EXHIBIT 99.1
Tekelec Announces Q2 2007 Results
Revenues Were $110.0 million; Cash Flow from Operating Activities from Continuing
Operations Was $21.7 Million in Q2 2007; GAAP Net Income from Continuing Operations
Was $3.8 Million; GAAP EPS from Continuing Operations Totaled $0.05
Revenues Were $110.0 million; Cash Flow from Operating Activities from Continuing
Operations Was $21.7 Million in Q2 2007; GAAP Net Income from Continuing Operations
Was $3.8 Million; GAAP EPS from Continuing Operations Totaled $0.05
MORRISVILLE, N.C. (Wednesday, August 1, 2007): Tekelec (NASDAQ: TKLC ), a leading developer of high-performance network applications for next-generation fixed, mobile and packet networks, today announced its results for the quarter and six months ended June 30, 2007. Results from continuing operations for all periods presented include the results from the Network Signaling Group (“NSG”) and the Communications Software Solutions Group (“CSSG”). Results of the Company’s Switching Solutions Group (“SSG”) for the quarter and six months ended June 30 of 2007 and 2006 and the results of the IEX contact center (“IEX”) business unit for the quarter and six months ended June 30, 2006 are included in the results from discontinued operations.
Results from Continuing Operations
Revenue from continuing operations for the second quarter of 2007 was $110.0 million, down 8% compared to $119.1 million for the second quarter of 2006. For the second quarter of 2007, the Company had orders of $84.7 million, up 4% compared to $81.8 million for the second quarter of 2006. Backlog as of June 30, 2007 was $334.7 million compared to $360.0 million as of March 31, 2007.
Revenue from continuing operations for the second quarter of 2007 was $110.0 million, down 8% compared to $119.1 million for the second quarter of 2006. For the second quarter of 2007, the Company had orders of $84.7 million, up 4% compared to $81.8 million for the second quarter of 2006. Backlog as of June 30, 2007 was $334.7 million compared to $360.0 million as of March 31, 2007.
On a GAAP basis, the Company reported income from continuing operations for the second quarter of 2007 of $3.8 million, or $0.05 per diluted share, compared to income from continuing operations of $15.7 million, or $0.22 per diluted share, for the second quarter of 2006. On a Non-GAAP basis, income from continuing operations for the second quarter of 2007 was $9.0 million, or $0.12 per diluted share, compared to income from continuing operations of $20.7 million, or $0.28 per diluted share, for the second quarter of 2006. Please refer to the attached financial statement schedules for a reconciliation of the Company’s GAAP operating results to its Non-GAAP operating results.
Revenue from continuing operations for the first six months of 2007 was $218.8 million, up 19% compared to $184.0 million for the first six months of 2006. For the first six months of 2007, the Company had orders from continuing operations of $163.9 million, down 3% compared to $168.2 million for the first six months of 2006.
On a GAAP basis, the Company reported income from continuing operations for the first six months of 2007 of $6.8 million, or $0.10 per diluted share, compared to income from continuing operations of $5.4 million, or $0.08 per diluted share, for the first six months of 2006. On a Non-GAAP basis, income from continuing operations for the first six months of 2007 was $19.6 million, or $0.27 per diluted share, compared to income from continuing operations of $13.8 million, or $0.20 per diluted share, for the first six months of 2006. Please refer to the attached
Q2 2007 Results
financial statement schedules for a reconciliation of the Company’s GAAP operating results to its Non-GAAP operating results.
Results from Discontinued Operations
On April 21, 2007, the Company completed the sale of the SSG business to GENBAND Inc. and the operations of SSG have been presented as a discontinued operation. On a GAAP basis, loss from discontinued operations, including a loss on the sale of discontinued operations, in the second quarter of 2007 was $11.5 million, or $0.16 loss per diluted share, compared to a loss from discontinued operations of $1.1 million, or $0.02 loss per diluted share, in the second quarter of 2006. On a GAAP basis, loss from discontinued operations, including a loss on the sale of discontinued operations, for the first six months of 2007 was $65.0 million, or $0.92 loss per diluted share, compared to a loss from discontinued operations of $7.4 million, or $0.11 loss per diluted share, for the first six months of 2006.
