Unica Announces Financial Results for First Quarter Fiscal 2008
Unica Corporation (Nasdaq: UNCA), a leading global provider of
enterprise marketing management (EMM) solutions, today announced
financial results for its fiscal first quarter ended December 31,
2007.
For the quarter ended December 31, 2007, the company reported
total revenue of $28.5 million, an increase of 20% compared with the
first quarter of fiscal 2007. Perpetual license revenue was
$11.1 million, an increase of 23%, subscription revenue was $2.7
million, an increase of 19%, and maintenance and services revenue was
$14.6 million, an increase of 17%, each compared to the prior year
quarter. For the quarter ended December 31, 2007, maintenance revenue
on perpetual licenses was $10.6 million, an increase of 12% from the
prior year quarter, and services revenue was $4.0 million, an increase
of 32% from the prior year quarter.
Yuchun Lee, chief executive officer of Unica Corporation, stated,
"We are pleased with the company´s execution during the first quarter,
highlighted by solid revenue growth that exceeded the high-end of our
guidance. We continue to see solid demand for our suite of Enterprise
Marketing Management (EMM) solutions, which was particularly strong
internationally in Q1. We believe the market is increasingly
evaluating EMM vendors based on their ability to deliver a broad suite
of solutions, which we believe favors Unica due to our industry
leading product breadth and depth and strong technology architecture."
Lee added, "In addition, we are also excited with the progress of
our newly created, Unica On-Demand business. We believe there is a
tremendous growth opportunity at the departmental and mid-tier segment
of the EMM market that will augment our overall growth and leadership
position."
For the quarter ended December 31, 2007, Unica reported a loss
from operations, in accordance with generally accepted accounting
principles (GAAP), of $1.6 million, as compared to a loss from
operations of $586,000 for the quarter ended December 31, 2006. GAAP
loss from operations includes $1.8 million of non-cash share-based
compensation expense and $727,000 of amortization of acquired
intangibles. GAAP net loss for the quarter ended December 31, 2007 was
$446,000, compared to GAAP net loss of $180,000 in the same period
last year. GAAP net loss per diluted share for the quarter ended
December 31, 2007 was $0.02 per share, compared to GAAP net loss of
$0.01 per diluted share in the same period last year.
For the quarter ended December 31, 2007, non-GAAP income from
operations, which excludes non-cash share-based compensation expense
and amortization of acquired intangibles, was $882,000, as compared to
non-GAAP income from operations of $1.1 million in same period last
year. During the quarter ended December 31, 2007, the company incurred
professional fees of approximately $640,000 associated with the
completion of the previously disclosed restatement of interim
financial information for the first three quarters of fiscal 2007.
Based on a 30% non-GAAP effective tax rate, non-GAAP net income
was $1.0 million in the quarter ended December 31, 2007, compared to
non-GAAP net income of $946,000 for the same period last year.
Non-GAAP net income per diluted share was $0.05 in the quarter ended
December 31, 2007, compared to $0.04 in the same period last year when
the effective non-GAAP tax rate was 44%.
A reconciliation of GAAP to non-GAAP results has been provided in
the financial statement tables included in this press release. An
explanation of these measures is also included below under the heading
"Non-GAAP Financial Measures." In addition, all references to
financial results for the first fiscal quarter of the prior year are
to those results as restated in the Company´s Annual Report on Form
10-K for the fiscal year ended September 30, 2007.
As of December 31, 2007, Unica had cash, cash equivalents, and
short-term investments of $38.0 million, compared to $38.1 million at
September 30, 2007. During the first fiscal quarter, the Company
generated $1.1 million in cash from operations, which was offset by
capital expenditures and certain financing activities. At December 31,
2007, deferred revenue was $39.3 million, an increase from $38.6
million at the end of the previous quarter.
Ralph Goldwasser, chief financial officer of Unica, said, "While
professional fees led to higher-than-anticipated overall expenses for
the quarter, the level of investment in the overall business was
in-line with our targets. The Company´s enterprise business continues
to deliver healthy contribution margins, which provides the
profitability and cash flow to fund the investment phase of our newly
created Unica On-Demand business. This is a medium-term investment,
which we believe is essential in order to realize the significant
growth opportunity and recurring revenue sources associated with the
on-demand business."
