SOURCE: Ixia

Ixia

October 21, 2010 16:03 ET

Ixia Announces Record Revenue of $70.9 Million for Third Quarter of 2010

Significant Sequential Increase in Operating Income and Earnings

CALABASAS, CA--(Marketwire - October 21, 2010) - Ixia (NASDAQ: XXIA) today reported its financial results for the third quarter ended September 30, 2010.

Total revenue for the 2010 third quarter was a record $70.9 million, an increase of 53 percent over the $46.4 million reported for the 2009 third quarter and an increase of 7 percent over the $66.1 million reported in the immediately preceding quarter. Revenue for the 2010 third quarter includes approximately $21.8 million attributable to sales of our IxN2X and IxCatapult products following the acquisition of Agilent Technologies' N2X Data Network Testing Product Line in October 2009 and the acquisition of Catapult Communications in June 2009. Revenue for the 2009 third quarter included approximately $7.5 million attributable to sales of our IxCatapult products.

On a GAAP basis, the company recorded net income for the 2010 third quarter of $4.9 million, or $0.07 per diluted share, compared with a net loss of $6.2 million, or $0.10 per share, for the 2009 third quarter.

Non-GAAP net income for the 2010 third quarter was $9.8 million, or $0.14 per diluted share, compared with non-GAAP net income of $1.5 million, or $0.02 per diluted share, reported in the third quarter of the prior year.

"Continued momentum across our key product lines and increased demand in Europe and Asia resulted in our third sequential quarter of record revenue," commented Atul Bhatnagar, Ixia's president and chief executive officer. "Our strong revenue performance coupled with continued execution of our strategy and strong operating expense discipline resulted in solid bottom-line results, including significant increases in both our operating income and earnings per share.

"Building on our award winning suite of Ethernet products," continued Mr. Bhatnagar, "last week we announced our new Xcellon™ family of 10 Gigabit products that utilizes next-generation testing architecture and for the first time ever breaks the terabit traffic generation barrier. Xcellon is designed to fully support data center convergence and cloud-computing paradigms that are changing the dynamics of business computing. It leverages cutting-edge multi-core processors, hardware encryption coprocessors, and high test port density to generate realistic media-rich application traffic on the extreme scale required for next-generation networks."

In the 2010 third quarter, cash, cash equivalents and investments in the aggregate increased by nearly $18 million over the 2010 second quarter to $121 million due in part to the $14.5 million of net cash provided by operating activities. As of September 30, 2010, the company had no debt.

Ixia's non-GAAP 2010 third quarter results exclude $3.0 million related to stock-based compensation expenses, $0.3 million for acquisition-related and restructuring costs, $3.5 million for the amortization of acquired intangible assets and a net tax benefit of $2.0 million related to (i) the items above and (ii) changes in the valuation allowance related to the company's deferred tax assets. Ixia's non-GAAP 2009 third quarter results exclude charges of $1.6 million related to stock-based compensation, $880,000 for acquisition-related costs, $3.8 million for the amortization of acquired intangible assets, $2.5 million related to restructuring expenses, $1.0 million for certain inventory write-downs and $1.4 million related to the impairment of certain investments, and a net tax benefit of $3.4 million related to these items.

Ixia will host a conference call today, at 5:00 p.m., Eastern Time, for analysts and investors to discuss its 2010 third quarter results and its business outlook for the 2010 fourth quarter. Open to the public, investors may access the call by dialing (678) 825-8347. A live webcast of the conference call, along with supplemental financial information, will be accessible from the "Investors" section of Ixia's web site (www.ixiacom.com). Following the live webcast, an archived version will be available in the "Investors" section on the Ixia web site for 90 days.

