Clicksoftware Reports Financial Results for the Third Quarter of 2007

BURLINGTON, Massachusetts, October 31 /PRNewswire-FirstCall/ -- ClickSoftware Technologies Ltd. (NasdaqCM: CKSW), the leading provider of mobile workforce management and service optimization solutions, today announced the financial results for the third quarter ended September 30, 2007.

For the third quarter ended September 30, 2007, total revenues were $10.1 million, an increase of 16% compared with $8.7 million for the parallel quarter of 2006, and a decrease of 4% compared with the previous quarter. Net income for the period was $0.7 million, or $0.02 per share, compared with $0.8 million, or $0.03 per share, for the parallel quarter of 2006. Excluding expenses for share-based compensation related to the adoption of SFAS-123R, net income for the third quarter was $0.9 million, or $0.03 per share. Shares outstanding for the quarter on a fully diluted basis were 30,409,632, up 9% compared to the parallel quarter of 2006.

Software license revenues for the third quarter of 2007 were $4.3 million, an increase of 33% compared to the third quarter of 2006. Services revenues for the period were $5.8 million, an increase of 6% compared to the third quarter of 2006.

Gross profit for the quarter increased 16% to $6 million, compared to $5.1 million in the third quarter of 2006. Gross margin for the period remained stable at 59%.

Cash, cash equivalents and short and long-term investments increased to $21.3 million, up $1.1 million from $20.2 million at the end of the second quarter of 2007. Net cash provided from operating activities during the period was $0.5 million.

"The third quarter was another period of excellent execution as reflected in strong year-over-year growth in revenues, profits and cash flow, as well as important strategic progress," said Dr. Moshe BenBassat, ClickSoftware's Chairman and CEO. "Our revenues are down slightly from the second quarter, reflecting the specific timing of several multi-million dollar deals. One of these deals, with a major telecommunications company in India, has already closed in the fourth quarter".

Dr. BenBassat continued, "We are very excited about the momentum that continues to build in our business. We are in the final stage of signing a deal with a large utility in North America. We have also been selected as the winner in another large, highly competitive deal, and are currently in final negotiations. Internationally, we have been selected by an important customer in France, and are deploying a pilot solution for one of Japan's largest utility companies. As a result, not only we are able to confirm our full-year revenue guidance, but we are also building a nice book of orders that will make us start 2008 with comfortable backlog of contractually committed orders. On the product front, we have just released the IMRS package, our exciting Microsoft-integration-ready offering for the mid-market, which we believe will prove especially attractive to the Microsoft Partners community. In addition, we have formed a partnership with ServiceBench, a move designed to open new opportunities in the service Market".

Outlook

Based on the reported activity and the current pipeline, management maintains the annual guidance provided in the second quarter earnings release: annual revenues ranging from $41-$42 million, an increase of 26.5%-29.5% compared to 2006 revenues of $32.4 million.

Investors Conference Call

ClickSoftware will host a conference call today at 9:30 a.m. ET to discuss its financial results and other matters discussed in this press release, as well as answer questions from the investment community. To participate, please call [phone] and ask for the ClickSoftware conference call. International participants, please call [phone]. The call will be available live on the internet (in listen mode only) at http://www.clicksoftware.com/. A replay of this call will be available on the ClickSoftware website, or by calling [phone] (international callers can dial +[phone]), ID Code: 9343639.

About ClickSoftware

ClickSoftware is the leading provider of mobile workforce management and service optimization solutions that create business value for service operations through higher levels of productivity, customer satisfaction and cost effectiveness. Combining educational, implementation and support services with best practices and its industry leading solutions, ClickSoftware drives service decision making across all levels of the organization. From proactive customer demand forecasting and capacity planning to real-time decision-making, incorporating scheduling, mobility and location based services, ClickSoftware helps service organizations get the most out of their resources. With over 100 customers across a variety of industries and geographies, and strong partnerships with leading platform and system integration partners - ClickSoftware is uniquely positioned to deliver superb business performance to any organization. The company is headquartered in Burlington, MA and Israel, with offices in Europe, and Asia Pacific.

For more information about ClickSoftware, please call [phone] or [phone], or visit http://www.clicksoftware.com/.

