Exhibit 99.1
FOR IMMEDIATE RELEASE
| | | | |
| Contacts: | | Amy Conley | | Don Duffy |
| | (617) 556-2305 | | (408) 498-6040 |
| | aconley@financialengines.com | | ir@financialengines.com |
Financial Engines Reports Third Quarter 2012 Financial Results
AUM Grows 46% Year Over Year
Revenue Grows 36% Year Over Year
Adjusted EBITDA Grows 47% Year Over Year
SUNNYVALE, Calif. –November 6, 2012 – Financial Engines (NASDAQ: FNGN), America’s largest independent registered investment advisor, today reported financial results for its third quarter ended September 30, 2012.
Financial results for the third quarter of 2012 compared to the third quarter of 2011:i
| | • | | Revenue increased 36% to $48.4 million for the third quarter of 2012 from $35.7 million for the third quarter of 2011. |
| | • | | Professional management revenue increased 50% to $39.6 million for the third quarter of 2012 from $26.3 million for the third quarter of 2011. |
| | • | | Net income was $4.8 million, or $0.10 per diluted share, for the third quarter of 2012 compared to $3.4 million, or $0.07 per diluted share, for the third quarter of 2011. |
| | • | | Non-GAAP Adjusted EBITDAi increased 47% to $14.3 million for the third quarter of 2012 from $9.7 million for the third quarter of 2011. |
| | • | | Non-GAAP Adjusted Net Incomei increased 51% to $6.3 million for the third quarter of 2012 from $4.2 million for the third quarter of 2011. |
| | • | | Non-GAAP Adjusted Earnings Per Sharei increased 63% to $0.13 for the third quarter of 2012 from $0.08 for the third quarter of 2011. |
Key operating metrics as of September 30, 2012:ii
| | • | | Assets under contract (“AUC”) were $560 billion. |
| | • | | Assets under management (“AUM”) were $61.5 billion. |
| | • | | Members in Professional Management were over 648,000. |
| | • | | Asset enrollment rates for companies where services have been available for 26 months or more averaged 12.7%iii and an estimated 12.6% had AUC been marked-to-market at the end of the third quarter of 2012. |
| i | Please see “About Non-GAAP Financial Measures” for definitions of the terms Adjusted Net Income, Adjusted Earnings Per Share, and Adjusted EBITDA. |
| ii | Operating metrics include both advised and subadvised relationships. |
| iii | Information regarding enrollment rates and the component AUC can be found in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Securities and Exchange Commission (“SEC”) filings, including the Form 10-K for the year ended December 31, 2011 and the Form 10-Q to be filed for the period ended September 30, 2012. |
“Baby Boomers are facing a new kind of retirement, with decisions that are more complex and a world that is more uncertain than the generation that preceded them,” said Jeff Maggioncalda, president and chief executive officer of Financial Engines. “We have designed Income+ to provide safe and flexible retirement spending and now have more than 50 signed contracts representing $79 billion in retirement assets and over 900,000 employees.”
Review of Financial Results for the Third Quarter of 2012
Revenue increased 36% to $48.4 million for the third quarter of 2012 from $35.7 million for the third quarter of 2011. The increase in revenue was driven primarily by the growth in professional management revenue, which increased 50% to $39.6 million for the third quarter of 2012 from $26.3 million for the third quarter of 2011.
Costs and expenses increased 35% to $40.9 million for the third quarter of 2012 from $30.4 million for the third quarter of 2011. This was due primarily to an increase in fees paid to plan providers for connectivity to plan and plan participant data, printed material costs associated with enrollment campaigns and member materials, non-cash stock-based compensation expense, wages due to increased headcount and higher compensation, as well as an increase in consulting services expenses.
As a percentage of revenue, cost of revenue (exclusive of amortization of internal use software) increased to 39% for the third quarter of 2012 from 36% for the third quarter of 2011, due primarily to an increase in fees paid to plan providers for connectivity to plan and plan participant data resulting from the achievement of certain contractual AUM-based milestones in 2012 and, to a lesser extent, due to an increase in print costs as a result of a revised agreement with one of our subadvisory plan providers.
Income from operations was $7.5 million for the third quarter of 2012 compared to $5.3 million for the third quarter of 2011. As a percentage of revenue, income from operations remained constant at 15% for the comparable periods.
Net income increased to $4.8 million, or $0.10 per diluted share, for the third quarter of 2012 compared to net income of $3.4 million, or $0.07 per diluted share, for the third quarter of 2011.
