Callidus Software Announces Quarterly Revenues of $19.7 Million, up 22% Year-Over-YearRecord Total Recurring Revenue of $14.7 Million, up 20% Year-Over-Year; Fifth Consecutive Quarter of Revenue Growth; Third Consecutive Quarter of Profitable Growth
PLEASANTON, CA -- (Marketwire - May 03, 2011) - Callidus Software Inc. (NASDAQ: CALD), the leader in Sales Performance Management (SPM), today announced financial results for the first quarter ending March 31, 2011.
"I am pleased that for the third consecutive quarter, we achieved non-GAAP profitability. For the fifth consecutive quarter, we achieved sequential growth in total revenues. Overall we grew Q1 total revenues by 22% year-over-year, and recurring revenues by 20%. New recurring revenues, which exclude maintenance revenues, are up 38% over the prior year, demonstrating the growth profile of our SaaS business model," said Leslie Stretch, President and CEO of Callidus Software Inc.
"In the quarter, we continued to drive new customer expansion and add-on business in our installed base, signing deals with our core compensation solution and our new acquisitions -- ForceLogix, a pure play SaaS solution that helps optimize sales force results with actionable sales coaching programs, and Salesforce Assessments, a self-service online application for predicting sales hiring success. These acquisitions round out our Sales Talent Management suite and add to our cross sell opportunities. Our continued growth reflects the value of our solutions for Sales Selection, Onboarding, Goal Management, Coaching, and Compensation Management."
Financial Highlights for the First Quarter 2011
- Total revenue was $19.7 million, representing an increase of 22% compared to the first quarter last year. Recurring revenues, which include subscription and support, were $14.7 million, up 20% compared to the first quarter of 2010. Service revenues were $4.3 million, up 18% compared to the first quarter of 2010. License revenues were $0.7 million, up from $0.2 million reported in the first quarter of 2010.
- Total gross profit was 39%, up from 32% in the first quarter of 2010.
- GAAP operating expenses were $10.3 million, down $1.5 million or 13% from the same quarter in 2010.
- Non-GAAP operating expenses were $8.7 million, down $1.2 million or approximately 12% from Q1 2010. Non-GAAP operating expenses exclude restructuring expense, stock-based compensation expense, and amortization of acquired intangible assets.
- GAAP net loss was $2.5 million, or ($0.08) per share, which included $2.4 million of stock-based compensation expense, $189,000 amortization of acquired intangible assets and $39,000 of restructuring expense. This compares to a GAAP net loss of $6.0 million, or ($0.19) per share, for the first quarter of 2010, which included $1.4 million of stock-based compensation expense, $719,000 of restructuring expense, and $157,000 amortization of acquired intangible assets.
- Non-GAAP net income was $90,000, essentially breakeven on a per share basis, compared to a non-GAAP net loss of $3.7 million, or ($0.11) per share, for the same period last year. The company's non-GAAP results exclude the effects of stock-based compensation expense, amortization of acquired intangibles and restructuring expense previously noted.
- Cash generated by operations was $.8 million for the quarter compared to $1.9 million in cash used in operating activities in the prior year.
Business Highlights for the First Quarter 2011
- Callidus acquired all of the assets of ForceLogix Inc., a leading SaaS provider of sales coaching and talent optimization solutions. The acquisition opens up new opportunities in the breakout market for sales and call center coaching and increases Callidus cross sell opportunity. Since closing the acquisition, Callidus has demonstrated good momentum with the solution, adding new customers as well as signing long standing Callidus customers to the ForceLogix solutions.
- Callidus acquired substantially all of the assets of leading sales assessment provider Salesforce Assessments Ltd. Through the acquisition, Callidus gains a leading sales talent testing solution with 55 new customers, increases its cross sell opportunity with Callidus' existing 2.2 million users, and extends its footprint to deliver the broadest SPM portfolio in the industry. For more information, see: Salesforce Assessments.
- Callidus sponsored and presented at a number of leading industry conferences in the quarter, including: the Annual Asian Banker Summit 2011, held April 6-8, 2011 in Hong Kong, China; the 9th Annual Sales Force Effectiveness Europe 2011 Conference, held March 29-31, 2011 in Dusseldorf, Germany; and CFO Magazine's 18th Annual CFO Rising Conference, held March 13-16, 2011 in Orlando, FL.
- Callidus expanded its international reach, signing two new strategic global alliances and signing a new strategic reseller partnership with MuniConS GmbH, further extending Callidus penetration in the German and broader Central European regions.
