S1 Corporation Reports Third Quarter 2009 Results
Revenue Increased 3% and Adjusted EBITDA Increased 11%
in the Third Quarter Compared to the Same Period in 2008
Norcross, Georgia, November 5, 2009 -- S1 Corporation (Nasdaq:SONE), a leading global provider of customer interaction financial and payment solutions, today announced financial results for the third quarter of 2009:
| n | Total revenue in the third quarter of 2009 increased three percent to $60.3 million from $58.6 million in the third quarter of 2008. Total revenue in the nine months ended September 30, 2009 increased six percent to $179.5 million from $169.8 million in the nine months ended September 30, 2008. |
| n | GAAP earnings were $6.9 million or $0.12 per share (diluted) in the third quarter of 2009 compared to GAAP earnings of $6.2 million or $0.11 per share (diluted) in the third quarter of 2008. GAAP earnings were $20.5 million or $0.37 per share (diluted) in the nine months ended September 30, 2009, a $0.09 increase over GAAP earnings of $16.5 million or $0.28 per share (diluted) in the nine months ended September 30, 2008. These figures include a stock based compensation benefit of $139 thousand and an expense of $412 thousand in the third quarter of 2009 and 2008, respectively, and an expense of $421 thousand and $4.6 million in the nine months ended September 30, 2009 and 2008, respectively. |
| n | Adjusted EBITDA in the third quarter of 2009 was $11.7 million compared to $10.5 million in the third quarter of 2008. Adjusted EBITDA in the nine months ended September 30, 2009 was $33.9 million compared to $32.5 million in the nine months ended September 30, 2008. Adjusted EBITDA does not include stock based compensation expense and is described below (1) and reconciled to GAAP Net income in Tables 4, 5 and 6. |
| n | Total revenue from international operations in the third quarter of 2009 increased one percent to $17.8 million from $17.7 million in the third quarter of 2008. Total revenue from international operations in the nine months ended September 30, 2009 increased six percent to $51.3 million from $48.3 million in the nine months ended September 30, 2008. |
| n | Under a previously announced stock repurchase program, the Company repurchased 755 thousand shares of its common stock for $5.0 million during the third quarter of 2009. The Company ended the third quarter of 2009 with $70.9 million in cash, cash equivalents and short-term investments. |
| n | The Company expects to generate approximately $25 to $26 million in revenue from State Farm in 2010. |
| n | The Company reaffirms its full year guidance of $240 to $245 million in revenue and $47 to $50 million in Adjusted EBITDA. |
“I am pleased that we were able to post another quarter of year-over-year growth in both revenue and Adjusted EBITDA despite the challenging economic environment,” said Johann Dreyer, Chief Executive Officer of S1. “Although financial institutions are proceeding very cautiously with making investment decisions, we continue to see excellent sales opportunities around the world, particularly with our payments and cash management offerings. I am also very excited about the positive feedback we continue to receive on our new Internet banking platform.”
(1) Adjusted EBITDA
See Tables 4, 5 and 6 for reconciliations of Adjusted EBITDA to GAAP Net income.
This press release includes references to Adjusted EBITDA, a non-GAAP financial measure, the most directly comparable GAAP equivalent of which is Net income. We define Adjusted EBITDA as Net income less net interest income, plus income taxes, depreciation, amortization of intangibles, and stock-based compensation expense. A reconciliation of our non-GAAP financial measure to the most directly comparable financial measure is detailed in the reconciliation of GAAP to non-GAAP financial measures in Tables 4, 5 and 6. We believe that the presentation of this non-GAAP financial measure provides useful information to investors regarding our results of operations.
We believe that excluding depreciation, amortization, stock-based compensation expense, net interest income and income tax expense provides supplemental information and an alternative presentation useful to investors' understanding of the Company's core operating results and trends. Not only are depreciation and amortization expenses based on historical costs of assets that may have little bearing on present or future replacement costs, but they are also based on management estimates of remaining useful lives. Additionally, while stock-based compensation is an important part of overall compensation expense, a portion of our stock-based compensation expense is the result of cash-settled stock appreciation rights that are revalued each quarter for GAAP earnings based on the closing price of the Company's stock on the last day of the quarter. Consequently, fluctuations in our stock price can have a significant impact on the Company's reported GAAP earnings. Additionally, it is possible that the Company may begin recording income tax provisions for GAAP earnings despite being able to reduce taxes payable through the potential use of net operating loss carry forwards and other tax credits.
