EX-99.1 3 g77373exv99w1.txt PRESS RELEASE DATED JULY 25, 2002 EXHIBIT 99.1 [JACADA LOGO] NEWS RELEASE FINAL JACADA REPORTS 2002 SECOND-QUARTER RESULTS IMPLEMENTS COST-REDUCTIONS AND REORGANIZATION ATLANTA, JULY 25, 2002 - Jacada Ltd. (Nasdaq: JCDA), the leading provider of legacy extension and integration solutions, today reported results for the second quarter 2002. Total revenue for the 2002 second quarter was $5.3 million, compared to $6.0 million in the 2002 first quarter. Software license revenue was $2.2 million, compared to $2.9 million in the 2002 first quarter. Service and maintenance revenues were $3.1 million in the 2002 second quarter, unchanged from the 2002 first quarter. Gross margin for the 2002 second quarter was $4.1 million, or 77% of revenues, compared to $4.6 million, or 76% of revenues, in the 2002 first quarter. Net loss for the quarter was $1.2 million, or $(0.07) per share, compared to a net loss of $786,000, or $(0.04) per share, in the 2002 first quarter. At the end of the 2002 second quarter, cash, cash equivalents, short-term deposits, and marketable securities were $41.6 million, unchanged from the end of the 2002 first quarter. For the six-month period ended June 30, 2002, revenue was $11.4 million; gross margin was $8.7 million, or 76% of revenues; and net loss was $ 2.0 million, or $(0.11) per share. In the three and six month periods ended June 30, 2001, revenue was $6.8 million and $14.6 million, respectively; gross margin was $5.0 million and $11.0, respectively; and net loss was $1.8 million, or $(0.10) per share, and $2.1 million, or $(0.11) per share, respectively. Jacada also announced today major cost reductions and a restructuring aimed at aligning expenses to near-term and projected business levels, as well as supporting new sales and marketing initiatives. As part of this plan, Jacada has initiated a reduction in workforce of approximately 25%, which is expected to reduce operating expenses by approximately $6.0 million on an annualized basis. -1- Included in this plan was the elimination of the position of president of Jacada Inc., overseeing Jacada's North American operations which was previously held by Peter Fausel. Gideon Hollander, CEO of Jacada Ltd., will assume the responsibilities of the position. Staff reductions were implemented across all departments company-wide. "Our actions reflect the reality of difficult market conditions being experienced by the majority of companies in the technology sector," said Gideon Hollander. "Although we continue to see demand for our legacy integration and extension technology, we are seeing a change in buying patterns, which includes longer procurement cycles and smaller average deal sizes. We anticipate that these buying patterns will continue. As a result, Jacada is reorganizing its sales force and implementing new cost-effective ways to market and deliver its products and services as well as to reach a broader market." "Jacada has become the leading vendor for legacy extension and integration, and it is our goal to maintain and expand that leadership position and become a one-stop-shop for all legacy access and integration needs," said Hollander. "Despite the cost reductions and restructuring, Jacada continues to expand and enhance its product and service offerings to meet the rapidly changing market demands." Hollander continued, "We are encouraged by the number of deals we were able to close in the first and second quarters, which indicates to us that there is a continuing need for our products and services. Companies continue to be cautious with major capital expenditures and tend to procure products and services in a phased approach. We anticipate increased follow-on business from our new customers as market conditions improve." During the second quarter, Jacada secured direct and indirect business with customers such as Airline Tariff Publishing Company, Banca Popolare di Milano, Bayer AG, Invitrogen, Lesco, Maersk, NCS Pearson, Real Property Identification, State of Tennessee, Superdrug, TNT Logistics, and Unigroup, among others. "Jacada continues to benefit from its partner channel," said Mike Potts, president of Jacada Ltd. "Most notably in the second quarter, Jacada