Exhibit 99.1
CALLIDUS SOFTWARE REPORTS FIRST QUARTER 2006 RESULTS
Q1 REVENUES $17.0 MILLION, UP 17% YEAR OVER YEAR
LICENSE REVENUES DOUBLED YEAR OVER YEAR
SAN JOSE, Calif., April 26 /PRNewswire-FirstCall/ -- Callidus Software
Inc. (Nasdaq: CALD), a leader in Enterprise Incentive Management (EIM), today
announced financial results for the first quarter ended March 31, 2006.
Total first quarter revenues were $17.0 million, an increase of 17% compared
to first quarter 2005 and a decrease of 2% from the prior quarter. First quarter
license revenues were $7.0 million, an increase of 99% compared to first quarter
2005 and a decrease of 4% compared to the prior quarter. First quarter net loss
was $3.2 million, or ($0.12) per share, compared to a net loss of $2.5 million,
or ($0.10) per share, for the first quarter of 2005 and a net loss of $1.5
million, or ($0.06) per share, for the prior quarter.
Excluding stock-based compensation expense, non-GAAP net loss for the first
quarter was $2.0 million, or ($0.07) per share, as compared to non-GAAP net loss
of $2.1 million, or ($0.08) per share in the first quarter of 2005, and non-GAAP
net loss of $1.9 million, or ($0.07) per share in the prior quarter. A
reconciliation between GAAP and non-GAAP information is contained in the
attached tables.
Cash and investments totaled $60.6 million at March 31, 2006, a decrease of
$3.1 million since December 31, 2005.
"We continue to build on our market momentum. License revenues doubled
year-on-year and this marks our third quarter of significant license revenue
growth, on a year-over-year basis. We continued to add new marquee customers
with key wins in our target vertical markets, and we generated new business from
our existing customers," said Robert Youngjohns, president and CEO of Callidus
Software. "We were pleased with the revenue growth from our On-Demand, technical
support and training organizations. However, our consulting organization did not
achieve the results we had anticipated. Sales of new services designed to offset
a larger percentage of implementation projects led by partners was slower than
we expected, which contributed to the shortfall. The success of our partners is
of strategic importance to Callidus and we will continue to focus on achieving
the proper alignment between our growth expectations and the success of our
partners."
"We continue to see substantial market opportunity for our EIM and Sales
Performance Management solutions. Our recently published ROI study demonstrates
the significant returns achieved by our customers in using our products as a
driver of revenue and profits," Mr. Youngjohns concluded.
Recent Business Highlights
-- Some of the customers purchasing Callidus solutions in the first quarter
included ADP, CDW Corporation, HSBC, Medtronic, Network Appliance, Nokia, North
Carolina Farm Bureau, and Vodafone Australia.
-- Callidus gained substantial traction with its On-Demand Solutions group
generating revenues of over $1.5 million in the quarter. On-Demand Solutions,
together with maintenance revenues, accounted for over $5.5 million, or more
than 30%, of total revenues in the quarter. Both On-Demand and software
maintenance contracts provide for recurring revenue streams but remain subject
to periodic adjustment or cancellation.
-- Callidus recently signed new partnership agreements with Celfocus and
Hexaware to grow our international presence and to complement the partnerships
we have with Accenture, Atos Origin, IBM, Iconixx and Compensation Technologies.
-- A research study we published in March detailed the rapid
return-on-investment (ROI) achieved by Callidus TrueComp customers in the
financial services industry. Revenue growth, effective use of incentives and
improved productivity led to paybacks in as little as six months and returns of
up to $79 million for the companies we studied. A copy of the full report is
available at www.callidussoftware.com/papers/roi-study.jsp.
-- Charles M. Boesenberg was appointed to the Board of Directors in
February 2006. Mr. Boesenberg is CEO and Chairman of the Board of NetIQ and a
30-year veteran in the technology industry. NetIQ has been a customer of
Callidus since 2003.
-- Bill Williamson was appointed Regional Director for the Asia Pacific
Region, continuing our focus on growing revenues internationally. Mr. Williamson
has over 30 years of enterprise sales and management experience at leading
technology companies including SAP and Filenet.
Q1 2006 Financial Highlights
-- License revenues were $7.0 million, increasing 99% from $3.5 million in
Q1 2005 and decreasing 4% from $7.3 million in the prior quarter.
