SOURCE: Selectica


August 08, 2013 08:00 ET

Selectica Announces Financial Results for the First Quarter of Fiscal 2014

SAN MATEO, CA--(Marketwired - Aug 8, 2013) - Selectica, Inc. (NASDAQ: SLTC), provider of software that accelerates sales cycles and streamlines contract processes, today announced financial results for its fiscal first quarter ended June 30, 2013.

Selectica Chairman Michael Brodsky said, "Our first quarter was overall weaker than anticipated. However, I remain fully confident in our potential to continue to grow our top-tier client base and seize the opportunity to supply best-in-class CPQ and contract management solutions to a growing, global market."

"We're pleased to have completed a capital raise earlier in the quarter resulting in net proceeds of approximately $5.2 million through the sale of stock and warrants," said Todd Spartz, Selectica Chief Financial Officer. "We did, however, recognize increased bad debt, resulting in a quarter-over-quarter increase of $415,000 within general administrative expense."

Financial highlights

Selectica delivered the following financial results for the first quarter of fiscal 2014:

  • Recurring revenue: Selectica grew recurring revenue from $2.6 million in Q1 FY 2013 to $3.2 million in Q1 FY2014, a year-over-year increase of 20%.
  • Billings: Billings for Q1 FY2014 were $3.3 million, compared to $4.1 million in Q1 FY2013, a 21% decrease year-over-year. Billings were $6.7 million in Q4 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: As of Q1 FY2014, the company had deferred revenue of $6.8 million, a 2% year-over-year increase from Q1 FY2013, when deferred revenue was $6.7 million. As of Q4 FY2013, deferred revenue was $7.9 million.

Business highlights

Business highlights from Q1 FY2014 include:

  • Equity financing to fuel SaaS revenue growth: In May, Selectica secured equity financing to be delivered over the course of two quarters and to be used to fuel additional sales presence both in North America and EMEA. The total value of the raise was $6.4 million with the first installment being $5.7 million (net $5.2 million).
  • Summer release featuring major CPQ enhancements: Selectica's summer release, announced in June, introduced a series of significant enhancements to its core configure price quote solution, including a comprehensive analytics dashboard, workflows that can be configured according to user needs, and an out-of-the-box integration with Selectica Contract Lifecycle Management for a seamless path from configuration, pricing, and quoting through to contract management.
  • Launch of Selectica CPQ for NetSuite: At NetSuite's annual user conference, SuiteWorld 2013, Selectica launched its Selectica CPQ for NetSuite offering, giving NetSuite users the opportunity to expand the value of their investment, and configure, price, and quote accurate deals from their NetSuite environment.
  • Selectica CLM 6.0 release: Selectica announced the release of Selectica Contract Lifecycle Management (CLM) 6.0 which features an integration with DocuSign, improved contract approvals visibility, and a revamped composer UI to simplify approvals rule modeling.
  • Growing presence in EMEA: Selectica expanded its global operations into EMEA territory, adding two sales representatives local to the area dedicated to nurturing overseas pipeline.

Additional results

Total revenues for Q1 FY2014 were $4.4 million, compared to $4.2 million for Q1 FY2013, a year-over-year increase of 5%. Total revenues were $4.2 million in Q4 FY2013.

Net loss applicable to common stockholders for Q1 FY2014 was $2.9 million, or $(0.97) per share, compared to a net loss applicable to common stockholders of $709,000, or $(0.25) per share in Q1 FY2013, and a net loss applicable to common stockholders of $2.1 million, or $(0.73) per share, in Q4 FY2013. On a non-GAAP basis, excluding the non-cash accounting effects of our warrants, preferred stock, and stock-based compensation, the company lost $1.8 million or $(0.60) per share, compared to a loss of $501,000 or $(.18) per share in Q1 FY2013 and $1.3 million or $(0.47) per share in Q4 FY 2013.

Complete financial results for Q1 FY2014 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.

