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Originator-Name: webmaster@www.sec.gov
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Item 9.01. Financial Statements and Exhibits
(a) Financial statements:
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
By: /s/ Ronald J. Fior Revenues of $18.5 Million; Recurring Revenues Up 18% Year on Year; Signed 21 On Demand Deals in the Quarter PLEASANTON, CA -- (Marketwire - October 28, 2010) - Callidus Software Inc. (NASDAQ: CALD), the
leader in Sales Performance Management (SPM), today announced financial
results for the third quarter ended September 30, 2010.
"I was pleased with our profitable growth in Q3," said Leslie Stretch,
president and CEO, Callidus Software. "We signed 21 On Demand deals in the
quarter and several license transactions in emerging markets, reflecting
improving demand and a better business climate in key regions. We added to
our SaaS Sales Talent Lifecycle Management suite with the addition of
Callidus Onboarding for the Extended Enterprise and we continued to
strengthen the performance of our services business. We again managed
operating expenses carefully. We believe our control of costs and focus on
recurring revenues together with our broadened solution portfolio sets us
up for sustained growth and profitability going forward."
Total third quarter revenues of $18.5 million represented an increase of 6%
compared to the same quarter last year. In addition, revenues were up 8%
compared to the second quarter this year. Recurring revenues, which include
subscription and support, were $13.2 million, an increase of 18% compared
to the same quarter last year. Recurring revenues now contribute 72% of
total revenues, up from 64% in the same quarter last year.
Third quarter services revenues were $3.6 million, down 33% from the same
quarter last year, and up 3% from the second quarter of 2010. The services
business returned to gross margin profitability in Q3. Third quarter
license revenues were $1.6 million, up from both the third quarter of 2009
and second quarter of 2010, reflecting ratable recognition of licenses
signed earlier in the year as well as solid results in our Latin America
and Asia Pacific business, which is based on a perpetual license model.
Progress in our Services business gross margin combined with the high
license gross margins helped drive an overall third quarter gross margin of
46%, up from 37% for the third quarter of 2009 and 40% for the second
quarter of 2010. GAAP Operating expenses of $10.0 million for the quarter
were down $3.0 million or 23% from the same quarter in 2009 and down $0.5
million or 5% from the prior quarter.
Third quarter GAAP net loss was $1.6 million, or ($0.05) per share, which
included $0.5 million of restructuring expense, $1.4 million of stock-based
compensation expense, and $0.2 million of amortization of acquired
intangible assets. This compares to GAAP net loss of $6.7 million, or
($0.22) per share, for the third quarter of 2009, which included $2.0
million of restructuring expense, $1.0 million of stock-based compensation
expense and $0.1 million of amortization of acquired intangible assets.
Third quarter non-GAAP net income was $0.4 million or $0.01 per share,
compared to a non-GAAP net loss of $3.6 million, or ($0.12) per share, for
the same period last year and a non-GAAP loss of $1.2 million or ($0.04)
per share in the prior quarter. Non-GAAP net income and loss excludes
restructuring expense, stock-based compensation expense, and amortization
of acquired intangible assets. Non-GAAP operating expenses for the third
quarter of $8.3 million were down $1.9 million or approximately 18% from
the same quarter in 2009 and flat compared to the prior quarter. Non-GAAP
operating expenses exclude restructuring expense, stock-based compensation
expense, and amortization of acquired intangible assets.
Cash and investments totaled $27.8 million at September 30, 2010, a
decrease of $1.9 million from June 30, 2010. Cash generated from operations
was $0.1 million for the 9 months ended September 30, 2010 as compared to
cash used in operations of $2.2 million in the same 9 months of 2009. Total
deferred revenue of $28.8 million is up $6.7 million since year end and
down $0.5 million from the prior quarter.
Recent Business Highlights
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Securities Exchange Act of 1934
Date of Report: October 28, 2010
(Date of earliest event reported)
Callidus Software Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction
of incorporation)
000-50463
(Commission File Number)
77-0438629
(IRS Employer
Identification Number)
6200 Stoneridge Mall Road, Suite 500, Pleasanton, California
(Address of principal executive offices)
94588
(Zip Code)
(925) 251-2200
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Item 2.02. Results of Operations and Financial Condition
On October 28, 2010, Callidus Software Inc. issued a press release announcing its financial results as of and for the quarter ended September 30, 2010. The press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K. The information furnished in this report, including the exhibit, shall not be deemed to be incorporated by reference into Callidus Software Inc.'s filings with the SEC under the Securities Act of 1933 and shall not be deemed to be "filed" with the SEC under the Securities Exchange Act of 1934.
None
(b) Pro forma financial information:
None
(c) Shell company transactions:
None
(d) Exhibits
99.1 Press Release of Callidus Software Inc. dated October 28, 2010
Dated: October 28, 2010
CALLIDUS SOFTWARE INC.
Ronald J. Fior
Senior Vice President, Finance and Operations and Chief Financial Officer
Exhibit No.
