EX-99.1 2 b61871ucexv99w1.htm EX-99.1 PRESS RELEASE DATED, AUGUST 3, 2006 exv99w1
 

Exhibit 99.1
Unica Announces Results for Fiscal 2006 Third Quarter
WALTHAM, Mass — August 3, 2006 – Unica® Corporation (Nasdaq: UNCA), a leading global provider of Enterprise Marketing Management (EMM) solutions, today announced financial results for its fiscal third quarter ended June 30, 2006.
For the third quarter of fiscal 2006, Unica reported record total revenue of $21.7 million, an increase of 33% compared with the third quarter of fiscal 2005. License revenue increased 42% to $10.5 million and maintenance and services revenue increased 25% to $11.2 million from the prior year quarter. For the third quarter of fiscal 2006, maintenance revenue was $8.3 million, an increase of 28% from the prior year quarter, and services revenue was $2.9 million, an increase of 17% from the prior year quarter.
Yuchun Lee, chief executive officer of Unica Corporation, stated, “I am very pleased with the Company’s performance in the third fiscal quarter, which was highlighted by record license revenue and very strong growth.” Lee added, “Unica is consistently recognized as the leader in the EMM market, and we are making the necessary investments to maintain and extend this leadership position as market awareness and demand increases. We believe that other vendors cannot match Unica’s leading technology and ability to meet the market’s growing desire to purchase a broad EMM suite from a single vendor. Moreover, the strength of each application within our suite is evidenced by our leadership position in campaign management coupled with the growing traction of our MRM and internet marketing solutions.”
For the third quarter of fiscal 2006, Unica reported a loss from operations, in accordance with generally accepted accounting principles (GAAP), of $238,000. GAAP loss from operations includes $1.0 million in non-cash stock compensation expense and $721,000 in amortization of acquired intangibles. GAAP net income for the fiscal third quarter of 2006 was $215,000, resulting in GAAP net income per diluted share of $0.01, compared to $0.05 in the same period last year.
For the third quarter of fiscal 2006, non-GAAP income from operations, which excludes stock-based compensation expense and amortization of acquired intangibles, was $1.5 million, or a non-GAAP operating margin of 7%. Based on an estimated 29% non-GAAP effective tax rate, non-GAAP net income was $1.4 million in the third quarter of fiscal 2006, resulting in non-GAAP diluted earnings per share of $0.07, compared to $0.08 in the same period last year.
Non-GAAP diluted earnings per share assumes the conversion of Unica’s preferred stock into common shares for the fiscal third quarter of 2005. 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.”
As of June 30, 2006 Unica had cash, cash equivalents, and short-term investments of $42.1 million, an increase from $39.4 million at March 31, 2006. The Company generated $1.7 million in cash from operations in the three months ended June 30, 2006, and $9.2 million for the first nine months of fiscal 2006. At June 30, 2006, deferred revenue was $31.4 million, representing an increase of 32% on a year-over-year basis.
Ralph Goldwasser, chief financial officer of Unica, stated, “In addition to delivering strong top line growth, we are very pleased with the company’s ability to generate strong cash flow while making investments to deliver on our EMM vision.”
Additional Third-Quarter Business Highlights:
  Continued to achieve success and growth with industry leaders across a broad range of vertical markets, including financial services, retail, travel, and business services. New customers from these sectors included Macy’s, Payless Shoe Source, Inc., Expedia, Inc. and PTK Centertel, a subsidiary of French Telecom. In addition, the Company added several new web-analytics customers, including, Procter & Gamble, Honda of Canada, ABN AMRO, Foxwoods Resort Casino and Columbia University. Unica also added several new MSP channel partners, both in North America and Europe, including Abacus and Wegener.

 


 

  Announced the availability of Affinium NetInsightTM, an enterprise-level web analytics solution, which enables cross-channel information integration. Affinium NetInsight delivers significant enhancements in the product’s enterprise capabilities and integration with other modules within the overall Affinium suite.
 
  Positioned in the “Visionaries” quadrant of Gartner, Inc.’s first “Magic Quadrant for Enterprise Marketing Management, 2006.”
 
  Held its fifth annual Marketing Innovation Summit for customers from around the world. The three-day, sold-out event, held on May 7 through May 9, drew more than 450 attendees from 11 countries.
 
  Named as a Finalist for the 2006 Mass Technology Leadership Awards, which honor Massachusetts companies and individuals who best exemplify leadership and excellence in business and technology.
 
