Exhibit 99.1
CALLIDUS SOFTWARE REPORTS FOURTH QUARTER 2004 RESULTS
Q4 REVENUES $15.1 MILLION
San Jose, Calif., January 26, 2005-- Callidus Software Inc. (Nasdaq: CALD), a
leader in Enterprise Incentive Management (EIM), today announced financial
results for the fourth quarter ended December 31, 2004.
Total fourth quarter revenues were $15.1 million, an increase of 8% compared to
prior quarter revenues of $13.9 million, and a decrease of 32% compared to
fourth quarter 2003 revenues of $22.3 million. Fourth quarter net loss was $1.3
million, or ($0.05) per share, compared to a net loss of $4.4 million, or
($0.18) per share for the prior quarter and net income of $0.7 million, or $0.03
per share for the fourth quarter of 2003.
Non-GAAP net loss for the fourth quarter was $0.8 million, or ($0.03) per share,
as compared to non-GAAP net loss of $2.5 million, or ($0.10) per share in the
prior quarter and non-GAAP net income of $2.7 million, or $0.11 per share in the
fourth quarter of 2003. A reconciliation between GAAP and non-GAAP information
is contained in the attached tables.
For fiscal year 2004, total revenues were $58.7 million, a decrease of 18% from
total revenues of $71.7 million in fiscal year 2003. Net loss for fiscal year
2004 was $25.5 million, or ($1.04) per share, compared to net income of $0.8
million, or $0.04 per share in fiscal year 2003. Non-GAAP net loss for fiscal
year 2004 was $13.3 million, or ($0.54) per share, compared to non-GAAP net
income of $5.4 million or $0.25 per share in fiscal year 2003.
"Callidus achieved another quarter of sequential growth in license revenues. Our
maintenance and service revenues and associated gross margin again exceeded our
estimates for the quarter and operating expenses were also better than we had
expected. As we begin 2005, Callidus is focused on improving financial results
and expanding the analytic and modeling capability of our products," said David
Pratt, president and CEO of Callidus Software.
Callidus software also announced today that Christopher Cabrera, senior vice
president, operations has resigned effective February 28, 2005 to get back into
a startup business. "Chris joined Callidus in 1998 and has been an instrumental
part of the company's success since Callidus was an early stage start-up. I
would like to thank Chris for his contributions to Callidus," said Pratt. A
search will be conducted to fill the vice president of sales position.
Q4 2004 FINANCIAL SUMMARY
. License revenues were $4.0 million, increasing 73% sequentially from the
prior quarter, but declining 63% year-over-year.
. Maintenance and service revenues were $11.0 million, decreasing 5%
sequentially from the prior quarter and 3% year-over-year.
. Maintenance and service gross margin was 33%, down from 34% in Q3 2004
and up from 31% in Q4 2003. License gross margin was 97%, up from 96% in
each of Q3 2004 and Q4 2003.
. Operating expenses were $9.2 million compared to $10.8 million in Q3
2004 and $13.3 million in Q4 2003. Excluding stock-based compensation,
non-GAAP operating expenses were $8.7 million, down from non-GAAP
operating expenses of $9.1 million in Q3 2004 and $11.3 million in Q4
2003.
. Cash and investments totaled $59.8 million on December 31, 2004 as
compared to $62.6 million on September 30, 2004.
. Days Sales Outstanding (DSO) in accounts receivable at the end of the
quarter was 66 days, up from 65 days at the end of the third quarter of
2004.
Q1 2005 GUIDANCE
. Maintenance and services revenue is expected to be between $10.5 million
and $11.0 million with a corresponding gross margin between 29% and 31%.
. Operating expenses are expected to be between $10.2 million and $10.7
million. Excluding stock-based compensation, non-GAAP operating expenses
are expected to be between $9.5 million and $10.0 million. Stock-based
compensation is expected to be $0.7 million.
. No guidance is being given on license revenues or earnings.
CONFERENCE CALL
Callidus Software's fourth quarter 2004 conference call is scheduled for 1:30
p.m. Pacific Time (PT), Wednesday, January 26, 2005. The conference call is
available via web cast and can be accessed live, and for two weeks after the
call, at the Investor Relations section of Callidus Software's website at
www.CallidusSoftware.com. To participate in the call via telephone, the dial-in
number is 800-510-0219 (international 617-614-3451), passcode 72964789. A replay
of the conference call can be accessed after 3:30 p.m. PT, by calling
888-286-8010 (international 617-801-6888), passcode 81221198.
