Selectica Business Opportunity Blaine Mathieu Chief Executive - - PowerPoint PPT Presentation

Contract ¡Management ¡and ¡ Configura0on ¡Solu0ons ¡

Selectica Business Opportunity

Blaine Mathieu Chief Executive Officer bmathieu@selectica.com

Forward Looking Statements

Certain statements in this release and elsewhere by Selectica are forward-looking statements within the meaning of the federal securities laws and the Private Securities Litigation Reform Act of 1995. Such statements may include, without limitation, statements about business outlook, assessment of market conditions, anticipated financial and operating results, strategies, future plans, contingencies and contemplated transactions of the Company. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors which may cause or contribute to actual results of Company operations, or the performance or achievements of the Company or industry results, to differ materially from those expressed, or implied by the forward-looking

• statements. In addition to any such risks, uncertainties and other factors discussed

elsewhere herein, risks, uncertainties and other factors that could cause or contribute to actual results differing materially from those expressed or implied for the forward- looking statements include, but are not limited to the on-going global recession; fluctuations in demand for Selectica’s products and services; government policies and regulations, including, but not limited to those affecting the Company’s industry; and risks related to the Company’s past stock granting policies and related restatement of financial statements. Selectica undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or

• therwise. Additional risk factors concerning the Company can be found in the

Company’s most recent Form 10-K, filed by the Company with the Securities and Exchange Commission.

HEAD OFFICE:

San Mateo, California

PEOPLE:

75 US-based employees 90 off-shore contractors

CLIENTS:

120 large enterprises

Company Snapshot

*Market data as of 04/15/2014

SHARE PRICE*:

$6.13

MARKET CAP*: $29.2 Million SHARES OUTS. (BASIC): 4.8 Million SHARES OUTS. (FULLY DILUTED): 7.1 Million

Solutions

Configuration Contract Management

1 2

Contract Management

• Contract Lifecycle

Management

• Contract Discovery

and Analytics (NEW)

• Best Practices Consulting
• Implementation Services
• Optimize & configure

to precisely fit customer requirements

• Adapt & integrate to

any system

• Richest functionality
• n the market

SOLUTIONS

1 |

Our Solutions Our Differentiators

1 |

Contract Management

SOLUTIONS

Configuration

• Configuration Platform
• Model Builder
• Best Practices Consulting
• Implementation Services
• Ultimate in configurability,

extensibility

• Constraints-based (not

rules) engine handles most complex challenges

• Battle-tested – $Billions
• f transactions

Our Solutions Our Differentiators

SOLUTIONS

2|

2|

Configuration

SOLUTIONS

Historical Overview

9

¡ ¡

• Lack of support & service
• Single major client churn
• Business needed refocus
• n service
• Began transition to SaaS
• New product/price model
• Priority on cust. acquisition
• Management overhaul
• Refocus on customers
• Raised additional capital

Current Focus

Complete client transition to full SaaS Finish

• perational

improvements Expand beyond CLM to full Contract Management Solution Drive 3-pronged go-to-market channel initiatives

Growth Drivers

Channel Expansion Solution Expansion

1 2

Solution Expansion

$500 to $750 Million

Sources: Forrester, Gartner, and IACCM (Global Contract Mgmt. Association)

$2.3

Billion

SELL-SIDE BUY-SIDE

CLM

1 |

GROWTH DRIVER

Contract Discovery

• Launched 2/26
• Automated contract discovery and analysis

– Get contracts into Selectica CLM quickly and understand what they are

• Goals:

– Remove perceived barriers – Improve time to value – Double ASPs for relevant deals

GROWTH DRIVER

1 |

Now Working on Our Next Move

GROWTH DRIVER

1 |

2|

Channel Expansion

New Client Channel

• Build sales

and marketing “machine”

• Future

international expansion

GROWTH DRIVER

2|

Channel Expansion

Existing Client Growth Channel New Client Channel

• Build sales

and marketing “machine”

• Future

international expansion

• Majority of

clients lightly penetrated

• Penetrate new

divisions

• Seat expansion
• Upsell new

products and services

GROWTH DRIVER

Blue Chip Customers

Leading companies depend on Selectica

GROWTH DRIVER

2|

Partner/SI Channel

• Untapped

partner ecosystem

• Force-multiplier

for other growth drivers

Channel Expansion

New Client Channel

• Build sales

and marketing “machine”

