Jacada Reports Financial Results for the 2004 Fourth Quarter and Year End

Business Wire, Feb 3, 2005

ATLANTA -- Jacada Ltd. (Nasdaq: JCDA), a leader in software solutions that accelerate business improvement, today reported financial results for the 2004 fourth quarter and year.

Total revenues for the 2004 fourth quarter were $5.0 million, compared to $4.9 million in the 2004 third quarter and $5.1 million in the fourth quarter of 2003. Software and products revenues were $1.8 million in the 2004 fourth quarter, compared to $1.4 million in the 2004 third quarter and $1.8 million in the fourth quarter of 2003. Service and maintenance revenues were $3.2 million in the 2004 fourth quarter, compared to $3.5 million in the 2004 third quarter and $3.3 million in the fourth quarter of 2003.

Gross profit for the 2004 fourth quarter was $3.7 million, or 74% of total revenues, compared to $3.6 million, or 74% of total revenues, in the 2004 third quarter. Operating loss for the 2004 fourth quarter was $1.4 million, compared to $1.2 million in the 2004 third quarter. Net loss for the 2004 fourth quarter was $1.1 million, or $0.06 per share, compared to a net loss of $1.1 million, or $0.06 per share, in the 2004 third quarter. In the fourth quarter of 2003, Jacada reported gross profit of $4.0 million, or 79% of total revenues, an operating loss of $0.8 million, and a net loss of $0.6 million, or $0.03 per share.

For the year ended December 31, 2004, Jacada reported a net loss of $5.6 million, or $0.29 per share, on revenues of $19.8 million, compared to a net loss of $2.1 million, or $0.11 per share, on revenues of $20.6 million in 2003. Gross profit for 2004 was $14.7 million, or 74% of revenues, compared to $16.2 million, or 79% of revenues, in 2003. Software license revenues were $5.8 million in 2004, compared to $8.4 million in 2003. Service and maintenance revenues were $14.0 million in 2004, compared to $12.2 million in 2003.

At the end of the 2004 fourth quarter, Jacada's cash and investments totaled $37.6 million, compared to $38.0 million at the end of the 2004 third quarter and $41.8 million at the end of the 2003 fourth quarter. "The decrease in cash, after several years of stabilization, is due to the launch of the Jacada Fusion product along with its associated costs," said Gideon Hollander, CEO of Jacada. "We are monitoring this decline carefully."

"We continue to be encouraged by the momentum Jacada Fusion is gaining," said Gideon Hollander, CEO of Jacada. "During the fourth quarter, we successfully implemented Jacada Fusion in several contact centers."

"One of the world's largest telecommunications providers has implemented Jacada Fusion to help streamline the customer retention process in one of their contact centers," said Hollander. "We were very pleased that their early results using Jacada Fusion indicated as much as a 50% reduction in call time. With the success of this project, we are encouraged by the potential for follow-on revenues at this very strategic account."

Also in the fourth quarter, Jacada expanded an agreement with West Corporation, one of the largest providers of outsourced contact centers and communication solutions. West is using Jacada Fusion to simplify the way its agents access and manage the data housed in its clients' systems. According to Hollander, West has completed two Jacada Fusion projects and recently started a third.

Jacada Fusion solves a significant productivity and efficiency problem for contact centers, where employees are faced with learning and using multiple, diverse business applications to complete even the simplest task. This complexity results in longer call handling times, expensive training programs, higher employee turnover, and ultimately poor customer satisfaction. Jacada Fusion addresses this dilemma by providing a rapid, non-invasive approach for 'fusing' all the applications at the desktop to deliver a new, simplified process and user interaction.

"We believe contact centers are an excellent market for Jacada Fusion, and we are excited about the interest we are generating there," said Hollander. "As our product mix evolves, we anticipate that sales revenue from Jacada Fusion will gain momentum in 2005, while sales revenue from our traditional products will continue to decline as anticipated. Our challenge will be to minimize the gap between these two trends."

Jacada will hold a teleconference at 10:30 a.m. Eastern time today. To participate in the teleconference, please call toll-free 1-800-230-1951, or 612-332-0802 for international callers, approximately 10 minutes prior to the start time. The teleconference will also be available via Webcast at www.jacada.com (under "Investors") or www.fulldisclosure.com

A telephonic playback of the teleconference will be available for 48 hours beginning at 2 p.m. ET on February 3. To access the replay, dial toll-free 800-475-6701, or for international callers dial 320-365-3844, and provide Access Code 765663.

About Jacada - Jacada solutions help customers rapidly simplify and improve high-value business processes while eliminating the traditional long and expensive systems replacement projects.