Selectica Inc. Reports Operating Results (10-Q)

Selectica Inc. (SLTC, Financial) filed Quarterly Report for the period ended 2011-12-31.

Selectica Inc. has a market cap of $10.4 million; its shares were traded at around $3.87 with and P/S ratio of 0.6.

Highlight of Business Operations:

For the three months ended December 31, 2011, our revenues were approximately $3.3 million. Services revenues represented 100% of total revenues, which further demonstrates the shift in the market preference to cloud deployment models. In addition, approximately 34% of our quarterly revenues came from three customers. Services margins for the quarter were 60%. Net loss for the quarter was approximately $1.4 million, or $(0.52) per share. For the three months ended December 31, 2010, our revenues were approximately $3.9 million with license revenues representing 17% and services revenues representing 83% of total revenues. Approximately 31% of our quarterly revenues came from three customers. License margins for the quarter were 80% and services margins were 71%. Net loss for the quarter was approximately $54,000, or $(0.02) per share.

License. License revenues consist of revenue from licensing our software products. For the three and nine months ending December 31, 2011, license revenues decreased $0.7 million and $1.7 million, respectively, compared to the three and nine months ending December 31, 2010 due to fewer license transactions. We expect license revenues to continue to fluctuate in future periods as a percentage of total revenues and in absolute dollars depending on the number and size of new license contracts.

Services. Services revenues are comprised of fees from consulting, maintenance, hosting, training, subscription revenues and out-of-pocket reimbursements. During the three months ended December 31, 2011, services revenues were flat. During the nine months ended December 31, 2011, services revenues increased $1.4 million compared to the nine months ended December 31, 2010 primarily due to a higher level of consulting services delivered to our customers. In addition, we recognized higher subscription revenues from a larger number of customers. Maintenance revenues represented 51% and 50% of total services revenues for the three months ended December 31, 2011 and December 31, 2010, respectively, and 47% and 53% of total services revenues for the nine months ended December 31, 2011 and December 31, 2010, respectively.

Sales and marketing expenses consist primarily of salaries and related costs for our sales and marketing organization, sales commissions, expenses for travel and entertainment, trade shows, public relations, collateral sales materials, advertising and certain allocated expenses. For the three and nine months ended December 31, 2011, sales and marketing expenses increased $0.4 million and $1.0 million, respectively, compared to the same periods in 2010. These increases are primarily due to our 2011 annual Fusion conference, increased marketing headcount, as well as other trade show expenses.

Net cash provided by operating activities was $0.3 million for the nine months ended December 31, 2010, resulting primarily from a $0.8 million decrease in accounts receivable, net resulting from strong cash collection efforts during the year, a $0.5 million increase in accounts payable and other accrued liabilities and long-term liabilities, and $0.6 million in non-cash charges for depreciation and stock-based compensation expense. These increases were partially offset by our year to date net loss of $1.1 million, and a $0.4 million decrease in deferred revenues.

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