SOURCE: Pegasystems

Pegasystems

July 29, 2015 16:02 ET

Pegasystems Announces Financial Results for Second Quarter and First Six Months of 2015

Exceeds Revenue Targets and Continues to Build Backlog in First Half of 2015

CAMBRIDGE, MA--(Marketwired - July 29, 2015) - Pegasystems Inc. (NASDAQ: PEGA), the software company empowering the world's leading enterprises with strategic business applications, today announced results for its second quarter and six months ended June 30, 2015.

"We are delighted with our strong performance in the first half of 2015, which we believe reflects our unique ability to help clients manage customer engagement on a global scale and rapidly adapt to change," said Alan Trefler, Founder and CEO of Pegasystems. "We exceeded our revenue goals while building backlog, demonstrating strong execution throughout the organization. We continue to be gratified that the most successful enterprises in the world are choosing Pega to transform their organizations for efficiency and competitive advantage."

SELECTED GAAP & NON-GAAP RESULTS (1)
  Three Months Ended June 30,   
($ in thousands except per share amounts) 2015  2015  2014  2014  % Increase
GAAP  Non-GAAP  GAAP  Non-GAAP  GAAP Non-GAAP
Total Revenue $162,019  $162,019  $142,985  $143,868  13% 13%
License Revenue $63,497  $63,497  $54,012  $54,533  18% 16%
Cloud Revenue $7,279  $7,279  $3,727  $3,936  95% 85%
Net Income $3,104  $10,945  $1,504  $7,989  106% 37%
Diluted Earnings per share $0.04  $0.14  $0.02  $0.10  100% 40%
               
   Six Months Ended June 30,   
($ in thousands except per share amounts)  2015   2015   2014   2014  % Increase (Decrease)
 GAAP   Non-GAAP   GAAP   Non-GAAP  GAAP Non-GAAP
Total Revenue $315,937  $315,937  $283,449  $286,091  11% 10%
License Revenue $121,472  $121,472  $106,626  $107,669  14% 13%
Cloud Revenue $13,456  $13,456  $7,585  $8,182  77% 64%
Net Income $9,039  $21,131  $11,269  $23,695  (20%) (11%)
Diluted Earnings per share $0.11  $0.27  $0.14  $0.30  (21%) (10%)
               
(1) See a reconciliation of our GAAP to Non-GAAP measures contained in the financial schedules at the end of this release.

Cash: Total cash, cash equivalents, and marketable securities at June 30, 2015 was $226.9 million, up 7% from 2014 year-end.

Cash generated from operations for the first six months of 2015 was $39.4 million. Free Cash Flow, which we define as operating cash flow less Cap Ex, was $32.1 million for the first six months of 2015.

License and Cloud Backlog: The Company computes license and cloud backlog by adding billed deferred license and cloud revenue and off-balance sheet license and cloud commitments, which is business that is contracted, unbilled, and not recorded on the Company's balance sheet.

License and Cloud Backlog (1)
   June 30,   
($ in thousands)  2015  2014  % Increase
 Total billed deferred license and cloud revenue  61,339  54,938  12%
 Total off-balance sheet license and cloud commitments (2)  330,043  298,658  11%
TOTAL LICENSE AND CLOUD BACKLOG  391,382  353,596  11%
          
(1) See historical quarterly license backlog amounts including cloud in a separate schedule at the end of this release.
(2) See the “Future Cash Receipts from License and Cloud Arrangements” table on page 23 of the Quarterly Report on Form 10-Q for the period ending June 30, 2015.

"With a strong first half to 2015, Pegasystems continues to execute against its financial performance goals," said Rafe Brown, Pegasystems CFO. "As a result of the increased visibility gained by building backlog in the first half, we believe we will modestly exceed our previously issued GAAP and non-GAAP revenue guidance of approximately $653 million for the full year 2015. We reiterate our previously issued GAAP diluted EPS guidance for the year of approximately 49 cents per share and non-GAAP diluted EPS guidance for the year of approximately 78 cents per share, as we continue to invest in our strategic applications, cloud, sales, and marketing efforts."

See the reconciliation of our GAAP diluted EPS guidance to non-GAAP diluted EPS guidance for the full year of 2015 at the end of this release.