Non-GAAP Information

To supplement our consolidated financial results prepared in accordance with Generally Accepted Accounting Principles ("GAAP"), we have included certain non-GAAP financial measures in this press release and in the attachments hereto. Specifically, we have provided non-GAAP financial measures (e.g., non-GAAP cost of revenues, non-GAAP operating expenses, non-GAAP operating income, non-GAAP interest and other income, net, non-GAAP income tax expense, non-GAAP net income, and non-GAAP diluted earnings per share) that exclude certain non-cash and/or non-recurring income and expense items such as proceeds from legal settlement, stock-based compensation expenses, acquisition and other related costs, the amortization of acquisition-related intangible assets, restructuring expenses, certain inventory adjustments, the impairment charges related to certain investments, and the related income tax effects of these items, as well as the income tax impacts of valuation allowances recorded against certain deferred tax assets. The aforementioned items represent income and expense items that may be difficult to estimate from period to period and that are not directly attributable to the underlying performance of our business operations. These non-GAAP financial measures are provided to enhance the user's overall understanding of our financial performance. We believe that by excluding these items, as well as the related income tax effects, our non-GAAP measures provide supplemental information to both management and investors that is useful in assessing our core operating performance, in evaluating our ongoing business operations and in comparing our results of operations on a consistent basis from period to period. These non-GAAP financial measures are also used by management to plan and forecast future periods and to assist in making operating and strategic decisions. The presentation of this additional information is not prepared in accordance with GAAP. The information therefore may not necessarily be comparable to that of other companies and should be considered as a supplement to, not a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP. Investors are encouraged to review the reconciliations of GAAP to non-GAAP financial measures which are included below in this press release.

About Ixia

Ixia is a leading provider of converged IP performance test systems and service verification platforms for wireless and wired infrastructures and services. Ixia's test systems are used by network and telephony equipment manufacturers, semiconductor manufacturers, service providers, governments and enterprises to validate the performance and reliability of complex networks, devices and applications. Ixia's multiplay test systems address the growing need to test voice, video and data services and network capability under real-world conditions.

For more information, contact Ixia at 26601 W. Agoura Road, Calabasas, CA 91302; (818) 871-1800, Fax: (818) 871-1805; Email: info@ixiacom.com or visit our Web Site at http://www.ixiacom.com. Ixia, the Ixia four-petal logo and Xcellon are registered trademarks or trademarks of Ixia.

Safe Harbor Under the Private Securities Litigation Reform Act of 1995:

Certain statements made in this press release are forward-looking statements, including, without limitation, statements regarding possible future revenues, cost savings, growth and profitability and future business and market share. In some cases, such forward looking statements can be identified by terms such as "may," "will," "should," "could," "would," "expect," "plan," "anticipate," "believe," "estimate," "project," "predict," "potential," and variations of these words and similar expressions are intended to identify forward-looking statements. These statements reflect our current views with respect to future events and are based on assumptions and are subject to risks and uncertainties. These risks, uncertainties and other factors may cause our future results, performances or achievements to be materially different from those expressed or implied by our forward-looking statements and include, among other things: the current global economy, our success with the integration of our 2009 acquisitions of Catapult and Agilent Technologies' N2X Data Network Testing Product Line, competition, our ability to successfully defend any claims from taxing authorities in the various countries where we conduct business, consistency of orders from significant customers, our success in developing and producing new products, market acceptance of our products and our ability to realize all of the expected benefits of our restructuring plan. The factors that may cause future results to differ materially from our current expectations also include, without limitation, the risks identified in our Annual Report on Form 10-K for the year ended December 31, 2009, and in our other filings with the Securities and Exchange Commission. Many of these risks and uncertainties are outside of our control and are difficult for us to forecast or mitigate. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.



                            IXIA
           Condensed Consolidated Balance Sheets
                       (in thousands)
                         (unaudited)


                                                 September 30, December 31,
                                                      2010         2009
                                                  ------------ ------------

Assets
Current assets:
  Cash and cash equivalents                       $     42,691 $     15,061
  Short-term investments in marketable securities       40,379       10,337
  Accounts receivable, net                              65,843       55,765
  Inventories                                           23,659       14,541
  Prepaid expenses and other current assets              9,232        9,727
                                                  ------------ ------------
    Total current assets                               181,804      105,431

Investments in marketable securities                    37,493       53,582
Property and equipment, net                             22,372       18,693
Intangible assets, net                                  56,481       69,132
Goodwill                                                60,121       60,121
Other assets                                             2,232        2,129
                                                  ------------ ------------
    Total assets                                  $    360,503 $    309,088
                                                  ============ ============


Liabilities and Shareholders' Equity
Current liabilities:
  Accounts payable                                $     11,776 $      6,136
  Accrued expenses                                      31,221       21,253
  Deferred revenues                                     34,488       29,842
  Income taxes payable                                   1,090        1,263
                                                  ------------ ------------
    Total current liabilities                           78,575       58,494

Deferred revenues                                        7,206        7,309
Other liabilities                                        6,654        6,620
                                                  ------------ ------------
    Total liabilities                                   92,435       72,423
                                                  ------------ ------------


