SciQuest Announces Third Quarter Financial Results

Exceeds Revenue Guidance

Advances Sales Transformation

Drives Operational Integration Progress

CARY, N.C., Nov. 5, 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 third quarter ended September 30, 2013.

Stephen Wiehe, President and Chief Executive Officer of SciQuest, said, "The third quarter was characterized by good execution, strong results and advancement against our strategic priorities. We drove the sales transformation forward while attracting new customers, generating healthy cross-selling and rebuilding sales momentum. These efforts contributed to non-GAAP revenue that exceeded the top end of the guidance range and increased 33 percent from a year ago. They also helped drive non-GAAP EPS to the high end of expectations. Meanwhile, operational integration of CombineNet, which we acquired on August 30^th, is on track, and we are pleased with the initial levels of customer interest in the rest of our software suite. As a result, we are well positioned for success in the fourth quarter and beyond, including progress towards our long-term revenue growth and profitability targets."

Third Quarter 2013 Results

SciQuest reported GAAP revenues of $22.5 million for the quarter ended September 30, 2013 compared to $17.2 million in the third quarter of 2012.

GAAP loss from operations in the third quarter of 2013 was $1.8 million compared to GAAP loss from operations of $0.1 million in the third quarter of 2012. GAAP net loss was $2.4 million in the third quarter of 2013 compared to GAAP net income of $0.7 million in the same quarter in the prior year. The primary drivers of the decline from 2012 were the expected impacts of the acquisitions.

GAAP basic net loss per share was $0.10 in the third quarter of 2013 based on 23.1 million average basic shares outstanding. GAAP diluted net income per share in the third quarter of 2012 was $0.03 based on 22.7 million average diluted shares outstanding.

Non-GAAP revenues⁽¹⁾ in the third quarter of 2013 were $23.5 million, up 33% from the prior year.

Non-GAAP income from operations⁽²⁾ in the third quarter of 2013 was $3.6 million compared to $2.3 million in the third quarter of 2012. Non-GAAP net income⁽³⁾ in the third quarter of 2013 was $2.2 million compared to $1.4 million in the same quarter in the prior year.

Non-GAAP diluted net income per share⁽³⁾ was $0.09 in the third quarter of 2013 based on 23.5 million average diluted shares outstanding. Based on 22.7 million average diluted shares outstanding, non-GAAP diluted net income per share⁽³⁾ in the third quarter of 2012 was $0.06.

Business Outlook

SciQuest is issuing the following guidance for the fourth quarter and updating its full year 2013 guidance:

Fourth quarter 2013

• GAAP revenues to be between $24.4 million and $24.7 million.
• GAAP basic net loss per share to be between $0.04 and $0.05.
• Basic weighted average shares outstanding to be approximately 23.7 million.
• Non-GAAP revenues⁽¹⁾ to be between $25.3 million and $25.6 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 24.4 million.

Full Year 2013

• GAAP revenues to be between $88.8 million and $89.1 million.
• GAAP basic net loss per share to be between $0.19 and $0.20.
• Basic weighted average shares outstanding to be approximately 22.8 million.
• Net cash provided by operating activities to be between $15.3 million and $15.8 million.
• Purchase of property and equipment of approximately $3.5 million, capitalization of software development costs of approximately $4.2 million and acquisition related cash costs of approximately $2.9 million.
• Non-GAAP revenues⁽¹⁾ to be between $92.1 million and $92.4 million.
• Non-GAAP diluted net income per share⁽³⁾ to be between $0.34 and $0.35.
• Diluted weighted average shares outstanding to be approximately 23.3 million.
• Adjusted free cash flow⁽⁴⁾ to be between $10.5 million and $11.0 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 and loss 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 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 (i) the purchase of property and equipment and (ii) capitalization of software development costs.

Conference Call Information

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.

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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 the fourth quarter and beyond, long-term 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.  

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