Although we believe, for the foregoing reasons, that our presentation of a non-GAAP financial measure provides useful supplemental information to investors regarding our results of operations, our non-GAAP financial results should only be considered in addition to, and not as a substitute for or superior to, our financial measures prepared in accordance with GAAP.
Use of non-GAAP financial measures is subject to inherent limitations because they do not include all the expenses that must be included under GAAP and because they involve the exercise of judgment of which charges should properly be excluded from the non-GAAP financial measure. Management accounts for these limitations by not relying exclusively on non-GAAP financial measures, but only using such information to supplement GAAP financial results. We urge investors not to consider non-GAAP financial measures as a substitute for, or superior to, any measure of financial performance prepared in accordance with GAAP. Our non-GAAP financial measure may be different from such measures used by other companies.
Adjusted EBITDA is not a measure of liquidity calculated in accordance with accounting principles generally accepted in the United States, and should be viewed as a supplement to -- not a substitute for -- our results of operations presented on the basis of accounting principles generally accepted in the United States. Adjusted EBITDA does not purport to represent cash flow provided by, or used in, operating activities as defined by accounting principles generally accepted in the United States. Our statement of cash flows presents our cash flow activity in accordance with accounting principles generally accepted in the United States. Furthermore, Adjusted EBITDA is not necessarily comparable to similarly-titled measures reported by other companies.
We believe Adjusted EBITDA is used by and is useful to investors and other users of our financial statements in evaluating our operating performance because it provides them with an additional tool to compare business performance across companies and across periods. We believe that Adjusted EBITDA is widely used by investors to measure a company's operating performance without regard to items such as interest expense, taxes, depreciation and amortization, and stock-based compensation expense which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired.
Our management uses Adjusted EBITDA as a measure of operating performance to assist in comparing performance from period to period on a consistent basis; as a measure for planning and forecasting overall expectations and for evaluating actual results against such expectations; and in communications with the Board of Directors, stockholders, analysts and investors concerning our financial performance.
Conference Call Information
Company management will host a conference call for interested parties to discuss its third quarter results on Friday, November 6, 2009, at 8:30 a.m. ET. A webcast of the call will be available through the Company's website, www.s1.com. The conference call will contain forward-looking statements and other material information. A replay of the call will be available for two weeks following the call on the Company's website.
About S1 Corporation
Leading banks, credit unions, retailers, and processors need technology that adapts to the complex and challenging needs of their businesses. These organizations want solutions that can respond quickly to changes in the marketplace and help grow their businesses. For more than 20 years, S1 Corporation (NASDAQ: SONE) has been a leader in developing software products that offer flexibility and reliability. Over 3,000 organizations worldwide depend on S1 for payments, online banking, mobile banking, voice banking, branch banking and lending solutions that deliver a competitive advantage. www.s1.com
Forward Looking Statements
This press release contains forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act. These statements include statements with respect to our financial condition, results of operations and business. The words "believes," "expects," "may," "will," "should," "projects," "contemplates," "anticipates," "forecasts," "intends" or similar terminology identify forward-looking statements. Forward-looking statements may include projections of our revenue, expenses, Adjusted EBITDA, capital expenditures, earnings per share, product development projects, future economic performance or management objectives. These statements, including without limitation statements regarding expected revenue from State Farm, are based on our beliefs as well as assumptions made using information currently available to us. Because these statements reflect our current views concerning future events, they involve risks, uncertainties and assumptions. Therefore, actual results may differ significantly from the results discussed in the forward-looking statements. The risk factors included in our reports filed with the Securities and Exchange Commission (and available on our web site at www.s1.com or the SEC's web site at www.sec.gov) provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. Except as provided by law, we undertake no obligation to update any forward-looking statement for any reason, even if new information becomes available.
