JCDA Jacada Ltd. - Ordinary Shares (MM)

Jacada Ltd. (Nasdaq: JCDA), a leading provider of customer experience management and process optimization solutions, today reported financial results for the first quarter ended March 31, 2010.

First Quarter 2010 Highlights

• First quarter revenues were $5.0 million, which represents a 10% increase over first quarter 2009 revenues.
• Signed a material deal with a large, new customer with opportunity for significant additional revenue potential.
• Launched two new customer service center products: Jacada® Advisor, which overlays complex third-party applications, such as CRM, and simplifies the agent experience by driving next best action, optimizing workflow and scripting interactions, and Jacada® Insight, a new multi-channel analytics capability that allows organizations to gain a deeper understanding of how they interact with customers across various channels.
• Launched new versions of Jacada® WorkSpace (5.2) and Jacada® Fusion (5.5).

“We made progress in most areas of our business during the first quarter of 2010,” said Tom Clear, chief executive officer for Jacada. “The compelling value proposition of our product suite resulted in a win with a significant new customer in the telecommunications space in the quarter and our improving product delivery led to the completion of several successful implementations. Our investment into product strategy and R&D has resulted in the successful launch of two exciting new products, which expand our market opportunities and allow us to help companies drive revenue through improved customer experience across multiple channels. We continue to push hard to accelerate the pace of our new business wins, and to take advantage of firming market conditions and our ability to execute. We are seeing an increase in demand for our solutions and we’re excited about the opportunity we see to increase our bookings and overall financial performance throughout the balance of 2010.”

Financial Results

For the first quarter of 2010, total revenues were $5.0 million compared to $4.5 million in the first quarter of 2009, representing an increase of 10%. Software revenues for the 2010 first quarter were $581K compared to $577K during the 2009 first quarter. Services revenues were $3.9 million in the 2010 first quarter and $3.3 million in the 2009 first quarter. Maintenance revenues were $530K and $647K in the 2010 and 2009 first quarters, respectively.

Gross margins were 37% and 31% of total revenues during the 2010 and 2009 first quarters, respectively. The improvement in our gross margin was driven primarily by increased services revenues during the 2010 first quarter and from efforts aimed at delivering services more efficiently.

Total operating expenses for the 2010 first quarter were $3.7 million compared to $3.4 million during the 2009 first quarter. The 2009 expenses included approximately $0.3 million in reversals of prior year general and administrative accruals. When compared on a normalized basis, without the benefit of the 2009 accrual reversals, 2010 operating expenses have remained relatively flat in relation to the 2009 first quarter.

In the 2010 first quarter, we generated a loss from operations of $(1.9 million) in relation to a loss of $(2.0 million) in the 2009 first quarter. Financial income in 2010 was $21K reflecting reduced interest rates and cash and investment balances in relation to 2009 when we reported $531K in financial income, which included $353K in a one-time gain resulting from the sale of our investment in auction rate securities.

The 2010 first quarter net loss was $(1.8 million) or ($0.11) per share compared to a $(1.4 million) or ($0.09) per share in the first quarter of 2009. The higher net loss was primarily due to financial income, being lower as described above.

At the end of the 2010 first quarter, cash and investments were $20.2 million, compared to $23.8 million at the end of the 2009 fourth quarter. The reduction in cash during the 2010 first quarter of approximately $3.6 million resulted primarily from the net loss of $(1.8 million) and to an increase in trade receivables of $2.0 million. The increase in trade receivables resulted from delayed collections from two significant customers, which we collected subsequent to the end of the quarter, in April 2010.

Conference Call Details

Management will hold a conference call to discuss the first quarter 2010 financial results at 10:30 a.m. ET on May 13, 2010. To participate in the teleconference, please call toll-free 888-713-4209 or 617-213-4863 for international callers, and provide passcode 15570405 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=PXUFYQBM3. 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 12:30 p.m. ET on May 13, 2010. To access the replay, dial toll-free 888-286-8010, or for international callers 617-801-6888, and provide passcode 40114727.