Condensed Consolidated Statements of Operations  
(In thousands, except per share amounts)  
    Three Months Ended  
    June 30,     June 30,  
    2013     2012  
  Recurring revenues   $ 3,166     $ 2,636  
  Non-recurring revenues     1,206       1,540  
    Total revenues     4,372       4,176  
Cost of revenues:                
  Cost of recurring revenues     672       331  
  Cost of non-recurring revenues     1,236       1,228  
    Total cost of revenues     1,908       1,559  
Gross profit:                
  Recurring gross profit     2,494       2,305  
  Non-recurring gross profit     (30 )     312  
    Total gross profit     2,464       2,617  
Operating expenses:                
  Research and development     1,103       931  
  Sales and marketing     2,073       1,520  
  General and administrative     1,555       870  
    Total operating expenses     4,731       3,321  
Loss from operations     (2,267 )     (704 )
Increase in fair value of warrant liability     (139 )     -  
Interest and other income (expense), net     (15 )     (5 )
Net loss     (2,421 )     (709 )
Preferred stock accretion     477       -  
Net loss applicable to common stockholders   $ (2,898 )   $ (709 )
Basic and diluted net loss per common share applicable to common stockholders   $ (0.97 )   $ (0.25 )
Reconciliation to non-GAAP net loss:                
Net loss applicable to common stockholders   $ (2,898 )   $ (709 )
Increase in fair value of warrant liability     139       -  
Stock-based compensation expense     485       208  
Preferred stock accretion     477       -  
Non-GAAP net loss   $ (1,797 )   $ (501 )
Non-GAAP basic and diluted net loss per share   $ (0.60 )   $ (0.18 )
Weighted average shares outstanding for basic and diluted net loss per share applicable to common stockholders     3,000       2,807  
Condensed Consolidated Balance Sheets
(In thousands)
    June 30,   March 31,
    2013   2013
Current assets            
  Cash and cash equivalents   $ 13,913   $ 12,098
  Accounts receivable     2,935     3,455
  Prepaid expenses and other current assets     832     853
    Total current assets     17,680     16,406
Property and equipment, net     401     407
Other assets     89     39
    Total assets   $ 18,170   $ 16,852
Current liabilities            
  Credit facility   $ 5,561   $ 6,000
  Accounts payable     1,006     1,010
  Accrued payroll and related liabilities     850     982
  Accrued restructuring costs     35     232
  Warrant liabilty     2,407     -
  Other accrued liabilities     83     163
  Deferred revenue     5,413     6,153
    Total current liabilities     15,355     14,540
  Long-term deferred revenue     1,393     1,772
  Other long-term liabilities     20     20
    Total liabilities     16,768     16,332
Redeemable convertible preferred stock     477     -
Stockholders' equity     925     520
    Total liabilities and stockholders' equity   $ 18,170   $ 16,852
Condensed Consolidated Statements of Cash Flows  
(In thousands)  
    Three Months Ended  
    June 30,     June 30,  
    2013     2012  
Operating activities                
Net loss   $ (2,421 )   $ (709 )
Adjustments to reconcile net loss to net cash used in operating activities:                
Depreciation     48       48  
Loss on disposition of property and equipment     2       -  
Stock-based compensation expense     485       208  
Increase in fair value of warrant liability     139       -  
Changes in assets and liabilities:                
  Accounts receivable (net)     520       (1,135 )
  Prepaid expenses and other current assets     21       (124 )
  Other assets     (50 )     -  
  Accounts payable     (100 )     535  
  Accrued restructuring costs     (197 )     -  
  Accrued payroll and related liabilities     (132 )     (1,157 )
  Other accrued liabilities and long term liabilities     (102 )     (8 )
  Deferred revenue     (1,119 )     (57 )
Net cash used in operating activities     (2,906 )     (2,399 )
Investing activities                
  Purchase of property and equipment     (44 )     (58 )
  Proceeds from maturities of short-term investments     -       199  
Net cash (used in) provided by investing activities     (44 )     141  
Financing activities                
  Credit facility borrowings, net     (439 )     -  
  Employee taxes paid in exchange for restricted stock awards forfeited     (136 )     -  
  Proceeds from sale of common stock, preferred stock and warrants, net of issuance costs     5,340       (36 )
Net cash provided by (used in) financing activities     4,765       (36 )
Net increase (decrease) in cash and cash equivalents     1,815       (2,294 )
Cash and cash equivalents at beginning of the period     12,098       15,877  
Cash and cash equivalents at end of the period   $ 13,913     $ 13,583  
Billings Reconciliation  
(In thousands)  
    Three Months Ended  
    June 30,   June 30,  
    2013   2012  
Total revenues   $ 4,372   $ 4,176  
Deferred revenue:              
End of period     6,806     6,664  
Beginning of period     7,925     6,721  
Change in deferred revenue     (1,119 )   (57 )
Total billings (total revenues plus the change in deferred revenue)   $ 3,253   $ 4,119