Motley Fool Rule Breakers selection Click Commerce (NASDAQ:CKCM) has reported a very nice first quarter, delivering an 80% year-over-year revenue increase and a solid $0.22 per diluted share in GAAP earnings. The earnings were flat over last year, mainly because of the fact that a 41% tax rate has kicked in since Q1 2005. On a fully taxed non-GAAP basis, earnings weighed in at $0.33 per share.
The maker of supply chain-management software nearly doubled its sales to $19.7 million, mainly thanks to the maintenance and hosting operations where Click plays host to the online business management needs of customers like Microsoft (NASDAQ:MSFT) and FedEx (NYSE:FDX). The earnings may not have moved much, but other than appeasing the tax man, Click is spending its money in all the right places.
Research and development doubled to $2.4 million, and sales and marketing landed at $2.1 million -- up 83% from last year. Now, that's how you grow a business, especially a largely unknown technology specialist like this one. Much of that research budget presumably went into supporting the burgeoning RFID tag technology, and Click should be in great shape to take advantage of that revolution as it takes off, being a first mover in this exciting new field.
If you haven't heard of RFID tags before, you should check out my esteemed colleague Rick Munarriz's excellent primer on the subject. It's easy to get excited about supporting a budding technology that greases the huge wheels of Wal-Mart's (NYSE:WMT) ultra-efficient operations. That is exactly what Click Commerce does, providing the Bentonville behemoth with the software needed to keep track of the movement of tags through the supply chain. Home Depot (NYSE:HD) is also on the customer list for that solution, as is the aforementioned FedEx. Once all these huge customers, and the smaller ones following in their footsteps, fully implement their Click management packages, we should really see the cash flowing in.
Click Commerce stock has gotten an 11.8% haircut since the company was recommended to Rule Breakers subscribers last July. Maybe this pick hasn't clicked quite yet, but it's a small and volatile stock, and if you bought in near the 52-week low a couple of months later, you'd be up 60% today.
Such is the life of a tiny Rule Breaker, flying below the radar of Wall Street analysts, small enough that it doesn't take much capital flowing in or out before making a large difference in the stock price. Click Commerce carries a market cap of just $275 million today. With great potential gains also come a need for great patience.
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Microsoft and Home Depot are Motley Fool Inside Value selections, while FedEx is a Motley Fool Stock Advisor pick. Little Click certainly travels in great company. Check out our suite of newsletters with a 30-day free test-drive.
Anders Bylund does not own shares in any company mentioned, despite the great lineup today. The Fool has a disclosure policy .