Shareholders' equity:
  Common stock, without par value; 200,000 shares
   authorized at September 30, 2010 and December
   31, 2009; 66,061 and 63,062 shares issued and
   outstanding as of September 30, 2010 and
   December 31, 2009, respectively                     103,940       87,283
  Additional paid-in capital                           127,634      118,754
  Retained earnings                                     34,361       28,979
  Accumulated other comprehensive income                 2,133        1,649
                                                  ------------ ------------
    Total shareholders' equity                         268,068      236,665
                                                  ------------ ------------

    Total liabilities and shareholders' equity    $    360,503 $    309,088
                                                  ============ ============




                                 IXIA
            Condensed Consolidated Statements of Operations
                (in thousands, except per share data)
                              (unaudited)




                                 Three months ended     Nine months ended
                                    September 30,         September 30,
                                --------------------- --------------------
                                  2010       2009       2010       2009
                                ---------- ---------  ---------  ---------

Revenues:
  Products                      $   58,540 $  37,076  $ 164,134  $  97,598
  Services                          12,350     9,298     34,901     24,305
                                ---------- ---------  ---------  ---------
    Total revenues                  70,890    46,374    199,035    121,903
                                ---------- ---------  ---------  ---------

Costs and operating expenses:(1)
  Cost of revenues - products       14,231    10,461     39,449     25,971
  Cost of revenues - services        1,535       823      4,561      2,567
  Research and development          17,802    13,692     54,323     37,001
  Sales and marketing               19,665    15,233     57,986     42,990
  General and administrative         8,443     7,359     25,667     20,097
  Amortization of intangible
   assets(2)                         3,532     3,774     13,676      6,485
  Acquisition and other related        312       880      2,991      3,402
  Restructuring                         30     2,527      3,587      3,538
                                ---------- ---------  ---------  ---------
    Total costs and operating
     expenses                       65,550    54,749    202,240    142,051
                                ---------- ---------  ---------  ---------

    Income (loss) from
     operations                      5,340    (8,375)    (3,205)   (20,148)
Interest and other income, net(2)      578       343      9,674      1,572
Other-than-temporary impairment
 on investments                         --    (1,356)        --     (2,761)
                                ---------- ---------  ---------  ---------
    Income (loss) before income
     taxes                           5,918    (9,388)     6,469    (21,337)
Income tax expense (benefit)         1,044    (3,165)     1,087     (8,469)
                                ---------- ---------  ---------  ---------
    Net income (loss)           $    4,874 $  (6,223) $   5,382  $ (12,868)
                                ========== =========  =========  =========

Earnings (loss) per share:
  Basic                         $     0.07 $   (0.10) $    0.08  $   (0.21)
  Diluted                       $     0.07 $   (0.10) $    0.08  $   (0.21)

Weighted average number of
 common and common equivalent
 shares outstanding:
  Basic                             65,513    62,551     64,388     62,649
  Diluted                           68,018    62,551     66,341     62,649



(1) Stock-based compensation included in:

  Cost of revenues - products   $      115 $      76  $     371  $     339
  Cost of revenues - services           44        29        140        129
  Research and development           1,191       596      3,748      3,259
  Sales and marketing                  772       271      2,503      2,332
  General and administrative           916       626      2,468      1,986

(2) The three months ended September 30, 2010 included out-of-period
    adjustments attributable to the three months ended June 30, 2010, which
    decreased non-cash amortization of intangible assets by $333,000 and
    increased interest and other income, net by $267,000.
.




                                 IXIA
          Non-GAAP Information and Reconciliation to Comparable
                        GAAP Financial Measures
          (in thousands, except percentages and per share data)
                             (unaudited)



                                     Three months ended September 30,
                                ------------------------------------------
                                        2010                  2009
                                --------------------  --------------------
                                % Total               % Total
                                Amount ($) Revenues   Amount ($) Revenues
                                ---------  ---------  ---------  ---------
Total cost of revenues - GAAP   $  15,766       22.2% $  11,284       24.3%
Inventory write-down and
 adjustments(a)                        --         --%    (1,012)      -2.2%
Stock-based compensation(b)          (159)      -0.2%      (105)      -0.2%
                                ---------  ---------  ---------  ---------
Total cost of revenues -
 Non-GAAP                       $  15,607       22.0% $  10,167       21.9%
                                =========  =========  =========  =========

