OPERATING HIGHLIGHTS
- Reaffirmation of full year 2012 guidance
- Strong sales bookings of $192 million across all geographies, up 67% over prior year and 23% over prior quarter
- Repurchased 312,000 shares in the open market for $13.8 million
- Repurchased outstanding IBM warrants for $29.6 million
- 1.8 million shares remaining in share repurchase authorization
- Completed the acquisition of Distra Pty Ltd
NAPLES, Fla., Nov. 8, 2012 (GLOBE NEWSWIRE) -- ACI Worldwide, Inc. (Nasdaq:ACIW), a leading international provider of payment systems, today announced financial results for the period ended September 30, 2012. We will hold a conference call on November 8, 2012, at 4:30 p.m. EST to discuss this information. Interested persons may also access a real-time audio broadcast of the teleconference at www.aciworldwide.com/investors.
"We achieved strong sales bookings across all geographies in the quarter driven by sales, net of term extensions. The strength in global sales underscores our 2012 growth objectives and provides us with strong forward momentum," said Chief Executive Officer Philip Heasley. "Also, our acquisition of Distra in September further enhances our focus on product innovation and will enable cross-selling opportunities and acceleration of customer implementations when orchestrated with ACI's suite of payments products," continued Mr. Heasley.
FINANCIAL SUMMARY
2012 Guidance
We are reiterating our guidance for the 2012 calendar year as follows: Non-GAAP revenue to achieve a range of $706-$716 million, Non-GAAP Operating Income of $122-$127 million and Adjusted EBITDA of $188-$193 million. All guidance metrics exclude the impact of $23 million of deferred revenue that would have been recognized in the normal course of business by S1 but was not recognized due to GAAP purchase accounting requirements. The Non-GAAP Operating Income and Adjusted EBITDA also exclude $31 million of acquisition and integration related one-time expenses. Previous guidance given on July 26, 2012 did not consider the aforementioned $23 million impact of the S1 deferred revenue adjustment, as follows: GAAP Revenue $683-$693 million, non-GAAP Operating Income of $99-$104 million, and Adjusted EBITDA of $165-$170 million.
Sales
Sales bookings in the quarter totaled $192 million, an increase of $77 million, or 67%, over prior year quarter. Sales net of term extensions in the quarter totaled $126 million, an increase of $51 million, or 69%, over the prior-year quarter. S1 contributed $44 million to sales in the quarter. Historical ACI sales increased $33 million, or 28%, over prior year quarter sales bookings of $115 million.
Backlog
60-month backlog increased $61 million in the quarter to $2.367 billion as compared to $2.306 billion as of June 30, 2012. 12-month backlog increased $14 million to $584 million as compared to $570 million at June 30, 2012.
Revenue
GAAP revenue increased to $155.1 million, an increase of $42.9 million, or 38%, over prior-year quarter. S1 contributed $47.8 million of revenue in the third quarter. Historical ACI revenue was impacted by approximately $2 million in unfavorable foreign currency movements as compared to the prior year quarter. Non-GAAP revenue was $159.9 million, an increase of $47.8 million, or 43%, over prior year quarter. Non-GAAP revenue excludes the impact of $4.9 million of deferred revenue that would have been recognized in the normal course of business by S1 but was not recognized due to GAAP purchase accounting requirements.
Operating Expenses
Excluding $4.5 million and $3.4 million of S1 acquisition related one-time expenses incurred in the quarters ended September 30, 2012 and 2011, respectively, operating expenses increased $44.8 million compared to the prior year quarter due to the addition of $44.0 million of S1 operating expenses, inclusive of $4.0 million of intangibles amortization. Total GAAP operating expenses for the quarter were $146.8 million.
Operating Income
Consolidated GAAP operating income was $8.3 million for the quarter. Non-GAAP operating income totaled $17.7 million, an increase of $3.0 million, or 20%, compared to the prior-year quarter. Non-GAAP operating income excludes the $4.9 million deferred revenue adjustment due to purchase accounting as well as the impact of $4.5 million of acquisition-related one-time expenses.
