ClickSoftware Reports Results for the Third Quarter Ended September 30, 2010

Quarterly Revenues up 5% and License Revenues up 11% Year-Over-Year

Oct 25, 2010, 04:00 ET from ClickSoftware Technologies Ltd

BURLINGTON, Massachusetts, October 25, 2010 /PRNewswire-FirstCall/ -- ClickSoftware Technologies Ltd. (NasdaqGS: CKSW), the leading provider of automated workforce management and optimization solutions for the service industry, today announced results for the third quarter ended September 30, 2010.

For the third quarter ended September 30, 2010, total revenues were $17.5 million, up 5% from $16.6 million in the third quarter of 2009. Net income for the third quarter of 2010 was $2.3 million, or $0.07 per fully diluted share, compared to net income of $3.2 million, or $0.10 per fully diluted share, for the same period last year.

Non-GAAP net income for the quarter was $2.8 million, or $0.09 per fully diluted share, compared to $3.6 million, or $0.11 per fully diluted share, for the same period last year.

Software license revenues for the third quarter of 2010 were $6.0 million, up 11% compared with software license revenues of $5.4 million for the same period last year. Service and maintenance revenues were $11.5 million, up 2% compared with service and maintenance revenues of $11.2 million in the same period last year.

Gross profit in the third quarter of 2010 was $10.9 million, or 62% of revenues, compared to $10.9 million, or 65% of revenues, in the same period last year.

Cash, cash equivalents and short and long-term investments at the end of the third quarter of 2010 increased to $48.3 million from $42.5 million at the end of the second quarter of 2010. Net cash provided by operating activities was $5.7 million during the third quarter of 2010.

"As we previously reported, delays in signing certain contracts somewhat impacted our third quarter revenues; still, we are on target on a nine-month basis and believe that we will meet our annual projections for 2010. We continue to execute operationally for on-going sustainable growth by developing a strong pipeline of new business, expanding our partnerships, and further enhancing our product line offerings", said Dr. Moshe BenBassat, ClickSoftware's Chairman and CEO. "Our leadership in the mobile marketplace strengthened as we continue to sign new customers. The partnership with Sybase - an SAP company - by which our industry leading mobile application will run on the industry leading Sybase platform, creates one of the most attractive mobile offering in the enterprise software market. This is further amplified by our device agnostic approach that makes our mobile applications run on iPhone, iPad and Android-based devices. Additionally, the introduction of a Facebook application offers service organizations access into social media, and provides a self-service approach for customers," Dr. BenBassat added. "To conclude, our business remains strong and we expect the momentum to carry into the fourth quarter and into 2011".

Outlook

The Company expects revenues for the fourth quarter of 2010 to be above $20 million which will bring 2010 annual revenues to above $72.5 million. This will represent annual revenues growth of approximately 19% or higher.

Investors Conference Call

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. To participate, please call (888) 668-9141 and ask for the ClickSoftware conference call. International participants, please call +972-3-918-0610. 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. Alternatively, a telephone replay of the call will be available for a week or by calling (888) 326-9310 (international callers can dial +972-3-925-5900).

About ClickSoftware

ClickSoftware is the leading provider of automated workforce management and optimization solutions for every size of service business. Our portfolio of solutions, available on demand and on premise, creates business value through higher levels of productivity, customer satisfaction and operational efficiency. Our patented concept of 'continuous planning and scheduling' incorporates customer demand forecasting, long and short term capacity planning, shift planning, real-time scheduling, mobility and location-based services, as well as on-going communication with the consumer on the expected arrival time of the service resource.

As the pioneers of the 'W6' concept more than 20 years ago, we have perfected solutions for solving a wide variety of problems on Who does What, for Whom, with What, Where and When. The combination of proven technology with educational services helps businesses find the right balance between reducing costs, increasing customer satisfaction, employee preferences and industry regulations/legislation. ClickSoftware's solutions manage over 200,000 resources in service businesses across a variety of industries and geographies. Our flexible deployment approach, breadth and depth of solutions and strong partnerships with leading CRM/ERP vendors and system integrators makes us the number one choice to deliver superb business performance to any organization. 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 or follow us on Twitter (http://twitter.com/ClickSoftware), the content of which is not part of this press release.

