SOURCE: Callidus Software Inc.

Callidus Software Inc.

February 05, 2014 16:05 ET

CallidusCloud Reports Record Q4 Revenue of $30.2 Million, a 20% Year-Over-Year Increase

Record 2013 Revenue of $112.3 Million, an 18% Increase Over Prior Year: Generates $6.1 Million Cash From Operations in Fourth Quarter

PLEASANTON, CA--(Marketwired - Feb 5, 2014) - Callidus Software Inc. (NASDAQ: CALD), a leading provider of Cloud sales and marketing effectiveness software, today announced financial results for the fourth quarter and fiscal year ended December 31, 2013.

"Our fourth quarter results were a strong finish to an excellent year of double digit revenue growth, expanding gross margin and positive non-GAAP operating income," said Leslie Stretch, President and CEO, CallidusCloud. "We are well positioned to accelerate our growth in 2014, with international expansion, new products coming to market and a strong demand for our Lead to Money solutions."

Financial Highlights for the Fourth Quarter 2013
Total revenue was $30.2 million for the fourth quarter, an increase of 20%. Total recurring revenue was $21.4 million, which includes SaaS revenue of $17.2 million and maintenance revenue of $4.2 million. SaaS revenue increased 18% over the same quarter in the prior year. Services and other revenue of $8.8 million increased 30% compared to the same quarter in the prior year.

GAAP Performance

  • Total gross margin was 61% compared to 46% in the same quarter in the prior year. Recurring revenue gross margin was 67% compared to 59% in the same quarter in the prior year.
  • Operating loss was $1.6 million compared to $8.0 million in the same quarter in the prior year.
  • Net loss was $7.0 million, or ($0.17) per share, compared to a net loss of $9.1 million, or ($0.25) per share, for the same quarter in the prior year.
  • Days Sales Outstanding (DSO) on a gross basis increased to 78 days from 67 days in the prior quarter. Adjusting for a $7.0 million increase in total deferred revenue, DSO on a net basis was 64 days compared to 59 days in the third quarter of 2013.
  • Cash generated from operations was $6.1 million in the current quarter compared to $5.2 million in the third quarter of 2013.

Non-GAAP Performance
The following non-GAAP measures are described below and reconciled to the corresponding GAAP measures at the end of this release.

  • Total gross margin was 64% compared to 53% for the same quarter in the prior year. Recurring revenue gross margin was 70% compared to 65% for the same quarter in the prior year.
  • Operating income was $1.8 million compared to an operating loss of $2.4 million for the same quarter in the prior year.
  • Net income was $1.7 million, or $0.04 per fully diluted share, compared to a net loss of $2.7 million, or ($0.07) per fully diluted share for the same quarter in the prior year.

Financial Highlights for the Full Fiscal 2013
Total revenue for the full fiscal year was $112.3 million, an increase of 18% over 2012. Total recurring revenue was $81.7 million, which includes SaaS revenue of $65.9 million and maintenance revenue of $15.8 million. SaaS revenue increased 20% over the prior year. Services and other revenue of $30.6 million increased 27% compared to 2012.

GAAP Performance

  • Total gross margin for the full fiscal year was 57% compared to 47% in 2012. Recurring revenue gross margin was 65% compared to 58% in the prior year.
  • Operating loss for the full fiscal year was $11.7 million compared to $23.9 million in the prior year.
  • Net loss for the full fiscal year was $21.4 million, or ($0.55) per share, compared to a net loss of $27.7 million, or ($0.78) per share in the prior year.
  • Cash and short term investments ended the year at $36.2 million, compared to $34.1 million in the third quarter of 2013 and $29.2 million at December 31, 2012.
  • Cash generated from operations was $13.7 million for the twelve months ended December 31 2013, compared to cash used in operations of $1.7 million for the twelve months ended December 31, 2012.
  • Deferred revenue increased to a record $56.7 million which represents a 14% increase compared to the third quarter of 2013 and a 45% increase compared to December 31, 2012.

Non-GAAP Performance
The following non-GAAP measures are described below and reconciled to the corresponding GAAP measures at the end of this release.

  • Total gross margin for the full fiscal year was 61% compared to 54% in 2012. Recurring revenue gross margin was 68% compared to 63% in the prior year.
  • Operating income for the full fiscal year was $5.2 million compared to an operating loss of $4.7 million in the prior year.
  • Net income for the full fiscal year was $3.3 million, or $0.07 per fully diluted share, compared to a net loss of $5.4 million, or ($0.15) per fully diluted share in the prior year.

