ClickSoftware Reports Record Financial Results for the Fourth Quarter and Year-Ended December 31, 2014

BURLINGTON, Mass., Feb. 4, 2015 /PRNewswire/ -- ClickSoftware Technologies Ltd. (Nasdaq GS: CKSW), the leading provider of automated mobile workforce management and optimization solutions for the service industry, today announced results for the fourth quarter and year ended December 31, 2014.

Fourth Quarter 2014 Highlights

• Record revenues of $34.5 million, up 12% year-over-year;
• Strong win rate, added 22 new customers, of which 15 were cloud subscriptions;
• Cloud subscriptions revenues increased to $5.7 million compared to $0.5 million last year;
• Recurring revenues from cloud subscriptions and support reached 41% of total revenues;
• Non-GAAP net income of $3.6 million; Non-GAAP EPS of $0.11 per fully diluted share.

Full Year 2014 Highlights

• Record revenues of $126.2 million, up 22% year-over-year;
• Annualized Recurring Revenues (ARR) from cloud subscriptions entering 2015 were $22.7 million;
• Non-GAAP net income of $1.4 million; Non-GAAP EPS of $0.04 per fully diluted share.

2015 Annual Guidance

• Revenues of $140 million â€" $145 million;
• Non-GAAP EPS of $0.09 â€" $0.15 per fully diluted share.

"I am pleased to report the tremendous progress in our efforts to grow the Company while we and the market transition to a cloud subscription model," said Dr. Moshe BenBassat, ClickSoftware's Founder and CEO. "It is a remarkable achievement to have recorded year-over-year revenue growth of 22% during such period of transition. Our existing user base in the cloud, combined with significant new cloud wins of large customers, prove that we have become the premier cloud vendor in the service sector in terms of user base and solution breadth for service companies of all sizes. Our leadership was also recognized in Gartner's Magic Quadrant for Field Service Management report, which selected ClickSoftware as leaders for the fourth consecutive year."

"We are also very pleased to have accomplished our goal of returning to profitability and positive cash flow. Our annual cloud subscriptions and support recurring revenues represented 42% of total 2014 revenues and, together with strong bookings on the fourth quarter, we expect this trend to continue to grow, providing us with good visibility into future revenues, and with stability going forward."

"In the fourth quarter alone we added 22 new enterprise customers, far above our historical average, 15 (68%) of which selected our cloud-based solutions. With large cloud customers, we continue to experience a stair-step approach, whereby small initial contracts increase in size over time as customers progress with their roll-out of our solution. A number of such large customers that had initially signed up a small number of users in 2014, represent substantial potential for additional paying users," Dr. BenBassat added.

"With our continuous innovations we have expanded our addressable market, building a company that is now addressing a deeper and broader share of the service sector. First, our solutions today cover the needs of individual service companies of all sizes, in all industry verticals, in the cloud and on-premise, for both office users and mobile workers. Second, we also expanded to enable win-win harmony within business networks of service providers which collaborate in a variety of outsourcing and contracting arrangements to deliver top quality customer service. Our Optimization as a Service technology is now bringing to SMBs (Small/Medium Businesses) advanced decision support and optimization that was previously only available to large companies," concluded Dr. BenBassat.

Fourth Quarter Results

For the fourth quarter ended December 31, 2014, total revenues were $34.5 million, up 12% from $30.7 million for the fourth quarter of 2013. Net income on a GAAP basis for the quarter was $2.6 million, or $0.08 per fully diluted share, compared with net income of $2.3 million, or $0.07 per fully diluted share, for the same period last year. Operating expenses on a GAAP basis included $309,000 attributed to the restructuring of the Company's Xora operations. Non-GAAP net income for the quarter increased 59% to $3.6 million, or $0.11 per fully diluted share, compared with Non-GAAP net income of $2.3 million, or $0.07 per fully diluted share, for the same period last year.

Software license revenues for the fourth quarter of 2014 were $9.3 million, down 11% compared with $10.4 million for the same period last year. This decrease was offset by a more than ten-fold increase in Cloud subscription revenues to $5.7 million, from $0.5 million for the same period last year. Support revenues were $8.6 million, up 6% compared with support revenues of $8.1 million for the same period last year. Consulting revenues were $11.0 million, down 6% compared with consulting revenues of $11.7 million for the same period last year.

Gross profit for the fourth quarter of 2014 was $20.2 million, or 59% of revenues, compared with $19.0 million, or 62% of revenues, for the same period last year. The decrease in gross profit margins was primarily due to the decrease in consulting revenues.

Cash and liquid investments at the end of the fourth quarter of 2014 were $45.0 million, an increase of $1.3 million, compared with the end of the third quarter of 2014. Net cash provided by operating activities was $0.6 million during the fourth quarter of 2014.

Full Year 2014 Results

Total revenues for 2014 increased 22% to $126.2 million, compared with revenues of $103.2 million for the same period in 2013. The net loss on a GAAP basis for 2014 narrowed to $3.0 million, or $(0.09) per fully diluted share, compared with a net loss of $4.2 million, or $(0.13) per fully diluted share, for 2013. Non-GAAP net income for 2014 improved to $1.4 million, or $0.04 per fully diluted share, compared with Non-GAAP net loss of $2.5 million, or $(0.08) per fully diluted share, for 2013.