-- Maintenance and service revenues were $10.0 million, down 9% from $11.0
million in Q1 2005 and equal to $10.0 million in the prior quarter.
-- Maintenance and service gross margin was 22%, down from 34% in Q1 2005
and 24% in the prior quarter. Excluding stock-based compensation, the non- GAAP
maintenance and service gross margin was 25%, a decrease from 35% in Q1 2005 and
an increase from 24% in the prior quarter. License gross margin was 98%, up from
97% in Q1 2005 and equal to 98% in the prior quarter.
-- Operating expenses were $12.8 million, compared to $10.0 million in Q1
2005 and $11.5 million in the prior quarter. Excluding stock-based compensation,
non-GAAP operating expenses were $11.9 million, compared to $9.6 million in Q1
2005 and $11.9 million in the prior quarter.
Q2 2006 Financial Outlook
-- License revenues may fluctuate on a quarter-to-quarter basis, as they are
inherently difficult to predict; therefore we will not be providing guidance on
license revenues.
-- Maintenance and service revenues are expected to be between $10.0 million
and $10.5 million, with a related gross margin between 23% and 25% (25% and 27%
excluding stock-based compensation).
-- Operating expenses are expected to be between $12.7 million and $13.2
million. Excluding stock-based compensation, we expect non-GAAP operating
expenses to be between $11.7 million and $12.2 million.
Conference Call
A conference call to discuss the first quarter results is scheduled for
today at 1:30 p.m. Pacific Daylight Time (PDT). 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 800-591-6942 (international +1-617-614-4909),
passcode 49427270.
A telephone playback and webcast replay of the conference call will be
available after 3:30 p.m. PDT today through May 10, 2006. The telephone replay
will be available by calling 888-286-8010 (international: +1-617-801-6888),
passcode 51635651. The webcast replay will be available at the Investor
Relations section of Callidus' website under Calendar of Events.
About Callidus Software
Founded in 1996, Callidus Software Inc. (www.callidussoftware.com) is an
industry 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
Software delivers an EIM solution that combines the power and scalability of
grid computing with the flexibility of rules-based interface. Customers/Partners
include 7-Eleven, Accenture, CUNA Mutual, HP, IBM, Philips Medical Systems,
Sprint Nextel, Sun Microsystems, Time Warner Corporation and Wachovia. Callidus
Software 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. 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. Reconciliations between GAAP and non-GAAP financial
measures are included in the accompanying tables.
Note on Forward-Looking Statements
The forward looking statements included in this press release, including
with respect to the substantial market opportunity in EIM products, second
quarter maintenance and service revenues, associated gross margin, estimates of
second quarter operating expenses and the impact of 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, timing and size of software license orders, management's ability
to successfully implement its business plan, changes in executive management,
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, 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.
NOTE: Callidus Software, the Callidus Software logo, Callidus TrueAnalytics,
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
March 31,
---------------------------
2006 2005
------------ ------------
Revenues:
License revenues $ 6,958 $ 3,500
Maintenance and service revenues 9,999 11,001
Total revenues 16,957 14,501
Cost of revenues:
License revenues 136 97
Maintenance and service
revenues (1) 7,780 7,230
Total cost of revenues 7,916 7,327
Gross profit 9,041 7,174
Operating expenses:
Sales and marketing (1) 6,190 4,538
Research and development (1) 3,570 3,075
General and administrative (1) 3,087 2,342
Total operating expenses 12,847 9,955
Operating loss (3,806) (2,781)
Interest and other income, net 567 312
Loss before provision for income
taxes (3,239) (2,469)
Provision (benefit) for income
taxes (1) 25
Net loss $ (3,238) $ (2,494)
Basic net loss per share $ (0.12) $ (0.10)
Diluted net loss per share $ (0.12) $ (0.10)
Shares used in basic per share
computation 27,116 25,742
