Delaware
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000-50463
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77-0438629
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||
(State or other jurisdiction
of incorporation)
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(Commission
file number)
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(I.R.S. Employer
Identification No.)
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¨
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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¨
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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¨
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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¨
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 2.02.
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Results of Operations and Financial Condition
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Item 9.01.
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Financial Statements and Exhibits.
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(d)
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Exhibits
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Exhibit
Number
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|
Description
|
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Press Release of Callidus Software Inc. dated October 31, 2013
|
CALLIDUS SOFTWARE, INC.
|
||||
Date: October 31, 2013
|
By:
|
/s/ Bob L. Corey
|
||
Bob L. Corey
|
||||
Chief Financial Officer,
Senior Vice President, Finance and Operations
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Exhibit
Number
|
|
Description
|
|
Press Release of Callidus Software Inc. dated October 31, 2013
|
·
|
Total gross margin was 62% compared to 50% in the same quarter prior year. Recurring revenue gross margin was 65% compared to 60% in the same quarter prior year.
|
·
|
Net loss was $1.4 million, or ($0.04) per share, compared to a net loss of $6.4 million, or ($0.18) per share, for the same period prior year.
|
·
|
Days Sales Outstanding (DSO) on a gross basis improved to 67 days from 85 days in the prior quarter. Adjusting for a $2.3 million increase in total deferred revenue, DSO on a net basis was 59 days compared to 71 days in the second quarter of 2013.
|
·
|
Cash and short term investments ended the quarter at $34.1 million, compared to $27.2 million in the second quarter of 2013.
|
·
|
Cash generated from operations was $5.2 million and $7.6 million for the current quarter and year to date 2013, respectively.
|
·
|
Deferred revenue increased to a record $49.6 million which represents a 48% year over year increase in SaaS deferred revenue.
|
·
|
Total gross margin was 65% compared to 56% for the same quarter in the prior year. Recurring revenue gross margin was 69% compared to 65% for the same quarter in the prior year.
|
·
|
Operating income was $3.7 million compared to an operating loss of $0.6 million for the same quarter in the prior year.
|
·
|
Net income was $3.3 million, or $0.07 per fully diluted share, compared to a net loss of $0.9 million, or ($0.03) per fully diluted share for the same quarter in the prior year.
|
·
|
Gartner research released the inaugural Magic Quadrant for the Sales Performance Management market. CallidusCloud is the leader in the Magic Quadrant based on our ability to execute and completeness of our vision.
|
·
|
CallidusCloud sponsored key industry events including the World Art Work Spotlight on Sales Compensation in Chicago, Boxworks in San Francisco, the AppDirect Partner Summit in San Francisco and the Blues Sales Compensation and Channel Performance Conference in Florida.
|
·
|
CallidusCloud was honored with 20 awards at the International Business Awards and the American Business Awards held in Barcelona, San Francisco and Chicago. Awards included Most Innovative Technology Company of the Year, Company of the Year, New Product of the Year, Marketing Team of the Year and Best Website.
|
·
|
CallidusCloud announced Thunderbridge, a new innovative Big Sales Data solution set to revolutionize critical sales decision making by providing industry specific data visualizations.
|
CALLIDUS SOFTWARE INC.