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 in accordance with the requirements of ASC 718 (originally issued as SFAS No. 123R, "Share-based Payment" ("123R")), tax benefit related to the update of deferred tax asset and the amortization of acquired intangible assets. 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, visibility into future periods, growth and future rates of growth and expectations regarding future closing of contracts. For example, when we discuss our "Outlook" for 2010 fourth quarter revenues and demand and visibility for future periods, we are using forward-looking statements. 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, 2009 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

                          ClickSoftware Technologies Ltd.
                       CONSOLIDATED STATEMENTS OF OPERATIONS
           (Unaudited. In thousands, except share and per share amounts)

                                            Three Months Ended
                             September 30, 2010       September 30, 2009
                             ------------------       ------------------
                                           % of                     % of
                                 $     Revenues       $         Revenues
                             ------------------       ------------------
    Revenues:
        Software license       $ 5,969      34%       $ 5,369        32%
        Services                11,509      66%        11,239        68%
                             ------------------       ------------------
          Total revenues        17,478     100%        16,608       100%
                             ------------------       ------------------
    Cost of revenues:
         Software license          617       4%           611         4%
         Services                5,986      34%         5,143        31%
                             ------------------       ------------------
          Total cost of
          revenues               6,603      38%         5,754        35%
                             ------------------       ------------------
    Gross profit                10,875      62%        10,854        65%
                             ------------------       ------------------
    Operating expenses:
        Research and
        development
        costs, net               2,128      12%         1,701        10%
        Selling and
        marketing
        expenses                 4,727      27%         4,282        26%
        General and
        administrative
        expenses                 1,579       9%         1,736        10%
                             ------------------       ------------------
          Total operating
          expenses               8,434      48%         7,719        46%
                             ------------------       ------------------
    Net income from
    operations                   2,441      14%         3,135        19%

    Interest, net                   69       0%           101         1%
                             ------------------       ------------------
    Net income before
    taxes                      $ 2,510      14%       $ 3,236        19%
    Taxes on income                183       1%            68         0%
                             ------------------       ------------------
    Net income                 $ 2,327      13%       $ 3,168        19%

    Net income per
    ordinary share:
    Basic                       $ 0.08                 $ 0.11
                             ------------------       ------------------
    Diluted                     $ 0.07                 $ 0.10
                             ------------------       ------------------
    Shares used in
    computing basic net
    income per share        30,451,473             29,916,657
                            -------------------    ---------------------
    Shares used in
    computing diluted net
    income per share        31,951,042             31,968,186
                            -------------------    ---------------------


                         ClickSoftware Technologies Ltd.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
        (Unaudited. In thousands, except share and per share amounts)

                                          Nine Months Ended
                                  September 30, 2010       September 30, 2009
                             -----------------------     --------------------
                                              % of                     % of
                                   $        Revenues      $          Revenues
                             -----------------------     --------------------
     Revenues:
         Software license      $ 19,056          36%        $ 3,729       31%
         Services                33,487          64%         30,222       69%
                             -----------------------     --------------------
          Total revenues         52,543         100%         43,951      100%
                             -----------------------     --------------------
     Cost of revenues:
         Software license         1,648           3%          1,601        4%
         Services                18,210          35%         13,148       30%
                             -----------------------     --------------------
          Total cost of
          revenues               19,858          38%         14,749       34%
                             -----------------------     --------------------
     Gross profit                32,685          62%         29,202       66%
                             -----------------------     --------------------
     Operating expenses:
         Research and
         development
         costs, net               5,867          11%          4,701       11%
         Selling and
         marketing
         expenses                13,900          26%         11,789       27%
         General and
         administrative
         expenses                 4,559           9%          4,721       11%
                             -----------------------     --------------------
          Total operating
          expenses               24,326          46%         21,211       48%
                             -----------------------     --------------------
     Net income from
     operations                   8,359          16%          7,991       18%

     Interest, net                  120           0%            424        1%
                             -----------------------     --------------------
     Net income before
     taxes                      $ 8,479          16%        $ 8,415       19%
     Tax expense
     (income), net                1,027           2%          (299)      (1%)
                             -----------------------     --------------------
     Net income                 $ 7,452          14%        $ 8,714       20%
                             -----------------------     --------------------

