Jacada Ltd. (Nasdaq: JCDA), a leading provider of customer
experience management and process optimization solutions, today
reported financial results for the fourth quarter and full-year
period ended December 31, 2009.
Fourth Quarter 2009 Highlights
- Revenues grew 48% sequentially
to $5.7 million.
- Net loss from continuing
operations narrowed to $(578,000), or $(0.03) per share compared to
$(1.0 million), or ($0.06) per share, year over year.
- Entered into an agreement with a
new customer, the Swedish subsidiary of the world's largest gas and
power company, E.ON, the first Jacada utility contract in Europe
and the start of our expansion into the Nordics region.
- First joint win with Wipro, to
provide Jacada’s unified desktop solution to a U.S national
electric and gas utility. This was announced during the quarter as
a material deal, i.e. greater than $1.0 million.
Subsequent to Year-End 2009
- Signed partnership agreement
with Upstream Works Software to expand existing solutions to enable
Jacada to introduce additional functionality and advanced analytics
capabilities into its Jacada WorkSpace suite of unified service
desktop solutions.
- Completed implementation of the
Unified Service Desktop for Central Hudson Gas & Electric
Corporation, a regulated gas and electricity provider serving
approximately 374,000 customers in eight counties in New York
State's Mid-Hudson River Valley region to deploy a more efficient
desktop environment that enables CSRs to improve effectiveness and
deliver better customer service to Central Hudson customers.
2009 Full-Year Recap
- Signed and announced seven
material software and/or services contracts with new and existing
customers. The Company defines a material contract as one with an
initial value of $1.0 million or more.
- Backlog, which includes unfilled
orders and support renewals, increased to $9.1 million,
representing a 22% increase from December 31, 2008.
- Increased focus on service
projects and stringent expense controls resulted in increased
services revenues and improved service margins.
- Ended the year with $23.8
million in cash and investments.
- Jacada and O2 Telefonica UK, the
leading provider of mobile services to consumers and businesses in
the UK, were recognized at the prestigious Global Telecoms Business
Awards by winning the Consumer Service Innovation Award. The GTB
Innovation Awards honor innovative projects involving telecoms
operators and service providers around the world.
- Announced a strategic
partnership with Wipro, a global leader in product engineering and
support services, which will allow Jacada to explore new market
opportunities, leveraging the geographic reach and resource flex
provided by Wipro.
“The efforts we have made to improve our customer value
proposition and services delivery are starting to pay off in the
form of improved financial results,” said Tom Clear, chief
executive officer for Jacada. “We have challenged our services
management teams to deliver results, including assisting our
customers with improving call center efficiencies and generating
additional revenue opportunities within each account. One result
has been a turnaround in our services business, both for the
quarter and year, which can be seen at the top- and bottom-lines
and with rebuilding of our backlog. These factors support our
confidence that we are successfully executing our customer-centric
strategy, and we are hopeful that we will continue to see
improvements throughout the coming year.”
Mr. Clear continued, “Our pipeline continues to improve, and our
close rate has also been encouraging. In the last quarter we signed
material agreements with the U.S. operations of a large
international public utilities company and the Swedish operations
of German-based E.ON, which shows the quality and size of the
customers that we’re attracting. We have industry leaders in each
of our three primary verticals – telecom, utilities and
insurance/financial services – which again validate the high
quality of our pipeline. We’ve seen sequential revenue growth and
margin improvement, we’ve kept expenses in check, and we have
assembled a great team and the resources needed for 2010. These
factors, coupled with several near-term new product and solution
launches, gives us reason to be confident that many of these
positive trends in our business will continue into 2010 and we’re
looking forward to an exciting year of growth.”