Additional First Quarter and Recent Business Highlights:
-- Unica continued to achieve success and growth with industry
leaders across a broad range of vertical markets, including
financial services, communications, insurance, retail,
hospitality, technology and manufacturing. New customers added
during the first quarter included: Astra Zeneca, Belgacom
Mobile, IKEA, Insurance Australia Limited, Kasikorn Bank, Quad
Graphics, Inc., Royal Bank of Scotland, Sterling Jewelers, and
TACA International Airlines, among others. In addition, the
company expanded the scope of its relationship with existing
customers, including Aetna Life Insurance Company, Banco
Bilbao Vizcaya Argentaria (Latin America), Comcast Cable
Communications, Inc., Fifth Third Bank, Monster Worldwide Inc.
and Orbitz, LLC.
-- Unica cited as the marketing platform leader in marketing
leadership and relationship marketing and as a strong
performer in marketing operations in the January 2008 report,
"The Forrester Wave(TM): Enterprise Marketing Platforms, Q1
2008 report."
-- Peppers & Rogers Group awarded a Unica Affinium(R)
Campaign(TM)and Affinium Leads(TM) customer it silver 1to1(R)
Impact Award for Marketing Optimization.
-- Within Unica´s On-Demand business, it added customers such as
Franklin Templeton Investments, LPL Financial, Phillips
Investment Resources, Upromise and Collette Travel, among
others, for its web analytics application. In addition, it
added customers such as Invesco, Cessna Aircraft Company and
McKesson Corporation among others for its Marketing Central
MRM solution.
-- Unica continued to expand and deepen its senior executive
leadership team with the appointment of Paul McNulty to SVP
and Chief Marketing Officer. McNulty brings more than 20 years
of technology and international market experience, most
recently serving as VP of world wide marketing at Progress
Software.
Financial Outlook
Outlook for the second quarter ending March 31, 2008 and fiscal
year ending September 30, 2008 are as follows:
Second Quarter of Fiscal Year 2008:
-- Revenue: Targeting between $29 million and $30 million with a
certain amount of variability.
-- Non-GAAP Operating Income: Expected to be between $1.5 million
and $1.9 million, with a certain amount of variability.
-- Non-GAAP Diluted Earnings Per Share: Expected to be $0.06 to
$0.07 based on an estimated weighted average of 21.8 million
shares outstanding and an estimated non-GAAP effective tax
rate of 30%.
Fiscal Year 2008:
-- Revenue: Targeting between $121 million and $123 million with
a certain amount of variability.
-- Non-GAAP Operating Income: Expected to be between $8 million
and $9 million, with a certain amount of variability.
-- Non-GAAP Diluted Earnings Per Share: Expected to be $0.31 to
$0.34 based on an estimated weighted average of 22.1 million
shares outstanding and an estimated non-GAAP effective tax
rate of 30%.
The preceding forward-looking information with respect to non-GAAP
operating income and earnings per share excludes share-based
compensation expense in an estimated amount of approximately $1.8
million and $7.2 million for the second quarter and full year fiscal
2008, respectively. Amortization of acquired intangibles related to
previous acquisitions is estimated to be approximately $0.7 and $2.9
million for the second quarter and full year fiscal 2008,
respectively.
Conference Call Details
Unica will discuss its quarterly results and related matters via a
teleconference today, February 6, 2008 at 5:00 p.m. EST. To access
this call, dial 888-240-0602 (domestic) or 913-312-1424
(international). Additionally, a live audio webcast of the conference
call will be available through Unica´s web site at
http://investor.unica.com.
A replay of this conference call will be available from 8:00 p.m.
EST on Wednesday, February 6, 2008 through 11:59 p.m. EST on
Wednesday, February 20, 2008 at 888-203-1112 (domestic) or
719-457-0820 (international). The replay passcode is 9453227. A replay
of the webcast will also be available on the events portion of the
Unica web site following the earnings call.
Non-GAAP Financial Measures
Unica has provided in this press release selected financial
information that has not been prepared in accordance with GAAP. This
information includes historical non-GAAP operating income, net income,
effective tax rate and earnings per share.
Unica uses these non-GAAP financial measures internally in
analyzing its financial results and believes they are useful to
investors, as a supplement to GAAP measures, in evaluating Unica´s
ongoing operational performance. Unica believes that the use of these
non-GAAP financial measures provides an additional tool for investors
to use in evaluating ongoing operating results and trends, and in
comparing its financial results with other companies in Unica´s
industry, many of which present similar non-GAAP financial measures to
investors. Specifically, on both a historic and a forward-looking
basis, these non-GAAP measures exclude:
-- Expense associated with the write-off of in-process research
and development and amortization of intangible assets related to
acquisitions, as exclusion of these expenses allows comparisons of
operating results that are consistent over time for both the company´s
newly acquired and long-held businesses and with both acquisitive and
non-acquisitive peer companies.
