SOURCE: Selectica

Selectica

June 10, 2015 16:42 ET

Selectica Announces 4th Quarter and Fiscal-Year 2015 Financial Results

Execution of Strategic Plan on Track

SAN MATEO, CA--(Marketwired - Jun 10, 2015) - Selectica, Inc. (NASDAQ: SLTC), a leading provider of supply management and enterprise contract lifecycle management applications from source to pay, and configuration solutions today announced financial results for its fourth quarter and fiscal year ended March 31, 2015.

FY2015 Financial Highlights:

  • GAAP revenue was $20.9 million in FY 2015, compared to $15.8MM in FY 2014, an increase of 32%. Non-GAAP revenue increased 41% from $15.8 million to $22.3 million. The difference between GAAP and Non-GAAP revenue is due to the Iasta purchase accounting deferred revenue adjustment.

  • GAAP gross profit percentage decreased from 46% in FY2014 to 41% in FY2015. Non-GAAP gross profit percentage increased from 46% in FY2014 to 47% in FY2015. The difference between GAAP and Non-GAAP gross profit is due to the Iasta purchase accounting deferred revenue adjustment and the amortization of intangibles.

  • Deferred revenues increased 47% from $5.7 million in FY2014 to $8.4 million in FY2015.

  • Billings increased 73% from $13.6 million in FY2014 to $23.6 million in FY2015. Billings, a non-GAAP measure, are defined as revenues plus the change in deferred revenues.

Q4 and FY2015 Financial Measures:

                                 
Q4'15 GAAP Financial Measures   Q4   Q3   Q4   Change   Change           Change
  (in thousands, except per share amounts)                                
    FY 2015   FY 2015   FY 2014   Q/Q   Y/Y   FY 2015   FY 2014   Y/Y
                                 
Revenue   $ 5,929   $ 5,984   $ 3,541     (1%)     67%   $ 20,877   $ 15,789     32%
Gross profit   $ 2,234   $ 3,082   $ 969     (28%)     131%   $ 8,574   $ 7,228     19%
Gross profit percentage     38%     52%     27%     (14 pts)     11 pts     41%     46%     (5 pts)
Net Loss   $ (4,253)   $ (3,843)   $ (3,168)     11%     34%   $ (13,746)   $ (8,179)     68%
EPS   $ (0.53)   $ (0.49)   $ (1.89)   $ (0.04)   $ 1.36   $ (1.89)   $ (2.13)   $ 0.24
                                                 
                                                 
Non-GAAP Financial Measures   Q4   Q3   Q4   Change   Change           Change
  (in thousands, except per share amounts)                                
    FY 2015   FY 2015   FY 2014   Q/Q   Y/Y   FY 2015   FY 2014   Y/Y
                                                 
Revenue   $ 6,085   $ 6,316   $ 3,541     (4%)     72%   $ 22,328   $ 15,789     41%
Gross profit   $ 2,392   $ 3,573   $ (969)     (33%)     (347%)   $ 10,025   $ 7,228     39%
Gross profit percentage     39%     57%     (27%)     (18 pts)     66 pts     45%     46%     (1 pts)
Net Loss   $ (1,790)   $ (2,482)   $ (2,940)     (28%)     (39%)   $ (9,605)   $ (7,785)     23%
EPS   $ (0.22)   $ (0.32)   $ (0.64)   $ 0.10   $ 0.42   $ (1.32)   $ (2.03)   $ 0.71
Billings   $ 6,227   $ 7,209   $ 3,199     (14%)     95%   $ 23,560   $ 13,613     73%
                                                 

"Since joining Selectica eighteen months ago, the executive team architected a strategic plan to become a leader in Supply Management and Enterprise Contract Lifecycle Management. In fiscal year 2015, this strategy has come to fruition with the integration of Iasta into Selectica and the pending closure of the b-pack acquisition," said Patrick Stakenas, CEO and President of Selectica. "This is a tremendously exciting time for me to lead Selectica as delivery on our strategic roadmap is on track, the re-launch of our sales organization is complete, and the business is now positioned to deliver results. I'm very optimistic as I look ahead at our pipeline, full suite of products and high performing team."

