DemandTec Announces Fourth Quarter and Full Fiscal Year 2008 Financial Results

SAN CARLOS, Calif. - April 3, 2008 "(PressReleasePoint)".- DemandTec, Inc. (NASDAQ:DMAN), a leading provider of on-demand merchandising and marketing software services for retailers and consumer products companies, today announced financial results for the fourth quarter and full fiscal year 2008 ended February 29, 2008.

"During the fourth quarter and full fiscal year 2008, we delivered financial results that met or exceeded our guidance and, even more importantly, we continued to make progress against our three point growth strategy -- winning new retailers, expanding our relationships with existing retailers and consumer products (CP) companies, and leveraging our strong presence with retailers to create and expand our relationships with their CP trading partners," said Dan Fishback, President and Chief Executive Officer of DemandTec.

Fishback added, "From a long-term perspective, we are optimistic about DemandTec's opportunity based on the strategic nature of the market we are serving, combined with our proven value proposition, expanding global presence, strong competitive position and SaaS business model that is based on recurring revenue. We plan to continue investing in our business during fiscal 2009 to solidify and extend our market leadership position, much as our industry leading customers seek to gain a strategic advantage during more challenging macroeconomic times. At the same time, we remain focused on cash flow generation for our stockholders."

Fourth Quarter Financial Highlights

Revenue: Revenue was $17.4 million in the fourth quarter of fiscal 2008, up 42% from $12.3 million in the fourth quarter of fiscal 2007 and 9% from $15.9 million in the third quarter of fiscal 2008.

Gross Profit: GAAP gross profit was $11.9 million in the fourth quarter of fiscal 2008. Non-GAAP gross profit, which excludes stock-based compensation expense and amortization of intangibles, was $12.4 million in the fourth quarter of fiscal 2008, up 57% from the fourth quarter of fiscal 2007 and representing a non-GAAP gross margin of 71.4%.

GAAP Operating and Net Loss: Loss from operations was $1.9 million in the fourth quarter of fiscal 2008, compared to a loss from operations of $1.3 million in the fourth quarter of fiscal 2007. Net loss attributable to common stockholders was $1.2 million, or ($0.04) per share, in the fourth quarter of fiscal 2008, compared to net loss attributable to common stockholders of $1.6 million, or ($0.24) per share, in the fourth quarter of fiscal 2007.

Non-GAAP Operating and Net Income/Loss: Non-GAAP income from operations, which excludes $2.3 million in stock-based compensation expense and $241,000 in amortization of intangibles, was $659,000 in the fourth quarter of fiscal 2008, compared to a non-GAAP operating loss of $792,000 in the fourth quarter of fiscal 2007. Non-GAAP net income attributable to common stockholders was $1.3 million, or $0.04 per diluted share, in the fourth quarter of fiscal 2008, compared to a non-GAAP net loss attributable to common stockholders of $1.1 million, or ($0.17) per diluted share, in the fourth quarter of fiscal 2007.

Cash: Cash, cash equivalents and marketable securities at the end of the fiscal year totaled $75.9 million, an increase of approximately $1.8 million from the end of the third quarter of fiscal 2008. The increase in cash, cash equivalents and marketable securities was primarily attributable to cash generated from operations in the fourth quarter. For the full fiscal year 2008, the company generated $11.2 million in cash flow from operations and invested $4.1 million in capital expenditures, resulting in free cash flow of $7.1 million for the fiscal year.

Full Fiscal Year 2008 Financial Highlights

Revenue: Revenue was $61.3 million for the full fiscal year 2008, up 41% from $43.5 million in fiscal year 2007.

Gross Profit: GAAP gross profit was $40.8 million for the full fiscal year 2008. Non-GAAP gross profit, which excludes stock-based compensation expense and amortization of intangibles, was $42.7 million for the full fiscal year 2008, up 45% from fiscal year 2007 and representing a non-GAAP gross margin of 69.7%.

GAAP Operating and Net Loss: Loss from operations was $5.6 million for the full fiscal year 2008, compared to a loss from operations of $984,000 for the full fiscal year 2007. Net loss attributable to common stockholders was $4.5 million, or ($0.25) per diluted share, for fiscal year 2008, compared to net loss attributable to common stockholders of $1.5 million, or ($0.28) per diluted share, for fiscal year 2007.

Non-GAAP Operating and Net Income/Loss: Non-GAAP income from operations, which excludes $5.3 million in stock-based compensation expense and $968,000 in amortization of intangibles, was $742,000 for the full fiscal year 2008, compared to a non-GAAP operating loss of $330,000 for fiscal year 2007. Non-GAAP net income attributable to common stockholders was $1.8 million, or $0.08 per diluted share, for fiscal year 2008, compared to a non-GAAP net loss attributable to common stockholders of $894,000, or ($0.16) per diluted share, for fiscal 2007.

Mark Culhane, Chief Financial Officer of DemandTec, stated, "During fiscal 2008, DemandTec delivered revenue growth of over 40%, while the growth in our cash flow evidenced the scalability potential inherent in our business model. In particular, cash flow from operations grew 115% year-over-year and represented 18% of revenue, while free cash flow grew 146% year-over-year and represented 12% of revenue."

Conference Call Information

DemandTec will host a conference call today, April 3, 2008, at 5:00 p.m. EDT (2:00 p.m. PDT) to discuss the Company's financial results and financial guidance. To access this call, dial 303-262-2131 with passcode 11110289. A replay of this conference call will be available through April 10, 2008, at 800-405-2236. The replay passcode is 11110289#. A live webcast of this conference call will be available on the "Investor Relations" page of the Company's Web site (http://investor.demandtec.com) and a replay will be archived on the Web site as well.

About DemandTec

DemandTec's on-demand merchandising and marketing software services empower retailers and consumer products companies to optimize strategic decisions and collaborate in order to achieve their revenue, profitability and sales volume objectives. DemandTec has managed more than one million trade promotion deals between retailers and their manufacturer partners. DemandTec customers include leading retailers such as Advance Auto Parts, Best Buy, Circle K Stores, Delhaize America, Giant-Carlisle, H-E-B Grocery Co., Monoprix and Safeway, as well as more than 100 consumer products companies.

Contact:
Mark Culhane
EVP and CFO
DemandTec, Inc.
(650) 226-4600

Investor Contact:
Michael Kern
ICR
(617) 956-6731
Michael.kern@icrinc.com