Posts Year-Over-Year Non-GAAP Revenue Growth of 23% While Generating GAAP Revenue of $25 million
Generates Strong Momentum with Point Solutions
CARY, N.C., May 1, 2014 (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, 2014.
"During the first quarter, we advanced our long-term initiatives and delivered financial results consistent with our quarterly guidance ranges," said Stephen Wiehe, President and Chief Executive Officer of SciQuest. "We added 16 new customers, a record for a first quarter. Additions spanned multiple markets and solutions. We also expanded relationships with existing customers by generating healthy cross-selling. On the operations front, we released the latest version of our software suite and drove efficiencies across the organization.
"While we achieved first quarter financial guidance, we experienced an unexpected lengthening of sales cycles for large enterprise deals. This caused us to revise full year guidance. Importantly, the delays have not been caused by competitive pressures and our fundamental drivers remain strong. We therefore remain confident in our ability to achieve our long-term financial targets."
First Quarter 2014 Results
SciQuest reported GAAP revenues of $25.4 million for the quarter ended March 31, 2014 compared to $20.7 million in the first quarter of 2013.
GAAP loss from operations in the first quarter of 2014 was $0.1 million compared to GAAP loss from operations of $1.3 million in the first quarter of 2013. GAAP net income was $0.1 million in the first quarter of 2014 compared to GAAP net loss of $0.6 million in the same quarter in the prior year.
GAAP diluted net income per share was breakeven in the first quarter of 2014 based on 24.5 million weighted average diluted shares outstanding. GAAP basic net loss per share in the first quarter of 2013 was $0.03 based on 22.6 million weighted average basic shares outstanding.
Non-GAAP revenue(1) in the first quarter was $26.2 million, an increase of 23% from the prior year.
Non-GAAP income from operations(2) in the first quarter of 2014 was $3.5 million compared to non-GAAP income from operations(2) of $2.9 million in the first quarter of 2013. Non-GAAP net income(3) in the first quarter of 2014 was $2.1 million compared to non-GAAP net income(3) in the first quarter of 2013 of $1.8 million.
Non-GAAP diluted net income per share(3) was $0.09 in the first quarter of 2014 based on 24.5 million weighted average diluted shares outstanding. Based on 22.9 million weighted average diluted shares outstanding, non-GAAP diluted net income per share(3) in the first quarter of 2013 was $0.08.
Business Outlook
SciQuest is issuing the following guidance:
Second quarter 2014
- GAAP revenues to be between $24.8 million and $25.2 million.
- Per share results to be between GAAP basic net loss per share of $0.01 and breakeven.
- Weighted average basic shares outstanding to be approximately 27.4 million.
- Non-GAAP revenues(1) to be between $25.2 million and $25.6 million.
- Non-GAAP diluted net income per share(3) to be between $0.06 and $0.07.
- Weighted average diluted shares outstanding to be approximately 28.1 million.
Full Year 2014
- GAAP revenues to be between $101.6 million and $104.6 million.
- GAAP diluted net loss per share of between $0.02 and $0.05.
- Weighted average basic shares outstanding to be approximately 26.6 million.
- Net cash provided by operating activities to be between $18.4 million and $22.4 million.
- Purchase of property and equipment of approximately $5.5 million, capitalization of software development costs of approximately $4.8 million, acquisition related cash costs of $3.6 million and headquarter relocation costs of approximately $0.3 million.
- Non-GAAP revenues(1) to be between $103.0 million and $106.0 million.
- Non-GAAP diluted net income per share(3) to be between $0.27 and $0.30.
- Weighted average diluted shares outstanding to be approximately 27.2 million.
- Adjusted free cash flow(4) to be between $12.0 million and $16.0 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 deferred revenue adjustment.
2) Non-GAAP income from operations excludes the purchase accounting 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 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 burden of the tax effect of these items.
4) Adjusted free cash flow is defined as net cash provided by operating activities plus acquisition-related costs plus headquarter relocation costs, if any, less (i) the purchase of property and equipment and (ii) capitalization of software development costs.
Conference Call Information
| What: | SciQuest's first quarter results conference call |
| When: | Thursday, May 1, 2014 |
| Time: | 4:30 p.m. ET |
| Webcast: | http://investor.sciquest.com (live and replay) |
| Live Call: | (877) 407-8289, domestic |
| (201) 689-8341, international | |
| Replay: | (877) 660-6853, domestic |
| (201) 612-7415, international | |
| Live and replay conference ID code: 13580192 | |
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 purchase accounting impact on deferred revenue; and (v) the beneficial income tax effect of these items; 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
SciQuest (Nasdaq:SQI) is the largest publicly held pure-play provider of cloud-based, business automation solutions for spend management – offering deep domain knowledge and a leading, customer-driven portfolio. SciQuest solutions enable greater visibility and compliance organization-wide to help you gain control, optimize efficiencies, and reduce spend. These cloud-based solutions are easy to implement and proven to deliver measurable, sustainable value with SciQuest's high-touch support, analysis and automation. Learn more about our solutions and how we can help your organization turn spending into savings at www.sciquest.com.