Operating expenses - GAAP       $  49,784       70.2% $  43,465       93.7%
Amortization of intangible
 assets(c)                         (3,532)      -5.0%    (3,774)      -8.1%
Acquisition and other
 related(d)                          (312)      -0.4%      (880)      -1.9%
Restructuring(e)                      (30)      -0.0%    (2,527)      -5.4%
Stock-based compensation(b)        (2,879)      -4.1%    (1,493)      -3.3%
                                ---------  ---------  ---------  ---------
Operating expenses - Non-GAAP   $  43,031       60.7% $  34,791       75.0%
                                =========  =========  =========  =========

Income (loss) from operations -
 GAAP                           $   5,340        7.5% $  (8,375)     -18.1%
Effect of reconciling items(f)      6,912        9.8%     9,791       21.2%
                                ---------  ---------  ---------  ---------
Income from operations -
 Non-GAAP                       $  12,252       17.3% $   1,416        3.1%
                                =========  =========  =========  =========

Other-than-temporary impairment
 on investments - GAAP          $      --         --% $  (1,356)      -2.9%
Effect of reconciling items(g)         --         --%     1,356        2.9%
                                ---------  ---------  ---------  ---------
Other-than-temporary impairment
 on investments - Non-GAAP      $      --         --% $      --         --%
                                =========  =========  =========  =========

Income tax expense (benefit) -
 GAAP                           $   1,044        1.5% $  (3,165)      -6.8%
Effect of reconciling items(h)      1,998        2.8%     3,379        7.3%
                                ---------  ---------  ---------  ---------
Income tax expense - Non-GAAP   $   3,042        4.3% $     214        0.5%
                                =========  =========  =========  =========

Net income (loss) - GAAP        $   4,874        6.9% $  (6,223)     -13.4%
Effect of reconciling items(i)      4,914        6.9%     7,768       16.7%
                                ---------  ---------  ---------  ---------
Net income - Non-GAAP           $   9,788       13.8% $   1,545        3.3%
                                =========  =========  =========  =========

Basic earnings (loss) per share
 - GAAP                         $    0.07             $   (0.10)
Effect of reconciling items(j)       0.07                  0.12
                                ---------             ---------
Diluted earnings per share -
 Non-GAAP                       $    0.14             $    0.02
                                =========             =========

(a) This reconciling item represents the write-down for certain inventory
    items.  While we may have additional inventory adjustments in the
    future, management excludes these expenses when evaluating current
    performance, forecasting future results, measuring core operating
    results, and making operating and strategic decisions.  We believe that
    by excluding these adjustments, we provide investors with supplemental
    information that is useful in comparing our operating results from
    period to period and in evaluating our core operations and performance.

(b) This reconciling item represents stock-based compensation expenses.  As
    stock-based compensation represents a non-cash charge that is not
    directly attributable to the underlying performance of our business
    operations, we believe that by excluding stock-based compensation,
    investors are provided with supplemental information that is useful in
    comparing our operating results from period to period and in evaluating
    our core operations and performance.  While we expect to continue to
    recognize stock-based compensation expense in the future, management
    also excludes this expense when evaluating current performance,
    forecasting future results, measuring core operating results, and
    making operating and strategic decisions.

(c) This reconciling item represents the amortization of intangible assets
    related to the acquisitions of various businesses and technologies such
    as the acquisitions of Catapult Communications Corporation, Agilent
    Technologies' N2X Data Network Testing Product Line and certain rights
    associated with the Chariot® product line from NetIQ Corporation.  As
    the amortization expense represents a non-cash charge that is not
    directly attributable to the underlying performance of our business
    operations, we believe that by excluding the amortization of
    acquisition-related intangible assets, investors are provided with
    supplemental information that is useful in evaluating our ongoing
    operations and performance.  While the amortization of intangible
    assets is expected to continue in the future, management also excludes
    this expense when evaluating current performance, forecasting future
    results, measuring core operating results, and making operating and
    strategic decisions.

(d) This reconciling item represents costs associated with our acquisitions
    of Catapult Communications Corporation in June 2009 and Agilent
    Technologies' N2X Data Network Testing Product Line in October 2009.
    Acquisition and other related costs consist primarily of transaction
    and integration related costs such as professional fees for legal,
    accounting and tax services, integration related consulting fees,
    certain employee, facility and infrastructure transition costs, and
    other related expenses.  We believe that by excluding acquisition and
    other related costs, we provide investors with supplemental information
    that is useful in comparing our ongoing operating results from period
    to period and in evaluating our core operations and performance.

(e) This reconciling item represents costs primarily associated with our
    restructuring plans.  These costs primarily relate to one-time employee
    termination benefits consisting of severance and other related costs.
    We believe that by excluding restructuring costs, we provide investors
    with supplemental information that is useful in comparing our operating
    results from period to period and in evaluating our core operations and
    performance.