This press release contains express or implied forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. These forward-looking statements include, but are not limited to, those regarding future results of operations, visibility into future periods, continued growth and rate of growth, and expectations regarding future closing of contracts and receipt of orders, recognition of revenues and deferred revenues. Such "forward-looking statements" involve known and unknown risks, uncertainties and other factors, which may cause actual results or performance to be materially different from those projected. Achievement of these results by ClickSoftware and its subsidiaries may be affected by many factors, including among others, the following: risks and uncertainties regarding the general economic outlook; the length of or change in the Company's sales cycle; the Company's ability to close sales to potential customers in a timely manner; the Company's ability to penetrate new markets; the Company's ability to maintain or increase relationships with strategic partners; timing of revenue recognition; and the Company's ability to maintain or increase its sales pipeline. The forward-looking statements contained in this press release are subject to other risks and uncertainties, including those discussed in ClickSoftware's annual report on Form 20F for the year ended December 31, 2006 and subsequent filings with the Securities and Exchange Commission. The Company is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.

Note: Financial Schedules Attached ClickSoftware Technologies Ltd. CONSOLIDATED BALANCE SHEETS (In thousands, except share data) September 30 December 31 --------------------------- 2007 2006 ASSETS --------------------------- CURRENT ASSETS Cash and cash equivalents $ 7,470 $ 13,385 Short-term investments 12,910 5,918 Trade receivables, net 8,788 6,465 Other receivables and prepaid expenses 1,288 953 --------------------------- Total current assets 30,456 26,721 --------------------------- FIXED ASSETS Cost 2,648 1,692 Less - accumulated depreciation 1,309 888 --------------------------- Total fixed assets 1,339 804 --------------------------- Long-term investments 925 451 Severance pay deposits 1,075 996 --------------------------- Total Assets $ 33,795 $ 28,972 --------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and accrued expenses $ 6,796 $ 5,945 Deferred revenues 6,366 5,965 --------------------------- Total current liabilities 13,162 11,910 --------------------------- LONG TERM LIABILITIES Accrued severance pay 2,249 2,031 Deferred revenues - Long term 2,261 2,490 Total long-term --------------------------- liabilities 4,510 4,521 --------------------------- Total liabilities 17,672 16,431 --------------------------- SHAREHOLDERS' EQUITY Ordinary shares of NIS 0.02 par value 115 113 Additional paid-in capital 73,577 72,205 Deferred Stock Compensation - (63) Accumulated deficit (57,526) (59,671) Treasury stock, at cost: 39,000 shares (43) (43) Total shareholders' --------------------------- equity 16,123 12,541 --------------------------- Total liability and shareholders' equity $ 33,795 $ 28,972 --------------------------- ClickSoftware Technologies Ltd. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share and per share amounts) Three Months Ended September 30, 2007 September 30, 2006 ------------------ ------------------ % of % of $ Revenues $ Revenues ------------------ ------------------ Revenues: Software license $ 4,293 43% $ 3,224 37% Services 5,762 57% 5,456 63% ------------------ ------------------ Total revenues 10,055 100% 8,680 100% ------------------ ------------------ Cost of revenues: Software license 712 7% 668 8% Services 3,386 34% 2,870 33% ------------------ ------------------ Total cost of revenues 4,098 41% 3,538 41% ------------------ ------------------ Gross profit 5,957 59% 5,142 59% ------------------ ------------------ Operating expenses: Research and development costs, net 1,496 15% 1,037 12% Selling and Marketing expenses 3,222 32% 2,472 28% General and administrative expenses 1,039 10% 959 11% ------------------ ------------------ Total operating expenses 5,757 57% 4,468 51% ------------------ ------------------ Income from operations 200 2% 674 8% Other income 216 2% - - Interest, net 249 2% 123 1% ------------------ ------------------ Net income before taxes 665 6% 797 9% Taxes on income (60) 1% - - ----------------------------------------- Net income $ 725 7% $ 797 9% ----------------------------------------- Net income per ordinary share: Basic $ 0.03 $ 0.03 ------------------ ------------------ Diluted $ 0.02 $ 0.03 ------------------ ------------------ Shares used in computing basic Net income per share 28,352,213 27,774,196 ------------------ ------------------- Shares used in computing diluted Net income per share 30,409,632 27,774,196 ------------------ ------------------- ClickSoftware Technologies Ltd. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share and per share amounts) Nine Months Ended September 30, 2007 September 30, 2006 ------------------- ------------------ % of % of $ Revenues $ Revenues ------------------- ------------------ Revenues: Software license $ 12,418 42% $ 8,703 38% Services 17,187 58% 14,406 62% ------------------- ------------------ Total revenues 29,605 100% 23,109 100% ------------------- ------------------ Cost of revenues: Software license 1,929 7% 1,523 7% Services 9,669 33% 7,600 33% ------------------- ------------------ Total cost of revenues 11,598 40% 9,123 40% ------------------- ------------------ Gross profit 18,007 60% 13,986 60% ------------------- ------------------ Operating expenses: Research and development costs, net 4,149 14% 2,965 13% Selling and Marketing expenses 9,591 32% 7,471 32% General and administrative expenses 3,231 11% 2,797 12% ------------------- ------------------ Total operating expenses 16,971 57% 13,233 57% ------------------- ------------------ Income from operations 1,036 3% 753 3% Other income 404 1% - - Interest, net 693 2% 326 1% ----------------------------------------- Net income before taxes 2,133 6% 1,079 5% Taxes on income (12) 0% - - ----------------------------------------- Net income $ 2,145 7% $ 1,079 5% ----------------------------------------- Net income per ordinary share: Basic $ 0.08 $ 0.04 ------------------- ------------------ Diluted $ 0.07 $ 0.04 ------------------- ------------------ Shares used in computing basic Net income per share 28,190,978 27,708,283 ------------------- ------------------ Shares used in computing diluted Net income per share 29,490,538 27,708,283 ------------------- ------------------ Use of Non-GAAP financial results