Business Highlights for the Fourth Quarter 2013

  • CallidusCloud hosted a sellout C3 EMEA user conference in London. Leading EMEA customers and partners shared best practice and analysis on the evolution of selling and marketing.
  • CallidusCloud launched Territory and Quota Manager, our new solution to address the challenges organizations face when trying to optimize existing sales capacity and plan for growth.
  • CallidusCloud sponsored key industry events including Dreamforce in San Francisco, DevLearn in Las Vegas and SiriusDecisions Summit in London.
  • CallidusCloud expanded its international footprint with a new office in Mexico City to serve as the company's Latin America hub.

Financial Outlook for 2014 - First Quarter and Full Year
For the first quarter of 2014, the Company expects total revenue to be between $29.0 million to $30.0 million. GAAP operating loss is expected to be between $2.1 million and $2.8 million with ($0.05) to ($0.08) GAAP loss per share. Non-GAAP operating income is expected to be between $1.5 million and $2.0 million with non-GAAP fully diluted earnings per share between $0.02 to $0.04.

For the full year of 2014, the Company expects total revenue to be between $126.0 million to $131.0 million, representing an increase to previous guidance of $125.0 million to $130.0 million. GAAP operating loss is expected to be between $8.3 million and $11.3 million with ($0.23) to ($0.28) GAAP loss per share. Non-GAAP operating income is expected to be between $7.0 million to $9.0 million with non-GAAP fully diluted earnings per share between $0.12 and $0.16.

Conference Call
In conjunction with this announcement CallidusCloud will host a conference call at 1:30 p.m. Pacific Standard Time (PST) today to discuss the fourth quarter and fiscal 2013 results and outlook for the first quarter 2014 and full year 2014. The conference call will be available via live webcast at the Investor Relations section of CallidusCloud's website.

Webcast site: http://www.calliduscloud.com/about-us/investor-relations/
Dial-in: 800-510-0146 (International callers: 617-614-3449)
Passcode: 51131502
Replay information: A webcast replay will be available on the Investor Relations section of our website under Calendar of Events.

For more information, please visit: http://www.calliduscloud.com/about-us/investor-relations/

About CallidusCloud
Callidus Software Inc. (NASDAQ: CALD), doing business as CallidusCloud, is a leading provider of cloud software. CallidusCloud® enables organizations to accelerate and maximize their lead to money process with sales and marketing effectiveness cloud software. CallidusCloud maximizes and accelerates sales and marketing processes for over 2,200 leading organizations. Small, medium and large enterprises across multiple industries and geographies rely on CallidusCloud for better marketing and smarter selling.

For more information, please visit www.calliduscloud.com.

Note on Forward-Looking Statements

The forward-looking statements included in this press release, including discussion of our commercial prospects, estimates of revenues, operating expenses, stock-based compensation expense, amortization of acquired intangibles, restructuring, and patent litigation defense costs reflect management's best judgment based on factors currently known and involve risks and uncertainties. These risks and uncertainties include, but are not limited to, potential disruption of customer purchase decisions resulting from global economic conditions, timing and size of orders, relative growth of our recurring revenue, potential decreases in customer spending, uncertainty regarding purchasing trends in the cloud software market, customer cancellations or non-renewal of maintenance contracts or on-demand services, our potential inability to manage effectively any growth we experience, our ability to develop new products and services, increased competition or new entrants in the marketplace, potential impact of acquisitions and investments, and other risks detailed in reports we file with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K which may be obtained by contacting CallidusCloud's Investor Relations department at 925-251-2248, or from the Investor Relations section of CallidusCloud's website (http://www.calliduscloud.com/about-us/investor-relations/). Actual results may differ materially from those presently reported. We assume no obligation to update the information contained in this release.

