UNCA Unica (MM)

Unica Corporation (Nasdaq: UNCA), a leading global provider of enterprise marketing management (EMM) solutions, today announced financial results for its second quarter fiscal 2009 ended March 31, 2009.

For the second quarter fiscal 2009, the company reported total revenue of $23.3 million, consistent with the company�s preliminary results. This represents a decrease of 24% compared with the second quarter of fiscal 2008. Subscription revenue was $4.4 million, an increase of 45%, perpetual license revenue was $4.2�million, a decrease of 64%, maintenance revenue on perpetual licenses was $10.8 million, an increase of 1%, and services revenue was $3.8 million, a decrease of 29%, each compared to the second quarter fiscal 2008.

�While our business related to perpetual software licenses continues to face strong economic- related headwinds, our subscription-based offerings are experiencing solid demand levels and growth. During the second quarter, we also closed several sizeable transactions on a subscription basis even though our solutions are being deployed on-premise,� stated Yuchun Lee, chief executive officer of Unica Corporation. �We believe the EMM market will experience healthy demand for both subscription and perpetual license solutions from a long-term perspective. This supports our strategy to provide customers with flexibility in their purchase and deployment options, which enables Unica to maximize its addressable market opportunity and adapt to customer�s changing preferences over time.�

Lee added, �We continue to believe that EMM represents a large, under-penetrated market opportunity. In addition, we are highly confident in Unica�s ability to weather this economic cycle based on our market and technology leadership position, large customer base and strong balance sheet.�

For the quarter ended March 31, 2009, Unica reported loss from operations, in accordance with generally accepted accounting principles (GAAP), of $17.3 million, compared to loss from operations of $777,000 for the quarter ended March 31, 2008. GAAP loss from operations for the quarter ended March 31, 2009 includes $1.3�million of non-cash share-based compensation expense, $678,000 of amortization of acquired intangible assets and a $15.3 million goodwill impairment charge. GAAP net loss for the quarter ended March 31, 2009 was $16.1 million, compared to GAAP net loss of $277,000 for the quarter ended March 31, 2008. GAAP net loss per share for the quarter ended March 31, 2009 was $0.77, compared to GAAP net loss per share of $0.01 in the corresponding quarter of the prior year.

During the closing process for the quarter ended March 31, 2009, the company performed an interim impairment assessment of its goodwill and other intangible assets due primarily to the decline in the company�s market capitalization and operating results caused by the difficult economic environment. As a result of this assessment, the company recorded a $15.3 million expense relating to the impairment of goodwill. A related adjustment was also made to the company�s balance sheet.

For the quarter ended March 31, 2009, non-GAAP income from operations, which excludes the above mentioned non-cash share-based compensation expense, amortization of acquired intangible assets, and the goodwill impairment charge, was approximately break-even, compared to non-GAAP income from operations of $1.5 million for the quarter ended March 31, 2008. Non-GAAP net loss was $338,000 for the quarter ended March 31, 2009. This compares to non-GAAP net income of $1.2 million for the quarter ended March 31, 2008. Non-GAAP net loss per diluted share was $0.01 for the quarter ended March 31, 2009, compared to net income per diluted share of $0.05 for the corresponding quarter of the prior year.

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 March 31, 2009, Unica had cash, cash equivalents and investments of $47.7 million, an increase compared to $46.5 million at December 31, 2008, due primarily to $2.5 million of cash provided by operations.

At March 31, 2009, deferred revenue was $37.3 million, a decrease compared to $37.9 million at December 31, 2008.

Kevin Shone, chief financial officer of Unica, said, �Unica�s commitment to improving its operational efficiency is reflected by the third consecutive quarter in which non-GAAP operating expenses have been reduced, leading to an 18% reduction compared to the prior-year quarter. In light of the continued challenging macro environment, we will continue to focus on cost controls. We will continue to invest in our growth initiatives with the goal of delivering positive non-GAAP operating profitability for the full year fiscal 2009.�

The preceding forward-looking information with respect to non-GAAP operating income for the full year fiscal 2009 excludes share-based compensation expense, amortization of acquired intangible assets related to previous acquisitions and the impairment of goodwill, but includes restructuring charges incurred during the first quarter.

Additional Second Quarter and Recent Business Highlights:

• Continued to expand its perpetual license business with industry leaders across a broad range of vertical markets, including telecommunications, technology, life sciences, travel and leisure, retail, financial services, insurance, and energy and utility. New customers added during the second quarter include: Advanta Bank Corp., Assurant, and Foxtel, among others. In addition, the company expanded the scope of its relationship with existing customers, including Allstate, Credit du Nord, CVS, DiGi, HDFC Bank, Invitrogen, Liberty Mutual, M&T Bank, and Orange, among others.
• Added customers for its subscription offerings, including Bank Mizrahi, BT Conferencing, Clover Technologies, Columbus Regional Hospital, CNA Insurance, Career Builder, Deutsche Bank Belgium, First Tennessee Bank, Guitar Center, IBA Molecular, Massachusetts Medical Society, and Vault.com, among others.