- Callidus Monaco On Demand suite was selected as a finalist for the prestigious CODiE Awards in the "Best Cloud Infrastructure Application" category, further validating the strength of our on-going product innovation in our SaaS solution suite.
Financial Outlook
Total revenue for the second quarter of 2011 is expected to be between $19 million and $20 million. GAAP operating expenses, including stock-based compensation of approximately $3.9 million and amortization of acquired intangibles of $0.2 million, are expected to be between $13.0 million and $14.0 million in the second quarter of 2011.
Conference Call
A conference call to discuss the first quarter 2011 results and outlook is scheduled for 1:30 p.m. Pacific Daylight Time (PDT) 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=3945695
Dial-in number: 866.356.4281
International callers: 617.597.5395
Passcode: 33024656
Replay: A webcast replay will be available after 3:30 p.m. PT on May 3, 2011 through May 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 second 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 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, TrueComp Manager, ActekSoft and ACom3 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
March 31,
------------------
2011 2010
-------- --------
Revenues:
Recurring $ 14,692 $ 12,287
Services 4,286 3,645
License 729 229
-------- --------
Total revenues 19,707 16,161
Cost of revenues:
Recurring (1) 7,887 6,414
Services (1) (2) 3,946 4,412
License 91 110
-------- --------
Total cost of revenues 11,924 10,936
-------- --------
Gross profit 7,783 5,225
Operating expenses:
Sales and marketing (1) (2) 4,215 4,645
Research and development (1) 2,533 3,138
General and administrative (1) 3,472 3,232
Restructuring 39 719
-------- --------
Total operating expenses 10,259 11,734
-------- --------
Operating loss (2,476) (6,509)
Interest and other income, net 50 7
-------- --------
Income (loss) before provision for income taxes (2,426) (6,502)
Provision (benefit) for income taxes 80 (551)
-------- --------
Net Income (loss) $ (2,506) $ (5,951)
======== ========
Basic net income (loss) per share $ (0.08) $ (0.19)
======== ========
Diluted net income (loss) per share $ (0.08) $ (0.19)
======== ========
Shares used in basic per share computation 33,110 30,963
======== ========
Shares used in diluted per share computation 33,110 30,963
======== ========
(1) Stock-based compensation included in amounts
above by category:
Cost of recurring 719 124
Cost of services 323 241
Sales and marketing 367 272
Research and development 360 218
General and administrative 599 498
-------- --------
Total stock-based compensation $ 2,368 $ 1,353
======== ========
(2) Acquisition related asset amortization $ 189 $ 157
CALLIDUS SOFTWARE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
March 31, December 31,
Assets 2011 2010
----------- -----------
Current assets:
Cash and cash equivalents $ 14,027 $ 12,830
Short-term investments 15,413 17,873
Accounts receivable, net 19,784 19,908
Prepaid and other current assets 4,495 4,441
----------- -----------
Total current assets 53,719 55,052
Long-term investments 787 787
Property and equipment, net 7,577 8,016
Goodwill 9,692 8,031
Intangible assets, net 6,050 4,274
Deferred income taxes, noncurrent 1,645 1,645
Deposits and other assets 1,747 2,000
----------- -----------
Total assets $ 81,217 $ 79,805
=========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 2,982 $ 3,299
Accrued payroll and related expenses 2,654 2,859
Accrued expenses 5,085 6,169
Deferred income taxes 1,691 1,691
Deferred revenue 30,130 28,417
Capital lease obligations, short term 1,140 1,119
----------- -----------
Total current liabilities 43,682 43,554
Long-term deferred revenue 3,916 4,388
Long-term deferred income taxes 39 -
Other liabilities 1,528 1,619
Capital lease obligations, long term 1,818 2,162
----------- -----------
Total liabilities 50,983 51,723
----------- -----------
Stockholders' equity
Common stock 32 31
Additional paid-in capital 226,978 222,363
Accumulated other comprehensive income (56) (98)
Accumulated deficit (196,720) (194,214)
----------- -----------
Total stockholders' equity 30,234 28,082
----------- -----------
Total liabilities and stockholders'
equity $ 81,217 $ 79,805
=========== ===========
CALLIDUS SOFTWARE INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
Three months ended
March 31,
------------------
2011 2010
-------- --------