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

March 31,

  2010       2009  

 

Unaudited Revenues:

Software licenses

$ 581 $ 577 Services 3,858 3,307 Maintenance   530     647     Total revenues   4,969     4,531     Cost of revenues: Software licenses 66 114 Services 2,860 2,844 Maintenance   184     176     Total cost of revenues   3,110     3,134     Gross profit   1,859     1,397     Operating expenses: Research and development 896 944 Sales and marketing 1,532 1,606 General and administrative   1,284     812     Total operating expenses   3,712     3,362     Operating loss (1,853 ) (1,965 ) Financial income, net   21     531     Loss before taxes (1,832 ) (1,434 ) Taxes   -     (12 )   Net loss $ (1,832 ) $ (1,446 )   Basic and diluted net loss per share $ (0.11 ) $ (0.09 )   Weighted average number of shares used in computing basic and diluted net loss per share   16,624,523     16,554,286      

CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands)

      March 31, December 31,   2010     2009   Unaudited   Audited ASSETS   CURRENT ASSETS: Cash and cash equivalents *) $ 7,894 $ 12,624 Marketable securities *) - 6,210 Trade receivables 6,975 4,949 Restricted cash *) 573 557 Other current assets   1,895     1,834     Total current assets   17,337     26,174     LONG-TERM INVESTMENTS: Marketable securities *) 11,735 4,456 Severance pay fund   271     286     Total long-term investments   12,006     4,742     PROPERTY AND EQUIPMENT, NET   1,014     994     GOODWILL   3,096     3,096     Total assets $ 33,453   $ 35,006     *) Total Cash and Investments including restricted cash $ 20,202   $ 23,847     LIABILITIES AND SHAREHOLDERS' EQUITY   CURRENT LIABILITIES: Trade payables $ 1,927 $ 1,675 Deferred revenues 890 634 Accrued expenses and other liabilities   1,756     1,917     Total current liabilities   4,573     4,226     LONG-TERM LIABILITIES: Accrued severance pay 507 505 Other long-term liabilities   103     123     Total long-term liabilities   610     628     SHAREHOLDERS' EQUITY: Share capital 60 60 Additional paid-in capital 75,669 75,422 Treasury shares at cost (17,863 ) (17,863 ) Accumulated other comprehensive profit (loss) (19 ) 278 Accumulated deficit   (29,577 )   (27,745 )   Total shareholders' equity   28,270     30,152     Total liabilities and shareholders' equity $ 33,453   $ 35,006      

CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

    Three months ended

March 31,

  2010       2009   Unaudited

Cash flows from operating activities:

  Net loss $ (1,832 ) $ (1,446 ) Less: net income from discontinued operation   -     -     Net loss from continuing operations (1,832 ) (1,446 )   Adjustments required to reconcile net loss from continuing operations to net cash used in operating activities from continuing operations: Depreciation and amortization 124 173 Stock-based compensation related to options granted to employees, non-employees and directors 172 144 Accrued interest and amortization of premium on marketable securities 107 139 Gain from sales of marketable securities (9 ) (353 ) Accrued severance pay, net 17 (102 ) Decrease (increase) in trade receivables, net (2,026 ) 1,288 Decrease (increase) in other current assets (35 ) 711 Increase (decrease) in trade payables 252 (239 ) Increase in deferred revenues 298 229 Decrease in accrued expenses and other liabilities (161 ) (731 ) Decrease in other long-term liabilities (20 ) (3 ) Other   47     -     Net cash used in operating activities from continuing operations (3,066 ) (190 )   Net cash used in operating activities from discontinued operations   -     (62 )   Net cash used in operating activities   (3,066 )   (252 )  

Cash flows from investing activities:

  Investment in available-for-sale marketable securities (10,992 ) (4,896 ) Proceeds from sale and redemption of available-for-sale marketable securities 9,727 11,377 Increase in restricted cash held by trustee (16 ) (11 ) Purchase of property and equipment   (195 )   (157 )   Net cash provided by (used in) investing activities   (1,476 )   6,313      

CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

    Three months ended

March 31,

  2010       2009   Unaudited  

Cash flows from financing activities:

  Proceeds from exercise of stock options   75     54     Net cash provided by financing activities   75     54     Effect of exchange rate changes on cash   (263 )   (88 )   Increase (decrease) in cash and cash equivalents (4,730 ) 6,027 Cash and cash equivalents at the beginning of the period   12,624     11,059     Cash and cash equivalents at the end of the period $ 7,894   $ 17,086