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Selectica Announces Earnings for Second Quarter Fiscal 2013

SAN MATEO, CA--(Marketwire - Oct 25, 2012) - Selectica, Inc. ( NASDAQ : SLTC ), provider of software that accelerates sales cycles and streamlines contract processes, today announced financial results for its second quarter of fiscal 2013, ended September 30, 2012.

"I'm pleased with our accelerated revenue growth; we are now outpacing the market," said Jason Stern, President and CEO at Selectica. "And while revenue was up, we were also able to keep expenses flat for the third successive quarter, leading to a non-GAAP net loss of less than $250,000."

The company's net loss on a GAAP basis was $0.9 million in Q2 FY2013, down 57% compared to Q2 FY2012.

Financial highlights

Selectica delivered the following financial results for the second quarter of fiscal 2013:

  • Recurring revenue: Selectica grew recurring revenue from $2.2 million in Q2 FY 2012 to $3.0 million in Q2 FY2013, a year-over-year increase of 36%. Recurring revenue in Q1 FY2013 was $2.6 million.

  • Billings: Billings for Q2 FY2013 were $3.8 million, compared to $3.0 million in Q2 FY2012, a 27% increase year-over-year. Billings were $4.1 million in Q1 FY2013. The company defines billings, a non-GAAP financial measure, as revenue recognized during the period plus the change in deferred revenue from the beginning to the end of the period. Please refer to the financial tables below for a reconciliation of this non-GAAP measure to GAAP.

  • Deferred revenue: In Q2 FY2013, the company had deferred revenue of $5.8 million, a 76% year-over-year increase over Q2 FY2012, when deferred revenue was $3.3 million. In Q1 FY2013, deferred revenue was $6.7 million.

Business highlights
Business highlights from Q2 FY2013 include:

  • Seventh patent issued for Selectica sales configuration technology: Selectica announced its newest patent for the declarative constraint engine that powers Selectica Guided Selling and enables customers to use dynamic, rather than static, components to configure products and services with a large number of options and possible solutions.
  • Recognized as an important participant in cloud computing: In JMP Securities' September 24, 2012, report on salesforce.com, titled "CRM: JMP Visits 10 Growth Companies at Dreamforce," Selectica was featured as one of the growth companies in the salesforce.com partner ecosystem.
  • New version of Selectica Contract Lifecycle Management (CLM): In July 2012, Selectica released the latest version of its flagship contract lifecycle management (CLM) product, featuring Contract Blueprints, a set of pre-configured, best-practice contract types that enable users to get started with contract management quickly. The release also offered improvements in the product's Microsoft Word integration, eSignature, and audit trail capabilities.
  • Introduction of Selectica Guided Selling for Salesforce on the Salesforce AppExchange: Also in July, Selectica announced availability of its configure-price-quote (CPQ) offering Selectica Guided Selling for Salesforce on the Salesforce AppExchange. The application brings the proven benefits of Selectica sales configuration technology to the cloud and makes them available to organizations with revenues of $100 million to several billion dollars.
  • Bronze Stevie award winner: Selectica Guided Selling received a Bronze Stevie Award in the "Best New Software Product or Service of the Year, Cloud Application or Service" category of the 10th Annual American Business Awards.

Additional results

Total revenues for Q2 FY2013 were $4.7 million, compared to $3.5 million for Q2 FY2012, a year-over-year increase of 34%. Total revenues were $4.2 million in Q1 FY2013.

Net loss for Q2 FY2013 was $0.9 million, or $(0.32) per share, compared to a net loss of $2.1 million, or $(0.74) per share in Q2 FY2012, and a net loss of $0.7 million, or $(0.25) per share, in Q1 FY2013.

Complete financial results for Q2 FY2013 can be found in the attached financial tables.

