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Jacada Reports 2014 Financial Results
[April 30, 2015]

Jacada Reports 2014 Financial Results


Jacada (News - Alert) Ltd., a leading global provider of customer engagement technology designed to simplify customer interactions and drive efficiency across all customer touch points, today reported financial results for the year ended December 31, 2014.

Financial Highlights

  • 5% revenue growth to $16.4 million in 2014 from $15.6 million in 2013
  • Investments in research and development and sales and marketing to support new technologies cause increase in operating expenses to $11.5 million from $10.4 million in 2013
  • Operating loss of $1.6 million and gain on sale of marketable securities of $1.9 million combine for income before taxes of $299,000

2014 and Recent Business Highlights

  • Announced the issuance by the United States Patent and Trade Office (USPTO) of US Patent No.: US 8,995,646 B2 granting Jacada exclusive rights as the inventor of Visual IVR technology that includes a system and method for identifying a caller via a call connection, and matching the caller to a user session involving the caller. Jacada originally announced its Visual IVR product to the market in April 2013 and has now patented the underlying technology.
  • Obtained valuable references, including a Fortune 50 technology company and a leading cable operator, for post-production benefits of our Visual IVR product. With the references garnered through these customers in production, including information regarding their end-user adoption, call deflection rates and cost savings, we believe we have the ability to grow the revenue obtained from the Visual IVR market in the future.
  • Developed cloud versions of specific products, including Jacada Visual IVR and Jacada Agent Scripting, allowing us to begin offering these products in a Software-as-a-Service (SaaS (News - Alert)) recurring revenue model.
  • Established partnerships with call center host providers, large system integrators and technology partners which will enable us to quickly grow both our agent desktop and business process optimization solutions as well as our mobile self-service and Visual IVR solutions. One such partnership is with Avaya (News - Alert), a partnership which has already yielded two important contracts, including a Fortune 500 office supply company and a government organization, during 2014 and early 2015. In addition, during 2014, we announced the release of the Jacada Multi-channel Desktop Enhancement to the Avaya Aura® Call Center Elite Multi-channel platform.
  • Continued to deliver our core solutions to improve agent efficiency and simplify customer interactions for new customers, including a large communications service provider in South Africa and a prominent US credit reporting agency, as well as for existing customers, including a leading digital cable and telecommunications company.

"We have considered 2014 to be a year of investment: in the continued development of new technologies, including Visual IVR and Jacada Agent Desktop for Avaya EMC (News - Alert); in expanding our products to the cloud, supporting new business models; and in sales and marketing efforts surrounding these new technologies and products," commented Caroline Cronin, Chief Financial Officer of Jacada. "With revenue growth to $16.4 million and the gain on the sale of marketable securities of $1.9 million, we were able to support these additional investments, incurring an operating loss of $1.6 million and income before taxes of $299,000."

"Our 2014 investments in technology innovation have already yielded an intellectual property patent supporting our Visual IVR offering as well as allowed us to gain several additional Fortune 500 software and retail customers," said Guy Yair, Co-Chief Executive Officer of Jacada. "Continued dedication to our core products along with consistent partner initiatives have strengthened our global footprint while maintaining long standing accounts across both EMEA and the US."

Financial Results

Total revenues were $16.4 million in 2014 compared to $15.6 million in 2013. Software revenues for 2014 were $2.4 million compared to $2.9 million during 2013. Services revenues were $9.7 million in 2014 and $8.9 million in 2013. Maintenance revenues were $4.2 million and $3.7 million in 2014 and 2013, respectively.

Gross margins were 60% and 62% of total revenues during 2014 and 2013, respectively. Operating expenses for 2014 were $11.5 million, compared to $10.4 million in 2013. Financial income, net, was $1.9 million and $473,000 in 2014 and 2013, respectively. During 2014, the company had an income tax expense of $1.0 million, while in 2013, the company had an income tax benefit of $382,000.

The net loss for 2014 was $668,000, or $(0.16) per share, compared to net income of $118,000, or $0.03 per share, in 2013.

About Jacada

Jacada solutions improve an organization's customer experiences and reduce their operational costs. Jacada enables them to deliver advanced customer and agent interactions by implementing cutting-edge mobile customer service and visual IVR solutions, simplified agent desktops, and process optimization products. Customers can benefit from an improved customer service experience at every touch point with the organization, whether at the call center, on the mobile, or at the retail store. Jacada projects often deploy in less than six months, and customers often realize a complete return on investment within 12 months of deployment. Founded in 1990, Jacada operates globally with offices in Atlanta, USA; London, England; Munich, Germany; and Herzliya, Israel. For more information, please visit www.Jacada.com. To view a product demonstration video, click here.

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.