Description
99.1
Press Release of Callidus Software Inc. dated October 28, 2010
Financial Outlook
Conference Call
A conference call to discuss the third quarter 2010 results and outlook is scheduled for 1:30 p.m. Pacific Time (PT) today. The conference call will be available via live webcast at the Investor Relations section of Callidus Software's website at http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=146634&eventID=3409081. To participate in the call via telephone, the dial-in number will be: (800) 591-6942(international: +1 (617) 614-4909, passcode 29975139.
A webcast replay will be available after 3:30 p.m. PT on October 28, 2010 through November 5, 2010. The webcast replay will be available at the Investor Relations section of our website under Calendar of Events.
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 fourth quarter 2010 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 2009 and Form 10-Q for the first and second quarters of 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.
© 1997-2010 Callidus Software Inc. All rights reserved. Callidus Software, the Callidus Software logo, and TrueComp Manager are trademarks, servicemarks, 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 Nine months ended September 30, September 30, -------------------- -------------------- 2010 2009 2010 2009 --------- --------- --------- --------- Revenues: Recurring $ 13,231 $ 11,170 $ 38,783 $ 34,669 Services 3,600 5,349 10,734 25,958 License 1,638 872 2,254 5,034 --------- --------- --------- --------- Total revenues 18,469 17,391 51,771 65,661 Cost of revenues: Recurring (1) 6,664 5,711 19,198 16,912 Services (1) (2) 3,306 5,054 11,763 22,034 License 92 214 290 656 --------- --------- --------- --------- Total cost of revenues 10,062 10,979 31,251 39,602 --------- --------- --------- --------- Gross profit 8,407 6,412 20,520 26,059 Operating expenses: Sales and marketing (1) (2) 3,537 4,586 12,174 15,892 Research and development (1) 2,524 3,397 8,088 10,871 General and administrative (1) 3,511 3,072 10,371 9,322 Restructuring 450 1,973 1,620 2,778 --------- --------- --------- --------- Total operating expenses 10,022 13,028 32,253 38,863 --------- --------- --------- --------- Operating loss (1,615) (6,616) (11,733) (12,804) Interest and other income (expense), net 79 49 (14) 239 --------- --------- --------- --------- Loss before provision (benefit) for income taxes (1,536) (6,567) (11,747) (12,565) Provision (benefit) for income taxes 51 173 (462) 319 --------- --------- --------- --------- Net loss $ (1,587) $ (6,740) $ (11,285) $ (12,884) ========= ========= ========= ========= Basic and diluted net loss per share $ (0.05) $ (0.22) $ (0.36) $ (0.43) ========= ========= ========= ========= Shares used in basic and diluted per share computation 31,546 30,205 31,267 29,901 ========= ========= ========= ========= (1) Stock-based compensation included in amounts above by category: Cost of recurring revenues 157 108 394 402 Cost of services revenues 157 185 599 441 Sales and marketing 180 221 760 795 Research and development 245 181 712 590 General and administrative 661 310 2,190 989 --------- --------- --------- --------- Total stock-based compensation $ 1,400 $ 1,005 $ 4,655 $ 3,217 ========= ========= ========= ========= (2) Acquisition related asset amortization $ 157 $ 125 $ 473 $ 438 CALLIDUS SOFTWARE INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (unaudited) September 30, December 31, 2010 2009 ------------- ------------- Assets Current assets: Cash and cash equivalents $ 10,729 $ 11,565 Short-term investments 16,168 21,985 Accounts receivable, net 16,748 12,715 Deferred income taxes 170 170 Prepaid and other current assets 5,044 3,872 ------------- ------------- Total current assets 48,859 50,307 Long-term investments 945 1,142 Property and equipment, net 6,566 4,355 Goodwill 8,054 5,528 Intangible assets, net 5,067 2,993 Deferred income taxes, noncurrent 1,255 1,255 Deposits and other assets 1,947 679 ------------- ------------- Total assets $ 72,693 $ 66,259 ============= ============= Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 3,405 $ 3,407 Accrued payroll and related expenses 3,380 3,929 Accrued expenses 6,946 3,219 Deferred income taxes 1,229 1,229 Deferred revenue 24,482 21,440 Capital lease obligations, short-term 526 - ------------- ------------- Total current liabilities 39,968 33,224 Long-term deferred revenue 4,305 668 Other liabilities 1,634 1,136 Capital lease obligations, long-term 944 - ------------- ------------- Total liabilities 46,851 35,028 ------------- ------------- Stockholders' equity: Common stock 31 30 Additional paid-in capital 218,256 212,435 Deferred compensation 333 - Accumulated other comprehensive income (15) 244 Accumulated deficit (192,763) (181,478) ------------- ------------- Total stockholders' equity 25,842 31,231 ------------- ------------- Total liabilities and stockholders' equity $ 72,693 $ 66,259 ============= ============= CALLIDUS SOFTWARE INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (unaudited) Nine months ended September 30, --------- --------- 2010 2009 --------- --------- Cash