• Positioned in the �Leaders�� quadrant in both the Gartner, Inc.�s �Magic Quadrant for Marketing Resource Management� report, (February 9, 2009) and �Magic Quadrant for Multichannel Campaign Management� (April 24, 2009).

• Appointed Gerry Wilson to chief information officer, where he will guide Unica�s Information Technology organization, as well as the Facilities organization.�Wilson previously served as senior vice president and CIO of RSA Security, now known as RSA, the Security Division of EMC.

Conference Call Details

Unica will discuss its quarterly results and related matters via a teleconference today, April 30, 2009 at 5:00 p.m. ET. To access this call, dial 888-801-6490 (domestic) or 913-981-5591 (international). Additionally, a live audio webcast of the conference call will be available through Unica�s web site at http://investor.unica.com.

A replay of this conference call will be available from 8:00 p.m. ET on Thursday, April 30, 2009 through 11:59 p.m. ET on Thursday, May 14, 2009 at 888-203-1112 (domestic) or 719-457-0820�(international). The replay passcode is 4947425. A replay of the webcast will also be available on the events portion of the Unica web site following the earnings call.

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 non-GAAP operating income, net income, 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 an historic and a forward-looking basis, these non-GAAP measures exclude:

• Expense associated with the amortization of intangible assets related to acquisitions and the impairment of goodwill, 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 share-based compensation related to options to purchase common stock, the employee stock purchase plan and restricted stock units because, while share-based compensation is a significant ongoing expense affecting the company�s results of operations, the company�s management excludes share-based compensation from the company�s forecasting and planning process used to allocate resources. In addition, because of varying available valuation methodologies, subjective assumptions and the variety of award types, the company believes that excluding share-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 (Nasdaq: UNCA) is a leading global provider of enterprise marketing management (EMM) software and services. The most comprehensive EMM suite on the market today, Unica's marketing management solutions streamline the entire marketing process from analysis and planning to project management, execution and measurement. More than 800 companies worldwide depend on Unica for their enterprise marketing management solution.

Unica is headquartered in Waltham, Mass. with offices around the globe. For more information, visit www.unica.com.

Note to editors: Copyright 2009 Unica Corporation. Unica and the Unica logo 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

The information provided in this press release above contains forward-looking statements that relate to future events and 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 those factors listed in the Company�s most recent Quarterly Report on Form 10-Q and the Company�s most recent Annual Report on Form 10-K for the fiscal year ended September 30, 2008 under �Risk Factors�, which factors could cause Unica's performance or achievements to be materially different from those expressed or implied by the forward-looking statements.

UNICA CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

� � March 31, September 30, 2009 2008 � ASSETS Current assets: Cash and cash equivalents $ 43,617 $ 35,799 Short-term investments 4,107 11,482 Accounts receivable, net 19,235 21,339 Prepaid expenses and other current assets � 3,561 � 6,116 Total current assets 70,520 74,736 � Property and equipment, net 4,602 4,781 Long-term investments - 2,989 Goodwill and other acquired intangible assets, net 15,977 33,028 Other assets � 1,541 � 1,375 � Total Assets $ 92,640 $ 116,909 � LIABILITIES AND STOCKHOLDERS� EQUITY Current liabilities: Accounts payable $ 2,051 $ 3,536 Accrued expenses 11,459 14,527 Short-term deferred revenue � 36,075 � 35,369 Total current liabilities 49,585 53,432 � Long-term deferred revenue 1,198 1,733 Other long-term liabilities � 473 � 1,738 Total liabilities 51,256 56,903 � Stockholders� equity � 41,384 � 60,006 � Total liabilities and stockholders� equity $ 92,640 $ 116,909

UNICA CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

� � � Three Months Ended Six Months Ended March 31, March 31, 2009 2008 2009 2008 � Revenue: License $ 4,205 $ 11,635 $ 10,665 $ 22,780 Maintenance and services 14,628 16,092 29,984 30,681 Subscription � 4,423 � 3,060 � � � 8,701 � � 5,790 � Total Revenue 23,256 30,787 49,350 59,251 Costs of revenue: License 505 828 1,141 1,587 Maintenance and services 4,483 6,637 9,704 12,430 Subscription � 1,037 � 652 � � � 2,050 � � 1,305 � Total cost of revenue � 6,025 � 8,117 � � � 12,895 � � 15,322 � Gross profit 17,231 22,670 36,455 43,929 Operating expenses: Sales and marketing 9,919 12,626 20,941 24,387 Research and development 4,970 5,864 10,416 11,811 General and administrative 3,932 4,583 7,889 9,577 Restructuring charges (credits) (6 ) (20

)

�

748 (286 ) Goodwill impairment 15,266 - 15,266 - Amortization of acquired intangible assets � 450 � 394 � � � 935 � � 787 � Total operating expenses � 34,531 � 23,447 � � � 56,195 � � 46,276 � Loss from operations (17,300 ) (777

)

�

(19,740 ) (2,347 ) Other income (expense), net � (323 ) 182 � � � (1,200 ) � 763 � Loss before income taxes (17,623 ) (595

