Written by: Aaron Katsman | October 31, 2007
Aaron Katsman
www.IsraelNewsletter.com
Clicksoftware(CKSW), the leading provider of mobile workforce management and service optimization solutions, reported earnings this morning. For Q3 ‘07, 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.
Gross profit increased 16% to $6 million, compared to $5.1 million in Q3 ‘06. 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 stock is trading down about 10% as it appeared that it was priced for a blowout quarter. Historically, it pays to buy Clicksoftware, when it gets hammered. The business is showing strong growth, and keep in mind this is a market in its’ infancy.
Commenting on the results, Dr. Moshe BenBassat CEO, said,”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,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.”
With ‘08 looking good this makes for a nice way to make some money. Buy Clicksoftware on weakness.
Please see our Disclaimer HERE.
Disclosure: Author has a position in CKSW as of 10/31/07.
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Aaron Katsman is the lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.
Written by: Zack Miller | October 30, 2007
Zack Miller
IsraelNewsletter.com
As we’ve said repeatedly, Israel has a stable of really interesting microcap/smallcap companies trading under most investors’ radars. Cimatron (CIMT) is one of these plays worth a look.
Sporting a micro-cap of less than $25M, Cimatron provides investors with a profitable microcap with cash on the books, poised to see some nice growth in the future. CIMT competes in the competitive CAD/CAM space for the tooling and manufacturing vertical. As much of manufacturing is pushed offshore, Cimatron continues to see nice growth from foreign markets — so much so, that they’ve purchase two tranches of their Italian distributor, Microsystem, with a call option to purchase the remaining shares.
Cimatron was up almost 15% yesterday (and over 125% on the year) off of the strength of their conference call, held in China.
I thought it’d be useful to highlight some points from the conference call that got the market excited.
- Microsystem had $10.5M in revenue in 2006 and poised to continue to grow profitably. Looks like earnings will become accretive in Q32007.
- Launch of Cimatron 8.0 appears to be really interesting for the company, as it positions them in a new market, the die design market. The company expects organic growth from this new target market in the quarters ahead.
- In terms of geographical sales, CIMT sells 57% in Europe, 23% in the Asia Pacific, 12% in North America and 8% in the rest of the world.
- The company said that they are focused on increasing shareholder value. Look for some more M&A in the future.
Interesting little play deserving doing the work.
Disclosure: Author’s fund has no position in any stock mentioned as of 10/28/2007.
Please see our Disclaimer HERE.
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Zack Miller is the lead equity analyst for America Israel Investment Associates, LLC. and a former equity analyst for a leading multinational hedge fund. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email zack@profile-financial.com
Written by: Zack Miller | October 28, 2007
Zack Miller
IsraelNewsletter.com
It’s great when you read about your own service provider going public. It’s a tremendous feeling of accomplishment as a consumer when you think your well-spent dollars have helped propel your ISP into the big leagues. So I read with excitement today that my ISP, 012 Smile.Communications (SMLC) is gearing up for an IPO this week.
SeekingAlpha has a short write up on the IPO. I love Smile’s service — I love their logo (cure little smiley a la Incredimail (MAIL)). At first blush, I don’t love the IPO. 40% yoy revenue growth off the back of a 60% rise in cost of revenues. Not a particularly jiggy biz in my mind.
In fact, it hearkens to the same discussion we’ve raised before at IsraelNewsletter.com about the interest in investing in native Israeli service providers: where’s the growth? Read Aaron “Buy Everything” Katsman’s write up on Israeli cellular leader: Cellcom (CEL). Aaron’s pretty tough on CEL and explains that growth is going to eventually have to come from international expansion. The same will probably hold true for SMLC.
I’m reserving my smile for now on 012 Smile.Communication’s IPO. Let’s watch how the market receives the new offering.
Disclosure: Author’s fund has no position in any stock mentioned as of 10/28/2007.
Please see our Disclaimer HERE.
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*******************************
Zack Miller is the lead equity analyst for America Israel Investment Associates, LLC. and a former equity analyst for a leading multinational hedge fund. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email zack@profile-financial.com
Written by: Aaron Katsman | October 25, 2007
Aaron Katsman
www.IsraelNewsletter.com
First things first. A big thank you to fellow IsraelNewsletter colleague Doug Goldstein, for taking out the entire IsraelNewsletter team(with spouses), to a really nice restaurant last night, and springing for the check. Giddy up.
Much has been made over the last few days over last weekend’s FT article about Gilat Satellite Networks(GILT) and potential suitors. The article said that the company could fetch upwards of $500 million in a deal. That puts it about 15% above it’s current market value. I would expect a deal to get done and I wouldn’t be surprised if it was for even more than the predicted $500 million.
Gilat’s business is doing well. Revenues for Q2 ‘07 were at a 5-year high. Net income grew strongly, and they continue to sign both extensions and new deals. Yesterday they signed an expansion deal with Russian telecommunications provider North-West Telecom. North-West Telecom is expanding its Gilat SkyEdge satellite network to bring telephony and broadband Internet services to a growing number of remote communities in northwest Russia. The network expansion will serve many more sites in the Murmansk, Karelia, Komi and Vologda regions. Heck, if they do a deal in Kamchatka, they would win in RISK.
The company has rejected offers in the past at lower valuations, and I would expect them to hold out for a higher premium than is currently being mentioned. At $10.90 a share, either through a takeover or growing the business, the stock looks cheap.
Please see our Disclaimer HERE.
Disclosure: Author has no holdings in any stock mentioned.
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Aaron Katsman is the lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.
