Exhibit 99.1
CALLIDUS SOFTWARE REPORTS SECOND QUARTER 2005 RESULTS
Q2 REVENUES $12.6 MILLION
SAN JOSE, Calif., July 27 /PRNewswire-FirstCall/ -- Callidus Software Inc.
(Nasdaq: CALD), a leader in Enterprise Incentive Management (EIM), today
announced financial results for the second quarter ended June 30, 2005.
Total second quarter revenues were $12.6 million, a decrease of 13% compared
to prior quarter revenues of $14.5 million, and a decrease of 5% compared to
second quarter 2004 revenues of $13.2 million. Second quarter net loss was $3.7
million, or ($0.14) per share, compared to a net loss of $2.5 million, or
($0.10) per share for the prior quarter and a net loss of $13.7 million, or
($0.57) per share for the second quarter of 2004.
Non-GAAP net loss for the second quarter was $3.3 million, or ($0.12) per
share, as compared to non-GAAP net loss of $2.1 million, or ($0.08) per share in
the prior quarter and non-GAAP net loss of $5.7 million, or ($0.24) per share in
the second quarter of 2004. A reconciliation between GAAP and non- GAAP
information is contained in the attached tables.
"License revenues for the second quarter were disappointing. A number of
license transactions we anticipated would close in the second quarter did not.
Our maintenance and services organization, however, met its revenue and related
gross margin targets for the quarter. Our operating expenses were substantially
lower than our targeted range, due primarily to lower personnel related costs,"
said Robert Youngjohns, president and chief executive officer of Callidus
Software.
"After my first two months at Callidus, I clearly believe that Callidus has
a large opportunity. Our products provide a system of record for every aspect of
a sales organization empowering sales leaders to compete more effectively. We
intend to capitalize on this foundation through a series of initiatives that we
are pursuing aggressively. We will reprioritize our spending accordingly with a
priority on reestablishing product revenue growth," concluded Youngjohns.
Q2 2005 Financial Summary
-- License revenues were $1.3 million, decreasing 63% sequentially from the
prior quarter and 31% year-over-year.
-- Maintenance and service revenues were $11.3 million, increasing 3%
sequentially from the prior quarter and equal to the prior year.
-- Maintenance and service gross margin was 32%, down from 35% in Q1 2005
but up from 26% in Q2 2004. License gross margin was 93%, down from 97%
in Q1 2005 but up from 85% in Q2 2004.
-- Operating expenses were $8.9 million compared to $10.0 million in Q1 2005
and $16.7 million in Q2 2004. Non-GAAP operating expenses were $8.5
million, compared to non-GAAP operating expenses of $9.6 million in Q1
2005 and $11.4 million in Q2 2004.
-- Cash and investments totaled $59.4 million at June 30, 2005 as compared
to $61.7 million at March 31, 2005.
-- Days Sales Outstanding (DSO) in accounts receivable at the end of the
quarter was 67 days, down from 68 days at the end of Q1 2005.
Q3 2005 Guidance
-- Maintenance and services revenue is expected to be between $10.3 million
and $10.8 million with a corresponding gross margin between 30% and 32%.
-- Operating expenses are expected to be between $9.8 million and $10.3
million. Non-GAAP operating expenses, which exclude stock-based
compensation, are expected to be between $9.5 million and $10.0 million.
Stock-based compensation is expected to be $0.3 million.
-- No guidance is being given on license revenues or earnings.
Conference Call
Callidus Software's second quarter 2005 conference call is scheduled for
1:30 p.m. Pacific Daylight Time (PDT), on Wednesday, July 27, 2005. The
conference call will be available via live webcast 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 800-299-7635
(international 617-786-2901), passcode 77018686.
A telephone playback and webcast replay of the conference call will be
available after 3:30 p.m. PDT on July 27, 2005 through August 10, 2005. The
telephone replay will be available by calling 888-286-8010 (international
callers: 617-801-6888), passcode 53470012. The webcast replay will be available
at the Investor Relations section of our website under Calendar of Events.
About Callidus Software
Founded in 1996, Callidus Software (www.CallidusSoftware.com) is a leading
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 and 2004
financial results also exclude legal settlements, amortization and impairment of
intangible assets and an accrual for claims related to TruePerformance. 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
with respect to estimates of third quarter maintenance and service revenues and
associated gross margin, estimates of third quarter operating expenses and
stock-based compensation and our new sales, product, marketing and partnership
initiatives and related spending increases, 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, management's ability to
successfully implement its business plan, including the initiatives stated in
the press release above, 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
Callidus' reports filed with the Securities and Exchange Commission (SEC),
including its Form 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
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.