Cash flows from operating activities:
Net loss $ (2,506) $ (5,951)
Adjustments to reconcile net loss to net cash provided
by (used in) operating activities:
Depreciation expense 803 549
Amortization of intangible assets 664 869
Provision for doubtful accounts and service
remediation reserves 43 (148)
Stock-based compensation 2,326 1,277
Stock-based compensation related to acquisition 42 77
Revaluation of acquisition contingent consideration - 22
Release of valuation allowance - (614)
Net amortization on investments 80 47
Put option loss - 33
Gain on investments classified as trading securities - (41)
Changes in operating assets and liabilities:
Accounts receivable 81 (1,768)
Prepaid and other current assets (54) 37
Other assets 253 (607)
Accounts payable (508) (1,133)
Accrued expenses (1,383) 743
Accrued payroll and related expenses (252) (329)
Accrued restructuring (104) (133)
Deferred revenue 1,243 5,104
Deferred income taxes 38 51
-------- --------
Net cash provided by (used in) operating activities 766 (1,915)
-------- --------
Cash flows from investing activities:
Purchases of investments (5,180) (2,474)
Proceeds from maturities and sale of investments 7,563 6,700
Purchases of property and equipment (440) (356)
Purchases of intangible assets (214) (240)
Acquisition, net of cash acquired (3,260) (1,649)
-------- --------
Net cash provided by (used in) investing activities (1,531) 1,981
-------- --------
Cash flows from financing activities:
Net proceeds from issuance of common stock 2,525 762
Repurchase of common stock from employees for payment
of taxes on vesting of restricted stock units (277) (75)
Repayment of debt assumed through acquisition - (899)
Payment of principle under capital lease (323) -
-------- --------
Net cash provided by (used in) financing activities 1,925 (212)
-------- --------
Effect of exchange rates on cash and cash equivalents 37 (79)
-------- --------
Net decrease in cash and cash equivalents 1,197 (225)
Cash and cash equivalents at beginning of quarter 12,830 11,565
-------- --------
Cash and cash equivalents at end of quarter $ 14,027 $ 11,340
======== ========
Non-cash activities:
Acquistion of property and equipment through capital
leases $ 453 $ -
======== ========
CALLIDUS SOFTWARE INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except for percentages and per share data)
(unaudited)
Three months ended
March 31,
--------------------
2011 2010
--------- ---------
Non-GAAP operating expense reconciliation:
Operating expenses $ 10,259 $ 11,734
Operating expenses, as a % of total revenues 52% 73%
Add back:
Non-cash stock-based compensation $ (1,326) $ (988)
Non-cash amortization of acquired intangible
assets (189) (157)
Restructuring (39) (719)
--------- ---------
Non-GAAP Operating Expenses $ 8,705 $ 9,870
--------- ---------
Non-GAAP Operating expenses, as a % of total
revenues 44% 61%
Non-GAAP operating income (loss) reconciliation:
Operating income (loss) $ (2,476) $ (6,509)
Operating income (loss), as a % of total revenues -13% -40%
Add back:
Non-cash stock-based compensation $ 2,368 $ 1,353
Non-cash amortization of acquired intangible
assets 189 157
Restructuring 39 719
--------- ---------
Non-GAAP Operating income (loss) $ 120 $ (4,280)
--------- ---------
Non-GAAP Operating income (loss), as a % of total
revenues 1% -26%
Non-GAAP net income (loss) reconciliation:
Net income (loss) $ (2,506) $ (5,951)
Net income (loss), as a % of total revenues -13% -37%
Add back:
Non-cash stock-based compensation $ 2,368 $ 1,353
Non-cash amortization of acquired intangible
assets 189 157
Restructuring 39 719
--------- ---------
Non-GAAP Net income (loss) $ 90 $ (3,722)
--------- ---------
Non-GAAP Net income (loss), as a % of total
revenues 0% -23%
Non-GAAP net income (loss) per share reconciliation:
Net income (loss) per basic and diluted share $ (0.08) $ (0.19)
Add back:
Non-cash stock-based compensation 0.07 0.04
Non-cash amortization of acquired intangible assets 0.01 0.01
Restructuring - 0.02
--------- ---------
Non-GAAP net income (loss) per basic share $ - $ (0.12)
--------- ---------
Non-GAAP net income (loss) per diluted share $ - $ (0.11)
--------- ---------
Basic and fully diluted shares reconciliation:
Basic shares 33,110 30,963
--------- ---------
Add back:
Weighted average effect of dilutive securities 4,816 1,588
--------- ---------
Diluted shares 37,926 32,551
--------- ---------
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