ABOUT CALLIDUS SOFTWARE
Founded in 1996, Callidus Software (www.CallidusSoftware.com) is an enterprise
incentive management (EIM) provider to global companies across multiple
industries. Callidus' EIM systems allow enterprises to develop and manage
incentive compensation linked to the achievement of strategic business
objectives. Through its TrueComp(R) Grid architecture, Callidus delivers an EIM
solution that combines the power and scalability of grid computing with the
flexibility of a rules-based interface. Customers/Partners include AOL Time
Warner Corporation, AT&T Wireless, BMC Software, CUNA Mutual, DIRECTV, Dun &
Bradstreet, IBM, Pennzoil-Quaker State Company, SBC Communications and Sun
Microsystems. Callidus is publicly traded on the NASDAQ under the symbol CALD.
NON-GAAP FINANCIAL MEASURES
The non-GAAP information provided in this press release is a supplement to, and
not a substitute for, our financial results presented in accordance with
generally accepted accounting principles (GAAP) in the United States. The
non-GAAP financial results exclude stock-based compensation expense,
restructuring expenses, customer and legal settlements, insurance
reimbursements, and amortization and impairment of intangible assets. The
non-GAAP financial measures provide what we believe is an additional tool for
investors to use in understanding our operational results and trends. These
non-GAAP financial results are used internally by management to evaluate our
operations, plan and forecast for future periods and to allocate resources
within the organization. A reconciliation between GAAP and non-GAAP financial
measures is included in the accompanying tables.
NOTE ON FORWARD-LOOKING STATEMENTS
The forward looking statements included in this press release, including
conducting a search for a vice president of sales, improving financial results
in 2005, expanding the analytic and modeling capability of our products,
estimates of maintenance and service revenues and associated gross margin and of
operating expenses and stock-based compensation for the first quarter of 2005,
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, changes in executive management, timing of software license orders,
potential material fluctuations in financial results and future growth rates,
decreases in customer spending, increased competition or new entrants in the
marketplace, litigation and other risks detailed in the company's SEC reports,
including its From 10-K and Form 10-Qs, copies of which may be obtained by
contacting Callidus Software's Investor Relations department at 408-808-6577, or
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.
(C)? 2005 by Callidus Software Inc. All rights reserved. Callidus Software, the
Callidus Software logo, Everyone Profits, TrueChannel, TrueComp, TrueComp Grid,
TrueInformation, TruePerformance, TrueReferral, and TrueResolution are
trademarks of Callidus Software Inc. All other trademarks are the property of
their respective owners.
###
Investor Relations Contact: Press Contact:
Jon Pexton Jane Le Fevre
408-808-6577 408-808-6511
ir@callidussoftware.com pr@callidussoftware.com
CALLIDUS SOFTWARE INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except for per share data)
(unaudited)
Three months ended Year ended
December 31, December 31,
----------------------- -----------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
Revenues:
License revenues $ 4,013 $ 10,909 $ 12,758 $ 37,526
Maintenance and service revenues 11,047 11,376 45,936 34,208
---------- ---------- ---------- ----------
Total revenues 15,060 22,285 58,694 71,734
Cost of revenues:
License revenues 137 455 774 1,909
Maintenance and service revenues 7,396 7,807 32,070 25,746
Impairment of purchased technology -- -- 1,800 --
---------- ---------- ---------- ----------
Total cost of revenues 7,533 8,262 34,644 27,655
---------- ---------- ---------- ----------
Gross profit 7,527 14,023 24,050 44,079
Operating expenses:
Sales and marketing 4,377 6,598 20,577 20,813
Research and development 2,809 2,937 13,415 10,963
General and administrative 1,516 1,766 7,493 6,323
Impairment of intangible asset -- -- 1,994 --
Restructuring expenses -- -- 1,488 --
Stock-based compensation 500 2,008 5,585 4,577
---------- ---------- ---------- ----------
Total operating expenses 9,202 13,319 50,552 42,676
---------- ---------- ---------- ----------
Operating income (loss) (1,675) 704 (26,502) 1,403
Interest expense (13) (99) (122) (502)
Interest and other income, net 348 151 1,216 201
---------- ---------- ---------- ----------
Income (loss) before provision
for income taxes (1,340) 756 (25,408) 1,102
Provision for income taxes -- 92 75 267