(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.
CALLIDUS SOFTWARE INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for per share data)
(unaudited)
Three months ended Six months ended
June 30, June 30,
----------------------- -----------------------
2005 2004 2005 2004
---------- ---------- ---------- ----------
Revenues:
License revenues $ 1,295 $ 1,889 $ 4,795 $ 6,428
Maintenance and service revenues 11,320 11,345 22,321 23,268
---------- ---------- ---------- ----------
Total revenues 12,615 13,234 27,116 29,696
Cost of revenues:
License revenues 86 286 183 549
Maintenance and service revenues 7,684 8,384 14,864 16,994
Impairment of purchased technology -- 1,800 -- 1,800
---------- ---------- ---------- ----------
Total cost of revenues 7,770 10,470 15,047 19,343
---------- ---------- ---------- ----------
Gross profit 4,845 2,764 12,069 10,353
Operating expenses:
Sales and marketing 3,549 5,345 7,961 11,745
Research and development 2,838 3,876 5,789 7,586
General and administrative 2,098 2,774 4,300 4,746
Impairment of intangible assets -- 1,994 -- 1,994
Stock-based compensation 423 2,721 863 4,465
---------- ---------- ---------- ----------
Total operating expenses 8,908 16,710 18,913 30,536
---------- ---------- ---------- ----------
Operating loss (4,063) (13,946) (6,844) (20,183)
Interest and other income, net 353 256 665 449
---------- ---------- ---------- ----------
Loss before provision for income
taxes (3,710) (13,690) (6,179) (19,734)
Provision (benefit) for income
taxes (34) 25 (9) 50
---------- ---------- ---------- ----------
Net loss $ (3,676) $ (13,715) $ (6,170) $ (19,784)
========== ========== ========== ==========
Basic net loss per share $ (0.14) $ (0.57) $ (0.24) $ (0.82)
========== ========== ========== ==========
Diluted net loss per share $ (0.14) $ (0.57) $ (0.24) $ (0.82)
========== ========== ========== ==========
Shares used in basic per share
computation 26,144 24,204 25,948 24,095
========== ========== ========== ==========
Shares used in diluted per share
computation 26,144 24,204 25,948 24,095
========== ========== ========== ==========
CALLIDUS SOFTWARE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
June 30, December 31,
2005 2004
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 11,644 $ 7,651
Short-term investments 47,760 52,166
Accounts receivable, net 8,767 12,126
Prepaid and other current assets 1,882 1,868
------------ ------------
Total current assets 70,053 73,811
Property and equipment, net 3,163 3,361
Deposits and other assets 1,587 1,317
------------ ------------
Total assets $ 74,803 $ 78,489
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 1,489 $ 1,904
Current portion of long-term debt 221 471
Accrued payroll and related expenses 3,700 3,827
Accrued expenses 1,454 1,881
Deferred revenue 7,958 6,856
------------ ------------
Total current liabilities 14,822 14,939
Long-term debt, less current portion -- 48
Deferred rent 323 292
Long-term deferred revenue 31 178
------------ ------------
Total liabilities 15,176 15,457
------------ ------------
Stockholders' equity
Common stock 26 26
Additional paid-in capital 186,213 184,443
Deferred stock-based compensation (1,288) (2,316)
Accumulated other comprehensive income 75 108
Accumulated deficit (125,399) (119,229)
------------ ------------
Total stockholders' equity 59,627 63,032
------------ ------------
Total liabilities and stockholders' equity $ 74,803 $ 78,489
============ ============
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
June 30, 2005 March 31, 2005
-------------------------------------- --------------------------------------
Non-GAAP Non-GAAP
GAAP Adjustments Non-GAAP GAAP Adjustments Non-GAAP
---------- ------------ ---------- ---------- ------------ ----------
Revenues:
License revenues $ 1,295 $ 1,295 $ 3,500 $ 3,500
Maintenance and
service
revenues 11,320 11,320 11,001 11,001
---------- ---------- ---------- ----------