To join the conversation, please visit our blog, The Open Kitchen at http://www.sciquest.com/blog/ or follow us on Twitter @SciQuest.
Cautionary Note Regarding Forward-Looking Statements
Forward-looking statements include information concerning SciQuest's possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, potential market opportunities, the effects of competition and other factors that could impact future performance. Forward-looking statements, which include references to our lengthening sales cycle, fundamental drivers, long-term financial targets and all statements in the "Business Outlook" section, consist of statements that are not historical facts and can be identified by terms such as, but not limited to, "accelerates", "anticipates," "believes," "could," "seeks," "estimates," "expects," "intends," "may," "plans," "potential," "predicts," "projects," "should," "will," "would" or similar expressions and the negatives of those terms. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Certain of these risks are discussed in "Part I, Item 1A, Risk Factors" and elsewhere in SciQuest's most recent Annual Report on Form 10-K and other reports, as filed with the United States Securities and Exchange Commission ("SEC"). The company's SEC reports are available free of charge on the SEC's website at http://www.sec.gov or on the company's website at www.sciquest.com. All forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Also, forward-looking statements represent management's beliefs and assumptions only as of the date of this release. Except as required by law, SciQuest assumes no obligation to update these forward-looking statements publicly or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.
SQI-F
| SCIQUEST, INC. | ||
| CONSOLIDATED BALANCE SHEETS | ||
| (in thousands except per share amounts) | ||
| As of March 31, | As of December 31, | |
| 2014 | 2013 | |
| (unaudited) | ||
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $ 16,067 | $ 19,117 |
| Short-term investments | 15,105 | 15,105 |
| Accounts receivable, net | 9,918 | 12,987 |
| Prepaid expenses and other current assets | 2,450 | 3,268 |
| Deferred tax asset | 306 | 290 |
| Total current assets | 43,846 | 50,767 |
| Property and equipment, net | 10,292 | 10,028 |
| Goodwill | 64,732 | 65,280 |
| Intangible assets, net | 27,962 | 29,490 |
| Deferred commissions | 6,245 | 6,701 |
| Deferred tax asset, less current portion | 10,955 | 10,885 |
| Other | 334 | 294 |
| Total assets | $ 164,366 | $ 173,445 |
| Liabilities and Stockholders' Equity | ||
| Current liabilities: | ||
| Accounts payable | $ 348 | $ 741 |
| Accrued liabilities | 7,220 | 13,765 |
| Deferred revenues | 55,023 | 57,417 |
| Total current liabilities | 62,591 | 71,923 |
| Deferred revenues, less current portion | 12,532 | 13,343 |
| Stockholders' equity: | ||
| Common stock, $0.001 par value; 50,000 shares authorized; 23,983 and 23,811 shares issued and outstanding as of March 31, 2014 and December 31, 2013, respectively | 24 | 24 |
| Additional paid-in capital | 110,619 | 108,864 |
| Accumulated other comprehensive loss | (2,158) | (1,401) |
| Accumulated deficit | (19,242) | (19,308) |
| Total stockholders' equity | 89,243 | 88,179 |
| Total liabilities and stockholders' equity | $ 164,366 | $ 173,445 |
| SCIQUEST, INC. | ||
| CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||
| (in thousands except per share amounts) | ||
| Three Months Ended March 31, | ||
| 2014 | 2013 | |
| (unaudited) | ||
| Revenues | $ 25,407 | $ 20,665 |
| Cost of revenues (1)(2) | 7,670 | 6,614 |
| Gross profit | 17,737 | 14,051 |
| Operating expenses: (1) | ||
| Research and development | 6,927 | 6,542 |
| Sales and marketing | 6,960 | 5,471 |
| General and administrative | 3,110 | 2,895 |
| Amortization of intangible assets | 797 | 454 |
| Total operating expenses | 17,794 | 15,362 |
| Loss from operations | (57) | (1,311) |
| Other (expense) income, net: | ||
| Interest income | 6 | 20 |
| Other (expense) income, net | (9) | (26) |
| Total other (expense) income, net | (3) | (6) |
| Loss before income taxes | (60) | (1,317) |
| Income tax benefit | 126 | 705 |
| Net income (loss) | $ 66 | $ (612) |
| Other comprehensive loss: | ||