  Obtained a non-exclusive world-wide license to certain patents owned by NetRatings related to web-analytics in exchange for a one-time fee of $1.5 million as part of a patent litigation settlement previously disclosed by the Company on Form 8-K on July 3, 2006.
Financial Outlook
Outlook for the quarter ending September 30, 2006, and update for the fiscal year ending September 30, 2006:
Fourth Quarter of Fiscal 2006
    Revenue: Targeting between $23.0 million and $23.5 million with a certain amount of variability
 
    Non-GAAP Operating Income: Expected to be between $2.2 million and $2.3 million with a certain amount of variability
 
    Non-GAAP Diluted Earnings Per Share: Expected to be $0.08 based on an estimated weighted average of 20.5 million shares outstanding and an estimated non-GAAP effective tax rate of 35.5%
Fiscal Year 2006
    Revenue: Targeting between $81.1 million and $81.6 million, with certain amount of variability related to fourth quarter actual results
 
    Non-GAAP Operating Income: Expected to be between $7.6 million and $7.7 million, with a certain amount of variability related to fourth quarter actual results
 
    Non-GAAP Diluted Earnings Per Share: Expected to be $0.31, based on an estimated weighted average of 20.5 million shares outstanding and an estimated non-GAAP effective tax rate of 33%
The preceding forward-looking information with respect to non-GAAP operating income and earnings per share for fiscal year 2006 excludes stock-based compensation expense in an estimated amount of between $3.0 million and $3.1 million, as well as the write-off of in-process research and development related to the Sane Solutions acquisition in an estimated amount of approximately $4.0 million and the amortization of intangibles arising from business combinations in an estimated amount of approximately $ 1.8 million.
Conference Call Details
Unica will discuss its quarterly results and related matters via teleconference today, August 3, 2006, at 5:00 p.m. (EDT). To access this call, dial 800-289-0494 (domestic) or 913-981-5520 (international). Additionally, a live webcast of the conference call will be available on the “Investor Relations” page of the Company’s Web site, www.unica.com.
A replay of this conference call will be available from 8:00 p.m. EST on Thursday, August 3, 2006 through 11:59 p.m. EST on Thursday, August 17, 2006 at 888-203-1112 (domestic) or 719-457-0820 (international). The replay passcode is 8619040. An archived webcast of this conference call will also be available on the “Investor Relations” page of the Company’s Web site, www.unica.com.

 


 

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 and estimated future 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 stock-based compensation related to stock options, the Company’s employee stock purchase plan and restricted stock units because, while stock-based compensation is a significant ongoing expense affecting the Company’s results of operations, the Company’s management excludes stock-based compensation from the Company’s forecasting and planning process used to allocate resources. Additionally, the Company believes that excluding this expense could be helpful in comparing the Company’s financial results to previous periods because prior to the adoption of FAS 123R on October 1, 2005, stock option expense was recorded in the statement of operations based on intrinsic value, not fair value. Finally, because of varying available valuation methodologies, subjective assumptions and the variety of award types, the Company believes that excluding stock-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 is a leading global provider of Enterprise Marketing Management (EMM) software designed to help businesses increase their revenues and improve the efficiency and measurability of their marketing operations. Unica focuses exclusively on the needs of marketing organizations and its Affinium® software addresses the principal functions of EMM including marketing and customer analytics, demand generation and marketing resource management. More than 400 companies in a wide range of industries use Unica software to manage the complexities and processes of marketing and to facilitate the operations of a customer-centric business. Unica’s customers include ABN AMRO, Capital One, Choice Hotels, Comcast, Lands’ End, Nordstrom, Reader’s Digest, Scotiabank and Vodafone. Unica has offices across the United States, including its corporate headquarters in Waltham, Massachusetts, as well offices in the United Kingdom, France, Germany, Singapore and India. For more information, call 781-839-8000 or visit www.unica.com.
###
Note to Editors: Copyright 2006 Unica Corporation. Unica, the Unica logo, and Affinium 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 timing of Unica’s customers’ purchasing decisions

 


 

or other factors; the long sales cycle for Unica’s software; a failure by Unica to develop new software products and enhance existing products; failure to retain key staff; a failure by Unica to maintain historical maintenance renewal rates; difficulties that the Company may encounter in its integration of acquired companies; customer and industry analyst response to Unica’s strategic direction may change; perceived market opportunities may change or not exist; the internet marketing sector may not grow as quickly as Unica expects; the Company’s strategy of differentiating itself through expanding its presence in the internet marketing sector may not result in extending its leadership position in the EMM market; 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; the Company’s financial projections may be incorrect; costs and expenses, particularly those related to Sarbanes-Oxley compliance may continue to increase; and failure to properly protect Unica’s proprietary rights and intellectual property may damage the Company. These and other important risk factors listed in the Company’s most recent Annual Report on Form 10K and most recent Quarterly Report on Form 10-Q 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.
Contacts:
     