Financial Results
For the fourth quarter of 2009, total revenues were $5.7 million
compared to $5.9 million in the fourth quarter of 2008, a decrease
of 3% but up 48% sequentially from $3.9 million in the third
quarter of 2009. Total service revenues were $4.5 million for the
fourth quarter of 2009 compared to $4.1 million in the fourth
quarter of 2008, an increase of 10%, and up 36% sequentially from
$3.3 million in the third quarter of 2009. The sequential increase
was due to higher software and services revenues from ongoing
implementations.
Total gross profit for the 2009 fourth quarter was $2.6 million
or 46% of total revenues compared to $2.7 million or 45% in the
2008 fourth quarter and up sequentially from the third quarter of
2009 when gross profit was $1.4 million or 37%. The increase in
gross margin was driven by the increase in software and services
revenues.
The fourth quarter net loss from continuing operations was
$(578,000) or $(0.03) per share compared to a $(1.0 million) or
$(0.06) per share in the fourth quarter of 2008 and to a $(2.0
million) or $(0.12) per share loss in the third quarter of
2009.
For the 2009 fourth quarter, the Company reported net income of
$5,000 or $0.00 per share as compared to a net loss of $(2.6
million), or $(0.16) per share in the 2008 quarter. The 2009 net
income included income from discontinued operations of $583,000, or
$0.03 per share, net of taxes, related to the discharge of a
provision associated with the discontinued operations. The 2008 net
loss included, $(1.6 million) net loss from discontinued
operations.
For the full-year period ending December 31, 2009, total
revenues were $16.7 million compared to $24.4 million in 2008. The
reduction in revenues in the three month ending December 31, 2009
and full-year periods are directly related to global business
conditions throughout 2009 and to a decline in new business booked
during 2008. However, the company has experienced an increase in
new bookings in recent quarters and reported backlog at the end of
the fourth quarter grew to $9.1 million, up from $7.4 million at
December 31, 2008.
Gross profit for the full-year ended December 31, 2009 was $5.7
million or 34% of total revenues compared to $11.9 million or 49.0%
of total revenues for the 2008 period.
During the full-year ending December 31, 2009, the Company
incurred a net loss from continuing operations of $(7.5 million) or
$(0.45) per share compared to $(5.0 million), or $(0.26) per share
during 2008.
In 2009, the Company posted a net loss of $(6.9 million) or
$(0.42) per share compared to net income of $13.2 million, or $0.68
per share in 2008. The 2009 net loss included income from
discontinued operations of $583,000, or $0.03 per share, net of
taxes, related to the discharge of a provision associated with the
discontinued operations. 2008 net income included $18.2 million or
$0.94 per share in income, net of taxes, from discontinued
operations, which was generated in the form of a capital gain from
the sale of the Company's legacy business during the 2008 first
quarter.
At the end of the 2009 fourth quarter, cash and investments was
$23.8 million, compared to $33.1 million at year end 2008, which
amount included $2.6 million in restricted cash, which was being
held in escrow as part of the sale of the company’s legacy business
to Software AG and which was subsequently released during 2009.The
reduction in cash during the 2009 fourth quarter of approximately
$2.2 million resulted primarily from the net loss from continuing
operations of $578,000, an increase in trade receivables of
$423,000 in support of increased revenues during the quarter, an
increase in other current assets of $334,000 associated with the
deferral of certain services expenses and to a reduction of accrued
expenses of $810,000 related to the discontinued operation.
Conference Call Details
To participate in the teleconference, which is scheduled for
today February 11, 2010 at 10:30 a.m. ET, please call toll free
1-888-680-0869, or 617-213-4854 for international callers, and
provide passcode 23951289 approximately 10 minutes prior to the
start time. Interested parties may pre-register for the
teleconference via this URL:
https://www.theconferencingservice.com/prereg/key.process?key=PLNBELCDR.
A (live audio) webcast will also be available over the Internet at
www.jacada.com (under "About Us" then "Investors") or
www.earnings.com.
A replay of the teleconference will be available for three days
beginning at 1:30 p.m. ET on February 11, 2010. To access the
replay, dial toll-free 1-888-286-8010, or for international callers
617-801-6888, and provide passcode 23427022.