Shares used in diluted per share
computation 27,116 25,742
(1) Stock-based compensation included in amounts above by category:
Cost of maintenance and service
revenues $ 264 $ 50
Sales and marketing 266 126
Research and development 247 124
General and administrative 432 140
Total stock-based compensation $ 1,209 $ 440
CALLIDUS SOFTWARE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
March 31, December 31,
2006 2005
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 19,202 $ 23,705
Short-term investments 41,442 40,000
Accounts receivable, net 11,103 11,063
Prepaid and other current assets 1,368 1,581
Total current assets 73,115 76,349
Property and equipment, net 2,919 2,801
Deposits and other assets 1,452 1,494
Total assets $ 77,486 $ 80,644
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 1,315 $ 756
Accrued payroll and related
expenses 3,791 6,383
Accrued expenses 2,107 2,043
Deferred revenue 11,818 12,205
Total current liabilities 19,031 21,387
Deferred rent 608 377
Long-term deferred revenue 554 729
Total liabilities 20,193 22,493
Stockholders' equity
Common stock 27 27
Additional paid-in capital 188,102 186,232
Deferred stock-based
compensation -- (445)
Accumulated other comprehensive
income 236 171
Accumulated deficit (131,072) (127,834)
Total stockholders'
equity 57,293 58,151
Total liabilities and
stockholders' equity $ 77,486 $ 80,644
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
March 31, 2006 December 31, 2005
------------------------------- -------------------------------
Non-GAAP Non-GAAP
Adjust- Adjust-
GAAP ments Non-GAAP GAAP ments Non-GAAP
-------- -------- -------- -------- -------- --------
Revenues:
License revenues $ 6,958 $ 6,958 $ 7,261 $ 7,261
Maintenance and
service revenues 9,999 9,999 9,978 9,978
Total revenues 16,957 16,957 17,239 17,239
Cost of revenues:
License revenues 136 136 118 118
Maintenance and
service revenues 7,780(a) (264) 7,516 7,581(a) (20) 7,561
Total cost of
revenues 7,916 7,652 7,699 7,679
Gross profit 9,041 9,305 9,540 9,560
Operating expenses:
Sales and
marketing 6,190(a) (266) 5,924 5,194(a) 470 5,664
Research and
development 3,570(a) (247) 3,323 3,482(a) 1 3,483
General and
administrative 3,087(a) (432) 2,655 2,813(a) (81) 2,732
Total operating
expenses 12,847 11,902 11,489 11,879
Operating loss (3,806) (2,597) (1,949) (2,319)
Interest and other
income, net 567 567 419 419
Loss before
provision for
income taxes (3,239) (2,030) (1,530) (1,900)
Provision (benefit)
for income taxes (1) (1) (43) (43)
Net loss $ (3,238) $ (2,029) $ (1,487) $ (1,857)
Diluted net loss
per share $ (0.12) $ (0.07) $ (0.06) $ (0.07)
Shares used in
diluted per share
computation 27,116 27,116 26,752 26,752
(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
March 31, 2006 March 31, 2005
------------------------------- -------------------------------
Non-GAAP Non-GAAP
Adjust- Adjust-
GAAP ments Non-GAAP GAAP ments Non-GAAP
-------- -------- -------- -------- -------- --------
Revenues:
License revenues $ 6,958 $ 6,958 $ 3,500 $ 3,500
Maintenance and
service revenues 9,999 9,999 11,001 11,001
Total revenues 16,957 16,957 14,501 14,501
Cost of revenues:
License revenues 136 136 97 97
Maintenance and
service revenues 7,780(a) (264) 7,516 7,230(a) (50) 7,180
Total cost of
revenues 7,916 7,652 7,327 7,277
Gross profit 9,041 9,305 7,174 7,224
Operating expenses:
Sales and
marketing 6,190(a) (266) 5,924 4,538(a) (126) 4,412
Research and
development 3,570(a) (247) 3,323 3,075(a) (124) 2,951
General and
administrative 3,087(a) (432) 2,655 2,342(a) (140) 2,202
Total operating
expenses 12,847 11,902 9,955 9,565
Operating loss (3,806) (2,597) (2,781) (2,341)
Interest and other
income, net 567 567 312 312
Loss before
provision for
income taxes (3,239) (2,030) (2,469) (2,029)
Provision (benefit)
for income taxes (1) (1) 25 25
Net loss $ (3,238) $ (2,029) $ (2,494) $ (2,054)
Diluted net loss
per share $ (0.12) $ (0.07) $ (0.10) $ (0.08)
Shares used in
diluted per share
computation 27,116 27,116 25,742 25,742
(a) Non-cash stock based compensation
SOURCE Callidus Software Inc.
-0- 04/26/2006
/CONTACT: investors, Jon Pexton, +1-408-808-6577, or
ir@callidussoftware.com, or press, Jock Breitwieser, +1-408-975-6683, or
pr@callidussoftware.com, both for Callidus/
/Web site: http://www.callidussoftware.com /
(CALD)