On April 21, 2007, the Company completed the sale of the SSG business to GENBAND Inc. and the operations of SSG have been presented as a discontinued operation. On a GAAP basis, loss from discontinued operations, including a loss on the sale of discontinued operations, in the second quarter of 2007 was $11.5 million, or $0.16 loss per diluted share, compared to a loss from discontinued operations of $1.1 million, or $0.02 loss per diluted share, in the second quarter of 2006. On a GAAP basis, loss from discontinued operations, including a loss on the sale of discontinued operations, for the first six months of 2007 was $65.0 million, or $0.92 loss per diluted share, compared to a loss from discontinued operations of $7.4 million, or $0.11 loss per diluted share, for the first six months of 2006.
Included in the income from discontinued operations for the three months ended June 30, 2007 is a pretax restructuring charge of $5.8 million associated with certain lease exit and moving costs recorded in connection with our exit of the facilities in Plano, Texas utilized by the SSG business. The Company anticipates an additional charge of $2.0-$3.0 million related to exit of the facilities in Plano, Texas to be recorded in the third quarter of 2007.
Balance Sheet Results
At June 30, 2007, Tekelec’s consolidated cash, cash equivalents and short-term investments totaled $464.8 million, up from $450.0 million at March 31, 2007. Deferred revenues from continuing operations were $158.8 million at June 30, 2007, down from $173.3 million at March 31, 2007.
At June 30, 2007, Tekelec’s consolidated cash, cash equivalents and short-term investments totaled $464.8 million, up from $450.0 million at March 31, 2007. Deferred revenues from continuing operations were $158.8 million at June 30, 2007, down from $173.3 million at March 31, 2007.
Frank Plastina, president and chief executive officer of Tekelec, stated, “We are pleased with our operating results from continuing operations and with our strong balance sheet at the end of the June quarter. We were disappointed by our volume of orders; however, we are encouraged by the strength of our EAGLE 5 ISS signaling business internationally, which included seven new customers this quarter.”
Consolidated Results
On a GAAP basis, net loss on a consolidated basis for the three months ended June 30, 2007 was $7.8 million, or $0.11 loss per diluted share, compared to net income on a consolidated basis for the three months ended June 30, 2006 of $14.6 million, or $0.20 per diluted share. On a GAAP basis, net loss on a consolidated basis for the six months ended June 30, 2007 was $58.2 million, or $0.82 loss per diluted share, compared to a net loss on a consolidated basis for the six months ended June 30, 2006 of $2.0 million, or $0.03 loss per diluted share.
On a GAAP basis, net loss on a consolidated basis for the three months ended June 30, 2007 was $7.8 million, or $0.11 loss per diluted share, compared to net income on a consolidated basis for the three months ended June 30, 2006 of $14.6 million, or $0.20 per diluted share. On a GAAP basis, net loss on a consolidated basis for the six months ended June 30, 2007 was $58.2 million, or $0.82 loss per diluted share, compared to a net loss on a consolidated basis for the six months ended June 30, 2006 of $2.0 million, or $0.03 loss per diluted share.
Conference Call
Tekelec has scheduled a conference call for Wednesday, August 1, 2007 for management to discuss second quarter 2007 results. The Company also plans to provide on its web site immediately prior to the call both GAAP and Non-GAAP financial measures (including GAAP reconciliations) for the second quarter and to discuss during this call certain forward looking information concerning the Company’s prospects for 2007.
Tekelec has scheduled a conference call for Wednesday, August 1, 2007 for management to discuss second quarter 2007 results. The Company also plans to provide on its web site immediately prior to the call both GAAP and Non-GAAP financial measures (including GAAP reconciliations) for the second quarter and to discuss during this call certain forward looking information concerning the Company’s prospects for 2007.
Q2 2007 Results
"Live” Webcast and Replay
Tekelec will host a live webcast of its conference call on Wednesday, August 1, 2007, at 8:00 a.m. EDT. To access the webcast, visit Tekelec’s web site located at www.tekelec.com, enter the Investor Relations section and click on the webcast icon. A webcast replay will be available at approximately 10:45 a.m. on August 1st and for 90 days thereafter.
Tekelec will host a live webcast of its conference call on Wednesday, August 1, 2007, at 8:00 a.m. EDT. To access the webcast, visit Tekelec’s web site located at www.tekelec.com, enter the Investor Relations section and click on the webcast icon. A webcast replay will be available at approximately 10:45 a.m. on August 1st and for 90 days thereafter.
Telephone Replay
A telephone replay of the call will also be available for one week after the live webcast by calling either (800) 642-1687 or (706) 645-9291, and entering the conference ID #10917724.
