SOURCE: Selectica

Selectica

May 02, 2013 16:00 ET

Selectica Fourth Quarter and Year-End Financial Results for Fiscal 2013 Show 27% Year-Over-Year Revenue Growth

$2.3 Million Cash Flow Positive in the 4th Quarter

SAN MATEO, CA--(Marketwired - May 2, 2013) - Selectica, Inc. (NASDAQ: SLTC), provider of software that accelerates sales cycles and streamlines contract processes, today announced financial results for its fiscal fourth quarter and year ended March 31, 2013.

"The Selectica story has shifted from one of a turnaround to one of growth," said Jason Stern, Selectica President and CEO. "All of our customers over the past two years have opted for our SaaS offering, which further motivates us to invest in our current vision, already resonating with our customers and the market as a whole: combining our industry-leading CPQ and CLM solutions into a single, integrated CPQC offering."

"Our strong year-over-year revenue growth is a result of significant new customer acquisitions combined with high renewal rates from existing customers," said Todd Spartz, Chief Financial Officer. "As far as our move to SaaS, the numbers tell the story: this quarter 100% of our liscense transactions were subscription, and we've seen 60-70% growth in our SaaS product offerings overall."

Financial highlights

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

  • Recurring revenue: Selectica grew recurring revenue from $2.3 million in Q4 FY 2012 to $3.1 million in Q4 FY2013, a year-over-year increase of 35%.

  • Billings: Billings for Q4 FY2013 were $6.7 million, compared to $5.4 million in Q4 FY2012, a 24% increase year-over-year. Billings were $4.2 million in Q3 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 Q4 FY2013, the company had deferred revenue of $7.9 million, an 18% year-over-year increase from Q4 FY2012, when deferred revenue was $6.7 million. In Q3 FY2013, deferred revenue was $5.5 million.

Business highlights

Business highlights from FY2013 include:

  • Selectica CPQ application on the Salesforce AppExchange: In July 2012, Selectica announced the availability of its CPQ offering on the salesforce.com AppExchange. The application brings patented Selectica configuration technology to the Salesforce interface so that sales reps and channel partners can assemble and price deals faster and more efficiently.
  • Introduction of Contract Blueprints in Selectica CLM: Also in July, Selectica announced the inclusion of Contract Blueprints in its flagship contract management solution. Contract Blueprints is comprised of a set of pre-configured, best-practice contract types that enable users to get started with contract management quickly.
  • Seventh patent for configuration technology: In September, Selectica received a seventh patent for its sales configuration technology that powers its CPQ solution. This declarative constraint engine enables customers to use dynamic components to configure product and service offerings from a large number of options.
  • Gold sponsorship at Dreamforce: Selectica attended salesforce.com's Dreamforce '12 event held in September 2012 as a gold sponsor. Participation in the event resulted in increased interest in Selectica CPQ for Salesforce, including new customers using the integrated product.
  • Growth in customer base: Selectica ended the year with 130 customers in industries such as healthcare, government contracting, financial services, high tech, and media and entertainment. New customers included global businesses headquartered in APAC and Europe.
  • Executive team additions:Among several key executive team hires, Selectica appointed Michael Mothersbaugh as Executive Vice President, Worldwide Sales, and David Humphrey as Vice President of Professional Services. In their respective roles, Mothersbaugh and Humphrey are critical to growing and maintaining the Selectica customer base.

Additional results

Total revenues for Q4 FY2013 were $4.2 million, compared to $3.2 million for Q4 FY2012, a year-over-year increase of 31%. Total revenues were $4.5 million in Q3 FY2013.

Net loss for Q4 FY2013 was $2.1 million, or $(0.73) per share, compared to a net loss of $2.2 million, or $(0.78) per share in Q4 FY2012, and a net loss of $1.1 million, or $(0.37) per share, in Q3 FY2013.

Complete financial results for Q4 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     Fiscal Year Ended  
    March 31,     March 31,     March 31,     March 31,  
    2013     2012     2013     2012  
                         
Revenues:                        
  Recurring revenues   $ 3,123     $ 2,337     $ 11,773     $ 8,930  
  Non-recurring revenues     1,109       905       5,786       4,857  
    Total revenues     4,232       3,242       17,559       13,787  
                                 
Cost of revenues:                                
  Cost of recurring revenues     779       227       2,006       986  
  Cost of non-recurring revenues     1,360       1,208       5,419       4,567  
    Total cost of revenues     2,139       1,435       7,425       5,553  
                                 
Gross profit:                                
  Recurring gross profit     2,344       2,110       9,767       7,944  
  Non-recurring gross profit     (251 )     (303 )     367       290  
    Total gross profit     2,093       1,807       10,134       8,234  
                                 
Operating expenses:                                
  Research and development     964       886       3,706       3,394  
  Sales and marketing     1,821       2,135       6,708       6,247  
  General and administrative     1,064       928       3,618       3,767  
  Restructuring costs     331       -       331       -  
  Fees related to comprehensive settlement agreement     -       -       500       500  
    Total operating expenses     4,180       3,949       14,863       13,908  
                                 