Investor Contact:
Paul M. Parrish
Chief Financial Officer
404.923.3500
paul.parrish@s1.com
Consolidated Statements of Operations
(In thousands, except share and per share data)
| | | Three Months Ended | | | Nine Months Ended | |
| | | 9/30/2009 | | | 9/30/2008 | | | 9/30/2009 | | | 9/30/2008 | |
| | | | | | | | | | | | | |
| Revenue: | | | | | | | | | | | | |
| Software licenses | | $ | 10,225 | | | $ | 9,208 | | | $ | 34,154 | | | $ | 26,860 | |
| Support and maintenance | | | 13,472 | | | | 12,259 | | | | 39,569 | | | | 36,557 | |
| Professional services | | | 25,787 | | | | 24,939 | | | | 72,952 | | | | 69,797 | |
| Data center | | | 10,853 | | | | 12,243 | | | | 32,792 | | | | 36,596 | |
| Total revenue | | | 60,337 | | | | 58,649 | | | | 179,467 | | | | 169,810 | |
| | | | | | | | | | | | | | | | | |
| Operating expenses: | | | | | | | | | | | | | | | | |
| Cost of software licenses (1) | | | 623 | | | | 938 | | | | 2,735 | | | | 3,075 | |
| Cost of professional services, support and maintenance (1) | | | 19,200 | | | | 19,422 | | | | 55,997 | | | | 54,947 | |
| Cost of data center (1) | | | 7,079 | | | | 6,743 | | | | 21,169 | | | | 19,701 | |
| Selling and marketing | | | 7,500 | | | | 8,360 | | | | 23,751 | | | | 25,919 | |
| Product development | | | 8,996 | | | | 7,658 | | | | 26,141 | | | | 21,440 | |
| General and administrative | | | 5,578 | | | | 6,094 | | | | 17,581 | | | | 18,912 | |
| Depreciation and amortization of intangible assets | | | 2,298 | | | | 2,257 | | | | 7,298 | | | | 6,685 | |
| Total operating expenses | | | 51,274 | | | | 51,472 | | | | 154,672 | | | | 150,679 | |
| | | | | | | | | | | | | | | | | |
| Operating income | | | 9,063 | | | | 7,177 | | | | 24,795 | | | | 19,131 | |
| Interest and other (expense) income, net | | | (516 | ) | | | 296 | | | | (1,034 | ) | | | 714 | |
| Income tax expense | | | (1,637 | ) | | | (1,282 | ) | | | (3,276 | ) | | | (3,328 | ) |
| Net income | | $ | 6,910 | | | $ | 6,191 | | | $ | 20,485 | | | $ | 16,517 | |
| | | | | | | | | | | | | | | | | |
| Earnings per share: | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.13 | | | $ | 0.11 | | | $ | 0.38 | | | $ | 0.29 | |
| Diluted | | $ | 0.12 | | | $ | 0.11 | | | $ | 0.37 | | | $ | 0.28 | |
| | | | | | | | | | | | | | | | | |
| Weighted average common shares outstanding - basic | | | 52,598,922 | | | | 56,559,777 | | | | 52,766,275 | | | | 56,577,987 | |
| Weighted average common shares outstanding - diluted | | | 53,452,888 | | | | 57,526,966 | | | | 53,494,437 | | | | 57,330,269 | |
____________________
(1) Excludes charges for depreciation. Cost of software licenses includes amortization of acquired technology
of $400 thousand and $700 thousand for the three months ended September 30, 2009 and 2008, respectively,
and $1.4 million and $2.1 million for the nine months ended September 30, 2009 and 2008, respectively.