|
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||||||
(In thousands, except for per share data)
|
||||||||||||||||
(unaudited)
|
||||||||||||||||
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
Revenues:
|
||||||||||||||||
Recurring
|
$ | 21,119 | $ | 17,533 | $ | 60,359 | $ | 52,446 | ||||||||
Services and other
|
9,559 | 6,392 | 21,791 | 17,273 | ||||||||||||
Total revenues
|
30,678 | 23,925 | 82,150 | 69,719 | ||||||||||||
Cost of revenues:
|
||||||||||||||||
Recurring (1) (2)
|
7,303 | 6,989 | 21,687 | 22,434 | ||||||||||||
Services and other (1) (2)
|
4,475 | 5,078 | 14,436 | 14,266 | ||||||||||||
Total cost of revenues
|
11,778 | 12,067 | 36,123 | 36,700 | ||||||||||||
Gross profit
|
18,900 | 11,858 | 46,027 | 33,019 | ||||||||||||
Operating expenses:
|
||||||||||||||||
Sales and marketing (1) (2)
|
8,981 | 8,322 | 24,516 | 23,544 | ||||||||||||
Research and development (1) (2)
|
4,146 | 3,947 | 12,984 | 12,037 | ||||||||||||
General and administrative (1) (2) (3) (4)
|
5,757 | 4,785 | 16,889 | 14,639 | ||||||||||||
Acquisition related contingent consideration
|
- | 50 | - | (1,787 | ) | |||||||||||
Restructuring
|
141 | (53 | ) | 1,699 | 561 | |||||||||||
Total operating expenses
|
19,025 | 17,051 | 56,088 | 48,994 | ||||||||||||
Operating loss
|
(125 | ) | (5,193 | ) | (10,061 | ) | (15,975 | ) | ||||||||
Interest income and other income (expense) (5) (6)
|
(831 | ) | (721 | ) | (2,670 | ) | (2,460 | ) | ||||||||
Loss before provision (benefit) for income taxes
|
(956 | ) | (5,914 | ) | (12,731 | ) | (18,435 | ) | ||||||||
Provision (benefit) for income taxes (7)
|
457 | 444 | 1,700 | 213 | ||||||||||||
Net loss
|
$ | (1,413 | ) | $ | (6,358 | ) | $ | (14,431 | ) | $ | (18,648 | ) | ||||
Net loss per share - basic and diluted
|
||||||||||||||||
Net loss per share
|
$ | (0.04 | ) | $ | (0.18 | ) | $ | (0.38 | ) | $ | (0.53 | ) | ||||
Shares used in basic and diluted per share computation
|
38,648 | 35,853 | 37,873 | 35,070 | ||||||||||||
(1) Stock-based compensation included in amounts above by category:
|
||||||||||||||||
Cost of recurring
|
234 | 351 | 612 | 1,280 | ||||||||||||
Cost of services
|
218 | 573 | 860 | 1,623 | ||||||||||||
Sales and marketing
|
769 | 997 | 1,924 | 2,937 | ||||||||||||
Research and development
|
384 | 477 | 1,317 | 1,376 | ||||||||||||
General and administrative
|
939 | 1,024 | 3,632 | 3,701 | ||||||||||||
Total stock-based compensation
|
2,544 | 3,422 | 8,345 | 10,917 | ||||||||||||
(2) Acquisition, acquired and settlement related asset amortization
|
||||||||||||||||
Cost of recurring
|
521 | 540 | 1,548 | 1,514 | ||||||||||||
Cost of services
|
12 | (6 | ) | 37 | 38 | |||||||||||
Sales and marketing
|
234 | 233 | 693 | 646 | ||||||||||||
General and administrative
|
60 | 60 | 177 | 180 | ||||||||||||
Total acquisition related asset amortization
|
827 | 827 | 2,455 | 2,378 | ||||||||||||
(3) Acquisition related expense
|
- | 183 | - | 820 | ||||||||||||
(4) Patent litigation costs
|
341 | 166 | 1,002 | 786 | ||||||||||||
(5) Interest expense on convertible notes
|
704 | 704 | 2,110 | 2,110 | ||||||||||||
(6) Amortization of convertible note issuance costs
|
134 | 134 | 402 | 402 | ||||||||||||
(7) Tax benefit from release of valuation allowance
|
- | - | - | (224 | ) |
CALLIDUS SOFTWARE INC.
|
||||||||
CONSOLIDATED BALANCE SHEETS
|
||||||||
(In thousands except per share data)
|
||||||||
September 30,
|
December 31,
|
|||||||
2013
|
2012
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 25,192 | $ | 16,400 | ||||
Short-term investments
|
8,886 | 12,771 | ||||||
Accounts receivable, net
|
23,304 | 22,567 | ||||||
Deferred income taxes
|
40 | 40 | ||||||
Prepaid and other current assets
|
7,761 | 6,718 | ||||||
Total current assets
|
65,183 | 58,496 | ||||||
Property and equipment, net
|
12,381 | 10,580 | ||||||
Goodwill
|
31,207 | 31,207 | ||||||
Intangible assets, net
|
18,083 | 21,196 | ||||||
Deferred income taxes, noncurrent
|
392 | 392 | ||||||
Deposits and other assets
|
3,243 | 2,872 | ||||||
Total assets
|
$ | 130,489 | $ | 124,743 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 1,415 | $ | 4,705 | ||||
Accrued payroll and related expenses
|
5,868 | 5,854 | ||||||
Accrued expenses
|
6,635 | 8,164 | ||||||
Deferred income taxes
|
944 | 944 | ||||||
Deferred revenue
|
42,054 | 35,483 | ||||||
Capital lease obligations
|
1,232 | 921 | ||||||
Total current liabilities
|
58,148 | 56,071 | ||||||
Deferred revenue, noncurrent
|
7,592 | 3,702 | ||||||
Deferred income taxes, noncurrent
|
345 | 160 | ||||||
Other liabilities
|
1,908 | 2,159 | ||||||
Capital lease obligations, noncurrent
|
1,460 | 8 | ||||||
Convertible notes
|
59,215 | 59,215 | ||||||
Total liabilities
|
128,668 | 121,315 | ||||||
Stockholders’ equity:
|
||||||||
Common stock
|
39 | 34 | ||||||
Additional paid-in capital
|
268,228 | 255,331 | ||||||
Treasury stock
|
(14,430 | ) | (14,430 | ) | ||||
Accumulated other comprehensive income
|
161 | 239 | ||||||
Accumulated deficit
|
(252,177 | ) | (237,746 | ) | ||||
Total stockholders’ equity
|
1,821 | 3,428 | ||||||
Total liabilities and stockholders’ equity
|
$ | 130,489 | $ | 124,743 |
CALLIDUS SOFTWARE INC.
