Selectica Announces Earnings for Third Quarter Fiscal 2013

Selectica Announces Earnings for Third Quarter Fiscal 2013 
Achieves 36% Total, 35% Recurring Revenue Growth Year-Over-Year 
SAN MATEO, CA -- (Marketwire) -- 01/31/13 --  Selectica, Inc.
(NASDAQ: SLTC), provider of software that accelerates sales cycles
and streamlines contract processes, today announced financial results
for its third quarter of fiscal 2013, ended December 31, 2012.  
"We are very pleased with our top line results for the third quarter
of fiscal 2013," said Jason Stern, President and CEO of Selectica.
"Both total and recurring revenue continued to climb, up 36% and 35%
respectively over the third quarter of fiscal 2012. We've also
completed more transactions -- and generated nearly as much revenue
-- in the first three quarters of this year than we did in all four
quarters of last year." 
Financial highlights 
Selectica delivered the following financial results for the third
quarter of fiscal 2013: 


 
--  Recurring revenue: Selectica grew recurring revenue from $2.3 million
    in Q3 FY 2012 to $3.1 million in Q3 FY2013, a year-over-year increase
    of 35%. Recurring revenue in Q2 FY2013 was $3.0 million.
    
    
--  Billings: Billings for Q3 FY2013 were $4.2 million, compared to $4.5
    million in Q3 FY2012, a 7% decrease year-over-year. Billings were $3.8
    million in Q2 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 Q3 FY2013, the company had deferred revenue of
    $5.5 million, a 22% year-over-year increase from Q3 FY2012, when
    deferred revenue was $4.5 million. In Q2 FY2013, deferred revenue was
    $5.8 million.

  
Business highlights 
Business highlights from Q3 FY2013 include:  


 
--  New investment in headcount and partnerships: To meet the continued
    growth in demand for its contract management and guided selling
    solutions, Selectica further expanded its team in Q3 FY2013. By the
    end of the quarter, its U.S. workforce had increased by over 20%
    compared to the previous year, and i
ts overseas team had doubled. In
    Q3 FY2013, the company also cemented new partnerships with several
    systems integrators and other solutions providers that further
    increase its capacity to get customers up and running on Selectica
    solutions quickly and successfully.
--  Key new executive team hires: In the third quarter of fiscal 2013,
    Selectica announced the addition of Mike Mothersbaugh as its Executive
    Vice President of Worldwide Sales and David Humphrey as its Vice
    President of Professional Services. With their previous experience,
    Mothersbaugh most recently at salesforce.com and Humphrey at Accruent,
    these new members of the executive team bring additional expertise in
    sales, delivery, and customer adoption, which are critical to the
    company's ongoing success as a software-as-a-service (SaaS) solution
    provider.
--  Golden Bridge Award honor: Selectica Guided Selling won Silver in the
    "Best New Product Or Service -- SaaS or Cloud Computing" category at
    the 4th annual Golden Bridge Awards held in October, reflecting a
    continuing trend of interest in configure-price-quote (CPQ) solutions
    in the market. The Golden Bridge Awards are an industry and peer
    recognition program honoring the best companies worldwide.

  
Additional results 
Total revenues for Q3 FY2013 were $4.5 million, compared to $3.3
million for Q3 FY2012, a year-over-year increase of 36%. Total
revenues were $4.7 million in Q2 FY2013. 
Net loss for Q3 FY2013 was $1.1 million, or $(0.37) per share,
compared to a net loss of $1.4 million, or $(0.52) per share in Q3
FY2012, and a net loss of $0.9 million, or $(0.32) per share, in Q2
FY2013. 
The company's cash balance at the end of Q3 FY2013 was $9.8 million,
while its accounts receivable balance was $4.6 million. Since the
close of the quarter, several large payments totaling approximately
$2.3 million have been collected. 
Complete financial results for Q3 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: 


 
--  Visit the Selectica website to learn more about the company and its
    products and customers (http://www.selectica.com)
--  Follow @Selectica_Inc on Twitter to stay up to date with industry news
    and updates (http://twitter.com/Selectica_Inc)
--  Visit "Done Deal," the Selectica blog, to read articles, advice, and
    commentary on how to optimize deal processes
    (http://www.selectica.com/blog)
--  Watch Selectica videos on YouTube to see what Selectica and its
    products can do (http://www.youtube.com/user/SelecticaVideos)
--  Browse the Selectica resource center to find guides and resources on
    how to improve sales and contracting processes
    (http://www.selectica.com/resources)