Adjusted EBITDA
Adjusted EBITDA increased to $33.6 million, an improvement of $9.5 million, or 40%, compared to the prior year quarter. Adjusted EBITDA excludes the impact of $4.9 million of deferred revenue that would have been recognized in the normal course of business by S1 but was not recognized due to GAAP purchase accounting requirements and $4.4 million of acquisition related one-time expenses.
Liquidity
We ended the quarter with $87.7 million in cash on hand as of September 30, 2012. During the quarter, we repurchased approximately 312,000 shares in the open market for $13.8 million and we purchased 2.5 million warrants from IBM for a total purchase price of $29.6 million. At the end of third quarter, the remaining stock repurchase authorization was 1.8 million shares, or approximately $76 million based on the closing share price on September 30, 2012. In addition, we paid $3.1 million in principal payments on our term credit facility. Also, during the quarter, we acquired Distra for $49.8 million.
Operating Free Cash Flow
Operating free cash flow ("OFCF") for the quarter was essentially break-even, a decrease of $25 million as compared to the prior-year quarter primarily from timing of customer billings and collections as we integrate S1 back office and corporate functions and higher capital expenditures resulting from our facilities, IT and data center consolidations.
Other Expense
Other expense for the quarter was $3.8 million, an increase of $3.6 million as compared to other expense of $0.2 million in the prior-year quarter. The variance was driven by an increase of $2.2 million in interest expense as well as a negative foreign exchange variance of $1.4 million.
Taxes
Income tax benefit in the quarter was $1.2 million compared to income tax expense of $0.5 million in the prior year quarter. The income tax benefit for the quarter ended September 30, 2012 was primarily due to the beneficial impact of domestic losses at the U.S. tax rate offset by foreign income at lower tax rates. The effective tax rate was also beneficially impacted by the release of certain tax reserves related to tax years for which the statute of limitations has expired.
Net Income and Diluted Earnings Per Share
Net income for the quarter ended September 30, 2012 was $5.7 million, compared to net income of $10.5 million during the same period last year.
Earnings per share for the quarter ended September 30, 2012 was $0.14 per diluted share compared to $0.31 per diluted share during the same period last year. Excluding the impact of $4.5 million of S1 acquisition related one-time expenses and the impact of $4.9 of million deferred revenue that would have been recognized in the normal course of business by S1 but was not recognized due to GAAP purchase accounting requirements, earnings per share was $0.29 per diluted share.
Weighted Average Shares Outstanding
Total diluted weighted average shares outstanding were 40.7 million for the quarter ended September 30, 2012 as compared to 34.3 million shares outstanding for the quarter ended September 30, 2011. The number of weighted average shares outstanding was increased by 5.8 million due to the issuance of shares related to the acquisition of S1 Corporation.
About ACI Worldwide
ACI Worldwide powers electronic payments and banking for more than 1,650 financial institutions, retailers and processors around the world. ACI software enables $12 trillion in payments each day, processing transactions for 14 of the leading global retailers, and 24 of the world's 25 largest banks. Through our integrated suite of software products and hosted services, we deliver a broad range of solutions for payments processing, card and merchant management, online banking, mobile, branch and voice banking, fraud detection, and trade finance. To learn more about ACI and the reasons why our solutions are trusted globally, please visit www.aciworldwide.com. You can also find us on www.paymentsinsights.com or on Twitter @ACI_Worldwide.