| Foreign currency translation adjustments | (757) | (324) |
| Comprehensive loss | $ (691) | $ (936) |
| Net income (loss) per share | ||
| Basic | $ 0.00 | $ (0.03) |
| Diluted | $ 0.00 | $ (0.03) |
| Weighted average shares outstanding used in computing per share amounts | ||
| Basic | 23,908 | 22,564 |
| Diluted | 24,499 | 22,564 |
| (1) Amounts include stock-based compensation expense, as follows: | ||
| Three Months Ended March 31, | ||
| 2014 | 2013 | |
| (unaudited) | ||
| Cost of revenues | $ 163 | $ 120 |
| Research and development | 180 | 412 |
| Sales and marketing | 362 | 433 |
| General and administrative | 758 | 597 |
| $ 1,463 | $ 1,562 | |
| (2) Cost of revenues includes amortization of capitalized software development costs of: | ||
| Amortization of capitalized software development costs: | $ 558 | $ 367 |
| Amortization of acquired software: | 520 | 325 |
| $ 1,078 | $ 692 | |
| SCIQUEST, INC. | ||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| (in thousands) | ||
| Three Months Ended March 31, | ||
| 2014 | 2013 | |
| (unaudited) | ||
| Cash flows from operating activities | ||
| Net income (loss) | $ 66 | $ (612) |
| Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | ||
| Depreciation and amortization | 2,485 | 1,620 |
| Stock-based compensation expense | 1,463 | 1,562 |
| Deferred taxes | (86) | (636) |
| Changes in operating assets and liabilities: | ||
| Accounts receivable | 3,017 | 4,334 |
| Prepaid expense and other current assets | 805 | (665) |
| Deferred commissions and other assets | 418 | 211 |
| Accounts payable | (392) | (719) |
| Accrued liabilities | (6,521) | (844) |
| Deferred revenues | (3,101) | (1,835) |
| Net cash (used in) provided by operating activities | (1,846) | 2,416 |
| Cash flows from investing activities | ||
| Addition of capitalized software development costs | (1,308) | (1,079) |
| Purchase of property and equipment | (174) | (887) |
| Purchase of short-term investments | -- | (12,425) |
| Maturities of short-term investments | -- | 6,560 |
| Net cash used in investing activities | (1,482) | (7,831) |
| Cash flows from financing activities | ||
| Proceeds from exercise of common stock options | 292 | 340 |
| Net cash provided by financing activities | 292 | 340 |
| Effect of exchange rate change on cash and cash equivalents | (14) | (10) |
| Net decrease in cash and cash equivalents | (3,050) | (5,085) |
| Cash and cash equivalents at beginning of the period | 19,117 | 15,606 |
| Cash and cash equivalents at end of the period | $ 16,067 | $ 10,521 |
| RECONCILIATION DATA | ||
| (UNAUDITED) | ||
| (in thousands except per share amounts) | ||
| Reconciliation of Net Income (Loss) to Non-GAAP Net Income: | Three Months Ended March 31, | |
| 2014 | 2013 | |
| Net income (loss) | $ 66 | $ (612) |
| Purchase accounting deferred revenue adjustment | 747 | 656 |
| Amortization of intangible assets | 797 | 454 |
| Amortization of acquired software | 520 | 325 |
| Stock-based compensation | 1,463 | 1,562 |
| Acquisition related costs | -- | 1,200 |
| Tax effect of adjustments | (1,476) | (1,826) |
| Non-GAAP net income | $ 2,117 | $ 1,759 |
| Non-GAAP net income per share: | ||
| Basic | $ 0.09 | $ 0.08 |
| Diluted | $ 0.09 | $ 0.08 |
| Weighted average shares outstanding used in computing per share amounts: | ||
| Basic | 23,908 | 22,564 |
| Diluted | 24,499 | 22,939 |
| Reconciliation of Loss from Operations to Non-GAAP Income from Operations: | Three Months Ended March 31, | |
| 2014 | 2013 | |
| Loss from operations | $ (57) | $ (1,311) |
| Purchase accounting deferred revenue adjustment | 747 | 656 |
| Amortization of intangible assets | 797 | 454 |
| Amortization of acquired software | 520 | 325 |
| Stock-based compensation | 1,463 | 1,562 |
| Acquisition related costs | -- | 1,200 |
| Non-GAAP income from operations | $ 3,470 | $ 2,886 |
| Reconciliation of Operating Expenses to Non-GAAP Operating Expenses: | Three Months Ended March 31, | |
| 2014 | 2013 | |
| Operating expenses | $ 17,794 | $ 15,362 |
| Amortization of intangible assets | (797) | (454) |
| Stock-based compensation | (1,300) | (1,442) |
| Acquisition related costs | -- | (1,200) |
| Non-GAAP operating expenses | $ 15,697 | $ 12,266 |
