JCDA Jacada Ltd. - Ordinary Shares (MM)

Jacada Ltd. (Nasdaq: JCDA), a leading provider of customer experience management and process optimization solutions, today reported financial results for the third quarter ended September 30, 2011.

Third Quarter Highlights

• Executed a material multi-year service and solution support agreement with Kabel Deutschland, Germany’s largest cable operator
• Executed an agreement for the development of key integration components that allow Blue Cross Blue Shield of Massachusetts to leverage their existing investments in future strategic initiatives for an integrated provider management system
• Introduced the latest version of Jacada Interface Server (JIS) with updated browser support and extensions to the Jacada knowledge base
• Third quarter revenues were $3.0 million with a net loss of $1.7 million

“We were pleased to extend our relationship with Kabel Deutschland as we continue to provide ongoing professional services for the development of future releases of the company’s unified desktop,” commented Gideon Hollander, co-chief executive officer of Jacada. “This quarter, we also began the development of key integration components for Blue Cross Blue Shield of Massachusetts’ integrated provider management system. This system will allow their agents to more efficiently service healthcare providers by providing access to more organized information.”

“While these agreements extended our services engagements, there were limited software deliveries during the third quarter, reducing our software revenue to $42,000 from $813,000 in the previous quarter,” commented Caroline Cronin, Chief Financial Officer. “While total expenses remained consistent between the second and third quarters of 2011, this reduction in software revenue, which typically carries a higher margin, impacted our net income, increasing our net loss to $1.7 million in the third quarter from $1.1 million in the second quarter.”

Financial Results

For the third quarter of 2011, total revenues were $3.0 million compared to $5.0 million in the third quarter of 2010. Software revenues for the 2011 third quarter were $42,000 compared to $455,000 during the 2010 third quarter. Services revenues were $2.2 million and $3.9 million in the third quarter of 2011 and 2010, respectively. Maintenance revenues improved to $735,000 in the third quarter of 2011 from $651,000 in the 2010 third quarter.

Gross margins were 30% and 39% of total revenues during the 2011 and 2010 third quarters, respectively. Margins were impacted both by the reduction in software revenue, which typically carries a higher margin, and by a reduction in services margins as fixed expenses were absorbed by lower services revenue. Third quarter 2011 operating expenses of $2.6 million, reflecting savings from cost containment measures implemented during the third quarter of 2010, were significantly less than third quarter 2010 operating expenses of $3.5 million.

The 2011 third quarter net loss was $1.7 million or ($0.41) per share compared to a net loss of $1.5 million or ($0.36) per share in the third quarter of 2010.

Conference Call Details

Management will hold a conference call to discuss the third quarter 2011 financial results at 10:30am ET on November 21, 2011. To participate in the teleconference, please call toll-free 888-680-0860 or 617-213-4852 for international callers, and provide pass code 73346396 approximately 10 minutes prior to the start time. Interested parties may pre-register for the teleconference via this URL: https://www.theconferencingservice.com/prereg/key.process?key=PALYQ4CPM. A (live audio) webcast will also be available over the Internet at www.jacada.com (under "About Us" then "Investors") or www.earnings.com.

A replay of the teleconference will be available for three days beginning at 1:30 p.m. ET on November 21, 2011. To access the replay, dial toll-free 888-286-8010, or for international callers 617-801-6888, and provide pass code 27258901.

About Jacada

Jacada provides solutions that optimize and improve the effectiveness of customer interactions. Jacada unified desktop and process optimization solutions help companies reduce the cost of their operations, drive customer satisfaction and provide a complete return on investment in as little as 12 months after deployment.

Founded in 1990, Jacada operates globally with offices in Atlanta, USA; Herzliya, Israel; London, England; Munich, Germany; and Stockholm, Sweden. More information is available at www.jacada.com, www.jacada.com/blog, www.jacada.com/facebook and www.jacada.com/twitter.

This news release may contain forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. The words "may," "could," "would," "will," "believe," "anticipate," "estimate," "expect," "intend," "plan," and similar expressions or variations 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 including the performance and continued acceptance of our products, general economic conditions and other Risk Factors specifically identified in our reports filed with the Securities and Exchange Commission. 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. Jacada is a trademark of Jacada Inc. All other brands or product names are trademarks of their respective owners.