Total revenues 12,615 12,615 14,501 14,501
Cost of revenues:
License revenues 86 86 97 97
Maintenance and
service
revenues 7,684 7,684 7,180 7,180
---------- ---------- ---------- ----------
Total cost
of revenues 7,770 7,770 7,277 7,277
---------- ---------- ---------- ----------
Gross profit 4,845 4,845 7,224 7,224
Operating expenses:
Sales and
marketing 3,549 3,549 4,412 4,412
Research and
development 2,838 2,838 2,951 2,951
General and
administrative 2,098 2,098 2,202 2,202
Stock-based
compensation 423(a) (423) -- 440(a) (440) --
---------- ---------- ---------- ----------
Total
operating
expenses 8,908 8,485 10,005 9,565
---------- ---------- ---------- ----------
Operating loss (4,063) (3,640) (2,781) (2,341)
Interest and other
income, net 353 353 312 312
---------- ---------- ---------- ----------
Loss before
provision for
income taxes (3,710) (3,287) (2,469) (2,029)
Provision
(benefit) for
income taxes (34) (34) 25 25
---------- ---------- ---------- ----------
Net loss $ (3,676) $ (3,253) $ (2,494) $ (2,054)
========== ========== ========== ==========
Diluted net
loss per
share $ (0.14) $ (0.12) $ (0.10) $ (0.08)
========== ========== ========== ==========
Shares used in
diluted per
share
computation 26,144 26,144 25,742 25,742
========== ========== ========== ==========
----------
(a) Non-cash stock based compensation
CALLIDUS SOFTWARE INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
YEAR OVER YEAR COMPARISON OF THE QUARTER
(In thousands, except for per share data)
(unaudited)
Three months ended Three months ended
June 30, 2005 June 30, 2004
-------------------------------------- --------------------------------------
Non-GAAP Non-GAAP
GAAP Adjustments Non-GAAP GAAP Adjustments Non-GAAP
---------- ------------ ---------- ---------- ------------ ----------
Revenues:
License
revenues $ 1,295 $ 1,295 $ 1,889 $ 1,889
Maintenance
and service
revenues 11,320 11,320 11,345(a) 775 12,120
---------- ---------- ---------- ----------
Total
revenues 12,615 12,615 13,234 14,009
Cost of revenues:
License
revenues 86 86 286(b) (100) 186
Maintenance
and service
revenues 7,684 7,684 8,384 8,384
Impairment of
purchased
technology -- -- 1,800(c) (1,800) --
---------- ---------- ---------- ----------
Total cost
of revenues 7,770 7,770 10,470 8,570
---------- ---------- ---------- ----------
Gross profit 4,845 4,845 2,764 5,439
Operating expenses:
Sales and
marketing 3,549 3,549 5,345 5,345
Research and
development 2,838 2,838 3,876(b) (158) 3,718
General and
administrative 2,098 2,098 2,774(d) (450) 2,324
Impairment of
intangible
assets -- -- 1,994(c) (1,994) --
Stock-based
compensation 423(e) (423) -- 2,721(e) (2,721) --
---------- ---------- ---------- ----------
Total
operating
expenses 8,908 8,485 16,710 11,387
---------- ---------- ---------- ----------
Operating loss (4,063) (3,640) (13,946) (5,948)
Interest and
other income,
net 353 353 256 256
---------- ---------- ---------- ----------
Loss before
provision for
income taxes (3,710) (3,287) (13,690) (5,692)
Provision
(benefit) for
income taxes (34) (34) 25 25
---------- ---------- ---------- ----------
Net loss $ (3,676) $ (3,253) $ (13,715) $ (5,717)
========== ========== ========== ==========
Diluted net
loss per share $ (0.14) $ (0.12) $ (0.57) $ (0.24)
========== ========== ========== ==========
Shares used in
diluted per
share
computation 26,144 26,144 24,204 24,204
========== ========== ========== ==========
----------
(a) Accrual for a claim related to TruePerformance
(b) Amortization of purchased intangible assets
(c) Impairment of purchased intangible assets
(d) Legal settlement with Gordon Food Service
(e) Non-cash stock based compensation
CONTACT: Investor Relations: Jon Pexton, +1-408-808-6577 or
ir@callidussoftware.com, or Press: Jane Le Fevre, +1-408-808-6511 or
pr@callidussoftware.com, both of Callidus Software Inc./
Web site: http://www.callidussoftware.com /