EXHIBIT 99.1
[SciQuest LOGO]
SciQuest Reports First Quarter 2003 Results
Recurring base of revenues continues to grow from multi-year subscription
customers
Increased revenues and reduced expenses drive improved EPS
Solid quarter-end cash position of $27 million
RESEARCH TRIANGLE PARK, N.C., April 29, 2003 - SciQuest, Inc. (NASDAQ: SQST)
today reported a net loss of $3.7 million, or ($.12) per share, before non-cash
and other charges, for the first quarter of 2003, based on pro forma diluted
weighted average shares outstanding. On a GAAP basis, the net loss, including
non-cash and other charges, for the first quarter of 2003 was $5.5 million, or
($.19) per share.
"During the first quarter, the SciQuest team made great progress in building the
sales pipeline, expanding our market presence among customers, introducing
several new software products and reducing expenses," said Stephen J. Wiehe, CEO
of SciQuest. "These efforts resulted in simultaneous improvements in revenue and
expense performance and position the Company well for future success."
"We continue to execute on a very targeted marketing and sales program designed
to enhance lead generation and contract closings. SciQuest is gaining market
penetration, in part, because of its vertically focused business model. By
building solutions, marketing programs and a streamlined sales force that are
focused by vertical competence, SciQuest is aligned to meet the unique
procurement and materials management needs of its targeted markets," Wiehe
explained.
"We remain confident that our persistence, focus, and long-term customer
relationships will ultimately reward our shareholders," Wiehe concluded. "Deep
customer relationships in attractive verticals with recurring revenue streams is
our formula for maximizing value for our customers and stockholders."
First Quarter Results
Revenues in the first quarter of 2003 consisted of $1.9 million from licenses
and other professional services, which is up from $1.7 million in the fourth
quarter of 2002 and $1.7 million in the first quarter of 2002.
Gross profit, before non-cash and other charges, in the first quarter of 2003
was $1.2 million, compared to $1.1 million in the fourth quarter of 2002. Gross
profit, before non-cash and other charges, was $1.0 million in the first quarter
of 2002. Gross margin, before non-cash and other charges, in the first quarter
of 2003 was 62%, which compared to 64% in the fourth quarter of 2002 and 62% in
the first quarter of 2002. In the first quarter of 2003, gross profit, including
non-cash and other charges, was ($120,799) compared to ($144,014) in the fourth
quarter of 2002 and $137,472 in the first quarter of 2002.
In the first quarter of 2003, operating expenses, before non-cash and other
charges, were $5.0 million, a 14% reduction from $5.8 million in the fourth
quarter of 2002. The decrease reflected continuing efforts to control and
reallocate resources throughout the organization. In addition to operating
expenses in the first quarter of 2003, the Company recorded a restructuring
charge of $380,000 related to severance costs for eliminated positions, which is
excluded from operating expenses before non-cash and other charges. In the first
quarter of 2002, operating expenses, before non-cash and other charges, were
$5.0 million. In the first quarter of 2003, operating expenses, including
non-cash and other charges, were $5.5 million compared to $8.8 million in the
fourth quarter of 2002 and $14.8 in the first quarter of 2002.
The Company's net loss, before non-cash and other charges, for the first quarter
of 2003 was $3.7 million, or ($.12) per share, based on 29.5 million pro forma
diluted weighted average shares outstanding. In the fourth quarter of 2002,
SciQuest reported a net loss, before non-cash and other charges, of $4.6
million, or ($.15) per diluted share. In the first quarter of 2002, SciQuest
reported a net loss, before non-cash and other charges, of $3.7 million, or
($.11) per diluted share.
In the first quarter of 2003, the net loss, including non-cash and other
charges, was $5.5 million, or ($.19) per share. In the fourth quarter of 2002,
the net loss, including non-cash and other charges, was $8.8 million, or ($.30)
per share. In the first quarter of 2002, the net loss, including non-cash and
other charges, was $52.6 million, or ($1.81) per share, which included the
cumulative effect of an accounting change for the impairment of goodwill equal
to $38 million, or ($1.32) per share.
Cash and investments at March 31, 2003 equaled $27.2 million.
This release contains financial measures that exclude "non-cash and other
charges", which are non-GAAP financial measures. SciQuest management believes
that these non-GAAP financial measures provide investors with greater insight to
its operating results, including the impact of SciQuest's operating performance
on its cash position, by excluding expenses that do not result in cash charges,
require cash settlement or are non-recurring. SciQuest management uses these
non-GAAP financial measures internally to measure and analyze the company's
operating and financial performance. This release contains a reconciliation of
these non-GAAP financial measures to SciQuest's GAAP financial statements under
the caption "Reconciliation of Pro Forma Earnings and Other Pro Forma Financial
Measures to GAAP Financial Statements (Unaudited)."