On a non-GAAP basis, Adjusted Net Incomei was $6.3 million and Adjusted Earnings Per Sharei were $0.13 for the third quarter of 2012 compared to Adjusted Net Income of $4.2 million and Adjusted Earnings Per Share of $0.08 for the third quarter of 2011.
“Our Q3 results and our outlook for the balance of 2012 and all of 2013 are consistent with our goals of balancing top line growth, margin expansion, and investing for future opportunities,” said Ray Sims, chief financial officer of Financial Engines.
Assets Under Contract and Assets Under Management
AUC was $560 billion as of September 30, 2012, an increase of 25% from $447 billion as of September 30, 2011, due primarily to new employers making our services available, market performance, and contributions. AUC for plans in which the Income+ service has been made available was $27 billion as of September 30, 2012.
AUM increased by 46% year over year to $61.5 billion as of September 30, 2012, from $42.0 billion as of September 30, 2011. The increase in AUM was driven primarily by net new enrollment into the Professional Management service, market performance, and contributions.
| | | | | | | | | | | | | | | | |
| In billions | | Q4’11 | | | Q1’12 | | | Q2’12 | | | Q3’12 | |
AUM, Beginning of Period | | $ | 42.0 | | | $ | 47.5 | | | $ | 53.7 | | | $ | 54.2 | |
New Enrollment(1) | | | 4.6 | | | | 3.0 | | | | 3.7 | | | | 4.9 | |
Voluntary Cancellations(2) | | | (1.3 | ) | | | (1.2 | ) | | | (1.0 | ) | | | (1.2 | ) |
Involuntary Cancellations(3) | | | (1.1 | ) | | | (0.8 | ) | | | (1.0 | ) | | | (0.9 | ) |
Contributions(4) | | | 0.9 | | | | 1.0 | | | | 1.0 | | | | 1.1 | |
Market Movement and Other(5) | | | 2.4 | | | | 4.2 | | | | (2.2 | ) | | | 3.4 | |
| | | | | | | | | | | | | | | | |
AUM, End of Period | | $ | 47.5 | | | $ | 53.7 | | | $ | 54.2 | | | $ | 61.5 | |
| | | | | | | | | | | | | | | | |
| (1) | The aggregate amount of assets under management, at the time of enrollment, of new members who enrolled in our Professional Management service within the period. |
| (2) | The aggregate amount of assets, at the time of cancellation, for voluntary cancellations from the Professional Management service within the period. |
| (3) | The aggregate amount of assets, as of the last available positive account balance, for involuntary cancellations occurring when the member’s 401(k) plan account balance has been reduced to zero or when the cancellation of a plan sponsor contract for the Professional Management service has become effective within the period. |
| (4) | Employer and employee contributions are estimated each quarter from annual contribution rates based on data received from plan providers or plan sponsors. The data presented in the table above differs from data provided in filings prior to September 30, 2012, as the data above represents an estimate of the contributions for the entire AUM base, and the prior contributions data reported represented only a subset of members for whom we received salary data. |
| (5) | Other factors affecting assets under management include estimated market movement, plan administrative fees, participant loans and hardship withdrawals, and timing differences. |
For further information on the AUM data above, please refer to our Form 10-Q to be filed for the period ended September 30, 2012.
Aggregate Investment Style Exposure for Portfolios Under Management
As of September 30, 2012, the approximate aggregate investment style exposure of the portfolios we managed was as follows:
| | | | |
Cash | | | 5 | % |
Bonds | | | 25 | % |
Domestic Equity | | | 47 | % |
International Equity | | | 23 | % |
| | | | |
Total | | | 100 | % |
| | | | |
Outlook
Financial Engines’ growth strategy includes focusing on increasing penetration within existing Professional Management plan sponsors, enhancing and extending services to individuals entering retirement, and expanding the number of plan sponsors.
Based on financial markets remaining at November 1, 2012 levels, the company estimates that its 2012 revenue will be in the range of $185 million to $187 million, and its 2012 non-GAAP Adjusted EBITDA to be $56 million, plus or minus $1 million.
Based on financial markets remaining at November 1, 2012 levels, the company estimates that its 2013 revenue will be in the range of $217 million to $222 million, and its 2013 non-GAAP Adjusted EBITDA will be in the range of $65 million to $67 million. Under typical market conditions, we estimate 2013 revenue to be in the range of $226 million to $231 million and non-GAAP Adjusted EBITDA to be in the range of $70 million to $72 million.
