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per response... 28.0 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 28,
2004 CHORDIANT SOFTWARE, INC.
(Exact name of Registrant as specified in its charter)
Delaware |
93-1051328 |
(State or other jurisdiction of incorporation) |
(I.R.S. Employer Identification No.) |
Commission file number:
000-29357
20400 Stevens Creek Boulevard, Suite 400
Cupertino, CA 95014
Registrant's telephone number, including area code: (408) 517-6100
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:
[ ] 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 28, 2004, Chordiant Software, Inc. issued a press release announcing results for the quarter ended September 30, 2004. A copy of the press release is attached as Exhibit 99.1 to this current report on Form 8-K and is incorporated by reference herein.
The information in this Form 8-K and the Exhibit attached hereto shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, unless Chordiant Software, Inc. specifically incorporates the foregoing information into those documents by reference.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits
99.1 Press release issued by Chordiant Software, Inc. dated October 28, 2004.
SIGNATURE
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.
Chordiant Software, Inc.
Date: October 28, 2004 |
By: /s/
Charles W. Swan Charles Swan Interim Chief Financial Officer |
CHORDIANT ANNOUNCES FINANCIAL RESULTS
FOR THE THIRD QUARTER ENDED SEPTEMBER 30, 2004
North America Accounts for 67% of Revenue in the Third Quarter
Raises Revenue Guidance for 2004
CUPERTINO, California - October 28, 2004 -- Chordiant Software, Inc. (Nasdaq: CHRD) today announced its financial results for the third quarter ended September 30, 2004.
Total revenues for the third quarter of 2004 were $23.7 million, compared to revenues of $17.8 million reported for the third quarter of 2003. For the first nine months of 2004, revenues were $60.8 million, compared to $48.7 million for the same period of the prior year. License revenues for the third quarter of 2004 were $9.0 million, compared to $6.6 million reported for the third quarter of 2003. For the first nine months of 2004, license revenues were $23.6 million, compared to the $17.3 million reported for the same period of 2003. Service revenues for the third quarter were $14.8 million, compared to $11.1 million reported for the third quarter of 2003. For the nine months ended September 30, 2004, service revenues were $37.1 million, compared to $31.4 million for the same period of 2003. Chordiant had $61.8 million in cash and cash equivalents, short-term investments, and restricted cash at September 30, 2004.
Chordiant posted a U.S. GAAP (Generally Accepted Accounting Principles) net income of $1.4 million in the third quarter of 2004, or $0.02 per share, compared to a GAAP net loss of $2.1 million, or $0.04 per share loss, for the third quarter of 2003.In addition, Chordiant recognized expenses of approximately $500,000 for costs
related to the review and delay in Chordiant's second quarter financial results.
Chordiant also incurred incremental costs for Sarbanes-Oxley Section 404 of the
Act of 2002, and expenses associated with as many as 15 Sarbanes-Oxley
consultants assisting with compliance projects.
With its rapid growth of revenues and pipeline in North America, Chordiant has
recruited ahead of plan 15 sales and professional services employees in North
America during the third quarter. The company also continued to invest in its
credit card and teller applications.
FOURTH QUARTER AND 2004 FINANCIAL OUTLOOK
"For the full year 2004, we are raising our guidance and expect revenues to be
in the range of $83 million to $85 million," Kelly said. For the fourth quarter
of 2004, Chordiant anticipates revenues to be in a range of $22 million to $24
million. "From an earnings perspective, with the additional costs for
professional fees, new hires related to our revenue growth in North America,
internal controls and processes, compliance with Section 404 of
the Sarbanes-Oxley Act of 2002, and maintaining our strategic growth plans around teller and
credit card applications in the fourth quarter, there will be continuing
short-term pressure on earnings," Kelly said. On a GAAP basis, Chordiant is
unable to accurately give GAAP EPS guidance because of the variability of the
stock-based compensation expense. "Our estimate of non-GAAP earnings per share
for the fourth quarter of 2004 is expected to be in the range of $0.00 to
$0.01," Kelly stated.
