Jacada Reports First Quarter 2011 Results

Jacada Ltd. (Nasdaq: JCDA), a leading provider of customer service experience and process optimization solutions, today reported financial results for the first quarter ending March 31, 2011 and the adjustment of its 2010 unaudited financial results.

First Quarter 2011 Financial Results

For the first quarter of 2011, total revenues were $3.0 million compared to $5.0 million in the first quarter of 2010. First quarter revenues were impacted by weak bookings during the fourth quarter of 2010.

Software revenues for the 2011 first quarter were $247 thousand compared to $581 thousand during the 2010 first quarter. Services revenues were $2.1 million in the 2011 first quarter and $3.9 million in the 2010 first quarter. Maintenance revenues were $657 thousand and $530 thousand in the 2011 and 2010 first quarters, respectively.

Gross margin during the first quarter of 2011 was 22%, compared to gross margins of 37% in the first quarter of 2010.

Total operating expenses for the 2011 and 2010 first quarters were $2.5 million and $3.7 million, respectively, reflecting the savings of the cost reduction plans implemented during late 2010.

The 2011 first quarter net loss was $1.8 million or $0.44 per share compared to a net loss of $1.8 million or $0.44 per share in the first quarter of 2010.

At the end of the 2011 first quarter, cash and investments were $17.8 million, compared to $18.5 million at December 31, 2010.

"While our first quarter 2011 results were disappointing, we have seen positive initiatives throughout the company, including the continued development of the next generation versions of Jacada WorkSpace and Jacada WinFuse and a growing interest in our Jacada JumpStart program,” commented Tom Clear, chief executive officer of Jacada.

Adjustment of 2010 Unaudited Financial Results

Events subsequent to February 10, 2011, the date of our press release announcing our 2010 annual financial results, have led to a change in estimates associated with the percentage of completion used to calculate revenue on a certain project, the company’s goodwill valuation and the classification of the loss on one of the company’s marketable securities to other-than-temporary. These subsequent events provided additional evidence about conditions that existed as of the balance sheet date of December 31, 2010 and are thus "recognized” subsequent events, requiring adjustments to the December 31, 2010 unaudited financial results as previously reported in the Company's February 10, 2011 press release.

The difficult delivery of a single large project required us to invest additional resources during the first quarter of 2011. As a result of these additional hours invested subsequent to the balance sheet date, the estimate of the percentage of completion we had used to calculate revenue for this project as of December 31, 2010 had to be adjusted. In addition, a change in the estimate of our fair value required us to apply a second phase goodwill impairment test, the results of which indicated that our goodwill was fully impaired as of December 31, 2010. The entire goodwill balance of $3.1 million was therefore written off as of December 31, 2010.

As a result of these adjustments, our 2010 financial results reflect a decrease in revenue of $0.7 million and an increase in net loss of $3.8 million. Thus, our revenues and net loss for calendar year 2010 will be revised to $17.1 million and $10.6 million, or $2.55 per share, respectively. The revenues and net loss for calendar year 2010 reported in the unaudited financial results announced on February 10, 2011 were $17.9 million and $6.7 million, or $1.60 per share, respectively.

Conference Call Details

Management will hold a conference call to discuss the first quarter 2011 financial results at 10:30am ET on June 14, 2011. To participate in the teleconference, please call toll-free 888-679-8034 or 617-213-4847 for international callers, and provide passcode 57583756 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=P373LJTYD. A (live audio) webcast will also be available over the Internet at www.jacada.com (under "About Us" then "Investors") or www.earnings.com.

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 is a trademark of Jacada Ltd. All other brands or product names are trademarks of their respective owners.