ClickSoftware Reports Financial Results for the Second Quarter Ended June 30, 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

• Revenues were $24.7 million (10% year-over-year growth)
• GAAP EPS $(0.09); Non-GAAP EPS $(0.07)
• Total cash and investments decreased to $54.4 million
• Cash 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 [phone] and ask for the ClickSoftware conference call. International participants, please call [phone]. 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 [phone] (international callers can dial [phone]).

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 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 Revenues		$	% of 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, net		4,019	16%		2,979	13%
	Selling and marketing expenses		10,269	42%		7,403	33%
	General and administrative expenses		2,292	9%		2,255	10%
		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%)		$           73	0%
Net (loss) earnings per ordinary share:
	Basic		$       (0.09)			$        0.00
	Diluted		$       (0.09)			$        0.00
Shares used in computing basic net (loss) income per share			31,926,052			31,545,346
Shares used in computing diluted net (loss) income per share			32,955,793			32,867,492

 

 

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 Revenues		$	% of 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 costs, net		7,724	16%		5,650	13%
	Selling and marketing expenses		18,725	38%		14,737	33%
	General and administrative expenses		4,345	9%		4,197	9%
		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%)		$           774	2%
Net (loss) earnings per ordinary share:
	Basic		$       (0.09)			$        0.02
	Diluted		$       (0.09)			$        0.02
Shares used in computing basic net (loss) income per share			31,807,389			31,479,942
Shares used in computing diluted net (loss) income per share			32,927,531			32,925,309

 

 

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' equity	$       91,820		$        94,469

 

 

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 compensation	1,189		1,232
			Amortization of acquired intangible assets	181		415
			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 expenses	(1,280)		(1,883)
			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 securities		4,071		845
	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 EQUIVALENTS				6,438		(760)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD				12,793		14,683
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 Revenues		$	% of Revenues
GAAP Net (loss) income			$      (2,915)	(12%)		$               73	0%
Share-based compensation (1)			620			684
Amortization of intangible assets (2)			51			174
Deferred taxes			(70)			40
Non-GAAP Net (loss) income			$       (2,314)	(9%)		$             971	4%
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, net		75			64
	Selling and marketing expenses		177			156
	General and administrative expenses		277			382
			$             620			$             684
(2) Amortization of intangible assets:
	Cost of revenues		$             51			$             144
	Research and development costs, net		-			30
			$             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 Revenues		$	% of Revenues
GAAP Net (loss) income			$         (2,830)	(6%)		$             774	2%
Share-based compensation (1)			1,189			1,232
Amortization of intangible assets (2)			181			415
Tax payment for previous years retained earnings*			744			-
Deferred taxes			(790)			(120)
Non-GAAP Net (loss) income			$         (1,506)	(3%)		$          2,301	5%
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 retained earnings*			0.02			0.00
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, net		136			113
	Selling and marketing expenses		329			273
	General and administrative expenses		554			705
			$            1,189			$          1,232
(2) Amortization of intangible assets:
	Cost of revenues		$             152			$             355
	Research and development costs, net		29			60
			$             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
[phone]	212-896-1206
[e-mail]	[e-mail]

 

SOURCE ClickSoftware Technologies Ltd.

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