-- Expense associated with share-based compensation related to
options to purchase common stock, the employee stock purchase plan and
restricted stock units because, while share-based compensation is a
significant ongoing expense affecting the company´s results of
operations, the company´s management excludes share-based compensation
from the company´s forecasting and planning process used to allocate
resources. In addition, because of varying available valuation
methodologies, subjective assumptions and the variety of award types,
the company believes that excluding share-based compensation may
enable useful comparisons of the company´s operating results to its
competitors.
Non-GAAP financial measures should not be considered in isolation
from, or as a substitute for, financial information prepared in
accordance with GAAP. Investors are encouraged to review the
reconciliation of these non-GAAP measures to their most directly
comparable GAAP financial measure as detailed above. As previously
mentioned, a reconciliation of GAAP to non-GAAP results has been
provided in the financial statement tables included in this press
release.
About Unica
Unica Corporation (Nasdaq: UNCA) is a leading global provider of
enterprise marketing management (EMM) software and services. The most
comprehensive EMM suite on the market today, Unica´s Affinium(R)
software streamlines the entire marketing process from analysis and
planning to project management, execution and measurement. More than
600 companies worldwide depend on Unica for their enterprise marketing
management solution.
Unica is headquartered in Waltham, Mass. with offices around the
globe. For more information, visit www.unica.com.
Note to editors: Copyright 2008 Unica Corporation. Unica, the
Unica logo, Affinium, MarketingCentral, and NetInsight are registered
trademarks of Unica Corporation. All other product names, service
marks, and trademarks mentioned herein are trademarks of their
respective owners.
Forward-looking Statements
Information provided in this press release contains
forward-looking statements that relate to future events and the future
financial performance of Unica. These forward-looking statements are
based upon Unica´s historical performance and its current plans,
estimates and expectations, and are not a representation that such
plans, estimates, or expectations will be achieved. These
forward-looking statements represent Unica´s expectations as of the
date of this press announcement. Subsequent events may cause these
expectations to change, and Unica disclaims any obligation to update
or revise the forward-looking statements in the future. Matters
subject to forward-looking statements involve known and unknown risks
and uncertainties, including but not limited to the possibility that
the market for enterprise software does not develop as anticipated;
lower than expected sales due to competitive factors; the company may
not continue to deliver year-over-year growth in revenue and
profitability; the company may not continue to generate cash from
operations; and the company´s financial projections may be incorrect.
These and other important risk factors listed in the company´s most
recent Annual Report on Form 10-K could cause Unica´s performance or
achievements to be materially different from those expressed or
implied by the forward-looking statements. These filings are available
on a web site maintained by the SEC at http://www.sec.gov.
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UNICA CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December September
31, 30,
-------- ---------
2007 2007
-------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 16,632 $ 18,493
Short-term investments 21,359 19,614
Accounts receivable, net 28,786 28,058
Prepaid expenses and other current assets 9,621 9,033
-------- ---------
Total current assets 76,398 75,198
Property and equipment, net 4,443 4,135
Goodwill and other acquired intangible assets, net 35,333 36,066
Other assets 5,818 5,949
-------- ---------
Total Assets $121,992 $121,348
======== =========
LIABILITIES AND STOCKHOLDERS´ EQUITY
Current liabilities:
Accounts payable $ 2,607 $ 2,366
Accrued expenses 16,512 17,431
Short-term deferred revenue 36,518 34,946
-------- ---------
Total current liabilities 55,637 54,743
Long-term deferred revenue 2,793 3,686
-------- ---------
Total liabilities 58,430 58,429
Stockholders´ equity 63,562 62,919
-------- ---------
Total liabilities and stockholders´ equity $121,992 $121,348
======== =========
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UNICA CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended
December 31,
-------------------
2007 2006
-------- ----------
(as
restated)
Revenue
License $11,145 $ 9,031
Maintenance and services 14,589 12,465