| Reconciliation of Net Cash (Used In) Provided by Operating Activities to Adjusted Free Cash Flow: | Three Months Ended March 31, | |
| 2014 | 2013 | |
| Net cash (used in) provided by operating activities | $ (1,846) | $ 2,416 |
| Purchase of property and equipment | (174) | (887) |
| Capitalization of software development costs | (1,308) | (1,079) |
| Free cash flow | (3,328) | 450 |
| Acquisition related costs | 3,600 | -- |
| Adjusted free cash flow | $ 272 | $ 450 |
| RECONCILIATION DATA | ||
| (UNAUDITED) | ||
| (in thousands) | ||
| Reconciliation of Revenues to Non-GAAP Revenues: | Three Months Ended March 31, | |
| 2014 | 2013 | |
| Revenues | $ 25,407 | $ 20,665 |
| Purchase accounting deferred revenue adjustment | 747 | 656 |
| Non-GAAP Revenues | $ 26,154 | $ 21,321 |
| Reconciliation of Cost of Revenues to Non-GAAP Cost of Revenues: | Three Months Ended March 31, | |
| 2014 | 2013 | |
| Cost of revenues | $ 7,670 | $ 6,614 |
| Amortization of acquired software | (520) | (325) |
| Stock-based compensation | (163) | (120) |
| Non-GAAP Cost of revenues | $ 6,987 | $ 6,169 |
| Reconciliation of Research and Development to Non-GAAP Research and Development: | Three Months Ended March 31, | |
| 2014 | 2013 | |
| Research and development | $ 6,927 | $ 6,542 |
| Stock-based compensation | (180) | (412) |
| Acquisition related costs | -- | (600) |
| Non-GAAP Research and development | $ 6,747 | $ 5,530 |
| Reconciliation of Sales and Marketing to Non-GAAP Sales and Marketing: | Three Months Ended March 31, | |
| 2014 | 2013 | |
| Sales and marketing | $ 6,960 | $ 5,471 |
| Stock-based compensation | (362) | (433) |
| Acquisition related costs | -- | (600) |
| Non-GAAP Sales and marketing | $ 6,598 | $ 4,438 |
| Reconciliation of General and Administrative to Non-GAAP General and Administrative: | Three Months Ended March 31, | |
| 2014 | 2013 | |
| General and administrative | $ 3,110 | $ 2,895 |
| Stock-based compensation | (758) | (597) |
| Non-GAAP General and administrative | $ 2,352 | $ 2,298 |
| Reconciliation of Amortization of Intangible Assets to Non-GAAP Amortization of Intangible Assets: | Three Months Ended March 31, | |
| 2014 | 2013 | |
| Amortization of intangible assets | $ 797 | $ 454 |
| Amortization of intangible assets | (797) | (454) |
| Non-GAAP Amortization of intangible assets | $ -- | $ -- |
| RECONCILIATION DATA | ||||
| (UNAUDITED) | ||||
| (in thousands except per share amounts) | ||||
| Reconciliation of Revenue Outlook to Non-GAAP Revenue Outlook: |
Three Months Ended June 30, 2014 |
Twelve Months Ended December 31, 2014 |
||
| Low end of Range | High end of Range | Low end of Range | High end of Range | |
| Revenues | $ 24,800 | $ 25,200 | $ 101,600 | $ 104,600 |
| Purchase accounting deferred revenue adjustment | 400 | 400 | 1,400 | 1,400 |
| Non-GAAP revenues | $ 25,200 | $ 25,600 | $ 103,000 | $ 106,000 |
| Reconciliation of (Loss) Earnings per Share Outlook to Non-GAAP Earnings per Share Outlook: |
Three Months Ended June 30, 2014 |
Twelve Months Ended December 31, 2014 |
||
| Low end of Range | High end of Range | Low end of Range | High end of Range | |
| Loss per Share | $ (0.01) | $ -- | $ (0.05) | $ (0.02) |
| Purchase accounting deferred revenue adjustment per share | 0.01 | 0.01 | 0.05 | 0.05 |
| Amortization of intangible assets per share and acquired software per share | ||||
| Stock-based compensation per share | 0.06 | 0.06 | 0.24 | 0.24 |
| Headquarter relocation expenses per share | 0.00 | 0.00 | 0.05 | 0.05 |
| Tax effect of adjustments per share | (0.05) | (0.05) | (0.21) | (0.21) |
| Non-GAAP earnings per share | $ 0.06 | $ 0.07 | $ 0.27 | $ 0.30 |
| Reconciliation of Net Cash Provided by Operating Activities Outlook to Adjusted Free Cash Flow Outlook: |
Twelve Months Ended December 31, 2014 |
|||
| Low end of Range | High end of Range | |||
| Net cash provided by operating activities | $ 18,400 | $ 22,400 | ||
| Purchase of property and equipment | (5,500) | (5,500) | ||
| Capitalization of software development costs | (4,800) | (4,800) | ||
| Acquisition related costs | 3,600 | 3,600 | ||
| Headquarter relocation costs | 300 | 300 | ||
| Adjusted free cash flow | $ 12,000 | $ 16,000 | ||