Click Reports Thirteenth Consecutive Quarter of Increased Revenue and Twelfth Straight Quarter of Profitability; Click Commerce Reports Q2 2006 Non-GAAP EPS of 36 cents, GAAP EPS of 24 cents.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 results for its second quarter ended June June: see month. 30, 2006. Total second quarter 2006 revenues were $19.7 million, representing a 48% growth from second quarter 2005 revenues of $13.3 million. Net income on a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis was $3.2 million, or $0.24 per share for the quarter ended June 30, 2006. Because of significant net operating loss carryforwards Net operating loss carryforwards Application of losses to offset earnings in future years. , the Company had an effective tax rate of 0% in the prior year quarter. If the Company had been taxed in the prior year quarter at the current quarters' tax rate of 33%, the prior year net income would have been $2.1 million or $0.18 per share for the quarter ended June 30, 2005 on a GAAP basis. The Company, however, was not taxed at that effective tax rate in the prior year quarter and thus reported net income of $3.2 million or $.27 per share on a GAAP basis. The Company's second quarter results represent its twelfth consecutive profitable quarter. As compared to the first quarter of 2006, the Company incurred additional expenses of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $0.4 million including increased spending on marketing, Sarbanes Oxley Oxley refers to several things: People
On a fully-taxed non-GAAP basis, excluding certain charges as described below, net income was $4.6 million, or $0.36 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 $1.7 million over Q2 2005's non-GAAP net income of $2.9 million, or $0.24 per share on a diluted basis. Non-GAAP adjustments comprise To embrace, cover, or include; to confine within; to consist of. In the law governing patents—grants of an exclusive right or privilege to make, use, or sell an invention or product for a term of years—the term 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 calculated at a 33% effective tax rate. The Company's cash and cash equivalents were $12.7 million as of June 30, 2006 compared to $22.3 million as of March 31, 2006. The decrease of $9.6 million primarily related to the use of $8.0 million of cash to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. shares originally issued in connection with its acquisition of certain business assets 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. and the purchase of property and equipment of $0.8 million. Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses in the quarter was a net use of $0.4 million. In addition, the Company repaid a short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. note of $0.4 million. For the six months ended June 30, 2006, the Company generated $7.7 million of cash flow from operations. Second 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 102 days as compared to first quarter 2006 days sales outstanding of 101 days. Deferred revenue was $14.3 million as of June 30, 2006. Conference Call The Company will hold a conference call to discuss the results today, July July: see month. 27, immediately following the issue of this release with remarks from 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. 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. and CFO See Chief Financial Officer. 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. . Nancy Nancy (näNsē`), city (1990 pop. 102,410), capital of Meurthe-et-Moselle dept., NE France, on the Meurthe River and the Marne-Rhine Canal. It is the administrative, economic, and educational center of Lorraine. Koenig, executive vice president 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 Installing, setting up, testing and running. This military term, which means the placement of troops and equipment in the field, is widely used with computers as an alternate to the word "implementation. 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 December: see month. 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 ReVisions is a 2004 anthology of alternate history short-stories. It is edited by Julie E. Czerneda and Isaac Szpindel. Contents Title Author The Resonance of Light James Alan Gardner Out of China Julie E. 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, stock based compensation expense 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 COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. . 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 June 30, 2006
----------------------------------------
Basic Diluted
Net Earnings Earnings Profit