Quarterly Conference Call

Pegasystems will host a conference call and audio-only Webcast associated with this announcement at 5:00 p.m. EDT today. A live audio webcast of the conference call, together with detailed financial information, can be accessed through the Company's Website at www.pega.com/about/investors. Dial-in information is as follows: 1-877-407-3982 (domestic) or 1-201-493-6780 (international). To listen to the Webcast, log onto www.pega.com at least 5 minutes prior to the event's broadcast and click on the Webcast icon in the Investors section. A replay of the call will also be available on www.pega.com in the Investors section Earnings Calls link.

Discussion of Non-GAAP Financial Measures

To supplement financial results presented in accordance with Generally Accepted Accounting Principles in the U.S. ("GAAP"), the Company provides non-GAAP measures, including in this release. Pegasystems' management utilizes a number of different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of the business, for making operating decisions, and for forecasting and planning for future periods. The Company's annual financial plan is prepared both on a GAAP and non-GAAP basis, and both are approved by our board of directors. In addition and as a consequence of the importance of these measures in managing the business, the Company uses non-GAAP measures and financial performance results in the evaluation process to establish management's compensation.

The non-GAAP measures exclude the effects of certain business combination accounting entries, stock-based compensation expense, amortization of acquired intangibles, acquisition-related expenses, and the benefit associated with favorable settlements of certain indemnification claims and indirect tax liabilities. The Company believes that these non-GAAP measures are helpful in understanding its past financial performance and its anticipated future results. These non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP. A reconciliation of the Company's GAAP to non-GAAP measures is included in the financial schedules at the end of this release.

Forward-Looking Statements

"Safe harbor" statement under the Private Securities Litigation Reform Act of 1995: Certain statements contained in this press release may be construed as "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. The words "expect," "anticipate," "intend," "plan," "believe," "could," "estimate," "may," "target," "strategy," "is intended to," "project," "guidance" and similar expressions, among others, identify forward-looking statements, which speak only as of the date the statement was made. These statements are based on current expectations and assumptions and involve various risks and uncertainties, which could cause the Company's actual results to differ from those expressed in such forward-looking statements. These risks and uncertainties include, among others, variation in demand for our products and services and the difficulty in predicting the completion of product acceptance and other factors affecting the timing of our license revenue recognition; the ongoing consolidation in the financial services, insurance, healthcare, and communications markets; reliance on third party relationships; the potential loss of vendor specific objective evidence for our time and materials professional services arrangements; the inherent risks associated with international operations and the continued weakness in international economies; foreign currency exchange rates; the financial impact of the Company's past acquisitions and any future acquisitions; and management of the Company's growth. Further information regarding these and other factors which could cause the Company's actual results to differ materially from any forward-looking statements contained in this press release is contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2014 and other recent filings with the Securities and Exchange Commission. These documents are available on the Company's website at http://www.pega.com/about/investors. The forward-looking statements contained in this press release represent the Company's views as of July 29, 2015. Investors are cautioned not to place undue reliance on such forward-looking statements and there are no assurances that the matters contained in such statements will be achieved. Although subsequent events may cause the Company's view to change, except as required by applicable law, the Company does not undertake and specifically disclaims any obligation to publicly update or revise these forward-looking statements whether as the result of new information, future events or otherwise. The statements should therefore not be relied upon as representing the Company's view as of any date subsequent to July 29, 2015.

About Pegasystems
Pegasystems (NASDAQ: PEGA) develops strategic applications for sales, marketing, service, and operations. Pega's applications streamline critical business operations, connect enterprises to their customers seamlessly in real-time across channels, and adapt to meet rapidly changing requirements. Pega's Global 2000 customers include many of the world's most sophisticated and successful enterprises. Pega's applications, available in the cloud or on-premises, are built on its unified Pega 7 platform, which uses visual tools to easily extend and change applications to meet clients' strategic business needs. Pega's clients report that Pega gives them the fastest time to value, extremely rapid deployment, efficient re-use, and global scale. For more information, please visit us at www.pega.com.

