EX-99.1 3 a06-11500_1ex99d1.htm EX-99

Exhibit 99.1

 

Click Commerce Reports Q1 2006 Non-GAAP EPS of 33 cents, GAAP EPS of 22 cents

 

Company Posts Record Profits and Revenues

 

CHICAGO, May 9, 2006 - Click Commerce, Inc. (Nasdaq: CKCM), a leading provider of on-demand supply chain management solutions, today announced record results for its first quarter ended March 31, 2006.

 

Total first quarter 2006 revenues were $19.7 million, representing over 80% growth from first quarter 2005 revenues of $10.9 million. On a fully-taxed non-GAAP basis, excluding certain charges as described below, net income was $4.3 million, or $0.33 per share on a diluted basis. This represents an improvement of approximately $2.3 million over Q1 2005’s non-GAAP net income of $2.1 million, or $0.18 per share on a diluted basis. On a GAAP basis, net income was $2.9 million, or $0.22 per share for the quarter ended March 31, 2006 compared to $2.6 million, or $0.23 per share for the quarter ended March 31, 2005. The Company’s first quarter results represent its eleventh consecutive profitable quarter, with a non-GAAP net income margin of 22% in the first quarter. Non-GAAP basis adjustments comprise non-cash charges related to the amortization of intangible assets and stock-based compensation, net of related income taxes and the addition of a 41% effective tax rate, applied to the first quarter of 2005.

 

The Company’s cash and cash equivalents were $22.3 million as of March 31, 2006 compared to $17.5 million as of December 31, 2005. The increase of $4.8 million primarily related to cash flows from operations of $8.2 million and proceeds from exercise of stock options of $1.3 million offset by $3.6 million of cash used in the February 2006 acquisition of the On-Demand Services and Contractor Management Software Business from Elance, Inc. (“Elance”). First quarter days sales outstanding were 101 days as compared to fourth quarter 2005 days sales outstanding of 111 days. Deferred revenue was $15.6 million as of March 31, 2006.

 

“This is Click Commerce’s best quarter ever. The improved year-over-year results reflect our focus on responsible growth and the successful integration of our acquisitions,” said Michael W. Ferro, Jr., chairman and CEO of Click Commerce. “These efforts continue to add to our top-line growth as well as our bottom-line performance.”

 

Today, the Company also announced that it has elected David Arney as the Company’s new Chief Financial Officer (“CFO”), effective May 8, 2006. Mr. Arney, with over 20 years of experience as a finance professional, will become the Company’s new CFO, replacing Mike Nelson, who is assuming a new position managing the Company’s M&A efforts and other strategic initiatives. Prior to being named the CFO, Mr. Arney held senior-level financial positions at various technology and business-to-business companies, including Q Interactive, Inc., formerly known as CoolSavings, Inc., where he was CFO from 2001 to 2006. Before that, Mr. Arney held various financial leadership positions at eLoyalty and Trans Union Corporation. Mr. Arney is a CPA and holds an MBA from Northwestern University’s J.J. Kellogg Graduate School of Management.

 

Conference Call

 

The Company will hold a conference call to discuss the results today, May 9th, at 9:00 a.m. (EDT), with remarks from Chairman and CEO Michael W. Ferro, Jr. and Michael W. Nelson. David Arney and Nancy Koenig, EVP of Operations, will be joining the call for Q&A. 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, estimates, assumptions, 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: the ability of the Company to integrate acquisitions or investments in other companies, the extent of customer acceptance and utilization of channel management products and services, the impact of competitive products and services, the volume and timing of customer contracts, changes in technology, deployment delays or errors associated with Click Commerce products and the ability to protect Click Commerce’s intellectual property rights. We refer you to the risk factors listed in our annual report on Form 10-K for the year ended December 31, 2005, 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 and an adjustment to present the prior year net income as if such results had been fully taxed. 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 and including prior year tax expense 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 expenses, as well as providing non-GAAP net income measures that exclude such items, 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 March 31, 2006

 

Three months ended March 31, 2005

 

 

 

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

 

