The U.S. Department of Homeland Security is currently investigating a number of cases of suspected cybersecurity flaws in medical devices and hospital equipment. As Reuter’s reports, products under the spotlight include infusion pumps and implantable heart devices.
Bell ID Launches Tokenization Manager
New solution will assist card issuers and merchants to reduce fraud resulting from stolen card account data
Payment credential management specialist, Bell ID, has launched its Tokenization Manager software. The solution will be used by card issuers and merchants to enhance security and limit fraud by facilitating tokenized payments.
EMV payment tokenization is the process of replacing a personal account number (PAN) with a unique identifier, known as a ‘payment token’. The payment token can only be used in a specific domain such as a merchant’s online website, or channel for example a mobile device to make a near-field-communication (NFC) payment.
Pat Curran, Executive Chairman at Bell ID, explains: “As an example, tokenization replaces the need for merchants or digital wallet operators to store customers’ card data. As the payment tokens are created for a designated purpose, they are very unappealing to fraudsters as the data stolen cannot be used more widely. Tokenization will therefore prevent large scale attacks on merchants for card data, keeping confidential, sensitive information out of reach and helping to increase consumer trust. This is very important following a number of large scale data breaches in the US over the past year.”
Bell ID’s Tokenization Manager, which has already been deployed worldwide to support mobile NFC payments, provides Token Service Provider functionality in line with the EMV Payment Tokenization Specification – Technical Framework v1.0. It will be used by token requesters such as card issuers to manage payment tokens, digital wallet providers to deliver tokens to support mobile NFC payments, and merchants to replace card on-file storage of PANs.
The solution operates and manages a secure repository, referred to as a token vault, which maintains a link between the payment token and real PAN. It also generates the payment token and associated cryptographic data, provides de-tokenization services for transaction authorization and clearance, and delivers access to securely issue and manage the lifecycle of the token.
“The ability to manage the payment token securely and efficiently is very important, as it can be ‘unlinked’ from the PAN if the token is no longer required. For example if a mobile handset is lost or stolen or a customer closes their account with the merchant,” explains Curran. “We have leveraged our long-standing experience in this space to create a product that provides a seamless user experience for our customers and consequently end users, whilst increasing the security of mobile payment credentials. It is measures such as these that will pave the way for the mass market adoption of mobile payments.”
To find out more about Bell ID Tokenization Manager, visit the Bell ID website. Bell ID will also be present at Money 2020 and Cartes offering a comprehensive demo of the solution – schedule a meeting via our website.
Rambus Ecebs Wins Contract to supply HOPS for South East Flexible Ticketing Scheme
October 2014
Rambus Ecebs gains strong foothold in rail through new HOPS contract award
Rail Settlement Plan Ltd, the company representing UK rail operators, has awarded a contract to Rambus Ecebs to provide the technology and back office transaction services required to deliver ‘smart’ ticketing infrastructure and products to the rail network surrounding London.
Rambus Ecebs will install its market-leading Paragon HOPS software as a shared service that franchises can use in the South East of England. The software is critical to the operation of the whole scheme planned for the region’s rail network, which aims to introduce smart ticketing for all rail commuters in the South East of England in one, ITSO-compliant system.
The Department for Transport’s South East Flexible Ticketing (SEFT) scheme involves franchises currently run by 12 train operators including Govia Thameslink Railway, East Coast and Virgin West Coast and covers an area that includes Milton Keynes in the North, Brighton in the South, Reading in the West, and Dover in the East.
Rambus Ecebs technology will enable smart ticketing to work across thousands of devices including railway station gates, validators and ticket machines. The system will enable rail passengers to use ITSO-compliant smart tickets to travel to London and then also use these same tickets within London at national rail stations.
Russell McCullagh, Managing Director of Rambus Ecebs, said: “This could be a watershed moment for the integration of smart ticketing in the UK rail industry. The group of passengers this system is targeting makes a third of all rail journeys in the UK. Paragon HOPS is the only system operating in the UK to have proven its reliability at managing high volume transactions on a regular basis. It should give other train operators confidence that they too can benefit from the infrastructure that is being put in place as part of the SEFT smart ticketing scheme.”