partnered with SeeBeyond to finalize a transaction with Banca Popolare di Milano (BPM). BPM selected Jacada Integrator to provide legacy integration for its Multi-Channel Banking System, a project that consolidates all banking and financial applications onto a unified Linux platform." Jacada Integrator will be the primary connection between the bank's legacy applications and the IBM WebSphere e-commerce front-end that will serve as the main interface for over 10,000 internal and external users, including customers, employees and partners. -2- Hollander noted Jacada's cash position of $41.6 million has remained unchanged during the past nine months. "With our exceptional balance sheet, we believe we are in an excellent position to capitalize on opportunities to further expand our market share and emerge an even stronger company as market conditions improve," concluded Hollander. About Jacada - Jacada Ltd. is the leading provider of legacy integration and web-enablement solutions that address the need for extending and integrating legacy systems, automating enterprise workflow, and delivering a universal user interface for new and existing applications. Jacada solutions are in use today at major corporations and government organizations such as AIG, Bank of America, Caterpillar, Delta Air Lines, The Federal Reserve Bank, Porsche Cars North America, Prudential Insurance Company of America, and the US Department of Interior. Jacada operates globally with headquarters in Atlanta, Georgia; Herzliya, Israel; and London, England. Jacada can be reached at www.jacada.com or at 1-800-773-9574. This press release may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to financial results and plans for future business development activities, and are prospective. These statements include all statements that are not statements of historical fact regarding intent, belief or current expectations of the Company, its directors or its officers with respect to, among other things: (i) the Company's financing plans; (ii) trends affecting the Company's financial condition or results of operations; and (iii) the Company's growth strategy and operating strategy (including the development of its products and services). The words "may," "could," "would," "will," "believe," "anticipate," "estimate," "expect," "intend," "plan," and similar expressions or variation thereof are intended to identify forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of the future performance and involve risks and uncertainties, many of which are beyond the Company's ability to control. Actual results may differ materially from those projected in the forward-looking statements as a result of various factors. The Company undertakes no obligation to update or revise any forward-looking statement for events or circumstances after the date on which such statement is made. The Company cannot assess the impact of or the extent to which any single factor or risk, or combination of them, may cause. For a more complete discussion of risk factors, please see the Company's Form 20-F and other Statements filed with the Securities and Exchange Commission. Jacada Contacts: Ann Conrad 770-352-1310 ext 382 aconrad@jacada.com and Phil Bourdillon Silverman Heller Associates 310-208-2550 bourdillon@sha-ir.com -- END -- -3- CONSOLIDATED BALANCE SHEETS ------------------------------------------------------------------------------ U.S. DOLLARS IN THOUSANDS
JUNE 30, DECEMBER 31, 2002 2001 ---------- ------------ UNAUDITED AUDITED ---------- ------------ ASSETS CURRENT ASSETS: Cash and cash equivalents $ 8,141 $ 5,982 Short-term bank deposits 4,916 -- Marketable securities 24,654 35,660 Trade receivables (net of allowance for doubtful accounts of $658 and $1,022 at June 30, 2002 and December 31, 2001, respectively) 3,621 4,261 Other current assets 636 626 ------- ------- Total current assets 41,968 46,529 ------- ------- LONG-TERM INVESTMENTS: Marketable securities 3,892 -- Severance pay fund 612 567 Long-term other assets 100 203 ------- ------- Total long-term investments 4,604 770 ------- ------- PROPERTY AND EQUIPMENT, NET 3,395 3,632 ------- ------- OTHER ASSETS, NET: Technology (net of accumulated amortization of $229 and $95 at June 30, 2002 and December 31, 2001, respectively) 1,111 1,245 Goodwill 4,283 4,283 ------- ------- Total other assets 5,394 5,528 ------- ------- $55,361 $56,459 ======= =======
