Cindy Curtin Knezevich
770-352-1300
cindyk@jacada.com
Peter L. Seltzberg
Hayden Communications
646-415-8972
peter@haydenir.com
Press Release
Jacada Reports Financial Results for Third-Quarter 2003
Software License Revenue up 25% and Total Revenue up 14% Year-Over-Year
ATLANTA, October 27, 2003 – Jacada Ltd. (Nasdaq: JCDA), the leading provider of legacy integration and Web-to-host solutions, today reported financial results for the 2003 third quarter.
Total revenue for the 2003 third quarter was $5.3 million, up from $5.1 million in the 2003 second quarter, and 14% higher than the $4.6 million reported in the third quarter of 2002. Software license revenue was $2.3 million in the 2003 third quarter, up from $2.1 million in the 2003 second quarter, and 25% higher than the $1.8 million reported in the third quarter of 2002. Service and maintenance revenues were $3.0 million in the 2003 third quarter, unchanged from the 2003 second quarter, and 7% higher than the $2.8 million reported in the third quarter 2002.
Gross profit for the 2003 third quarter was $4.2 million, or 79% of total revenue, compared to $4.2 million, or 82% of total revenue, in the 2003 second quarter. Operating loss for the quarter was $713,000, improved slightly from the operating loss of $773,000 during the 2003 second quarter. Net loss for the quarter, after financial income, was $558,000, or $0.03 per share, compared to a net loss of $361,000, or $0.02 per share, in the 2003 second quarter. In the third quarter of 2002, Jacada reported gross profit of $3.6 million, an operating loss of $1.5 million, and a net loss of $1.3 million, or $0.07 per share.
At the end of the 2003 third quarter, Jacada's cash and investments totaled $40.9 million, compared to $42.5 million at June 30, 2003.
"We are very pleased with the growth in total revenue, which was attributable to strong software license bookings in North America," said Gideon Hollander, CEO of Jacada. "The growth in software license revenue underscores the quick ROI value that our suite of business solutions brings to organizations looking to extend the life of their valuable legacy computing systems."
Third-Quarter Highlights
During the quarter, Jacada closed new and follow-on business with customers such as BG Chemie, Citibank, HomeEq Servicing Corporation, Jefferson Regional Medical Center, Qwest, Security Service Federal Credit Union, State of Tennessee, and Value Options.
Jacada's focus on partnerships continues to expand revenue opportunities. During the third quarter, Jacada's partnership with Computer Associates (CA) resulted in the signing of another large customer agreement. The partnership positions Jacada as the exclusive legacy integration and Web-to-host solution for customers leveraging CA solutions that require mainframe application access such as CleverPath Portal.
Also in the third quarter, Jacada announced a joint development and marketing agreement with Oracle Corp. As part of the agreement, Jacada Integrator will provide Oracle® Application Server customers with the ability to integrate valuable legacy applications with Oracle applications and infrastructure technology. Oracle consulting and pre-sales organizations can use Jacada Integrator to help customers build and deploy legacy integration solutions.
"Partnerships are a valuable source of revenue for Jacada, since they enable to us to market our products as part of a larger solution sale," said Hollander. "We are encouraged by the success of our relationships with Computer Associates and Oracle, as well as our other key partners PeopleSoft, SeeBeyond and Siebel. We believe partnerships such as these provide the best business solutions to our customers."
In September, Jacada released version 5.0 of Jacada Terminal Emulator. This version features the first thin-client Java FTP (File Transfer Protocol) component in the emulation market, expanded UNIX support with VT340 emulation, additional language capability, support for the Java 2 platform, and usability improvements such as customized hotspots and font enhancements.
"Jacada continues to enhance its product lines with the overriding goal of being the one-stop-shop for all things legacy," said Hollander. "We continue to see significant interest within our prospect and customer base and are encouraged about the prospects for the fourth quarter and beyond."
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to future financial results and plans for future business development activities, and are prospective. These statements include all statements that are not statements of historical fact and consists of those regarding intent, belief or current expectations of the Company, its directors or its officers with respect to, among other things: (i) the Company's financing plans; (ii) trends affecting the Company's financial condition or results of operations; and (iii) the Company's growth strategy and operating strategy (including the development of its products and services). 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. The Company cannot assess the impact of or the extent to which any single factor or risk, or combination of them, may cause. For a more complete discussion of risk factors, please see the Company's Form 20-F and other Statements filed with the Securities and Exchange Commission.