A telephone replay of the call will also be available for one week after the live webcast by calling either (800) 642-1687 or (706) 645-9291, and entering the conference ID #10917724.
Non-GAAP Information
Certain Non-GAAP financial measures are included in this press release, including a full Non-GAAP statement of operations. In the calculation of these measures, Tekelec generally excludes certain items such as amortization of acquired intangibles, restructuring and other charges, non-cash stock-based compensation charges, and unusual, non-recurring gains and charges. Tekelec believes that excluding such items provides investors and management with a representation of the Company’s core operating performance and with information useful in assessing its prospects for the future and underlying trends in Tekelec’s operating expenditures and continuing operations. Management uses such Non-GAAP measures and the Non-GAAP statements of operations to (i) evaluate financial results, (ii) manage the Company’s operations, and (iii) establish operational goals. Further, each of the individual Non-GAAP measures within the Non-GAAP statement of operations and the Non-GAAP statement of operations itself are utilized by the Company’s management and board of directors to determine incentive compensation and evaluate key trends within the business. In addition, since the Company has historically reported Non-GAAP measures to the investment community, the Company believes the inclusion of this information provides consistency in our financial reporting. The attachments to this release provide a reconciliation of each of the Non-GAAP measures, including those included in the full Non-GAAP statement of operations, referred to in this release to the most directly comparable GAAP measure. The Non-GAAP financial measures are not meant to be considered a substitute for the corresponding GAAP financial measures.
Certain Non-GAAP financial measures are included in this press release, including a full Non-GAAP statement of operations. In the calculation of these measures, Tekelec generally excludes certain items such as amortization of acquired intangibles, restructuring and other charges, non-cash stock-based compensation charges, and unusual, non-recurring gains and charges. Tekelec believes that excluding such items provides investors and management with a representation of the Company’s core operating performance and with information useful in assessing its prospects for the future and underlying trends in Tekelec’s operating expenditures and continuing operations. Management uses such Non-GAAP measures and the Non-GAAP statements of operations to (i) evaluate financial results, (ii) manage the Company’s operations, and (iii) establish operational goals. Further, each of the individual Non-GAAP measures within the Non-GAAP statement of operations and the Non-GAAP statement of operations itself are utilized by the Company’s management and board of directors to determine incentive compensation and evaluate key trends within the business. In addition, since the Company has historically reported Non-GAAP measures to the investment community, the Company believes the inclusion of this information provides consistency in our financial reporting. The attachments to this release provide a reconciliation of each of the Non-GAAP measures, including those included in the full Non-GAAP statement of operations, referred to in this release to the most directly comparable GAAP measure. The Non-GAAP financial measures are not meant to be considered a substitute for the corresponding GAAP financial measures.
FORWARD-LOOKING STATEMENTS
Certain statements made in this press release are forward looking, reflect the Company’s current intent, belief or expectations and involve certain risks and uncertainties. The Company’s actual future performance may not meet the Company’s expectations. As discussed in the Company’s Quarterly Reports on Form 10-Q for the 2007 first quarter (the “Q1 2007 Form 10-Q”), its Annual Report on Form 10-K for 2006 (the “2006 Form 10-K”) and its other filings with the Securities and Exchange Commission (the “Commission”), the Company’s future operating results are difficult to predict and subject to significant fluctuations. Factors that may cause future results to differ materially from the Company’s current expectations, in addition to those identified in the Company’s 2006 Form 10-K, the Q1 2007 Form 10-Q and its other filings with the Commission, include, among others, the risk that the Company will not realize all the benefits of its restructuring activities; the risk that the sales cycle will lengthen as customers evaluate current technology and anticipate technology shifts; delays in new product introduction and slower than anticipated customer orders related to such products; the risk that continued service provider consolidation will require additional review of capital expenditures and lengthen their procurement cycle; and the uncertainties related to the timing of revenue recognition due to the increasing percentage of international and new customer orders in the Company’s backlog. The Company undertakes no obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise.