(f) This adjustment represents the effects of the reconciling items noted
    in footnotes (a), (b), (c), (d) and (e).

(g) This reconciling item represents an other-than-temporary impairment on
    our investment in auction rate securities.  As this
    other-than-temporary impairment represents a non-cash charge that is
    not directly attributable to the underlying performance of our business
    operations, we believe that by excluding this other-than-temporary
    impairment, we provide investors with supplemental information that is
    useful in comparing our operating results from period to period and in
    evaluating our core operations and performance.

(h) This adjustment represents the income tax effects of the reconciling
    items noted in footnotes (a), (b), (c), (d), (e) and (g) as well as
    changes in the valuation allowance relating to the Company's deferred
    tax assets.

(i) This adjustment represents the effects of the reconciling items noted
    in footnotes (a), (b), (c), (d), (e) and (g), net of tax.

(j) This adjustment represents the effects of the reconciling items noted
    in footnotes (a), (b), (c), (d), (e) and (g), net of tax, on a diluted
    per share basis.




                                   IXIA
           Non-GAAP Information and Reconciliation to Comparable
                         GAAP Financial Measures
          (in thousands, except percentages and per share data)
                               (unaudited)



                                      Nine months ended September 30,
                                ------------------------------------------
                                        2010                  2009
                                --------------------  --------------------
                                           % Total               % Total
                                Amount ($) Revenues   Amount ($) Revenues
                                ---------  ---------  ---------  ---------
Total cost of revenues - GAAP   $  44,010       22.1% $  28,538       23.4%
  Inventory write down(a)              --         --%    (1,785)      -1.5%
  Stock-based compensation(b)        (511)      -0.2%      (468)      -0.3%
                                ---------  ---------  ---------  ---------
Total cost of revenues -
 Non-GAAP                       $  43,499       21.9% $  26,285       21.6%
                                =========  =========  =========  =========

Operating expenses - GAAP       $ 158,230       79.5% $ 113,513       93.1%
  Amortization of intangible
   assets(c)                      (13,676)      -6.9%    (6,485)      -5.3%
  Acquisition and other 
   related(d)                      (2,991)      -1.5%    (3,402)      -2.8%
  Restructuring(e)                 (3,587)      -1.8%    (3,538)      -2.9%
  Stock-based compensation(b)      (8,719)      -4.4%    (7,577)      -6.2%
                                ---------  ---------  ---------  ---------
Operating expenses - Non-GAAP   $ 129,257       64.9% $  92,511       75.9%
                                =========  =========  =========  =========

Loss from operations - GAAP     $  (3,205)      -1.6% $ (20,148)     -16.5%
  Effect of reconciling items(f)   29,484       14.8%    23,255       19.0%
                                ---------  ---------  ---------  ---------
Income from operations -
 Non-GAAP                       $  26,279       13.2% $   3,107        2.5%
                                =========  =========  =========  =========

Interest and other income, net
 - GAAP                         $   9,674        4.9% $   1,572        1.3%
  Settlement proceeds(g)           (8,925)      -4.5%        --         --%
                                ---------  ---------  ---------  ---------
Interest and other income, net
 - Non-GAAP                     $     749        0.4% $   1,572        1.3%
                                =========  =========  =========  =========

Other-than-temporary impairment
 on investments - GAAP          $      --        -- % $  (2,761)      -2.3%
  Effect of reconciling items(h)       --        -- %     2,761        2.3%
                                ---------  ---------  ---------  ---------
Other-than-temporary impairment
 on investments - Non-GAAP      $      --         --% $      --         --%

Income tax expense (benefit) -
 GAAP                           $   1,087        0.5% $  (8,469)      -6.9%
  Effect of reconciling items(i)    6,016        3.1%     9,211        7.5%
                                ---------  ---------  ---------  ---------
Income tax expense - Non-GAAP   $   7,103        3.6% $     742        0.6%
                                =========  =========  =========  =========

Net income (loss)- GAAP         $   5,382        2.7% $ (12,868)     -10.6%
  Effect of reconciling items(j)   14,543        7.3%    16,805       13.8%
                                ---------  ---------  ---------  ---------
Net income - Non-GAAP           $  19,925       10.0% $   3,937        3.2%
                                =========  =========  =========  =========

Diluted earnings (loss) per
 share - GAAP                   $    0.08             $   (0.21)
  Effect of reconciling items(k)     0.22                  0.27
                                ---------             ---------
Diluted earnings per share -
 Non-GAAP                       $    0.30             $    0.06
                                =========             =========

(a) This reconciling item represents the write-down for certain inventory
    items.  While we may have additional inventory write-downs in the
    future, management excludes this expense when evaluating current
    performance, forecasting future results, measuring core operating
    results, and making operating and strategic decisions.  We believe that
    by excluding this inventory write-down, we provide investors with
    supplemental information that is useful in comparing our operating
    results from period to period and in evaluating our core operations and
    performance.

