Attached files
| file | filename |
|---|---|
| 8-K - ZAGG INC FORM 8-K - ZAGG Inc | form8k.htm |
| EX-99.2 - EXHIBIT 99.2 - ZAGG Inc | ex992.htm |
Exhibit 99.1
ZAGG INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par value)
(Unaudited)
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September 30,
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December 31,
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2012
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2011
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ASSETS
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Current assets
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Cash and cash equivalents
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$ | 16,344 | $ | 26,433 | ||||
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Accounts receivable, net of allowances of $3,074 in 2012 and $2,070 in 2011
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44,995 | 45,450 | ||||||
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Inventories
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34,445 | 29,622 | ||||||
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Prepaid expenses and other current assets
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4,264 | 1,593 | ||||||
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Income tax receivable
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1,888 | - | ||||||
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Deferred income tax assets
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6,728 | 5,132 | ||||||
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Total current assets
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108,664 | 108,230 | ||||||
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Investment in HzO
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3,398 | 4,879 | ||||||
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Property and equipment, net of accumulated depreciation at $2,708 in 2012 and $1,857 in 2011
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4,955 | 4,162 | ||||||
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Goodwill
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6,925 | 6,925 | ||||||
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Intangible assets, net of accumulated amortization at $11,351 in 2012 and $3,989 in 2011
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66,400 | 73,691 | ||||||
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Deferred income tax assets
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82 | 82 | ||||||
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Note receivable
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583 | 1,349 | ||||||
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Other assets
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3,014 | 3,010 | ||||||
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Total assets
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$ | 194,021 | $ | 202,328 | ||||
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities
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Accounts payable
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$ | 16,019 | $ | 16,013 | ||||
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Income taxes payable
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- | 4,294 | ||||||
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Accrued liabilities
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3,908 | 3,886 | ||||||
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Accrued wages and wage related expenses
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1,500 | 1,468 | ||||||
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Deferred revenue
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287 | 320 | ||||||
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Current portion of note payable
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- | 2,372 | ||||||
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Sales returns liability
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4,995 | 5,387 | ||||||
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Total current liabilities
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26,709 | 33,740 | ||||||
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Revolving line of credit
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3,534 | 23,332 | ||||||
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Noncurrent portion of note payable
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41,000 | 42,628 | ||||||
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Total liabilities
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71,243 | 99,700 | ||||||
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Stockholders' equity
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Common stock, $0.001 par value; 100,000 shares authorized;
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30,401 and 29,782 shares issued and outstanding, respectively
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30 | 30 | ||||||
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Additional paid-in capital
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76,247 | 70,248 | ||||||
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Accumulated other comprehensive income
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(193 | ) | (33 | ) | ||||
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Note receivable collateralized by stock
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(566 | ) | (566 | ) | ||||
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Retained earnings
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47,260 | 32,949 | ||||||
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Total stockholders' equity
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122,778 | 102,628 | ||||||
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Total liabilities and stockholders' equity
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$ | 194,021 | $ | 202,328 | ||||
1
ZAGG INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
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Three Months Ended
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Nine Months Ended
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September 30, 2012
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September 30, 2011
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September 30, 2012
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September 30, 2011
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Net sales
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$ | 59,828 | $ | 45,887 | $ | 176,943 | $ | 111,565 | ||||||||
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Cost of sales
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33,203 | 26,414 | 94,980 | 61,043 | ||||||||||||
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Gross profit
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26,625 | 19,473 | 81,963 | 50,522 | ||||||||||||
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Operating expenses:
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Advertising and marketing
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3,378 | 2,763 | 8,181 | 7,880 | ||||||||||||
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Selling, general and administrative
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13,707 | 10,305 | 38,237 | 26,719 | ||||||||||||
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Amortization of definite-lived intangibles
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2,422 | 1,791 | 7,313 | 2,198 | ||||||||||||
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Total operating expenses
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19,507 | 14,859 | 53,731 | 36,797 | ||||||||||||
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Income from operations
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7,118 | 4,614 | 28,232 | 13,725 | ||||||||||||
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Other income (expense):
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Interest expense
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(1,012 | ) | (1,399 | ) | (3,519 | ) | (1,570 | ) | ||||||||
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Loss from equity method investment in HzO
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(545 | ) | - | (1,481 | ) | - | ||||||||||
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Other income and (expense)
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(215 | ) | 126 | (237 | ) | 137 | ||||||||||
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Total other expense
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(1,772 | ) | (1,273 | ) | (5,237 | ) | (1,433 | ) | ||||||||
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Income before provision for income taxes
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5,346 | 3,341 | 22,995 | 12,292 | ||||||||||||
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Income tax provision
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(1,958 | ) | (1,241 | ) | (8,684 | ) | (4,335 | ) | ||||||||
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Net income
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3,388 | 2,100 | 14,311 | 7,957 | ||||||||||||
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Net loss attributable to noncontrolling interest
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- | 148 | - | 345 | ||||||||||||
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Net income attributable to stockholders
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$ | 3,388 | $ | 2,248 | $ | 14,311 | $ | 8,302 | ||||||||
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Earnings per share attributable to stockholders:
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Basic earnings per share
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$ | 0.11 | $ | 0.07 | $ | 0.47 | $ | 0.31 | ||||||||
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Diluted earnings per share
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$ | 0.11 | $ | 0.07 | $ | 0.45 | $ | 0.29 | ||||||||
2
ZAGG INC AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION TO GAAP
(Unaudited)
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Unaudited Supplemental Data
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The following information is not a financial measure under generally accepted accounting principals (GAAP). In addition, it should not be construed as an
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alternative to any other measures of performance determined in accordance with GAAP, or as an indicator of our operating performance, liquidity or cash
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flows generated by operating, investing and financing activities as there may be significant factors or trends that it fails to address. We present this financial
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information because we believe that it is helpful to some investors as a measure of our operations. We caution investors that non-GAAP financial information,
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by its nature, departs from traditional accounting conventions; accordingly, its use can make it difficult to compare our results with our results from other
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reporting periods and with the results of other companies.