Non-GAAP Financial Measures

In this release, CallidusCloud has provided financial information that has not been prepared in accordance with GAAP. This information includes non-GAAP gross margin, non-GAAP recurring revenue gross margin, non-GAAP operating loss, non-GAAP net loss, and non-GAAP net loss per share. CallidusCloud uses non-GAAP measures internally in analyzing its financial results and believes that they are useful to investors, as a supplement to GAAP measures, in evaluating CallidusClouds' operating performance. CallidusCloud believes that the use of these non-GAAP measures provides additional insight for investors to use in evaluation of ongoing operating results and trends and in comparing its financial measures with other companies in CallidusClouds' industry, many of which present non-GAAP financial measures that may resemble our non-GAAP financial measures. Our non-GAAP financial measures exclude stock-based compensation expense, purchase acquisition adjustments, restructuring expense, acquisition related expense, patent litigation defense cost, convertible note interest expense, amortization of convertible note issuance cost, convertible note conversion costs and amortization of acquired intangibles. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

©2013. Callidus Software Inc. All rights reserved. Callidus, Callidus Software, the Callidus Software logo, CallidusCloud, the CallidusCloud logo, TrueComp Manager, ActekSoft, ACom3, Salesforce Assessments, iCentera, Webcom, Litmos, the Litmos logo, LeadFormix, Rapid Intake, and 6FigureJobs are trademarks, service marks, or registered trademarks of Callidus Software Inc. and its affiliates in the United States and other countries. All other brand, service or product names are trademarks or registered trademarks of their respective companies or owners.

   
   
CALLIDUS SOFTWARE INC.  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
(In thousands, except for per share data)  
(unaudited)  
                         
    Three Months Ended December 31,     Twelve Months Ended December 31,  
    2013     2012     2013     2012  
Revenues:                                
  Recurring   $ 21,375     $ 18,473     $ 81,734     $ 70,919  
  Services and other     8,812       6,760       30,603       24,033  
    Total revenues     30,187       25,233       112,337       94,952  
Cost of revenues:                                
  Recurring (1) (2) (8)     7,054       7,605       28,741       30,039  
  Services and other (1) (2) (8)     4,612       6,035       19,048       20,301  
    Total cost of revenues     11,666       13,640       47,789       50,340  
Gross profit     18,521       11,593       64,548       44,612  
                                 
Operating expenses:                                
  Sales and marketing (1) (2) (8)     10,400       8,898       34,916       32,442  
  Research and development (1) (2) (8)     4,159       4,606       17,143       16,643  
  General and administrative (1) (2) (3) (4) (8)     6,062       5,314       22,951       19,953  
  Income from settlement and patent licensing     (500 )     -       (500 )     -  
  Acquisition related contingent consideration     -       175       -       (1,612 )
  Restructuring     -       554       1,699       1,115  
    Total operating expenses     20,121       19,547       76,209       68,541  
                                     
Operating loss     (1,600 )     (7,954 )     (11,661 )     (23,929 )
Debt conversion expense     (4,776 )     -       (4,776 )     -  
Interest income and other income (expense) (5) (6)     (249 )     (921 )     (2,919 )     (3,381 )
                                 
Loss before provision (benefit) for income taxes     (6,625 )     (8,875 )     (19,356 )     (27,310 )
Provision (benefit) for income taxes (7)     355       175       2,055       388  
                                 
Net loss   $ (6,980 )   $ (9,050 )   $ (21,411 )   $ (27,698 )
                                 
Net loss per share - basic and diluted                                
  Net loss per share   $ (0.17 )   $ (0.25 )   $ (0.55 )   $ (0.78 )
                                   
Shares used in basic and diluted per share computation     41,778       36,359       38,858       35,393  
                                 
(1) Stock-based compensation included in amounts above by category:                          
  Cost of recurring     171       270       783       1,550  
  Cost of services     200       447       1,060       2,070  
  Sales and marketing     496       841       2,420       3,778  
  Research and development     480       406       1,797       1,782  
  General and administrative     703       774       4,335       4,475  
    Total stock-based compensation     2,050       2,738       10,395       13,655  
                                     
(2) Acquisition, acquired and settlement related asset amortization                          
  Cost of recurring     520       522       2,068       2,036  
  Cost of services     14       12       51       50  
  Sales and marketing     233       234       926       880  
  General and administrative     48       59       225       239  
    Total acquisition related asset amortization     815       827       3,270       3,205  
                                     
(3) Acquisition-related expense     -       45       -       865  
(4) Patent litigation costs     502       317       1,504       1,103  
(5) Interest expense on convertible notes     494       703       2,604       2,813  
(6) Amortization of convertible note issuance costs     83       134       485       536  
(7) Tax benefit from release of valuation allowance     -       -       -       (224 )
(8) India operations transfer fee      -       859        -       859  
                                 
                                 
   