Revenue and earnings per share estimates are based on the assumption that
overall technology spending will not deteriorate from current levels, as well as
information on various factors that could affect the financial results of
Chordiant which are included in the risks detailed in Chordiant's Securities and
Exchange Commission filings, including Chordiant's Annual Report on Form 10-K,
as amended and Quarterly Reports filed on Form 10-Q.
Teleconference Webcast Today - October 28, 2004 at 2:00 P.M. (Pacific)
Chordiant management has scheduled a teleconference for today, October 28, 2004,
at 2:00 P.M. (Pacific), 5:00 P.M. (Eastern) and 22:00 (London) to discuss
financial results and business events for the third quarter of 2004, as well as
the current outlook for the fourth quarter and full year 2004. This
teleconference will be webcast live for the public from Chordiant's website at
http://www.chordiant.com. The public, industry analysts and media are invited to
attend the conference on a listen-only basis. For more information, including
this press release and Chordiant's Current Report on Form 8-K, any non-GAAP
financial measures that may be discussed on the webcast as well as the most
directly comparable GAAP financial measures and a reconciliation of the
difference between the GAAP and any non-GAAP financial measures discussed on the
webcast (other than non-GAAP financial measures discussed and reconciled in this
news release), and any other material financial and other statistical
information contained in the webcast, please visit the Investor Relations
section of Chordiant's web site at http://www.chordiant.com. From this site, you
can listen to the teleconference, assuming that your computer system is
configured properly. A phone replay will also be available for seven days after
the live call at 303-590-3000, Passcode 11010484.
About Chordiant Software, Inc.
Chordiant solutions automate and manage operational business processes for
leading service-driven global organizations with a focus on retail finance and
telecommunications.
Chordiant orchestrates the unique processes of an organization from the point of customer interaction, through the front and back offices to multiple transactional systems, corporate applications and data stores. Our solutions integrate existing infrastructure to orchestrate the assembly, enhancement and delivery of optimal role based business processes to the appropriate channels. Business value is realized through improved employee productivity, savings in operational costs, and increased business adaptability.
Headquartered in Cupertino, California, Chordiant maintains offices in Boston;
Chicago; Mahwah, N.J.; Manchester, N.H.; New York City; London; Paris;
Amsterdam; and Munich.
SAFE HARBOR
This news release includes "forward-looking statements" that are subject to
risks, uncertainties and other factors that could cause actual results or
outcomes to differ materially from those contemplated by the forward-looking
statements. Forward-looking statements in this release are generally identified
by words, such as "believes," "anticipates," "plans," "expects," "will,"
"would," 'guidance," 'projects" and similar expressions which are intended to
identify forward-looking statements. There are a number of important factors
that could cause the results of Chordiant to differ materially from those
indicated by these forward-looking statements, including, among others,
potential difficulties in the assimilation of operations, strategies,
technologies, personnel and products of acquired companies and technologies, the
impact of perceived or actual weakening of economic conditions on customers' and
prospective customers' spending on Chordiant software and services; quarterly
fluctuations in Chordiant's revenues or other operating results; failure by
Chordiant to meet financial expectations of analysts and investors, including
failure resulting from significant reductions in demand from earlier anticipated
levels; risks related to market acceptance of Chordiant's products;
customization and deployment delays or errors associated with Chordiant
products; impact of long sales and implementation cycles for certain Chordiant
products; reliance by Chordiant on a limited number of customers for a majority
of its revenues; Chordiant's need to retain and enhance business relationships
with systems integrators and other parties; Chordiant's use in its products of
third-party software; activities by Chordiant and others regarding protection of
intellectual property; and competitors' release of competitive products and
other actions. Further information on potential factors that could affect the
financial results of Chordiant are included in risks detailed from time to time
in Chordiant's Securities and Exchange Commission filings, including without
limitation Chordiant's Annual Report on Form 10-K, as amended and Quarterly
Reports. These filings are available on a Web site maintained by the Securities
and Exchange Commission at http://www.sec.gov. Chordiant does not undertake an
obligation to update forward-looking or other statements in this release.