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Adjusted EBITDA Reconciliation
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Three months ended
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Nine months ended
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September 30, 2012
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September 30, 2011
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September 30, 2012
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September 30, 2011
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Net income attributable to stockholders in accordance with GAAP
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$ | 3,388 | $ | 2,248 | $ | 14,311 | $ | 8,302 | ||||||||||||
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Adjustments:
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| a. |
Stock based compensation expense
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2,087 | 406 | 4,922 | 2,674 | |||||||||||||||
| b. |
Depreciation and amortization
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2,823 | 2,400 | 8,506 | 3,463 | |||||||||||||||
| c. |
iFrogz acquisition expenses
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- | 119 | - | 1,947 | |||||||||||||||
| d. |
iFrogz inventory fair value write up
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- | 3,063 | - | 3,642 | |||||||||||||||
| e. |
Provision for income taxes
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1,958 | 1,241 | 8,684 | 4,335 | |||||||||||||||
| f. |
Impairment of note receivable
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- | 1,071 | - | 1,071 | |||||||||||||||
| g. |
Other expense
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1,772 | 1,273 | 5,237 | 1,433 | |||||||||||||||
| h. |
Noncontrolling interest
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- | (148 | ) | - | (345 | ) | |||||||||||||
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Adjusted EBITDA
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$ | 12,028 | $ | 11,673 | $ | 41,660 | $ | 26,522 | ||||||||||||
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Non-GAAP Reconciliation
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Three months ended
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Nine months ended
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September 30, 2012
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September 30, 2011
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September 30, 2012
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September 30, 2011
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Net income attributable to stockholders in accordance with GAAP
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$ | 3,388 | $ | 2,248 | $ | 14,311 | $ | 8,302 | ||||||||||||
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Adjustments:
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| a. |
Stock based compensation expense
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2,087 | 406 | 4,922 | 2,674 | |||||||||||||||
| c. |
Depreciation and amortization
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2,823 | 2,400 | 8,506 | 3,463 | |||||||||||||||
| d. |
iFrogz acquisition expenses
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- | 119 | - | 1,947 | |||||||||||||||
| e. |
iFrogz inventory fair value write up
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- | 3,063 | - | 3,642 | |||||||||||||||
| f. |
Impairment of note receivable
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- | 1,071 | - | 1,071 | |||||||||||||||
| g. |
Other expense
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1,772 | 1,273 | 5,237 | 1,433 | |||||||||||||||
| h. |
Noncontrolling interest
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- | (148 | ) | - | (345 | ) | |||||||||||||
| i. |
CEO departure expense
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910 | - | 910 | - | |||||||||||||||
| j. |
Income tax effects
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(2,781 | ) | (3,122 | ) | (7,392 | ) | (5,332 | ) | |||||||||||
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Non-GAAP net income attributable to stockholders
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$ | 8,199 | $ | 7,310 | $ | 26,494 | $ | 16,855 | ||||||||||||
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Non-GAAP EPS attributable to stockholders
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$ | 0.26 | $ | 0.23 | $ | 0.84 | $ | 0.60 | ||||||||||||
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Weighted average number of shares outstanding - diluted
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31,734 | 31,375 | 31,647 | 28,308 | ||||||||||||||||
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Non-GAAP Reconciliation
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Three months ended | |||||||||||||||||||
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June 30, 2012
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Net income attributable to stockholders in accordance with GAAP
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$ | 5,812 | ||||||||||||||||||
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Adjustments:
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| a. |
Stock based compensation expense
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1,494 | ||||||||||||||||||
| b. |
Depreciation and amortization
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2,862 | ||||||||||||||||||
| c. |
Other expense
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1,235 | ||||||||||||||||||
| d. |
Income tax effects
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(2,189 | ) | |||||||||||||||||
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Non-GAAP net income attributable to stockholders
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$ | 9,214 | ||||||||||||||||||
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Non-GAAP EPS attributable to stockholders
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$ | 0.29 | ||||||||||||||||||
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Weighted average number of shares outstanding - diluted
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31,738 | |||||||||||||||||||
3