MEDIA:
  INVESTORS:
Laura Hindermann
  Kori Doherty
Greenough Communications
  Integrated Corporate Relations
617-275-6519
  617-217-2084
lhindermann@greenoughcom.com
  kdoherty@icrinc.com
 
   
Source: Unica Corporation
   

 


 

UNICA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
                 
    September 30,     June 30,  
    2005     2006  
            (unaudited)  
ASSETS
               
Current assets:
               
Cash and cash equivalents
  $ 43,754     $ 38,191  
Restricted cash
    144       248  
Short-term investments
    16,172       3,629  
Accounts receivable, net of allowance for doubtful accounts of $569 and $568, respectively
    15,220       18,772  
Purchased customer receivables
          971  
Deferred tax asset, net of valuation allowance
    926       853  
Prepaid expenses and other current assets
    1,002       2,787  
 
           
Total current assets
    77,218       65,451  
 
               
Property and equipment, net
    1,630       2,191  
Purchased customer receivables, long-term
          1,785  
Intangible assets, net
    253       7,952  
Goodwill
    2,337       20,915  
Deferred tax asset, long term
          1,713  
Other assets
    166       398  
 
           
 
               
Total assets
  $ 81,604     $ 100,405  
 
           
 
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
Current liabilities:
               
Accounts payable
  $ 1,356     $ 3,076  
Accrued expenses
    9,241       13,784  
Short-term deferred revenue
    21,323       26,952  
 
           
Total current liabilities
    31,920       43,812  
 
               
Long-term deferred revenue
    3,311       4,475  
 
           
Total liabilities
    35,231       48,287  
 
           
 
               
Commitments and contingencies
               
Stockholders’ equity:
               
Common stock
    189       195  
Additional paid-in capital
    44,927       50,677  
Retained earnings
    1,097       1,003  
Accumulated other comprehensive income
    160       243  
 
           
Total stockholders’ equity
    46,373       52,118  
 
           
 
               
Total liabilities and stockholders’ equity
  $ 81,604     $ 100,405  
 
           

 


 

UNICA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
                                 
    Three Months Ended     Nine Months Ended  
    June 30,     June 30,  
    2005     2006     2005     2006  
Revenue:
                               
License
  $ 7,416     $ 10,509     $ 21,358     $ 27,507  
Maintenance and services
    8,950       11,198       24,953       30,636  
 
                       
Total revenue
    16,366       21,707       46,311       58,143  
 
                       
Costs of revenue(1):
                               
License
    266       686       679       1,395  
Maintenance and services
    2,854       3,853       7,843       9,941  
 
                       
Total cost of revenue
    3,120       4,539       8,522       11,336  
 
                       
Gross profit
    13,246       17,168       37,789       46,807  
 
                       
Operating expenses(1):
                               
Sales and marketing
    6,586       8,992       20,050       23,497  
Research and development
    3,073       4,775       8,483       12,159  
General and adminstrative
    1,863       3,197       4,913       8,148  
In-process research and development
                      4,037  
Amortization of intangible assets
    114       442       350       715  
 
                       
Total operating costs and expenses
    11,636       17,406       33,796       48,556  
 
                       
Income (loss) from operations
    1,610       (238 )     3,993       (1,749 )
Other income:
                               
Interest income, net
    119       401       283       1,466  
Other income (expense), net
    (146 )     38       (25 )     (72 )
 
                       
Total other income (loss)
    (27 )     439       258       1,394  
Income (loss) before income taxes
    1,583       201       4,251       (355 )
Provision for (benefit from) income taxes
    512       (14 )     1,446       (261 )
 
                       
Net income (loss)
  $ 1,071     $ 215     $ 2,805     $ (94 )
 
                       
Net income (loss) per common share:
                               
Basic
  $ 0.06     $ 0.01     $ 0.15     $ 0.00  
 
                       
Diluted
  $ 0.05     $ 0.01     $ 0.13     $ 0.00  
 
                       
Shares used in computing net income (loss) per common share:
                               
Basic
    10,092       19,472       9,853       19,164  
 
                       
Diluted
    11,367       20,329       11,374       19,164  
 
                       
 
(1)   Amounts include stock-based compensation expense as follows:
                                 
