-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, N7hlnYbadmJF2BJgrenMrB8IsdJrp8etk9l8To06bW92QBe+6/097rmvdQ3loCYu 4CJSMUP5j5qbu/l3fTCirg== 0001275287-06-005370.txt : 20061024 0001275287-06-005370.hdr.sgml : 20061024 20061024160529 ACCESSION NUMBER: 0001275287-06-005370 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20061024 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20061024 DATE AS OF CHANGE: 20061024 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CALLIDUS SOFTWARE INC CENTRAL INDEX KEY: 0001035748 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING SERVICES [7371] IRS NUMBER: 770438629 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-50463 FILM NUMBER: 061160348 BUSINESS ADDRESS: STREET 1: 160 WEST SANTA CLARA STREET STREET 2: 15TH FLOOR CITY: SAN JOSE STATE: CA ZIP: 95113 FORMER COMPANY: FORMER CONFORMED NAME: TALLYUP SOFTWARE INC DATE OF NAME CHANGE: 19980807 8-K 1 cs7582.txt FORM 8-K ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): OCTOBER 24, 2006 CALLIDUS SOFTWARE INC. (Exact Name of Registrant as Specified in Charter) Delaware 000-50463 77-0438629 (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 160 W. Santa Clara Street, Suite 1500 San Jose, CA 95113 (Address of Principal Executive Offices) (Zip Code) (408) 808-6400 (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 (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c)) ================================================================================ ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On October 24, 2006, Callidus Software Inc. issued a press release announcing its financial results of and for the quarter ended September 30, 2006. 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. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS. (d) Exhibits. 99.1 Earnings Press Release, dated October 24, 2006 SIGNATURES 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. CALLIDUS SOFTWARE INC. Date: October 24, 2006 By: /s/ Ronald J. Fior ---------------------------- Name: Ronald J. Fior Title: Vice President, Finance and Chief Financial Officer EXHIBIT INDEX 99.1 Earnings Press Release, dated October 24, 2006. EX-99.1 2 cs7582ex991.txt EXHIBIT 99.1 Exhibit 99.1 CALLIDUS SOFTWARE REPORTS THIRD QUARTER 2006 RESULTS Q3 REVENUES $17.4 MILLION; YEAR-TO-DATE REVENUES UP 18% YEAR-TO-DATE HOSTED ON-DEMAND BOOKINGS REACH $6.1 MILLION SAN JOSE, Calif., Oct. 24 /PRNewswire/ -- Callidus Software Inc. (Nasdaq: CALD), a leading provider of Enterprise Incentive Management (EIM) software, today announced financial results for the third quarter ended September 30, 2006. Total third quarter revenues were $17.4 million, essentially flat compared to the third quarter 2005 and to the prior quarter. Third quarter license revenues were $5.8 million, equal to the third quarter 2005 and down slightly from the prior quarter. Third quarter maintenance and service revenues were $11.6 million, an increase of 3% compared to the third quarter 2005 and a slight decrease compared to the prior quarter. In addition, hosted on-demand bookings were $1.5 million in the third quarter compared to zero in the third quarter of 2005. License revenues plus hosted on-demand bookings in the quarter totaled $7.3M, an increase of 26% compared to the third quarter 2005. On a year-to-date basis, total revenues are up 18% from $44.2 million to $52.0 million compared to 2005. Year-to-date license revenues are up 76% from $10.6 million to $18.7 million compared to 2005. Year-to-date hosted on-demand bookings were $6.1 million, compared to zero in 2005. Year-to-date license revenues plus on-demand bookings totaled $24.8 million, an increase of 134% compared to the equivalent period in 2005. A significant development over the past six months has been the launch and growth of our hosted on-demand offering. Starting from zero, the company has sold multi-year contracts with a total value of $6.1 million over the past six months. These contracts are expected to generate annual recurring revenues of $2.3 million. Contractual terms are generally two to five years with the total value based on the non-cancellable period. Hosted on-demand revenues will be recognized ratably over the contract term in maintenance and service revenues, generally after an implementation is complete. We do not expect the impact of the revenue stream associated with the currently booked contracts to be fully realized until the first quarter of 2007. To date, hosted on-demand recognized revenues have been minimal. Third quarter