UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date
of Report: January 31, 2006
(Date
of earliest event reported)
_________________________
TRANSACTION
SYSTEMS ARCHITECTS, INC.
(Exact
name of registrant as specified in its charter)
|
Delaware
|
0-25346
|
47-0772104
|
|
(State
or other jurisdiction
of
incorporation
|
(Commission
File
Number)
|
(I.R.S.
Employer
Identification
No.)
|
224
South 108th Avenue,
Omaha,
Nebraska 68154
(Address
of principal executive offices, including zip code)
(402)
334-5101
(Registrant’s
telephone number, including area code)
_________________________
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o
Written
communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting
material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
2.02. Results of Operations and Financial Condition.
On
January 31, 2006, Transaction Systems Architects, Inc. issued a press release
announcing its financial results for the quarterly period ending December
31,
2005. A copy of this press release is attached hereto as Exhibit
99.1.
The
foregoing information (including the exhibit hereto) is being furnished under
“Item 2.02 - Results of Operations and Financial Condition” and “Item 7.01 -
Regulation FD Disclosure.” Such information (including the exhibit hereto) shall
not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended, nor shall it be deemed incorporated by reference in
any
filing under the Securities Act of 1933, as amended, except as shall be
expressly set forth by specific reference in such filing.
The
filing of this Report and the furnishing of this information pursuant to
Items
2.02 and 7.01 do not mean that such information is material or that disclosure
of such information is required.
Item
7.01. Regulation FD Disclosure.
See
“Item 2.02 - Results of Operations and Financial Condition”
above.
Item
9.01. Financial Statements and Exhibits.
Exhibit
99.1 -- Press Release dated January 31, 2006.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
|
TRANSACTION
SYSTEMS ARCHITECTS, INC.
|
|||
|
Date:
January
31, 2006
|
By:
|
/s/
David R. Bankhead
|
|
|
David
R. Bankhead
Senior
Vice President,
Chief
Financial Officer and
Treasurer
|
|||
EXHIBIT
INDEX
|
Exhibit
Number
|
Description
|
|
|
99.1
|
Press
Release dated January 31, 2006.
|
Exhibit
99.1
News
Release
TRANSACTION
SYSTEMS
ARCHITECTS INC
224
SOUTH 108 AVENUE
OMAHA,
NEBRASKA
68154
402.334.5101
FAX
402.390.8077
For
more information contact:
William
J. Hoelting
Vice
President, Investor Relations
402.390.8990
FOR
IMMEDIATE RELEASE
Transaction
Systems Architects Reports
First
Quarter of Fiscal 2006 Results
(OMAHA,
Neb. — January 31, 2006) —
Transaction Systems Architects, Inc. (Nasdaq: TSAI), today announced financial
results for its first quarter of fiscal 2006 which ended December 31, 2005.
The
Company will hold a conference call at 5:00 p.m. EST today (4:00 p.m. CST)
to
discuss this information. Interested persons may access a real-time audio
broadcast of the teleconference at: www.tsainc.com/investors.
“We’re
off to a nice start for fiscal 2006 and we believe the enterprise is performing
well,” said Philip G. Heasley, CEO. “In this the first quarter of our new
structure we have produced good revenues, increased our customer base, and
produced strong EPS. These results do contain both additional and new expenses.
It is also the first full quarter that reflects S2 acquisition accounting.
The
results also include a tax benefit booked in the quarter and previously
described in our Form 10-K.”
The
Company added seven new customers during the quarter and sold 32 new
applications to existing customers. In addition, 15 customers licensed capacity
upgrades valued at over $100 thousand. Activity during the quarter included
licensing BASE24-es® to a top bank in Pakistan, BASE24® to a top Mexican
retailer and capacity upgrades by several top 500 world banks. In addition,
the
Company licensed its Proactive Risk Manager fraud detection solution to both
new
and existing customers.
