EX-99.1 2 a05-19601_1ex99d1.htm EXHIBIT 99

Exhibit 99.1

 

Click Commerce Reports Q3 2005 Non-GAAP EPS of 40 cents, GAAP EPS of 31 cents

 

Company Posts Record Profits and Revenues

 

CHICAGO, Nov. 3, 2005 - Click Commerce, Inc. (Nasdaq: CKCM), a provider of on-demand collaborative commerce solutions, today announced record results for its third quarter ended Sept. 30, 2005.

 

Total third quarter 2005 revenues were $16.2 million, representing a 130% growth over third quarter 2004 revenue of $7.0 million. On a non-GAAP basis, excluding certain charges as described below, net income was $4.9 million, or $0.40 per share on a diluted basis. This represents an improvement of approximately $3.3 million over Q3 2004’s non-GAAP net income of $1.6 million, an increase of 200%. On a GAAP basis, net income was $3.8 million, or $0.31 per share, an improvement of approximately $2.4 million over the third quarter of 2004’s net income of $1.4 million, an increase of 176%. The Company’s third quarter results represent its ninth consecutive profitable quarter, with a non-GAAP profit margin of 30% in the third quarter. GAAP profit margins were 23% in the third quarter.

 

The Company’s third quarter results include a $0.15 million non-recurring charge related to certain leasehold improvements that were abandoned as part of the Company’s relocation of its Chicago headquarters.

 

The Company’s cash and cash equivalents were $11.1 million as of the third quarter compared to $11.8 million at the end of the second quarter. Cash flows from operations in the quarter were a net use of $0.4 million. This amount includes third quarter net reductions in accounts payable and accruals of $1.8 million, primarily from cash outlays related to liabilities assumed in the Company’s acquisitions in the first half of 2005. Accounts receivable increased from the second quarter by $0.6 million to $16.5 million due to increased revenue in the third quarter, while days sales outstanding decreased during this period by 15 days to 93 days. Deferred revenue was $11.0 million as of Sept. 30, 2005, a decrease of $1.0 million from the end of the second quarter as a result of normal calendar year-based renewal cycles.

 

Conference Call

 

The Company will hold a conference call to discuss the results today, Nov. 3, at 4:30 p.m. (EST), with remarks from Chairman and CEO Michael W. Ferro, Jr. and Chief Financial Officer Michael W. Nelson. The call will also be broadcast live over the Internet. Investors interested in listening to the Webcast should go to the “Investor Center” on Click Commerce’s Web site, located at www.clickcommerce.com, at least 15 minutes prior to the call.

 

Information Concerning Forward-Looking Statements

 

Information contained in this release that are not historical facts and refer to the Company’s future operations are forward-looking statements under the Private Securities Litigation Reform Act of 1995. Such statements involve expectations, beliefs, hopes, plans or strategies regarding the future. These statements are subject to risks and uncertainties and actual results may differ materially from those indicated by these forward-looking statements. Factors which could cause or contribute to such differences include, but are not limited to: success of our suite of applications, impact of acquisitions or investments in other companies, general economic trends, introduction of new products or services by competitors, and security risks and regulation related to the Internet. We refer you to the risk factors listed in our annual report on Form 10-K, quarterly reports on Form 10-Q and other filings, which are on file with the Securities and Exchange Commission. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in the Company’s expectations

 


 

with regard thereto or to reflect any change in any event, condition or circumstance on which such forward-looking statement is based, in whole or in part.

 

Non-GAAP Financial Measures

 

The non-GAAP financial measures contained in this earnings press release exclude amortization of intangible assets. The Company uses these measures for planning and forecasting its future business as well as analyzing such forecasts against past performance.  In addition, excluding these charges enhances the Company’s understanding of trends developing in its operations as well as its performance in its market and against its competitors. The Company believes that providing specific financial information on the cost of such expense, as well as providing non-GAAP net income measures that exclude such charges, best allows investors to understand the Company’s ongoing business activities during the quarter. The Company believes that inclusion of certain non-GAAP financial measures provides comparability to similar companies in the Company’s industry, many of which present similar non-GAAP financial measures to investors. The non-GAAP financial measures should not be considered as a substitute for, or preferable to, measures of financial performance prepared in accordance with GAAP and may be different from non-GAAP financial measures used by others.