While the scheme is initially based in the South East of England, it has the potential to be expanded all over the UK as Government plans to introduce ITSO-based smart ticketing to improve travel for all UK passengers come into effect.
The initial four-year contract between Ecebs and RSP includes an option to extend.
RSP provides and manages a number of shared services on behalf of franchised rail operators ranging from the provision of ticket stock to IT services such as the allocation of industry revenue from smart ticketing systems. All rail operators are working together with Government to provide the infrastructure required to operate an ITSO-compliant smart ticketing solution.
The deal provides Rambus Ecebs with a strong foothold in the rail industry, building on its existing contracts in place across metro, bus and ferries across the UK. Ecebs already provides smart ticketing solutions in cities outside of London, including Glasgow, Nottingham and Newcastle.
About SEFT
South East Flexible Ticketing (SEFT) is a DfT sponsored scheme, approved by the Chancellor of the Exchequer as part of the Growth Agenda in 2011. It is being delivered by the Department working with The Association of Train Operating Companies, and TfL.
Its objective is to provide passengers with a modern smartcard ticketing service which both reflects passengers’ travel patterns and can respond to their future travel and ticket needs.
The SEFT scheme will roll out with 12 train operating companies and Transport for London through a staged introduction of “smart ticketing” throughout the South East, maximising economies of scale through cross-industry collaboration.
Smart ticketing is already used in some parts of the UK. One of the most used in the UK is London’s Oyster Scheme. For passengers using season tickets, smart ticketing provides a more durable ticket and overcomes one of the fundamental flaws of paper ticketing in that lost or damaged tickets can be more easily replaced.
Smart ticketing can also offer passengers:
1. Greater convenience, through touch-in technology, longer-lasting “tickets” and greatly reduced ticket and gate queues
2. Greater value for money (eg by capping the amount they pay, or replacing several tickets with a more efficient one, eg a travelcard or carnet)
3. An opportunity for more flexible ticketing products in the future, that could not work on paper-based tickets.
UX matters for the Internet of Things
Writing for the Harvard Business Review, H. James Wilson confirms that the evolving Internet of Things (IoT) will prompt companies to place more of an emphasis on understanding and developing an intuitive user experience (UX).
“As the IoT expands to include people, companies that create value will need to understand user experience, psychological, and even some philosophical concepts much more deeply than they do now,” he explained. “They must learn how people really interact with things and why those things matter.”
DRAM leads all semiconductors in 2014
Worldwide semiconductor revenue remains on track to reach $338 billion in 2014, a 7.2 percent increase from 2013, and up from the previous quarter’s forecast of 6.7 percent growth. According to Gartner analysts, DRAM leads all semiconductors in 2014 with revenue growth of 26.3 percent – and is expected to reach all-time revenue high of $44.1 billion for the year.
Rambus Reports Third Quarter Financial Results
Business and Financial Highlights
- Generated quarterly revenue of $69.7 million
- Introduced family of DPA resistant cryptographic cores
- Announced DDR4/3 PHY interoperability with Northwest Logic
- GAAP diluted net income per share of $0.05; non-GAAP diluted net income per share of $0.13
SUNNYVALE, Calif. – October 20, 2014 — Rambus Inc. (NASDAQ:RMBS), the innovative technology solutions company that brings invention to market, today reported financial results for the third quarter ended September 30, 2014.
GAAP Financial Results:
Revenue for the third quarter of 2014 was $69.7 million, down 9% on a sequential basis from the second quarter of 2014 primarily due to a one-time catch-up payment from the new license agreement signed with Qualcomm during the second quarter of 2014 and lower royalty revenue from NVIDIA. As compared to the third quarter of 2013, revenue was down 5% primarily due to lower royalty revenue from Samsung and NVIDIA, offset by the license agreements signed with Qualcomm and Micron Technology.
