CARY, N.C., Aug. 4, 2011 (GLOBE NEWSWIRE) -- SciQuest, Inc. (Nasdaq:SQI), a leading provider of on-demand strategic procurement and supplier management solutions, today announced its financial results for the second quarter ended June 30, 2011.
Stephen Wiehe, President and Chief Executive Officer of SciQuest, said, "We are pleased with our strong financial performance in the second quarter. New customer activity was robust in the second quarter, and we signed new customers in each of our four target markets. We are particularly excited about activity in the state and local government market, including the signing of the State of Colorado as a new customer. As a member of the Western States Contracting Alliance, we believe our Colorado relationship could expand to additional alliance members over time, which gives us additional confidence in our long-term potential. With continued investments in products and delivery, as well as sales and marketing, we believe we can further penetrate our target markets and explore additional opportunities to drive long-term growth, profitability and cash flow."
Second Quarter 2011 Results
SciQuest reported total revenue of $12.9 million for the quarter ended June 30, 2011, an increase of 22% compared to revenue of $10.6 million for the comparable period in 2010.
GAAP income from operations in the second quarter of 2011 was $1.0 million, compared to GAAP income from operations of $2.2 million in the second quarter of 2010. GAAP net income was $0.6 million, or $0.03 per share, in the second quarter of 2011, compared to $0.6 million, or $0.04 per share, in the comparable period in 2010.
Non-GAAP income from operations was $2.3 million in the second quarter of 2011, excluding stock-based compensation expenses and amortization of intangible assets. Non-GAAP income from operations was $2.4 million in the second quarter of 2010, excluding stock-based compensation expenses and amortization of intangible assets.
Non-GAAP net income was $1.4 million, or $0.06 per share, for the second quarter of 2011, based on 22.5 million weighted average diluted shares outstanding. This compared to non-GAAP net income of $1.4 million, or $0.10 per share, in the second quarter of 2010, based on 14.7 million weighted average diluted shares outstanding.
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.
Other Second Quarter and Recent Highlights
- Ended the second quarter with 322 customers, an increase from 313 customers at the end of the first quarter of 2011
Business Outlook
Based on information available as of August 4, 2011, SciQuest is issuing guidance for the third quarter and full year 2011 as follows:
Third Quarter 2011: The company expects third quarter revenue to be in the range of $13.8 million to $14.0 million. The company expects GAAP net income per share to be approximately $0.03. GAAP net income per share includes stock-based compensation expense and amortization of intangible assets.
The company expects non-GAAP net income per share of $0.07 to $0.08based on diluted weighted average shares outstanding of 22.6million shares. Non-GAAP net income excludes stock-based compensation expenses of approximately $1.1 million and amortization of acquired software and intangible assets of approximately $0.3 million.
Full Year 2011: The company expects full year 2011 revenue to be in the range of $53.7 million to $54.5 million. The company expects full year GAAP net income per share to be in the range of $0.11 to $0.12. GAAP net income per share includes stock-based compensation expense and amortization of intangible assets.
Non-GAAP net income per share is expected to be in the range of $0.26 to $0.27 based on diluted weighted average shares outstanding of 22.3 million shares. Non-GAAP net income excludes stock-based compensation expenses of approximately $4.0 million, amortization of acquired software and intangible assets of approximately $1.0 million, and acquisition-related costs of $130,000.
The company expects operating cash flow in 2011 to be in the range of $14.7 to $15.2 million. Free cash flow, which is defined as cash flow from operations less purchases of property and equipment of approximately $1.4 million, and capitalization of software development costs of approximately $0.7 million, to be in the range of $13.0 to $13.5 million in 2011.