FY 2015 Business Highlights:

  • In Q2 FY 2015 Completed acquisition and Integration of Iasta, an industry leading SaaS-based sourcing and spend management solutions company focused on providing strategic sourcing, business intelligence, spend analysis, supplier management, and contract management technology.

  • In Q2 FY 2015, Selectica hosted its first Contract Lifecycle Management and Supply Management Customer User Conference. The successful event spanned over three days and included 60+ attendees across more than 35 companies.

  • In Q3 FY 2015, Selectica launched SmartSource Cloud, the Company's latest solution that intelligently blends eSourcing, Supplier Information Management and Spend Analytics. Its powerful analytic information is integrated directly into the sourcing application that ensures maximum user adoption driving better decision-making and impacts to an enterprise's bottom line. SmartSource Cloud was designed and architected from the ground up to be the best strategic sourcing product on the market.

  • In Q4 of FY 2015, announced agreement to acquire b-pack, a global leader in purchase-to-pay software and services. The acquisition is expected to close in early Q2 FY 2016, and provides complementary solutions to Selectica's current offerings and go-to-market strategy to provide upstream and downstream supply management solutions.

  • In Q4 FY 2015, Selectica was acknowledged as a Visionary in the Magic Quadrant for Strategic Sourcing Application, published by Gartner.

  • During the fiscal year added 35+ new corporate brands to the customer portfolio, including major multinational corporate customers across numerous business verticals, including pharmaceuticals, retail, transportation (airlines), packaged foods, soft drinks, consulting, business analytics + consulting, medical devices, networking/telecommunications, regulated utilities and shipping.

June 10, 2015 Conference Call & Webcast:
A conference call and webcast will be held today at 5:00 p.m. EDT to review these results. Interested parties may participate via conference call and webcast; more details:

Participant Conference Call Numbers:

  • Toll-Free: 1-877-407-0789
  • Toll/International: 1-201-689-8562

Participant Webcast Link: http://public.viavid.com/index.php?id=114749

Related: http://www.selectica.com/investors

Supporting Resources

Selectica "Social Contracting" blog
Selectica on LinkedIn
Selectica on Twitter
Selectica on Facebook
Selectica on YouTube
Selectica guides & misc. resources

About Selectica, Inc.

Selectica, Inc. (NASDAQ: SLTC), is a leading provider of enterprise contract management, supply management, and configuration solutions. Since 1996, Selectica has helped global companies actively manage their contracts throughout the sales, procurement, and legal life cycle. Selectica's contract lifecycle management, strategic sourcing, and purchasing solutions drive business value by assisting organizations in managing contracts profitably, effectively accelerating revenue opportunities, and minimizing risk through compliance. Our patented technology assists customers across a myriad of industries including high-tech, telecommunications, manufacturing, healthcare, and financial services -- to accelerate and streamline contract management, sales processes, spend analysis, procurement intelligence, sourcing, and supplier lifecycle management. Selectica also provides a powerful configuration engine, which Fortune 500 companies use to accelerate revenue by facilitating the right combination of products, services, and price. More information, visit: www.selectica.com and www.iasta.com.

Non-GAAP Financial Measures

To supplement our financial results presented in accordance with Generally Accepted Accounting Principles (GAAP), this press release and the accompanying tables contain certain non-GAAP financial measures, including non-GAAP revenue, non-GAAP gross profit, non-GAAP net income, and non-GAAP earnings per share, which we believe are helpful in understanding our past financial performance and future results. For reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section titled "GAAP to Non-GAAP Reconciliations" of the accompanying "Condensed Consolidated Statements of Operations" table, and, separately, in the accompanying table titled "Billings Reconciliation." Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management regularly uses our supplemental non-GAAP financial measures internally to understand and manage our business and forecast future periods; as such, we believe it is useful for investors to understand the effects of these items on our total operations. Our non-GAAP revenue is intended to reflect the full amount of revenues that would have been otherwise been recorded by the acquired entity, while our non-GAAP gross profit excludes the amortization of intangibles that occurred due to the acquisition of the entity.