About Jacada
Jacada provides solutions that optimize and improve the
effectiveness of customer interactions. Jacada unified desktop and
process optimization solutions help companies reduce the cost of
their operations, drive customer satisfaction and provide a
complete return on investment in as little as 12 months after
deployment. Founded in 1990, Jacada operates globally with offices
in Atlanta, USA; Herzliya, Israel; London, England; Munich,
Germany; and Stockholm, Sweden. More information is available at
www.jacada.com, www.jacada.com/blog, www.jacada.com/facebook and
www.jacada.com/twitter.
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.
CONSOLIDATED STATEMENTS OF
OPERATIONS
U.S. dollars in thousands,
except per share data
Three months ended
December 31,
Year ended
December 31,
2009 2008
2009 2008
Unaudited Revenues: Software licenses $ 678 $ 1,275 $ 1,370
$ 7,647 Services 4,536 4,116 12,967 14,540 Maintenance 532
534 2,324 2,178
Total revenues 5,746 5,925
16,661 24,365 Cost of revenues:
Software licenses 64 77 238 544 Services 2,928 2,975 10,047 11,038
Maintenance 128 187 648
856 Total cost of revenues 3,120
3,239 10,933 12,438
Gross profit 2,626 2,686
5,728 11,927 Operating expenses:
Research and development 797 1,111 3,490 4,819 Sales and marketing
1,775 1,650 6,205 8,829 General and administrative 891 1,571 4,433
5,583 Restructuring - 451 -
451 Total operating expenses
3,463 4,783 14,128 19,682
Operating loss (837 ) (2,097 ) (8,400 ) (7,755 )
Financial income (expenses), net 39 (308 )
708 715 Pretax loss from
continuing operations (798 ) (2,405 ) (7,692 ) (7,040 ) Tax benefit
220 1,404 201
2,043 Net loss from continuing operations (578 ) (1,001 )
(7,491 ) (4,997 ) Income from discontinued operations, net of taxes
583 (1,624 ) 583 18,234
Net income (loss) $ 5 $ (2,625 ) $ (6,908 ) $
13,237 Basic and diluted net income (loss) per share:
Continuing operations $ (0.03 ) $ (0.06 ) $ (0.45 ) $ (0.26 )
Discontinued operations $ 0.03 $ (0.10 ) $ 0.03 $
0.94 Total $ - $ (0.16 ) $ (0.42 ) $ 0.68
Weighted average number of shares used in computing basic
and diluted net earnings (loss) per share 16,572,996
16,460,779 16,565,323 19,354,810
CONSOLIDATED BALANCE
SHEETS
U.S. dollars in
thousands
December 31, December 31,
2009 2008 Unaudited
Unaudited ASSETS CURRENT ASSETS: Cash and cash
equivalents *) $ 12,624 $ 11,059 Marketable securities *) 6,210
8,915 Trade receivables 4,949 4,713 Restricted cash held by trustee
*) - 2,640 Restricted cash *) 557 559 Other current assets 1,885
2,022 Assets held for sale - 64
Total current assets 26,225 29,972
LONG-TERM INVESTMENTS: Marketable securities *) 4,456 9,896
Severance pay fund 286 586 Total
long-term investments 4,742 10,482
PROPERTY AND EQUIPMENT, NET 994 1,266
GOODWILL 3,096 3,096
Total assets $ 35,057 $ 44,816 *) Total
Cash and Investments including restricted cash $ 23,847 $
33,069 LIABILITIES AND SHAREHOLDERS EQUITY
CURRENT LIABILITIES: Trade payables $ 1,194 $ 1,245 Deferred
revenues 685 1,006 Accrued expenses and other liabilities 2,290
3,096 Liabilities held for sale - 1,363
Total current liabilities 4,169 6,710
LONG-TERM LIABILITIES: Accrued severance pay 505
1,120 Other liabilities 123 185
Total long-term liabilities 628 1,305
SHAREHOLDERS' EQUITY: Share capital 60 60 Additional paid-in
