Click Commerce Reports Q1 2006 Non-GAAP EPS of 33 cents, GAAP EPS of 22 cents; Company Posts Record Profits and Revenues.CHICAGO Chicago, city, United States Chicago (shĭkä`gō, shĭkô`gō), city (1990 pop. 2,783,726), seat of Cook co., NE Ill., on Lake Michigan; inc. 1837. -- Click Commerce, Inc. (Nasdaq:CKCM), a leading provider of on-demand On-Demand refers to a service or feature which addresses the user's need for instant gratification and immediacy of use. In most cases the value proposition for an on-demand service is wrapped up in the fact that the user or consumer of the service avoids a significant up-front 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 di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis. This represents an improvement of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $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 GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (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 In music or music theory an eleventh is the note eleven scale degrees from the root of a chord and also the interval between the root and the eleventh. Since there are only seven degrees in a diatonic scale the eleventh degree is the same as the subdominant and the interval consecutive profitable quarter, with a non-GAAP net income margin of 22% in the first quarter. Non-GAAP basis adjustments comprise non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. related to the amortization of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible 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 December: see month. 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 February: see month. 2006 acquisition of the On-Demand Services and Contractor Management Software Business from Elance E`lance´ v. t. 1. To throw as a lance; to hurl; to dart. [ imp. & p. p. os> r>; p. pr. & vb. n. os> r>.] While thy unerring hand elanced . . . a dart. , Inc. ("Elance"). First quarter days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). 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 Michael, archangel Michael (mī`kəl) [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God's presence. W. Ferro, Jr., chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Click Commerce. "These efforts continue to add to our top-line growth as well as our bottom-line bot·tom-line adj. 1. Concerned exclusively with costs and profits: bottom-line issues. 2. Ruthlessly realistic; pragmatic: a bottom-line political strategy. performance." Today, the Company also announced that it has elected e·lect v. e·lect·ed, e·lect·ing, e·lects v.tr. 1. To select by vote for an office or for membership. 2. To pick out; select: elect an art course. David Arney Arney is a small village in County Fermanagh, Northern Ireland. It had a population of 114 people (along with Skea) in the 2001 Census. It lies to the southwest of Enniskillen, between the village of Bellanaleck and the Five Points road junction. as the Company's new Chief Financial Officer ("CFO See Chief Financial Officer. "), 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  This article or section needs copy editing for grammar, style, cohesion, tone and/or spelling.You can assist by [ editing it] now. 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 (Computer Press Association, Landing, NJ) An earlier membership organization founded in 1983 that promoted excellence in computer journalism. Its annual awards honored outstanding examples in print, broadcast and electronic media. The CPA disbanded in 2000. and holds an MBA MBA abbr. Master of Business Administration Noun 1. MBA - a master's degree in business Master in Business, Master in Business Administration from Northwestern north·west n. 1. Abbr. NW The direction or point on the mariner's compass halfway between due north and due west, or 45° west of due north. 2. An area or region lying in the northwest. 3. 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 EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT ), with remarks from Chairman and CEO Michael W. Ferro, Jr. and Michael W. Nelson. David Arney and Nancy Koenig, EVP EVP Executive Vice President EVP EGR (Exhaust Gas Recirculation) Valve Position Sensor EVP Electronic Voice Phenomenon EVP Europäische Volkspartei (Germany) EVP Employee Value Proposition of Operations, will be joining the call for Q&A. The call will also be broadcast live over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the . 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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2005, quarterly reports on Form 10-Q Form 10-Q See 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 there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. or to reflect any change in any event, condition or circumstance Circumstance or circumstances can refer to:
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 Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. 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
----------------------------------------
Basic Diluted
Net Earnings Earnings Profit
income per share per share Margin
----------------------------------------
As reported GAAP financial
measures $2,917 $0.25 $0.22 15%
Adjustments
Amortization of intangible
assets presented in:
Cost of revenues, Product
License 431 0.04 0.03 2%
Operating expense 986 0.08 0.08 5%
Stock-based compensation 81 0.01 0.01 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%
----------------------------------------
Total adjustments 1,430 0.12 0.11 7%
----------------------------------------
Non-GAAP financial measures $4,347 $0.37 $0.33 22%
========================================
Three months ended March 31, 2005
----------------------------------------
Basic Diluted
Net Earnings Earnings Profit
income per share per share Margin
----------------------------------------
As reported GAAP financial
measures $2,630 $0.25 $0.23 24%
Adjustments
Amortization of intangible
assets presented in:
Cost of revenues, Product
License 197 0.02 0.02 2%
Operating expense 720 0.07 0.06 7%
Stock-based compensation - - - 0%
Income tax effect of non-GAAP
adjustments and applying the
same current year effective
tax rate to prior year (1,471) (0.14) (0.13) -13%
----------------------------------------
Total adjustments (554) (0.05) (0.05) -5%
----------------------------------------
Non-GAAP financial measures $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 high-tech also hi-tech adj. Informal Of, relating to, or resembling high technology. high-tech Adjective same as hi-tech Adj. 1. , and research and healthcare. Click Commerce enables corporations including Alaska Airlines Alaska Airlines, (NYSE: ALK) is an airline based in Seattle, Washington, United States. It operates hubs at Seattle-Tacoma International Airport, Ted Stevens Anchorage International Airport, Los Angeles International Airport, and Portland International Airport. , BASF BASF Bar Association of San Francisco (since 1872; San Francisco, California) BASF Badische Anilin und Soda Fabrik (German chemical products company) BASF Builders Association of South Florida , Citibank CITIBANK First National City Bank , Delphi, Eastman Kodak (company) Kodak - The photographic company responsible for Photo CD. http://kodak.com/. Company, Jabil Global Services, Lockheed Martin For the former company, see . Lockheed Martin (NYSE: LMT) is a leading multinational aerospace manufacturer and advanced technology company formed in 1995 by the merger of Lockheed Corporation with Martin Marietta. , Microsoft (Microsoft Corporation, Redmond, WA, www.microsoft.com) The most successful and influential software company. Microsoft's software and Intel's hardware pioneered the PC and revolutionized the computer industry. , Pier pier, in engineering, term applied to a mass of reinforced concrete or masonry supporting a large structure, such as a bridge. When piers are built on ground of poor bearing value, it is often necessary to drive piles to obtain a firm base. 1, Ryder Ry·der , Albert Pinkham 1847-1917. American painter known for his rhythmic allegorical works, landscapes, and marine scenes, such as Toilers of the Sea (c. 1884). , SAP sap, fluid in plants consisting of water and dissolved substances. Cell sap refers to this fluid present in the large vacuole, or cell cavity, that occupies most of the central portion of mature plant cells. , and Verizon to coordinate Belonging to a system of indexing by two or more terms. For example, points on a plane, cells in a spreadsheet and bits in dynamic RAM chips are identified by a pair of coordinates. Points in space are identified by sets of three coordinates. and optimize optimize - optimisation business processes, accelerate revenue, lower costs, and improve customer service. More information can be found at www.clickcommerce.com.
CLICK COMMERCE, INC.
Condensed Consolidated Balance Sheets
(Dollars in thousands, except per share data)
March 31, December 31,
2006 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
------------- -------------
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