   
CALLIDUS SOFTWARE INC.  
CONSOLIDATED BALANCE SHEETS  
             
(In thousands except per share data)  
             
    December 31,     December 31,  
    2013     2012  
ASSETS  
Current assets:                
  Cash and cash equivalents   $ 28,295     $ 16,400  
  Short-term investments     7,866       12,771  
  Accounts receivable, net     29,216       22,567  
  Deferred income taxes     -       40  
  Prepaid and other current assets     6,232       6,718  
    Total current assets     71,609       58,496  
                 
Property and equipment, net     11,351       10,580  
Goodwill     31,207       31,207  
Intangible assets, net     16,995       21,196  
Deferred income taxes, noncurrent     405       392  
Deposits and other assets     2,626       2,872  
    Total assets   $ 134,193     $ 124,743  
                 
   
LIABILITIES AND STOCKHOLDERS' EQUITY  
Current liabilities:                
  Accounts payable   $ 2,987     $ 4,705  
  Accrued payroll and related expenses     7,377       5,854  
  Accrued expenses     5,395       8,164  
  Deferred income taxes     1,159       944  
  Deferred revenue     46,222       35,483  
  Capital lease obligations     1,308       921  
    Total current liabilities     64,448       56,071  
                 
Deferred revenue, noncurrent     10,432       3,702  
Deferred income taxes, noncurrent     155       160  
Other liabilities     1,921       2,159  
Capital lease obligations, noncurrent     987       8  
Convertible notes     14,197       59,215  
    Total liabilities     92,140       121,315  
                 
Stockholders' equity:                
  Common stock     45       34  
  Additional paid-in capital     315,430       255,331  
  Treasury stock     (14,430 )     (14,430 )
  Accumulated other comprehensive income     165       239  
  Accumulated deficit     (259,157 )     (237,746 )
    Total stockholders' equity     42,053       3,428  
    Total liabilities and stockholders' equity   $ 134,193     $ 124,743  
                 
                 
   
   
CALLIDUS SOFTWARE INC.  
CONSOLIDATED STATEMENTS OF CASH FLOWS  
(In thousands)  
             
    Twelve Months Ended December 31,  
    2013     2012  
Cash flows from operating activities:                
  Net loss   $ (21,411 )   $ (27,698 )
  Adjustments to reconcile net loss to net cash used in operating activities:                
    Depreciation expense     4,458       3,114  
    Amortization of intangible assets     4,825       5,094  
    Provision for doubtful accounts and service remediation reserves     999       595  
    Stock-based compensation     10,395       13,655  
    Release of valuation allowance     -       (350 )
    Loss (gain) on disposal of property and equipment     3       (2 )
    Amortization of convertible notes issuance cost     485       402  
    Net amortization on investments     79       358  
    Debt conversion expense     4,776       -  
    Acquisition-related contingent consideration     -       (1,612 )
    Changes in operating assets and liabilities:                
      Accounts receivable     (7,648 )     (1,112 )
      Prepaid and other current assets     486       (820 )
      Other assets     (1,276 )     662  
      Accounts payable     (1,702 )     914  
      Accrued expenses     105       (1,106 )
      Accrued payroll and related expenses     1,861       987  
      Accrued restructuring     (392 )     443  
      Deferred revenue     17,469       4,576  
      Deferred income taxes     237       195  
Net cash provided by (used in) operating activities     13,749       (1,705 )
                 
Cash flows from investing activities:                
  Purchases of investments     (7,434 )     (16,536 )
  Proceeds from maturities and sale of investments     12,250       38,841  
  Purchases of property and equipment     (1,704 )     (6,692 )
  Proceeds from disposal of property and equipment     -       2  
  Purchases of intangible assets     (638 )     (6,196 )
  Acquisitions, net of cash acquired     -       (7,715 )
Net cash provided by investing activities     2,474       1,704  
                 
Cash flows from financing activities:                
  Proceeds from issuance of common stock     6,630       5,225  
  Repurchase of common stock from employees for payment of taxes on vesting of restricted stock units    
(1,298
)    
(2,346
)
  Payment of consideration related to acquisitions     (2,903 )     (2,660 )
  Repayment of debt assumed through acquisition     -       (30 )
  Payment on debt conversion     (4,374 )     -  
  Payment of principal under capital leases     (2,319 )     (1,193 )
Net cash used in financing activities     (4,264 )     (1,004 )
Effect of exchange rates on cash and cash equivalents     (64 )     22  
Net increase (decrease) in cash and cash equivalents     11,895       (983 )
Cash and cash equivalents at beginning of period     16,400       17,383  
Cash and cash equivalents at end of period   $ 28,295     $ 16,400  
                 