Conference Call
The Company will host a conference call to discuss third quarter 2012 financial results today at 5:00 PM ET. Hosting the call will be Jeff Maggioncalda, president and chief executive officer, and Ray Sims, chief financial officer. The conference call can be accessed live over the phone by dialing (877) 317-6789, or for international callers, (412) 317-6789. A replay will be available beginning approximately one hour after the call and can be accessed by dialing (877) 870-5176 or (858) 384-5517 for international callers. The conference ID is 10018829. The replay will remain available until Friday, November 9, 2012, and an archived replay will be available athttp://ir.financialengines.com/ for 30 calendar days after the call.
About Non-GAAP Financial Measures
This press release and its attachments include certain non-GAAP financial measures. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. generally accepted accounting principles (GAAP). These non-GAAP measures include non-GAAP Adjusted Net Income, non-GAAP Adjusted Earnings Per Share and non-GAAP Adjusted EBITDA. Non-GAAP Adjusted Net Income is defined as net income before non-cash stock-based compensation expense, net of tax, and certain other items such as the income tax benefit from the release of valuation allowances, if applicable for the period. Non-GAAP Adjusted Earnings Per Share is defined as non-GAAP Adjusted Net Income divided by the weighted-average of dilutive common share equivalents outstanding. Non-GAAP Adjusted EBITDA is defined as net income before net interest expense (income), income tax expense (benefit), depreciation, amortization of internal use software, amortization of direct response advertising, amortization of deferred commissions, and non-cash stock-based compensation. Further information regarding the non-GAAP financial measures included in this press release is contained in the attachments.
To supplement the Company’s consolidated financial statements presented on a GAAP basis, management believes that these non-GAAP measures provide useful information about the Company’s core operating results and thus are appropriate to enhance the overall understanding
of the Company’s past financial performance and its prospects for the future. These adjustments to the Company’s GAAP results are made with the intent of providing both management and investors a more complete understanding of the Company’s underlying operational results, trends and performance.
About Financial Engines
Financial Engines is the nation’s largest independent investment advisor and is committed to providing everyone the trusted retirement help they deserve. The company helps investors with their total retirement picture by offering personalized retirement plans for saving, investment, and retirement income. To meet the needs of different investors, Financial Engines offers both Online Advice and Professional Management. Co-founded in 1996 by Nobel Prize-winning economist Bill Sharpe, Financial Engines works with America’s leading employers and retirement plan providers to make retirement help available to millions of American workers. For more information, visit www.financialengines.com.
Forward-Looking Statements
This press release and its attachments contain forward-looking statements that involve risks and uncertainties. These forward-looking statements may be identified by terms such as “plan to,” “designed to,” “will,” “can,” “expect,” “estimates,” “believes,” “intends,” “may,” “continues,” “to be” or the negative of these terms, and similar expressions intended to identify forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding Financial Engines’ expected financial performance and outlook, its strategic operational plans, objectives and growth strategy, its market opportunity, benefits of Income+, and the benefits of our non-GAAP financial measures. These statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to differ materially from those expressed or implied by such forward-looking statements, and reported results should not be considered as an indication of future performance. These risks and uncertainties include, but are not limited to, our reliance on fees earned on the value of assets we manage for a substantial portion of our revenue, the impact of the financial markets on our revenue and earnings, unanticipated delays in rollouts of our services, our ability to increase enrollment, our ability to correctly identify and invest appropriately in growth opportunities, our ability to introduce new services and accurately estimate the impact of any future services on our business, the risk that the anticipated benefits of our investments in these services or in growth opportunities may not outweigh the resources and costs associated with these investments or the liabilities associated with the operation of these services, our relationships with plan providers and plan sponsors, the fees we can charge for our Professional Management service, our reliance on accurate and timely data from plan providers and plan sponsors, system failures, errors or unsatisfactory performance of our services, our reputation, our ability to protect the confidentiality of plan provider, plan sponsor and plan participant data and other privacy concerns, acquisition activity involving plan providers or plan sponsors, our ability to compete, our regulatory environment and risks associated with our fiduciary obligations. More information regarding these and other risks, uncertainties and factors is contained in the Company’s Form 10-K for the year ended December 31, 2011 and the
Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, as filed with the SEC, and in other reports filed by the Company with the SEC from time to time. You are cautioned not to unduly rely on these forward-looking statements, which speak only as of the date of this press release. All information in this press release and its attachments is as of the date stated or November 6, 2012 and unless required by law, Financial Engines undertakes no obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this press release or to report the occurrence of unanticipated events.