net loss was $2.5 million, or ($0.09) per share (including $1.1 million of stock-based compensation expense). This compares to a net loss of $0.9 million, or ($0.03) per share, for the third quarter of 2005 (including $0.1 million of stock-based compensation expense) and a net loss of $3.2 million, or ($0.12) per share, for the prior quarter (including $1.4 million of stock-based compensation expense). Cash and investments totaled $53.2 million at September 30, 2006, a decrease of $3.5 million from June 30, 2006. "After a slow start, Q3 was a solid quarter where we continued to consolidate on progress made earlier in the year. Year-to-date total revenue growth was 18% and we continued to gain good traction with our hosted on-demand product offering. Our service revenues were limited by capacity rather than demand as we diverted service resources to our hosted on-demand business and were not able to backfill as quickly as we would have liked," said Robert Youngjohns, president and CEO. "We continue to see substantial market opportunity for our EIM and Sales Performance Management solutions, both in our traditional enterprise software model and through our new hosted on-demand offering," Mr. Youngjohns concluded. Recent Business Highlights -- Some of the customers purchasing Callidus solutions in the third quarter included, Discovery Communications, Health Net, Inc., Kronos, Mashreqbank PSC, Principal Financial Group, RVS Levensverzekering N.V. (an ING Group N.V. company), SanDisk, US Bank, and Vodafone Romania. -- Callidus announced SAP is now able to promote and market TrueComp(R) and TrueInformation(R) products in the United States and Canada. Callidus also announced its TrueComp and TrueInformation products achieved "Powered by SAP NetWeaver(R)" status. -- Callidus signed an agreement with Hyperion to sublicense part of its System 9 technology for Callidus' new Quota Management product. Callidus Quota Management, a soon to be announced product, is an application for revenue planning to create quota targets and quota planning and assignment to sales management and field representatives. -- Callidus received a "Positive" rating from Gartner, Inc. in the firm's MarketScope for Sales Incentive Compensation Management Software, 2006. In the report, Gartner evaluated ten sales incentive compensation management vendors. Callidus was one of three vendors to receive the highest rating given to vendors in the report, "Positive." Callidus was also highlighted in a June 2006 Forrester report on Incentive compensation characterizing Callidus as one that "leads the incentive compensation specialists in customer share." Also, Callidus won CRM Magazine's Rising Star Award. -- Callidus released a new customer Return on Investment (ROI) study which is available for download on our website. TELUS Communications Company, one of the largest telecommunications companies in Canada, realized an ROI of over 3,000% in the first two years from deployment of Callidus' TrueComp software. TELUS recouped its investment in less than six months, through increased revenues and increased cross-selling, a 60% reduction in overpayments, an 80% reduction in average time to resolve a dispute, and other efficiencies achieved with the TrueComp solution. Q4 2006 Financial Outlook -- Total revenues are expected to be between $19.5 million and $21.0 million. This would represent a 12% to 21% increase compared to third quarter total revenues of $17.4 million and includes only a partial effect of the currently booked hosted on-demand sales. The company has added capacity on the services side of the business and expects to grow both its license revenues and its maintenance and service revenues in the fourth quarter. -- Operating expenses, including stock-based compensation, are expected to be between $13.7 million and $14.2 million. -- Total stock-based compensation is expected to be approximately $1.1 million. Conference Call A conference call to discuss the third 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' website at www.callidussoftware.com . To participate in the call by telephone, the dial-in number is 800-599-9795 (international +1-617-786-2905), passcode 30465016. A telephone playback and webcast replay of the conference call will be available after 3:30 p.m. PDT today through November 7, 2006. The telephone replay will be available by calling 888-286-8010 (international: +1-617-801-6888), passcode 64360330. 