Revenue for the nine months ended September 30, 2014 was $224.5 million, which was up 13% over the prior year period, primarily due to the license agreements signed with SK hynix, Micron Technology, Nanya Technology Corporation and Qualcomm, partially offset by lower royalty revenue from Samsung.
Total operating costs and expenses for the third quarter of 2014 were $55.2 million, 2% lower than the previous quarter and 14% lower than the third quarter of 2013. Third quarter operating costs and expenses of $55.2 million included $3.4 million of stock-based compensation expenses and $6.7 million of amortization expenses. In comparison, total operating costs and expenses for the second quarter of 2014 of $56.4 million included $4.9 million of stock-based compensation expenses, $6.8 million of amortization expenses and $1.0 million of retention bonus expense from acquisitions. Total operating costs and expenses for the third quarter of 2013 were $64.2 million, which included $3.4 million of stock-based compensation expenses, $8.1 million of impairment of goodwill, $1.1 million of restructuring charges, $7.4 million of amortization expenses and $1.5 million of retention bonus expense from acquisitions. The change in total operating costs and expenses in the third quarter of 2014 as compared to the second quarter of 2014 was primarily due to decreased stock-based compensation expenses and retention bonus expense from acquisitions. The change in total operating costs and expenses in the third quarter of 2014 as compared to the third quarter of 2013 was primarily attributable to impairment of goodwill and restructuring charges in the third quarter of 2013 and lower retention bonus expense from acquisitions partially offset by higher cost of sales associated with the sale of lighting products and bonus expense.
Total operating costs and expenses for the nine months ended September 30, 2014 were $166.8 million, 8% lower than the nine months ended September 30, 2013. The nine months operating costs and expenses of $166.8 million included $11.2 million of stock-based compensation expenses, $20.3 million of amortization expenses and $2.5 million of retention bonus expense from acquisitions. This is compared to total operating costs and expenses for the nine months ended September 30, 2013 of $181.8 million, which included $11.9 million of stock-based compensation expenses, $8.1 million of impairment of goodwill, $3.3 million of restructuring charges, $8.5 million one-time reversal of accrued SK hynix related litigation costs, $21.4 million of amortization expenses and $8.9 million of retention bonus expense from acquisitions. The change in total operating costs and expenses was primarily attributable to impairment of goodwill and restructuring charges in 2013 and lower retention bonus expense from acquisitions, partially offset by higher cost of sales associated with the sale of lighting products and as a result of the one-time reversal of accrued SK hynix related litigation costs in the second quarter of 2013./p>
Net income for the third quarter of 2014 was $5.5 million as compared to net income of $5.0 million in the second quarter of 2014 and net loss of $5.7 million in the third quarter of 2013. Diluted net income per share for the third quarter of 2014 was $0.05 as compared to diluted net income per share of $0.04 in the second quarter of 2014 and diluted net loss per share of $0.05 in the third quarter of 2013.
Net income for the nine months ended September 30, 2014 was $18.4 million as compared to a net loss of $24.0 million for the same period of 2013. Diluted net income per share for the nine months ended September 30, 2014 was $0.16 as compared to a diluted net loss per share of $0.21 for the same period of 2013.
Non-GAAP Financial Results (1):
Total non-GAAP operating costs and expenses in the third quarter of 2014 were $45.1 million, 3% higher than the previous quarter, and 5% higher than the third quarter of 2013
Total non-GAAP operating costs and expenses for the nine months ended September 30, 2014 were $132.8 million as compared to $136.2 million in the same period of 2013 due primarily to lower general litigation expenses offset by higher cost of sales associated with the sale of lighting products.
Non-GAAP net income in the third quarter of 2014 was $14.8 million, 22% lower than the prior quarter and 15% lower than the third quarter of 2013. Non-GAAP diluted net income per share was $0.13 in the third quarter of 2014 as compared to $0.16 in the prior quarter and $0.15 in the third quarter of 2013.
Non-GAAP net income for the nine months ended September 30, 2014 was $53.4 million as compared to $33.3 million in the same period of 2013. Non-GAAP diluted net income per share was $0.45 for the nine months ended September 30, 2014 as compared to non-GAAP diluted net income per share of $0.29 for the nine months ended September 30, 2013.