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, product and channel development, 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 fluctuations in demand for Selectica's products and services, risks of losing key personnel or customers, protection of the company's intellectual property and government policies and regulations, including, but not limited to those affecting the company's industry. 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 as 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     Twelve Months Ended  
  March 31     March 31  
  2015     2014     2015     2014  
                               
Revenues:                              
  Recurring revenues $ 4,812     $ 2,933     $ 16,207     $ 12,210  
  Non-recurring revenues   1,117       608       4,670       3,579  
    Total revenues   5,929       3,541       20,877       15,789  
                               
Cost of revenues:                              
  Cost of recurring revenues   1,311       823       5,026       2,823  
  Cost of non-recurring revenues   2,384       1,749       7,277       5,738  
    Total cost of revenues   3,695       2,572       12,303       8,561  
                               
Gross profit:                              
  Recurring gross profit   3,501       2,110       11,181       9,387  
  Non-recurring gross profit   (1,267 )     (1,141 )     (2,607 )     (2,159 )
    Total gross profit   2,234       969       8,574       7,228  
                               
Operating expenses:                              
  Research and development   804       704       3,373       2,843  
  Sales and marketing   2,853       2,059       12,697       8,313  
  General and administrative   1,347       1,348       7,073       4,984  
  Acquisition related costs   1,033       -       1,715       -  
  Impairment of software development costs   340       -       340       -  
  Restructuring costs   -       -       -       227  
    Total operating expenses   6,377       4,111       25,198       16,367  
                               
Loss from operations   (4,143 )     (3,142 )     (16,624 )     (9,139 )
                               
Decrease in fair value of warrant liability   -       -       -       982  
Interest and other income (expense), net   (111 )     (26 )     (72 )     (22 )
Net loss before Income Tax $ (4,253 )   $ (3,168 )   $ (16,696 )   $ (8,179 )
                               
Benefit (provision) for income taxes $ -     $ -     $ 2,950       -  
Consolidated Net Loss   (4,253 )     (3,168 )     (13,746 )     (8,179 )
                               
Redeemable preferred stock accretion   1,046       -       3,691       3,513  
Net loss applicable to common stockholders $ (5,299 )   $ (3,168 )   $ (17,437 )   $ (11,692 )
                               
Basic and diluted net loss per share $ (0.53 )   $ (0.69 )   $ (1.89 )   $ (2.13 )
GAAP to Non-GAAP Reconciliations:                              
                               
Reconciliation of Total revenue:                              
  U.S. GAAP as reported $ 5,929     $ 3,541     $ 20,877     $ 15,789  
  Adjustments:                              
  Deferred revenue adjustment   156       -       1,451       -  
As adjusted $ 6,085     $ 3,541     $ 22,328     $ 15,789  
                               
Reconciliation to non-GAAP net loss:                              
Net loss $ (4,253 )   $ (3,168 )   $ (13,746 )   $ (8,179 )
Stock-based compensation expense   585       228       2,538       1,149  
Decrease in fair value of warrant liability   -       -       -       (982 )
Preferred stock accretion   -       -       -          
Restructuring costs   -       -       -       227  
Deferred revenue adjustment   156       -       1,451       -  
Acquisition related costs   1,033       -       1,715       -  
Amortization on Intangibles   349       -       1,047       -  
Impairment of software development costs   340       -       340       -  
Benefit for income taxes   -       -       (2,950 )     -  
Non-GAAP net loss $ (1,790 )   $ (2,940 )   $ (9,605 )   $ (7,785 )
                               
Non-GAAP basic and diluted net loss per share $ (0.22 )   $ (0.64 )   $ (1.32 )   $ (2.03 )
                               
                               
Weighted average shares outstanding for basic and diluted net loss per share   7,983       4,589       7,277       3,844  
                               
       
       
SELECTICA, INC.
Condensed Consolidated Balance Sheets
(In thousands)
(Audited)
       