income per share per share Margin
----------------------------------------
As reported GAAP financial
measures $3,160 $0.26 $0.24 16%
Adjustments
Amortization of intangible
assets presented in:
Cost of revenues, Product
License 488 0.04 0.04 2%
Operating expense 961 0.08 0.08 5%
Stock-based compensation 129 0.01 0.01 1%
Income tax effect of non-GAAP
adjustments and applying the
same current year effective
tax rate to prior year (148) (0.01) (0.01) -1%
----------------------------------------
Total adjustments 1,431 0.12 0.12 7%
----------------------------------------
Non-GAAP financial measures $4,591 $0.38 $0.36 23%
========================================
Three months ended June 30, 2005
----------------------------------------
Basic Diluted
Net Earnings Earnings Profit
income per share per share Margin
----------------------------------------
As reported GAAP financial
measures $3,212 $0.29 $0.27 24%
Adjustments
Amortization of intangible
assets presented in:
Cost of revenues, Product
License 279 0.03 0.02 2%
Operating expense 505 0.05 0.04 4%
Stock-based compensation - - - 0%
Income tax effect of non-GAAP
adjustments and applying the
same current year effective
tax rate to prior year (1,063) (0.10) (0.09) -8%
----------------------------------------
Total adjustments (279) (0.02) (0.03) -2%
----------------------------------------
Non-GAAP financial measures $2,933 $0.27 $0.24 22%
========================================
Six months ended June 30, 2006
----------------------------------------
Basic Diluted
Net Earnings Earnings Profit
income per share per share Margin
----------------------------------------
As reported GAAP financial
measures $6,077 $0.51 $0.47 15%
Adjustments
Amortization of intangible
assets presented in:
Cost of revenues, Product
License 919 0.08 0.07 2%
Operating expense 1,947 0.16 0.15 5%
Stock-based compensation 210 0.02 0.02 1%
Income tax effect of non-GAAP
adjustments and applying the
same current year effective
tax rate to prior year (299) (0.02) (0.02) -1%
----------------------------------------
Total adjustments 2,778 0.24 0.22 7%
----------------------------------------
Non-GAAP financial measures $8,855 $0.75 $0.69 22%
========================================
Six months ended June 30, 2005
----------------------------------------
Basic Diluted
Net Earnings Earnings Profit
income per share per share Margin
----------------------------------------
As reported GAAP financial
measures $5,842 $0.54 $0.50 24%
Adjustments
Amortization of intangible
assets presented in:
Cost of revenues, Product
License 481 0.04 0.04 2%
Operating expense 1,225 0.11 0.10 5%
Stock-based compensation - - - 0%
Income tax effect of non-GAAP
adjustments and applying the
same current year effective
tax rate to prior year (2,175) (0.20) (0.18) -9%
----------------------------------------
Total adjustments (469) (0.05) (0.04) -2%
----------------------------------------
Non-GAAP financial measures $5,373 $0.49 $0.46 22%
========================================
March 31, 2006 income tax effect of non-GAAP adjustments has been
adjusted due to a change in estimate
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). , 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)
June 30, December 31,
2006 2005
-------------------------
(unaudited)
ASSETS
Current Assets:
Cash, cash equivalents, and short-term
investments $12,696 $17,498
Trade accounts receivable, net 22,514 25,336
Revenue earned on contracts in progress in
excess of billings 1,054 481
Other current assets 4,311 1,879
------------ ------------
Total current assets 40,575 45,194
Property and equipment, net 3,411 2,765
Intangibles 23,880 22,129
Goodwill 60,303 48,782
Deferred tax asset 3,239 7,116
Other assets 1,719 1,673
------------ ------------
Total assets $133,127 $127,659
============ ============
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $1,010 $1,454
Billings in excess of revenues earned on
contracts in progress 15 177
Deferred revenue 14,331 16,421
Accrued compensation 1,351 3,190
Accrued rent 1,834 2,610
Accrued expenses and other current
liabilities 4,416 4,552
Short-term notes payable - 829
------------ ------------
Total current liabilities 22,957 29,233
Long-term debt 6,417 6,464
Other liabilities 1,177 846
------------ ------------
Total liabilities 30,551 36,543
Preferred stock - -
Common stock 13 12
Additional paid-in capital 133,898 120,589
Accumulated other comprehensive income 249 194
Treasury stock (10,905) (2,923)
Accumulated deficit (20,679) (26,756)
------------ ------------
Total shareholders' equity 102,576 91,116
------------ ------------
Total liabilities and
shareholders' equity $133,127 $127,659
============ ============
Click Commerce, Inc.