In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles (GAAP), the Company's earnings release contains non-GAAP financial measures that exclude the effects of share-based compensation and the requirements of SFAS No. 123R, "Share-based Payment" ("123R"). The non-GAAP financial measures used by management and disclosed by the Company exclude the income statement effects of all forms of share-based compensation .The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated.

ClickSoftware Technologies Ltd. SUPPLEMENTAL RECONCILIATIONS OF GAAP TO NON-GAAP RESULTS (In thousands, except share and per share amounts) Three Months Ended September 30, September 30, 2007 2006 ------------------ ------------------ % of % of $ Revenues $ Revenues ------------------ ------------------ GAAP Net income: $ 725 7% $ 797 9% Adjustment of share-based compensation within: Cost of Services 30 22 Research and development costs, net 27 18 Selling and Marketing expenses 46 30 General and administrative expenses 97 87 ------------------ ------------------ Net income excluding share-based compensation $ 925 9% $ 954 11% ------------------ ------------------ GAAP Net income per ordinary share: Basic $ 0.03 $ 0.03 ------------------ ------------------ Diluted $ 0.02 $ 0.03 ------------------ ------------------ Net income per ordinary share excluding share-based compensation: ------------------ ------------------ Basic $ 0.03 $ 0.03 ------------------ ------------------ Diluted $ 0.03 $ 0.03 ------------------ ------------------ ClickSoftware Technologies Ltd. SUPPLEMENTAL RECONCILIATIONS OF GAAP TO NON-GAAP RESULTS (In thousands, except share and per share amounts) Nine Months Ended September 30, September 30, 2007 2006 ------------------ ------------------ % of % of $ Revenues $ Revenues ------------------ ------------------ GAAP Net income: $ 2,145 7% $ 1,079 5% Adjustment of share-based compensation within: Cost of Services 73 46 Research and development costs, net 62 43 Selling and Marketing expenses 109 52 General and administrative expenses 258 227 ------------------ ------------------ Net income excluding share-based compensation $ 2,647 9% $ 1,447 6% ------------------ ------------------ GAAP Net income per ordinary share: Basic $ 0.08 $ 0.04 ------------------ ------------------ Diluted $ 0.07 $ 0.04 ------------------ ------------------ Net income per ordinary share excluding share-based compensation: ------------------ ------------------ Basic $ 0.09 $ 0.05 ------------------ ------------------ Diluted $ 0.09 $ 0.05 ------------------ ------------------ Contacts: Shmuel Arvatz Adam J. Rosen, Chief Financial Officer [phone], [phone],[e-mail]