                 
   
   
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES  
(In thousands, except for percentages and per share data)  
(unaudited)  
             
    Three months ended     Twelve months ended  
    December 31,     December 31,  
    2013     2012     2013     2012  
                                 
Non-GAAP gross profit reconciliation                                
                                 
Gross profit   $ 18,521     $ 11,593     $ 64,548     $ 44,612  
                                 
  Profit margin, as a % of total revenues     61 %     46 %     57 %     47 %
Add back:                                
  Non-cash stock-based compensation     371       717       1,843       3,620  
  Non-cash amortization of acquired intangible assets     534       534       2,119       2,086  
  India operations transfer fee     -       535       -       535  
Non-GAAP gross profit   $ 19,426     $ 13,379     $ 68,510     $ 50,853  
                                 
  Profit margin, as a % of total revenues     64 %     53 %     61 %     54 %
                                 
                                 
Non-GAAP recurring revenue gross profit reconciliation                                
                                 
Recurring revenue gross profit   $ 14,321     $ 10,868     $ 52,993       40,880  
  Recurring revenue profit margin, as a % of recurring revenues     67 %     59 %     65 %     58 %
Add back:                                
  Non-cash stock-based compensation     171       270       783       1,550  
  Non-cash amortization of acquired intangible assets     520       522       2,068       2,036  
  India operations transfer fee     -       387       -       387  
Non-GAAP Recurring revenue gross profit   $ 15,012     $ 12,047     $ 55,844     $ 44,853  
  Recurring revenue profit margin, as a % of recurring revenues     70 %     65 %     68 %     63 %
                                 
                                 
Non-GAAP operating expense reconciliation:                                
                                 
Operating expenses   $ 20,121       19,547     $ 76,209       68,541  
  Operating expenses, as a % of total revenues     67 %     77 %     68 %     72 %
Add back:                                
  Non-cash stock-based compensation     (1,679 )     (2,021 )     (8,552 )     (10,035 )
  Non-cash amortization of acquired intangible assets     (281 )     (293 )     (1,151 )     (1,119 )
  Acquisition-related expense     -       (45 )     -       (865 )
  Patent litigation and settlement costs     (502 )     (317 )     (1,504 )     (1,103 )
  Acquisition-related adjustment     -       (175 )     -       1,612  
  Restructuring     -       (554 )     (1,699 )     (1,115 )
  India operations transfer fee     -       (324 )     -       (324 )
Non-GAAP Operating Expenses   $ 17,659     $ 15,818     $ 63,303     $ 55,592  
  Non-GAAP Operating expenses, as a % of total revenues     58 %     63 %     56 %     59 %
                                 
                                 
Non-GAAP operating income (loss) reconciliation:                                
                                 
Operating loss   $ (1,600 )     (7,954 )   $ (11,661 )     (23,929 )
  Operating loss, as a % of total revenues     -5 %     -32 %     -10 %     -25 %
Add back:                                
  Non-cash stock-based compensation     2,050       2,738       10,395       13,655  
  Non-cash amortization of acquired intangible assets     815       827       3,270       3,205  
  Acquisition-related expense     -       45       -       865  
  Patent litigation and settlement costs     502       317       1,504       1,103  
  Acquisition-related adjustment     -       175       -       (1,612 )
  Restructuring     -       554       1,699       1,115  
  India operations transfer fee     -       859       -       859  
Non-GAAP Operating income (loss)   $ 1,767     $ (2,439 )   $ 5,207     $ (4,739 )
  Non-GAAP Operating income (loss), as a % of total revenues     6 %     -10 %     5 %     -5 %
                                 
                                 
CALLIDUS SOFTWARE INC.  
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES  
(In thousands, except for percentages and per share data)  
(unaudited)  
             
    Three months ended     Twelve months ended  
    December 31,     December 31,  
    2013     2012     2013     2012  
                                 
Non-GAAP net loss reconciliation:                                
                                 