Non-GAAP Financial Measures
| ACI Worldwide, Inc. | ||||||||
| Reconciliation of Selected GAAP Measures to Non-GAAP Measures (1) | ||||||||
| (unaudited and in thousands, except per share data) | ||||||||
| FOR THE THREE MONTHS ENDED SEPTEMBER 30, | ||||||||
| 2012 | 2012 | 2011 | 2011 | |||||
| GAAP | Adjustments | Non-GAAP | GAAP | Adjustments | Non-GAAP | $ Diff | % Diff | |
| Revenues: (2) | ||||||||
| Total revenues | $ 155,062 | $ 4,882 | $ 159,944 | $ 112,149 | $ -- | $ 112,149 | $ 47,795 | 43% |
| Expenses: | ||||||||
| Cost of software license fees | 5,874 | -- | 5,874 | 3,763 | -- | 3,763 | 2,111 | 56% |
| Cost of maintenance, services and hosting fees | 51,944 | -- | 51,944 | 29,996 | -- | 29,996 | 21,948 | 73% |
| Research and development | 34,213 | -- | 34,213 | 22,481 | -- | 22,481 | 11,732 | 52% |
| Selling and marketing | 20,448 | -- | 20,448 | 19,814 | -- | 19,814 | 634 | 3% |
| General and administrative (3) | 24,533 | (4,476) | 20,057 | 19,068 | (3,400) | 15,668 | 4,389 | 28% |
| Depreciation and amortization | 9,742 | -- | 9,742 | 5,759 | -- | 5,759 | 3,983 | 69% |
| Total expenses | 146,754 | (4,476) | 142,278 | 100,881 | (3,400) | 97,481 | 44,797 | 46% |
| Operating income | 8,308 | 9,358 | 17,666 | 11,268 | 3,400 | 14,668 | 2,998 | 20% |
| Other income (expense): | ||||||||
| Interest income | 222 | -- | 222 | 205 | -- | 205 | 17 | 8% |
| Interest expense | (2,620) | -- | (2,620) | (406) | -- | (406) | (2,214) | 545% |
| Other, net | (1,430) | -- | (1,430) | (46) | -- | (46) | (1,384) | 3009% |
| Total other income (expense) | (3,828) | -- | (3,828) | (247) | -- | (247) | (3,581) | 1450% |
| Income before income taxes | 4,480 | 9,358 | 13,838 | 11,021 | 3,400 | 14,421 | (583) | -4% |
| Income tax (benefit) expense (4) | (1,175) | 3,275 | 2,100 | 482 | -- | 482 | 1,618 | 336% |
| Net income | $ 5,655 | $ 6,083 | $ 11,738 | $ 10,539 | $ 3,400 | $ 13,939 | $ (2,201) | -16% |
| Depreciation and amortization | 13,499 | -- | 13,499 | 7,221 | -- | 7,221 | 6,278 | 87% |
| Stock-based compensation (5) | 2,575 | (146) | 2,429 | 2,158 | -- | 2,158 | 271 | 13% |
| Adjusted EBITDA | $ 24,382 | $ 9,212 | $ 33,594 | $ 20,647 | $ 3,400 | $ 24,047 | $ 9,547 | 40% |
| Earnings per share information | ||||||||
| Weighted average shares outstanding | ||||||||
| Basic | 39,126 | 39,126 | 39,126 | 33,495 | 33,495 | 33,495 | ||
| Diluted | 40,712 | 40,712 | 40,712 | 34,305 | 34,305 | 34,305 | ||
| Earnings per share | ||||||||
| Basic | $ 0.14 | $ 0.16 | $ 0.30 | $ 0.31 | $ 0.10 | $ 0.42 | $ (0.12) | -28% |
| Diluted | $ 0.14 | $ 0.15 | $ 0.29 | $ 0.31 | $ 0.10 | $ 0.41 | $ (0.12) | -29% |
| (1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. | ||||||||
| (2) Adjustment for $4.9 million of deferred revenue that would have been recognized in the normal course of business by S1 but was not recognized due to GAAP purchase accounting requirements. | ||||||||
| (3) Adjust for the three months ended September 30, 2012 related to the acquisition of S1, including, $3.5 million for facility closures, $0.5 million for employee related actions, $0.1 million for termination of the IBM IT outsourcing agreement and $0.4 million for other professional fees. For the three months ended September 30, 2011, the adjustment relates to professional fees associated with the acquisition of S1. | ||||||||
| (4) Adjustments tax effected at 35%. | ||||||||
| (5) Accelerated stock compensation expense for terminated employees related to the S1 acquisition. | ||||||||
To supplement our financial results presented on a GAAP basis, we use the non-GAAP measure indicated in the tables, which exclude certain business combination accounting entries and expenses related to the acquisition of S1, as well as other significant non-cash expenses such as depreciation, amortization and share-based compensation, that we believe are helpful in understanding our past financial performance and our future results. The presentation of these non-GAAP financial measures should be considered in addition to our GAAP results and are not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Management generally compensates for limitations in the use of non-GAAP financial measures by relying on comparable GAAP financial measures and providing investors with a reconciliation of non-GAAP financial measures only in addition to and in conjunction with results presented in accordance with GAAP. We believe that these non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business. Certain non-GAAP measures include:
- Non-GAAP revenue: revenue plus deferred revenue that would have been recognized in the normal course of business by S1 if not for GAAP purchase accounting requirements. Non-GAAP revenue should be considered in addition to, rather than as a substitute for, revenue.
