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| Q114 Reconciliation of GAAP to Non-GAAP ADVENT SOFTWARE, INC. RECONCILIATION OF SELECTED CONTINUING OPERATIONS GAAP MEASURES TO NON-GAAP MEASURES (In thousands, except per share data) (Unaudited) To supplement our condensed consolidated financial statements presented in accordance with generally accepted accounting principles in the United States of America (or GAAP), Advent uses non-GAAP measures of continuing operations’ gross margin, operating income, net income and net income per share, which are adjusted to exclude certain costs, expenses and income we believe appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future. These adjustments to our current period GAAP results are made with the intent of providing both management and investor a more complete understanding of Advent’s underlying operational results and trends and our marketplace performance. In addition, these non-GAAP results are among the information management uses as a basis for our planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for results prepared in accordance with GAAP. Three Months Ended March 31 2014 2013 Amount % of Net Revenues Amount % of Net Revenues GAAP gross margin $68,322 70.6% $64,011 69.3% Amortization of acquired intangible 1,186 1,898 Stock-based compensation 1,217 870 Non-GAAP operating gross margin $70,725 73.1% $66,779 72.3% GAAP operating income $19,313 20.0% $16,213 17.5% Amortization of acquired intangible 2,095 2,855 Stock-based compensation 7,628 5,017 Restructuring charges 174 2,315 Non-GAAP net income $29,210 30.2% $26,400 28.5% GAAP net income $10,907 $12,057 Amortization of acquired intangibles 2,095 2,855 Stock-based compensation 7,628 5,017 Restructuring charges 174 2,315 Income tax adjustment (1) (3,264) (5,281) Non-GAAP net income $17,540 $27,785 GAAP net income $10,907 $12,057 Net interest 2,136 458 Provision for income taxes 6,181 3,853 Depreciation expense 2,766 2,945 Amortization expense 2,709 3,455 Stock-based compensation 7,628 5,017 Adjusted EBITDA $32,327 $27,785 Diluted net income per share $0.20 $0.23 GAAP $0.33 $0.32 Shares used to compute diluted net income per share 53,807 52,598 (1) The estimated non-GAAP effective tax rate was 35% for the three months ended March 31,2014 and 2013, respectively, and has been used to adjust the provision for income taxes for non-GAAP net income and non-GAAP diluted net income per share purposes.10 |