Callidus Software Announces Fourth Quarter and Full Year 2010 ResultsTotal Q4 Revenues of $19.1 Million, Up 24% Year Over Year; Second Consecutive Quarter of Profitable Growth; Annual Recurring Revenues Up 15% Year Over Year; Cash & Investments up $3.7 Million From Q3
PLEASANTON, CA -- (Marketwire - February 03, 2011) - Callidus Software Inc (NASDAQ: CALD), the leader in Sales Performance Management (SPM), today announced financial results for the fourth quarter and fiscal year ending December 31, 2010.
"I am pleased to report another quarter of profitable growth," said Leslie Stretch, president and CEO, Callidus Software. "For the second consecutive quarter, we achieved non-GAAP profitability and for the fourth consecutive quarter, sequential increase in total revenues. We also saw increased growth in recurring revenues, with recurring revenue now accounting for over 75% of our total revenues compared to 57% last year."
"In the year, we continued to drive new customer expansion, signing deals in 15 countries and adding a record number of on demand customers as well as total new customers. On the strength of our growth, we are exiting 2010 with a record $53 million in recurring revenues and $33.1 million in deferred revenues."
Financial Highlights for the Fourth Quarter 2010
- Total revenue was $19.1 million for the fourth quarter, representing an increase of 24% compared to the same quarter last year. Recurring revenues, which include subscription and support, were $14.2 million, up 22% compared to the fourth quarter of 2009. Service revenues were $4.3 million, up 16% compared to the fourth quarter of 2009. License revenues were $.5 million, up from zero license revenue reported in the fourth quarter of 2009.
- Total gross margin was 45% for the fourth quarter, up from 36% from the fourth quarter of 2009.
- GAAP operating expenses were $10.0 million for the fourth quarter, down $.7 million or 6% from the same quarter in 2009.
- GAAP net loss was $1.5 million, or ($0.04) per share, for the quarter, which included $1.4 million of stock-based compensation expense, $34,000 of restructuring expense, $157,000 of amortization of acquired intangible assets, and $160,000 for impairment of an acquired intangible asset. This compares to a GAAP net loss of $5.1 million, or ($0.17) per share, for the fourth quarter of 2009, which included $1.1 million of stock-based compensation expense, $216,000 of restructuring expense, and $125,000 of amortization of acquired intangible assets.
- Non-GAAP operating expenses for Q4 2010 were $8.5 million, down $.9 million or approximately 10% from Q4 2009. Non-GAAP operating expenses exclude restructuring expense, stock based compensation expense, amortization of acquired intangible assets, and impairment of an acquired intangible asset.
- Non-GAAP net income was $.4 million, or $0.01 per share, for the quarter, compared to a non-GAAP net loss of $3.6 million, or ($0.12) per share, for the same period last year. Non-GAAP net income and loss excludes stock-based compensation expense, restructuring expense, amortization of acquired intangible assets, and impairment of an acquired intangible asset.
- Cash and Investments balance increased by $3.7 million in the quarter to $31.5 million.
Financial Highlights for the Full Fiscal Year 2010
- Total revenue for the full fiscal year was $70.9 million, down 13% from $81.1 million in 2009. Recurring revenues were $53.0 million, up 14% over 2009. Services revenues were down 49% to $15.1 million, and license revenues were down 45% to $2.8 million. The full year numbers reflect the transition to a predominantly recurring revenue business.
- GAAP net loss was $12.7 million, or ($0.40) per share, for the full year, which included $6.1 million of stock-based compensation expense, $1.7 million restructuring expense, $0.6 million of amortization of acquired intangible assets and $160,000 for impairment of an acquired intangible asset. This compares to GAAP net loss of $18 million, or ($0.60) per share, for the full year of 2009, which included $4.3 million of stock-based compensation expense, $3 million restructuring expense, and $.6 million of amortization of acquired intangible assets.