-more-
“As
part of the combination of business units announced in October, we have
rebranded our solutions under the ACI Worldwide name,” added Heasley. “We
believe that this will allow us to leverage the ACI brand and more effectively
globalize our entire solutions portfolio.”
“The
Company continues to invest in a number of key areas including product,
technology and our corporate infrastructure,” said Heasley. “We continue to see
progress with our Proactive Risk Manager solution and see more interest in
the
market for payments convergence across the enterprise and for specific needs
like transaction settlement. We believe our ongoing investments in BASE24-es
are
paying off. We signed a new license with a top bank in Pakistan and received
customer acceptance from another BASE24-es user. We now have five stand-alone
BASE24-es clients live in production environments running on a range of hardware
platforms. We continue to validate the performance and efficiency of BASE24-es
on multiple hardware platforms.”
Revenues
Revenue
was $85.1 million in the first fiscal quarter, a six percent increase over
the
same period last year, and an increase of eight percent over the fourth quarter
of fiscal 2005. “Revenue increased year-over-year and sequentially,” said
Heasley. “In particular, our international business continues to perform well,
growing over 18
percent year-over-year.”
Revenue
detail for the quarter is as follows: the Americas' revenues were $43.9 million,
as compared to $41.4 million for the first quarter of fiscal 2005. The Americas'
revenues consisted of U.S. revenues of $28.3 million and Americas' international
revenues of $15.6 million, as compared to $32.7 million and $8.7 million,
respectively, for the same period last year. Revenues for the Europe/Middle
East/Africa region were $33.7 million, as compared to $31.4 million for the
first quarter of fiscal 2005. Asia-Pacific's revenues were $7.5 million, as
compared to $7.8 million for the first quarter of 2005. Total international
revenues were $56.8 million,
or 67 percent of total revenues, as compared to $47.9 million, or 59 percent
of
total revenues, for the first quarter of fiscal 2005.
-more-
Revenues
for the quarter were comprised of software license fees of $43.4 million,
maintenance fees of $25.3 million and services of $16.4 million. Recurring
revenue was $46.4 million, compared to $42.9 million during the same period
last
year. Recurring revenue was comprised of monthly license fees of $17.7 million,
maintenance fees of $25.3 million and services (facilities management fees)
of
$3.4 million. Recurring revenue comprised 55 percent of total revenues.
Expenses
Expenses
for the quarter were $70.6 million, which included $6.3 million in expenses
related to S2 and equity-based compensation expense. Expenses for last quarter
totaled $67.9 million, which included $3.8 million in S2 expenses. Expenses
for
our first quarter of last fiscal year were $58.5 million. Excluding the S2
expenses and equity-based compensation expenses, the most recent quarter’s
expenses represent a nominal increase over last quarter and a 10 percent
increase over the same quarter last fiscal year.
During
the quarter, the Company incurred additional expenses of approximately $2.0
million, including approximately $0.8 million related to previously deferred
expenses linked to customer projects, approximately $0.7 million for sales
commission associated with higher-than-expected sales activity and approximately
$0.4 million for severance related to the combination of business units. The
Company also incurred higher than expected expenses associated with strategic
activities during the quarter. The Company adopted SFAS No. 123R, “Share-Based
Payment,” as of October 1, 2005. This resulted in expenses of $1.4 million
during the quarter.
Operating
Income
Operating
income was $14.5 million, with an operating margin of 17.1 percent. This
compared to operating income of $11.1 million, with an operating margin of
14.1
percent, for the fourth quarter of fiscal 2005, and $22.1 million, with an
operating margin of 27.4 percent for the first quarter of fiscal 2005. The
Company believes that the operating margin in the first quarter of fiscal 2005
was abnormally high and, therefore, not indicative of the operating margin
in
the first quarter of fiscal 2006 or that can be expected in the future.