Conference Call Information
| What: | SciQuest's second quarter 2011 financial results conference call |
| When: | Thursday, August 4, 2011 |
| Time: | 5:00 p.m. ET |
| Webcast: | http://investor.sciquest.com (live and replay) |
| Live Call: | (877) 430-3736, domestic |
| (760) 298-5046, international | |
| Replay: | (800) 642-1687, passcode 81809571, domestic |
| (706) 645-9291, passcode 81809571, international |
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, including acquisition related expense in 2011 and gains on the sale of an investment in 2010, and (iv) the income tax effect of non-GAAP pre-tax adjustments from the provision for income taxes; 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. 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 a leading provider of an integrated, web-based end-to-end eProcurement solution that enables users to realize significant efficiencies and savings on their purchases of indirect goods and services. SciQuest's unique industry segment expertise and innovative "source-to-settle" approach to eProcurement enables Fortune 1000 companies and organizations in the higher education, life sciences, healthcare and public sector markets, as well as other industries, to identify savings opportunities they may otherwise have missed, while improving contract management, compliance and supplier management. SciQuest's solutions help customers turn spending into a source of savings.
SciQuest is a registered trademark of SciQuest, Inc. Other trademarks contained herein remain the property of their respective owners. For more information about SciQuest, please visit www.sciQuest.com or call 888-638-7322 in the U.S. or +44 1794 341182 in Europe.
Cautionary Note Regarding Forward-Looking Statements
Any statements in this release that are not historical or current facts are forward-looking statements. These forward-looking statements include references to activity in the state and local government market, expansion to Western States Contracting Alliance members, our long-term potential, further penetration of our target markets and opportunities to drive long-term growth, profitability and cash flows as well as all statements under the heading "Business Outlook." 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 Registration Statement on Form S-1 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. | |||
| BALANCE SHEETS | |||
| (in thousands except share and per share amounts) | |||
| As of June 30, | As of December 31, | ||
| 2011 | 2010 | ||
| (unaudited) | |||
| Assets | |||
| Current assets: | |||
| Cash and cash equivalents | $ 17,552 | $ 17,494 | |
| Short-term investments | 32,395 | 20,000 | |
| Accounts receivable | 8,481 | 6,400 | |
| Prepaid expenses and other current assets | 1,287 | 1,297 | |
| Deferred tax asset | 255 | 207 | |
| Total current assets | 59,970 | 45,398 | |
| Property and equipment, net | 2,423 | 1,993 | |
| Goodwill | 15,719 | 6,765 | |
| Intangible assets, net | 5,963 | 1,039 | |
| Deferred project costs | 6,007 | 5,667 | |
| Deferred tax asset | 13,914 | 15,675 | |
| Other | 131 | 150 | |
| Total assets | $ 104,127 | $ 76,687 | |
| Liabilities | |||
| Current liabilities: | |||
| Accounts payable | $ -- | $ 51 | |
| Accrued liabilities | 4,039 | 4,200 | |
| Deferred revenues | 32,218 | 28,305 | |
| Total current liabilities | 36,257 | 32,556 | |
| Deferred revenues, less current portion | 11,263 | 9,896 | |
| Stockholders' Equity | |||
| Common stock, $0.001 par value; 50,000,000 shares authorized; 22,144,212 and 20,532,443 shares issued and outstanding as of June 30, 2011 and December 31, 2010, respectively | 22 | 20 | |