Consolidated Balance Sheets
(In thousands, except share data)
| | | September 30, | | | December 31, | |
| | | 2009 | | | 2008 | |
| | | | | | | |
| Assets | | | | | | |
| Current assets: | | | | | | |
| Cash and cash equivalents | | $ | 67,407 | | | $ | 63,840 | |
| Accounts receivable, net | | | 56,873 | | | | 42,561 | |
| Prepaid expenses | | | 5,004 | | | | 5,123 | |
| Other current assets | | | 5,527 | | | | 3,575 | |
| Total current assets | | | 134,811 | | | | 115,099 | |
| Property and equipment, net | | | 23,207 | | | | 23,015 | |
| Intangible assets, net | | | 5,392 | | | | 7,585 | |
| Goodwill, net | | | 126,618 | | | | 124,362 | |
| Other assets | | | 9,274 | | | | 8,625 | |
| Total assets | | $ | 299,302 | | | $ | 278,686 | |
| | | | | | | | | |
| Liabilities and Stockholders' Equity | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Accounts payable | | $ | 2,079 | | | $ | 1,366 | |
| Accrued compensation and benefits | | | 12,930 | | | | 16,147 | |
| Accrued restructuring | | | 2,158 | | | | 2,323 | |
| Accrued other expenses | | | 9,440 | | | | 10,271 | |
| Deferred revenues | | | 30,984 | | | | 25,271 | |
| Current portion of debt obligation | | | 2,004 | | | | 3,917 | |
| Total current liabilities | | | 59,595 | | | | 59,295 | |
| Debt obligation, excluding current portion | | | 5,188 | | | | 6,196 | |
| Accrued restructuring, excluding current portion | | | 1,901 | | | | 3,443 | |
| Other liabilities | | | 1,594 | | | | 1,012 | |
| Total liabilities | | $ | 68,278 | | | $ | 69,946 | |
| | | | | | | | | |
| Stockholders' equity: | | | | | | | | |
| Preferred stock | | | 10,000 | | | | 10,000 | |
| Common stock | | | 522 | | | | 528 | |
| Additional paid-in capital | | | 1,790,141 | | | | 1,791,924 | |
| Accumulated deficit | | | (1,567,472 | ) | | | (1,587,957 | ) |
| Accumulated other comprehensive loss | | | (2,167 | ) | | | (5,755 | ) |
| Total stockholders' equity | | | 231,024 | | | | 208,740 | |
| Total liabilities and stockholders' equity | | $ | 299,302 | | | $ | 278,686 | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Preferred shares issued and outstanding | | | 749,064 | | | | 749,064 | |
| Common shares issued and outstanding | | | 52,203,371 | | | | 52,799,310 | |
Consolidated Statements of Cash Flows
| | | Three Months Ended | | | Nine Months Ended | |
| | | 9/30/2009 | | | 9/30/2008 | | | 9/30/2009 | | | 9/30/2008 | |
| | | | | | | | | | | | | |
| Cash flows from operating activities: | | | | | | | | | | | | |
| Net income | | $ | 6,910 | | | $ | 6,191 | | | $ | 20,485 | | | $ | 16,517 | |
| Adjustments to reconcile net income to net cash | | | | | | | | | | | | | | | | |
| provided by operating activities: | | | | | | | | | | | | | | | | |
| Depreciation and amortization | | | 2,735 | | | | 2,917 | | | | 8,650 | | | | 8,752 | |
| Provision for doubtful accounts receivable and billing adjustments | | | (257 | ) | | | 43 | | | | (534 | ) | | | (342 | ) |
| Deferred income tax | | | 209 | | | | - | | | | 240 | | | | - | |
| Stock based compensation (benefit) expense | | | (139 | ) | | | 412 | | | | 421 | | | | 4,605 | |
| Changes in assets and liabilities | | | | | | | | | | | | | | | | |
| (Increase) decrease in accounts receivable | | | (285 | ) | | | 5,017 | | | | (11,730 | ) | | | (3,610 | ) |
| (Increase) decrease in prepaid expenses and other assets | | | (677 | ) | | | 1,156 | | | | (1,962 | ) | | | 1,263 | |
| (Decrease) increase in accounts payable | | | (735 | ) | | | (1,023 | ) | | | 646 | | | | 134 | |
| (Decrease) increase in income taxes payable | | | (1,565 | ) | | | 870 | | | | (938 | ) | | | 2,099 | |