Subscription 2,730 2,302
-------- ----------
28,464 23,798
Costs of revenue:
License 803 567
Maintenance and services 6,237 3,883
Subscription 209 149
-------- ----------
Total cost of revenue 7,249 4,599
-------- ----------
Gross profit 21,215 19,199
Operating expenses:
Sales and marketing 11,761 9,213
Research and development 5,947 4,996
General and administrative 4,994 3,939
Restructuring charges (266) 1,244
Amortization of acquired intangible assets 393 393
-------- ----------
Total operating expenses 22,829 19,785
-------- ----------
Loss from operations (1,614) (586)
Other income, net 581 538
-------- ----------
Loss before income taxes (1,033) (48)
Provision (benefit) from income taxes (587) 132
-------- ----------
Net loss $ (446) $ (180)
======== ==========
Net loss per common share:
Basic $ (0.02) $ (0.01)
======== ==========
Diluted $ (0.02) $ (0.01)
======== ==========
Shares used in computing net loss per common share:
Basic 20,131 19,640
======== ==========
Diluted 20,131 19,640
======== ==========
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UNICA CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
Three Months Ended
December 31,
--------------------
2007 2006
--------- ----------
(as
restated)
Cash flows from operating activities:
Net income $ (446) $ (180)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation of property and equipment and
amortization of capitalized software 494 269
Amortization of acquired intangible assets 727 670
Share-based compensation 1,769 1,059
Excess tax benefits from share-based
compensation 37 (374)
Deferred tax benefits 117 34
Changes in operating assets and
liabilities, net of assets acquired and
liabilities assumed:
Accounts receivable, net (679) (5,980)
Prepaid expenses and other current
assets (583) (3,911)
Other assets 190 331
Accounts payable 239 383
Accrued expenses (1,382) 1,678
Deferred revenue 600 2,546
--------- ----------
Net cash provided by (used in) operating
activities 1,083 (3,475)
Cash flows from investing activities:
Purchase of property and equipment (763) (375)
Cash collected from license acquired in
acquisition 41 -
Sales and maturities of short-term investments 12,155 4,751
Purchases of short-term investments (13,901) (12,360)
Increase in restricted cash - (5)
--------- ----------
Net cash used in investing activities (2,468) (7,989)
Cash flows from financing activities:
Proceeds from exercises of stock options and
employee stock plan purchases 38 148
Excess tax benefits from share-based
compensation (37) 374
Common stock repurchased under employee stock
plans - (300)
Payment of withholding taxes in connection with
settlement of restricted stock units (478) -
--------- ----------
Net cash provided by (used in) financing
activities (477) 222
Effect of exchange rate changes on cash and
cash equivalents 1 100
--------- ----------
Net decrease in cash and cash equivalents (1,861) (11,142)
Cash and cash equivalents at beginning of
period 18,493 30,501
--------- ----------
Cash and cash equivalents at end of period $ 16,632 $ 19,359
--------- ----------
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UNICA CORPORATION AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
Three Months
Ended
December 31,
-----------------
2007 2006
-------- --------
Non-GAAP financial measures and reconciliation:
GAAP loss from operations $(1,614) $ (586)
Add: Share-based compensation 1,769 1,059
Amortization of acquired intangible assets 727 670
-------- --------
Non-GAAP income from operations $ 882 $ 1,143
======== ========
GAAP loss before income taxes $(1,033) $ (48)
Add: Share-based compensation 1,769 1,059
Add: Amortization of acquired intangible assets 727 670
Adjusted provision for income taxes (439) (735)
-------- --------
Non-GAAP net income $ 1,024 $ 946
======== ========
Diluted non-GAAP net income per share $ 0.05 $ 0.04
======== ========
Shares used in diluted per share calculation: 21,750 21,121
-------- --------
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UNICA CORPORATION AND SUBSIDIARIES
UNAUDITED SUMMARY OF SHARE-BASED COMPENSATION EXPENSE AND
AMORTIZATION OF ACQUIRED INTANGIBLE ASSETS
(In thousands)
Three Months
Ended
December 31,
-------------
2007 2006
------ ------
Share-based compensation:
Cost of license $ 12 $ -
Cost of maintenance and services revenue 197 89
Sales and marketing expense 654 276
Research and development expense 334 208
General and administrative expense 572 486
------ ------
Total share-based compensation expense $1,769 $1,059
====== ======
Amortization of acquired intangible
assets:
Cost of license revenue $ 333 $ 276
Operating expenses 394 394
------ ------
Total amortization of acquired intangible assets $ 727 $ 670
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