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 financial measures provided in this press release are 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 measures reflect our bookings of hosted on-demand services. Total contract values of booked contracts represent the fees payable over the non-cancellable terms of the contracts, generally 2 to 5 years, and exclude implementation costs sold on a time and materials basis. 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. Note on Forward-Looking Statements The forward looking statements included in this press release, including with respect to the substantial market opportunity in EIM and Sales Performance Management solutions, fourth quarter total revenues and recurring revenues expected to be derived from the Company's hosted on-demand contracts, and estimates of fourth quarter 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, timing and size of software license orders, management's ability to successfully implement its business plan and its hosted on-demand offering, potential material fluctuations in financial results and future growth rates, decreases in customer spending, customer cancellation or non-renewal of software maintenance contracts or on-demand services, uncertainty regarding the demand for our hosted on-demand offering, 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 its Form 10-Q for the second quarter of 2006, 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 Nine months ended September 30, September 30, ------------------------ ------------------------ 2006 2005 2006 2005 ---------- ---------- ---------- ---------- Revenues: License revenues $ 5,776 $ 5,787 $ 18,669 $ 10,582 Maintenance and service revenues 11,649 11,311 33,377 33,632 Total revenues 17,425 17,098 52,046 44,214 Cost of revenues: License revenues 105 76 389 259 Maintenance and service revenues (1) 8,205 7,748 24,570 22,703 Total cost of revenues 8,310 7,824 24,959 22,962 Gross profit 9,115 9,274 27,087 21,252 Operating expenses: Sales and marketing (1) 5,570 5,208 17,929 13,358 Research and development (1) 3,612 3,109 10,832 9,124 General and administrative (1) 3,195 2,232 9,274 6,931 Total operating expenses 12,377 10,549 38,035 29,413 Operating loss (3,262) (1,275) (10,948) (8,161) Interest and other income, net 754 407 1,997 1,072 Loss before provision for income taxes (2,508) (868) (8,951) (7,089) Provision (benefit) for income taxes - 38 - 29 Loss before cummulative effect of a change in accounting principle (2,508) (906) (8,951) (7,118) Cummulative effect of a change in accounting principle - - 128 - Net loss $ (2,508) $ (906) $ (8,823) $ (7,118) Basic net loss per share $ (0.09) $ (0.03) $ (0.32) $ (0.27) Diluted net loss per share $ (0.09) $ (0.03) $ (0.32) $ (0.27) Shares used in basic per share computation 27,888 26,425 27,500 26,636 Shares used in diluted per share computation 27,888 26,425 27,500 26,636 (1) Stock-based compensation included in amounts above by category: Cost of maintenance and service revenues $ 250 $ (2) $ 760 $ 89 Sales and marketing 264 55 794 244 Research and development 217 1 682 227 General and administrative 335 (3) 1,429 354 Total stock-based compensation $ 1,066 $ 51 $ 3,665 $ 914
CALLIDUS SOFTWARE INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (unaudited) September 30, December 31, 2006 2005 ------------- ------------- Assets Current assets: Cash and cash equivalents $ 14,157 $ 23,705 Short-term investments 39,054 40,000 Accounts receivable, net 15,510 11,063 Prepaid and other current assets 3,164 1,581 Total current assets 71,885 76,349 Property and equipment, net 3,173 2,801 Deposits and other assets 1,233 1,494 Total assets $ 76,291 $ 80,644 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 752 $ 756 Accrued payroll and related expenses 4,417 6,383 Accrued expenses 2,600 2,043 Deferred revenue 11,370 12,205 Total current liabilities 19,139 21,387 Other liabilities 747 377 Long-term deferred revenue 594 729 Total liabilities 20,480 22,493 Stockholders' equity Common stock 28 27 Additional paid-in capital 192,108 186,232 Deferred stock-based compensation - (445) Accumulated other comprehensive income 332 171 Accumulated deficit (136,657) (127,834) Total stockholders' equity 55,811 58,151 Total liabilities and stockholders' equity $ 76,291 $ 80,644 SOURCE Callidus Software Inc. -0- 10/24/2006 /CONTACT: investors, Jon Pexton, +1-408-808-6577, or ir@callidussoftware.com, or media, Jock Breitwieser, +1-408-975-6683, or pr@callidussoftware.com, both of Callidus Software/ /Web site: http://www.callidussoftware.com/ (CALD) -----END PRIVACY-ENHANCED MESSAGE-----