| (Decrease) increase in accrued expenses and other liabilities | | | (824 | ) | | | 1,719 | | | | (1,557 | ) | | | (290 | ) |
| (Decrease) increase in deferred revenues | | | (2,758 | ) | | | (2,420 | ) | | | 5,429 | | | | 2,053 | |
| Net cash provided by operating activities | | | 2,614 | | | | 14,882 | | | | 19,150 | | | | 31,181 | |
| Cash flows from investing activities: | | | | | | | | | | | | | | | | |
| Maturities of investment securities | | | 1,587 | | | | 9,203 | | | | 2,504 | | | | 20,653 | |
| Purchases of investment securities | | | (5,224 | ) | | | (2,465 | ) | | | (5,224 | ) | | | (3,447 | ) |
| Amounts released in escrow related to sale of business | | | - | | | | - | | | | - | | | | 3,712 | |
| Purchases of property, equipment and technology | | | (1,858 | ) | | | (2,556 | ) | | | (6,364 | ) | | | (7,273 | ) |
| Net cash (used in) provided by investing activities | | | (5,495 | ) | | | 4,182 | | | | (9,084 | ) | | | 13,645 | |
| Cash flows from financing activities: | | | | | | | | | | | | | | | | |
| Proceeds from exercise of employee stock options | | | 50 | | | | 30 | | | | 192 | | | | 858 | |
| Payments on capital leases and debt obligations | | | (376 | ) | | | (917 | ) | | | (2,921 | ) | | | (2,785 | ) |
| Repurchase and retirement of common stock | | | (4,971 | ) | | | (8,428 | ) | | | (4,971 | ) | | | (10,167 | ) |
| Net cash used in financing activities | | | (5,297 | ) | | | (9,315 | ) | | | (7,700 | ) | | | (12,094 | ) |
| Effect of exchange rate changes on cash and cash equivalents | | | 378 | | | | (1,796 | ) | | | 1,201 | | | | (2,357 | ) |
| Net (decrease) increase in cash and cash equivalents | | | (7,800 | ) | | | 7,953 | | | | 3,567 | | | | 30,375 | |
| Cash and cash equivalents at beginning of period | | | 75,207 | | | | 67,433 | | | | 63,840 | | | | 45,011 | |
| Cash and cash equivalents at end of period | | $ | 67,407 | | | $ | 75,386 | | | $ | 67,407 | | | $ | 75,386 | |
S1 Corporation
Consolidated Statements of Operations
(In thousands)
(Unaudited)
| | | Three Months Ended | | | Nine Months Ended | |
| | | 9/30/2009 | | | 9/30/2008 | | | 9/30/2009 | | | 9/30/2008 | |
| | | | | | | | | | | | | |
| Revenue: | | | | | | | | | | | | |
| Software licenses | | $ | 10,225 | | | $ | 9,208 | | | $ | 34,154 | | | $ | 26,860 | |
| Support and maintenance | | | 13,472 | | | | 12,259 | | | | 39,569 | | | | 36,557 | |
| Professional services | | | 25,787 | | | | 24,939 | | | | 72,952 | | | | 69,797 | |
| Data center | | | 10,853 | | | | 12,243 | | | | 32,792 | | | | 36,596 | |
| Total revenue | | | 60,337 | | | | 58,649 | | | | 179,467 | | | | 169,810 | |
| | | | | | | | | | | | | | | | | |
| Operating expenses: | | | | | | | | | | | | | | | | |
| Cost of software licenses | | | 623 | | | | 938 | | | | 2,735 | | | | 3,075 | |
| Cost of professional services, support and maintenance | | | 19,200 | | | | 19,422 | | | | 55,997 | | | | 54,947 | |
| Cost of data center | | | 7,079 | | | | 6,743 | | | | 21,169 | | | | 19,701 | |
| Selling and marketing | | | 7,500 | | | | 8,360 | | | | 23,751 | | | | 25,919 | |
| Product development | | | 8,996 | | | | 7,658 | | | | 26,141 | | | | 21,440 | |
| General and administrative | | | 5,578 | | | | 6,094 | | | | 17,581 | | | | 18,912 | |
| Depreciation and amortization of intangible assets | | | 2,298 | | | | 2,257 | | | | 7,298 | | | | 6,685 | |
| Total operating expenses (1) | | | 51,274 | | | | 51,472 | | | | 154,672 | | | | 150,679 | |
| | | | | | | | | | | | | | | | | |
| Operating income | | | 9,063 | | | | 7,177 | | | | 24,795 | | | | 19,131 | |
