SciQuest Announces First Quarter Financial Results

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
         mperkins@sciquest.com
        
         SciQuest Investor contact:
         Jamie Andelman
         SciQuest, Inc.
         919-659-2322
         jandelman@sciquest.com
 
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