Other Financial Highlights:
Cash, cash equivalents, and marketable securities as of September 30, 2014 were $271.1 million, an increase of $24.7 million from June 30, 2014.
During the third quarter of 2014, the Company recorded an income tax provision of approximately $5.3 million. As the Company continues to maintain a full valuation allowance against its U.S. deferred tax assets, the Company’s tax provision consists of primarily foreign withholding taxes.
Fourth Quarter 2014 Outlook:
For the fourth quarter of 2014, the Company expects revenue to be between $70 million and $75 million. Revenue is not without risk and includes expectations that the Company will sign new customers for patent as well as solutions licensing.
Conference Call:
The Company will host a conference call at 2:00 p.m. PT today to discuss its financial results. The call, audio and slides will be available online at investor.rambus.com. A replay will be available following the call as a webcast on the Rambus Investor Relations website and for one week at the following numbers: (855) 859-2056 (domestic) or (404) 537-3406 (international) with ID#12537633.
(1) Non-GAAP Financial Information:
In the commentary set forth above and in the financial statements included in this earnings release, the Company presents the following non-GAAP financial measures: operating costs and expenses, operating income (loss) and net income (loss). In computing each of these non-GAAP financial measures, the following items were considered as discussed below: stock-based compensation expenses, acquisition-related transaction costs and retention bonus expense, amortization expenses, costs of restatement and related legal activities, restructuring charges, impairment charges, severance costs, non-cash interest expense and certain other one-time adjustments. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated. Management believes the non-GAAP financial measures are appropriate for both its own assessment of, and to show investors, how the Company’s performance compares to other periods. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. Reconciliation from GAAP to non-GAAP results is included in the financial statements contained in this release.
The Company’s non-GAAP financial measures reflect adjustments based on the following items:
Stock-based compensation expense. These expenses primarily relate to employee stock options, employee stock purchase plans, and employee non-vested equity stock and non-vested stock units. The Company excludes stock-based compensation expense from its non-GAAP measures primarily because such expenses are non-cash expenses that the Company does not believe are reflective of ongoing operating results. Additionally, given the fact that other companies may grant different amounts and types of equity awards and may use different option valuation assumptions, excluding stock-based compensation expense permits more accurate comparisons of the Company’s results with peer companies.
Acquisition-related transaction costs and retention bonus expense. These expenses include all direct costs of certain acquisitions and the current periods’ portion of any retention bonus expense associated with the acquisitions. The Company excludes these expenses in order to provide better comparability between periods.
Restructuring charges. These charges may consist of severance, contractual retention payments, exit costs and other charges and are excluded because such charges are not directly related to ongoing business results and do not reflect expected future operating expenses.
Impairment of goodwill and long-lived assets. These charges consist of non-cash charges to goodwill and long-lived assets and are excluded because such charges are non-recurring and do not reduce the Company’s liquidity.
Amortization expense. The Company incurs expenses for the amortization of intangible assets acquired in acquisitions. The Company excludes these items because these expenses are not reflective of ongoing operating results in the period incurred. These amounts arise from the Company’s prior acquisitions and have no direct correlation to the operation of the Company’s core business.
Costs of restatement and related legal activities. These expenses consist primarily of investigation, audit, legal and other professional fees related to the 2006-2007 stock option investigation and related litigation, as well as recoveries received from third parties. The Company excludes these costs and recoveries from its non-GAAP measures primarily because the Company believes that these non-recurring costs and recoveries have no direct correlation to the operation of the Company’s core business.
Non-cash interest expense on convertible notes. The Company incurs non-cash interest expense related to its convertible notes. The Company excludes non-cash interest expense related to its convertible notes to provide more accurate comparisons of the Company’s results with other peer companies and to more accurately reflect the Company’s ongoing operations.
Reversal of one-time litigation costs. These adjustments are a one-time litigation cost reversal of prior litigation costs accrued related to previously awarded costs that the Company was required to pay in connection with the SK hynix and Micron Technology litigation. The Company excludes these reversals from its non-GAAP measures because the Company believes that these reversals have no direct correlation to the operations of the Company’s core business and they are a one-time event.