Highlights since December 31, 2002:
.. Arizona State University signed a multi-year contract to license the
SciQuest HigherMarkets e-procurement solution. The University is a leader
among public universities and invested more than $100 million in research
and development in 2002.
.. The University of Nottingham signed an agreement to license the SciQuest
HigherMarkets e-procurement solution. The University of Nottingham is one
of the top ten research universities in the United Kingdom, with 2001-2002
research grants and contracts in excess of $128 million.
.. The University of Pennsylvania, one of the top 10 research universities in
the U.S., signed an agreement for SciQuest to develop a supplier promotion
module to enhance the University's existing Oracle e-procurement system.
.. Emory University licensed the SelectSite Spend Director supplier enablement
solution to manage product information for key suppliers.
.. The University of Michigan signed a multi-year contract to license the
SciQuest HigherMarkets e-procurement solution. The University of Michigan
is consistently ranked the third largest school in the U.S. based on
research and development spending of $565 million in 2002.
.. The University of Arizona signed a multi-year contract to license the
SciQuest HigherMarkets e-procurement solution as part of a collaboration
between SciQuest and IT consulting firm, AMS. The University ranks 15th
among U.S. public universities based on research and development spending
of $345 million in 2000.
.. Six biotechnology and research organizations signed contracts to license
the SciQuest SelectSite e-procurement solution.
.. The research and development business unit of a multinational Fortune 50
industrial technology and services company signed a contract to license
SciQuest Enterprise Reagent Manager software.
.. SciQuest hosted the second annual Next Level Conference and User Forum to
discuss trends and issues surrounding campus e-procurement March 2-5, 2003
in Tempe, Arizona.
.. SciQuest announced a multi-year agreement with SCT (Nasdaq: SCTC) to
jointly market the SciQuest HigherMarkets e-procurement solution to SCT
clients.
.. SciQuest announced the launch of LifeCycle Biologicals Manager, a
specialized materials management solution for biological samples and
related data.
.. SciQuest announced a partnership with Essex Technology to deliver LifeCycle
BioBox, a materials management appliance designed to make effective
biological sample management accessible and affordable for emerging life
science companies.
.. SciQuest launched SelectSite Spend Director, a multi-commodity supplier
enablement, catalog management and contract compliance solution for
research-intensive organizations.
SciQuest will host a conference call to discuss the first quarter 2003 results
and future outlook at 10:00 a.m. ET on April 29, 2003. The conference call will
be available live via web cast on SciQuest's web site at www.sciquest.com, in
the Investor Relations section. The call will also be available via telephone at
888-987-0082 for domestic callers and +1-484-630-0993 for international callers
(passcode: SciQuest Q1 2003). The dial-in number for the replay will be
888-566-0572 for domestic callers and +1-402-998-0838 for international callers
(no passcode is necessary). The telephone replay will be available until
midnight on Friday, May 9, 2003.
About SciQuest
SciQuest provides technology, services and domain expertise to optimize
procurement and materials management for the life sciences, industrial research
and higher education markets. SciQuest solutions enable research-intensive
organizations to reduce costs, improve quality and speed the process of
innovation by helping them find and acquire resources and manage the lifecycle
of critical assets.
Many of the world's leading pharmaceutical, biotechnology, chemical and academic
organizations rely on SciQuest solutions to streamline the Innovation Supply
Chain including GlaxoSmithKline, Pfizer, Roche, Schering-Plough Research
Institute, Procter & Gamble, the Rensselaer Polytechnic University and Indiana
University. SciQuest is headquartered in Research Triangle Park, NC, with
offices in Philadelphia, San Francisco and London. For more information about
SciQuest, please visit www.sciquest.com or call +1-919-659-2100.
Statements in this press release that are not historical facts are
forward-looking statements that involve risks and uncertainties, including all
statements regarding the Company's sales execution, opportunities for future
growth, position for future success and future rewards for stockholders. For
such statements, the Company claims the protection of the safe harbor for
forward-looking statements under the Private Securities Litigation Reform Act of
1995. The potential risks and uncertainties associated with these
forward-looking statements could cause actual results to differ materially from
those presented herein, and the reported results should not be considered as an
indication of future performance. Factors that could cause actual results to
differ from those contained in the forward-looking statements are discussed in
the Company's Annual Report on Form 10-K for the period ended December 31, 2002,
filed with the Securities and Exchange Commission, under the caption "Factors
That May Affect Future Results", and include the risk that forecasting future
performance may be difficult and that the Company may not achieve profitability.
SciQuest and SelectSite are registered trademarks of SciQuest, Inc. LifeCycle
and HigherMarkets are trademarks of SciQuest, Inc.