|
||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||
(In thousands)
|
||||||||
Nine Months Ended September 30,
|
||||||||
2013
|
2012
|
|||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
$ | (14,431 | ) | $ | (18,648 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Depreciation expense
|
3,278 | 2,184 | ||||||
Amortization of intangible assets
|
3,621 | 3,818 | ||||||
Provision for doubtful accounts and service remediation reserves
|
846 | 188 | ||||||
Stock-based compensation
|
8,345 | 10,917 | ||||||
Release of valuation allowance
|
- | (350 | ) | |||||
Gain on disposal of property and equipment
|
2 | (6 | ) | |||||
Amortization of convertible notes issuance cost
|
402 | 402 | ||||||
Net amortization on investments
|
63 | 310 | ||||||
Acquisition-related contingent consideration
|
- | (1,787 | ) | |||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(1,583 | ) | (7,627 | ) | ||||
Prepaid and other current assets
|
(1,043 | ) | (1,809 | ) | ||||
Other assets
|
(773 | ) | 322 | |||||
Accounts payable
|
(3,250 | ) | (129 | ) | ||||
Accrued expenses
|
1,517 | 741 | ||||||
Accrued payroll and related expenses
|
462 | (267 | ) | |||||
Accrued restructuring
|
(476 | ) | 37 | |||||
Deferred revenue
|
10,461 | 1,635 | ||||||
Deferred income taxes
|
185 | 111 | ||||||
Net cash provided by (used in) operating activities
|
7,626 | (9,958 | ) | |||||
Cash flows from investing activities:
|
||||||||
Purchases of investments
|
(5,634 | ) | (16,536 | ) | ||||
Proceeds from maturities and sale of investments
|
9,450 | 31,811 | ||||||
Purchases of property and equipment
|
(1,714 | ) | (4,927 | ) | ||||
Proceeds from disposal of property and equipment
|
- | 6 | ||||||
Purchases of intangible assets
|
(634 | ) | (4,485 | ) | ||||
Acquisitions, net of cash acquired
|
- | (7,721 | ) | |||||
Net cash provided by (used in) investing activities
|
1,468 | (1,852 | ) | |||||
Cash flows from financing activities:
|
||||||||
Proceeds from issuance of common stock
|
5,375 | 5,222 | ||||||
Repurchase of common stock from employees for payment of taxes on vesting of restricted stock units
|
(818 | ) | (2,079 | ) | ||||
Payment of consideration related to acquisitions
|
(3,078 | ) | (1,160 | ) | ||||
Repayment of debt assumed through acquisition
|
- | (30 | ) | |||||
Payment of principal under capital leases
|
(1,709 | ) | (887 | ) | ||||
Net cash (used in) provided by financing activities
|
(230 | ) | 1,066 | |||||
Effect of exchange rates on cash and cash equivalents
|
(72 | ) | 58 | |||||
Net increase (decrease) in cash and cash equivalents
|
8,792 | (10,686 | ) | |||||
Cash and cash equivalents at beginning of period
|
16,400 | 17,383 | ||||||
Cash and cash equivalents at end of period
|
$ | 25,192 | $ | 6,697 |
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,
|
||||||||||||||||
2013
|
2012
|
2013
|
2012
|
||||||||||||||
Non-GAAP gross profit reconciliation
|
|||||||||||||||||
Gross profit
|
$ | 18,900 | $ | 11,858 | $ | 46,027 | $ | 33,019 | |||||||||
Profit margin, as a % of total revenues
|
62 | % | 50 | % | 56 | % | 47 | % | |||||||||
Add back:
|
|||||||||||||||||
Non-cash stock-based compensation
|
452 | 924 | 1,472 | 2,903 | |||||||||||||
Non-cash amortization of acquired intangible assets
|
533 | 534 | 1,585 | 1,552 | |||||||||||||
Non-GAAP gross profit
|
$ | 19,885 | $ | 13,316 | $ | 49,084 | $ | 37,474 | |||||||||