-more-
Other
Income
Other
income for the quarter was $2.5 million, which was positively impacted by the
impact of approximately $1.8 million of interest income recognized from the
expected receipt of an income tax refund due to a tax settlement with the
Internal Revenue Service (see discussion below).
Taxes
During
the quarter, the Company’s net income was positively impacted by a tax benefit
of $4.1 million that was the result of adjustments to reserve accounts. The
tax
benefit was derived from the resolution of tax audits in the Company’s favor by
the Internal Revenue Service. Additionally, during the second fiscal quarter
the
Company expects to receive a cash refund of $10.7 million related to the tax
settlement. This refund is not expected to have an effect on the second fiscal
quarter profit and loss.
Including
the impact of the tax settlement and anticipated refund, the Company’s effective
tax rate for the quarter was 10.9 percent. Tax provision for the quarter was
$1.9 million. The Company continues to estimate an effective tax rate of 35
percent for the remainder of the fiscal year. That estimated rate could change
based on continuing tax optimization efforts by the Company.
Net
Income
Net
income for the quarter was $15.2 million, compared to $12.9 million during
the
same period last year and $9.1 million in the fourth quarter of fiscal 2005.
Net
income was positively impacted by $5.3 million due to the tax settlement
(including the impact of the expected payment and interest income) offset by
approximately $1.3 million, assuming a 35 percent tax rate, in additional
expenses in the quarter.
-more-
Earnings
Per Diluted Share
Earnings
per diluted share were $0.40, which includes $0.14 due to the tax settlement,
offset by $0.03 in additional expenses. This compares to earnings per diluted
share of $0.34 during the same period last year and $0.24 in the fourth quarter
of fiscal 2005.
Operating
Cash Flow and Cash Balance
Operating
cash flow was $13.5 million compared to operating cash flow of $15.0 million
in
the first fiscal quarter of 2005. The Company's cash, cash equivalents and
marketable securities as of December 31, 2005 were $157.8 million. This cash
balance does not reflect the anticipated tax refund payment discussed above.
During
the quarter, the Company repurchased 477,399 shares of its common stock for
approximately $13.3 million. Through December 31, 2005, the Company has
repurchased a total of 1,944,363 shares for approximately $46.7 million under
its current stock purchase program. Total shares outstanding were 37.2 million
as of December 31, 2005. During the first quarter, the Company received $3.3
million in proceeds from employee stock option exercises.
Backlog
As
of December 31, 2005, the Company's 12-month backlog was $254.4 million, as
compared to $250.0 million for the quarter ended September 30, 2005, which
amount was recalculated under the revised methodology described below. The
recurring portion of backlog, which includes monthly license fees, maintenance
fees and facilities management fees, amounted to $183.1 million. The
non-recurring portion of backlog, which totaled $71.3 million, includes other
software license fees and services. In conjunction with the reporting of a
60-month backlog (see below), the Company has revised its methodology for
calculating 12-month backlog, which is now consistent with that used in the
60-month calculation. Specifically, the amounts noted above in the 12-month
backlog do not include adjustments for identified risk categories (such as
amounts recognizable upon the receipt of customer payment) as was previously
performed, and it
-more-
assumes
renewal of one-time license fees on a monthly fee basis if such renewal is
expected to occur in the next 12 months.
For
the first time, the Company is reporting its 60-month backlog. The 60-month
backlog represents a forecast of expected revenues from existing customers,
assuming normal renewal rates and renewals based on a recurring revenue
structure with no increases in expected revenues from those contracts during
the
60-month term. See Appendix A to this release for the specific assumptions
used
by the Company in the calculation of its 60-month backlog. As of December 31,
2005, the Company’s estimated 60-month backlog was $1.035 billion. For
comparison purposes, as of September 30, 2005 the Company’s estimated 60-month
backlog was $1.031 billion.
“We
believe that the 60-month backlog provides additional visibility into the
long-term, recurring nature of our business,” said Heasley.