| Additional paid-in capital | 71,817 | 50,462 | |
| Notes receivable from stockholders | -- | (15) | |
| Accumulated deficit | (15,232) | (16,232) | |
| Total stockholders' equity | 56,607 | 34,235 | |
| Total liabilities, redeemable preferred stock, and stockholders' equity | $ 104,127 | $ 76,687 | |
| SCIQUEST, INC. | ||||
| STATEMENTS OF OPERATIONS | ||||
| (in thousands except per share amounts) | ||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||
| 2011 | 2010 | 2011 | 2010 | |
| (unaudited) | (unaudited) | |||
| Revenues | $ 12,910 | $ 10,562 | $ 25,434 | $ 20,688 |
| Cost of revenues (1)(2) | 3,134 | 2,337 | 5,961 | 4,446 |
| Gross profit | 9,776 | 8,225 | 19,473 | 16,242 |
| Operating expenses: (1) | ||||
| Research and development | 2,916 | 1,882 | 5,669 | 3,919 |
| Sales and marketing | 3,635 | 2,831 | 7,419 | 5,969 |
| General and administrative | 1,997 | 1,255 | 4,113 | 2,635 |
| Amortization of intangible assets | 210 | 75 | 419 | 151 |
| Total operating expenses | 8,758 | 6,043 | 17,620 | 12,674 |
| Income from operations | 1,018 | 2,182 | 1,853 | 3,568 |
| Other income (expense), net: | ||||
| Interest income | 21 | 5 | 44 | 12 |
| Interest expense | -- | -- | -- | (2) |
| Other (expense) income, net | -- | (4) | 13 | 1,678 |
| Total other income, net | 21 | 1 | 57 | 1,688 |
| Income before income taxes | 1,039 | 2,183 | 1,910 | 5,256 |
| Income tax expense | (463) | (909) | (910) | (2,052) |
| Net income | $ 576 | $ 1,274 | $ 1,000 | $ 3,204 |
| Dividends on redeemable preferred stock | -- | 693 | -- | 1,364 |
| Net income attributable to common stockholders | $ 576 | $ 581 | $ 1,000 | $ 1,840 |
| Net income attributable to common stockholders per share | ||||
| Basic | $ 0.03 | $ 0.04 | $ 0.05 | $ 0.13 |
| Diluted | $ 0.03 | $ 0.04 | $ 0.05 | $ 0.13 |
| Weighted average shares outstanding used in computing per share amounts | ||||
| Basic | 21,859 | 14,075 | 21,275 | 14,079 |
| Diluted | 22,463 | 14,703 | 21,906 | 14,680 |
| (1) Amounts include stock-based compensation expense, as follows: | ||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||
| 2011 | 2010 | 2011 | 2010 | |
| (unaudited) | (unaudited) | |||
| Cost of revenues | $ 61 | $ 20 | $ 108 | $ 31 |
| Research and development | 273 | 22 | 515 | 175 |
| Sales and marketing | 293 | 21 | 559 | 118 |
| General and administrative | 379 | 85 | 526 | 432 |
| $ 1,006 | $ 148 | $ 1,708 | $ 756 | |
| (2) Cost of revenues includes amortization of capitalized software development costs of: | ||||
| Amortization of capitalized software development costs: | $ 94 | $ 49 | $ 166 | $ 97 |
| Amortization of acquired software: | 42 | -- | 84 | -- |
| $ 136 | $ 49 | $ 250 | $ 97 | |
| SCIQUEST, INC. | ||
| STATEMENTS OF CASH FLOWS | ||
| (in thousands) | ||
| Six Months Ended June 30, | ||
| 2011 | 2010 | |
| (unaudited) | ||
| Cash flows from operating activities | ||
| Net income | $ 1,000 | $ 3,204 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Depreciation and amortization | 1,007 | 518 |
| Gain on sale of investment | -- | (1,700) |
| Stock-based compensation expense | 1,708 | 756 |
| Deferred taxes | 1,016 | 1,764 |
| Changes in operating assets and liabilities: | ||
| Accounts receivable | (1,250) | (1,917) |
| Prepaid expense and other current assets | 184 | 89 |
| Deferred project costs and other assets | (321) | (1,369) |
| Accounts payable | (51) | (43) |
| Accrued liabilities and other | (685) | (162) |
| Deferred revenues | 2,918 | 1,233 |
| Net cash provided by operating activities | 5,526 | 2,373 |
| Cash flows from investing activities | ||
| Business acquisition, net of cash acquired | (7,346) | -- |