flows from operating activities: Net loss $ (11,285) $ (12,884) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation expense 1,731 2,184 Amortization of intangible assets 1,916 1,450 Provision for doubtful accounts and service remediation reserves 137 (128) Stock-based compensation 4,322 3,217 Stock-based compensation related to acquisition contingent consideration 333 - Revaluation of acquisition contingent consideration 63 - Release of valuation allowance (614) - Leasehold improvement allowance 961 - Net amortization on investments 166 32 Put option loss 52 387 Gain on investments classified as trading securities (118) (472) Changes in operating assets and liabilities: Accounts receivable (3,155) 10,921 Prepaid and other current assets (1,235) 610 Other assets (674) 232 Accounts payable 46 (57) Accrued expenses 1,076 (2,252) Accrued payroll and related expenses (540) (1,640) Accrued restructuring 251 (417) Deferred revenue 6,547 (3,542) Deferred income taxes 128 111 --------- --------- Net cash provided by (used in) operating activities 108 (2,248) --------- --------- Cash flows from investing activities: Purchases of investments (13,432) (18,311) Proceeds from maturities and sale of investments 19,184 9,670 Purchases of property and equipment (2,632) (1,554) Proceeds from disposal of property and equipment 19 - Purchases of intangible assets (1,668) (1,487) Acquisition, net of cash acquired (1,922) (14) Change in restricted cash (600) 202 --------- --------- Net cash used in investing activities (1,051) (11,494) --------- --------- Cash flows from financing activities: Net proceeds from issuance of common stock 1,407 1,719 Repurchases of stock - (742) Repurchase of common stock from employees for payment of taxes on vesting of restricted stock units (363) (372) Repayment of debt assumed through acquisition (899) - --------- --------- Net cash provided by financing activities 145 605 --------- --------- Effect of exchange rates on cash and cash equivalents (38) 55 --------- --------- Net decrease in cash and cash equivalents (836) (13,082) Cash and cash equivalents at beginning of period 11,565 35,390 --------- --------- Cash and cash equivalents at end of period $ 10,729 $ 22,308 ========= ========= CALLIDUS SOFTWARE INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (In thousands, except for percentages and per share data) (unaudited) Three months ended Nine months ended September 30, September 30, ---------------------- ---------------------- 2010 2009 2010 2009 ---------- ---------- ---------- ---------- Non-GAAP operating expense reconciliation: Operating expenses $ 10,022 $ 13,028 $ 32,253 $ 38,863 Operating expenses, as a % of total revenues 54% 75% 62% 59% Add back: Non-cash stock-based compensation $ (1,086) $ (712) $ (3,662) $ (2,374) Non-cash amortization of acquired intangible assets (157) (125) (473) (250) Restructuring (450) (1,973) (1,620) (2,778) ---------- ---------- ---------- ---------- Non-GAAP Operating Expenses $ 8,329 $ 10,218 $ 26,498 $ 33,461 ---------- ---------- ---------- ---------- Non-GAAP Operating expenses, as a % of total revenues 45% 59% 51% 51% Non-GAAP operating income (loss) reconciliation: Operating income (loss) $ (1,615) $ (6,616) $ (11,733) $ (12,804) Operating income (loss), as a % of total revenues -9% -38% -23% -20% Add back: Non-cash stock-based compensation $ 1,400 $ 1,005 $ 4,655 $ 3,217 Non-cash amortization of acquired intangible assets 157 125 473 438 Restructuring 450 1,973 1,620 2,778 ---------- ---------- ---------- ---------- Non-GAAP Operating income (loss) $ 392 $ (3,513) $ (4,985) $ (6,371) ---------- ---------- ---------- ---------- Non-GAAP Operating income (loss), as a % of total revenues 2% -20% -10% -10% Non-GAAP net income (loss) reconciliation: Net income (loss) $ (1,587) $ (6,740) $ (11,285) $ (12,884) Net income (loss), as a % of total revenues -9% -39% -22% -20% Add back: Non-cash stock-based compensation $ 1,400 $ 1,005 $ 4,655 $ 3,217 Non-cash amortization of acquired intangible assets 157 125 473 438 Restructuring 450 1,973 1,620 2,778 ---------- ---------- ---------- ---------- Non-GAAP Net income (loss) $ 420 $ (3,637) $ (4,537) $ (6,451) ---------- ---------- ---------- ---------- Non-GAAP Net income (loss), as a % of total revenues 2% -21% -9% -10% Non-GAAP net income (loss) per share reconciliation: Net income (loss) per basic and diluted share $ (0.05) $ (0.22) $ (0.36) $ (0.43) Add back: Non-cash stock-based compensation 0.04 0.03 0.15 0.12 Non-cash amortization of acquired intangible assets 0.01 0.01 0.01 0.01 Restructuring 0.01 0.06 0.05 0.08 Non-GAAP net income (loss) per basic and diluted ---------- ---------- ---------- ---------- share $ 0.01 $ (0.12) $ (0.15) $ (0.22) ---------- ---------- ---------- ---------- Shares used in calculation of GAAP and Non-GAAP net income (loss) per share: ---------- ---------- ---------- ---------- Basic and diluted 31,546 30,205 31,267 29,901 ---------- ---------- ---------- ----------
Investor Relations Contact: Ron Fior 925-251-2205 ir@callidussoftware.com Press Contact: Lorna Heynike 925-251-2207 pr@callidussoftware.com-----END PRIVACY-ENHANCED MESSAGE-----