Our investment advisory and management services are provided through our subsidiary, Financial Engines Advisors L.L.C., a federally registered investment adviser. References in this press release to “Financial Engines,” “our company,” “the Company,” “we,” “us” and “our” refer to Financial Engines, Inc. and its consolidated subsidiaries during the periods presented unless the context requires otherwise.
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Financial Tables
FINANCIAL ENGINES, INC. AND SUBSIDIARIES
Unaudited Consolidated Balance Sheets
| | | | | | | | |
| | | December 31,
2011 | | | September 30,
2012 | |
| | | (In thousands, except per share data) | |
| Assets | | | | | | | | |
Current assets: | | | | | | | | |
Cash and cash equivalents | | $ | 145,002 | | | $ | 166,382 | |
Accounts receivable, net | | | 30,495 | | | | 41,574 | |
Prepaid expenses | | | 3,008 | | | | 2,583 | |
Deferred tax assets | | | 13,155 | | | | 13,155 | |
Other current assets | | | 3,498 | | | | 4,067 | |
| | | | | | | | |
Total current assets | | | 195,158 | | | | 227,761 | |
Property and equipment, net | | | 3,926 | | | | 13,404 | |
Internal use software, net | | | 10,723 | | | | 10,561 | |
Long-term deferred tax assets | | | 31,424 | | | | 25,954 | |
Direct response advertising, net | | | 8,851 | | | | 10,410 | |
Other assets | | | 4,361 | | | | 3,929 | |
| | | | | | | | |
Total assets | | $ | 254,443 | | | $ | 292,019 | |
| | | | | | | | |
| Liabilities and Stockholders’ Equity | | | | | | | | |
Current liabilities: | | | | | | | | |
Accounts payable | | $ | 9,740 | | | $ | 15,574 | |
Accrued compensation | | | 13,262 | | | | 10,542 | |
Deferred revenue | | | 9,691 | | | | 8,343 | |
Other current liabilities | | | 124 | | | | 215 | |
| | | | | | | | |
Total current liabilities | | | 32,817 | | | | 34,674 | |
Long-term deferred revenue | | | 1,533 | | | | 1,239 | |
Long-term deferred rent | | | 459 | | | | 6,206 | |
Other liabilities | | | 74 | | | | 241 | |
| | | | | | | | |
Total liabilities | | | 34,883 | | | | 42,360 | |
| | | | | | | | |
Commitments and Contingencies | | | | | | | | |
Stockholders’ equity: | | | | | | | | |
Preferred stock, $0.0001 par value— 10,000 authorized as of December 31, 2011 and September 30, 2012; None issued and outstanding as of December 31, 2011 and September 30, 2012 | | | — | | | | — | |
Common stock, $0.0001 par value— 500,000 authorized as of December 31, 2011 and September 30, 2012; 45,784 and 47,161 shares issued and outstanding at December 31, 2011 and September 30, 2012, respectively | | | 5 | | | | 5 | |
Additional paid-in capital | | | 298,196 | | | | 316,182 | |
Accumulated deficit | | | (78,641 | ) | | | (66,528 | ) |
| | | | | | | | |
Total stockholders’ equity | | | 219,560 | | | | 249,659 | |
| | | | | | | | |
Total liabilities and stockholders’ equity | | $ | 254,443 | | | $ | 292,019 | |
| | | | | | | | |
FINANCIAL ENGINES, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Net and Comprehensive Income
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
September 30, | | | Nine Months Ended
September 30, | |
| | | 2011 | | | 2012 | | | 2011 | | | 2012 | |
| | | (In thousands, except per share data) | |
Revenue: | | | | | | | | | | | | | | | | |
Professional management | | $ | 26,305 | | | $ | 39,582 | | | $ | 76,706 | | | $ | 107,639 | |
Platform | | | 8,299 | | | | 8,253 | | | | 24,058 | | | | 24,764 | |
Other | | | 1,054 | | | | 611 | | | | 2,447 | | | | 2,040 | |
| | | | | | | | | | | | | | | | |
Total revenue | | | 35,658 | | | | 48,446 | | | | 103,211 | | | | 134,443 | |
| | | | | | | | | | | | | | | | |
Costs and expenses: | | | | | | | | | | | | | | | | |
Cost of revenue (exclusive of amortization of internal use software) | | | 12,924 | | | | 18,798 | | | | 36,811 | | | | 51,423 | |