Guidance
The
Company has revised its revenue estimate for fiscal 2006 from a range of $340
million to $358 million to a range of $345 million to $360 million. The Company
has revised its diluted EPS estimate from a range of $1.32 to $1.46 to a range
of $1.46 to $1.58.
About
Transaction Systems Architects, Inc.
The
Company's software facilitates electronic payments by providing consumers and
companies access to their money. Its products are used to process transactions
involving credit cards, debit cards, secure electronic commerce, mobile
commerce, smart cards, secure electronic document delivery and payment, checks,
high-value money transfers, bulk payment clearing and settlement, and enterprise
e-infrastructure. The Company's solutions are used on more than 1,980 product
systems in 83 countries on six continents.
-more-
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 the Company “believes,” “expects,” “looks forward to,”
and words and phrases of similar impact, and include but are not limited to
statements regarding future operations, business strategy and business
environment and specifically include amounts estimated in the 12-month and
60-month backlogs and the Company’s revenue and earnings guidance. 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
the:
| · |
Company’s
belief that rebranding solutions will allow the Company to leverage
the
ACI brand and more effectively globalize our entire solutions
portfolio
|
| · |
Company’s
belief that the enterprise is performing
well
|
| · |
Company’s
belief that its customers are experiencing growing electronic transaction
volumes
|
| · |
Company’s
calculation of recurring and non-recurring
backlog
|
| · |
Company's
revenues and EPS estimates for fiscal
2006
|
| · |
Company’s
expectation regarding serving the S2 customer
base
|
| · |
Company’s
belief that it is making progress with its Proactive Risk Manager
solution
|
| · |
Company’s
belief that there is more interest in the market for payments
convergence
|
| · |
Company’s
belief that investments in BASE24-es are paying
off
|
| · |
Company’s
validation of the performance and efficiency of
BASE24-es
|
Any
or all of the forward-looking statements may turn out to be wrong. They can
be
affected by the judgments and estimates underlying such assumptions or by known
or unknown risks and uncertainties. Many of these factors will be important
in
determining the Company’s actual future results. Consequently, no
forward-looking statement can be guaranteed. Actual future results may vary
materially from those expressed or implied in any forward-looking statements.
In
addition, the Company disclaims any obligation to update any forward-looking
statements after the date of this release.
All
of the foregoing forward-looking statements are expressly qualified by the
risk
factors discussed in the Company’s filings with the Securities and Exchange
Commission. For a detailed discussion of these risk factors, parties that are
relying on the forward-looking statements should review the Company's filings
with the Securities and Exchange Commission, including the Company's Form 10-K
filed on December 14, 2005 and
specifically the sections entitled “Factors That May Affect the Company's Future
Results or the Market Price of the Company's Common Stock.”
The
risks identified in the Company’s filings with the Securities and Exchange
Commission include:
| · |
Risks
associated with the restructuring of the Company’s
organization
|
| · |
Risks
inherent in making an estimate of the Company's backlog which involve
substantial judgment and estimates; such risks relate to the Company’s