(b) This reconciling item represents stock-based compensation expenses.  As
    stock-based compensation represents a non-cash charge that is not
    directly attributable to the underlying performance of our business
    operations, we believe that by excluding stock-based compensation,
    investors are provided with supplemental information that is useful in
    comparing our operating results from period to period and in evaluating
    our core operations and performance.  While we expect to continue to
    recognize stock-based compensation expense in the future, management
    also excludes this expense when evaluating current performance,
    forecasting future results, measuring core operating results, and
    making operating and strategic decisions.

(c) This reconciling item represents the amortization of intangible assets
    related to the acquisitions of various businesses and technologies such
    as the acquisitions of Catapult Communications Corporation, Agilent
    Technologies' N2X Data Network Testing Product Line and certain rights
    associated with the Chariot® product line from NetIQ Corporation.  As
    the amortization expense represents a non-cash charge that is not
    directly attributable to the underlying performance of our business
    operations, we believe that by excluding the amortization of
    acquisition-related intangible assets, investors are provided with
    supplemental information that is useful in evaluating our ongoing
    operations and performance.  While the amortization of intangible
    assets is expected to continue in the future, management also excludes
    this expense when evaluating current performance, forecasting future
    results, measuring core operating results, and making operating and
    strategic decisions.

(d) This reconciling item represents costs associated with our acquisitions
    of Catapult Communications Corporation in June 2009 and Agilent
    Technologies' N2X Data Network Testing Product Line in October 2009.
    Acquisition and other related costs consist primarily of transaction
    and integration related costs such as success-based banking fees,
    professional fees for legal, accounting and tax services, integration
    related consulting fees, certain employee, facility and infrastructure
    transition costs, and other related expenses.  We believe that by
    excluding acquisition and other related costs, we provide investors
    with supplemental information that is useful in comparing our ongoing
    operating results from period to period and in evaluating our core
    operations and performance.

(e) This reconciling item represents costs primarily associated with our
    restructuring plans.  These costs primarily relate to one-time employee
    termination benefits consisting of severance and other related costs.
    We believe that by excluding restructuring costs, we provide investors
    with supplemental information that is useful in comparing our operating
    results from period to period and in evaluating our core operations and
    performance.

(f) This adjustment represents the effects of the reconciling items noted
    in footnotes (a), (b), (c), (d) and (e).

(g) This reconciling item represents settlement proceeds during the first
    quarter of 2010 relating to claims asserted by us against our former
    investment manager for damages and losses relating to our investments
    in auction rate securities with an aggregate par value of $19.0
    million. As the settlement proceeds are not directly attributable to
    the underlying performance of our business operations, we believe that
    by excluding these settlement proceeds, we provide investors with
    supplemental information that is useful in comparing our operating
    results from period to period and in evaluating our core operations and
    performance.

(h) This reconciling item represents an other-than-temporary impairment on
    our investment in auction rate securities.  As this
    other-than-temporary impairment represents a non-cash charge that is
    not directly attributable to the underlying performance of our business
    operations, we believe that by excluding this other-than-temporary
    impairment, we provide investors with supplemental information that is
    useful in comparing our operating results from period to period and in
    evaluating our core operations and performance.

(i) This adjustment represents the income tax effects of the reconciling
    items noted in footnotes (a), (b), (c), (d), (e), (g) and (h) as well
    as changes in the valuation allowance relating to the Company's
    deferred tax assets.

(j) This adjustment represents the effects of the reconciling items noted
    in footnotes (a), (b), (c), (d), (e), (g) and (h), net of tax.

(k) This adjustment represents the effects of the reconciling items noted
    in footnotes (a), (b), (c), (d), (e), (g) and (h), net of tax, on a
    diluted per share basis.


Contact Information

  • Financial Contact:
    The Blueshirt Group
    Investor Relations
    Chris Danne or Maria Riley
    415-217-7722
    Or
    Tom Miller
    Chief Financial Officer
    Dir: 818-444-2325
    Email Contact