JACADA LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. dollars in thousands, except per share data)     Three months ended

September 30,

Nine months ended

September 30,

  2011       2010     2011       2010   Unaudited Revenues: Software licenses $ 42 $ 455 $ 1,102 $ 1,585 Services 2,203 3,878 6,485 11,010 Maintenance   735     651     2,070     1,856     Total revenues   2,980     4,984     9,657     14,451     Cost of revenues: Software licenses 9 65 84 197 Services 1,868 2,793 5,906 8,134 Maintenance   212     199     575     582     Total cost of revenues   2,089     3,057     6,565     8,913     Gross profit 891 1,927 3,092 5,538   Operating expenses: Research and development 787 926 2,123 2,746 Sales and marketing 792 1,236 2,460 4,141 General and administrative 1,058 1,126 3,125 3,579 Restructuring   -     196     -     196     Total operating expenses   2,637     3,484     7,708     10,662     Operating loss (1,746 ) (1,557 ) (4,616 ) (5,124 ) Financial income, net   63     58     7     107     Loss before taxes (1,683 ) (1,499 ) (4,609 ) (5,017 ) Taxes  

(16

)

  (10 )   (19 )   (11 )   Net loss   (1,699 )   (1,509 )   (4,628 )   (5,028 )       Basic and diluted net earnings loss per share $ (0.41 ) $ (0.36 ) $ (1.11 ) $ (1.21 )   Weighted average number of shares used in computing basic and diluted net loss per share   4,159,134     4,159,134     4,159,134     4,158,023       JACADA LTD. AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (U.S. dollars in thousands)     September 30, December 31,   2011     2010   Unaudited   Audited ASSETS   CURRENT ASSETS: Cash and cash equivalents $ 4,320 $ 5,945 Marketable securities 556 1,240 Trade receivables 2,469 4,081 Restricted cash 489 493 Other current assets   953     1,079     Total current assets   8,787     12,838     LONG-TERM INVESTMENTS: Marketable securities 9,356 10,809 Severance pay fund   195     186     Total long-term investments   9,551     10,995     PROPERTY AND EQUIPMENT, NET   672     856     Total assets $ 19,010   $ 24,689     LIABILITIES AND SHAREHOLDERS' EQUITY   CURRENT LIABILITIES: Trade payables $ 1,540 $ 1,566 Deferred revenues 1,008 1,076 Accrued expenses and other liabilities   1,198     1,478     Total current liabilities   3,746     4,120     LONG-TERM LIABILITIES: Accrued severance pay 383 366 Other long-term liabilities   2     44     Total long-term liabilities   385     410     SHAREHOLDERS' EQUITY: Share capital 60 60 Additional paid-in capital 75,973 75,829 Treasury shares at cost (17,863 ) (17,863 ) Accumulated other comprehensive profit (loss) (309 ) 487 Accumulated deficit   (42,982 )   (38,354 )   Total shareholders' equity   14,879     20,159     Total liabilities and shareholders' equity $ 19,010   $ 24,689       JACADA LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS U.S. dollars in thousands     Three months ended

September 30,

Nine months ended

September 30,

  2011       2010     2011       2010   Unaudited  

Cash flows from operating activities:

  Net loss $ (1,699 ) $ (1,509 ) $ (4,628 ) $ (5,028 )   Adjustments required to reconcile net loss to net cash used in operating activities: Depreciation and amortization 92 127 303 374 Stock-based compensation related to options granted to employees, non employees and directors 43 100 144 389 Decrease in restricted cash 8 - 4 - Accrued interest and amortization of premium on marketable securities - (15 ) 6 112 Other than temporary loss on marketable securities - - 205 - Gain from sales of marketable securities - - - (9 ) Decrease (increase) in accrued severance pay, net (8 ) (9 ) 8 (17 ) Decrease in trade receivables, net 1,280 46 1,632 84 Decrease (increase) in other current assets (60 ) (290 ) 101 474 Increase (decrease) in trade payables 23 (7 ) (16 ) (326 ) Increase (decrease) in deferred revenues (91 ) (115 ) (53 ) 483 Increase (decrease) in accrued expenses and other liabilities (432 ) 291 (408 ) 110 Decrease in other long-term liabilities (2 ) (20 ) (42 ) (59 ) Other     15     15     56     Net cash used in operating activities   (846 )   (1,386 )   (2,729 )   (3,357 )  

Cash flows from investing activities:

  Investment in available-for-sale marketable securities - - 1,210 (10,992 ) Proceeds from sale and redemption of available-for-sale marketable securities - - - 9,727 Decrease in restricted cash held by trustee - - - 141 Proceeds from sale of property and equipment - - - 7 Purchase of property and equipment   (33 )   (19 )   (119 )   (357 )   Net cash (used in) provided by investing activities (33 ) (19 ) 1,091 (1,474 )  

Cash flows from financing activities:

Proceeds from exercise of stock options   -     -     -     75     Net cash provided by financing activities   -     -     -     75     Effect of exchange rate changes on cash (41 ) 229 13 (112 )   Decrease in cash and cash equivalents (920 ) (1,176 ) (1,625 ) (4,868 ) Cash and cash equivalents at the beginning of the period   5,240     8,932     5,945     12,624     Cash and cash equivalents at the end of the period $ 4,320   $ 7,756   $ 4,320   $ 7,756       JACADA LTD. AND ITS SUBSIDIARIES   U.S. dollars in thousands     Supplemental Information: Cash and Investments   September 30, December 31,   2011   2010 Unaudited Audited   Cash and cash equivalents cash: 4,320

5,945

Marketable securities 9,912 12,049 Restricted cash   489   493   Total cash and investments including restricted cash $ 14,721 $ 18,487