- Non-GAAP operating income: operating income (loss) plus deferred revenue that would have been recognized in the normal course of business by S1 if not for GAAP purchase accounting requirements and one-time expense related to the acquisition of S1. Non-GAAP operating income should be considered in addition to, rather than as a substitute for, operating income.
- Adjusted EBITDA: net income (loss) plus income tax expense, net interest income (expense), net other income (expense), depreciation, amortization and non-cash compensation, as well as deferred revenue that would have been recognized in the normal course of business by S1 if not for GAAP purchase accounting requirements and one-time expense related to the acquisition of S1. Adjusted EBITDA should be considered in addition to, rather than as a substitute for, operating income.
ACI is also presenting operating free cash flow, which is defined as net cash provided by operating activities, plus net after-tax payments associated with employee-related actions and facility disclosures, net after-tax payments associated with IBM IT outsourcing transition, and less capital expenditures. Operating free cash flow is considered a non-GAAP financial measure as defined by SEC Regulation G. We utilize this non-GAAP financial measure, and believe it is useful to investors, as an indicator of cash flow available for debt repayment and other investing activities, such as capital investments and acquisitions. We utilize operating free cash flow as a further indicator of operating performance and for planning investing activities. Operating free cash flow should be considered in addition to, rather than as a substitute for, net cash provided by operating activities. A limitation of operating free cash flow is that it does not represent the total increase or decrease in the cash balance for the period. This measure also does not exclude mandatory debt service obligations and, therefore, does not represent the residual cash flow available for discretionary expenditures. We believe that operating free cash flow is useful to investors to provide disclosures of our operating results on the same basis as that used by our management.
| Reconciliation of Operating Free Cash Flow | Quarter Ended September 30, | |
| (millions) | 2012 | 2011 |
| Net cash provided by operating activities | $5.3 | $26.8 |
| Net after-tax payments associated with employee-related actions | 1.3 | -- |
| Net after-tax payments associated with lease terminations | 0.7 | -- |
| Net after-tax payments associated with S1 related transaction costs | -- | 0.2 |
| Net after-tax payments associated with IBM IT Outsourcing Transition | 0.2 | 0.2 |
| Less capital expenditures | (8.0) | (2.7) |
| Operating Free Cash Flow | ($0.5) | $24.5 |
ACI also includes backlog estimates, which include all software license fees, maintenance fees and services specified in executed contracts, as well as revenues from assumed contract renewals to the extent that we believe recognition of the related revenue will occur within the corresponding backlog period. We have historically included assumed renewals in backlog estimates based upon automatic renewal provisions in the executed contract and our historic experience with customer renewal rates.
Backlog is considered a non-GAAP financial measure as defined by SEC Regulation G. Our 60-month backlog estimate represents expected revenues from existing customers using the following key assumptions:
- Maintenance fees are assumed to exist for the duration of the license term for those contracts in which the committed maintenance term is less than the committed license term.