Cost of maintenance and services revenue
  $ 25     $ 101     $ 75     $ 172  
Sales and marketing expense
    41       280       133       489  
Research and development expense
    22       214       70       454  
General and administrative expense
    30       444       90       916  
 
                       
Total stock-based compensation expense
    118       1,039       368       2,031  
 
                       

 


 

UNICA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
                 
    Nine Months Ended  
    June 30,  
    2005     2006  
    (unaudited)  
Cash flows from operating activities:
               
Net income (loss)
  $ 2,805     $ (94 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
               
Depreciation and amortization
    587       777  
Amortization of intangible assets
    350       1,115  
In-process research and development
          4,037  
Non-cash stock-based compensation charge
    368       2,031  
Deferred tax benefit
    (63 )     (1,640 )
Changes in operating assets and liabilities, net of assets acquired and liabilities assumed:
               
Accounts receivable, net
    (704 )     (2,387 )
Prepaid expenses and other current assets
    (36 )     (1,255 )
Other assets
    (112 )     (1,457 )
Accounts payable
    51       1,300  
Accrued expenses
    990       (717 )
Deferred revenue
    3,591       7,521  
 
           
Net cash provided by operating activities
    7,827       9,231  
 
           
Cash flows from investing activities:
               
Purchase of property and equipment, net of acquisitions
    (870 )     (1,019 )
Net cash paid for acquisitions
          (28,286 )
Sales and maturities of short-term investments
          21,942  
Purchase of short-term investments
          (9,396 )
Decrease (increase) in restricted cash
    144       (104 )
 
           
Net cash used in investing activities
    (726 )     (16,863 )
 
           
Cash flows from financing activities:
               
Payment of deferred offering costs
    (1,541 )      
Tax benefit related to exercised stock options
          816  
Proceeds from exercise of stock options
    623       1,104  
 
           
Net cash (used in) provided by financing activities
    (918 )     1,920  
 
           
Effect of exchange rate changes on cash and cash equivalents
    (98 )     149  
 
           
Net increase (decrease) in cash and cash equivalents
    6,085       (5,563 )
Cash and cash equivalents at beginning of period
    23,773       43,754  
 
           
Cash and cash equivalents at end of period
  $ 29,858     $ 38,191  
 
           
Supplemental disclosure of cash flow information:
               
Income taxes paid
  $ 1,228     $ 1,651  
 
           
Supplemental disclosure of non-cash investing and financing activities:
               
Accretion of preferred stock dividends
  $ 757     $  
 
           

 


 

UNICA CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(unaudited)
                                 
    Three Months Ended     Nine Months Ended  
    June 30,     June 30,  
    2005     2006     2005     2006  
Non-GAAP financial measures and reconciliation:
                               
 
                               
GAAP income (loss) from operations
  $ 1,610     $ (238 )   $ 3,993     $ (1,749 )
Add: Stock-based compensation
    118       1,039       368       2,031  
Add: In-process research and development and amortization of intangible assets
    114       721       350       5,151  
 
                       
Non-GAAP income from operations
  $ 1,842     $ 1,522     $ 4,711     $ 5,433  
 
                       
 
                               
GAAP net income (loss)
  $ 1,071     $ 215     $ 2,805     $ (94 )
Less: Difference in tax rate (2)
    6       (69 )     27       (148 )
Add: Stock-based compensation, net of tax (2)
    80       738       245       1,381  
Add: In-process research and development and amortization of intangible assets, net of tax (2)
    77       512       233       3,503  
 
                       
Non-GAAP net income
  $ 1,234     $ 1,396     $ 3,310     $ 4,642  
 
                       
 
                               
Diluted non-GAAP net income per share (3)
  $ 0.08     $ 0.07     $ 0.21     $ 0.23  
 
                       
 
                               
Shares used in non-GAAP per share calculation:
                               
Diluted
    15,504       20,498       15,554       20,343  
 
                       
 
(2)   Non-GAAP effective tax rates for the three and nine months ending June 30, 2006 were 29% and 32%, respectively versus GAAP effective tax rates of (7%) and 74%, reflecting the impact of discrete tax items. The non-GAAP tax provision excludes impact from the write-off of in-process research and development, amortization of intangibles arising from business combinations and stock-based compensation expense.
 
(3)   Non-GAAP weighted average shares outstanding for the three and nine months ended June 30, 2005 assumes the conversion of Unica’s preferred stock into 4,083 shares of common stock. As a result, earnings applicable to common shareholders are not affected by the accretion of preferred stock dividends, or allocation of earnings to preferred stockholders, as in the computation of GAAP EPS.