Jacada is a trademark of Jacada Ltd. All other brands or product names are trademarks of their respective owners.
| JACADA LTD. CONSOLIDATED BALANCE SHEETS U.S. Dollars in thousands |
| September 30, | December 31, | |||
| 2003 | 2002 | |||
| ASSETS | Unaudited | Audited | ||
| CURRENT ASSETS: | ||||
| Cash and cash equivalents | $ | 9,770 | $ | 15,319 |
| Marketable securities | 6,626 | 22,326 | ||
| Trade receivables (net of allowance for doubtful accounts of $ 284 and $ 398 at September 30, 2003 and December 31, 2002, respectively) | 3,939 | 2,661 | ||
| Other current assets | 391 | 645 | ||
| Total current assets | 20,726 | 40,951 | ||
| LONG-TERM INVESTMENTS: | ||||
| Marketable securities | 24,550 | 3,737 | ||
| Severance pay fund | 712 | 576 | ||
| Long-term other assets | 56 | 79 | ||
| Total long-term investments | 25,318 | 4,392 | ||
| PROPERTY AND EQUIPMENT, NET | 2,039 | 2,804 | ||
OTHER ASSETS, NET: Technology, net (net of accumulated amortization of $ 617 and $ 381 at September 30, 2003 and December 31, 2002, respectively) | 941 | 1,177 | ||
| Other
intangibles, net (net of accumulated amortization of $ 61 and $ 23 at September 30, 2003 and December 31, 2002, respectively) | 102 | 140 | ||
| Goodwill | 4,554 | 4,554 | ||
| Total other assets | 5,597 | 5,871 | ||
| $ | 53,680 | $ | 54,018 |
| JACADA LTD. CONSOLIDATED BALANCE SHEETS U.S. Dollars in thousands, except share data |
| September 30, | December 31, | |||
| 2003 | 2002 | |||
| Unaudited | Audited | |||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
| CURRENT LIABILITIES: | ||||
| Trade payables | $ | 514 | $ | 760 |
| Deferred revenues | 3,229 | 2,144 | ||
| Accrued expenses and other liabilities | 3,598 | 3,599 | ||
| Total current liabilities | 7,341 | 6,503 | ||
| LONG TERM LIABILITIES: | ||||
| Accrued severance pay | 1,126 | 927 | ||
| Accrued expenses | 73 | 124 | ||
| Total long-term liabilities | 1,199 | 1,051 | ||
| SHAREHOLDERS' EQUITY: | ||||
| Share capital: | ||||
| Ordinary shares of NIS 0.01 par value: | ||||
| Authorized: 30,000,000 shares
at September 30, 2003 and December 31, 2002; Issued and outstanding: 19,033,778 and 18,935,903 shares as of September 30, 2003 and December 31, 2002, respectively | 55 | 55 | ||
| Additional paid-in capital | 69,277 | 69,143 | ||
| Deferred stock compensation | (21) | (25) | ||
| Accumulated other comprehensive income | 169 | 81 | ||
| Accumulated deficit | (24,340) | (22,790) | ||
| Total shareholders' equity | 45,140 | 46,464 | ||
| $ | 53,680 | $ | 54,018 | |
|
JACADA LTD. CONSOLIDATED STATEMENTS OF OPERATIONS U.S. Dollars in thousands, except share and per share data |
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|
Nine months ended September 30, |
Three months ended September 30, |
Year ended December 31, |
|||||||||||||
| 2003 | 2002 | 2003 | 2002 | 2002 | |||||||||||
| Unaudited | Audited | ||||||||||||||
| Revenues: | |||||||||||||||
| Software license | $ | 6,594 | $ | 6,999 | $ | 2,294 | $ | 1,834 | $ | 9,783 | |||||
| Services | 3,295 | 3,661 | 1,093 | 965 | 4,518 | ||||||||||
| Maintenance | 5,579 | 5,317 | 1,886 | 1,812 | 7,235 | ||||||||||
| Total revenues | 15,468 | 15,977 | 5,273 | 4,611 | 21,536 | ||||||||||
| Cost of revenues: | |||||||||||||||
| Software license | 406 | 179 | 224 | 58 | 248 | ||||||||||
| Services | 1,747 | 2,576 | 596 | 671 | 3,115 | ||||||||||
| Maintenance | 824 | 950 | 267 | 287 | 1,247 | ||||||||||
| Total cost of revenues | 2,977 | 3,705 | 1,087 | 1,016 | 4,610 | ||||||||||
| Gross profit | 12,491 | 12,272 | 4,186 | 3,595 | 16,926 | ||||||||||
| Operating expenses: | |||||||||||||||
| Research and development | 4,109 | 4,406 | 1,393 | 1,353 | 6,191 | ||||||||||
| Sales and marketing | 7,128 | 7,665 | 2,338 | 2,211 | 9,450 | ||||||||||
| General and administrative | 3,601 | 3,451 | 1,168 | 863 | 4,602 | ||||||||||
| Restructuring charges | - | 701 | - | 701 | 501 | ||||||||||
| Total operating expenses | 14,838 | 16,223 | 4,899 | 5,128 | 20,744 | ||||||||||
| Operating loss | (2,347) | (3,951) | (713) | (1,533) | (3,818) | ||||||||||
| Financial income, net | 797 | 598 | 155 | 209 | 909 | ||||||||||
| Net loss | $ | (1,550) | $ | (3,353) | $ | (558) | $ | (1,324) | $ | (2,909) | |||||
| Basic and diluted net loss per share |
$ | (0.08) | $ | (0.18) | $ | (0.03) | $ | (0.07) | $ | (0.16) | |||||
| Weighted average number of shares used in computing basic and diluted net loss per share |
19,003,988 | 18,638,041 | 19,020,340 | 18,806,114 | 18,710,105 | ||||||||||