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Press Release

Jacada Reports Second Quarter 2007 Results

ATLANTA, August 7, 2007 – Jacada Ltd. (Nasdaq: JCDA), a leading provider of unified desktop and process optimization solutions for customer service operations, today reported financial results for the second quarter of 2007.

Total revenues were $5.1 million compared to $4.8 million in the second quarter of 2006. Non-GAAP gross profit was $3.9 million, or 77% gross margin, compared to $3.8 million, and 80%, respectively, in the second quarter last year. Total GAAP gross profit was $3.8 million, or 74% gross margin, compared to $3.7 million, and 77%, respectively, in last year's second quarter.

Non-GAAP net loss for the second quarter of 2007 was ($385,000), or ($0.02) per basic and diluted share, compared to a non-GAAP net loss of ($861,000), or ($0.04) per basic and diluted share, in last year's second quarter. GAAP net loss, for the quarter was ($681,000), or ($0.03) per basic and diluted share compared to a GAAP net loss of ($1.1 million), or ($0.06) per basic and diluted share in the second quarter last year.

Total revenues for the first half of 2007 grew 15.8% to $11.6 million from $10 million in the first half of 2006.

Non-GAAP gross profit for first half of 2007 was $9.0 million, or 78% gross margin, compared to $7.9 million, and 79%, respectively, for the first half of last year. Total GAAP gross profit was $8.8 million, or 76% gross margin, compared to $7.7 million, and 77%, respectively, in last year's first half.

Non-GAAP net income for the first half of 2007 was $367,000, or $0.02 per diluted share, compared to a non-GAAP net loss of ($1.3 million), or ($0.07) per basic and diluted share, in the first half of 2006. On a GAAP basis, net loss for the first half of 2007 was ($213,000), or ($0.01) per basic and diluted share, compared to a net loss of ($1.8 million), or ($0.09) per basic and diluted share, in the first half of 2006.

At the end of the second quarter of 2007 cash and investments were $36.0 million, which was relatively flat compared to the amount reported on December 31, 2006.

"As expected, revenue for the second quarter of 2007 showed moderate growth over the same period last year," commented Gideon Hollander, chief executive officer of Jacada.

"We had many important customers achieve key milestones with their contact center projects during the second quarter of 2007," continued Mr. Hollander. "We continue to see demand build for our innovative contact center solutions. We are also seeing an increase in the size and complexity of certain deals, which often results in longer sales cycles and can affect the timing of revenue recognition."

Other Second Quarter Highlights:

The second quarter of 2007 resulted in notable customer activity. During the quarter:

• Jacada signed a material contract with Harrah's Operating Company, Inc. Using the Jacada unified service desktop, Harrah's customer service agents will be able to provide customers an enhanced service experience by providing a more comprehensive and timely view of available properties and services. Using the non-invasive application integration capabilities of the Jacada solution, the new unified service desktop will be delivered without having to modify or replace any of the existing business systems.
• Jacada customers achieved key project milestones:
• Quelle.Contact, Germany's third largest contact center outsourcer, went live in 2 contact centers with 1,000 agents.
• A large telecommunications company in Hungary went live with 3,500 agents.
• Lillian Vernon, one of the leading catalogue and online retailers in North America went into production with the Jacada unified desktop less than 6 months after signing contracts.
• West Corporation, a premier provider of outsourced communication solutions, reached a significant milestone by deploying Jacada WorkSpace to 4,700 agents.

"During the past quarter, we have achieved major milestones in the evolution of our business strategy with the delivery of production quality contact center solutions to some of the highest profile organizations in the world," added Paul O'Callaghan, president of Jacada. "The rapid and successful adoption and deployment of our contact center solutions continues to strengthen our position in this market."

"Our strategy to partner with the world's leading IT systems integrators continues to deliver results," added O'Callaghan. "These partners are now championing our products and have contributed to recent wins and are actively engaged in implementation projects."

"Given our backlog and visibility in our sales pipeline for both our legacy and call center products for the remainder of the year, we are reiterating our annual revenue guidance growth of 23%-27%, with that growth occurring predominantly in the fourth quarter," concluded Mr. Hollander.

Conference Call Details

Any investor or interested individual can listen to the teleconference, which is scheduled to begin at 10:30 a.m. Eastern Time on August 7, 2007. To participate in the teleconference, please call toll-free 866-356-4279 or 617-597-5394 for international callers and provide passcode 59328490, approximately 10 minutes prior to the start time. The teleconference will also be available via Webcast at www.jacada.com (under "About Us" then "Investors") or www.earnings.com. A telephonic playback of the teleconference will be available for three days beginning at 12:30 p.m. ET on August 8, 2007. To access the replay, dial toll-free 888-286-8010, or for international callers dial 617-801-6888, and provide Access Code 78657804.

