SciQuest Announces First Quarter Financial Results Exceeds Quarterly Guidance as Non-GAAP Revenues Grew 48% Drives Significant Integration Progress Advances Strategic Priorities CARY, N.C., April 30, 2013 (GLOBE NEWSWIRE) -- SciQuest, Inc. (Nasdaq:SQI), a leading provider of cloud-based business automation solutions for spend management, today announced its financial results for the first quarter ended March 31, 2013. Stephen Wiehe, President and Chief Executive Officer of SciQuest, said, "We accomplished a great deal in the first quarter while we generated financial results that exceeded the high end of our quarterly guidance ranges. First quarter non-GAAP revenue grew by 48 percent from the prior year and non-GAAP earnings per share increased by over 60 percent compared to the prior year. Sales growth was fueled by the addition of ten new customers and upsells of newer solutions into our existing customer base. We also substantially completed the operational integration of the two acquisitions we made in the second half of 2012. In addition, our technical integration is on track based on enhancements that were included in the latest release of our software suite that went live in late March. Over the remainder of the year, we look forward to continuing to drive sales to new and existing customers, capture financial and operational efficiencies and enhance our solution suite." First Quarter 2013 Results SciQuest reported GAAP revenues of $20.7 million for the quarter ended March 31, 2013 compared to $14.4 million in the first quarter of 2012. GAAP loss from operations in the first quarter of 2013 was $1.3 million compared to GAAP income from operations of $0.3 million in the first quarter of 2012. GAAP net loss was $0.6 million in the first quarter of 2013 compared to GAAP net income of $0.2 million in the same quarter in the prior year. The primary drivers of the decline from 2012 were the expected impacts of the SciQuest Canada (formerly known as Upside Software) and Spend Radar acquisitions. GAAP basic net loss per share was $0.03 in the first quarter of 2013 based on 22.6 million average basic shares outstanding. GAAP diluted net income per share in the first quarter of 2012 was $0.01 based on 22.6 million average diluted shares outstanding. Non-GAAP revenues^(1) in the first quarter of 2013 were $21.3 million, up 48% from the prior year. Non-GAAP income from operations^(2) in the first quarter of 2013 was $2.9 million compared to non-GAAP income from operations^(2) of $1.7 million in the first quarter of 2012. Non-GAAP net income^(3) in the first quarter of 2013 was $1.8 million compared to non-GAAP net income^(3) in the first quarter of 2012 of $1.1 million. Non-GAAP diluted net income per share^(3) was $0.08 in the first quarter of 2013 based on 22.9 million average diluted shares outstanding. Based on 22.6 million average diluted shares outstanding, non-GAAP diluted net income per share^(3) in the first quarter of 2012 was $0.05. Business Outlook SciQuest is issuing the following guidance for the second quarter and confirming its full year 2013 guidance that it initially provided on February 7, 2013: Second quarter 2013 *GAAP revenues to be between $20.5 million and $21.0 million. *GAAP basic net loss per share to be between $0.05 and $0.06. *Basic weighted average shares outstanding to be approximately 22.7 million. *Non-GAAP revenues^(1) to be between $21.6 million and $22.1 million. *Non-GAAP diluted net income per share^(3) to be between $0.08 and $0.09. *Diluted weighted average shares outstanding to be approximately 23.1 million. Full Year 2013 *GAAP revenues to be between $86.1 million and $90.1 million. *GAAP basic net loss per share to be between $0.13 and $0.17. *Basic weighted average shares outstanding to be approximately 22.6 million. *Net cash provided by operating activities to be between $24.7 million and $27.7 million. *Purchase of property and equipment of approximately $3.5 million, capitalization of software development costs of approximately $5.6 million and acquisition related cash costs of approximately $2.4 million. *Non-GAAP revenues^(1) to be between $89.0 million and $93.0 million. *Non-GAAP diluted net income per share^(3) to be between $0.34 and $0.38. *Diluted weighted average shares outstanding to be approximately 23.1 million. *Adjusted free cash flow^(4) to be between $18.0 million and $21.0 million. A reconciliation of the most comparable GAAP financial measure to the non-GAAP measures used above is included with the financial tables at the end of this release. ENDNOTES 1)Non-GAAP revenues exclude the purchase accounting impact on deferred revenue adjustment. 