- Non-GAAP net loss was $4.2 million, or ($0.13) per share, for the full year, compared to a non-GAAP net loss of $10.1 million or ($0.34) per share, for 2009. Non-GAAP net loss/income excludes stock-based compensation expense, restructuring expense, amortization of acquired intangible assets, and impairment of an acquired intangible asset.
- Cash generated from operations for the year 2010 was $2.2 million versus $3.9 million of cash used in operations in 2009.
Recent Business Highlights
- Callidus announced it has signed a definitive agreement to acquire all of the assets of strategic technology partner ForceLogix (TSX-V: FLT), a leading provider of SaaS-based coaching and talent development solutions that help organizations increase the effectiveness of their sales force. The acquisition is anticipated to close in the first quarter of 2011.
- Callidus announced the formation of the new CallidusRX Division, a new packaged solution designed to address pharmaceutical commercial models in managing sales performance.
- Callidus announced the expansion of its SPM integration platform with the release of Callidus SPMConnect Integration Software. The new SPMConnect for Salesforce module, built on Force.com, was also released in the quarter.
- Callidus opened a new state-of-the-art Class A Tier III data center in Ashburn, Virginia, enabling Callidus to serve customers from around the world with superior performance.
- Callidus received the highest possible ratings across recent leading analyst reports. Callidus received a "Strong Positive" rating in the latest MarketScope for Insurance Incentive Compensation Management Applications by Gartner, Inc. (NYSE: IT). Callidus was also cited as "leader" in the Compensation and Benefits segment in a new Forrester Research Inc., study "HRM Solutions: Traditional Models Clash with Next-Generation Processes and Technology." Callidus customers were also found to out-perform best in class sales organizations by the Aberdeen Group in a study based on "Sales Performance Management: Getting Everyone on the Same Page."
- In the year, Callidus was also recognized by multiple industry publications, including: Named one of the "20 Top Coolest Cloud Computing Productivity App Vendors" by Everything Channel's CRN; listed in Software Magazine's 28th Annual Software 500 listing, ranking the world's largest software and service providers; cited among an elite group of 40 vendors to watch during 2010 by Information Management Magazine; and named a leader in CRM Magazine's 2010 CRM Market Leader awards in the Incentive Management category.
Financial Outlook
- Total revenue for the first quarter of 2011 is expected to be between $18.2 million and $19.2 million.
- GAAP operating expenses, including stock-based compensation of approximately $1.8 million, are expected to be between $10 million and $11 million in the first quarter of 2011.
Conference Call
A conference call to discuss the fourth quarter and full year 2010 results and outlook is scheduled for 1:30 p.m. Pacific Standard Time (PST) today. The conference call will be available via live webcast at the Investor Relations section of Callidus Software's website at www.callidussoftware.com.
Webcast site: http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=146634&eventID=3647008
Dial-in number: 866.543.6405
International callers: 617.213.8897
Passcode: 40164174
Replay: A webcast replay will be available after 3:30 p.m. PST on February 3, 2011 through February 11, 2011. The webcast replay will be available at the Investor Relations section of our website.
The time or manner of the webcast may change for technical or administrative reasons outside of Callidus Software's control.
About Callidus Software®
Callidus Software (NASDAQ: CALD) is the market and technology leader in Sales Performance Management (SPM). Callidus customers gain a competitive advantage by maximizing sales cost efficiencies and driving improvements in sales effectiveness. Our award-winning Software-as-a-Service (SaaS) applications set the standard for performance management of a company's sales force and channel partners. Over 2 million employees and channel partners have their performance managed by Callidus Software. For more information, please visit www.callidussoftware.com.