Use of Non-GAAP Financial Information

In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Jacada uses non-GAAP measures of operating income (loss), net income (loss) and income (loss) per share, which are adjustments from results based on GAAP to exclude non-cash stock-based compensation expenses in accordance with SFAS 123R and amortization of acquired intangible assets related to acquisitions effected by Jacada in previous years. Jacada's management believes the non-GAAP financial information provided in this release is useful to investors' understanding and assessment of Jacada's on-going core operations and prospects for the future. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. Management 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.

About Jacada

Jacada is a leading global provider of unified service desktop and process optimization solutions that simplify and automate customer service processes. By bridging disconnected systems into a single, "intelligent" WorkSpace, Jacada solutions create greater operational efficiency and increase agent and customer satisfaction. Founded in 1990, Jacada has more than 1200 customers and operates globally with offices in Atlanta, Georgia; Herzliya, Israel; London, England and Munich, Germany. Jacada can be reached at www.jacada.com.

Forward Looking Statement

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.

CONTACT:
Tzvia Broida
Chief Financial Officer
Jacada
972 9 9525927
Tzvia@jacada.com

Or

Peter Seltzberg
Hayden Communications
(646) 415-8972
peter@haydenir.com

JACADA LTD. CONSOLIDATED STATEMENTS OF OPERATIONS U.S. dollars in thousands, except per share data
		Six months ended June 30,						Three months ended June 30,
		2007			2006			2007			2006
		Unaudited
Revenues:
Software licenses	$	3,514		$	3,857		$	999		$	1,354
Services		3,222			1,401			1,610			990
Maintenance		4,819			4,716			2,513			2,427
Total revenues		11,555			9,974			5,122			4,771
Cost of revenues:
Software licenses		242			241			113			125
Services		2,065			1,610			971			730
Maintenance		460			444			236			221
Total cost of revenues		2,767			2,295			1,320			1,076
Gross profit		8,788			7,679			3,802			3,695
Operating expenses:
Research and development		2,264			1,931			1,062			928
Sales and marketing		5,049			5,398			2,601			2,777
General and administrative		2,383			2,689			1,136			1,423
Total operating expenses		9,696			10,018			4,799			5,128
Operating income (loss)		(908)			(2,339)			(997)			(1,433)
Financial income, net		828			635			392			357
Pretax income (loss)		(80)			(1,704)			(605)			(1,076)
Taxes		133			53			76			7
Net income (loss)	$	(213)		$	(1,757)		$	(681)		$	(1,083)
Basic net income (loss)    per share	$	(0.01)		$	(0.09)		$	(0.03)		$	(0.06)
Diluted net income (loss)   per share	$	(0.01)		$	(0.09)		$	(0.03)		$	(0.06)
Weighted average   number of shares   used in computing   basic net income (loss) per share		20,212,254			19,637,106			20,278,789			19,655,063
Weighted average   number of shares   used in computing   diluted net income (loss) per share		20,212,254			19,637,106			20,278,789			19,655,063

 

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JACADA LTD. NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS U.S. dollars in thousands, except per share data
		Six months ended June 30,						Three months ended June 30,
		2007			2006			2007			2006
		Unaudited
Revenues:
Software licenses	$	3,514		$	3,857		$	999		$	1,354
Services		3,222			1,401			1,610			990
Maintenance		4,819			4,716			2,513			2,427
Total revenues		11,555			9,974			5,122			4,771
Cost of revenues:
Software licenses		36			35			9			21
Services		2,021			1,584			946			718
Maintenance		458			438			235			218
Total cost of revenues		2,515			2,057			1,190			957
Gross profit		9,040			7,917			3,932			3,814
Operating expenses:
Research and development		2,231			1,885			1,044			907
Sales and marketing		4,955			5,346			2,549			2,765
General and administrative		2,182			2,600			1,040			1,353
Total operating expenses		9,368			9,831			4,633			5,025
Operating loss		(328)			(1,914)			(701)			(1,211)
Financial income, net		828			635			392			357
Pretax income (loss)		500			(1,279)			(309)			(854)
Taxes		133			53			76			7
Net income (loss)	$	367		$	(1,332)		$	(385)		$	(861)
Basic net income (loss)    per share	$	0.02		$	(0.07)		$	(0.02)		$	(0.04)
Diluted net income (loss)   per share	$	0.02		$	(0.07)		$	(0.02)		$	(0.04)
Weighted average   number of shares   used in computing   basic net income (loss) per share		20,212,254			19,637,106			20,278,789			19,655,063
Weighted average   number of shares   used in computing   diluted net income (loss) per share		20,546,534			19,637,106			20,278,789			19,655,063