Profit margin, as a % of total revenues
|
65 | % | 56 | % | 60 | % | 54 | % | |||||||||
Non-GAAP recurring revenue gross profit reconciliation
|
|||||||||||||||||
Recurring revenue gross profit
|
$ | 13,816 | $ | 10,544 | $ | 38,672 | 30,012 | ||||||||||
Recurring revenue profit margin, as a % of recurring revenues
|
65 | % | 60 | % | 64 | % | 57 | % | |||||||||
Add back:
|
|||||||||||||||||
Non-cash stock-based compensation
|
234 | 351 | 612 | 1,280 | |||||||||||||
Non-cash amortization of acquired intangible assets
|
521 | 540 | 1,548 | 1,514 | |||||||||||||
Non-GAAP Recurring revenue gross profit
|
$ | 14,571 | $ | 11,435 | $ | 40,832 | $ | 32,806 | |||||||||
Recurring revenue profit margin, as a % of recurring revenues
|
69 | % | 65 | % | 68 | % | 63 | % | |||||||||
Non-GAAP operating expense reconciliation:
|
|||||||||||||||||
Operating expenses
|
$ | 19,025 | 17,051 | $ | 56,088 | 48,994 | |||||||||||
Operating expenses, as a % of total revenues
|
62 | % | 71 | % | 68 | % | 70 | % | |||||||||
Add back:
|
|||||||||||||||||
Non-cash stock-based compensation
|
(2,092 | ) | (2,498 | ) | (6,873 | ) | (8,014 | ) | |||||||||
Non-cash amortization of acquired intangible assets
|
(294 | ) | (293 | ) | (870 | ) | (826 | ) | |||||||||
Acquisition-related expense
|
- | (183 | ) | - | (820 | ) | |||||||||||
Patent litigation and settlement costs
|
(341 | ) | (166 | ) | (1,002 | ) | (786 | ) | |||||||||
Acquisition-related adjustment
|
- | (50 | ) | - | 1,787 | ||||||||||||
Restructuring
|
(141 | ) | 53 | (1,699 | ) | (561 | ) | ||||||||||
Non-GAAP Operating Expenses
|
$ | 16,157 | $ | 13,914 | $ | 45,644 | $ | 39,774 | |||||||||
Non-GAAP Operating expenses, as a % of total revenues
|
53 | % | 58 | % | 56 | % | 57 | % | |||||||||
Non-GAAP operating income (loss) reconciliation:
|
|||||||||||||||||
Operating loss
|
$ | (125 | ) | (5,193 | ) | $ | (10,061 | ) | (15,975 | ) | |||||||
Operating loss, as a % of total revenues
|
0 | % | -22 | % | -12 | % | -23 | % | |||||||||
Add back:
|
|||||||||||||||||
Non-cash stock-based compensation
|
2,544 | 3,422 | 8,345 | 10,917 | |||||||||||||
Non-cash amortization of acquired intangible assets
|
827 | 827 | 2,455 | 2,378 | |||||||||||||
Acquisition-related expense
|
- | 183 | - | 820 | |||||||||||||
Patent litigation and settlement costs
|
341 | 166 | 1,002 | 786 | |||||||||||||
Acquisition-related adjustment
|
- | 50 | - | (1,787 | ) | ||||||||||||
Restructuring
|
141 | (53 | ) | 1,699 | 561 | ||||||||||||
Non-GAAP Operating income (loss)
|
$ | 3,728 | $ | (598 | ) | $ | 3,440 | $ | (2,300 | ) | |||||||
Non-GAAP Operating income (loss), as a % of total revenues
|
12 | % | -2 | % | 4 | % | -3 | % |
Three months ended
|
Nine months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
Non-GAAP net loss reconciliation:
|
||||||||||||||||
Net loss
|
$ | (1,413 | ) | $ | (6,358 | ) | $ | (14,431 | ) | (18,648 | ) | |||||
Net loss, as a % of total revenues
|
-5 | % | -27 | % | -18 | % | -27 | % | ||||||||
Add back:
|
||||||||||||||||
Non-cash stock-based compensation
|
2,544 | 3,422 | 8,345 | 10,917 | ||||||||||||
Non-cash amortization of acquired intangible assets
|
827 | 827 | 2,455 | 2,378 | ||||||||||||
Acquisition related expenses
|
- | 183 | - | 820 | ||||||||||||
Patent litigation and settlement costs
|
341 | 166 | 1,002 | 786 | ||||||||||||
Acquisition-related adjustment
|
- | 50 | - | (1,787 | ) | |||||||||||