Research and development | | | 5,098 | | | | 6,496 | | | | 15,644 | | | | 18,716 | |
Sales and marketing | | | 7,436 | | | | 10,440 | | | | 22,312 | | | | 29,160 | |
General and administrative | | | 3,404 | | | | 3,653 | | | | 9,855 | | | | 11,271 | |
Amortization of internal use software | | | 1,508 | | | | 1,558 | | | | 4,276 | | | | 4,560 | |
| | | | | | | | | | | | | | | | |
Total costs and expenses | | | 30,370 | | | | 40,945 | | | | 88,898 | | | | 115,130 | |
| | | | | | | | | | | | | | | | |
Income from operations | | | 5,288 | | | | 7,501 | | | | 14,313 | | | | 19,313 | |
Interest income (expense) | | | (1 | ) | | | (5 | ) | | | 2 | | | | (1 | ) |
| | | | | | | | | | | | | | | | |
Income before income taxes | | | 5,287 | | | | 7,496 | | | | 14,315 | | | | 19,312 | |
Income tax expense | | | 1,933 | | | | 2,718 | | | | 4,942 | | | | 7,199 | |
| | | | | | | | | | | | | | | | |
Net and comprehensive income | | $ | 3,354 | | | $ | 4,778 | | | $ | 9,373 | | | $ | 12,113 | |
| | | | | | | | | | | | | | | | |
Net income per share attributable to holders of common stock | | | | | | | | | | | | | | | | |
Basic | | $ | 0.07 | | | $ | 0.10 | | | $ | 0.21 | | | $ | 0.26 | |
Diluted | | $ | 0.07 | | | $ | 0.10 | | | $ | 0.19 | | | $ | 0.24 | |
Shares used to compute net income per share attributable to holders of common stock | | | | | | | | | | | | | | | | |
Basic | | | 45,237 | | | | 46,889 | | | | 44,508 | | | | 46,469 | |
Diluted | | | 49,419 | | | | 50,194 | | | | 49,356 | | | | 50,026 | |
FINANCIAL ENGINES, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Cash Flows
| | | | | | | | |
| | | Nine Months Ended
September 30, | |
| | | 2011 | | | 2012 | |
| | | (In thousands) | |
Cash flows from operating activities: | | | | | | | | |
Net income | | $ | 9,373 | | | $ | 12,113 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | |
Depreciation and amortization | | | 1,608 | | | | 2,075 | |
Amortization of internal use software | | | 4,027 | | | | 4,263 | |
Stock-based compensation | | | 3,922 | | | | 7,500 | |
Amortization of deferred sales commissions | | | 1,006 | | | | 1,464 | |
Amortization and impairment of direct response advertising | | | 1,869 | | | | 3,695 | |
Provision for doubtful accounts | | | 109 | | | | 209 | |
Loss on fixed asset disposal | | | — | | | | 4 | |
Excess tax benefit associated with stock-based compensation | | | (671 | ) | | | (1,446 | ) |
Changes in operating assets and liabilities: | | | | | | | | |
Accounts receivable | | | (9,052 | ) | | | (11,288 | ) |
Prepaid expenses | | | (100 | ) | | | 425 | |
Deferred tax assets | | | 4,063 | | | | 5,470 | |
Direct response advertising | | | (5,526 | ) | | | (5,240 | ) |
Other assets | | | (1,843 | ) | | | (2,150 | ) |
Accounts payable | | | 3,635 | | | | 6,899 | |
Accrued compensation | | | (5,627 | ) | | | (2,720 | ) |
Deferred revenue | | | 6,177 | | | | (1,642 | ) |
Deferred rent | | | 39 | | | | 5,788 | |
Other liabilities | | | 1 | | | | 3 | |
| | | | | | | | |
Net cash provided by operating activities | | | 13,010 | | | | 25,422 | |
| | | | | | | | |
Cash flows from investing activities: | | | | | | | | |
Purchase of property and equipment | | | (2,621 | ) | | | (10,954 | ) |
Capitalization of internal use software | | | (4,119 | ) | | | (4,131 | ) |
Restricted cash | | | (32 | ) | | | 550 | |
| | | | | | | | |
Net cash used in investing activities | | | (6,772 | ) | | | (14,535 | ) |
| | | | | | | | |
Cash flows from financing activities: | | | | | | | | |
Payments on capital lease obligations | | | — | | | | (8 | ) |
Net share settlements for stock-based awards minimum tax withholdings | | | (1,718 | ) | | | — | |