 

The Company believes that these non-GAAP financial measures provide an additional tool for investors to evaluate its ongoing operating results and trends. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures as detailed below (in thousands, except earnings per share and margins):

 

Reconciliation of Non-GAAP Financial Measures (unaudited)

 

 

 

Three months ended September 30, 2005

 

Three months ended September 30, 2004

 

 

 

Net
income

 

Basic
Earnings
per share

 

Diluted
Earnings
per share

 

Profit
Margin

 

Net
income

 

Basic
Earnings
per share

 

Diluted
Earnings
per share

 

Profit
Margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As reported GAAP financial measures

 

$

3,787

 

$

0.33

 

$

0.31

 

23

%

$

1,370

 

$

0.14

 

$

0.14

 

19

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets presented in:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues, Product License

 

299

 

0.03

 

0.02

 

2

%

71

 

0.01

 

0.01

 

1

%

Operating expense

 

809

 

0.07

 

0.07

 

5

%

191

 

0.02

 

0.02

 

3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total adjustment

 

1,108

 

0.10

 

0.09

 

7

%

262

 

0.03

 

0.03

 

4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP financial measures

 

$

 4,895

 

$

 0.43

 

$

 0.40

 

30

%

$

 1,632

 

$

 0.17

 

$

 0.17

 

22

%

 

 

 

Nine months ended September 30, 2005

 

Nine months September ended June 30, 2004

 

 

 

Net
income

 

Basic
Earnings
per share

 

Diluted
Earnings
per share

 

Profit
Margin

 

Net
income

 

Basic
Earnings
per share

 

Diluted
Earnings
per share

 

Profit
Margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As reported GAAP financial measures

 

$

9,629

 

$

0.86

 

$

0.81

 

24

%

$

3,398

 

$

0.38

 

$

0.36

 

18

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets presented in:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues, Product License

 

780

 

0.07

 

0.07

 

2

%

114

 

0.01

 

0.01

 

1

%

Operating expense

 

2,034

 

0.18

 

0.17

 

5

%

317

 

0.04

 

0.03

 

2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total adjustment

 

2,814

 

0.25

 

0.24

 

7

%

431

 

0.05

 

0.05

 

2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP financial measures

 

$

12,443

 

$

1.11

 

$

1.05

 

31

%

$

3,829

 

$

0.43

 

$

0.41

 

21

%

 


 

About Click Commerce, Inc.

 

Click Commerce, Inc. (Nasdaq: CKCM) provides collaborative commerce solutions for sales and order management, supply chain management, service parts optimization, and compliance automation. Enterprises and institutions in the aerospace and defense, consumer product, distribution, financial services, higher education and health care, manufacturing, retail, telecom, and transportation industries utilize the Company’s solutions. Click Commerce enables corporations such as Abbott Labs, Alaska Airlines, BAE Systems, Carrier, Cisco, Citibank, Dell, Delphi, Eastman Kodak, FedEx, Hewlett Packard, Home Shopping Network, IBM, Lockheed Martin, Microsoft, Pier 1, Ryder, Samsung, SBC Communications, Tellabs, Verizon, and Xerox, to coordinate and optimize business processes, accelerate revenue, lower costs, and improve customer service. Five of the top 10 research institutions in North America, including Johns Hopkins, University of Washington, and the University of Michigan, use the Company’s compliance automation software to automate their regulatory compliance processes and manage research project approvals. More information can be found at www.clickcommerce.com.

 

Investor Relations:

Mike Nelson

Click Commerce Inc.

312-377-3050

ir@clickcommerce.com

 

Media Relations:

Nellie Greely

Click Commerce Inc.

312-377-3944

nellie.greely@clickcommerce.com

 


 

CLICK COMMERCE, INC.