)

�

(20,940 ) (1,584 ) Provision for (benefit from) from income taxes � (1,492 ) (318

)

�

� (711 ) � (883 ) Net loss $ (16,131 ) $ (277

)

�

$ (20,229 ) $ (701 ) Net loss per common share: Basic $ (0.77 ) $ (0.01

)

�

$ (0.97 ) $ (0.03 ) Diluted $ (0.77 ) $ (0.01

)

�

$ (0.97 ) $ (0.03 ) Shares used in computing net loss per common share: Basic � 20,841 � 20,399 � � � 20,886 � � 20,265 � Diluted � 20,841 � 20,399 � � � 20,886 � � 20,265 �

UNICA CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

�

Six Months Ended March 31,

2009 � 2008 � Cash flows from operating activities: Net loss $ (20,229 ) $ (701 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation of property and equipment 1,385 1,020 Amortization of capitalized software development costs 86 34 Amortization of acquired intangible assets 1,474 1,453 Goodwill impairment 15,266 - Share-based compensation expense 2,637 3,281 Foreign currency translation gain/(loss) 153 - Excess tax benefits from share-based compensation - (130 ) Deferred tax benefits (1,435 ) (434 ) Changes in operating assets and liabilities: Accounts receivable 1,780 (954 ) Prepaid expenses and other current assets 2,456 (2,552 ) Other assets (110 ) 298 Accounts payable (1,344 ) 1,407 Accrued expenses (2,253 ) (360 ) Deferred revenue 452 991 Other long-term liabilities � - � � 444 � Net cash provided by (used in) operating activities 318 3,797 Cash flows from investing activities: Purchase of property and equipment (900 ) (1,474 ) Capitalization of software development costs (425 ) Cash collected from license acquired in acquisition 77 81 Proceeds from sales and maturities of investments 11,310 28,666 Purchases of investments (898 ) (16,173 ) Increase in restricted cash � (69 ) � - � Net cash provided by (used in) investing activities 9,095 11,100 Cash flows from financing activities: Proceeds from issuance of common stock under stock option and employee stock purchase plans 355 959 Excess tax benefits from share-based compensation - 130 Treasury shares purchased (912 ) - Payment of withholding taxes in connection with settlement of restricted stock units � (230 ) � (708 ) Net cash used in financing activities (787 ) 381 Effect of exchange rate changes on cash and cash equivalents � (808 ) � 157 � Net increase (decrease) in cash and cash equivalents 7,818 15,435 Cash and cash equivalents at beginning of period � 35,799 � � 18,493 � Cash and cash equivalents at end of period $ 43,617 � $ 33,928 �

UNICA CORPORATION AND SUBSIDIARIES

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(In thousands, except per share data)

� � � Three Months Ended Six Months Ended March 31, March 31, 2009 2008 2009 2008 � Non-GAAP financial measures and reconciliation: � GAAP loss from operations $ (17,300 ) $ (777 ) $ (19,740 ) $ (2,347 ) Add: Share-based compensation 1,341 1,512 2,637 3,281 Add: Amortization of acquired intangible assets 678 727 1,474 1,453 Add: Goodwill impairment � 15,266 � � - � � 15,266 � � - � Non-GAAP income (loss) from operations $ (15 ) $ 1,462 � $ (363 ) $ 2,387 � � � GAAP loss before income taxes $ (17,623 ) $ (595 ) $ (20,940 ) $ (1,584 ) Add: Share-based compensation 1,341 1,512 2,637 3,281 Add: Amortization of acquired intangible assets 678 727 1,474 1,453 Add: Goodwill impairment 15,266 - 15,266 - Adjusted benefit from (provision for) income taxes � - � � (493 ) � 355 � � (945 ) Non-GAAP net income (loss) $ (338 ) $ 1,151 � $ (1,208 ) $ 2,205 � � � Diluted non-GAAP net income per common share $ (0.01 ) $ 0.05 � $ (0.05 ) $ 0.10 � � � Shares used in computing non-GAAP net income per diluted common share: � 22,559 � � 21,868 � � 22,449 � � 21,881 �

UNICA CORPORATION AND SUBSIDIARIES

UNAUDITED SUMMARY OF SHARE-BASED COMPENSATION EXPENSE AND

AMORTIZATION OF ACQUIRED INTANGIBLE ASSETS

(In thousands)

� � � Three Months Ended Six Months Ended March 31, March 31, 2009 2008 2009 2008 � � Share-based compensation: Cost of license $ 13 $ 11 $ 30 $ 23 Cost of maintenance and services revenue 258 208 475 405 Sales and marketing expense 519 483 1,042 1,137 Research and development expense 240 343 474 677 General and administrative expense � 311 � 467 � 616 � 1,039 Total share-based compensation expense $ 1,341 $ 1,512 $ 2,637 $ 3,281 � Amortization of acquired intangible assets: Cost of license revenue $ 228 $ 333 $ 539 $ 666 Operating expenses � 450 � 394 � 935 � 787 Total amortization of acquired intangible assets $ 678 $ 727 $ 1,474 $ 1,453