Chordiant and the Chordiant logo are registered trademarks of Chordiant
Software, Inc. All other trademarks and registered trademarks are the properties
of their respective owners.
Chordiant Investor Relations Contact: |
Steve Polcyn |
Chordiant Software, Inc. |
(408) 517-6282 |
steve.polcyn@chordiant.com |
CHORDIANT SOFTWARE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In
thousands, except per share data)
Three Months Ended |
Nine Months Ended |
||||||||||||
|
|
||||||||||||
September 30, 2004 |
September 30, 2003 |
September 30, 2004 |
September 30, 2003 |
||||||||||
Revenues: |
|
|
|
|
|||||||||
License |
$ |
8,959 |
$ |
6,642 |
$ |
23,640 |
$ |
17,266 | |||||
Service |
14,774 | 11,124 | 37,141 | 31,400 | |||||||||
|
|
|
|
||||||||||
Total revenues |
23,733 |
17,766 | 60,781 |
48,666 |
|||||||||
Cost of revenues: |
|||||||||||||
License |
615 | 267 | 1,308 | 847 | |||||||||
Service |
8,359 | 6,406 | 21,153 | 18,356 | |||||||||
|
|
|
|
||||||||||
Total cost of revenues |
8,974 |
6,673 |
22,461 |
19,203 |
|||||||||
|
|
|
|
||||||||||
Gross profit |
14,759 |
11,093 |
38,320 |
29,463 |
|||||||||
|
|
|
|
||||||||||
Operating expenses: |
|||||||||||||
Sales and marketing |
6,270 | 4,995 | 17,993 | 15,728 | |||||||||
Research and development |
4,365 | 4,110 | 13,025 | 12,075 | |||||||||
General and administrative |
2,942 | 1,432 | 6,576 | 4,942 | |||||||||
Stock-based compensation |
(699 |
) |
1,736 | (111 | ) | 5,048 | |||||||
Amortization of intangible assets |
122 | 890 | 1,170 | 2,671 | |||||||||
Restructuring expenses | 245 | -- | 245 | 1,161 | |||||||||
|
|
|
|
||||||||||
Total operating expenses |
13,245 |
13,163 |
38,898 |
41,625 |
|||||||||
|
|
|
|
||||||||||
Income (loss) from operations |
1,514 |
|
(2,070 | ) | (578 |
) |
(12,162) | ||||||
Interest income (expense), net |
145 |
|
(37 | ) | 501 | (131) | |||||||
Other income (expense), net |
(78 |
) |
-- | (132 | ) | (80) | |||||||
|
|
|
|
||||||||||
Net income (loss) before income taxes |
|
1,581 |
|
(2,107 | ) | (209 | ) | (12,373) | |||||
Provision for income taxes | 154 | 22 | 405 | 93 | |||||||||
|
|
|
|
||||||||||
Net income (loss) | $ | 1,427 | $ | (2,129 | ) | $ | (614 |
) |
$ | (12,466) | |||
|
|
|
|
||||||||||
Net income (loss) per share: |
|||||||||||||
Basic and fully diluted |
$ |
0.02 |
$ |
(0.04 |
) |
$ |
(0.01 |
) |
$ |
(0.22) |
|||
|
|
|
|
||||||||||
Shares used in per share calculation[2]: |
75,406 | 60,037 | 69,761 | 57,327 | |||||||||
|
|
|
|
||||||||||
Supplemental information [1]: | |||||||||||||
Non-GAAP financial measures and reconciliation | |||||||||||||
Net income (loss) | $ | 1,427 | $ | (2,129 |
) |
$ | (614 | ) | $ | (12,466) | |||
Less: Stock-based compensation | (699 |
) |
1,736 | (111 | ) | 5,048 | |||||||
Less: Amortization of intangible assets | 122 | 890 | 1,170 | 2,671 | |||||||||
Less: Restructuring expenses | 245 | -- | 245 | 1,161 | |||||||||
|
|
|
|
||||||||||
Pro forma net income (loss): |
$ |
1,095 |
$ |
497 |
|
$ |
690 |
$ |
(3,586) | ||||
|
|
|
|
||||||||||
Diluted pro forma net income (loss) per share: |
$ |
0.01 |
$ |
0.01 |
$ |
0.01 |
$ |
(0.06) | |||||
|
|
|
|
||||||||||
Shares used in per share calculation [2]: |
75,406 |
65,403 |
75,000 |
57,327 |
|||||||||
|
|
|