Certain statements made in this press release are forward looking, reflect the Company’s current intent, belief or expectations and involve certain risks and uncertainties. The Company’s actual future performance may not meet the Company’s expectations. As discussed in the Company’s Quarterly Reports on Form 10-Q for the 2007 first quarter (the “Q1 2007 Form 10-Q”), its Annual Report on Form 10-K for 2006 (the “2006 Form 10-K”) and its other filings with the Securities and Exchange Commission (the “Commission”), the Company’s future operating results are difficult to predict and subject to significant fluctuations. Factors that may cause future results to differ materially from the Company’s current expectations, in addition to those identified in the Company’s 2006 Form 10-K, the Q1 2007 Form 10-Q and its other filings with the Commission, include, among others, the risk that the Company will not realize all the benefits of its restructuring activities; the risk that the sales cycle will lengthen as customers evaluate current technology and anticipate technology shifts; delays in new product introduction and slower than anticipated customer orders related to such products; the risk that continued service provider consolidation will require additional review of capital expenditures and lengthen their procurement cycle; and the uncertainties related to the timing of revenue recognition due to the increasing percentage of international and new customer orders in the Company’s backlog. The Company undertakes no obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise.
Q2 2007 Results
About Tekelec
Tekelec is a high-performance network applications company that is accelerating the transition to IP Multimedia Subsystem (IMS) networks for service providers around the globe. With its experience at the intersection of network applications and session control, Tekelec creates highly efficient platforms for managing media and delivering network solutions. Corporate headquarters are in Morrisville, N.C., U.S.A. in the Research Triangle Park area, with research and development facilities and sales offices throughout the world. For more information, please visitwww.tekelec.com.
Tekelec is a high-performance network applications company that is accelerating the transition to IP Multimedia Subsystem (IMS) networks for service providers around the globe. With its experience at the intersection of network applications and session control, Tekelec creates highly efficient platforms for managing media and delivering network solutions. Corporate headquarters are in Morrisville, N.C., U.S.A. in the Research Triangle Park area, with research and development facilities and sales offices throughout the world. For more information, please visitwww.tekelec.com.
Tekelec Investor Contacts:
Jim Chiafery
Director, Investor Relations
Tel: 919.461.6825
jim.chiafery@tekelec.com
Jim Chiafery
Director, Investor Relations
Tel: 919.461.6825
jim.chiafery@tekelec.com
Q2 2007 Results
TEKELEC
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
| (Thousands, except per share data) | ||||||||||||||||
Revenues | $ | 109,984 | $ | 119,098 | $ | 218,777 | $ | 183,950 | ||||||||
Cost of sales: | ||||||||||||||||
| Cost of goods sold | 46,774 | 37,763 | 98,676 | 70,022 | ||||||||||||
| Amortization of purchased technology | 592 | 587 | 1,179 | 1,174 | ||||||||||||
| Total cost of sales | 47,366 | 38,350 | 99,855 | 71,196 | ||||||||||||
| Gross profit | 62,618 | 80,748 | 118,922 | 112,754 | ||||||||||||
Operating expenses: | ||||||||||||||||
| Research and development | 24,064 | 19,104 | 46,271 | 37,102 | ||||||||||||
| Sales and marketing | 18,309 | 19,384 | 36,974 | 36,937 | ||||||||||||
| General and administrative | 14,762 | 16,039 | 27,794 | 30,119 | ||||||||||||
| Restructuring and other | 2,511 | 1,920 | 2,511 | 2,082 | ||||||||||||
| Amortization of intangible assets | 48 | 472 | 94 | 944 | ||||||||||||
| Total operating expenses | 59,694 | 56,919 | 113,644 | 107,184 | ||||||||||||
| Income (loss) from operations | 2,924 | 23,829 | 5,278 | 5,570 | ||||||||||||