Severance costs. These expenses relate to the separation payment to the Company’s former chief executive officer. The Company excludes these costs from its non-GAAP measures because the Company believes that these non-recurring costs have no direct correlation to the operations of the Company’s core business.
Income tax adjustments. For purposes of internal forecasting, planning and analyzing future periods that assume net income from operations, the Company estimates a fixed, long-term projected tax rate of approximately 36 percent, which consists of estimated U.S. federal and state tax rates, and excludes tax rates associated with certain items such as withholding tax, tax credits and deferred tax asset valuation allowance. Accordingly, the Company has applied the 36 percent tax rate to its non-GAAP financial results for all periods to assist the Company’s planning for future periods. The Company has provided below a reconciliation of its GAAP provision for income taxes and GAAP effective tax rate to the assumed non-GAAP provision for income taxes and non-GAAP effective tax rate.
On occasion in the future, there may be other items, such as significant gains or losses from contingencies that the Company may exclude in deriving its non-GAAP financial measures if it believes that doing so is consistent with the goal of providing useful information to investors and management.
Forward-Looking Statements
This release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995 including relating to Rambus’ expectations regarding revenue for the fourth quarter of 2014 and estimated, fixed, long-term projected tax rates. Such forward-looking statements are based on current expectations, estimates and projections, management’s beliefs and certain assumptions made by Rambus’ management. Actual results may differ materially. Rambus’ business generally is subject to a number of risks which are described more fully in Rambus’ periodic reports filed with the Securities and Exchange Commission. Rambus undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date hereof.
About Rambus Inc.
Rambus brings invention to market. Our customizable IP cores, architecture licenses, tools, services, and training improve the competitive advantage of our customers’ products while accelerating their time-to-market. Rambus products and innovations capture, secure and move data. For more information, visit www.rambus.com.
| Condensed Consolidated Balance Sheets (In thousands) (Unaudited) |
||
|---|---|---|
| September 30, 2014 | December 31, 2013 | |
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $ 125,686 | $ 338,696 |
| Marketable securities | 145,440 | 48,966 |
| Accounts receivable | 5,099 | 2,251 |
| Prepaids and other current assets | 7,959 | 8,253 |
| Deferred taxes | 1,379 | 205 |
| Total current assets | 285,563 | 398,371 |
| Intangible assets, net | 95,694 | 117,172 |
| Goodwill | 116,899 | 116,899 |
| Property, plant and equipment, net | 65,899 | 72,642 |
| Deferred taxes, long-term | 560 | 4,797 |
| Other assets | 2,542 | 3,498 |
| Total assets | $ 567,157 | $ 713,379 |
| Liabilities & Stockholders’ Equity | ||
| Current liabilities: | ||
| Accounts payable | $ 5,697 | $ 7,001 |
| Accrued salaries and benefits | 11,840 | 33,448 |
| Convertible notes, short-term | — | 164,047 |
| Other accrued liabilities | 8,739 | 8,346 |
| Total current liabilities | 26,276 | 212,842 |
| Long-term liabilities: | ||
| Convertible notes, long-term | 113,692 | 109,629 |
| Long-term imputed financing obligation | 39,148 | 39,349 |