About Selectica, Inc.
Selectica, Inc. ( NASDAQ : SLTC ) develops innovative software that the world's most successful companies rely on to improve the effectiveness of their sales and contracting processes. Our guided selling, sales configuration, and contract lifecycle management solutions support the Global 2000 and growing mid-size firms in closing billions of dollars' worth of business each year. Our patented technology, delivered through the cloud, makes it easy for customers in industries like high-tech, telecommunications, manufacturing, healthcare, financial services, and government contracting to overcome product and channel complexity, increase deal value, and accelerate time to revenue.

For more information:

Non-GAAP financial measures
Selectica provides quarterly and annual financial statements that are prepared in accordance with generally accepted accounting principles (GAAP). To help understand the company's past financial performance and future results, the company is providing non-GAAP financial measures to supplement the financial results that it provides in accordance with GAAP. The method the company uses to produce non-GAAP financial results is not computed according to GAAP and may differ from the methods used by other companies.

Forward-looking statements
Certain statements in this release and elsewhere by Selectica are forward-looking statements within the meaning of the federal securities laws and the Private Securities Litigation Reform Act of 1995. Such statements may include, without limitation, statements regarding business outlook, assessment of market conditions, anticipated financial and operating results, strategies, future plans, contingencies and contemplated transactions of the company. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors which may cause or contribute to actual results of company operations, or the performance or achievements of the company or industry results, to differ materially from those expressed, or implied by the forward-looking statements. In addition to any such risks, uncertainties and other factors discussed elsewhere herein, risks, uncertainties and other factors that could cause or contribute to actual results differing materially from those expressed or implied for the forward-looking statements include, but are not limited to the on-going global recession; fluctuations in demand for Selectica's products and services; government policies and regulations, including, but not limited to those affecting the company's industry; and risks related to the company's past stock granting policies and related restatement of financial statements. Selectica undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. Additional risk factors concerning the company can be found in the company's most recent Form 10-K, filed by the company with the Securities and Exchange Commission.

   
   
   
SELECTICA, INC.  
Condensed Consolidated Statements of Operations  
(In thousands, except per share amounts)  
(Unaudited)  
   
   
  Three Months Ended     Six Months Ended  
  September 30,     September 30,     September 30,     September 30,  
  2012     2011     2012     2011  
                               
Revenues:                              
  Recurring revenues $ 2,960     $ 2,162     $ 5,596     $ 4,335  
  Non-recurring revenues   1,695       1,370       3,235       2,950  
    Total revenues   4,655       3,532       8,831       7,285  
                               
Cost of revenues:                              
  Recurring cost of revenues   407       257       738       512  
  Non-recurring cost of revenues   1,347       1,278       2,574       2,316  
    Total cost of revenues   1,754       1,535       3,312       2,828  
                               
Gross profit:                              
  Recurring gross profit   2,553       1,905       4,858       3,823  
  Non-recurring gross profit   348       92       661       634  
    Total gross profit   2,901       1,997       5,519       4,457  
                               
Operating expenses:                              
  Research and development   861       810       1,792       1,706  
  Sales and marketing   1,726       1,415       3,245       2,594  
  General and administrative   698       843       1,568       1,774  
  Fees related to comprehensive settlement agreement   500       500       500       500  
    Total operating expenses   3,785       3,568       7,105       6,574  
                               
Loss from operations   (884 )     (1,571 )     (1,586 )     (2,117 )
                               
Loss on early extinguishment of note payable   -       470       -       470  
Interest and other income (expense), net   (5 )     (38 )     (12 )     (88 )
                               
Net loss $ (889 )   $ (2,079 )   $ (1,598 )   $ (2,675 )
                               
Basic and diluted net loss per share $ (0.32 )   $ (0.74 )   $ (0.57 )   $ (0.95 )
                               
Reconciliation to non-GAAP net loss:                              
Net loss $ (889 )   $ (2,079 )   $ (1,598 )   $ (2,675 )
Stock-based compensation expense $ 153     $ 179     $ 361     $ 288  
Loss on early extinguishment of note payable   -       470       -       470  
Fees related to comprehensive settlement agreement   500       500       500       500  
Non-GAAP net
loss
$ (236 )   $ (930 )   $ (737 )   $ (1,417 )
                               
