192   $ (385)

Basic net income (loss) 
  per share 		  $ (0.03)               $ (0.02)

Diluted net income (loss)
  per share 		  $ (0.03)               $ (0.02)

Weighted average
  number of shares
  used in computing
  basic net income (loss) per share 		  20,278,789         20,278,789

Weighted average
  number of shares
  used in computing
  diluted net income (loss) per   share 		  20,278,789         20,278,789
         
                         

 

 

CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands		    
   
June 30,   December 31,
  2007     2006
  ASSETS   Unaudited
 
CURRENT ASSETS:
  Cash and cash equivalents *)

$ 

 4,235

$ 

 4,735
  Marketable securities *) 13,262 12,338
  Trade receivables 2,216 1,681
  Other current assets   2,278   933
 
Total current assets   21,991   19,687
 
LONG-TERM INVESTMENTS:
   Marketable securities *) 18,495 18,849
   Severance pay fund   939   1,040
Total long-term investments   19,434   19,889
 
PROPERTY AND EQUIPMENT, NET   964   930

OTHER ASSETS, NET:
   Other intangibles, net 		368 574
   Goodwill   4,630   4,630
Total other assets  
4,998

 

  
5,204
Total assets $ 47,387 $ 45,710
 *)Total Cash and Investments $ 35,992 $ 35,922
 LIABILITIES AND SHAREHOLDERS EQUITY
 
CURRENT LIABILITIES:        
   Trade payables $ 1,106 $  1,202
   Deferred revenues 6,595 5,514
   Accrued expenses and other liabilities   4,095   3,813
   
Total current liabilities   11,796   10,529
 
LONG-TERM LIABILITIES:    
   Deferred revenues 56  219
   Accrued severance pay   1,486   1,567
   
Total long-term liabilities   1,542   1,786
 
 SHAREHOLDERS' EQUITY:
   Share capital 58 58
   Additional paid-in capital       72,527 71,547
   Accumulated other comprehensive loss  (241) (128)
   Accumulated deficit   (38,295)    (38,082)
   
Total shareholders' equity   34,049   33,395
Total Liabilities $ 47,387  $ 45,710
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