2015 Annual Guidance

For 2015, the Company is providing the following guidance:

• Revenues of $140 million to $145 million, or top line growth of 11% to 15% compared with 2014. This outlook is based on the Company's backlog and deferred revenues, current visibility into cloud ARR and business pipeline;
• Non-GAAP fully diluted earnings per share of $0.09 to $0.15, excluding share-based compensation costs of approximately $0.12 per share, amortization of intangible assets of approximately $0.04 per share, and deferred taxes of approximately $0.01 per share.

Investors Conference Call and Supplemental Slides

ClickSoftware will host a conference call today at 9:00 a.m. ET to discuss its financial results and other matters discussed in this press release, as well as answer questions from the investment community. For reference during the call, the Company will post certain supplemental slides in the Investor Relations section of ClickSoftware's web site at http://ir.clicksoftware.com.

To participate, please call (888) 668-9141 and ask for the ClickSoftware conference call. International participants, please call +972-3-918-0609. The call will be broadcasted by live webcast on the internet (in listen mode only) at http://ir.clicksoftware.com. A replay of this webcast will be available on the ClickSoftware website and on the Investor Relations App. Alternatively, a telephone replay of the call will be available for a week by calling (888) 326-9310 (international callers can dial +972-3-925-5900).

About ClickSoftware

ClickSoftware (NasdaqGS: CKSW) is the leading provider of automated mobile workforce management and service optimization solutions for the enterprise, both for mobile and in-house resources. As pioneers of the "Service chain optimization" concept, our solutions provide organizations with end-to-end visibility and control of the entire service management chain by optimizing forecasting, planning, shift and task scheduling, mobility and real-time management of resource and customer communication.

Available via the cloud or on-premise, our products incorporate best business practices and advanced decision-making algorithms to manage service operations more efficiently, in a scalable, integrated manner. Our solutions have become the backbone for many leading organizations worldwide by addressing the fundamental question of job fulfillment: Who does What, for Whom, With what, Where and When.

ClickSoftware is the premier choice for delivering superb business performance to service sector organizations of all sizes. The company is headquartered in the United States and Israel, with offices across Europe, and Asia Pacific. For more information, please visit http://www.clicksoftware.com. Follow us on Twitter, the content of which is not incorporated herein by reference.

To download ClickSoftware's investor relations app, which offers access to SEC documents, press releases, videos, audiocasts and more, the content of which is not incorporated herein by reference, please visit Apple's App Store to download on your iPhone and iPad, or Google Play for your Android mobile device.

Use of Non-GAAP Financial Results

In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles (GAAP), the Company's earnings release contains Non-GAAP financial measures of net income and net income per share that exclude the effects of share-based compensation, tax benefit related to the update of deferred tax asset, tax payment for previous years retained earnings, impairment of intangible assets, the amortization of acquired intangible assets and restructuring and related expenses. The Company's management believes the Non-GAAP financial information provided in this release is useful to investors' understanding and assessment of the Company's on-going core operations and prospects for the future. Management also uses both GAAP and Non-GAAP information in evaluating and operating business internally and as such deemed it important to provide all this information to investors. The Non-GAAP financial measures disclosed by the Company should not be considered in isolation or as a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. Reconciliations between GAAP measures and Non-GAAP measures are provided later in this press release.

Safe Harbor for Forward Looking Statements

This press release contains express or implied forward-looking statements within the Private Securities Litigation Reform Act of 1995 and other U.S. Federal securities laws. These forward-looking statements include, but are not limited to, those statements regarding future results of operations, including expected growth, profitability, cash flows, prospects, trends and opportunities in cloud subscriptions as well as recurring revenues, pipeline, demand for our solutions, expectations regarding additional paying users, our guidance for 2015 revenues and GAAP and Non-GAAP earnings per share, and our future expected ARR. Such "forward-looking statements" involve known and unknown risks, uncertainties and other factors that may cause actual results or performance to differ materially from those projected. Achievement of these results by ClickSoftware may be affected by many factors, including, but not limited to, risks and uncertainties regarding the general economic outlook, the length of or changes in ClickSoftware's sales cycle, ClickSoftware's ability to close sales to potential customers in a timely manner and maintain or strengthen relationships with strategic partners, the timing of revenue recognition, foreign currency exchange rate fluctuations and ClickSoftware's ability to maintain or increase its sales pipeline. The forward-looking statements contained in this press release are subject to other risks and uncertainties, including those discussed in the "Risk Factors" section and elsewhere in ClickSoftware's annual report on Form 20-F for the year ended December 31, 2013 and in subsequent filings with the Securities and Exchange Commission. Except as otherwise required by law, ClickSoftware is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.

Note: Financial Schedules Attached

* See Note 14.A to our consolidated financial statements for the year ended December 31, 2012 included in our Annual Report on Form 20-F, regarding November 2012 law.

SOURCE ClickSoftware

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