     Net income per
     ordinary share:
     Basic                       $ 0.25                      $ 0.30
                             -----------------------     --------------------
     Diluted                     $ 0.23                      $ 0.28
                             -----------------------     --------------------
     Shares used in
     computing basic net
     income per share        30,361,887                  29,134,317
                             -----------------------     --------------------
     Shares used in
     computing diluted net
     income per share        31,981,518                  30,924,013
                             -----------------------     --------------------


            ClickSoftware Technologies Ltd.
                               CONSOLIDATED BALANCE SHEETS
                           (In thousands, except share data)

                                                 September 30, December 31,
                                                          2010        2009
                                                       --------    --------

             ASSETS                                 (unaudited)   (audited)
     CURRENT ASSETS
       Cash and cash equivalents                       $ 17,941    $ 15,594
       Short term investments                            29,740      18,852
       Trade receivables, net                            15,852      16,410
       Deferred taxes                                     2,340       3,160
       Other receivables and prepaid expenses             2,023       1,980
                                                       --------    --------
                  Total current assets                   67,896      55,996
                                                       --------    --------
     FIXED ASSETS
       Cost                                               7,073       6,025
       Less - accumulated depreciation                    3,678       2,898
                                                       --------    --------
                  Total fixed assets                      3,395       3,127
                                                       --------    --------
       Long term investments                                599         528
       Intangible assets, net                             2,203       2,802
       Goodwill                                           2,511       2,511
       Severance pay deposits                             1,699       1,485
                                                       --------    --------
             Total Assets                              $ 78,303    $ 66,449
                                                       --------    --------

             LIABILITIES AND SHAREHOLDERS' EQUITY
     CURRENT LIABILITIES
       Accounts payable and accrued expenses           $ 10,433    $ 11,619
       Deferred revenues                                 10,115       6,711
                                                       --------    --------
                Total current liabilities               20,548      18,330
                                                       --------    --------
      LONG TERM LIABILITIES
       Accrued severance pay                              3,266       2,879
       Deferred revenues - long term                      2,618       2,582
                                                       --------    --------
               Total long term liabilities                5,884       5,461
                                                       --------    --------
               Total liabilities                         26,432      23,791
                                                       --------    --------
     SHAREHOLDERS' EQUITY
      Ordinary shares of NIS 0.02 par value                 126         124
      Additional paid-in capital                         80,629      78,933
      Accumulated deficit                               (28,986)    (36,438)
      Accumulated other comprehensive income                145          82
      Treasury stock, at cost: 39,000 shares                (43)        (43)
                                                       --------    --------
                Total shareholder equity                 51,871      42,658
                                                       --------    --------
           Total Liabilities and shareholders' equity  $ 78,303    $ 66,449
                                                       --------    --------


                      ClickSoftware Technologies Ltd.
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (In thousands)
                                                    Nine Months Ended
                                              September 30,     September 30,
                                                   2010              2009

                                                (unaudited)       (unaudited)
                                                 ----------         ---------
    CASH FLOWS FROM OPERATING ACTIVITIES
     Net income                                     $ 7,452           $ 8,714
     Adjustments to reconcile net income to
     net cash provided by operating activities:
      Expenses not affecting operating cash flows:
        Depreciation                                    936               747
        Amortization of deferred compensation           841               689
        Amortization of acquired intangible assets      597               207
        Severance pay, net                              173                27
        Other                                             3                17
      Changes in operating assets and liabilities:
        Decrease (Increase) in trade receivables        558           (3,898)
        Decrease (Increase) in deferred taxes           820             (430)
        Decrease (Increase) in other receivables         20             (710)
       (Decrease) Increase in accounts payable and
        accrued expenses                             (1,186)              587
        Increase in deferred revenues                 3,440             1,011
                                                 ----------         ---------
     Net cash provided by operating activities     $ 13,654           $ 6,961
                                                 ----------         ---------
    CASH FLOWS FROM INVESTING ACTIVITIES
     Purchase of equipment                          (1,205)           (1,424)
     Acquisition of intangible assets and
     goodwill in a business combination                   -           (4,193)
     Short-term investment                         (10,959)           (3,104)
                                                 ----------         ---------
     Net cash used in investment activities      $ (12,164)         $ (8,721)
                                                 ----------         ---------
    CASH FLOWS FROM FINANCING ACTIVITIES
     Employee options exercised                         857             3,151
                                                 ----------         ---------
     Net cash provided by financing activities        $ 857           $ 3,151
                                                 ----------         ---------
    INCREASE IN CASH AND CASH EQUIVALENTS             2,347             1,391
    CASH AND CASH EQUIVALENTS AT BEGINNING
    OF PERIOD                                        15,594            17,427
                                                 ----------         ---------
    CASH AND CASH EQUIVALENTS AT END OF PERIOD     $ 17,941          $ 18,818
                                                 ----------         ---------


