Selectica Announces Fourth Quarter and Full Year Fiscal 2008 Financial Results

Market Wire, May, 2008

Selectica, Inc. (NASDAQ: SLTC), a leading provider of enterprise contract lifecycle management and sales configuration solutions, today announced financial results for the fourth quarter and full fiscal year ended March 31, 2008.

Revenue for the fourth quarter of fiscal 2008 was $3.0 million, a 5% increase compared to $2.8 million for the same period in the previous year. Net loss for the quarter was $2.5 million, or $(0.09) per share, compared to a net loss of $4.9 million, or $(0.17) per share, in the fourth quarter of fiscal 2007. Non-GAAP net loss for the fourth quarter of fiscal 2008 was $2.4 million, or $(0.08) per diluted share, compared to non-GAAP net loss of $2.5 million, or $(0.09) per diluted share, for the same period of the prior year. Non-GAAP results exclude restructuring charges, patent litigation settlement expense, and stock option investigation expense of $168,000 for the fourth quarter of fiscal 2008 and $2.4 million for the fourth quarter of fiscal 2007.

For the full year fiscal 2008, Selectica reported revenue of $16.0 million, a 9% increase compared to $14.7 million for the full year fiscal 2007. Net loss for the full year fiscal 2008 was $23.9 million, or $(0.84), compared to a net loss of $20.9 million, or $(0.70) for the full year fiscal 2007. Non-GAAP net loss for the full year fiscal 2008 was $2.8 million, or $(0.10) per share, compared to a non-GAAP net loss of $12.3 million, or $(0.41) per share, for the full year fiscal 2007. Non-GAAP results exclude restructuring charges, patent litigation settlement expense, and stock option investigation expense of $21.1 million for the full year fiscal 2008 and $8.6 million for the full year fiscal 2007.

"Our fourth quarter results did not meet our expectations," said Robert Jurkowski, Chairman and Chief Executive Officer of Selectica. "We had transitions in the leadership within both of our business units and were unable to recognize revenue from a significant contract. However, we did form a landmark alliance with one of the largest global management consulting and technology services companies to jointly take our products to targeted global companies in the life sciences industry. Last quarter we signed a significant contract with one of the world's leading pharmaceutical companies and the revenue will be recognized over the next several quarters."

"We have refocused both our contract management and sales configuration business units, significantly reduced our operating expenses and are developing relationships with key partners to extend our market presence," continued Jurkowski. "Together with our market leading products and excellent customer base, I believe Selectica is in an excellent position to increase value for its customers and build value for its shareholders."

Financial Highlights

--  Selectica entered into a global alliance agreement with a leading
    global management consulting, technology services and outsourcing company
    to offer a joint, comprehensive contract lifecycle management (CLM)
    solution targeted for life science companies wanting to streamline the
    management of revenue cycle contracts.
--  In the fourth quarter, Selectica signed a contract with one of the
    world's largest pharmaceutical companies to provide its Contract
    Performance Management solution to address the company's needs related to
    its Managed Market Offers and Contract agreements. Selectica also signed
    its first contract with a retail banking institution.
--  Sales configuration license and services revenues represented 62% and
    contract management solutions represented 38% of total revenues in the
    fourth quarter of fiscal 2008.
--  Consolidated gross margins were 62% in the quarter compared with 44%
    in the fourth quarter of fiscal 2007.
--  Operating expenses declined 6% for the fourth quarter of fiscal 2008
    compared with the same period in the previous year.  For the fiscal year
    2008, operating expenses were 22% lower compared with the fiscal year 2007.
--  At March 31, 2008, Selectica had $35.2 million in cash, cash
    equivalents and investments.
    

Business Outlook

Selectica's fiscal 2009 guidance for the 12 month period ending March 31, 2009 is for revenue of approximately $25 million and net income of 8% to 10% of revenue. The company expects to become profitable on a quarterly basis during the second half of fiscal 2009.

Selectica will host a conference call to discuss its financial results and operational highlights today at 5:00 p.m. EDT (2:00 p.m. PDT). To access the conference call by phone, dial (800) 218-0204. The conference call will also be webcast live via the Internet, and can be accessed on the investor relations section of the Company's website ( http://www.selectica.com ). An archive of the webcast will be available in the same location shortly after the completion of the call.

About Selectica, Inc.

Selectica, Inc. (NASDAQ: SLTC) provides enterprise-class software solutions for sales configuration and contract lifecycle management. Selectica's contract management software solutions enable companies to manage critical business functions including contract administration, sourcing, procurement, governance, sales, revenue recognition, healthcare, and provide enterprise-wide visibility to key stakeholders such as General Counsel and executive management. Selectica's Sales Configuration Solutions simplify and automate the configuration, pricing, and quoting of complex products and services. For over 10 years, Selectica has helped its customers generate substantial savings. Selectica customers represent leaders in manufacturing, technology, finance, retail, real estate, insurance, healthcare, semiconductor and telecommunications, including: ABB, ADP, Accenture, Bell Canada, Cisco, Covad Communications, Fujitsu, General Electric, Fireman's Fund Insurance Company, Host Hotels, IBM, Juniper Networks, Reliance Industries, Rockwell Automation, Tellabs, and Walt Disney. Selectica is headquartered in San Jose, CA. For more information, visit the company's Web site at www.selectica.com .