Other income (expense), net: | ||||||||||||||||
| Interest income | 4,355 | 1,878 | 8,295 | 3,527 | ||||||||||||
| Interest expense | (956 | ) | (859 | ) | (1,851 | ) | (1,781 | ) | ||||||||
| Gain on sale of investments | 85 | — | 223 | 1,793 | ||||||||||||
| Other income, net | (1,118 | ) | 217 | (1,844 | ) | (351 | ) | |||||||||
| Total other income, net | 2,366 | 1,236 | 4,823 | 3,188 | ||||||||||||
| Income from continuing operations before provision for income taxes | 5,290 | 25,065 | 10,101 | 8,758 | ||||||||||||
| Provision for income taxes | 1,517 | 9,374 | 3,328 | 3,333 | ||||||||||||
Income from continuing operations | 3,773 | 15,691 | 6,773 | 5,425 | ||||||||||||
Loss from discontinued operations, net of taxes (1,2) | (7,084 | ) | (1,141 | ) | (23,276 | ) | (7,384 | ) | ||||||||
Loss on sale of discontinued operations, net of taxes (3,4) | (4,463 | ) | — | (41,743 | ) | — | ||||||||||
Net Income (Loss) | $ | (7,774 | ) | $ | 14,550 | $ | (58,246 | ) | $ | (1,959 | ) | |||||
Earnings per share from continuing operations: | ||||||||||||||||
| Basic | $ | 0.05 | $ | 0.23 | $ | 0.10 | $ | 0.08 | ||||||||
| Diluted | 0.05 | 0.22 | 0.10 | 0.08 | ||||||||||||
Earnings (loss) per share from discontinued operations: | ||||||||||||||||
| Basic | $ | (0.17 | ) | $ | (0.02 | ) | $ | (0.94 | ) | $ | (0.11 | ) | ||||
| Diluted | (0.16 | ) | (0.02 | ) | (0.92 | ) | (0.11 | ) | ||||||||
Earnings (loss) per share: | ||||||||||||||||
| Basic | $ | (0.11 | ) | $ | 0.22 | $ | (0.84 | ) | $ | (0.03 | ) | |||||
| Diluted | (0.11 | ) | 0.20 | (0.82 | ) | (0.03 | ) | |||||||||
Weighted average number of shares outstanding-continuing operations: | ||||||||||||||||
| Basic | 69,938 | 66,933 | 69,426 | 66,883 | ||||||||||||
| Diluted | 71,151 | 74,563 | 70,699 | 68,219 | ||||||||||||
Weighted average number of shares outstanding: | ||||||||||||||||
| Basic | 69,938 | 66,933 | 69,426 | 66,883 | ||||||||||||
| Diluted | 71,151 | 74,563 | 70,699 | 68,219 | ||||||||||||
Q2 2007 Results
Notes to Unaudited Condensed Consolidated Statements of Operations:
| (1) | For the three months ended June 30, 2007, loss from discontinued operations relates to our former SSG business unit, and includes loss from operating activities ($3.4 million) as well as restructuring charges ($3.7 million), net of taxes. For the three months ended June 30, 2006, loss from discontinued operations consists of ($10.7) million loss from operating activities of SSG, and $9.6 million gain from operating activities of IEX, net of taxes. | |
| (2) | For the six months ended June 30, 2007, loss from discontinued operations relates to our former SSG business unit, and includes loss from operating activities ($13.0 million) as well as restructuring charges ($10.3 million), net of taxes. For the six months ended June 30, 2006, loss from discontinued operations consists of ($19.9) million loss from operating activities of SSG, and $12.5 million gain from operating activities of IEX, net of taxes. | |
| (3) | For the three months ended June 30, 2007, the loss on sale of discontinued operations represents the current quarter impact of the final disposition of our former SSG business unit. | |
| (4) | For the six months ended June 30, 2007, the loss on sale of discontinued operations represents the impact of the final disposition of our former SSG business unit. |
Q2 2007 Results
TEKELEC
UNAUDITED NON-GAAP(1)STATEMENTS OF OPERATIONS FOR CONTINUING OPERATIONS
UNAUDITED NON-GAAP(1)STATEMENTS OF OPERATIONS FOR CONTINUING OPERATIONS
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
| (Thousands, except per share data) | ||||||||||||||||
Revenues | $ | 109,984 | $ | 119,098 | $ | 218,777 | $ | 183,950 | ||||||||
| Cost of sales: | ||||||||||||||||
| Cost of goods sold | 46,370 | 37,176 | 92,753 | 68,729 | ||||||||||||
Gross profit | 63,614 | 81,922 | 126,024 | 115,221 | ||||||||||||
| Research and development | 23,361 | 18,000 | 44,554 | 34,491 | ||||||||||||
| Sales and marketing | 17,516 | 18,140 | 35,164 | 34,178 | ||||||||||||