  
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       Nine Months Ended   
                             ----------------------  ---------------------- 
                              December    December    December    December  
                              31, 2012    31, 2011    31, 2012    31, 2011  
                             ----------  ----------  ----------  ---------- 
                                                                            
Revenues:                                                                   
  Recurring revenues         $    3,054  $    2,258  $    8,650  $    6,593 
  Non-recurring revenues          1,442       1,001       4,677       3,952 
                             ----------  ----------  ----------  ---------- 
    Total revenues                4,496       3,259      13,327      10,545 
                             ----------  ----------  ----------  ---------- 
                                                                            
Cost of revenues:                                                           
  Cost of recurring revenues        489         248       1,227         760 
  Cost of non-recurring                                                     
   revenues                       1,485       1,042       4,059       3,358 
                             ----------  ----------  ----------  ---------- 
    Total cost of revenues        1,974       1,290       5,286       4,118 
                             ----------  ----------  ----------  ---------- 
                                                                            
Gross profit:                                                               
  Recurring gross profit          2,565       2,010       7,423       5,833 
  Non-recurring gross profit        (43)        (41)        618         594 
                             ----------  ----------  ----------  ---------- 
    Total gross profit            2,522       1,969       8,041       6,427 
                             ----------  ----------  ----------  ---------- 
                                                                            
Operating expenses:                                                         
  Research and development          950         801       2,742       2,507 
  Sales and marketing             1,642       1,518       4,887       4,112 
  General and administrative        985       1,065       2,554       2,840 
  Fees related to                                                           
   comprehensive settlement                                                 
   agreement                          -           -         500         500 
                             ----------  ----------  ----------  ---------- 
    Total operating expenses      3,577       3,384      10,683       9,959 
                             ----------  ----------  ----------  ---------- 
                                                                            
Loss from operations             (1,055)     (1,415)     (2,642)     (3,532)
                                                                            
Loss on early extinguishment                                                
 of note payable                      -           -           -         470 
Interest and other income                                                   
 (expense), net                      (3)        (18)        (14)       (106)
                             ----------  ----------  ----------  ---------- 
                                                                            
Net loss                     $   (1,058) $   (1,433) $   (2,656) $   (4,108)
                             ==========  ==========  ==========  ========== 
                                                                            
Basic and diluted net loss                                                  
 per share                   $    (0.37) $    (0.52) $    (0.94) $    (1.47)
                             ==========  ==========  ==========  ========== 
                                                                            
Reconciliation to non-GAAP                                                  
 net loss:                                                                  
Net loss                     $   (1,058) $   (1,433) $   (2,656) $   (4,108)
Stock-based compensation                                                    
 expense                     $      338  $      144  $      699  $      432 
Loss on early extinguishment                                                
 of note payable                      -           -           -         470 
Fees related to                                                             
 comprehensive settlement                                                   
 agreement                            -           -         500         500 
                             ----------  ----------  ----------  ---------- 
Non-GAAP net loss            $     (720) $   (1,289) $   (1,457) $   (2,706)
                             ==========  ==========  ==========  ========== 
                                                                            
                             ----------  ----------  ----------  ---------- 
Non-GAAP basic and diluted                                                  
 net loss per share          $    (0.25) $    (0.47) $    (0.52) $    (0.97)
                             ==========  ==========  ==========  ========== 
                                                                            
                                                                            
Weighted average shares                                                     
 outstanding for basic and                                                  
 diluted net loss per share       2,830       2,737       2,818       2,796 
                             ==========  ==========  ==========  ========== 
                                                                            
                                                                            
                                                                            
                               SELECTICA, INC.                              
                    Condensed Consolidated Balance Sheets                   
                               (In thousands)                               
                                 (Unaudited)                                
                                                                            
                                                  December 31,   March 31,  
                                                      2012          2012    
                                                 ------------- -------------
                                                                            
ASSETS                                                                      
Current assets                                                              
  Cash and cash equivalents                      $       9,806 $      15,877
  Short-term investments                                     -           199
  Accounts receivable                                    4,591         2,446
  Prepaid expenses and other current assets                622           531
                                                 ------------- -------------
    Total current assets                                15,019        19,053
                                                                            