Note on Forward-Looking Statements
The forward-looking statements included in this press release, including estimates of first quarter 2011 total revenues, operating expenses and stock-based compensation expense reflect management's best judgment based on factors currently known and involve risks and uncertainties. These risks and uncertainties include, but are not limited to, potential disruption of customer purchase decisions resulting from global economic conditions, timing and size of orders, potential material fluctuations in financial results and future growth rates, decreases in customer spending, increased legal expense related to pending litigation, uncertainty regarding purchasing trends in the SPM market, customer cancellations or non-renewal of maintenance contracts or on-demand services, our potential inability to manage effectively any growth we experience, uncertainty regarding the demand for and profitability of our on-demand services, increased competition or new entrants in the marketplace, and other risks detailed in Callidus' reports filed with the Securities and Exchange Commission (SEC), including its Form 10-K for 2009 and Form 10-Q for the first, second, and third quarters of 2010, copies of which may be obtained by contacting Callidus Software's Investor Relations department at 925-251-2248, or from the Investor Relations section of Callidus Software's website (www.callidussoftware.com). Actual results may differ materially from those presently reported. We assume no obligation to update the information contained in this release.
Non-GAAP Financial Measures
Callidus has provided in this release financial information that has not been prepared in accordance with GAAP. This information includes non-GAAP operating expense, income (loss) from operations, net loss and net loss per share. Callidus uses non-GAAP measures internally in analyzing its financial results and believes that they are useful to investors, as a supplement to GAAP measures, in evaluating Callidus' operating performance. Callidus believes that the use of these non-GAAP measures provides additional insight for investors to use in evaluation of ongoing operating results and trends and in comparing its financial measures with other companies in Callidus' industry, many of which present similar non-GAAP financial measures to investors. As noted, the non-GAAP financial measures exclude stock-based compensation expense pursuant to SFAS 123(R), restructuring expense and amortization of acquired intangibles. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.
©1997-2011 Callidus Software Inc. All rights reserved. Callidus Software, the Callidus Software logo, and TrueComp Manager are trademarks, service marks, or registered trademarks of Callidus Software Inc. in the United States and other countries. All other brand, service or product names are trademarks or registered trademarks of their respective companies or owners.
CALLIDUS SOFTWARE INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for per share data)
(unaudited)
Three months ended Year ended
December 31, December 31,
-------------------- --------------------
2010 2009 2010 2009
--------- --------- --------- ---------
Revenues:
Recurring $ 14,243 $ 11,653 $ 53,025 $ 46,322
Services 4,327 3,744 15,061 29,702
License 539 - 2,794 5,034
--------- --------- --------- ---------
Total revenues 19,109 15,397 70,880 81,058
Cost of revenues:
Recurring (1) 6,905 5,556 26,104 22,468
Services (1) (2) 3,591 4,161 15,353 26,195
License 91 98 380 754
--------- --------- --------- ---------
Total cost of revenues 10,587 9,815 41,837 49,417
--------- --------- --------- ---------
Gross profit 8,522 5,582 29,043 31,641
Operating expenses:
Sales and marketing (1) (2) 4,055 4,477 16,229 20,369
Research and development (1) 2,356 2,982 10,445 13,853
General and administrative
(1) 3,383 2,987 13,754 12,310
Restructuring 34 216 1,655 2,993
Impairment of acquired
intangible asset 160 - 160 -
--------- --------- --------- ---------
Total operating expenses 9,988 10,662 42,243 49,525
--------- --------- --------- ---------
Operating loss (1,466) (5,080) (13,200) (17,884)