capital 75,422 75,173 Treasury shares (17,863 ) (17,863 )
Accumulated other comprehensive profit 278 160 Accumulated deficit
(27,637 ) (20,729 ) Total shareholders' equity
30,260 36,801 Total liabilities
$ 35,057 $ 44,816
CONSOLIDATED CASH FLOWS
U.S. dollars in
thousands
Three months ended
December 31,
Year ended
December 31,
2009 2008
2009 2008
Unaudited
Cash flows from operating activities:
Net income (loss) $ 5 $ (2,625 ) $ (6,908 ) $ 13,237 Less: net loss
(income) from discontinued operations, net of taxes (583 )
1,624 (583 ) (18,234 ) Net loss
from continuing operations (578 ) (1,001 )
(7,491 ) (4,997 ) Adjustments required to reconcile net loss
from continuing operations to net cash used in operating activities
from continuing operations: Depreciation and amortization 132 358
574 811 Stock-based compensation related to options granted to
employees and directors (138 ) 89 420 860 Stock-based compensation
related to options granted to non-employees 1 - 11 7 Accrued
interest and amortization of premium on marketable securities 34
310 139 389 Loss (gain) on sales of marketable securities - 281
(353 ) 372 Decrease in accrued severance pay, net (73 ) (32 ) (315
) (18 ) Increase in trade receivables, net (423 ) (911 ) (236 )
(1,100 ) Decrease (increase) in other current assets (334 ) (203 )
176 (478 ) Increase (decrease) in trade payables (31 ) 28 (51 ) 78
Decrease in deferred revenues (134 ) (442 ) (307 ) (948 ) Decrease
in accrued expenses and other liabilities (266 ) (93 ) (1,266 )
(212 ) Increase (decrease) in other long-term liabilities (20 ) (18
) (62 ) 185 Other - 1 -
10 Net cash used in operating activities from
continuing operations (1,830 ) (1,633 ) (8,761 ) (5,041 ) Net cash
used in operating activities from discontinued operations
(227 ) (1,454 ) (475 ) (1,695 ) Net
cash used in operating activities (2,057 ) (3,087 )
(9,236 ) (6,736 )
Cash flows from investing activities:
Investment in available-for-sale marketable securities (6,888 )
(3,900 ) (12,801 ) (29,297 ) Proceeds from sale and redemption of
available-for-sale marketable securities 1,498 7,483 21,039 37,523
Short term deposits, net 1,889 - - - Purchase of property and
equipment (59 ) (116 ) (303 ) (982 ) Proceeds from sale of property
and equipment - - - 5 Increase in restricted cash -
(559 ) - (559 ) Net cash
provided by (used in) investing activities from continuing
operations (3,560 ) 2,908 7,935 6,690 Proceeds from sale of
discontinued operations, net - -
2,642 22,094 Net cash provided by (used
in) investing activities (3,560 ) 2,908
10,577 28,784
Cash from financing activities:
Purchase of treasury shares - (1 ) - (17,863 ) Proceeds from
exercise of stock options 3 192
68 914 Net cash provided by (used in)
financing activities from continuing operations 3
191 68 (16,949 ) Effect
of exchange rate changes on cash (27 ) - 156 - Increase in
cash and cash equivalents (5,641 ) 12 1,565 5,099 Cash and cash
equivalents at the beginning of the quarter/year 18,265
11,047 11,059 5,960
Cash and cash equivalents at the end of the period
12,624 11,059 12,624 11,059 Marketable securities 10,666 18,811
10,666 18,811 Restricted cash 557 3,199
557 3,199 Total cash and
investments at the end of the period including restricted cash $
23,847 $ 33,069 $ 23,847 $ 33,069
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