| Other long-term liabilities | 10,441 | 11,330 |
| Total long-term liabilities | 163,281 | 160,308 |
| Total stockholders’ equity | 377,600 | 340,229 |
| Total liabilities and stockholders’ equity | $ 567,157 | $ 713,379 |
| Condensed Consolidated Statements of Operations (In thousands, except per share amounts) (Unaudited) |
||||
|---|---|---|---|---|
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||
| 2014 | 2013 | 2014 | 2013 | |
| Revenue: | ||||
| Royalties | $ 64,009 | $ 71,013 | $ 207,387 | $ 194,244 |
| Contract revenue and other revenue | 5,703 | 2,281 | 17,131 | 3,835 |
| Total revenue | 69,712 | 73,294 | 224,518 | 198,079 |
| Operating costs and expenses: | ||||
| Cost of revenue (1) | 10,540 | 8,958 | 31,199 | 22,857 |
| Research and development (1) | 27,014 | 27,553 | 81,580 | 91,178 |
| Marketing, general and administrative (1) | 18,200 | 18,698 | 55,639 | 57,956 |
| Restructuring charges | — | 1,129 | 39 | 3,335 |
| Impairment of goodwill and long-lived assets | — | 8,070 | — | 8,070 |
| Gain from sale of intellectual property | — | — | (170) | (1,388) |
| Gain from settlement | (510) | (179) | (1,530) | (179) |
| Total operating costs and expenses | 55,244 | 64,229 | 166,757 | 181,829 |
| Operating income | 14,468 | 9,065 | 57,761 | 16,250 |
| Interest income and other income (expense), net | (549) | 66 | (432) | (1,373) |
| Interest expense | (3,059) | (8,552) | (21,755) | (23,290) |
| Interest and other income (expense), net | (3,608) | (8,486) | (22,187) | (24,663) |
| Income (loss) before income taxes | 10,860 | 579 | 35,574 | (8,413) |
| Provision for income taxes | 5,347 | 6,304 | 17,214 | 15,558 |
| Net income (loss) | $ 5,513 | $ (5,725) | $ 18,360 | $ (23,971) |
| Net income (loss) per share: | ||||
| Basic | $ 0.05 | $ (0.05) | $ 0.16 | $ (0.21) |
| Diluted | $ 0.05 | $ (0.05) | $ 0.16 | $ (0.21) |
| Weighted average shares used in per share calculation | ||||
| Basic | 114,523 | 112,640 | 114,080 | 112,144 |
| Diluted | 118,206 | 112,640 | 117,540 | 112,144 |
| (1) Total stock-based compensation expense for the three and nine months ended September 30, 2014 and 2013 are presented as follows: | ||||
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||
| 2014 | 2013 | 2014 | 2013 | |
| Cost of revenue | $ 12 | $ 7 | $ 34 | $ 12 |
| Research and development | $ 1,648 | $ 1,630 | $ 5,574 | $ 5,166 |
| Marketing, general and administrative | $ 1,781 | $ 1,726 | $ 5,587 | $ 6,707 |
| Supplemental Reconciliation of GAAP to Non-GAAP Results (In thousands) (Unaudited) |
||||||
|---|---|---|---|---|---|---|
| Three Months Ended | Nine Months Ended | |||||
| September 30, 2014 | June 30, 2014 | September 30, 2013 | September 30, 2014 | September 30, 2013 | ||
| Operating costs and expenses | $ 55,244 | $ 56,414 | $ 64,229 | $ 166,757 | $ 181,829 | |
| Adjustments: | ||||||
| Stock-based compensation expense | (3,441) | (4,855) | (3,363) | (11,195) | (11,885) | |
| Acquisition-related transaction costs and retention bonus expense | (6) | (1,028) | (1,512) | (2,469) | (8,909) | |
| Amortization expense | (6,741) | (6,757) | (7,383) | (20,295) | (21,420) | |
| Reversal of one-time litigation costs | — | — | — | — | 8,482 | |
| Restructuring charges | — | — | (1,129) | (39) | (3,335) | |
| Impairment of goodwill and long-lived assets | — | — | (8,070) | — | (8,070) | |
| Severance costs | — | — | — | — | (514) | |
| Costs of restatement and related legal activities | — | — | — | — | (19) | |
| Non-GAAP operating costs and expenses | $ 45,056 | $ 43,774 | $ 42,772 | $ 132,759 | $ 136,159 | |