Net loss   $ (6,980 )   $ (9,050 )   $ (21,411 )     (27,698 )
  Net loss, as a % of total revenues     -23 %     -36 %     -19 %     -29 %
Add back:                                
  Non-cash stock-based compensation     2,050       2,738       10,395       13,655  
  Non-cash amortization of acquired intangible assets     815       827       3,270       3,205  
  Acquisition-related expenses     -       45       -       865  
  Patent litigation and settlement costs     502       317       1,504       1,103  
  Acquisition-related adjustment     -       175       -       (1,612 )
  Restructuring     -       554       1,699       1,115  
  Interest expense on convertible notes     494       703       2,604       2,813  
  Amortization of convertible note issuance cost     83       134       485       536  
  Debt conversion expense     4,776       -       4,776       -  
  India operations transfer fee     -       859       -       859  
  Tax benefit from release of valuation allowance     -       -       -       (224 )
Non-GAAP Net income (loss)   $ 1,740     $ (2,698 )   $ 3,322     $ (5,383 )
  Non-GAAP Net income (loss), as a % of total revenues    
6
%    
-11
%    
3
%    
-6
%
                                 
                                 
Non-GAAP net income (loss) per share reconciliation:                                
                                 
Net loss per basic and diluted share   $ (0.17 )     (0.25 )   $ (0.55 )   $ (0.78 )
Add back:                                
  Non-cash stock-based compensation     0.05       0.08       0.27       0.38  
  Non-cash amortization of acquired intangible assets     0.02       0.02       0.08       0.09  
  Acquisition-related expenses     -        -       -       0.02  
  Patent litigation and settlement costs     0.01       0.01       0.04       0.03  
  Acquisition-related adjustment     -       0.01       -       (0.04 )
  Restructuring     -       0.02       0.04       0.03  
  Interest expense on convertible notes     0.01       0.02       0.07       0.08  
  Amortization of convertible note issuance cost     -        -       0.01       0.02  
  Debt conversion expense     0.11       -       0.12       -  
  India operations transfer fee     -       0.02       -       0.02  
  Tax benefit from release of valuation allowance     -       -       -       (0.01 )
  Diluted shares impact on non-GAAP basis     0.01       -       (0.01 )     0.01  
Non-GAAP net income (loss) per diluted share   $ 0.04     $ (0.07 )   $ 0.07     $ (0.15 )
                                 
                                 
Basic and fully diluted shares reconciliation:                                
                                 
Basic shares     41,778       36,359       38,858       35,393  
Add back:                                
  Weighted average effect of dilutive securities     7,382       -       8,910       -  
Diluted shares     49,160       36,359       47,768       35,393  
                                 
                                 
 
 
CALLIDUS SOFTWARE INC.
FINANCIAL OUTLOOK
(In thousands)
(unaudited)
 
The guidance figures provided below and elsewhere in this press release are forward-looking statements, reflect a number of estimates, assumptions and other uncertainties, and are approximate in nature because of the company's future performance is difficult to predict. Such guidance is based on information available on the date of this press release, and the company assumes no obligation to update it.
         
    Three months ended
    March 31, 2014
    GAAP   Non-GAAP
Total Revenue   $29,000 - $30,000   $29,000 - $30,000
Operating Income (a)   ($2,100) - ($2,800)   $1,500 - $2,000
Net income (loss) per diluted share (c)   ($0.05) - ($0.08)   $0.02 - $0.04
         
         
         
    Twelve months ended
    December 31, 2014
    GAAP   Non-GAAP
Total Revenue   $126,000 - $131,000   $126,000 - $131,000
Operating Income (b)   ($8,300) - ($11,300)   $7,000 - $9,000
Net income (loss) per diluted share (c)   ($0.23) - ($0.28)   $0.12 - $0.16
         
         
   
(a) Estimated non-GAAP amounts above for the three months ending March 31, 2014, reflect adjustments that exclude the estimated amortization of acquired intangible assets of approximately $800 - $850 thousand, estimated stock-based compensation expense of approximately $2.7 - $3.0 million, patent litigation and settlement costs of approximately $500 - $550 thousand.
(b) Estimated non-GAAP amounts above for the twelve months ending December 31, 2014, reflect adjustments that exclude the estimated amortization of acquired intangible assets of approximately $3.2 - $3.4 million, estimated stock-based compensation expense of approximately $12.2 - $13.2 million, and patent litigation and settlement costs of approximately $1.7 - $1.9 million.
(c) Non-GAAP fully diluted share count is between 49.0 million to 50.5 million.  GAAP share count is between 46.0 million to 48.5 million.
   

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