| General and administrative | 12,629 | 14,221 | 22,806 | 26,036 | ||||||||||||
| Total operating expenses | 53,506 | 50,361 | 102,524 | 94,705 | ||||||||||||
Income from operations | 10,108 | 31,561 | 23,500 | 20,516 | ||||||||||||
| Interest and other income, net | 2,366 | 1,236 | 4,823 | 1,395 | ||||||||||||
Income from continuing operations before provision for income taxes | 12,474 | 32,797 | 28,323 | 21,911 | ||||||||||||
Provision for income taxes(2) | 3,459 | 12,134 | 8,705 | 8,106 | ||||||||||||
Net income from continuing operations | $ | 9,015 | $ | 20,663 | $ | 19,618 | $ | 13,805 | ||||||||
Earnings per share: | ||||||||||||||||
| Basic | $ | 0.13 | $ | 0.31 | $ | 0.28 | $ | 0.21 | ||||||||
Diluted(3) | 0.12 | 0.28 | 0.27 | 0.20 | ||||||||||||
Earnings per share weighted average number of shares outstanding: | ||||||||||||||||
| Basic | 69,938 | 66,933 | 69,426 | 66,883 | ||||||||||||
Diluted(3) | 77,512 | 74,563 | 77,060 | 74,580 | ||||||||||||
Notes to Unaudited Non-GAAP Statements of Operations for Continuing Operations:
| (1) | Please refer to the attached reconciliations of the GAAP Statements of Operations to the above Non-GAAP Statements of Operations. | |
| (2) | The above Non-GAAP Statements of Operations assume effective income tax rates of 28% and 37% for the three months ended June 30, 2007 and 2006, respectively. The above Non-GAAP Statements of Operations assume effective income tax rates of 31% and 37% for the six months ended June 30, 2007 and 2006, respectively. | |
| (3) | For the three and six months ended June 30, 2007, the calculation of diluted earnings per share includes the add-back to net income of $581,000 and $1,162,000, respectively for assumed after-tax interest cost and 6,361,000 weighted average shares related to the convertible debt using the “if-converted” method. For the three and six months ended June 30, 2006, the calculation of diluted earnings per share includes a potential add-back to net income of $581,000 and $1,162,000, respectively for assumed after-tax interest cost and 6,361,000 weighted average shares related to the convertible debt using the “if-converted” method. |
Q2 2007 Results
TEKELEC
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
| June 30, | December 31, | |||||||
| 2007 | 2006 | |||||||
| (Thousands, except share data) | ||||||||
| ASSETS | ||||||||
Current assets: | ||||||||
| Cash and cash equivalents | $ | 46,557 | $ | 45,329 | ||||
| Short-term investments, at fair value | 418,227 | 379,045 | ||||||
| Total cash, cash equivalents and short-term investments | 464,784 | 424,374 | ||||||
| Accounts receivable, net | 89,513 | 133,050 | ||||||
| Inventories | 25,322 | 25,739 | ||||||
| Income taxes receivable | 25,876 | 14,665 | ||||||
| Deferred income taxes | 25,502 | 27,671 | ||||||
| Deferred costs and prepaid commissions | 41,427 | 55,110 | ||||||
| Prepaid expenses and other current assets | 11,279 | 26,133 | ||||||
| Receivable from GenBand | 505 | — | ||||||
| Assets of discontinued operations | — | 118,341 | ||||||
| Total current assets | 684,208 | 825,083 | ||||||
| Property and equipment, net | 32,942 | 36,398 | ||||||
| Investments in privately-held companies | 18,553 | 7,322 | ||||||
| Deferred income taxes, net | 75,251 | 51,496 | ||||||
| Other assets | 2,380 | 2,539 | ||||||
| Goodwill | 26,876 | 26,876 | ||||||
| Intangible assets, net | 18,277 | 19,543 | ||||||
| Total assets | $ | 858,487 | $ | 969,257 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
| Trade accounts payable | $ | 26,706 | $ | 27,316 | ||||
| Accrued expenses | 43,030 | 55,665 | ||||||
| Accrued payroll and related expenses | 21,652 | 28,733 | ||||||
| Current portion of deferred revenues | 148,661 | 189,994 | ||||||
| Convertible debt | 125,000 | — | ||||||
| Liabilities associated with SSG | 5,330 | — | ||||||
| Liabilities of discontinued operations | — | 40,991 | ||||||
| Total current liabilities | 370,379 | 342,699 | ||||||
| Long-term convertible debt | — | 125,000 | ||||||
| Deferred income taxes | 1,381 | 1,481 | ||||||