Excess tax benefit associated with stock-based compensation | | | 671 | | | | 1,446 | |
Proceeds from issuance of common stock, net of offering costs | | | 12,188 | | | | 9,055 | |
| | | | | | | | |
Net cash provided by financing activities | | | 11,141 | | | | 10,493 | |
| | | | | | | | |
Net increase in cash and cash equivalents | | | 17,379 | | | | 21,380 | |
Cash and cash equivalents, beginning of period | | | 114,937 | | | | 145,002 | |
| | | | | | | | |
Cash and cash equivalents, end of period | | $ | 132,316 | | | $ | 166,382 | |
| | | | | | | | |
Supplemental cash flows information: | | | | | | | | |
Income taxes paid, net of refunds | | $ | 63 | | | $ | 185 | |
Interest paid | | $ | 5 | | | $ | 6 | |
Non-cash operating, investing and financing activities: | | | | | | | | |
Purchase of property and equipment under capital lease | | $ | — | | | $ | 223 | |
Capitalized stock-based compensation for internal use software | | $ | 219 | | | $ | 267 | |
Capitalized stock-based compensation for direct response advertising | | $ | 31 | | | $ | 46 | |
FINANCIAL ENGINES, INC. AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Operating Results
The table below sets forth a reconciliation of net income to non-GAAP Adjusted EBITDA based on our historical results:
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
September 30, | | | Nine Months Ended
September 30, | |
| Non-GAAP Adjusted EBITDA | | 2011 | | | 2012 | | | 2011 | | | 2012 | |
| | | (In thousands) | |
Net income | | $ | 3,354 | | | $ | 4,778 | | | $ | 9,373 | | | $ | 12,113 | |
Interest expense (income) | | | 1 | | | | 5 | | | | (2 | ) | | | 1 | |
Income tax expense | | | 1,933 | | | | 2,718 | | | | 4,942 | | | | 7,199 | |
Depreciation | | | 570 | | | | 878 | | | | 1,608 | | | | 2,075 | |
Amortization of internal use software | | | 1,419 | | | | 1,456 | | | | 4,027 | | | | 4,263 | |
Amortization and impairment of direct response advertising | | | 721 | | | | 1,393 | | | | 1,869 | | | | 3,695 | |
Amortization of deferred sales commissions | | | 367 | | | | 565 | | | | 1,006 | | | | 1,464 | |
Non-cash stock-based compensation | | | 1,355 | | | | 2,518 | | | | 3,922 | | | | 7,500 | |
| | | | | | | | | | | | | | | | |
Non-GAAP Adjusted EBITDA | | $ | 9,720 | | | $ | 14,311 | | | $ | 26,745 | | | $ | 38,310 | |
| | | | | | | | | | | | | | | | |
The table below sets forth a reconciliation of net income to non-GAAP Adjusted Net Income and non-GAAP Adjusted Earnings Per Share based on our historical results:
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
September 30, | | | Nine Months Ended
September 30, | |
| Non-GAAP Adjusted Net Income and Adjusted EPS | | 2011 | | | 2012 | | | 2011 | | | 2012 | |
| | | (In thousands, except per share amounts) | |
Net income | | $ | 3,354 | | | $ | 4,778 | | | $ | 9,373 | | | $ | 12,113 | |
Non-cash stock-based compensation, net of tax(1) | | | 837 | | | | 1,556 | | | | 2,423 | | | | 4,635 | |
| | | | | | | | | | | | | | | | |
Non-GAAP Adjusted Net Income | | $ | 4,191 | | | $ | 6,334 | | | $ | 11,796 | | | $ | 16,748 | |
| | | | | | | | | | | | | | | | |
Non-GAAP Adjusted Earnings Per Share | | $ | 0.08 | | | $ | 0.13 | | | $ | 0.24 | | | $ | 0.33 | |
Shares of common stock outstanding | | | 45,237 | | | | 46,889 | | | | 44,558 | | | | 46,469 | |
Dilutive restricted stock and stock options | | | 4,182 | | | | 3,305 | | | | 4,798 | | | | 3,557 | |
| | | | | | | | | | | | | | | | |
Non-GAAP adjusted weighted common shares outstanding | | | 49,419 | | | | 50,194 | | | | 49,356 | | | | 50,026 | |
| | | | | | | | | | | | | | | | |
| (1) | For the calculation of non-GAAP Adjusted Net Income, an estimated statutory tax rate of 38.2% has been applied to non-cash stock-based compensation for all periods presented. |
