Chordiant Software Reports Financial Results for 2Q Fiscal Year 2009 Ended March 31

May 11, 2009 (Close-Up Media via COMTEX) -- CHRDD | Quote | Chart | News | PowerRating -- Chordiant Software, Inc., a provider of Customer Experience (Cx) software and services, announced its financial results for the second quarter of fiscal year 2009 ended March 31, and filed its Quarterly Report on Form 10-Q with the Securities and Exchange Commission.

"I am pleased to announce that we posted our second consecutive quarter of positive operating cash flow despite challenging market conditions. Our total bookings fell short of our expectations in the second quarter due to the slippage of a multi-million dollar transaction which we are pleased to announce has subsequently closed," said Steve Springsteel, Chairman, President and Chief Executive Officer. "We are cautiously optimistic that this recent sale signals that customers are willing to begin investing again in those products which demonstrate strong ROI characteristics."

Second Quarter Fiscal Year 2009 Financial Results

In a release on May 7, the company noted that total revenues for the second quarter of fiscal year 2009 were $18.0 million, down from $23.4 million in the prior quarter and down from $24.7 million for the second quarter of fiscal year 2008.

License revenues for the second quarter of fiscal year 2009 were $4.3 million, down from the $7.9 million reported in the prior quarter and $4.8 million in the second quarter of fiscal year 2008. Service revenues for the second quarter of fiscal year 2009 were $13.7 million, compared to $15.4 million in the prior quarter and $19.9 million reported for the same period of fiscal year 2008.

Chordiant reported a GAAP net loss of $3.5 million, or GAAP loss per basic share of $0.12, for the second quarter of fiscal year 2009 compared to a GAAP net loss of $1.2 million, or GAAP loss per basic share of $0.04, for the same period of fiscal year 2008. Included in the GAAP results for the second quarter of fiscal 2009 was a $0.7 million non-cash deferred tax expense.

Chordiant reported a second quarter fiscal year 2009 non-GAAP net loss of $1.6 million, or a non-GAAP loss per basic share of $0.05, compared to non-GAAP net income of $0.1 million, or non-GAAP earnings per fully-diluted share of $0.00, for the second quarter of fiscal year 2008. Non-GAAP net income and non-GAAP net loss exclude stock-based compensation expense, the amortization of purchased intangible assets, and the non-cash tax expense relating to net operating loss carryforwards.

Deferred Revenue

Deferred revenue at the end of the second quarter of fiscal year 2009 was $36.4 million, a decrease of $6.7 million as compared to the ending balance of $43.1 million at December 31, 2008. Deferred revenue does not include future amounts due under the Vodafone transaction that was closed in the first quarter of fiscal year 2008.

Bookings

Bookings were $8.4 million for the second quarter of fiscal year 2009, compared to $13.6 million in the prior quarter and $20.4 million in the same period last year.

Backlog of Business

At March 31, Chordiant's backlog, which includes deferred revenue, decreased to $44.6 million from $55.6 million at the end of the prior quarter. The primary reasons for the decrease during the period were 1) the adverse impact of foreign exchange rates on our non-U.S. dollar denominated backlog; 2) the recognition of license revenues associated with Vodafone and license revenue taken on previously signed contracts; 3) the recognition of service revenue for hourly work completed; and 4) the cancelation of unutilized Statements of Work during the quarter. Backlog includes $4.2 million of remaining license commitments related to the Vodafone transaction that was closed in the first quarter of fiscal year 2008.

Cash Position

Chordiant's cash, cash equivalents, restricted cash and marketable securities position decreased by approximately $0.5 million during the quarter to $53.4 million at March 31, as compared to $53.9 million at December 31, 2008. The modest decline in the cash balance resulted from the impact of translating the Company's international currency positions into U.S. dollars. On a constant currency basis using exchange rates as of December 31, 2008, Chordiant's cash balance would have increased to approximately $54.7 million.

Outlook for Fiscal Year 2009

Although the Company is not providing specific bookings, revenue, cash flow or earnings per share guidance, it is providing the following basic parameters for its financial performance in the second half of fiscal 2009. We expect:

- to recognize approximately $4.2 million in total license revenues in the third quarter of fiscal year 2009 associated with the remaining contractual commitments under the Vodafone transaction that was closed in the first quarter of fiscal year 2008;

- to recognize a total of $1.0 to $2.0 million dollars of the remaining $6.0 million in license revenue backlog, exclusive of Vodafone, over the next two quarters of fiscal year 2009;

- to be non-GAAP profitable in the third quarter of fiscal year 2009, though the amount and timing of new license transactions are difficult to predict;

- to continue to renew our existing support and maintenance contracts at rates in line with our historical experience. For the trailing 12-month period ended March 31, support and maintenance revenues averaged approximately $9.5 million per quarter; and

- our average quarterly professional services revenues for the remainder of fiscal year 2009 to decline from the $5.2 million that was reported in the second quarter of fiscal year 2009.

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