Clicksoftware Technologies (CKSW) 8-K Clicksoftware Reports 2ND Consecutive Profitable Quarter As Revenues Rise 46% Over Prior Year Period

CLICKSOFTWARE REPORTS 2ND CONSECUTIVE PROFITABLE QUARTER
AS REVENUES RISE 46% OVER PRIOR YEAR PERIOD

BURLINGTON, MA, August 4– ClickSoftware Technologies, Ltd., (Nasdaq: CKSW) a leading provider of end-to-end service chain optimization software, today announced results for the second quarter ended June 30, 2003.

For the second quarter of 2003, total revenues were $5.1 million, with consolidated net income of $0.2 million, or $0.01 per share. This compares with revenues of $3.5 million and a net loss of $1.8 million, or a loss of $0.07 per share, for the same period last year, and revenues of $5.1 million and consolidated net income of $0.2 million, or $0.01 per share, for the first quarter of 2003.

Software license revenues for the second quarter of 2003 were $2.3 million, while service revenues were $2.8 million. This compares to software license revenues of $1.4 million and service revenues of $2.1 million for the same period last year, and $2.2 million in software licenses revenues and $2.9 million in service revenues in the first quarter of 2003.

Gross profit in the second quarter was $3.3 million, or 66% of revenues, compared to $1.8 million, or 51% of revenues, in the same period last year, and $3.3 million, or 65% of revenues, in the first quarter of 2003.

ClickSoftware used $0.3 million in cash, cash equivalents and short-term investments in the second quarter. As of June 30, 2003, cash, cash equivalents, and short and long-term investments were $8.3 million, up from $6.6 million at the end of 2002. Total assets at the close of the quarter were $14.5 million and stockholders’ equity was $7.1 million.

“The second quarter was marked by the addition of several new orders, most notably from Hewlett-Packard and Electrolux, a significant increase in year-over-year quarterly revenues and our second consecutive quarter of profitability. We believe that these results, coupled with additional customer wins since the end of the second quarter, a growing pipeline of deferred revenues, and our continuing tight cost controls, should advance our plans for consistent growth and profitability for the entire year,” said Dr. Moshe BenBassat, ClickSoftware’s Chairman and Chief Executive Officer.

6-Month Summary

For the first six months of 2003, total revenues were $10.2 million, with consolidated net income of $0.3 million, or $0.01 per share. This compares with revenues of $6.6 million and a net loss of $4.2 million, or a loss of $0.16 per share, for the first half of 2002.

Outlook

ClickSoftware said it believes that revenues for the third quarter should increase sequentially by about 10% to 15%, putting revenues in the range of $5.6 million to $5.8 million, which should enable the company to continue to be profitable for the third consecutive quarter.

Investor Conference Call

ClickSoftware will host a conference call today at 8:30 a.m. ET to discuss these results and answer questions from the investment community. To participate, please call (800) 473-6123 and ask for the ClickSoftware conference call. International participants, please call (973) 582-2706. The conference call will be simultaneously webcast (in listen mode only) and is available via the Internet at http://www.clicksoftware.com. A replay of this call will be available on the ClickSoftware website, or by calling (877) 519-4471 (international callers can dial (973) 341-3080). The pass-code for the replay is 4066387.

About ClickSoftware

ClickSoftware is a leading provider of end-to-end service optimization solutions that maximize service revenue and customer responsiveness while minimizing costs. ClickSoftware’s ServiceOptimization suite includes strategic and tactical workforce planning, optimized service scheduling, intelligent problem resolution, wireless workforce management, and business analytics, connecting all organizational levels and all functions.

The company is headquartered in Burlington, MA and Israel, with offices in the United States, Europe, and Asia Pacific. For more information about ClickSoftware, call (781) 272-5903 or (888) 438-3308 or visit http://www.clicksoftware.com

This press release contains express or implied forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. These forward-looking statements include, but are not limited to, those regarding demand for the company’s products, future results of operations, effectiveness of current cost controls, and the ability to sustain profitability. Such “forward-looking statements” involve known and unknown risks, uncertainties and other factors, which may cause actual results or performance to be materially different from those projected. ClickSoftware’s achievement of these results may be affected by many factors, including among others, the following: uncertainties regarding the general economic outlook; the length of or change in the company’s sales cycle; the company’s ability to identify potential customers and to close sales to potential customers in a timely manner; the company’s ability to maintain relationships with strategic partners, the ability of the company’s professional services group to successfully complete implementations; and the company’s ability to predict and control expenses and to align revenues and expenses. The forward-looking statements contained in this press release are subject to other risks and uncertainties, including those discussed in ClickSoftware’s annual report on Form 10-K for the year ended December 31, 2002 and subsequent quarterly reports on Form 10-Q and its other filings with the Securities and Exchange Commission.