Restructuring
|
141 | (53 | ) | 1,699 | 561 | |||||||||||
Interest expense on convertible notes
|
704 | 704 | 2,110 | 2,110 | ||||||||||||
Amortization of convertible note issuance cost
|
134 | 134 | 402 | 402 | ||||||||||||
Tax benefit from release of valuation allowance
|
- | - | - | (224 | ) | |||||||||||
Non-GAAP Net income (loss)
|
$ | 3,278 | $ | (925 | ) | $ | 1,582 | $ | (2,685 | ) | ||||||
Non-GAAP Net income (loss), as a % of total revenues | 11 | % | -4 | % | 2 | % | -4 | % | ||||||||
Non-GAAP net income (loss) per share reconciliation:
|
||||||||||||||||
Net loss per basic and diluted share
|
$ | (0.04 | ) | (0.18 | ) | $ | (0.38 | ) | $ | (0.53 | ) | |||||
Add back:
|
||||||||||||||||
Non-cash stock-based compensation
|
0.07 | 0.10 | 0.22 | 0.30 | ||||||||||||
Non-cash amortization of acquired intangible assets
|
0.02 | 0.02 | 0.06 | 0.07 | ||||||||||||
Acquisition related expenses
|
- | 0.01 | - | 0.02 | ||||||||||||
Patent litigation and settlement costs
|
0.01 | - | 0.03 | 0.02 | ||||||||||||
Acquisition-related adjustment
|
- | - | - | (0.05 | ) | |||||||||||
Restructuring
|
- | - | 0.04 | 0.02 | ||||||||||||
Interest expense on convertible notes
|
0.02 | 0.02 | 0.06 | 0.06 | ||||||||||||
Amortization of convertible note issuance cost
|
- | - | 0.01 | 0.01 | ||||||||||||
Tax benefit from release of valuation allowance
|
- | - | - | - | ||||||||||||
Diluted shares impact on non-GAAP basis
|
(0.01 | ) | - | (0.01 | ) | - | ||||||||||
Non-GAAP net income (loss) per diluted share
|
$ | 0.07 | $ | (0.03 | ) | $ | 0.03 | $ | (0.08 | ) | ||||||
Basic and fully diluted shares reconciliation:
|
||||||||||||||||
Basic shares
|
38,648 | 35,853 | 37,873 | 35,070 | ||||||||||||
Add back:
|
||||||||||||||||
Weighted average effect of dilutive securities
|
9,383 | - | 9,037 | - | ||||||||||||
Diluted shares
|
48,031 | 35,853 | 46,910 | 35,070 |
Three months ended
|
|||||||
December 31, 2013
|
|||||||
GAAP
|
Non-GAAP
|
||||||
Total Revenue
|
$ | 28,000 - $29,000 | $ | 28,000 - $29,000 | |||
Operating Income (a)
|
$ | (2,300) - ($1,900) | $ | 1,600 - $2,200 | |||
Net income (loss) per diluted share (c)
|
$ | (0.11) - ($0.10) | $ | 0.03 - $0.04 | |||
Twelve months ended
|
|||||||
December 31, 2013
|
|||||||
GAAP
|
Non-GAAP
|
||||||
Total Revenue
|
$ | 110,200 - $111,200 | $ | 110,200 - $111,200 | |||
Operating Income (b)
|
$ | (12,400) - ($12,000) | $ | 5,000 - $5,600 | |||
Net income (loss) per diluted share (c)
|
$ | (0.49) - ($0.48) | $ | 0.06 - $0.07 |
(a)
|
Estimated non-GAAP amounts above for the three months ending December 31, 2013, reflect adjustments that exclude the estimated amortization of acquired intangible assets of approximately $825 - $875 thousand, estimated stock-based compensation expense of approximately $2.7 - $2.9 million, patent litigation and settlement costs of approximately $350 - $390 thousand.
|
(b)
|
Estimated non-GAAP amounts above for the twelve months ending December 31, 2013, reflect adjustments that exclude the estimated amortization of acquired intangible assets of approximately $3.3 – $3.4 million, estimated stock-based compensation expense of approximately $11.0 - $11.3 million, patent litigation and settlement costs of approximately $1.35 - $1.45 million, and restructuring expense of approximately $1.7 - $1.9 million.
|
(c)
|
Non-GAAP EPS is on a fully diluted basis.
|