Interest and other income
(expense), net - 69 (14) 308
--------- --------- --------- ---------
Loss before provision (benefit)
for income taxes (1,466) (5,011) (13,214) (17,576)
Provision (benefit) for income
taxes (15) 58 (478) 377
--------- --------- --------- ---------
Net loss $ (1,451) $ (5,069) $ (12,736) $ (17,953)
========= ========= ========= =========
Basic and diluted net loss per
share $ (0.04) $ (0.17) $ (0.40) $ (0.60)
========= ========= ========= =========
Shares used in basic and
diluted per share computation 32,336 30,493 31,536 30,050
========= ========= ========= =========
(1) Stock-based compensation
included in amounts above by
category:
Cost of recurring revenues 154 70 548 472
Cost of services revenues 136 133 735 574
Sales and marketing 202 223 961 1,018
Research and development 279 147 991 737
General and administrative 675 535 2,866 1,524
--------- --------- --------- ---------
Total stock-based
compensation $ 1,446 $ 1,108 $ 6,101 $ 4,325
========= ========= ========= =========
(2) Acquisition related asset
amortization $ 157 $ 125 $ 631 $ 563
CALLIDUS SOFTWARE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
December 31, December 31,
2010 2009
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 12,830 $ 11,565
Short-term investments 17,758 21,985
Accounts receivable, net 20,201 12,715
Deferred income taxes - 170
Prepaid and other current assets 4,441 3,872
------------ ------------
Total current assets 55,230 50,307
Long-term investments 902 1,142
Property and equipment, net 8,016 4,355
Goodwill 8,031 5,528
Intangible assets, net 4,274 2,993
Deferred income taxes, noncurrent 1,645 1,255
Deposits and other assets 2,000 679
------------ ------------
Total assets $ 80,098 $ 66,259
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 3,299 $ 3,407
Accrued payroll and related expenses 2,859 3,929
Accrued expenses 6,179 3,219
Deferred income taxes 1,691 1,229
Deferred revenue 28,700 21,440
Capital lease obligations, short-term 1,119 -
------------ ------------
Total current liabilities 43,847 33,224
Long-term deferred revenue 4,388 668
Other liabilities 1,619 1,136
Capital lease obligations, long-term 2,162 -
------------ ------------
Total liabilities 52,016 35,028
------------ ------------
Stockholders' equity:
Common stock 31 30
Additional paid-in capital 221,893 212,435
Acquisition contingent consideration 470 -
Deferred compensation - -
Accumulated other comprehensive income (98) 244
Accumulated deficit (194,214) (181,478)
------------ ------------
Total stockholders' equity 28,082 31,231
------------ ------------
Total liabilities and stockholders'
equity $ 80,098 $ 66,259
============ ============
CALLIDUS SOFTWARE INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
Year ended
December 30,
--------------------------
2010 2009
------------ ------------
Cash flows from operating activities:
Net loss $ (12,736) $ (17,953)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation expense 2,565 2,748
Amortization of intangible assets 2,549 2,058
Provision for doubtful accounts and service
remediation reserves 198 (108)
Stock-based compensation 5,631 4,324
Stock-based compensation related to
acquisition contingent consideration 470 -
Impairment of acquired intangible asset 160 -
Revaluation of acquisition contingent
consideration 86 -
Release of valuation allowance (591) -
Leasehold improvement allowance 961 -
Net amortization on investments 249 58
Put option loss 52 390
Gain on investments classified as trading
securities (118) (484)
Changes in operating assets and liabilities:
Accounts receivable (6,668) 10,234
Prepaid and other current assets (614) 218
Other assets (745) 226
Accounts payable (10) 822
Accrued expenses 483 (2,336)
Accrued payroll and related expenses (1,029) (2,591)
Accrued restructuring 151 (668)
Deferred revenue 10,848 (998)
Deferred income taxes 255 200
------------ ------------
Net cash provided by (used in) operating
activities 2,147 (3,860)
------------ ------------
Cash flows from investing activities:
Purchases of investments (20,943) (28,957)
Proceeds from maturities and sale of
investments 25,015 11,670
Purchases of property and equipment (2,779) (1,943)