|
[1] The accompanying supplemental pro forma financial information represents a non-GAAP financial measure. A "non-GAAP financial measure" is defined as a numerical measure of a company's financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP in the company's financial statements. Non-GAAP financial measure of net income or net loss is used by investors and analysts of Chordiant Software, Inc. (the "Company") as an alternative to GAAP measures when evaluating the Company's performance in comparison to other companies. The Company's management believes that the presentation of non-GAAP financial measures of net income or net loss, excluding purchased in-process research and development, stock-based compensation, amortization of intangible assets and restructuring expenses, provide useful information regarding the Company's financial performance and earnings potential by calculating and quantifying the effect of certain charges on net income or net loss per share calculated in accordance with GAAP and gives investors and analysts insight into the profitability of the Company's operating business. Management also believes that the presentation of non-GAAP financial measures is consistent with its past practice, as well as industry practice in general, and will enable investors and analysts to compare current non-GAAP measures with non-GAAP measures presented in prior periods. The above non-GAAP financial information may not be comparable to similarly titled measures used by other companies and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.
[2] For periods with a net loss, diluted net loss per share for the three months ended September 30, 2004 and the nine months ended September 30, 2004 and 2003, is computed excluding potential common shares of 8,919, 5,239 and 5,714 as their effect is anti-dilutive.
CHORDIANT SOFTWARE, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In
thousands)
|
September 30, 2004 |
December 31, 2003 |
|||||||
---|---|---|---|---|---|---|---|---|---|
ASSETS | |||||||||
Current assets: |
|||||||||
Cash and cash equivalents |
$ |
59,748 | $ | 36,218 | |||||
Short-term investments and restricted cash | 590 | 581 | |||||||
Accounts receivable, net | 19,953 | 11,974 | |||||||
Prepaid expenses and other current assets | 3,351 | 2,675 | |||||||
|
|
||||||||
Total current assets | 83,642 | 51,448 | |||||||
Restricted cash | 1,500 | 1,500 | |||||||
Property and equipment, net | 2,784 | 3,071 | |||||||
Goodwill | 24,874 | 24,874 | |||||||
Intangible assets, net | 244 | 1,414 | |||||||
Other assets | 1,871 | 1,504 | |||||||
|
|
||||||||
Total assets |
$ |
114,915 | $ | 83,811 | |||||
|
|
||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||||||
Current liabilities: |
|||||||||
Accounts payable |
$ |
5,717 | $ | 3,931 | |||||
Accrued expenses | 12,392 | 13,038 | |||||||
Deferred revenue | 18,459 | 14,548 | |||||||
|
|
||||||||
Total current liabilities | 36,568 | 31,517 | |||||||
Deferred revenue, long-term | 2,122 | 3,848 | |||||||
|
|
||||||||
Total liabilities | 38,690 | 35,365 | |||||||
|
|
||||||||
Total stockholders' equity | 76,225 | 48,446 | |||||||
|
|
||||||||
Total liabilities and stockholders' equity |
$ |
114,915 | $ | 83,811 | |||||
|
|