12-month and 60-month backlogs
|
| · |
Risks
associated with tax positions taken by the Company which require
substantial judgment and with which taxing authorities may not agree
|
-more-
| · |
Risks
associated with various lawsuits against the Company, including the
lawsuits filed against the Company and certain directors and officers
relating to its restatement of prior consolidated financial results,
including the adequacy of insurance coverage and the possibility
of
additional litigation
|
| · |
Risks
associated with litigation in the software industry regarding intellectual
property rights
|
| · |
Risks
associated with the Company's concentration of business in the financial
services industry
|
| · |
Risks
associated with fluctuations in quarterly operating results and resulting
stock price volatility
|
| · |
Risks
associated with conducting international
operations
|
| · |
Risks
regarding the Company’s new BASE24-es
product
|
| · |
Risks
associated with the Company's dependence on its BASE24
solution
|
| · |
Risks
associated with the Company's dependence on the licensing of software
products that operate on Hewlett-Packard NonStop
servers
|
| · |
Risks
associated with the complexity of the Company’s software products
|
| · |
Risks
associated with the Company's acquisition of new products and
services or
enhancement of existing products and services through acquisitions
of
other companies, product lines, technologies and personnel, or
through
investments in other
companies
|
| · |
Risks
associated with the acquisition of S2 Systems and the integration
of its
operations and customers, including, without limitation, the risks
described in the Company’s Form 8-K filed July 1,
2005
|
| · |
Risks
associated with the Company's ability to protect its proprietary
rights
|
| · |
Risks
associated with new accounting standards, or revised interpretations
or
guidance regarding existing
standards
|
| · |
Risks
associated with the assessment and maintenance of internal controls
over
the Company’s financial reporting
|
Non-GAAP
Financial Measures
This
press release includes the statement "Excluding the S2 expenses and equity-based
compensation expenses, the most recent quarter's expenses represent a nominal
increase over last quarter and a 10 percent increase over the same quarter
last
fiscal year." As used in this statement, the financial measure of expenses
for
the most recent quarter and the previous quarter is not calculated in accordance
with generally accepted accounting principles (GAAP) because this comparison
excludes S2 expenses of $4.9 million and equity-based compensation expenses
of
$1.4 million from the most recent quarter's expenses and S2 expenses of $3.8
million from the previous quarter's expenses. The Company believes that
providing this non-GAAP financial measure of expenses is useful to its investors
as an operating measure because it excludes certain expenses and therefore
provides a consistent basis for comparison of the Company's expenses for the
most recent quarter with the expenses for the previous quarter and the first
quarter of fiscal 2005. The presentation of these non-GAAP financial measures
should be considered in addition to the Company’s GAAP results and is not
intended to be considered in isolation or as a substitute for the financial
information prepared and presented in accordance with GAAP.
FINANCIAL
HIGHLIGHTS TO FOLLOW
-more-
|
TRANSACTION SYSTEMS ARCHITECTS,
INC.
|
||||||||||
|
CONSOLIDATED BALANCE SHEETS
|
||||||||||
|
(in thousands)
|
||||||||||
|
|
December
31,
|
|
September
30,
|