2)Non-GAAP income and loss from operations excludes the purchase accounting impact on deferred revenue adjustment; stock-based compensation expense; acquisition related costs; and the amortization of (i) intangible assets and (ii) acquired software. 3)Non-GAAP net income and non-GAAP diluted net income per share exclude the purchase accounting impact on deferred revenue adjustment; stock-based compensation expense; acquisition related costs; and the amortization of (i) intangible assets and (ii) acquired software. Non-GAAP net income includes the negative tax-effect of these items. 4) Adjusted free cash flow is defined as net cash provided by operating activities plus acquisition related costs, less purchases of (i) property and equipment and (ii) capitalization of software development costs. Conference Call Information What: SciQuest's first quarter 2013 financial results conference call When: Tuesday, April 30, 2013 Time: 4:30 p.m. ET Webcast: http://investor.sciquest.com (live and replay) Live Call: (855) 297-9383, domestic (708) 290-1311, international Replay: (855) 859-2056, domestic (404) 537-3406, international Live and replay conference ID code: 35431899 Non-GAAP Financial Measures SciQuest provides all information required in accordance with GAAP, but believes evaluating its ongoing operating results may not be as useful if an investor is limited to reviewing only GAAP financial measures. Accordingly, SciQuest presents non-GAAP financial measures in reporting its financial results to provide investors with additional tools to evaluate SciQuest's operating results in a manner that focuses on what SciQuest believes to be its ongoing business operations and what SciQuest uses to evaluate its ongoing operations and for internal planning and forecasting purposes. SciQuest's management does not itself, nor does it suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. SciQuest's management believes it is useful for itself and investors to review, as applicable, both GAAP information that includes: (i) the amortization of acquired intangible assets; (ii) the impact of stock-based compensation; (iii) other significant items, such as acquisition related expenses; (iv) the income tax effect of non-GAAP pre-tax adjustments from the provision for income taxes; and (v) the purchase accounting impact on deferred revenue; and the non-GAAP measures that exclude such information in order to assess the performance of SciQuest's business and for planning and forecasting in subsequent periods. Whenever SciQuest uses such a non-GAAP financial measure, it provides a reconciliation of the non-GAAP financial measure to the most closely applicable GAAP financial measure to the extent possible. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measure as detailed herein. About SciQuest With a reputation for deep domain knowledge, a solid customer-driven portfolio, and industry-leading customer satisfaction, SciQuest (Nasdaq:SQI) is the largest public provider of cloud-based business automation solutions for spend management that turn spending into savings. SciQuest solutions enable greater visibility and compliance organization-wide to help you gain control, optimize efficiencies, and reduce spend. These cloud-based solutions are easier to implement and proven to deliver measurable, sustainable value with SciQuest's high-touch support, analysis and automation. To join the conversation, please visit our blog, The Open Kitchen—http://www.sciquest.com/blog/ or follow us on Twitter @SciQuest. Cautionary Note Regarding Forward-Looking Statements Any statements in this release that are not historical or current facts are forward-looking statements, including references to the remainder of 2013 and all statements in the "Business Outlook" section. All forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. Certain of these risks and uncertainties are described in the "Risk Factors" section of our most recent Annual Report on Form 10-K and other required reports, as filed with the SEC, which are available free of charge on the SEC's website at http://www.sec.gov or on our website at www.sciquest.com.Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. These forward-looking statements speak only as of the date hereof, and we undertake no obligation to update, amend or clarify any forward-looking statement for any reason. SQI-F SCIQUEST, INC. CONSOLIDATED BALANCE SHEETS (in thousands except per share amounts) As of March31, As of December31, 2013 2012 (unaudited) Assets Current assets: Cash and cash equivalents $10,521 $15,606 Short-term investments 35,605 29,740 Accounts receivable, net 8,537 12,916 Prepaid expenses and other current 2,098 1,434 assets Deferred tax asset 82 77 Total current assets 56,843 59,773 Property and equipment, net 8,213 7,093 Goodwill 37,064 37,295 Intangible assets, net 15,461 16,346 Deferred project costs 6,802 6,962 Deferred tax asset 13,313 12,682 Other 122 173 Total assets $137,818 $140,324 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $1,140 $1,864 Accrued liabilities 7,919 8,771 Deferred revenues 46,573 47,821 Total current liabilities 55,632 58,456 Deferred revenues, less current portion 13,992 14,640 Stockholders' equity: Common stock, $0.001par value; 50,000shares authorized; 22,727 and 22,525shares issued and outstanding as 23 23 of March 31, 2013 and December 31, 2012, respectively Additional paid-in capital 83,796 81,894 Accumulated other comprehensive loss (439) (115) Accumulated deficit (15,186) (14,574) Total stockholders' equity 68,194 67,228 Total liabilities and stockholders' $137,818 $140,324 equity SCIQUEST, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME (in thousands except per share amounts) Three Months Ended March 31, 2013 2012 (unaudited) Revenues $20,665 $14,408 Cost of revenues (1)(2) 6,614 4,177 Gross profit 14,051 10,231 Operating expenses: (1) Research and development 6,542 3,037 Sales and marketing 5,471 4,106 General and administrative 2,895 2,572 Amortization of intangible assets 454 209 Total operating expenses 15,362 9,924 (Loss) income from operations (1,311) 307 Other (expense) income, net: Interest income 20 24 Other (expense) income, net (26) 15 Total other (expense) income, net (6) 39 (Loss) income before income taxes (1,317) 346 Income tax benefit (expense) 705 (193) Net (loss) income $(612) $153 Other comprehensive (loss) income: Foreign currency translation adjustments (324) 6 Comprehensive (loss) income $(936) $159 Net (loss) income per share Basic $(0.03) $0.01 Diluted $(0.03) $0.01 Weighted average shares outstanding used in computing per share amounts Basic 22,564 22,190 Diluted 22,564 22,643 (1) Amounts include stock-based compensation expense, as follows: Three Months Ended March 31, 2013 2012 (unaudited) Cost of revenues $120 $121 Research and development 412 241 Sales and marketing 433 298 General and administrative 597 493 $1,562 $1,153 (2) Cost of revenues includes amortization of capitalized software development costs of: Amortization of capitalized software development $367 $148 costs: Amortization of acquired software: 325 42 $692 $190 SCIQUEST, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Three Months Ended March 31, 2013 2012 (unaudited) Cash flows from operating activities Net (loss) income $(612) $153 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 1,620 699 Stock-based compensation expense 1,562 1,153 Deferred taxes (636) 163 Changes in operating assets and liabilities: Accounts receivable 4,334 2,699 Prepaid expense and other current assets (665) (53) Deferred project costs and other assets 211 (203) Accounts payable (719) (102) Accrued liabilities (844) (1,804) Deferred revenues (1,835) (1,099) Net cash provided by operating activities 2,416 1,606 Cash flows from investing activities Addition of capitalized software development (1,079) (589) costs Purchase of property and equipment (887) (1,002) Purchase of short-term investments (12,425) (1,200) Maturities of short-term investments 6,560 5,020 Net cash (used in) provided by investing (7,831) 2,229 activities Cash flows from financing activities Proceeds from exercise of common stock options 340 172 Net cash provided by financing activities 340 172 Effect of exchange rate change on cash and cash (10) 6 equivalents Net (decrease) increase in cash and cash (5,085) 4,013 equivalents Cash and cash equivalents at beginning of the 15,606 14,958 period Cash and cash equivalents at end of the period $10,521 $18,971 RECONCILIATION DATA (UNAUDITED) (in thousands except per share amounts) Reconciliation of Net (Loss) Income to Non-GAAP Three Months Ended March 31, Net Income: 2013 2012 Net (loss) income $(612) $153 Purchase accounting deferred revenue adjustment 656 -- Amortization of intangible assets 454 209 Amortization of acquired software 325 42 Stock-based compensation 1,562 1,153 Acquisition related costs 1,200 -- Tax effect of adjustments (1,826) (488) Non-GAAP net income $1,759 $1,069 Non-GAAP net income per share: Basic $0.08 $0.05 Diluted $0.08 $0.05 Weighted average shares outstanding used in