Contacts:
Media Relations: Investor Relations:
Amber Link Peyton Anderson
919-659-2146 919-659-2103
alink@sciquest.com panderson@sciquest.com
-- End of Text --
-- Tables to Follow --
SciQuest
Condensed Statements of Operations (Unaudited)
Quarter Quarter Quarter
Ended Ended Ended
3/31/03 12/31/02 3/31/02
------------ ----------- ------------
Revenues:
License fees and other professional services ........................... $ 1,881,029 $ 1,716,032 $ 1,677,539
------------ ----------- ------------
Cost of revenues:
Cost of license fees and other professional services ................... 723,200 620,489 644,490
Amortization of acquired and capitalized software costs related to
license fees ........................................................ 1,278,628 1,239,557 895,577
------------ ----------- ------------
Total cost of revenues ............................................... 2,001,828 1,860,046 1,540,067
------------ ----------- ------------
Gross profit (loss) .................................................. (120,799) (144,014) 137,472
------------ ----------- ------------
Operating expenses:
Development. ........................................................... 1,281,215 1,482,968 1,805,911
Non-cash stock-based employee compensation ............................. 62,377 68,912 69,462
------------ ----------- ------------
Total development expenses ........................................... 1,343,592 1,551,880 1,875,373
------------ ----------- ------------
Sales and marketing. ................................................... 1,313,799 1,517,437 1,183,393
Non-cash stock-based employee comp. and customer acquisition ........... 15,797 7,567 698,113
------------ ---------- ------------
Total sales and marketing expenses ................................... 1,329,596 1,525,004 1,881,506
------------ ----------- ------------
General and administrative ............................................. 2,388,311 2,824,237 1,996,151
Non-cash stock-based employee comp. and amortization of intangibles ... 30,310 30,712 1,846,528
------------ ----------- ------------
Total general and administrative expenses ............................ 2,418,621 2,854,949 3,842,679
------------ ----------- ------------
Restructuring .......................................................... 380,000 2,900,000 --
Impairment of intangible assets -- -- 7,155,914
Total operating expenses ............................................. 5,471,809 8,831,833 14,755,472
------------ ----------- ------------
Operating loss ........................................................... (5,592,608) (8,975,847) (14,618,000)
------------ ----------- ------------
Other income (expense):
Interest income ........................................................ 161,940 226,256 317,232
Interest expense ....................................................... (20,137) (44,964) (27,472)
Other, net ............................................................. 463 (13,496) 5,738
------------ ----------- ------------
Total other income (expense), net .................................... 142,266 167,796 295,498
------------ ----------- ------------
Loss before cumulative effect of accounting change for impairment of
goodwill .............................................................. (5,450,342) (8,808,051) (14,322,502)
Cumulative effect of accounting change for impairment of goodwill ........ -- -- (38,257,357)
------------ ----------- ------------
Net loss ................................................................. $ (5,450,342) $(8,808,051) $(52,579,859)
============ =========== ============
Net loss per common share--basic and diluted:
Before cumulative effect of accounting change ........................ $ (0.19) $ (0.30) $ (0.49)
Cumulative effect of accounting change ............................... -- -- (1.32)
------------ ----------- ------------
Net loss per share-basic and diluted ........................... $ (0.19) $ (0.30) $ (1.81)
============ =========== ============
Weighted-average common shares outstanding--basic and diluted ............ 29,417,700 29,746,880 29,012,078
Supplemental information on pro forma net loss before non-cash
items, amortization of capitalized software costs, restructuring
charges and accounting changes:
Revenue ................................................................ $ 1,881,029 $ 1,716,032 $ 1,677,539
============ =========== ============
Gross profit ........................................................... $ 1,157,829 $ 1,095,543 $ 1,033,049
============ =========== ============
Operating expenses before depreciation and amortization ................ $ 4,297,478 $ 4,880,092 $ 4,031,399
Depreciation and amortization of internally used software .............. 685,847 944,550 954,056
------------ ----------- ------------
Operating expenses ..................................................... $ 4,983,325 $ 5,824,642 $ 4,985,455
============ =========== ============
Net loss ............................................................... $ (3,683,230) $(4,561,303) $ (3,656,908)
============ =========== ============
Pro forma net loss per share before non-cash items, amortization
of capitalized software costs, restructuring charges and
accounting changes:
Basic .................................................................. $ (0.13) $ (0.15) $ (0.13)
============ =========== ============
Diluted (pro forma) .................................................... $ (0.12) $ (0.15) $ (0.11)
============ =========== ============
Weighted-average common shares outstanding:
Basic .................................................................. 29,417,700 29,746,880 29,012,078
Diluted (pro forma) .................................................... 29,527,099 29,866,588 33,292,039
*See attached page for reconciliation between GAAP and pro forma earnings
(loss).