|||||||
|
2005
|
2005
|
|||||||||
|
ASSETS
|
||||||||||
|
Current
assets:
|
||||||||||
|
Cash
and cash equivalents
|
$
|
95,705
|
$
|
83,693
|
||||||
|
Marketable
securities
|
62,093
|
72,819
|
||||||||
|
Billed
receivables, net
|
53,806
|
63,530
|
||||||||
|
Accrued
receivables
|
11,882
|
5,535
|
||||||||
|
Recoverable
income taxes
|
4,976
|
3,474
|
||||||||
|
Deferred
income taxes, net
|
2,688
|
2,552
|
||||||||
|
Other
|
13,427
|
13,009
|
||||||||
|
Total
current assets
|
244,577
|
244,612
|
||||||||
|
|
||||||||||
|
Property
and equipment, net
|
9,264
|
9,089
|
||||||||
|
Software,
net
|
4,649
|
4,930
|
||||||||
|
Goodwill
|
66,482
|
66,169
|
||||||||
|
Other
intangible assets, net
|
12,908
|
13,573
|
||||||||
|
Deferred
income taxes, net
|
21,459
|
21,884
|
||||||||
|
Other
|
2,967
|
3,123
|
||||||||
|
Total
assets
|
$
|
362,306
|
$
|
363,380
|
||||||
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
||||||||||
|
Current liabilities:
|
||||||||||
|
Current portion of
debt -
financing agreements
|
$
|
975
|
$
|
2,165
|
||||||
|
Accounts payable
|
7,442
|
9,521
|
||||||||
|
Accrued employee
compensation
|
14,590
|
19,296
|
||||||||
|
Deferred revenue
|
80,746
|
81,374
|
||||||||
|
Accrued and other
liabilities
|
12,535
|
11,662
|
||||||||
|
Total current
liabilities
|
116,288
|
124,018
|
||||||||
|
Debt - financing agreements
|
58
|
154
|
||||||||
|
Deferred revenue
|
19,515
|
20,450
|
||||||||
|
Other
|
1,645
|
1,640
|
||||||||
|
Total
liabilities
|
137,506
|
146,262
|
||||||||
|
Stockholders' equity:
|
||||||||||
|
Common stock
|
203
|
202
|
||||||||
|
Treasury stock, at
cost
|
(81,924
|
)
|
(68,596
|
)
|
||||||
|
Additional paid-in
capital
|
280,410
|
274,344
|
||||||||
|
Retained earnings
|
35,519
|
20,329
|
||||||||
|
Accumulated other comprehensive
loss
|
(9,408
|
)
|
(9,161
|
)
|
||||||
|
Total
stockholders' equity
|
224,800
|
217,118
|
||||||||
|
Total liabilities and
stockholders' equity
|
$
|
362,306
|
$
|
363,380
|
||||||
-more-
|
TRANSACTION SYSTEMS ARCHITECTS,
INC.
|
||||||||||
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||
|
(unaudited and in thousands, except
per share
amounts)
|
||||||||||
|
Three
Months Ended December
31,
|
||||||||||
|
|
|
|
2005
|
|
|
|
|
|
2004
|
|
|
Revenues:
|
||||||||||
|
Software license
fees
|
$
|
43,392
|
$
|
47,806
|
||||||
|
Maintenance fees
|
25,318
|
22,080
|
||||||||
|
Services
|
16,365
|
10,720
|
||||||||
|
Total revenues
|
85,075
|
80,606
|
||||||||
|
Expenses:
|
||||||||||
|
Cost of software license
fees
|
6,935
|
|
5,906
|
|||||||
|
Cost of maintenance
and
services
|
20,891
|
13,836
|
||||||||
|
Research and
development
|
9,752
|
9,915
|
||||||||
|
Selling and
marketing
|
16,012
|
15,301
|
||||||||
|
General and
administrative
|
16,970
|
13,563
|
||||||||
|
Total
expenses
|
70,560
|
58,521
|
||||||||
|
Operating income
|
14,515
|
22,085
|
||||||||
|
Other income (expense):
|
||||||||||
|
Interest income
|
2,927
|
|
584
|
|||||||
|
Interest expense
|
(29
|
)
|
|
(168
|
)
|
|||||
|
Other, net
|
(366
|
)
|
(1,247
|
)
|
||||||
|
Total other
income (expense)
|
2,532
|
(831
|
)
|
|||||||
|
Income before income taxes
|
17,047
|
21,254
|
||||||||
|
Income tax provision
|
(1,857
|
)
|
(8,331
|
)
|
||||||
|
Net income
|
$
|
15,190
|
$
|
12,923
|
||||||
|
Earnings per share information:
|
||||||||||
|
Weighted average shares
outstanding:
|
||||||||||
|
Basic
|
37,253
|
37,781
|
||||||||
|
Diluted
|
38,026
|
38,552
|
||||||||
|
Earnings per
share:
|
||||||||||
|
Basic
|
$
|
0.41
|
$
|
0.34
|
||||||
|
Diluted
|
$
|
0.40
|
$
|
0.34
|
||||||
-more-
|
TRANSACTION SYSTEMS ARCHITECTS,
INC.