 

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RECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS U.S. dollars in thousands, except per share data
			Six months ended June 30, 2007 (unaudited)
			GAAP			Adjustments						Non-GAAP
						Amortization of acquired intangible assets			Stock based compensation expenses
Revenues:
Software licenses		$	3,514		$			$			$	3,514
Services			3,222									3,222
Maintenance			4,819									4,819
Total revenues			11,555									11,555
Cost of revenues:
Software licenses			242			(206)						36
Services			2,065						(44)			2,021
Maintenance			460						(2)			458
Total cost of revenues			2,767			(206)			(46)			2,515
Gross profit			8,788			206			46			9,040
Operating expenses:
Research and development			2,264						(33)			2,231
Sales and marketing			5,049						(94)			4,955
General and administrative			2,383						(201)			2,182
Total operating expenses			9,696						(328)			9,368
Operating loss			(908)			206			374			(328)
Financial income, net			828									828
Pretax income (loss)			(80)			206			374			500
Taxes			133									133
Net income (loss)		$	(213)		$	206		$	374		$	367
Basic net income (loss)    per share		$	(0.01)								$	0.02
Diluted net income (loss)   per share		$	(0.01)								$	0.02
Weighted average   number of shares   used in computing   basic net income (loss) per share			20,212,254									20,212,254
Weighted average   number of shares   used in computing   diluted net income (loss) per   share			20,212,254									20,546,534

 

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RECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS U.S. dollars in thousands, except per share data
			Three months ended June 30, 2007 (unaudited)

			GAAP			Adjustments						Non-GAAP
						Amortization of acquired intangible assets			Stock based compensation expenses
Revenues:
Software licenses		$	999		$			$			$	999
Services			1,610									1,610
Maintenance			2,513									2,513
Total revenues			5,122									5,122
Cost of revenues:
Software licenses			113			(104)						9
Services			971						(25)			946
Maintenance			236						(1)			235
Total cost of revenues			1,320			(104)			(26)			1,190
Gross profit			3,802			104			26			3,932
Operating expenses:
Research and development			1,062						(18)			1,044
Sales and marketing			2,601						(52)			2,549
General and administrative			1,136						(96)			1,040
Total operating expenses			4,799						(166)			4,633
Operating loss			(997)			104			192			(701)
Financial income, net			392									392
Pretax income (loss)			(605)			104			192			(309)
Taxes			76									76
Net income (loss)		$	(681)		$	104		$	192		$	(385)
Basic net income (loss)    per share		$	(0.03)								$	(0.02)
Diluted net income (loss)   per share		$	(0.03)								$	(0.02)
Weighted average   number of shares   used in computing   basic net income (loss) per share			20,278,789									20,278,789
Weighted average   number of shares   used in computing   diluted net income (loss) per   share			20,278,789									20,278,789

 

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CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands
		June 30,			December 31,
		2007			2006
ASSETS		Unaudited
CURRENT ASSETS:
Cash and cash equivalents *)	$	4,235		$	4,735
Marketable securities *)		13,262			12,338
Trade receivables		2,216			1,681
Other current assets		2,278			933
Total current assets		21,991			19,687
LONG-TERM INVESTMENTS:
Marketable securities *)		18,495			18,849
Severance pay fund		939			1,040
Total long-term investments		19,434			19,889
PROPERTY AND EQUIPMENT, NET		964			930
OTHER ASSETS, NET:    Other intangibles, net		368			574
Goodwill		4,630			4,630
Total other assets		4,998			5,204
Total assets	$	47,387		$	45,710
*)Total Cash and Investments	$	35,992		$	35,922
LIABILITIES AND SHAREHOLDERS EQUITY
CURRENT LIABILITIES:
Trade payables	$	1,106		$	1,202
Deferred revenues		6,595			5,514
Accrued expenses and other liabilities		4,095			3,813
Total current liabilities		11,796			10,529
LONG-TERM LIABILITIES:
Deferred revenues		56			219
Accrued severance pay		1,486			1,567
Total long-term liabilities		1,542			1,786
SHAREHOLDERS' EQUITY:
Share capital		58			58
Additional paid-in capital		72,527			71,547
Accumulated other comprehensive loss		(241)			(128)
Accumulated deficit		(38,295)			(38,082)
Total shareholders' equity		34,049			33,395
Total Liabilities	$	47,387		$	45,710