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Pegasystems Inc.
Unaudited Condensed Consolidated Statements of Operations
($ in thousands, except per share amounts)
             
   Three Months Ended  Six Months Ended
   June 30,  June 30,
   2015  2014  2015  2014
Revenue:            
 Software license  $63,497  $54,012  $121,472  $106,626
 Maintenance   49,329   45,393   98,081   90,274
 Services   49,193   43,580   96,384   86,549
  Total revenue   162,019   142,985   315,937   283,449
Cost of revenue:                
 Software license   1,030   1,177   2,106   2,756
 Maintenance   5,476   5,044   10,656   9,708
 Services   48,275   40,470   92,078   80,140
  Total cost of revenue (1)   54,781   46,691   104,840   92,604
Gross profit   107,238   96,294   211,097   190,845
Operating expenses:                
 Selling and marketing   60,389   56,342   116,124   102,149
 Research and development   31,372   27,323   61,216   51,932
 General and administrative   10,214   10,250   16,559   19,552
 Acquisition-related   13   157   39   363
  Total operating expenses (1)   101,988   94,072   193,938   173,996
Income from operations   5,250   2,222   17,159   16,849
Foreign currency transaction (loss) gain   (968)   (4)   (3,930)   318
Interest income, net   216   163   529   287
Other income (expense), net   3   6   3   (526)
Income before provision for income taxes   4,501   2,387   13,761   16,928
Provision for income taxes   1,397   883   4,722   5,659
  Net income  $3,104  $1,504  $9,039  $11,269
Earnings per share :                
Basic  $0.04  $0.02  $0.12  $0.15
Diluted  $0.04  $0.02  $0.11  $0.14
             
Weighted-average number of common shares outstanding:                
Basic   76,626   76,286   76,514   76,385
Diluted   78,950   78,280   78,771   78,563
                 
Dividends declared per share  $0.03  $0.03  $0.06  $0.045
                 
(1) Includes stock-based compensation as follows:                
Cost of revenue  $2,281  $1,387  $4,234  $2,398
Operating expenses  $6,364  $3,771  $10,680  $6,055
             
PEGASYSTEMS INC.
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)
($ in thousands, except per share amounts)
                 % Increase
   Three Months Ended June 30, (Decrease)
   2015     2015  2014     2014           
   GAAP  Adj.  Non-GAAP  GAAP  Adj.  Non-GAAP GAAP    Non-GAAP  
TOTAL REVENUE  $162,019  $-  $162,019  $142,985  $883  $143,868 13%     13%   
 Software license   63,497   -   63,497   54,012   521   54,533 18%     16%   
 Maintenance   49,329   -   49,329   45,393   153   45,546 9%     8%   
 Services   49,193   -   49,193   43,580   209   43,789 13%     12%   
                                    
TOTAL COST OF REVENUE  $54,781  $(3,628)  $51,153  $46,691  $(2,831)  $43,860 17%     17%   
 Amortization of intangible assets (2)   1,347   (1,347)   -   1,444   (1,444)   -           
 Stock-based compensation   2,281   (2,281)   -   1,387   (1,387)   -           
                                    
GROSS MARGIN %   66%       68%   67%       70% (116)  bp  (109)  bp
                                    
TOTAL OPERATING EXPENSES (3)  $101,988  $(8,149)  $93,839  $94,072  $(5,908)  $88,164 8%     6%   
 Amortization of intangible assets (2)   1,772   (1,772)   -   1,980   (1,980)   -           
 Stock-based compensation   6,364   (6,364)   -   3,771   (3,771)   -           
 Acquisition-related   13   (13)   -   157   (157)   -           
                                    
INCOME FROM OPERATIONS  $5,250  $11,777  $17,027  $2,222  $9,622  $11,844 136%     44%   
                                    
OPERATING MARGIN %   3%       11%   2%       8% 169  bp  228  bp
                                    
INCOME TAX EFFECTS (4)  $1,397  $3,936  $5,333  $883  $3,137  $4,020 58%     33%   
                                    
NET INCOME  $3,104  $7,841  $10,945  $1,504  $6,485  $7,989 106%     37%   
                                    
DILUTED EARNINGS PER SHARE  $0.04  $0.10  $0.14  $0.02  $0.08  $0.10 100%     40%   
                                    
DILUTED WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING   78,950   -   78,950   78,280   -   78,280 1%     1%   
                                    
