Breaking News - General:
Callidus Software Reports Second Quarter 2004 Results
Callidus Software Inc announced financial results for the second quarter ended
June 30.
Total second quarter revenues declined 20 percent to $13.2 million compared to
$16.6 million in the second quarter of 2003. Second quarter net loss was $13.6
3 cents per share, for the second quarter of 2003.
Non-GAAP net loss for the second quarter was $5.6 million, or 23 cents per
share, as compared to non-GAAP net income of $800,000, or 4 cents per share in
the second quarter of 2003. A reconciliation between GAAP and non-GAAP
information is contained in the attached tables.
"Second quarter maintenance and service revenues met our expectations;
however, product revenues were substantially below our initial expectations
for the quarter. We continued to experience longer selling cycles and delays
in closing transactions during the quarter," said David Pratt, president and
CEO of Callidus Software.
"During my short tenure, I have worked closely with the executive team and met
with many of our employees, customers, prospective customers and partners. My
assessment is that Callidus has great products, happy customers, strong
partnerships and a good employee base. Our focus in the near term will be on
sales execution efforts and on reducing our cost structure to lower our break-
even point."
Callidus also announced the discontinuance of its TruePerformance product. In
connection with this decision, Callidus recorded impairment charges totaling
$3.8 million on intangible assets in the second quarter.
"We believe the TrueComp suite of products has greater return on investment
potential than the TruePerformance product. Accordingly, the discontinued
investment in TruePerformance will result in quarterly cost savings of
approximately $800,000, excluding related shut down costs, while not
negatively impacting anticipated 2004 revenues," said Pratt. The TrueComp
suite, including TrueResolution, TrueReferral and TrueInformation, has
constituted the vast majority of product revenues since the inception of
Callidus.
In addition to discontinuing TruePerformance, Callidus expects to implement
other cost savings actions and closely monitor discretionary spending. These
actions are anticipated to result in additional quarterly cost savings of
approximately $1.2 million. The impact of the combined cost savings actions
will be partially realized in the third quarter. Accordingly, management
anticipates operating expenses for the third quarter of 2004, excluding
stock-based compensation and charges related to the cost savings actions, to
be between $9.5 million and $10.5 million.
Maintenance and service revenues for the third quarter are expected to be
between $10 million and $11 million with a contributing margin of 28 percent
to 30 percent.
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