$

2,917

 

$

0.25

 

$

0.22

 

15%

 

$

2,630

 

$

0.25

 

$

0.23

 

24%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets presented in:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues, Product License

 

431

 

0.04

 

0.03

 

2%

 

197

 

0.02

 

0.02

 

2%

 

Operating expense

 

986

 

0.08

 

0.08

 

5%

 

720

 

0.07

 

0.06

 

7%

 

Stock-based compensation

 

81

 

0.01

 

0.01

 

0%

 

 

 

 

0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax effect of non-GAAP adjustments and applying the same current year effective tax rate to prior year

 

(68

)

(0.01

)

(0.01

)

0%

 

(1,471

)

(0.14

)

(0.13

)

-13%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total adjustments

 

1,430

 

0.12

 

0.11

 

7%

 

(554

)

(0.05

)

(0.05

)

-5%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP financial measures

 

$

4,347

 

$

0.37

 

$

0.33

 

22%

 

$

2,076

 

$

0.20

 

$

0.18

 

19%

 

 

About Click Commerce, Inc.

 

Click Commerce, Inc., (Nasdaq: CKCM), a leading provider of on-demand supply chain management solutions, enables millions of users in 70 countries to collaborate, in real time, with business partners across the extended enterprise. Click Commerce solutions support the unique business processes of multiple industry segments such as manufacturing, aerospace and defense, high-tech, and research and healthcare. Click Commerce enables corporations including Alaska Airlines, BASF, Citibank, Delphi, Eastman Kodak Company, Jabil Global Services, Lockheed Martin, Microsoft, Pier 1, Ryder, SAP, and Verizon to coordinate and optimize business processes, accelerate revenue, lower costs, and improve customer service. 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 Vallieres

Click Commerce Inc.

312-377-3944

nellie.vallieres@clickcommerce.com

 



 

CLICK COMMERCE, INC.

 

Condensed Consolidated Balance Sheets

 

(Dollars in thousands, except per share data)

 

 

 

March 31, 2006

 

December 31, 2005

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

Cash, cash equivalents, and short-term investments

 

$

22,327

 

$

17,498

 

Trade accounts receivable, net

 

22,043

 

25,336

 

Revenue earned on contracts in progress in excess of billings

 

746

 

481

 

Other current assets

 

3,222

 

1,879

 

Total current assets

 

48,338

 

45,194

 

Property and equipment, net

 

2,922

 

2,765

 

Intangibles

 

24,574

 

22,129

 

Goodwill

 

60,565

 

48,782

 

Deferred tax asset

 

4,194

 

7,116

 

Other assets

 

1,653

 

1,673

 

Total assets

 

$

142,246

 

$

127,659

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

1,443

 

$

1,454

 

Billings in excess of revenues earned on contracts in progress

 

15

 

177

 

Deferred revenue

 

15,623

 

16,421

 

Accrued compensation

 

3,087

 

3,190

 

Accrued rent

 

1,986

 

2,610

 

Accrued expenses and other current liabilities

 

4,991

 

4,552

 

Short-term notes payable

 

307

 

829

 

Total current liabilities

 

27,452

 

29,233

 

 

 

 

 

 

 

Long-term debt

 

6,456

 

6,464

 

Other liabilities

 

1,185

 

846

 

Total liabilities

 

35,093

 

36,543

 

 

 

 

 

 

 

Preferred stock

 

 

 

Common stock

 

13

 

12

 

Additional paid-in capital

 

133,769

 

120,589

 

Accumulated other comprehensive income

 

133

 

194

 

Treasury stock

 

(2,923

)

(2,923

)

Accumulated deficit

 

(23,839

)

(26,756

)

Total shareholders’ equity

 

107,153

 

91,116

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

142,246

 

$

127,659

 

 



 

Click Commerce, Inc.