|
||||||||||
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||||
|
(unaudited and in thousands)
|
||||||||||
|
Three
Months Ended December
31,
|
||||||||||
|
2005
|
|
2004
|
||||||||
|
Cash flows from operating activities:
|
||||||||||
|
Net income
|
$
|
15,190
|
$
|
12,923
|
||||||
|
Adjustments to reconcile
net
income to net cash
|
||||||||||
|
provided by operating
activities:
|
||||||||||
|
Depreciation
|
990
|
988
|
||||||||
|
Amortization
|
923
|
292
|
||||||||
|
Deferred income taxes
|
217
|
2,092
|
||||||||
|
Share-based compensation
expense
|
1,406
|
-
|
||||||||
|
Tax benefit of stock
options
exercised
|
383
|
908
|
||||||||
|
Changes in operating
assets and
liabilities
|
||||||||||
|
Billed and accrued
receivables,
net
|
2,438
|
(2,456
|
)
|
|||||||
|
Other current
assets
|
(438
|
)
|
(632
|
)
|
||||||
|
Other assets
|
408
|
(1,739
|
)
|
|||||||
|
Accounts payable
|
(1,969
|
)
|
(578
|
)
|
||||||
|
Accrued employee
compensation
|
(4,188
|
)
|
(1,662
|
)
|
||||||
|
Accrued
liabilities
|
450
|
2,159
|
||||||||
|
Current income
taxes
|
(1,502
|
)
|
3,900
|
|||||||
|
Deferred revenue
|
(823
|
)
|
(1,285
|
)
|
||||||
|
Other current and
noncurrent
liabilities
|
21
|
104
|
||||||||
|
Net cash
provided by operating activities
|
13,506
|
15,014
|
||||||||
|
Cash flows from investing activities:
|
||||||||||
|
Purchases of property
and
equipment
|
(1,489
|
)
|
|
(522
|
)
|
|||||
|
Purchases of software
|
(143
|
)
|
(771
|
)
|
||||||
|
Purchases of marketable
securities
|
(7,703
|
)
|
(74,875
|
)
|
||||||
|
Sales of marketable
securities
|
18,428
|
8
|
||||||||
|
Acquisition of business
|
(59
|
)
|
-
|
|||||||
|
Net cash
provided by (used in) investing activities
|
9,034
|
(76,160
|
)
|
|||||||
|
Cash flows from financing activities:
|
||||||||||
|
Proceeds from issuance
of common
stock
|
283
|
|
240
|
|||||||
|
Proceeds from exercises
of stock
options
|
3,309
|
4,108
|
||||||||
|
Excess tax benefit
of stock
options exercised
|
683
|
-
|
||||||||
|
Purchases of common
stock
|
(12,802
|
)
|
-
|
|||||||
|
Payments on debt -
financing
arrangements
|
(1,275
|
)
|
(3,937
|
)
|
||||||
|
Other
|
(15
|
)
|
25
|
|||||||
|
Net cash provided
by
(used in) financing activities
|
(9,817
|
)
|
436
|
|||||||
|
Effect of exchange rate fluctuations on cash
|
(711
|
)
|
2,779
|
|||||||
|
Net increase (decrease) in cash and cash
equivalents
|
12,012
|
(57,931
|
)
|
|||||||
|
Cash and cash equivalents, beginning of
period
|
83,693
|
134,198
|
||||||||
|
Cash and cash equivalents, end of period
|
$
|
95,705
|
$
|
76,267
|
||||||
-more-
Appendix
A - Assumptions in 60-month Backlog Calculation
In
computing the Company’s 60-month backlog, the Company necessarily makes certain
assumptions. Key among these are the following:
| · |
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 historical Company
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.
|
| · |
Company
pricing policies and practices are assumed to remain constant over
the
60-month backlog period.
|
In
computing the Company’s 60-month backlog, the following items are specifically
not taken into account:
| · |
Anticipated
increases in transaction volumes in customer
systems.
|
| · |
Optional
annual uplifts or inflationary increases in recurring
fees.
|
| · |
Services
engagements, other than facilities management, are not assumed to
renew
over the 60-month backlog period.
|
| · |
The
potential impact of merger activity within the Company’s markets and/or
customers is not reflected in the computation of 60-month
backlog.
|
-end-