 

CONSOLIDATED STATEMENTS OF OPERATIONS

U.S. dollars in thousands, except per share data

     

Twelve months ended
December 31,

2014     2013
Audited
Revenues:
Software licenses

$

 

2,437

$

2,930

Services

 

9,687 8,948
Maintenance   4,249     3,748  
 
Total revenues   16,373     15,626  
 
Cost of revenues:
Software licenses 175 170
Services 5,813 5,417
Maintenance   496     353  
 
Total cost of revenues   6,484     5,940  
 
Gross profit   9,889     9,686  
 
Operating expenses:
Research and development 3,481 2,918
Sales and marketing 5,052 4,398
General and administrative   2,998     3,107  
 
Total operating expenses   11,531     10,423  
 
Operating loss (1,642 ) (737 )
Financial income, net   1,941     473  
 
Income (loss) before taxes 299 (264 )
Income tax benefit (expense)   (967 )   382  
 
Net income (loss) $ (668 ) $ 118  
 
Basic net earnings (loss) per share $ (0.16 ) $ 0.03  
Diluted net earnings (loss) per share $ (0.16 ) $ 0.03  
 

Weighted average number of shares used in computing basic net earnings (loss) per share

  4,159,576     4,159,134  
 
Weighted average number of shares used in computing diluted net earnings (loss) per share   4,159,576     4,166,033  
 

 

CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands

         
December 31, December 31,
2014 2013
Audited
ASSETS
 
CURRENT ASSETS:
Cash and cash equivalents

$

 

3,048

$

3,632

Marketable securities 3,349 3,000
Trade receivables 3,076 2,700
Restricted cash 787 597
Prepaid expenses 240 267
Deferred taxes 443 184
Other current assets   425     552  
 
Total current assets   11,368     10,932  
 
LONG-TERM INVESTMENTS:
Marketable securities 1,185 3,147
Severance pay fund 136 137
Other assets   38     45  
 
Total long-term investments   1,359     3,329  
 
PROPERTY AND EQUIPMENT, NET (News - Alert)   397     439  
 
Total assets $ 13,124   $ 14,700  
 
LIABILITIES AND SHAREHOLDERS EQUITY
 
CURRENT LIABILITIES:
Trade payables $ 1,190 $ 1,208
Accrued expenses and other liabilities 2,152 1,639
Deferred revenues   2,156     1,989  
 
Total current liabilities   5,498     4,836  
 
LONG-TERM LIABILITIES:
Deferred revenues 369 526
Deferred taxes 1 113
Accrued severance pay 376 354
Other long-term liabilities   87     128  
 
Total long-term liabilities   833     1,121  
 
SHAREHOLDERS' EQUITY:
Share capital 60 60
Additional paid-in capital 76,022 75,955
Treasury shares (17,863 ) (17,863 )
Accumulated other comprehensive income, net 720 2,069
Accumulated deficit   (52,146 )   (51,478 )
 
Total shareholders' equity   6,793     8,743  
 
Total liabilities and shareholders' equity $ 13,124   $ 14,700  
 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

     

Twelve months ended
December 31,

2014     2013
Audited

Cash flows from operating activities:

Net income (loss)

$

(668

)

$

118

 
 
Adjustments required to reconcile net income ( loss) to net cash used in operating activities:
Depreciation 190 241
Stock-based compensation 66 95
Gain on sale of marketable securities (1,862 ) (326 )
Accrued severance pay, net 23 7
Deferred taxes, net 230 (345 )
Increase in trade receivables (443 ) (984 )
Decrease (increase) in other current assets and prepaid expenses 158 (138 )
Increase (decrease) in trade payables (9 ) 193
Increase in accrued expenses and other liabilities 352 32
Increase in deferred revenue 34 160
Decrease in other long-term liabilities (41 ) (40 )
Other   2     6  
 
Net cash used in operating activities   (1,968 )   (981 )
 

Cash flows from investing activities:

Proceeds from sale of marketable securities 7,879 1,111
Investment in marketable securities (6,048 ) -
Purchase of property and equipment (150 ) (127 )
Decrease (increase) in restricted cash   (190 )   6  
 
Net cash provided by investing activities   1,491     990  
 
Effect of exchange rate changes on cash   (107 )   36  
 
Increase (decrease) in cash and cash equivalents (584 ) 45
Cash and cash equivalents at the beginning of the year   3,632     3,587  
 
Cash and cash equivalents at the end of the year $ 3,048   $ 3,632  
 

Non-cash investing information:

Investment in leasehold improvements and Computers and peripheral equipment upon accrued expenses and other liabilities $ 10   $ -  
Investment in leasehold improvements upon other long-term liabilities $ -   $ 6  
 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

 

Comprehensive Income

Comprehensive income consists of two components, net income and other comprehensive income. Other comprehensive income refers to revenue, expenses, gains and losses that under GAAP are recorded as an element of shareholders' equity but are excluded from net income. The Company's other comprehensive income consists of foreign currency translation adjustments from those subsidiaries not using the U.S. dollar as their functional currency, unrealized gains and losses on marketable securities classified as available-for-sale, and net deferred gains and losses on certain derivative instruments accounted for as cash flow hedges.

The following table presents the components of comprehensive income, net of taxes, during the twelve-month periods ended December 31, 2014 and December 31, 2013 (in thousands):

     

Twelve months ended
December 31,

2014     2013
 
Net income (loss)

$

(668 ) $ 118
Other comprehensive income:
Change in foreign currency translation (125 ) 8
 
Change in unrealized gains (losses) on cash flow hedges:
Unrealized gain on cash flow hedges arising during the period (226 ) 132
Reclassification to earnings of realized gains (losses) on cash flow hedges 45 (171 )
 
Change in unrealized gains (losses) on marketable securities:
Change in Unrealized gains on marketable securities, net of tax expense (benefit) 581 1,144
Gains of marketable securities reclassified into earning, net of tax expenses)   (1,624 )   (326 )
 
Total comprehensive income (loss) $ (2,017 ) $ 905  
 


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