---------- ---------- ---------- ----------
Net income (loss) $ (1,340) $ 664 $ (25,483) $ 835
========== ========== ========== ==========
Basic net income (loss) per share
attributable to common stockholders $ (0.05) $ 0.04 $ (1.04) $ 0.06
========== ========== ========== ==========
Diluted net income (loss) per share $ (0.05) $ 0.03 $ (1.04) $ 0.04
========== ========== ========== ==========
Shares used in basic per share
computation 24,989 11,651 24,419 4,003
========== ========== ========== ==========
Shares used in diluted per share
computation 24,989 24,475 24,419 21,294
========== ========== ========== ==========
CALLIDUS SOFTWARE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
DECEMBER 31, DECEMBER 31,
ASSETS 2004 2003
- ---------------------------------------------- ------------ ------------
Current assets:
Cash and cash equivalents $ 22,126 $ 56,330
Short-term investments 37,691 23,936
Accounts receivable, net 12,126 14,850
Prepaid and other current assets 1,868 1,511
------------ ------------
Total current assets 73,811 96,627
Property and equipment, net 3,361 2,721
Intangible asset -- 2,000
Deposits and other assets 1,317 851
------------ ------------
Total assets $ 78,489 $ 102,199
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 1,904 $ 3,504
Current portion of long-term debt 471 694
Accrued payroll and related expenses 3,827 3,638
Accrued expenses 1,881 3,542
Deferred revenue 6,856 7,930
------------ ------------
Total current liabilities 14,939 19,308
Long-term debt, less current portion 48 520
Deferred rent 292 180
Long-term deferred revenue 178 693
------------ ------------
Total liabilities 15,457 20,701
------------ ------------
Stockholders' equity
Common stock 26 24
Additional paid-in capital 184,443 184,343
Deferred stock-based compensation (2,316) (9,328)
Notes receivable from stockholders -- (83)
Accumulated other comprehensive income 108 288
Accumulated deficit (119,229) (93,746)
------------ ------------
Total stockholders' equity 63,032 81,498
------------ ------------
Total liabilities and stockholders' equity $ 78,489 $ 102,199
============ ============
CALLIDUS SOFTWARE INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
QUARTER OVER QUARTER COMPARISON
(In thousands, except for per share data)
(unaudited)
Three months ended Three months ended
December 31, 2004 September 30, 2004
------------------------------------------ ------------------------------------------
Non-GAAP Non-GAAP
GAAP Adjustments Non-GAAP GAAP Adjustments Non-GAAP
------------ ------------ ------------ ------------ ------------ ------------
Revenues:
License revenues $ 4,013 $ 4,013 $ 2,317(b)$ 150 $ 2,467
Maintenance and service revenues 11,047 11,047 11,621 11,621
------------ ------------ ------------ ------------
Total revenues 15,060 15,060 13,938 14,088
Cost of revenues:
License revenues 137 137 88 88
Maintenance and service revenues 7,396 7,396 7,680 7,680
------------ ------------ ------------ ------------
Total cost of revenues 7,533 7,533 7,768 7,768
------------ ------------ ------------ ------------
Gross profit 7,527 7,527 6,170 6,320
Operating expenses:
Sales and marketing 4,377 4,377 4,455 4,455
Research and development 2,809 2,809 3,020 3,020
General and administrative 1,516 1,516 1,231(c) 375 1,606
Restructuring expenses -- -- 1,488(d) (1,488) --
Stock-based compensation 500 (a) (500) -- 620(a) (620) --
------------ ------------ ------------ ------------
Total operating expenses 9,202 8,702 10,814 9,081
------------ ------------ ------------ ------------
Operating income (loss) (1,675) (1,175) (4,644) (2,761)
Interest expense (13) (13) (14) (14)
Interest and other income, net 348 348 324 324
------------ ------------ ------------ ------------
Income (loss) before provision for
income taxes (1,340) (840) (4,334) (2,451)
Provision for income taxes -- -- 25 25
------------ ------------ ------------ ------------
Net income (loss) $ (1,340) $ (840) $ (4,359) $ (2,476)
============ ============ ============ ============
Diluted net income (loss) per share $ (0.05) $ (0.03) $ (0.18) $ (0.10)
============ ============ ============ ============
Shares used in diluted per share
computation 24,989 24,989 24,489 24,489
============ ============ ============ ============
(a) Non-cash stock based compensation
(b) Customer settlement for discontinuance of TruePerformance product
(c) Insurance proceeds from TruePerformance related claim
(d) Reduction in force and discontinuance of TruePerformance product
CALLIDUS SOFTWARE INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
YEAR OVER YEAR COMPARISON OF THE FOURTH QUARTER
(In thousands, except for per share data)