       
  March 31,   March 31,
  2015   2014
           
ASSETS          
Current assets          
  Cash and cash equivalents $ 13,178   $ 16,907
  Accounts receivable   5,203     3,006
  Prepaid expenses and other current assets   1,681     689
    Total current assets   20,062     20,602
           
Property and equipment, net   290     312
Capitalized software   2,258     856
Goodwill   7,702     -
Intangibles, net   6,453     -
Other assets   521     30
    Total assets $ 37,286   $ 21,800
           
           
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY
Current liabilities          
  Credit facility $ 7,447   $ 6,949
  Accounts payable   1,535     1,371
  Accrued payroll and related liabilities   910     648
  Other accrued liabilities   1,877     345
  Deferred revenue   8,410     5,131
    Total current liabilities   20,179     14,444
  Long-term deferred revenue   22     618
  Convertible note, net of debt discount   2,900     -
  Other long-term liabilities   167     -
    Total liabilities   23,268     15,062
           
Redeemable convertible preferred stock   4,895     3,653
Stockholders' equity   9,123     3,085
Total liabilities, redeemable convertible preferred stock and stockholders' equity $ 37,286   $ 21,800
           
           
           
SELECTICA, INC.  
Condensed Consolidated Statements of Cash Flows  
(In thousands)  
(Audited)  
           
           
  Twelve Months Ended  
  March 31,     March 31,  
  2015     2014  
               
Operating activities              
Net loss $ (13,746 )   $ (8,179 )
Adjustments to reconcile net loss to net cash used in operating activities:              
Depreciation and Amortization   1,530       246  
Loss on disposition of property and equipment   -       23  
Impairment of capitalized software   340       -  
Stock-based compensation expense   2,538       1,149  
Increase in fair value of warrant liability   -       (982 )
Changes in assets and liabilities:              
  Accounts receivable (net)   421       449  
  Restricted cash   (34 )     -  
  Prepaid expenses and other current assets   (505 )     164  
  Other assets   (2 )     9  
  Accounts payable   (195 )     359  
  Accrued restructuring costs   -       (232 )
  Accrued payroll and related liabilities   (421 )     (334 )
  Other accrued liabilities and long term liabilities   158       162  
  Deferred Tax Liability   (2,989 )     -  
  Deferred revenue   1,270       (2,177 )
Net cash used in operating activities   (11,635 )     (9,343 )
               
Investing activities              
  Purchase of property and equipment   (51 )     (121 )
  Capitalized Software   (1,962 )     (910 )
  Purchase of business, net of cash   (4,451 )     -  
Net cash used in investing activities   (6,464 )     (1,031 )
               
Financing activities              
  Proceeds from sale of common stock, preferred stock and warrants, net of issuance costs   12,319       14,227  
  Employee taxes paid in exchange for restricted stock awards forefeited   (578 )     (232 )
  Issuance of common stock under employee stock plan   213       239  
  Credit facility borrowing, net   498          
  Credit facility payment   (655 )     949  
  Repayment of note Payable   (277 )     -  
  Issuance of Convertible Note, net   3,000       -  
  Issuance of cost associated with promissory note   (150 )     -  
Net cash provided by financing activities   14,370       15,183  
               
Net increase/(decrease) in cash and cash equivalents   (3,729 )     4,809  
Cash and cash equivalents at beginning of the period   16,907       12,098  
Cash and cash equivalents at end of the period $ 13,178     $ 16,907  
               
                   
                   
SELECTICA, INC.            
Billings Reconciliation            
(In thousands)            
(Unaudited)            
                   
                   
  Three Months Ended     Twelve Months Ended  
  March 31,   March 31,     March 31,   March 31,  
  2015   2014     2015   2014  
                           
Total revenues $ 5,929   $ 3,541     $ 20,877   $ 15,789  
Deferred revenue:                          
End of period   8,432     5,749       8,432     5,749  
Beginning of period   8,134     6,091       5,749     7,925  
Change in deferred revenue   298     (342 )     2,683     (2,176 )
Total billings (total revenues plus the change in deferred revenue) $ 6,227   $ 3,199     $ 23,560   $ 13,613  
                           

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