 

Condensed Consolidated Statements of Income

 

(Dollars in thousands, except per share data)

 

(unaudited)

 

 

 

Three Months Ended
March 31,

 

 

 

2006

 

2005

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

Product license and hardware

 

 

 

 

 

Product license

 

$

2,676

 

$

1,963

 

Hardware

 

376

 

 

Total product license and hardware

 

3,052

 

1,963

 

Service

 

 

 

 

 

Maintenance and hosting

 

9,007

 

3,814

 

Consulting and implementation service

 

5,643

 

3,497

 

Subscription

 

1,986

 

1,651

 

Total service

 

16,636

 

8,962

 

Total revenues

 

19,688

 

10,925

 

 

 

 

 

 

 

Cost of revenues

 

 

 

 

 

Product license and hardware

 

818

 

198

 

Service

 

6,083

 

3,989

 

Total cost of revenues

 

6,901

 

4,187

 

 

 

 

 

 

 

Gross profit

 

12,787

 

6,738

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

Sales and marketing

 

2,091

 

1,146

 

Research and development

 

2,439

 

1,209

 

General and administrative

 

2,364

 

1,006

 

Amortization of intangible assets

 

986

 

720

 

Stock-based compensation

 

81

 

 

 

 

 

 

 

 

Total operating expenses

 

7,961

 

4,081

 

 

 

 

 

 

 

Operating income

 

4,826

 

2,657

 

 

 

 

 

 

 

Other income (expense)

 

131

 

(27

)

 

 

 

 

 

 

Income before income taxes

 

4,957

 

2,630

 

Income tax expense

 

2,040

 

 

 

 

 

 

 

 

Net income

 

$

2,917

 

$

2,630

 

 

 

 

 

 

 

Basic net income per common share

 

$

0.25

 

$

0.25

 

 

 

 

 

 

 

Diluted net income per common share

 

$

0.22

 

$

0.23

 

 

 

 

 

 

 

Weighted average common shares outstanding- basic

 

11,896,592

 

10,423,675

 

 

 

 

 

 

 

Weighted average common shares outstanding - diluted

 

13,082,101

 

11,412,852

 

 



 

Click Commerce, Inc.

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(Dollars in thousands)

 

(Unaudited)

 

 

 

Three months ended
March 31,

 

 

 

2006

 

2005

 

Cash flows from operating activities:

 

 

 

 

 

Net income

 

$

2,917

 

$

2,630

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Income tax expense

 

2,040

 

 

Depreciation

 

353

 

204

 

Amortization of intangibles

 

1,417

 

917

 

Provision for doubtful accounts

 

79

 

 

Gain on disposal of assets

 

(13

)

 

Stock-based compensation

 

81

 

 

Changes in operating assets and liabilities, net of effect of acquisitions:

 

 

 

 

 

Trade accounts receivable

 

4,001

 

603

 

Prepaids and other current assets

 

(1,389

)

130

 

Accounts payable

 

(18

)

(1,303

)

Billings in excess of revenues earned on contracts in progress

 

(162

)

2

 

Deferred revenue

 

(2,076

)

(880

)

Accrued compensation

 

(145

)

(2,668

)

Accrued rent, accrued expenses and other current liabilities

 

1,098

 

415

 

Other, net

 

 

243

 

Net cash provided by operating activities

 

8,183

 

293

 

Cash flows from investing activities:

 

 

 

 

 

Purchases of property and equipment

 

(301

)

(156

)

Payments for acquisitions, net of transaction costs and cash acquired

 

(3,894

)

(1,986

)

Other investing activities

 

22

 

 

Net cash used in investing activities

 

(4,173

)

(2,142

)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Proceeds from exercise of stock options

 

1,349

 

114

 

Proceeds from long-term debt

 

 

4,500

 

Payments on capital lease obligations

 

 

(3

)

Payments of short-term debt obligations

 

(522

)

(1,761

)

Payments of long-term debt obligations

 

(8

)

(2,524

)

Net cash provided by financing activities

 

819

 

326

 

Net increase (decrease) in cash and cash equivalents

 

4,829

 

(1,523

)

Cash and cash equivalents at beginning of period

 

17,498

 

13,382

 

Cash and cash equivalents at end of period

 

$

22,327

 

$

11,859