| Operating income | $14,468 | $ 20,104 | $ 9,065 | $ 57,761 | $ 16,250 | |
| Adjustments: | ||||||
| Stock-based compensation expense | 3,441 | 4,855 | 3,363 | 11,195 | 11,885 | |
| Acquisition-related transaction costs and retention bonuse expense | 6 | 1,028 | 1,512 | 2,469 | 8,909 | |
| Amortization expense | 6,741 | 6,757 | 7,383 | 20,295 | 21,420 | |
| Reversal of one-time litigation costs | — | — | — | — | (8,482) | |
| Restructuring charges | — | — | 1,129 | 39 | 3,335 | |
| Impairment of goodwill and long-lived assets | — | — | 8,070 | — | 8,070 | |
| Severance costs | — | — | — | — | 514 | |
| Costs of restatement and related legal activities | — | — | — | — | 19 | |
| Non-GAAP operating income | $ 24,656 | $ 32,744 | $ 30,522 | $ 91,759 | $ 61,920 | |
| Income (loss) before income taxes | $ 10,860 | $ 11,438 | $ 579 | $ 35,574 | $ (8,413) | |
| Adjustments: | ||||||
| Stock-based compensation expense | 3,441 | 4,855 | 3,363 | 11,195 | 11,885 | |
| Acquisition-related transaction costs and retention bonuses expense | 6 | 1,028 | 1,512 | 2,469 | 8,909 | |
| Amortization expense | 6,741 | 6,757 | 7,383 | 20,295 | 21,420 | |
| Reversal of one-time litigation costs | — | — | — | — | (8,482) | |
| Restructuring charges | — | — | 1,129 | 39 | 3,335 | |
| Impairment of goodwill and long-lived assets | — | — | 8,070 | — | 8,070 | |
| Severance costs | — | — | — | — | 514 | |
| Costs of restatement and related legal activities | — | — | — | — | 19 | |
| Impairment of investment | 600 | — | — | 600 | 1,400 | |
| Non-cash interest expense on convertible notes | 1,515 | 5,469 | 5,135 | 13,226 | 13,369 | |
| Non-GAAP income before income taxes | $ 23,163 | $ 29,547 | $ 27,171 | $ 83,398 | $ 52,026 | |
| GAAP provision for income taxes | 5,347 | 6,395 | 6,304 | 17,214 | 15,558 | |
| Adjustment to GAAP provision for income taxes | 2,992 | 4,242 | 3,478 | 12,810 | 3,171 | |
| Non-GAAP provision for income taxes | 8,339 | 10,637 | 9,782 | 30,024 | 18,729 | |
| Non-GAAP net income | $ 14,824 | $ 18,910 | $ 17,389 | $ 53,374 | $ 33,297 | |
| Non-GAAP basic net income per share | $ 0.13 | $ 0.17 | $ 0.15 | $ 0.47 | $ 0.30 | |
| Non-GAAP diluted net income per share | $ 0.13 | $ 0.16 | $ 0.15 | $ 0.45 | $ 0.29 | |
| Weighted average shares used in non-GAAP per share calculation: | ||||||
| Basic | 114,523 | 114,116 | 112,640 | 114,080 | 112,144 | |
| Diluted | 118,206 | 117,398 | 116,052 | 117,540 | 115,833 | |
| Supplemental Reconciliation of GAAP to Non-GAAP Effective Tax Rate (1) | ||||||
|---|---|---|---|---|---|---|
| Three Months Ended | Nine Months Ended | |||||
| September 30, 2014 | June 31, 2014 | September 30, 2013 | September 30, 2014 | September 30, 2013 | ||
| GAAP effective tax rate | 49% | 56% | 1,089% | 48% | 185% | |
| Adjustment to GAAP effective tax rate | (13%) | (20%) | (1,053%) | (12%) | (149%) | |
| Non-GAAP effective tax rate | 36% | 36% | 36% | 36% | 36% | |
| (1) For purposes of internal forecasting, planning and analyzing future periods that assume net income from operations, the Company estimates a fixed, long-term projected tax rate of approximately 36 percent, which consists of estimated U.S. federal and state tax rates, and excludes tax rates associated with certain items such as withholding tax, tax credits and deferred tax asset valuation allowance. Accordingly, the Company has applied the 36 percent tax rate to its non-GAAP financial results for all periods to assist the Company’s planning for future periods. | ||||||