Condensed Consolidated Statements of Income
(Dollars in thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- -----------------------
2006 2005 2006 2005
----------- ----------- ----------- -----------
Revenues
Product license and
hardware
Product license $2,288 $1,841 $4,964 $3,804
Hardware $350 - $726 -
----------- ----------- ----------- -----------
Total product
license and
hardware $2,638 $1,841 $5,690 $3,804
Service
Maintenance and
hosting 9,098 5,729 18,105 9,543
Consulting and
implementation
service 6,017 3,849 11,660 7,346
Subscription 1,989 1,930 3,975 3,581
----------- ----------- ----------- -----------
Total service 17,104 11,508 33,740 20,470
----------- ----------- ----------- -----------
Total revenues 19,742 13,349 39,430 24,274
Cost of revenues
Product license and
hardware 818 344 1,636 542
Service 6,102 4,827 12,185 8,816
----------- ----------- ----------- -----------
Total cost of
revenues 6,920 5,171 13,821 9,358
Gross profit 12,822 8,178 25,609 14,916
Operating expenses
Sales and marketing 2,179 1,602 4,270 2,748
Research and
development 2,309 1,666 4,748 2,875
General and
administrative 2,629 1,282 4,993 2,288
Amortization of
intangible assets 961 505 1,947 1,225
Stock-based
compensation 129 - 210 -
----------- ----------- ----------- -----------
Total operating
expenses 8,207 5,055 16,168 9,136
Operating income 4,615 3,123 9,441 5,780
Other income 109 89 240 62
----------- ----------- ----------- -----------
Income before income
taxes 4,724 3,212 9,681 5,842
Income tax expense 1,564 - 3,604 -
----------- ----------- ----------- -----------
Net income $3,160 $3,212 $6,077 $5,842
=========== =========== =========== ===========
Basic net income per
common share $0.26 $0.29 $0.51 $0.54
----------- ----------- ----------- -----------
Diluted net income per
common share $0.24 $0.27 0.47 $0.50
----------- ----------- ----------- -----------
Weighted average common
shares outstanding -
basic 12,041,614 11,008,162 11,969,504 10,720,961
Weighted average common
shares outstanding -
diluted 12,912,929 12,116,806 12,927,854 11,766,721
CLICK COMMERCE, INC.
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
(unaudited)
Six months ended
June 30,
2006 2005
-------- --------
Cash flows from operating activities:
Net income $6,077 $5,842
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Income tax expense 2,995 --
Amortization of stock-based compensation 210 --
Depreciation 704 470
Amortization of intangibles 2,866 1,706
Provision for doubtful accounts (1) 60
Gain on disposal of assets (6) --
Changes in operating assets and liabilities, net of
effect of acquisitions:
Trade accounts receivable 3,065 (1,033)
Prepaids and other current assets (2,440) 673
Accounts payable (451) (1,726)
Billings in excess of revenues earned on contracts
in progress (162) 276
Deferred revenue (3,432) (3,374)
Accrued compensation (1,881) (3,922)
Accrued expenses and other current liabilities 227 (284)
Other, net -- 465
-------- --------
Net cash provided by (used in) operating activities 7,771 (847)
Cash flows from investing activities:
Purchase of property and equipment (1,148) (247)
Payments for acquisitions, net of transaction costs
and cash acquired (3,935) (1,774)
Other investing activities 22 --
-------- --------
Net cash used in investing activities (5,061) (2,021)
Cash flows from financing activities:
Proceeds from exercise of stock options 1,349 219
Payments on stock repurchase (7,982) --
Proceeds from long-term debt -- 6,368
Payments on long-term and short-term debt (879) (5,270)
Payments under capital lease obligations -- (3)
-------- --------
Net cash (used in) provided by financing activities (7,512) 1,314
Net decrease in cash and cash equivalents (4,802) (1,554)
Cash and cash equivalents at beginning of period 17,498 13,382
-------- --------
Cash and cash equivalents at end of period $12,696 $11,828
-------- ========
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