PEGASYSTEMS INC.
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)
($ in thousands, except per share amounts)
 
                    % Increase
   Six Months Ended June 30, (Decrease)
   2015     2015  2014     2014           
   GAAP  Adj.  Non-GAAP  GAAP  Adj.  Non-GAAP GAAP      Non-GAAP  
TOTAL REVENUE  $315,937  $-  $315,937  $283,449  $2,642  $286,091 11%     10%   
 Software license   121,472   -   121,472   106,626   1,043   107,669 14%     13%   
 Maintenance   98,081   -   98,081   90,274   375   90,649 9%     8%   
 Services   96,384   -   96,384   86,549   1,224   87,773 11%     10%   
                                    
TOTAL COST OF REVENUE  $104,840  $(6,849)  $97,991  $92,604  $(5,682)  $86,922 13%     13%   
 Amortization of intangible assets (2)   2,690   (2,690)   -   3,284   (3,284)   -           
 Stock-based compensation   4,234   (4,234)   -   2,398   (2,398)   -           
 Indemnification claim and indirect tax settlements   (75)   75   -   -   -   -           
                                    
GROSS MARGIN %   67%       69%   67%       70% (51)  bp  (63)  bp
                                    
TOTAL OPERATING EXPENSES (3)  $193,938  $(10,431)  $183,507  $173,996  $(10,314)  $163,682 11%     12%   
 Amortization of intangible assets (2)   3,567   (3,567)   -   3,896   (3,896)   -           
 Stock-based compensation   10,680   (10,680)   -   6,055   (6,055)   -           
 Indemnification claim and indirect tax settlements   (3,855)   3,855   -                       
 Acquisition-related   39   (39)   -   363   (363)   -           
                                    
INCOME FROM OPERATIONS  $17,159  $17,280  $34,439  $16,849  $18,638  $35,487 2%     (3%)   
                                    
OPERATING MARGIN %   5%       11%   6%       12% (51)  bp  (150)  bp
                                    
INCOME TAX EFFECTS (4)  $4,722  $5,188  $9,910  $5,659  $6,212  $11,871 (17%)     (17%)   
                                    
NET INCOME  $9,039  $12,092  $21,131  $11,269  $12,426  $23,695 (20%)     (11%)   
                                    
DILUTED EARNINGS PER SHARE  $0.11  $0.16  $0.27  $0.14  $0.16  $0.30 (21%)     (10%)   
                                    
DILUTED WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING   78,771   -   78,771   78,563   -   78,563 0%     0%   

PEGASYSTEMS INC.
FOOTNOTES FOR RECONCILIATION OF
SELECTED GAAP MEASURES TO NON-GAAP MEASURES

(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures see disclosure under Discussion of Non-GAAP Financial Measures included earlier in this release and below. Our non-GAAP financial measures reflect adjustments based on the following items, as well as the related income tax effects:

Revenue: Business combination accounting rules require that we determine the fair value of the deferred revenue liability for contractual obligations assumed primarily from our acquisition of Antenna Software, Inc. and its subsidiaries ("Antenna") in October 2013. In post-acquisition reporting periods, we recognize revenue for the fair value of these contracts, when all the revenue recognition criteria are satisfied, instead of the revenue that would have been recognized by Antenna as an independent company. We add back the effect of the deferred revenue fair value adjustment in non-GAAP revenue to reflect the full amount of these revenues to provide a more complete comparison of the revenue guidance to peer companies. No adjustments were made to revenue for the first six months of 2015.

Amortization of intangible assets: We have excluded the amortization expense of intangible assets from our non-GAAP operating expenses and net earnings measures. Amortization of intangible assets is inconsistent in amount and frequency and is significantly affected by the timing and size of our acquisitions. Investors should note that the use of intangible assets contributed to our revenues earned during the periods presented and will contribute to our future period revenues as well. Amortization of intangible assets will recur in future periods.