-4- CONSOLIDATED BALANCE SHEETS ------------------------------------------------------------------------------- U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA
JUNE 30, DECEMBER 31, 2002 2001 ---------- ----------- UNAUDITED AUDITED ---------- ----------- LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Trade payables $ 598 $ 750 Deferred revenues 3,279 2,065 Accrued expenses and other liabilities 3,680 4,089 -------- -------- Total current liabilities 7,557 6,904 -------- -------- LONG-TERM LIABILITIES: Accrued severance pay 1,002 967 Accrued expenses 161 -- -------- -------- Total long-term liabilities 1,163 967 -------- -------- SHAREHOLDERS' EQUITY: Share capital: Ordinary shares of NIS 0.01 par value: Authorized: 30,000,000 shares as of June 30, 2002 and December 31, 2001; Issued and outstanding: 18,562,530 and 18,537,704 shares as of June 30, 2002 and December 31, 2001, respectively 54 54 Additional paid-in capital 68,500 68,486 Deferred stock compensation (44) (71) Accumulated other comprehensive gain 41 -- Accumulated deficit (21,910) (19,881) -------- -------- Total shareholders' equity 46,641 48,588 -------- -------- $ 55,361 $ 56,459 ======== ========
-5- CONSOLIDATED STATEMENTS OF OPERATIONS ------------------------------------------------------------------------------ U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA
SIX MONTHS ENDED THREE MONTHS ENDED YEAR ENDED JUNE 30, JUNE 30, DECEMBER 31, -------------------------------- -------------------------------- ------------ 2002 2001 2002 2001 2001 ------------------------------------------------------------------------ ------------ UNAUDITED AUDITED ------------------------------------------------------------------------ ------------ Revenues: Software license $ 5,165 $ 7,037 $ 2,244 $ 2,996 $ 10,930 Services 2,696 4,947 1,235 2,446 8,986 Maintenance 3,505 2,585 1,858 1,321 5,630 ------------ ------------ ------------ ------------ ------------ Total revenues 11,366 14,569 5,337 6,763 25,546 ------------ ------------ ------------ ------------ ------------ Cost of revenues: Software license 121 325 4 181 520 Services 1,905 2,418 887 1,224 4,859 Maintenance 663 869 331 404 1,705 ------------ ------------ ------------ ------------ ------------ Total cost of revenues 2,689 3,612 1,222 1,809 7,084 ------------ ------------ ------------ ------------ ------------ Gross profit 8,677 10,957 4,115 4,954 18,462 ------------ ------------ ------------ ------------ ------------ Operating expenses: Research and development 3,053 3,044 1,550 1,617 6,446 Sales and marketing 5,454 8,181 2,761 4,218 14,619 General and administrative 2,588 2,752 1,256 1,581 5,679 Non-recurring charges -- 417 -- -- 2,846 ------------ ------------ ------------ ------------ ------------ Total operating expenses 11,095 14,394 5,567 7,416 29,590 ------------ ------------ ------------ ------------ ------------ Operating loss (2,418) (3,437) (1,452) (2,462) (11,128) Financial income, net 389 1,356 209 635 2,330 ------------ ------------ ------------ ------------ ------------ Loss before taxes on income (2,029) (2,081) (1,243) (1,827) (8,798) Taxes on income -- -- -- -- (7) ------------ ------------ ------------ ------------ ------------ Net loss $ (2,029) $ (2,081) $ (1,243) $ (1,827) $ (8,791) ============ ============ ============ ============ ============ Basic net loss per share $ (0.11) $ (0.11) $ (0.07) $ (0.10) $ (0.48) ============ ============ ============ ============ ============ Weighted average number of Shares used in computing Basic net loss per share 18,550,035 18,450,780 18,559,810 18,465,852 18,465,127 ============ ============ ============ ============ ============ Diluted net loss per share $ (0.11) $ (0.11) $ (0.07) $ (0.10) $ (0.48) ============ ============ ============ ============ ============ Weighted average number of Shares used in computing Diluted net loss per share 18,550,035 18,450,780 18,559,810 18,465,852 18,465,127 ============ ============ ============ ============ ============
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