| Interest and other (expense) income, net | | | (516 | ) | | | 296 | | | | (1,034 | ) | | | 714 | |
| Income tax expense | | | (1,637 | ) | | | (1,282 | ) | | | (3,276 | ) | | | (3,328 | ) |
| Net income | | $ | 6,910 | | | $ | 6,191 | | | $ | 20,485 | | | $ | 16,517 | |
| | | | | | | | | | | | | | | | | |
| Reconciliation to Adjusted EBITDA: | | | | | | | | | | | | | | | | |
| Net income | | $ | 6,910 | | | $ | 6,191 | | | $ | 20,485 | | | $ | 16,517 | |
| Interest and other (expense) income, net | | | 516 | | | | (296 | ) | | | 1,034 | | | | (714 | ) |
| Income tax expense | | | 1,637 | | | | 1,282 | | | | 3,276 | | | | 3,328 | |
| Depreciation | | | 2,022 | | | | 1,974 | | | | 6,457 | | | | 5,837 | |
| Amortization | | | 713 | | | | 943 | | | | 2,193 | | | | 2,915 | |
| Stock based compensation (benefit) expense | | | (139 | ) | | | 412 | | | | 421 | | | | 4,605 | |
| Adjusted EBITDA | | $ | 11,659 | | | $ | 10,506 | | | $ | 33,866 | | | $ | 32,488 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| (1) Includes stock based compensation (benefit) expense of: | | | | | | | | | | | | | | | | |
| Cost of professional services, support and maintenance | | $ | 6 | | | $ | 31 | | | $ | 67 | | | $ | 104 | |
| Cost of data center | | | 35 | | | | 29 | | | | 78 | | | | 76 | |
| Selling and marketing | | | (364 | ) | | | (5 | ) | | | (437 | ) | | | 1,601 | |
| Product development | | | 36 | | | | 15 | | | | 142 | | | | 599 | |
| General and administrative | | | 148 | | | | 342 | | | | 571 | | | | 2,225 | |
| Stock based compensation (benefit) expense | | $ | (139 | ) | | $ | 412 | | | $ | 421 | | | $ | 4,605 | |
| | | Three Months Ended | | | Nine Months Ended | |
| | | 9/30/2009 | | | 9/30/2008 | | | 9/30/2009 | | | 9/30/2008 | |
| | | | | | | | | | | | | |
| Revenue: | | | | | | | | | | | | |
| Software licenses | | $ | 2,478 | | | $ | 1,696 | | | $ | 6,948 | | | $ | 5,722 | |
| Support and maintenance | | | 4,792 | | | | 4,200 | | | | 14,459 | | | | 12,405 | |
| Professional services | | | 18,850 | | | | 19,741 | | | | 55,165 | | | | 54,935 | |
| Data center | | | 6,957 | | | | 7,269 | | | | 21,183 | | | | 21,404 | |
| Total revenue | | | 33,077 | | | | 32,906 | | | | 97,755 | | | | 94,466 | |
| | | | | | | | | | | | | | | | | |
| Operating expenses: | | | | | | | | | | | | | | | | |
| Cost of software licenses | | | 150 | | | | 236 | | | | 663 | | | | 988 | |
| Cost of professional services, support and maintenance | | | 10,446 | | | | 11,714 | | | | 32,767 | | | | 33,345 | |
| Cost of data center | | | 3,995 | | | | 4,015 | | | | 12,052 | | | | 11,695 | |
| Selling and marketing | | | 2,835 | | | | 3,643 | | | | 9,853 | | | | 11,614 | |
| Product development | | | 5,209 | | | | 4,584 | | | | 15,891 | | | | 13,154 | |
| General and administrative | | | 2,620 | | | | 3,202 | | | | 8,559 | | | | 10,141 | |
| Depreciation and amortization of intangible assets | | | 1,168 | | | | 1,127 | | | | 3,705 | | | | 3,392 | |
| Total operating expenses (1) | | | 26,423 | | | | 28,521 | | | | 83,490 | | | | 84,329 | |
| | | | | | | | | | | | | | | | | |
| Operating income | | $ | 6,654 | | | $ | 4,385 | | | $ | 14,265 | | | $ | 10,137 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Reconciliation to Adjusted EBITDA: | | | | | | | | | | | | | | | | |
| Operating income | | $ | 6,654 | | | $ | 4,385 | | | $ | 14,265 | | | $ | 10,137 | |
| Depreciation | | | 1,168 | | | | 1,127 | | | | 3,705 | | | | 3,392 | |
| Amortization | | | 62 | | | | 62 | | | | 184 | | | | 269 | |
| Stock based compensation (benefit) expense | | | (152 | ) | | | 214 | | | | 128 | | | | 2,934 | |