Contacts:
Shmuel Arvatz
Chief Financial Officer
++972-3-7659422
Shmuel.Arvatz@clicksoftware.com Howard Kalt
Kalt Rosen & Co.
(415) 397-2686
Kalt@KRC-IR.com

ClickSoftware Technologies Ltd.
CONSOLIDATED BALANCE SHEETS
(In thousands of U.S dollars)

			June 30			December 31
			2003			2002
		ASSETS
CURRENT ASSETS
	Cash and cash equivalents		$	3,910		$	3,400
	Short-term investments			4,143			2,949
	Trade receivables, net			2,773			4,043
	Other receivables and prepaid expenses			1,522			1,254
		Total current assets		12,348			11,646
FIXED ASSETS
	Cost			4,143			4,119
	Less – accumulated depreciation			3,108			2,869
				1,035			1,250
	Long-term investments			280			280
	Severance pay deposits			807			781
		Total Assets	$	14,470		$	13,957
		LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
	Short-term loans		$	—		$	17
	Accounts payable and accrued expenses			4,463			5,369
	Deferred revenues			1,365			411
		Total current liabilities		5,828			5,797
LONG TERM LIABILITIES
	Accrued severance pay			1,511			1,476
		Total long-term liabilities		1,511			1,476
		Total liabilities		7,339			7,273
SHAREHOLDERS’ EQUITY
	Ordinary shares of NIS 0.02 par value			103			102
	Additional paid-in capital			69,210			69,196
	Deferred Stock Compensation			—			(101	)
	Accumulated deficit			(62,139	)		(62,470	)
	Treasury stock, at cost: 39,000 shares			(43	)		(43	)
		Total shareholders’ equity		7,131			6,684
		Total liability and shareholders’ equity	$	14,470		$	13,957

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

						Three Months Ended
			June 30, 2003						June 30, 2002
			$			% of Revenues			$			% Of Revenues
Revenues:
	Software license		$	2,310			46	%	$	1,356			39	%
	Services			2,750			54	%		2,105			61	%
		Total revenues		5,060			100	%		3,461			100	%
Cost of revenues:
	Software license			305			6	%		281			8	%
	Services			1,422			28	%		1,404			41	%
		Total cost of revenues		1,727			34	%		1,685			49	%
Gross profit				3,333			66	%		1,776			51	%
Operating expenses:
	Research and development costs, net			508			10	%		590			17	%
	Selling and Marketing expenses			1,827			36	%		2,708			78	%
	General and administrative expenses			767			15	%		403			12	%
	Amortization of deferred stock-based compensation			26			1	%		75			2	%
		Total operating expenses		3,128			62	%		3,776			109	%
Income (Loss) from operations				205			4	%		(2,000	)		(58	)%
Interest and other income (expenses), net				(32	)		1	%		172			5	%
Net Income (loss)			$	173			3	%	$	(1,828	)		(53	)%
Earnings (loss) per ordinary share			$	0.01					$	(0.07	)
Earnings (loss) per ordinary share excluding charges for share based compensation			$	0.01					$	(0.07	)
Shares used in computing basic and diluted earnings (loss) per share				25,647,888						25,551,161

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

					Six Months Ended
			June 30, 2003					June 30, 2002
			$		% of Revenues			$			% of Revenues
Revenues:
	Software license		$	4,555		45	%	$	2,376			36	%
	Services			5,646		55	%		4,191			64	%
		Total revenues		10,201		100	%		6,567			100	%
Cost of revenues:
	Software license			436		4	%		317			5	%
	Services			3,099		31	%		2,791			43	%
		Total cost of revenues		3,535		35	%		3,108			48	%
Gross profit				6,666		65	%		3,459			52	%
Operating expenses:
	Research and development costs, net			994		10	%		1,407			21	%
	Selling and Marketing expenses			3,782		37	%		5,380			82	%
	General and administrative expenses			1,497		15	%		892			14	%
	Amortization of deferred stock-based compensation			101		1	%		150			2	%
		Total operating expenses		6,374		63	%		7,829			119	%
Income (Loss) from operations				292		2	%		(4,370	)		(67	)%
Interest and other income, net				39		1	%		192			3	%
Net Income (loss)			$	331		3	%	$	(4,178	)		(64	)%
Earnings (loss) per ordinary share			$	0.01				$	(0.16	)
Earnings (loss) per ordinary share excluding charges for share based compensation			$	0.01				$	(0.16	)
Shares used in computing basic and diluted earnings (loss) per share				25,632,149					25,520,105