computing per share amounts: Basic 22,564 22,190 Diluted 22,939 22,643 Reconciliation of (Loss) Income from Operations Three Months Ended March 31, to Non-GAAP Income from Operations: 2013 2012 (Loss) income from operations $(1,311) $307 Purchase accounting deferred revenue adjustment 656 -- Amortization of intangible assets 454 209 Amortization of acquired software 325 42 Stock-based compensation 1,562 1,153 Acquisition related costs 1,200 -- Non-GAAP income from operations $2,886 $1,711 Reconciliation of Operating Expenses to Non-GAAP Three Months Ended March 31, Operating Expenses: 2013 2012 Operating expenses $15,362 $9,924 Amortization of intangible assets (454) (209) Stock-based compensation (1,442) (1,032) Acquisition related costs (1,200) -- Non-GAAP operating expenses $12,266 $8,683 Reconciliation of Net Cash Provided by Operating Three Months Ended March 31, Activities to Adjusted Free Cash Flow: 2013 2012 Net cash provided by operating activities $2,416 $1,606 Purchase of property and equipment (887) (1,002) Capitalization of software development costs (1,079) (589) Free cash flow 450 15 Acquisition-related costs -- -- Adjusted free cash flow $450 $15 RECONCILIATION DATA (UNAUDITED) (in thousands) Reconciliation of Revenues to Non-GAAP Revenues: Three Months Ended March 31, 2013 2012 Revenues $20,665 $14,408 Purchase accounting deferred revenue adjustment 656 -- Non-GAAP Revenues $21,321 $14,408 Reconciliation of Cost of Revenues to Non-GAAP Three Months Ended March 31, Cost of Revenues: 2013 2012 Cost of revenues $6,614 $4,177 Amortization of acquired software (325) (42) Stock-based compensation (120) (121) Non-GAAP Cost of revenues $6,169 $4,014 Reconciliation of Research and Development to Three Months Ended March 31, Non-GAAP Research and Development: 2013 2012 Research and development $6,542 $3,037 Stock-based compensation (412) (241) Acquisition related costs (600) -- Non-GAAP Research and development $5,530 $2,796 Reconciliation of Sales and Marketing to Three Months Ended March 31, Non-GAAP Sales and Marketing: 2013 2012 Sales and marketing $5,471 $4,106 Stock-based compensation (433) (298) Acquisition related costs (600) -- Non-GAAP Sales and marketing $4,438 $3,808 Reconciliation of General and Administrative to Three Months Ended March 31, Non-GAAP General and Administrative: 2013 2012 General and administrative $2,895 $2,572 Stock-based compensation (597) (493) Non-GAAP General and administrative $2,298 $2,079 Reconciliation of Amortization of Intangible Assets to Non-GAAP Amortization of Intangible Three Months Ended March 31, Assets: 2013 2012 Amortization of intangible assets $454 $209 Amortization of intangible assets (454) (209) Non-GAAP Amortization of intangible assets $-- $-- RECONCILIATION DATA (UNAUDITED) (in thousands except per share amounts) Reconciliation of Revenue Three Months Ended June 30, Twelve Months Ended Outlook to Non-GAAP Revenue 2013 December 31, 2013 Outlook: Low end of High end of Low end of High end of Range Range Range Range Revenues $20,500 $21,000 $86,100 $90,100 Purchase accounting $1,100 $1,100 2,900 2,900 deferred revenue adjustment Non-GAAP revenues $21,600 $22,100 $89,000 $93,000 Reconciliation of (Loss) Earnings per Share Outlook Three Months Ended June 30, Twelve Months Ended to Non-GAAP Earnings per 2013 December 31, 2013 Share Outlook: Low end of High end of Low end of High end of Range Range Range Range Loss per Share $(0.06) $(0.05) $(0.17) $(0.13) Purchase accounting deferred revenue adjustment 0.05 0.05 0.13 0.13 per share Amortization of intangible assets per share and 0.03 0.03 0.14 0.14 acquired software per share Stock-based compensation 0.08 0.08 0.31 0.31 per share Acquisition related costs 0.05 0.05 0.21 0.21 per share Tax effect of adjustments (0.07) (0.07) (0.28) (0.28) per share Non-GAAP earnings per share $0.08 $0.09 $0.34 $0.38 Reconciliation of Net Cash Provided by Operating Twelve Months Ended Activities Outlook to December 31, 2013 Adjusted Free Cash Flow Outlook: Low end of High end of Range Range Net cash provided by $24,700 $27,700 operating activities Purchase of property and (3,500) (3,500) equipment Capitalization of software (5,600) (5,600) development costs Acquisition related costs 2,400 2,400 Adjusted free cash flow $18,000 $21,000 CONTACT: SciQuest media contact: Michelle Perkins SciQuest, Inc. 919-659-2228 email@example.com SciQuest Investor contact: Jamie Andelman SciQuest, Inc. 919-659-2322 firstname.lastname@example.org
SciQuest Announces First Quarter Financial Results
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