| Adjusted EBITDA | | $ | 7,732 | | | $ | 5,788 | | | $ | 18,282 | | | $ | 16,732 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| (1) Includes stock based compensation (benefit) expense of: | | | | | | | | | | | | | | | | |
| Cost of professional services, support and maintenance | | $ | 40 | | | $ | 51 | | | $ | 117 | | | $ | 89 | |
| Cost of data center | | | 11 | | | | 7 | | | | 19 | | | | 30 | |
| Selling and marketing | | | (379 | ) | | | (36 | ) | | | (518 | ) | | | 1,092 | |
| Product development | | | (21 | ) | | | (29 | ) | | | 5 | | | | 478 | |
| General and administrative | | | 197 | | | | 221 | | | | 505 | | | | 1,245 | |
| Stock based compensation (benefit) expense | | $ | (152 | ) | | $ | 214 | | | $ | 128 | | | $ | 2,934 | |
Postilion Segment
Statements of Operations
(In thousands)
(Unaudited)
| | | Three Months Ended | | | Nine Months Ended | |
| | | 9/30/2009 | | | 9/30/2008 | | | 9/30/2009 | | | 9/30/2008 | |
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| Revenue: | | | | | | | | | | | | |
| Software licenses | | $ | 7,747 | | | $ | 7,512 | | | $ | 27,206 | | | $ | 21,138 | |
| Support and maintenance | | | 8,680 | | | | 8,059 | | | | 25,110 | | | | 24,152 | |
| Professional services | | | 6,937 | | | | 5,198 | | | | 17,787 | | | | 14,862 | |
| Data center | | | 3,896 | | | | 4,974 | | | | 11,609 | | | | 15,192 | |
| Total revenue | | | 27,260 | | | | 25,743 | | | | 81,712 | | | | 75,344 | |
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| Operating expenses: | | | | | | | | | | | | | | | | |
| Cost of software licenses | | | 473 | | | | 702 | | | | 2,072 | | | | 2,087 | |
| Cost of professional services, support and maintenance | | | 8,754 | | | | 7,708 | | | | 23,230 | | | | 21,602 | |
| Cost of data center | | | 3,084 | | | | 2,728 | | | | 9,117 | | | | 8,006 | |
| Selling and marketing | | | 4,665 | | | | 4,717 | | | | 13,898 | | | | 14,305 | |
| Product development | | | 3,787 | | | | 3,074 | | | | 10,250 | | | | 8,286 | |
| General and administrative | | | 2,958 | | | | 2,892 | | | | 9,022 | | | | 8,771 | |
| Depreciation and amortization of intangible assets | | | 1,130 | | | | 1,130 | | | | 3,593 | | | | 3,293 | |
| Total operating expenses (1) | | | 24,851 | | | | 22,951 | | | | 71,182 | | | | 66,350 | |
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| Operating income | | $ | 2,409 | | | $ | 2,792 | | | $ | 10,530 | | | $ | 8,994 | |
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| Reconciliation to Adjusted EBITDA: | | | | | | | | | | | | | | | | |
| Operating income | | $ | 2,409 | | | $ | 2,792 | | | $ | 10,530 | | | $ | 8,994 | |
| Depreciation | | | 854 | | | | 847 | | | | 2,752 | | | | 2,445 | |
| Amortization | | | 651 | | | | 881 | | | | 2,009 | | | | 2,646 | |
| Stock based compensation expense | | | 13 | | | | 198 | | | | 293 | | | | 1,671 | |
| Adjusted EBITDA | | $ | 3,927 | | | $ | 4,718 | | | $ | 15,584 | | | $ | 15,756 | |
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| (1) Includes stock based compensation expense of: | | | | | | | | | | | | | | | | |
| Cost of professional services, support and maintenance | | $ | (34 | ) | | $ | (20 | ) | | $ | (50 | ) | | $ | 15 | |
| Cost of data center | | | 24 | | | | 22 | | | | 59 | | | | 46 | |
| Selling and marketing | | | 15 | | | | 31 | | | | 81 | | | | 509 | |
| Product development | | | 57 | | | | 44 | | | | 137 | | | | 121 | |
| General and administrative | | | (49 | ) | | | 121 | | | | 66 | | | | 980 | |
| Stock based compensation expense | | $ | 13 | | | $ | 198 | | | $ | 293 | | | $ | 1,671 | |