Stock-based compensation expense: We have excluded stock-based compensation expense from our non-GAAP operating expenses and net earnings measures. Although stock-based compensation is a key incentive offered to our employees, and we believe such compensation contributed to the revenues earned during the periods presented and will contribute to the generation of future period revenues, we continue to evaluate our business performance excluding stock-based compensation expense.

Acquisition-related expenses: We have excluded the effect of acquisition-related expenses from our non-GAAP operating expenses and net earnings measures. We incurred direct and incremental expenses associated with the Antenna and 2014 acquisitions. These acquisition-related expenses were primarily professional fees to affect the acquisitions. We believe it is useful for investors to understand the effects of these items on our total operating expenses.

Indemnification claim and indirect tax settlements: We reached an agreement with the former shareholders of Antenna to release a portion of the funds held in escrow as security for their indemnification obligations to us in settlement of the outstanding indemnification claims. The settlement resulted in a benefit to cost of revenue and operating expenses in the first quarter of 2015. In addition, we favorably settled indirect tax liabilities related to the Antenna acquisition, which resulted in a benefit to operating expenses in the first quarter of 2015. We believe the benefit associated with the settlements of the Antenna indemnification claims and indirect tax liabilities is not representative of our ongoing business, and we have excluded the effects of these items from our non-GAAP operating results and net earnings measures.

(2) Estimated future annual amortization expense related to intangible assets as of June 30, 2015 is as follows:

(in thousands)  
Remainder of 2015 $5,954
2016  11,524
2017  9,826
2018  8,826
2019  3,034
2020 and thereafter  255
 Total intangible assets subject to amortization $39,419

(3) Below is a reconciliation of non-GAAP operating expenses:

                   
   Three Months Ended June 30,
   2015     2015  2014     2014
(in thousands)  GAAP  Adj.  Non-GAAP  GAAP  Adj.  Non-GAAP
Selling and marketing  $60,389  $(3,866)  $56,523  $56,342  $(2,971)  $53,371
 Amortization of intangible assets   1,534   (1,534)   -   1,499   (1,499)   -
 Stock-based compensation   2,332   (2,332)   -   1,472   (1,472)   -
Research and development  $31,372  $(2,265)  $29,107  $27,323  $(1,106)  $26,217
 Stock-based compensation   2,265   (2,265)   -   1,106   (1,106)   -
General and administrative  $10,214  $(2,005)  $8,209  $10,250  $(1,674)  $8,576
 Amortization of intangible assets   238   (238)   -   481   (481)   -
 Stock-based compensation   1,767   (1,767)   -   1,193   (1,193)   -
Acquisition-related  $13  $(13)  $-  $157  $(157)  $-
TOTAL OPERATING EXPENSES  $101,988  $(8,149)  $93,839  $94,072  $(5,908)  $88,164
                         
    Six Months Ended June 30,
    2015       2015   2014       2014
(in thousands)   GAAP   Adj.   Non-GAAP   GAAP   Adj.   Non-GAAP
Selling and marketing  $116,124  $(6,936)  $109,188  $102,149  $(5,431)  $96,718
 Amortization of intangible assets   3,065   (3,065)   -   2,995   (2,995)   -
 Stock-based compensation   3,878   (3,878)   -   2,436   (2,436)   -
 Indemnification claim and indirect tax settlements   (7)   7   -   -   -   -
Research and development  $61,216  $(3,691)  $57,525  $51,932  $(1,749)  $50,183
 Stock-based compensation   4,131   (4,131)   -   1,749   (1,749)   -
 Indemnification claim and indirect tax settlements   (440)   440   -   -   -   -
General and administrative  $16,559  $235  $16,794  $19,552  $(2,771)  $16,781
 Amortization of intangible assets   502   (502)   -   901   (901)   -
 Stock-based compensation   2,671   (2,671)   -   1,870   (1,870)   -
 Indemnification claim and indirect tax settlements   (3,408)   3,408   -   -   -   -
Acquisition-related  $39  $(39)  $-  $363  $(363)  $-
TOTAL OPERATING EXPENSES  $193,938  $(10,431)  $183,507  $173,996  $(10,314)  $163,682

(4) The GAAP income tax effects were calculated using an effective tax rate of 31.0% and 37.0% for the second quarter of 2015 and 2014, respectively. The non-GAAP income tax effects were calculated using an effective non-GAAP tax rate of 32.8% and 33.5% for the second quarter of 2015 and 2014, respectively.

