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 third quarter ending September 30, 2010.

Third Quarter 2010 Highlights

• Third quarter revenues were $5.0 million, representing a 29% increase over third quarter 2009 revenues and an 11% increase over second quarter 2010 revenues
• A net loss of $1.5 million was generated during the quarter as compared to net losses of $2.0 million during the 2009 third quarter and $1.7 million during the 2010 second quarter
• Bookings during the 2010 third quarter were $4.3 million as compared to $3.8 million during the 2009 third quarter and $2.6 million during the 2010 second quarter

“Our total revenues are up 32% for the nine months ended September 30, 2010 as compared to the first nine months of 2009,” commented Tom Clear, chief executive officer of Jacada. “The increase was driven by bookings from existing customers and from improved services execution. Overall margins improved both in the current quarter and year to date periods in relation to the 2009 periods. While the business case for our solutions continues to be compelling, our sales cycles, in the current economic environment, continue to be long. The recently implemented cost reductions, which were announced in conjunction with our 2010 second quarter results, are designed to better align costs with our current business levels and are beginning to help minimize the use of our cash.”

Financial Results

For the third quarter of 2010, total revenues were $5.0 million compared to $3.9 million in the third quarter of 2009, representing an increase of 29%. Software revenues for the 2010 third quarter were $455K compared to $55K during the 2009 third quarter. Services revenues were $3.9 million in the 2010 third quarter and $3.3 million in the 2009 third quarter. Maintenance revenues were $651K and $492K in the 2010 and 2009 third quarters, respectively.

Gross margins were 39% and 37% of total revenues during the 2010 and 2009 third quarters, respectively. In 2010, we have continued the implementation of several material contracts signed at the end of 2009 and early 2010, thus increasing revenues and improving margins.

Total operating expenses for the 2010 and 2009 third quarters remained relatively flat at $3.5 million. Operating expenses in 2010 included approximately $0.2 million in restructuring costs and expenses associated with the previously announced cost reduction plan.

The 2010 third quarter net loss improved to $1.5 million or ($0.09) per share compared to a net loss of $2.0 million or ($0.12) per share in the third quarter of 2009, resulting from a growth in revenues, improving margins and a reduction in operating expenses during the periods.

For the nine month periods ending on September 30, 2010 and 2009, respectively, total revenues were $14.5 million and $10.9 million and gross profits were $5.5 million or 38% of total revenues and $3.1 million or 28% of total revenues. During the nine month period ending September 30, 2010, we incurred a net loss of $5.0 million or ($0.30) per share and, in the comparable 2009 period, we posted a net loss of $6.9 million or ($0.42) per share.

At the end of the 2010 third quarter, cash and investments were $19.5 million, compared to $19.9 million at the end of the 2010 second quarter and $23.8 million at December 31, 2009

Conference Call Details

Management will hold a conference call to discuss the third quarter 2010 financial results at 10:30am ET on November 4, 2010. To participate in the teleconference, please call toll-free 888.679.8037 or 617.213.4849 for international callers, and provide passcode 28273065 approximately 10 minutes prior to the start time.

Interested parties may pre-register for the teleconference via this URL: https://cossprereg.btci.com/prereg/key.process?key=PJVEV93Q7. 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 November 4, 2010. To access the replay, dial toll-free 888-286-8010, or for international callers 617-801-6888, and provide pass code 49386007.

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

September 30,

Nine months ended

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  2010       2009     2010       2009   Unaudited Revenues: Software licenses $ 455 $ 55 $ 1,585 $ 692 Services 3,878 3,327 11,010 8,431 Maintenance   651     492     1,856     1,792     Total revenues   4,984     3,874     14,451     10,915     Cost of revenues: Software licenses 65 27 197 174 Services 2,793 2,253 8,134 7,119 Maintenance   199     174     582     520     Total cost of revenues   3,057     2,454     8,913     7,813     Gross profit 1,927 1,420 5,538 3,102   Operating expenses: Research and development 926 859 2,746 2,693 Sales and marketing 1,236 1,273 4,141 4,430 General and administrative 1,126 1,388 3,579 3,542 Restructuring   196     -     196     -     Total operating expenses   3,484     3,520     10,662     10,665     Operating loss (1,557 ) (2,100 ) (5,124 ) (7,563 ) Financial income, net   58     44     107     669     Loss before taxes (1,499 ) (2,056 ) (5,017 ) (6,894 ) Taxes   (10 )   19     (11 )   (19 )   Net loss   (1,509 )   (2,037 )   (5,028 )   (6,913 )       Basic and diluted net earnings loss per share $ (0.09 ) $ (0.12 ) $ (0.30 ) $ (0.42 )   Weighted average number of shares used in computing basic and diluted net loss per share   16,636,534     16,569,721     16,632,093     16,562,959      

CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands)

            September 30, December 31,   2010     2009   Unaudited       Audited ASSETS   CURRENT ASSETS: Cash and cash equivalents *) $ 7,756 $ 12,624 Marketable securities *) 1,274 6,210 Trade receivables 4,865 4,949 Restricted cash *) 416 557 Other current assets   1,421     1,885     Total current assets   15,732     26,225     LONG-TERM INVESTMENTS: Marketable securities *)

 

10,044 4,456 Severance pay fund   177     286     Total long-term investments   10,221     4,742     PROPERTY AND EQUIPMENT, NET   912     994     GOODWILL   3,096     3,096     Total assets $ 29,961   $ 35,057     *) Total Cash and Investments including restricted cash $ 19,490   $ 23,847     LIABILITIES AND SHAREHOLDERS' EQUITY   CURRENT LIABILITIES: Trade payables $ 1,349 $ 1,194 Deferred revenues 1,084 685 Accrued expenses and other liabilities   2,070     2,398     Total current liabilities   4,503     4,277     LONG-TERM LIABILITIES: Accrued severance pay 379 505 Other long-term liabilities   64     123     Total long-term liabilities   443     628     SHAREHOLDERS' EQUITY: Share capital 60 60 Additional paid-in capital 75,885 75,422 Treasury shares at cost (17,863 ) (17,863 ) Accumulated other comprehensive income (loss) (294 ) 278 Accumulated deficit   (32,773 )   (27,745 )   Total shareholders' equity   25,015     30,152     Total liabilities and shareholders' equity $ 29,961   $ 35,057      

CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

           

Three months ended

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Nine months ended

September 30,

  2010       2009     2010       2009   Unaudited   Cash flows from operating activities:   Net loss $ (1,509 ) $ (2,037 ) $ (5,028 ) $ (6,913 ) Less: Net loss from discontinued operations, net of taxes   -     -     -     -     Net loss from continuing operations   (1,509 )   (2,037 )   (5,028 )   (6,913 )   Adjustments required to reconcile net loss from continuing operations to net cash used in operating activities from continuing operations: Depreciation and amortization 127 130 374 442 Stock-based compensation related to options granted to employees, non employees and directors 100 220 389 568 Accrued interest and amortization of premium on marketable securities (15 ) (16 ) 112 105 Gain from sales of marketable securities - - (9 ) (353 ) Decrease in accrued severance pay, net (9 ) (20 ) (17 ) (242 ) Decrease (increase) in trade receivables, net 46 (2,123 ) 84 187 Decrease (increase) in other current assets (290 ) (397 ) 474 705 Increase (decrease) in trade payables (7 ) 410 (326 ) (20 ) Increase (decrease) in deferred revenues (115 ) (228 ) 483 (173 ) Increase (decrease) in accrued expenses and other liabilities 291 (149 ) 110 (1,195 ) Decrease in other long-term liabilities (20 ) (20 ) (59 ) (42 ) Other   15     -     56     -     Net cash used in operating activities from continuing operations (1,386 ) (4,230 ) (3,357 ) (6,931 ) Net cash used in operating activities from discontinued operations   -     (18 )   -     (248 )   Net cash used in operating activities   (1,386 )   (4,248 )   (3,357 )   (7,179 )   Cash flows from investing activities:   Investment in available-for-sale marketable securities - - (10,992 ) (5,913 ) Proceeds from sale and redemption of available-for-sale marketable securities - 1,262 9,727 19,541 Short term deposits, net - (5 ) - (1,889 ) Decrease in restricted cash held by trustee - 2,655 141 2,642 Proceeds from sale of property and equipment - - 7 - Purchase of property and equipment   (19 )   (50 )   (357 )   (244 )   Net cash (used in) provided by investing activities from continuing operations (19 ) 3,862 (1,474 ) 14,137   Cash flows from financing activities: Proceeds from exercise of stock options   -     6     75     65     Net cash provided by financing activities from continuing operations   -     6     75     65     Effect of exchange rate changes on cash 229 17 (112 ) 183   Increase (decrease) in cash and cash equivalents (1,176 ) (363 ) (4,868 ) 7,206 Cash and cash equivalents at the beginning of the period   8,932     18,628     12,624     11,059     Cash and cash equivalents at the end of the period $ 7,756   $ 18,265   $ 7,756   $ 18,265