- License and facilities management arrangements are assumed to renew at the end of their committed term at a rate consistent with our historical experiences.
- Non-recurring license arrangements are assumed to renew as recurring revenue streams.
- Foreign currency exchange rates are assumed to remain constant over the 60-month backlog period for those contracts stated in currencies other than the U.S. dollar.
- Our pricing policies and practices are assumed to remain constant over the 60-month backlog period.
Estimates of future financial results are inherently unreliable. Our backlog estimates require substantial judgment and are based on a number of assumptions as described above. These assumptions may turn out to be inaccurate or wrong, including for reasons outside of management's control. For example, our customers may attempt to renegotiate or terminate their contracts for a number of reasons, including mergers, changes in their financial condition, or general changes in economic conditions in the customer's industry or geographic location, or we may experience delays in the development or delivery of products or services specified in customer contracts which may cause the actual renewal rates and amounts to differ from historical experiences. Changes in foreign currency exchange rates may also impact the amount of revenue actually recognized in future periods. Accordingly, there can be no assurance that contracts included in backlog estimates will actually generate the specified revenues or that the actual revenues will be generated within the corresponding 60-month period.
Backlog should be considered in addition to, rather than as a substitute for, reported revenue and deferred revenue.
Forward-Looking Statements
This press release contains forward-looking statements based on current expectations that involve a number of risks and uncertainties. Generally, forward-looking statements do not relate strictly to historical or current facts and may include words or phrases such as "believes," "will," "expects," "anticipates," "intends," and words and phrases of similar impact. The forward-looking statements are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements in this press release include, but are not limited to, statements regarding: (i) expectations that our strong global sales, net of term extensions, for the third quarter provide the company with strong forward momentum; (ii) expectations regarding revenue acceleration of customer implementations, enhanced product development, and increased sales from the Distra Pty Ltd. acquisition; and (iii) expectations regarding 2012 financial guidance related to revenue, operating income and adjusted EBITDA.
All of the foregoing forward-looking statements are expressly qualified by the risk factors discussed in our filings with the Securities and Exchange Commission. Such factors include but are not limited to, risks related to the global financial crisis and the continuing decline in the global economy, restrictions and other financial covenants in our credit facility, volatility and disruption of the capital and credit markets and adverse changes in the global economy, risks related to the expected benefits to be achieved in the transaction with S1, consolidations and failures in the financial services industry, the accuracy of management's backlog estimates, the cyclical nature of our revenue and earnings and the accuracy of forecasts due to the concentration of revenue generating activity during the final weeks of each quarter, impairment of our goodwill or intangible assets, exposure to unknown tax liabilities, volatility in our stock price, risks from operating internationally, including fluctuations in currency exchange rates, increased competition, our offshore software development activities, customer reluctance to switch to a new vendor, the performance of our strategic product, BASE24-eps, the maturity of certain products, our strategy to migrate customers to our next generation products, ratable or deferred recognition of certain revenue associated with customer migrations and the maturity of certain of our products, demand for our products, failure to obtain renewals of customer contracts or to obtain such renewals on favorable terms, delay or cancellation of customer projects or inaccurate project completion estimates, business interruptions or failure of our information technology and communication systems, our alliance with International Business Machines Corporation ("IBM"), our outsourcing agreement with IBM, the complexity of our products and services and the risk that they may contain hidden defects or be subjected to security breaches or viruses, compliance of our products with applicable legislation, governmental regulations and industry standards, our compliance with privacy regulations, the protection of our intellectual property in intellectual property litigation, future acquisitions, strategic partnerships and investments and litigation, the risk that expected synergies, operational efficiencies and cost savings from the S1 acquisition may not be fully realized or realized within the expected time frame. For a detailed discussion of these risk factors, parties that are relying on the forward-looking statements should review our filings with the Securities and Exchange Commission, including our most recently filed Annual Report on Form 10-K, Registration Statement on Form S-4, and subsequent reports on Forms 10-Q and 8-K.