The GAAP income tax effects were calculated using an effective tax rate of 34.3% and 33.4% for the first six months of 2015 and 2014, respectively. The non-GAAP income tax effects were calculated using an effective non-GAAP tax rate of 31.9% and 33.4% for the first six months of 2015 and 2014, respectively.

The difference between our GAAP and non-GAAP effective tax rates in the second quarter of 2015 primarily relates to the impact of non-GAAP income subjected to tax in higher tax rate jurisdictions during the period. The difference between our GAAP and non-GAAP effective tax rates in the first six months of 2015 primarily relates to the impact of higher non-GAAP income subjected to tax in lower tax rate jurisdictions during the period.

       
Pegasystems Inc.
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
    
   As of  As of
   June 30, 2015  December 31, 2014
Current Assets:      
 Cash and cash equivalents  $120,864  $114,585
 Marketable securities   106,068   96,631
  Total cash, cash equivalents, and marketable securities   226,932   211,216
 Trade accounts receivable, net   135,585   154,844
 Deferred income taxes   12,948   12,974
 Income taxes receivable   8,429   4,502
 Other current assets   12,536   9,544
  Total current assets   396,430   393,080
Property and equipment, net   33,855   30,156
Long-term deferred income taxes   70,765   69,258
Long-term other assets   3,016   2,783
Intangible assets, net   39,419   45,664
Goodwill   46,882   46,860
  Total assets  $590,367  $587,801
         
Current liabilities:        
 Accounts payable  $8,330  $4,752
 Accrued expenses   40,326   42,958
 Accrued compensation and related expenses   37,249   47,250
 Deferred revenue   143,001   134,672
  Total current liabilities   228,906   229,632
Income taxes payable   24,919   24,896
Long-term deferred revenue   16,214   20,859
Other long-term liabilities   16,751   17,709
  Total liabilities   286,790   293,096
Stockholders' equity:   303,577   294,705
  Total liabilities and stockholders' equity  $590,367  $587,801
         
Pegasystems Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
   Six Months Ended
   June 30,
   2015  2014
Operating activities:      
 Net income  $9,039  $11,269
 Adjustments to reconcile net income to cash provided by operating activities:        
  Excess tax benefits from equity awards and deferred income taxes   (3,805)   (3,425)
  Depreciation, amortization, foreign currency transaction loss (gain), and other non-cash items   15,738   11,589
  Stock-based compensation expense   14,914   8,453
  Change in operating assets and liabilities, net   3,513   46,049
 Cash provided by operating activities   39,399   73,935
 Cash used in investing activities   (18,212)   (18,008)
 Cash used in financing activities   (13,234)   (11,287)
Effect of exchange rates on cash and cash equivalents   (1,674)   2,240
Net increase in cash and cash equivalents   6,279   46,880
Cash and cash equivalents, beginning of period   114,585   80,231
Cash and cash equivalents, end of period  $120,864  $127,111
Pegasystems Inc.
Historical License and Cloud Backlog
(in thousands)
                  
   2015  2015  2014  2014 2014  2014  2013  2013
   Q2  Q1  Q4  Q3 Q2  Q1  Q4  Q3
 Total billed deferred license and cloud revenue   61,339   79,639   63,048   68,561  54,938   62,741   64,267   34,644
 Total off-balance sheet license and cloud commitments   330,043   294,412   301,409   265,309  298,658   270,243   283,099   248,403
TOTAL LICENSE AND CLOUD BACKLOG  $391,382  $374,051  $364,457  $333,870 $353,596  $332,984  $347,366  $283,047
Pegasystems Inc.
FY 2015 Reconciliation of Forward-Looking Guidance
($ in thousands, except per share amounts)
 
   Fiscal Year 2015
       
Net Income and Diluted EPS - GAAP basis  $38,943  $0.49
         
Adjustment to exclude amortization of intangible assets, net of tax   7,769   0.10
Adjustment to exclude stock-based compensation, net of tax   15,278   0.19
         
Net Income and Diluted EPS - Non-GAAP basis  $61,990  $0.78

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