                            ClickSoftware Technologies Ltd.
                SUPPLEMENTAL RECONCILIATIONS OF GAAP TO NON-GAAP RESULTS
                  (Unaudited. In thousands, except per share amounts)

                                      Three Months Ended

                          September 30, 2010               September 30, 2009
                          ------------------         ------------------------
                                      % of                             % of
                               $    Revenues              $          Revenues
                          ------------------         ------------------------


    GAAP Net income        $ 2,327     13%           $ 3,168             19%
    Share-based
    compensation (1)           179                       302
    Amortization of
    intangible assets (2)      199                       112
    Deferred taxes             100                         -
                          ------------------         ------------------------

    Non-GAAP Net income    $ 2,805     16%           $ 3,582             22%
                          ------------------         ------------------------

    GAAP Earnings per
    share (diluted)         $ 0.07                    $ 0.10
    Share-based
    compensation (1)          0.01                      0.01
    Amortization of
    intangible assets (2)     0.01                      0.00
    Deferred taxes            0.00                         -
                          ------------------         ------------------------
    Non-GAAP Earnings per
    share (diluted)         $ 0.09                    $ 0.11
                          ------------------         ------------------------

    (1) Share-based
    compensation:
            Cost of
            services            41                        36
            Research and
            development
            costs, net          36                        32
            Selling and
            marketing
            expenses            80                        72
            General and
            administrative
            expenses            22                       162
                          ------------------         ------------------------
                             $ 179                     $ 302
                          ------------------         ------------------------

    (2) Amortization of
    intangible assets:
    Cost of revenues           170                        82
    Research and
    development costs,
    net                         29                        30
                          ------------------         ------------------------
                             $ 199                     $ 112
                          ------------------         ------------------------



                            ClickSoftware Technologies Ltd.
               SUPPLEMENTAL RECONCILIATIONS OF GAAP TO NON-GAAP RESULTS
                  (Unaudited. In thousands, except per share amounts)

                                          Nine Months Ended
                              September                     September 30,
                               30, 2010                         2009
                           ------------------            -------------------
                                        % of                           % of
                            $        Revenues                $      Revenues
                           ------------------            -------------------


    GAAP Net income:       $ 7,452        14%            $ 8,714         20%
    Share-based
    compensation (1)           841                           690
    Amortization of
    intangible assets (2)      597                           207
    Deferred taxes             820                         (430)
                           ------------------            -------------------

    Non-GAAP Net income    $ 9,710        18%            $ 9,181         21%
                           ------------------            -------------------

    GAAP Earnings per
    share (diluted)         $ 0.23                        $ 0.28
    Share-based
    compensation (1)          0.03                          0.02
    Amortization of
    intangible assets (2)     0.02                          0.01
    Deferred taxes            0.02                        (0.01)
                           ------------------            -------------------
    Non-GAAP Earnings per
    share (diluted)         $ 0.30                        $ 0.30
                           ------------------            -------------------

    (1) Share-based
    compensation:
         Cost of
         services              128                            96
         Research and
         development
         costs, net            109                            88
         Selling and
         marketing
         expenses              253                           194
         General and
         administrative
         expenses              351                           312
                           ------------------            -------------------
                             $ 841                         $ 690
                           ------------------            -------------------

    (2) Amortization of
    intangible assets:
         Cost of revenues      508                           148
         Research and
         development costs,
         net                    89                            59
                           ------------------            -------------------
                             $ 597                         $ 207
                           ------------------            -------------------



    ClickSoftware Contact:
    Noa Schuman
    Investor Relations
    +972-3-7659-467
    Noa.Schuman@clicksoftware.com

    Investor Relations Contact:
    Marybeth Csaby / Rob Fink
    KCSA Strategic Communications
    +1-212-896-1236 / +1-212-896-1206
    mcsaby@kcsa.com / rfink@kcsa.com

SOURCE ClickSoftware Technologies Ltd