• Future

international expansion

• Majority of

clients lightly penetrated

• Penetrate new

divisions

• Seat expansion
• Upsell new

value-added products and services Existing Client Growth Channel

GROWTH DRIVER

2|

Partner Ecosystem

GROWTH DRIVER

2|

Experienced Management Team

Blaine Mathieu President & CEO Jeff Grosman COO Todd Spartz CFO Patrick Stakenas Chief Strategy Officer Eric Faulkner CIO & Pro Serve Leo Sigal CTO Rose Lee SVP Customer Success Mike Mothersbaugh SVP Sales

Summary Income Statement

TAKEAWAYS:

• Recurring and nonrecurring revenues are stabilizing
• Longer-term path to return to historical gross margins
• Revenue growth leverages across stable fixed cost base

FY 3/31/13 FY 3/31/14 Q1 Q2 Q3 Q4 FY 2013 Q1 Q2 Q3 YTD

Recurring Revenue $2.6 $3.0 $3.1 $3.1 $11.8 $3.2 $3.0 $3.1 $9.3 Nonrecurring Revenue $1.5 $1.7 $1.4 $1.1 $5.8 $1.2 $0.9 $0.9 $3.0 Total Revenue $4.2 $4.7 $4.5 $4.3 $17.6 $4.4 $3.9 $3.9 $12.2 Cost of Revenue $1.6 $1.8 $2.0 $2.1 $7.4 $1.9 $2.0 $2.1 $6.0 Gross Profit $2.6 $2.9 $2.5 $2.1 $10.2 $2.5 $2.0 $1.8 $6.3 Gross Margin 62.7% 62.3% 56.1% 49.7% 57.8% 56.4% 50.4% 46.0% 51.1% Operating Expense $3.3 $3.3 $3.6 $3.8 $14.0 $4.7 $3.5 $4.0 $12.3 Operating Income/(Loss) ($0.7) ($0.4) ($1.1) ($1.8) ($3.9) ($2.3) ($1.6) ($2.2) ($6.0) Other Expense/(Loss) $0.0 $0.5 $0.0 $0.3 $0.9 $0.2 ($0.9) ($0.0) ($0.8) Net Income/(Loss) ($0.7) ($0.9) ($1.1) ($2.1) ($4.7) ($2.4) ($0.5) ($2.1) ($5.0)

Summary Balance Sheet

TAKEAWAYS:

• Necessary cash to execute against the business model
• Warrants convert @$12.25, ~$8M cash

Cash $9,721 Credit facility $6,234 Accounts Receivable $4,040 Accounts payable $1,002 Prepaid expenses & other current assets $538 Accrued liabilities $753 Total current assets $14,299 Deferred revenue $5,275 Total current liabilities $13,264 Long-term deferred revenue $816 Total liabilities $14,080 Common stock, 3,864 outstanding Additional paid-in-capital $4 Treasury stock 96 shares at cost $273,067 Property & equipment, net $317 Accumulated deficit ($472) Capitalized software $661 Total stockholders’ equity ($271,362) Other assets $40 Total liabilities & stockholders’ equity $1,237 Total assets $15,317 $15,317

Milestones to Measure SLTC

• Expansion in recurring revenue
• Improvement in nonrecurring revenue
• Recovering gross margins
• Increasing billings
• New solutions added to product suite
• Strategic partner announcements

Market Consolidation

ACQUIRED ¡ BY ¡IBM ¡ ACQUIRED ¡ BY ¡ SCIQUEST ¡ ACQUIRED ¡ BY ¡ SAP ¡

*PROS ¡Holdings, ¡Inc. ¡(NYSE: ¡PRO) ¡

ACQUIRED ¡ WEBCOM ¡ ACQUIRED ¡ BY ¡ORACLE ¡ PENDING ¡ ¡ ACQUISITION ¡ ¡BY ¡PRO* ¡

Average ¡ acquisi0on ¡ EV/Rev ¡ mul0ples ¡ 2011 ¡– ¡2013 ¡ ¡

7.1X ¡

SLTC ¡EV/ Rev: ¡ ¡

1.5X ¡ ¡

CLM CPQ

Reasons to Invest

Overhauled management team Business realigned/ refocused Growth through solution expansion Attractive valuation Largely untapped customer base to upsell and further penetrate SaaS customers increasing

$

THANK YOU