(unaudited)
Three months ended Three months ended
December 31, 2004 December 31, 2003
------------------------------------------ ------------------------------------------
Non-GAAP Non-GAAP
GAAP Adjustments Non-GAAP GAAP Adjustments Non-GAAP
------------ ------------ ------------ ------------ ------------ ------------
Revenues:
License revenues $4,013 $ 4,013 $ 10,909 $10,909
Maintenance and service revenues 11,047 11,047 11,376 11,376
------------ ------------ ------------ ------------
Total revenues 15,060 15,060 22,285 22,285
Cost of revenues:
License revenues 137 137 455 455
Maintenance and service revenues 7,396 7,396 7,807 7,807
------------ ------------ ------------ ------------
Total cost of revenues 7,533 7,533 8,262 8,262
------------ ------------ ------------ ------------
Gross profit 7,527 7,527 14,023 14,023
Operating expenses:
Sales and marketing 4,377 4,377 6,598 6,598
Research and development 2,809 2,809 2,937 2,937
General and administrative 1,516 1,516 1,776 1,776
Stock-based compensation 500(a) (500) -- 2,008(a) (2,008) --
------------ ------------ ------------ ------------
Total operating expenses 9,202 8,702 13,319 11,311
------------ ------------ ------------ ------------
Operating income (loss) (1,675) (1,175) 704 2,712
Interest expense (13) (13) (99) (99)
Interest and other income, net 348 348 151 151
------------ ------------ ------------ ------------
Income (loss) before provision for
income taxes (1,340) (840) 756 2,764
Provision for income taxes -- -- 92 92
------------ ------------ ------------ ------------
Net income (loss) $ (1,340) $ (840) $ 664 $ 2,672
============ ============ ============ ============
Diluted net income (loss) per share $(0.05) $ (0.03) $ 0.03 $ 0.11
============ ============ ============ ============
Shares used in diluted per share
computation 24,989 24,989 24,475 24,475
============ ============ ============ ============
(a) Non-cash stock based compensation
CALLIDUS SOFTWARE INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
FISCAL YEAR OVER FISCAL YEAR COMPARISON
(In thousands, except for per share data)
(unaudited)
Year ended Year ended
December 31, 2004 December 31, 2003
------------------------------------------ ------------------------------------------
Non-GAAP Non-GAAP
GAAP Adjustments Non-GAAP GAAP Adjustments Non-GAAP
------------ ------------ ------------ ------------ ------------ ------------
Revenues:
License revenues $ 12,758(a)$ 150 $ 12,908 $ 37,526 $ 37,526
Maintenance and service revenues 45,936(b) 775 46,711 34,208 34,208
------------ ------------ ------------ ------------
Total revenues 58,694 59,619 71,734 71,734
Cost of revenues:
License revenues 774(c) (200) 574 1,909 1,909
Maintenance and service revenues 32,070 32,070 25,746 25,746
Impairment of purchased technology 1,800(c) (1,800) -- -- --
------------ ------------ ------------ ------------
Total cost of revenues 34,644 32,644 27,655 27,655
------------ ------------ ------------ ------------
Gross profit 24,050 26,975 44,079 44,079
Operating expenses:
Sales and marketing 20,577 20,577 20,813 20,813
Research and development 13,415(c) (158) 13,257 10,963 10,963
General and administrative 7,493(d) (75) 7,418 6,323 6,323
Impairment of intangible asset 1,994(c) (1,994) -- -- --
Restructuring expenses 1,488(e) (1,488) -- -- --
Stock-based compensation 5,585(f) (5,585) -- 4,577(f) (4,577) --
------------ ------------ ------------ ------------
Total operating expenses 50,552 41,252 42,626 38,099
------------ ------------ ------------ ------------
Operating income (loss) (26,502) (14,277) 1,403 5,980
Interest expense (122) (122) (502) (502)
Interest and other income, net 1,216 1,216 201 201
------------ ------------ ------------ ------------
Income (loss) before provision for
income taxes (25,408) (13,183) 1,102 5,679
Provision for income taxes 75 75 267 267
------------ ------------ ------------ ------------
Net income (loss) $ (25,483) $ (13,258) $ 835 $ 5,412
============ ============ ============ ============
Diluted net income (loss) per share $ (1.04) $ (0.54) $ 0.04 $ 0.25
============ ============ ============ ============
Shares used in diluted per share
computation 24,419 24,419 21,294 24,294
============ ============ ============ ============
(a) Customer settlement for discontinuance of TruePerformance product
(b) Accrual for a claim related to TruePerformance
(c) Amortization or impairment of purchased intangible assets
(d) $450k legal settlement with Gordon Food Service offset by $375k of insurance
proceeds from a True Performance related claim
(e) Reduction in force and discontinuance of TruePerformance product
(f) Non-cash stock based compensation