| ACI WORLDWIDE, INC. AND SUBSIDIARIES | ||
| CONSOLIDATED BALANCE SHEETS | ||
| (unaudited and in thousands, except share and per share amounts) | ||
| September 30, | December 31, | |
| 2012 | 2011 | |
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | $ 87,682 | $ 197,098 |
| Billed receivables, net of allowances of $8,020 and $4,843, respectively | 135,094 | 93,355 |
| Accrued receivables | 36,325 | 6,693 |
| Deferred income taxes, net | 42,987 | 25,944 |
| Recoverable income taxes | 9,008 | -- |
| Prepaid expenses | 15,733 | 9,454 |
| Other current assets | 10,677 | 9,320 |
| Total current assets | 337,506 | 341,864 |
| Property and equipment, net | 40,373 | 20,479 |
| Software, net | 133,603 | 22,598 |
| Goodwill | 505,787 | 214,144 |
| Other intangible assets, net | 125,552 | 18,343 |
| Deferred income taxes, net | 45,287 | 13,466 |
| Other noncurrent assets | 32,694 | 33,748 |
| TOTAL ASSETS | $ 1,220,802 | $ 664,642 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities | ||
| Accounts payable | $ 27,470 | $ 11,532 |
| Accrued employee compensation | 37,808 | 27,955 |
| Current portion of Term Credit Facility | 15,625 | -- |
| Deferred revenue | 169,190 | 132,995 |
| Income taxes payable | -- | 10,427 |
| Alliance agreement liability | 20,667 | 20,667 |
| Accrued and other current liabilities | 34,389 | 23,481 |
| Total current liabilities | 305,149 | 227,057 |
| Noncurrent liabilities | ||
| Deferred revenue | 44,156 | 32,721 |
| Note payable under Term Credit Facility | 175,000 | -- |
| Note payable under Revolving Credit Facility | 194,000 | 75,000 |
| Other noncurrent liabilities | 25,264 | 12,534 |
| Total liabilities | 743,569 | 347,312 |
| Commitments and contingencies | ||
| Stockholders' equity | ||
| Preferred stock; $0.01 par value; 5,000,000 shares authorized; no shares issued and outstanding at September 30, 2012 and December 31, 2011 | -- | -- |
| Common stock; $0.005 par value; 70,000,000 shares authorized; 46,606,796 and 40,821,516 shares issued at September 30, 2012 and December 31, 2011, respectively | 232 | 204 |
| Common stock warrants | -- | 24,003 |
| Treasury stock, at cost, 7,231,577 and 7,178,427 shares outstanding at September 30, 2012 and December 31, 2011, respectively | (188,545) | (163,411) |
| Additional paid-in capital | 531,331 | 322,654 |
| Retained earnings | 150,323 | 151,141 |
| Accumulated other comprehensive loss | (16,108) | (17,261) |
| Total stockholders' equity | 477,233 | 317,330 |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 1,220,802 | $ 664,642 |
| ACI WORLDWIDE, INC. AND SUBSIDIARIES | ||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||
| (unaudited and in thousands, except per share amounts) | ||
| For the Three Months Ended September 30, | ||
| 2012 | 2011 | |
| Revenues: | ||
| Software license fees | $ 39,560 | $ 39,249 |
| Maintenance fees | 47,920 | 36,928 |
| Services | 35,811 | 23,770 |
| Software hosting fees | 31,771 | 12,202 |
| Total revenues | 155,062 | 112,149 |
| Expenses: | ||
| Cost of software license fees (1) | 5,874 | 3,763 |
| Cost of maintenance, services and hosting fees (1) | 51,944 | 29,996 |
| Research and development | 34,213 | 22,481 |
| Selling and marketing | 20,448 | 19,814 |
| General and administrative | 24,533 | 19,068 |
| Depreciation and amortization | 9,742 | 5,759 |
| Total expenses | 146,754 | 100,881 |
| Operating income | 8,308 | 11,268 |