Property and equipment, net                                399           362
Other assets                                                39            39
                                                 ------------- -------------
    Total assets                                 $      15,457 $      19,454
                                                 ============= =============
                                                                            
                                                                            
LIABILITIES AND STOCKHOLDERS' EQUITY                                        
Current liabilities                                                         
  Credit facility                                $       5,894 $       6,000
  Accounts payable                                         751           395
  Accrued payroll and related liabilities                  819         1,771
  Other accrued liabilities                                 90            88
  Deferred revenue                                       4,636         5,394
                                                 ------------- -------------
    Total current liabilities                           12,190        13,648
                                                 ------------- -------------
  Long-term deferred revenue                               868         1,327
  Other long-term liabilities                               27            41
                                                 ------------- -------------
    Total liabilities                                   13,085        15,016
                                                 ------------- -------------
                                                                            
Stockholders' equity                                     2,372         4,438
                                                 ------------- -------------
    Total liabilities and stockholders' equity   $      15,457 $      19,454
                                                 ============= =============
                                                                            
                                                                            
                                                                            
                              SELECTICA, INC.                               
              Condensed Consolidated Statements of Cash Flows               
                               (In thousands)                               
                                (Unaudited)                                 
                                                                            
                                                      Nine Months Ended     
                                                 -------------------------- 
                                                 December 31,  December 31, 
                                                     2012          2011     
                                                 ------------  ------------ 
                                                                            
Operating activities                                                        
Net loss                                         $     (2,656) $     (4,108)
Adjustments to reconcile net loss to net cash                               
 used in operating activities:                                              
Depreciation                                              156           201 
Loss on disposition of property and equipment               -            13 
Stock-based compensation expense                          699           432 
Changes in assets and liabilities:                                          
  Accounts receivable (net)                            (2,145)           51 
  Prepaid expenses and other current assets               (91)           79 
  Other assets                                              -           (39)
  Accounts payable                                        356          (262)
  Accrued payroll and related liabilities                (951)          528 
  Other accrued liabilities and long term                                   
   liabilities                                            (12)          337 
  Deferred revenue                                     (1,216)         (122)
                                                 ------------  ------------ 
Net cash used in operating activities            $     (5,860) $     (2,890)
                                                                            
Investing activities                                                        
  Purchase of capital assets                             (193)         (172)
  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                                      $          6  $       (172)
                                                                            
Financing activities                                                        
  Payments on note payable to Versata                       -        (4,268)
  Purchase of treasury shares                               -          (472)
  Borrowings under credit facility                       (106)        6,000 
  Repurchases of common stock, net of issuance           (111)           (7)
                                                 ------------  ------------ 
Net cash (used in) provided by financing                                    
 activities                                      $       (217) $      1,253 
                                                                            
Net decrease in cash and cash equivalents              (6,071)       (1,809)
Cash and cash equivalents at beginning of the                               
 period                             
                   15,877        16,822 
                                                 ------------  ------------ 
Cash and cash equivalents at end of the period   $      9,806  $     15,013 
                                                 ============  ============ 
                                                                            
                                                                            
                                                                            
                               SELECTICA, INC.                              
                           Billings Reconciliation                          
                               (In thousands)                               
                                 (Unaudited)                                
                                                                            
                                   Three Months Ended    Nine Months Ended  
                                 --------------------- ---------------------
                                  December   December   December   December 
                                  31, 2012   31, 2011   31, 2012   31, 2011 
                                 ---------  ---------- ---------  ----------
                                                                            
Total revenues                   $   4,496  $    3,259 $  13,327  $   10,545
Deferred revenue:                                                           
End of period                        5,504       4,544     5,504       4,544
Beginning of period                  5,775       3,337     6,721       4,320
                                 ---------  ---------- ---------  ----------
Change in deferred revenue            (271)      1,207    (1,217)        224
                                 ---------  ---------- ---------  ----------
Total billings (total revenues                                              
 plus the change in deferred                                                
 revenue)                        $   4,225  $    4,466 $  12,110  $   10,769
                                 =========  ========== =========  ==========

  
Media contacts
Kimberly Canedo
Tanis Communications
(408) 295-4309 x104
kimberly.canedo@taniscomm.com 
Jordan McMahon
Selectica
(650) 532-1520
pr@selectica.com 
Investor contact 
Todd Spartz
Selectica
(650) 532-1540
ir@selectica.com