SciQuest
Reconciliation of Pro Forma Earnings and Other Pro Forma Financial Measures to
GAAP Financial Statements (Unaudited)
Quarter Quarter Quarter
Ended Ended Ended
3/31/03 12/31/02 3/31/02
------- -------- -------
Gross profit:
GAAP gross profit (loss) ........................................................... $ (120,799) $ (144,014) $ 137,472
Amortization of acquired and capitalized software costs related to license fees .... 1,278,628 1,239,557 895,577
------------ ------------ ------------
Pro forma gross profit ........................................................... $ 1,157,829 $ 1,095,543 $ 1,033,049
============ ============ ============
Operating expenses:
GAAP operating expenses ............................................................ $ 5,471,809 $ 8,831,833 $ 14,755,472
Non-cash stock-based employee compensation, customer acquisition and
amortization of intangibles ...................................................... 108,484 107,191 2,614,103
Restructuring ...................................................................... 380,000 2,900,000 --
Impairment of intangible assets .................................................... -- -- 7,155,914
------------ ------------ ------------
Pro forma operating expenses ..................................................... $ 4,983,325 $ 5,824,642 $ 4,985,455
============ ============ ============
Net loss:
GAAP net loss ...................................................................... $ (5,450,342) $ (8,808,051) $(52,579,859)
Amortization of acquired and capitalized software costs related to license fees .... 1,278,628 1,239,557 895,577
Non-cash stock-based employee compensation, customer acquisition and
amortization of intangibles ...................................................... 108,484 107,191 2,614,103
Restructuring ...................................................................... 380,000 2,900,000 --
Impairment of intangible assets .................................................... -- -- 7,155,914
Cumulative effect of accounting change for impairment of goodwill .................. -- -- 38,257,357
------------ ------------ ------------
Pro forma net loss ............................................................... $ (3,683,230) $ (4,561,303) $ (3,656,908)
============ ============ ============
Pro forma net loss per basic share ............................................... $ (0.13) $ (0.15) $ (0.13)
============ ============ ============
Pro forma net loss per diluted share ............................................. $ (0.12) $ (0.15) $ (0.11)
============ ============ ============
Weighted-average common shares outstanding--basic .................................... 29,417,700 29,746,880 29,012,078
Weighted-average common shares outstanding--diluted (pro forma) ...................... 29,527,099 29,866,588 33,292,039
Net loss per share:
GAAP net loss ...................................................................... $ (0.19) $ (0.30) $ (1.81)
Amortization of acquired and capitalized software costs related to license fees 0.04 0.04 0.03
Non-cash stock-based employee compensation, customer acquisition and
amortization of intangibles ...................................................... 0.01 0.01 0.09
Restructuring ...................................................................... 0.01 0.10 --
Impairment of intangible assets .................................................... -- -- 0.24
Cumulative effect of accounting change for impairment of goodwill .................. -- -- 1.32
------------ ------------ ------------
Pro forma net loss per basic share ............................................... $ (0.13) $ (0.15) $ (0.13)
============ ============ ============
Pro forma net loss per diluted share ............................................. $ (0.12) $ (0.15) $ (0.11)
============ ============ ============
Pro forma weighted-average common shares outstanding--diluted:
GAAP weighted-average common shares outstanding--basic ............................. 29,417,700 29,746,880 29,012,078
Potential common shares ............................................................ 109,399 119,708 4,279,961
------------ ------------ ------------
Pro forma weighted-average common shares outstanding--diluted .................... 29,527,099 29,866,588 33,292,039
============ ============ ============
Note: Pro forma figures exclude non-cash items, amortization of capitalized
software costs, restructuring charges and accounting changes.
SciQuest
Condensed Balance Sheets
March 31, December 31,
2003 2002
------------- ----------------
(Unaudited)
ASSETS
Current assets
Cash and short-term investments $ 21,317,399 $ 21,901,411
Accounts receivable 1,460,625 2,293,902
Other current assets 2,067,014 2,837,131
------------- --------------
Total current assets 24,845,038 27,032,444
------------- --------------
Long-term investments 5,868,028 9,254,841
Property and equipment - net 2,102,005 2,734,113
Capitalized software and web site development - net 7,661,118 8,192,335
Other intangible assets - net 286,281 415,642
Other assets 394,779 209,961
------------- --------------
Total assets $ 41,157,249 $ 47,839,336
============= ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 8,014,280 $ 8,753,930
Capital lease obligations and long-term debt 1,862,833 1,862,833
------------- --------------
Total liabilities 9,877,113 10,616,763
------------- --------------
Stockholders' equity (29,041,606 and
30,147,319 common shares
outstanding, net of treasury shares,
as of March 31, 2003 and Dec. 31,
2002, respectively) 31,280,136 37,222,573
------------- --------------
Total liabilities and stockholders' equity $ 41,157,249 $ 47,839,336
============= ==============