| Other income (expense): | ||
| Interest income | 222 | 205 |
| Interest expense | (2,620) | (406) |
| Other, net | (1,430) | (46) |
| Total other income (expense) | (3,828) | (247) |
| Income before income taxes | 4,480 | 11,021 |
| Income tax expense (benefit) | (1,175) | 482 |
| Net income | $ 5,655 | $ 10,539 |
| Earnings per share information | ||
| Weighted average shares outstanding | ||
| Basic | 39,126 | 33,495 |
| Diluted | 40,712 | 34,305 |
| Earnings per share | ||
| Basic | $ 0.14 | $ 0.31 |
| Diluted | $ 0.14 | $ 0.31 |
| (1) The cost of software license fees excludes charges for depreciation but includes amortization of purchased and developed software for resale. The cost of maintenance, services and hosting fees excludes charges for depreciation. | ||
| ACI WORLDWIDE, INC. AND SUBSIDIARIES | ||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| (unaudited and in thousands) | ||
|
For the Three Months Ended September 30, |
||
| 2012 | 2011 | |
| Cash flows from operating activities: | ||
| Net income | $ 5,655 | $ 10,539 |
| Adjustments to reconcile net income to net cash flows from operating activities | ||
| Depreciation | 3,559 | 2,001 |
| Amortization | 9,941 | 5,220 |
| Deferred income taxes | (4,748) | 795 |
| Stock-based compensation expense | 2,575 | 2,158 |
| Excess tax benefit of stock options exercised | (550) | (260) |
| Other | 855 | 123 |
| Changes in operating assets and liabilities, net of impact of acquisitions: | ||
| Billed and accrued receivables, net | (20,040) | 2,173 |
| Other current and noncurrent assets | 753 | 1,902 |
| Accounts payable | (3,156) | (879) |
| Accrued employee compensation | 1,567 | 4,322 |
| Accrued liabilities | 3,311 | 3,561 |
| Current income taxes | 1,865 | (3,020) |
| Deferred revenue | 5,789 | (385) |
| Other current and noncurrent liabilities | (2,051) | (1,499) |
| Net cash flows from operating activities | 5,325 | 26,751 |
| Cash flows from investing activities: | ||
| Purchases of property and equipment | (6,640) | (1,440) |
| Purchases of software and distribution rights | (1,386) | (1,302) |
| Purchase of available-for-sale equity securities | -- | (10,000) |
| Acquisition of businesses, net of cash acquired | (49,852) | -- |
| Net cash flows from investing activities | (57,878) | (12,742) |
| Cash flows from financing activities: | ||
| Proceeds from issuance of common stock | 290 | 340 |
| Proceeds from exercises of stock options | 1,253 | 405 |
| Excess tax benefit of stock options exercised | 550 | 260 |
| Repurchases of common stock | (13,772) | -- |
| Repurchase of restricted stock for tax withholdings | (578) | (312) |
| Proceeds from exercises of common stock warrants | 11,866 | -- |
| Cash settlement of common stock warrants | (29,596) | -- |
| Proceeds from revolving portion of credit agreement | 24,000 | 75,000 |
| Repayment of revolving credit facility | -- | (75,000) |
| Repayment of term portion of credit agreement | (3,125) | -- |
| Payments for debt issuance costs | (541) | -- |
| Payments on debt and capital leases | (1,205) | (2,403) |
| Net cash flows from financing activities | (10,858) | (1,710) |
| Effect of exchange rate fluctuations on cash | 1,477 | (3,406) |
| Net increase (decrease) in cash and cash equivalents | (61,934) | 8,893 |
| Cash and cash equivalents, beginning of period | 149,616 | 170,807 |
| Cash and cash equivalents, end of period | $ 87,682 | $ 179,700 |