Loss from operations     (2,087 )     (2,142 )     (4,729 )     (5,674 )
                                 
Loss on early extinguishment of note payable     -       -       -       (470 )
Interest and other income (expense), net     (6 )     (17 )     (20 )     (123 )
                                 
Net loss   $ (2,093 )   $ (2,159 )   $ (4,749 )   $ (6,267 )
                                 
Basic and diluted net loss per share   $ (0.73 )   $ (0.78 )   $ (1.68 )   $ (2.25 )
                                 
Reconciliation to non-GAAP net loss:                                
Net loss   $ (2,093 )   $ (2,159 )   $ (4,749 )   $ (6,267 )
Stock-based compensation expense     429       167       1,128       599  
Restructuring costs     331       -       331       -  
Loss on early extinguishment of note payable     -       -       -       (470 )
Fees related to comprehensive settlement agreement     -       -       500       500  
Non-GAAP net loss   $ (1,333 )   $ (1,992 )   $ (2,790 )   $ (5,638 )
                                 
Non-GAAP basic and diluted net loss per share   $ (0.47 )   $ (0.72 )   $ (0.99 )   $ (2.02 )
                                 
Weighted average shares outstanding for basic and diluted net loss per share     2,852       2,759       2,827       2,787  
                                 
                                 
           
           
SELECTICA, INC.  
Condensed Consolidated Balance Sheets  
(In thousands)  
(Unaudited)  
           
           
    March 31,   March 31,  
    2013   2012  
           
ASSETS          
Current assets          
  Cash and cash equivalents   $ 12,098   $ 15,877  
  Short-term investments     -     199  
  Accounts receivable     3,455     2,446  
  Prepaid expenses and other current assets     853     531  
    Total current assets     16,406     19,053  
               
Property and equipment, net     407     362  
Other assets     39     39  
    Total assets   $ 16,852   $ 19,454  
               
               
LIABILITIES AND STOCKHOLDERS' EQUITY              
Current liabilities              
  Credit facility   $ 6,000   $ 6,000  
  Accounts payable     1,010     395  
  Accrued payroll and related liabilities     982     1,771  
  Accrued restructuring costs     232     -  
  Other accrued liabilities     163     88  
  Deferred revenue     6,153     5,394  
    Total current liabilities     14,540     13,648  
  Long-term deferred revenue     1,772     1,327  
  Other long-term liabilities     20     41 %
    Total liabilities     16,332     15,016  
               
Stockholders' equity     520     4,438  
    Total liabilities and stockholders' equity   $ 16,852   $ 19,454  
               
               
             
             
SELECTICA, INC.  
Condensed Consolidated Statements of Cash Flows  
(In thousands)  
(Unaudited)  
             
             
    Fiscal Year Ended  
    March 31,     March 31,  
    2013     2012  
             
Operating activities            
Net loss   $ (4,749 )   $ (6,267 )
Adjustments to reconcile net loss to net cash used in operating activities:                
Depreciation     214       261  
Loss on disposition of property and equipment     -       13  
Stock-based compensation expense     1,128       599  
Changes in assets and liabilities:                
  Accounts receivable (net)     (1,009 )     249  
  Prepaid expenses and other current assets     (322 )     (81 )
  Other assets     -       (39 )
  Accounts payable     615       (418 )
  Restructuring liability     232       -  
  Accrued payroll and related liabilities     (788 )     1,322  
  Other accrued liabilities and long term liabilities     54       31  
  Deferred revenue     1,204       2,401  
Net cash used in operating activities   $ (3,421 )   $ (1,929 )
                 
Investing activities                
  Purchase of capital assets     (259 )     (215 )
  Proceeds from disposition of property and equipment     -       2  
  Purchase of short-term investments     -       (1,398 )
  Proceeds from maturities of short-term investments     199       1,398  
Net cash provided by (used in) investing activities   $ (60 )   $ (213 )
                 
Financing activities                
  Payments on note payable to Versata     -       (4,268 )
  Purchase of treasury shares     -       (472 )
  Borrowings under credit facility, net     -       6,000  
  Repurchases of common stock, net of issuance     (298 )     (63 )
Net cash (used in) provided by financing activities   $ (298 )   $ 1,197  
                 
Net decrease in cash and cash equivalents     (3,779 )     (945 )
Cash and cash equivalents at beginning of the period     15,877       16,822  
Cash and cash equivalents at end of the period   $ 12,098     $ 15,877  
                 
                 
               
               
SELECTICA, INC.
Billings Reconciliation
(In thousands)
(Unaudited)
               
               
  Three Months Ended   Fiscal Year Ended
  March 31,   March 31,   March 31,   March 31,
  2013   2012   2013   2012
               
Total revenues $ 4,232   $ 3,242   $ 17,559   $ 13,787
Deferred revenue:                      
End of period   7,925     6,721     7,925     6,721
Beginning of period   5,504     4,544     6,721     4,320
Change in deferred revenue   2,421     2,177     1,204     2,401
Total billings (total revenues plus the change in deferred revenue) $ 6,653   $ 5,419   $ 18,763   $ 16,188