Non-GAAP basic and diluted net loss per share $ (0.08 )   $ (0.33 )   $ (0.26 )   $ (0.50 )
                               
                               
Weighted average shares outstanding for basic and diluted net loss per share   2,818       2,820       2,815       2,826  
                               
                               
                               
SELECTICA, INC.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
 
 
    September 30,   March 31,
    2012   2012
             
ASSETS            
Current assets            
  Cash and cash equivalents   $ 12,052   $ 15,877
  Short-term investments     -     199
  Accounts receivable     3,682     2,446
  Prepaid expenses and other current assets     512     531
    Total current assets     16,246     19,053
             
Property and equipment, net     368     362
Other assets     39     39
    Total assets   $ 16,653   $ 19,454
             
             
LIABILITIES AND STOCKHOLDERS' EQUITY            
Current liabilities            
  Credit facility   $ 6,000   $ 6,000
  Accounts payable     876     395
  Accrued payroll and related liabilities     739     1,771
  Other accrued liabilities     87     88
  Deferred revenue     4,811     5,394
    Total current liabilities     12,513     13,648
  Long-term deferred revenue     964     1,327
  Other long-term liabilities     33     41
    Total liabilities     13,510     15,016
             
Stockholders' equity     3,143     4,438
    Total liabilities and stockholders' equity   $ 16,653   $ 19,454
             
             
             
SELECTICA, INC.  
Condensed Consolidated Statements of Cash Flows  
(In thousands)  
(Unaudited)  
   
   
    Six Months Ended  
    September 30,     September 30,  
    2012     2011  
                 
Operating activities                
Net loss   $ (1,598 )   $ (2,675 )
Adjustments to reconcile net loss to net cash used in operating activities:                
Depreciation     101       139  
Loss on disposition of property and equipment     -       1  
Stock-based compensation expense     361       288  
Changes in assets and liabilities:                
  Accounts receivable (net)     (1,236 )     987  
  Prepaid expenses and other current assets     19       50  
  Other assets     -       (39 )
  Accounts payable     481       (315 )
  Accrued payroll and related liabilities     (1,031 )     321  
  Other accrued liabilities and long term liabilities     (9 )     (243 )
  Deferred revenues     (946 )     (793 )
Net cash used in operating activities   $ (3,858 )   $ (2,279 )
                 
Investing activities                
  Purchase of capital assets     (107 )     (98 )
  Proceeds from maturities of short-term investments     199       (1,398 )
Net cash provided by (used in) investing activities   $ 92     $ (1,496 )
                 
Financing activities                
  Payments on note payable to Versata     -       (4,268 )
  Purchase of treasury shares     -       (472 )
  Borrowings under credit facility     -       4,713  
  Repurchases of common stock, net of issuance     (59 )     (7 )
Net cash used in financing activities   $ (59 )   $ (34 )
                 
Net decrease in cash and cash equivalents     (3,825 )     (3,809 )
Cash and cash equivalents at beginning of the period     15,877       16,822  
Cash and cash equivalents at end of the period   $ 12,052     $ 13,013  
                 
                 
                 
SELECTICA, INC.  
Billings Reconciliation  
(In thousands)  
(Unaudited)  
   
   
    Three Months Ended     Six Months Ended  
    September 30,     September 30,     September 30,     September 30,  
    2012     2011     2012     2011  
                                 
Total revenues   $ 4,655     $ 3,532     $ 8,831     $ 7,285  
Deferred revenue:                                
End of period     5,775       3,337       5,775       3,337  
Beginning of period     6,664       3,857       6,721       4,320  
Change in deferred revenue     (889 )     (520 )     (946 )     (983 )
Total billings (total revenues plus the change in deferred revenue)   $ 3,766     $ 3,012     $ 7,885     $ 6,302