Proceeds from disposal of property and
equipment 23 (1)
Purchases of intangible assets (1,832) (1,601)
Acquisition, net of cash acquired (1,922) (14)
Change in restricted cash (600) 202
------------ ------------
Net cash used in investing activities (3,038) (20,644)
------------ ------------
Cash flows from financing activities:
Net proceeds from issuance of common stock 3,926 1,789
Repurchases of stock - (742)
Repurchase of common stock from employees for
payment of taxes on vesting of restricted
stock units (554) (436)
Repayment of debt assumed through acquisition (899) -
Payment of principle under capital lease (244) -
------------ ------------
Net cash provided by financing activities 2,229 611
------------ ------------
Effect of exchange rates on cash and cash
equivalents (73) 68
------------ ------------
Net decrease in cash and cash equivalents 1,265 (23,825)
Cash and cash equivalents at beginning of
period 11,565 35,390
------------ ------------
Cash and cash equivalents at end of period $ 12,830 $ 11,565
============ ============
CALLIDUS SOFTWARE INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except for percentages and per share data)
(unaudited)
Three months ended Year ended
December 30, December 30,
---------------------- ----------------------
2010 2009 2010 2009
---------- ---------- ---------- ----------
Non-GAAP operating expense
reconciliation:
Operating expenses $ 9,988 $ 10,662 $ 42,243 $ 49,525
Operating expenses, as
a % of total
revenues 52% 69% 60% 61%
Add back:
Non-cash stock-based
compensation $ (1,156) $ (905) $ (4,818) $ (3,279)
Non-cash amortization
of acquired intangible
assets (157) (125) (631) (500)
Restructuring (34) (216) (1,655) (2,993)
Impairment of acquired
intangible asset (160) - (160) -
---------- ---------- ---------- ----------
Non-GAAP Operating Expenses $ 8,481 $ 9,416 $ 34,979 $ 42,753
---------- ---------- ---------- ----------
Non-GAAP Operating
expenses, as a %
of total revenues 44% 61% 49% 53%
Non-GAAP operating income
(loss) reconciliation:
Operating income (loss) $ (1,466) $ (5,080) $ (13,200) $ (17,884)
Operating income
(loss), as a % of
total revenues -8% -33% -19% -22%
Add back:
Non-cash stock-based
compensation $ 1,446 $ 1,108 $ 6,101 $ 4,325
Non-cash amortization
of acquired intangible
assets 157 125 631 563
Restructuring 34 216 1,655 2,993
Impairment of acquired
intangible asset 160 - 160 -
---------- ---------- ---------- ----------
Non-GAAP Operating income
(loss) $ 331 $ (3,631) $ (4,653) $ (10,003)
---------- ---------- ---------- ----------
Non-GAAP Operating
income (loss), as a %
of total revenues 2% -24% -7% -12%
Non-GAAP net income (loss)
reconciliation:
Net income (loss) $ (1,451) $ (5,069) $ (12,736) $ (17,953)
Net income (loss), as a
% of total revenues -8% -33% -18% -22%
Add back:
Non-cash stock-based
compensation $ 1,446 $ 1,108 $ 6,101 $ 4,325
Non-cash amortization
of acquired intangible
assets 157 125 631 563
Restructuring 34 216 1,655 2,993
Impairment of acquired
intangible asset 160 - 160 -
---------- ---------- ---------- ----------
Non-GAAP Net income (loss) $ 346 $ (3,620) $ (4,189) $ (10,072)
---------- ---------- ---------- ----------
Non-GAAP Net income
(loss), as a %
of total revenues 2% -24% -6% -12%
Non-GAAP net income (loss)
per share reconciliation:
Net income (loss) per basic
and diluted share $ (0.04) $ (0.17) $ (0.40) $ (0.60)
Add back:
Non-cash stock-based
compensation 0.05 0.04 0.20 0.15
Non-cash amortization
of acquired intangible
assets - 0.01 0.02 0.02
Restructuring - - 0.05 0.09
Impairment of acquired
intangible asset - - - -
Non-GAAP net income (loss)
per basic and diluted ---------- ---------- ---------- ----------
share $ 0.01 $ (0.12) $ (0.13) $ (0.34)
---------- ---------- ---------- ----------
Shares used in calculation
of GAAP and Non-GAAP net
income (loss) per share:
---------- ---------- ---------- ----------
Basic and diluted 32,336 30,493 31,536 30,050
---------- ---------- ---------- ----------
Investor Relations Contact:
Ron Fior
Callidus Software Inc.
925-251-2205
ir@callidussoftware.com
Press Contact:
Lorna Heynike
Callidus Software Inc.
925-251-2207
pr@callidussoftware.com