| Addition of capitalized software development costs | (405) | (422) |
| Purchase of property and equipment | (447) | (379) |
| Purchase of short-term investments | (12,395) | -- |
| Proceds from sale of investment | -- | 1,700 |
| Restricted cash | -- | 350 |
| Net cash (used in) provided by investing activities | (20,593) | 1,249 |
| Cash flows from financing activities | ||
| Proceeds from public offering | 15,405 | -- |
| Public offering costs | (408) | -- |
| Issuance of common and restricted stock | -- | 39 |
| Repurchases of restricted stock | -- | (273) |
| Repayment of notes payable | -- | (350) |
| Repayment of notes receivable from stockholders | 15 | 4 |
| Proceeds from exercise of common stock options | 113 | 21 |
| Net cash provided by (used in) financing activities | 15,125 | (559) |
| Net increase in cash and cash equivalents | 58 | 3,063 |
| Cash and cash equivalents at beginning of the period | 17,494 | 17,132 |
| Cash and cash equivalents at end of the period | $ 17,552 | $20,195 |
| RECONCILIATION DATA | ||||
| (UNAUDITED) | ||||
| (in thousands except share and per share amounts) | ||||
| Reconciliation of Net Income to non-GAAP Net Income: | Three Months Ended June 30, | Six Months Ended June 30, | ||
| 2011 | 2010 | 2011 | 2010 | |
| Net Income | $ 576 | $ 1,274 | $ 1,000 | $ 3,204 |
| Amortization of intangible assets | 210 | 75 | 419 | 151 |
| Amortization of acquired software | 42 | -- | 84 | -- |
| Stock-based compensation | 1,006 | 148 | 1,708 | 756 |
| Acquisition-related costs | -- | -- | 134 | -- |
| Gain on sale of investment | -- | -- | -- | (1,700) |
| Tax effect of adjustments | (431) | (83) | (746) | 295 |
| Non-GAAP net income | $ 1,403 | $ 1,414 | $ 2,599 | $ 2,706 |
| Non-GAAP net income per share: | ||||
| Basic | $ 0.06 | $ 0.10 | $ 0.12 | $ 0.19 |
| Diluted | $ 0.06 | $ 0.10 | $ 0.12 | $ 0.18 |
| Weighted average shares outstanding used in computing per share amounts: | ||||
| Basic | 21,859 | 14,075 | 21,275 | 14,079 |
| Diluted | 22,463 | 14,703 | 21,906 | 14,680 |
| Reconciliation of Income from Operations to non-GAAP Income from Operations: | Three Months Ended June 30, | Six Months Ended June 30, | ||
| 2011 | 2010 | 2011 | 2010 | |
| Income from Operations | $ 1,018 | $ 2,182 | $ 1,853 | $ 3,568 |
| Amortization of intangible assets | 210 | 75 | 419 | 151 |
| Amortization of acquired software | 42 | -- | 84 | -- |
| Stock-based compensation | 1,006 | 148 | 1,708 | 756 |
| Acquisition-related costs | -- | -- | 134 | -- |
| Non-GAAP income from operations | $ 2,276 | $ 2,405 | $ 4,198 | $ 4,475 |
| Reconciliation of Operating Expenses to non-GAAP Operating Expenses: | Three Months Ended June 30, | Six Months Ended June 30, | ||
| 2011 | 2010 | 2011 | 2010 | |
| Operating expenses | $ 8,758 | $ 6,043 | $ 17,620 | $ 12,674 |
| Amortization of intangible assets | (210) | (75) | (419) | (151) |
| Stock-based compensation | (945) | (128) | (1,600) | (725) |
| Acquisition-related costs | -- | -- | (134) | -- |
| Non-GAAP operating expenses | $ 7,603 | $ 5,840 | $ 15,467 | $ 11,798 |
| Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow: | Three Months Ended June 30, | Six Months Ended June 30, | ||
| 2011 | 2010 | 2011 | 2010 | |
| Net cash provided by operating activities | $ 3,754 | $ 2,005 | $ 5,526 | $ 2,373 |
| Purchase of property and equipment | (135) | (277) | (447) | (379) |
| Capitalization of software development costs | (210) | (220) | (405) | (422) |
| Free cash flow | 3,409 | 1,508 | 4,674 | 1,572 |
| Acquisition-related costs | -- | -- | 134 | -- |
| Adjusted free cash flow | $ 3,409 | $ 1,508 | $ 4,808 | $ 1,572 |