Condensed Consolidated Balance Sheets

(Dollars in thousands, except per share data)

 

 

 

September 30, 2005

 

December 31, 2004

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

Cash, cash equivalents, and short-term investments

 

$

11,135

 

$

13,382

 

Trade accounts receivable, net

 

16,453

 

7,264

 

Revenue earned on contracts in progress in excess of billings

 

839

 

276

 

Other current assets

 

2,670

 

389

 

Total current assets

 

31,097

 

21,311

 

 

 

 

 

 

 

Property and equipment, net

 

2,949

 

870

 

 

 

 

 

 

 

Intangibles

 

20,198

 

2,944

 

Goodwill

 

35,615

 

6,874

 

Other assets

 

1,184

 

738

 

Total assets

 

$

91,043

 

$

32,737

 

 

 

 

 

 

 

LIABILITIES AND
SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

1,039

 

$

573

 

Billings in excess of revenues earned on contracts in progress

 

15

 

68

 

Deferred revenue

 

10,971

 

5,174

 

Accrued compensation

 

2,499

 

1,585

 

Accrued expenses and other current liabilities

 

5,642

 

2,177

 

Short-term notes payable

 

1,070

 

—

 

Total current liabilities

 

21,236

 

9,577

 

 

 

 

 

 

 

Long-term debt

 

6,360

 

—

 

Other liabilities

 

20

 

6

 

Total liabilities

 

27,616

 

9,583

 

 

 

 

 

 

 

Preferred stock

 

—

 

—

 

Common stock

 

11

 

10

 

Additional paid-in capital

 

100,039

 

69,386

 

Accumulated other comprehensive income

 

140

 

153

 

Deferred compensation

 

—

 

—

 

Treasury stock

 

(117

)

(117

)

Accumulated deficit

 

(36,646

)

(46,278

)

Total shareholders’ equity

 

63,427

 

23,154

 

 

 

 

 

 

 

Total liabilities and
shareholders’ equity

 

$

91,043

 

$

32,737

 

 


 

Click Commerce, Inc.

Condensed Consolidated Statements of Income

(Dollars in thousands, except per share data)

(unaudited)

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

 

2005

 

2004

 

2005

 

2004

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

Product

 

 

 

 

 

 

 

 

 

Product license

 

$

2,107

 

$

1,221

 

$

5,911

 

$

3,081

 

Service

 

 

 

 

 

 

 

 

 

Maintenance and hosting

 

7,587

 

2,682

 

17,130

 

6,397

 

Consulting and implementation service

 

4,574

 

2,419

 

11,920

 

7,537

 

Subscription

 

1,937

 

714

 

5,518

 

1,501

 

Total service

 

14,098

 

5,815

 

34,568

 

15,435

 

Total revenues

 

16,205

 

7,036

 

40,479

 

18,516

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

 

 

 

 

 

 

 

 

Product license

 

613

 

97

 

1,155

 

240

 

Service

 

5,334

 

2,526

 

14,150

 

7,208

 

Total cost of revenues

 

5,947

 

2,623

 

15,305

 

7,448

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

10,258

 

4,413

 

25,174

 

11,068

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

Sales and marketing

 

2,058

 

1,084

 

4,806

 

2,362

 

Research and development

 

1,822

 

1,007

 

4,697

 

2,072

 

General and administrative

 

1,596

 

856

 

3,884

 

2,971

 

Amortization of stock-based compensation

 

—

 

—

 

—

 

21

 

Amortization of intangible assets

 

810

 

200

 

2,035

 

312

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

6,286

 

3,147

 

15,422

 

7,738

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

3,972

 

1,266

 

9,752

 

3,330

 

 

 

 

 

 

 

 

 

 

 

Other income

 

(185

)

104

 

(123

)

68

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

3,787

 

1,370

 

9,629

 

3,398

 

Income tax expense

 

—

 

—

 

—

 

—

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

3,787

 

$

1,370

 

$

9,629

 

$

3,398

 

 

 

 

 

 

 

 

 

 

 

Basic net income per common share

 

$

0.33

 

$

0.14

 

$

0.86

 

$

0.38

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per common share

 

$

0.31

 

$

0.14

 

0.81

 

$

0.36

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - basic

 

11,405,022

 

9,719,083

 

11,164,770

 

8,991,067

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - diluted

 

12,138,648

 

10,074,352

 

11,891,690

 

9,403,505