| Long-term portion of deferred revenues | 10,108 | 5,836 | ||||||
| Other long-term liabilities | 8,691 | — | ||||||
| Total liabilities | 390,559 | 475,016 | ||||||
Commitments and Contingencies | ||||||||
Shareholders’ equity: | ||||||||
| Common stock, without par value, 200,000,000 shares authorized; 70,648,940 and 68,728,986 shares issued and outstanding, respectively | 353,969 | 322,620 | ||||||
| Retained earnings | 113,476 | 171,722 | ||||||
| Accumulated other comprehensive income (loss) | 483 | (101 | ) | |||||
| Total shareholders’ equity | 467,928 | 494,241 | ||||||
| Total liabilities and shareholders’ equity | $ | 858,487 | $ | 969,257 | ||||
Q2 2007 Results
TEKELEC
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| Six Months ended June 30, | ||||||||
| 2007 | 2006 | |||||||
| (Thousands) | ||||||||
Cash flows from operating activities: | ||||||||
| Net loss | $ | (58,246 | ) | $ | (1,959 | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
| Loss from discontinued operations | 65,019 | 7,384 | ||||||
| Gain on sale of investments | (223 | ) | (1,793 | ) | ||||
| Provision for doubtful accounts and returns | 192 | — | ||||||
| Inventory write downs | 5,254 | 2,696 | ||||||
| Depreciation | 7,707 | 6,017 | ||||||
| Amortization of intangibles | 1,273 | 2,118 | ||||||
| Amortization, other | 929 | 2,186 | ||||||
| Deferred income taxes | (2,113 | ) | (2,714 | ) | ||||
| Stock-based compensation | 8,726 | 10,194 | ||||||
| Excess tax benefits from stock-based compensation | (2,912 | ) | (341 | ) | ||||
| Changes in operating assets and liabilities, net of business disposal: | ||||||||
| Accounts receivable | 43,228 | (18,958 | ) | |||||
| Inventories | (2,616 | ) | (11,053 | ) | ||||
| Deferred costs | 13,683 | (3,421 | ) | |||||
| Prepaid expenses and other current assets | 14,589 | (1,451 | ) | |||||
| Trade accounts payable | (535 | ) | (1,017 | ) | ||||
| Income taxes receivable/payable | 11,525 | (12,916 | ) | |||||
| Accrued expenses | (14,851 | ) | (518 | ) | ||||
| Accrued payroll and related expenses | (7,713 | ) | (407 | ) | ||||
| Deferred revenues | (37,003 | ) | 55,022 | |||||
| Total adjustments | 104,159 | 31,028 | ||||||
| Net cash provided by operating activities — continuing operations | 45,913 | 29,069 | ||||||
| Net cash used in operating activities — discontinued operations | (16,571 | ) | (9,148 | ) | ||||
| Net cash provided by operating activities | 29,342 | 19,921 | ||||||
Cash flows from investing activities: | ||||||||
| Proceeds from sales and maturities of investments | 332,918 | 383,480 | ||||||
| Purchases of investments | (372,016 | ) | (415,817 | ) | ||||
| Purchases of property and equipment | (10,087 | ) | (10,885 | ) | ||||
| Change in other assets | (224 | ) | 1,455 | |||||
| Net cash used in investing activities — continuing operations | (49,409 | ) | (41,767 | ) | ||||
| Net cash used in investing activities — discontinued operations | (2,320 | ) | (5,071 | ) | ||||
| Net cash used in investing activities | (51,729 | ) | (46,838 | ) | ||||
Cash flows from financing activities: | ||||||||
| Payments on notes payable | — | (85 | ) | |||||
| Proceeds from issuance of common stock | 20,234 | 3,904 | ||||||
| Excess tax benefits from stock-based compensation | 2,912 | 341 | ||||||
| Net cash provided by financing activities | 23,146 | 4,160 | ||||||
| Effect of exchange rate changes on cash | 469 | 284 | ||||||
| Net change in cash and cash equivalents | 1,228 | (22,473 | ) | |||||
Cash and cash equivalents, beginning of period | 45,329 | 52,069 | ||||||
Cash and cash equivalents, end of period | 46,557 | 29,596 | ||||||
| Less cash and cash equivalents of discontinued operations | — | 504 | ||||||
Cash and cash equivalents of continuing operations at end of period | $ | 46,557 | $ | 29,092 | ||||
Q2 2007 Results
TEKELEC
UNAUDITED IMPACT OF NON-GAAP ADJUSTMENTS ON NET INCOME
UNAUDITED IMPACT OF NON-GAAP ADJUSTMENTS ON NET INCOME
| Three Months Ended June 30, 2007 | ||||||||||||||||||||
| (Thousands, except per share data) | ||||||||||||||||||||
| GAAP | Non-GAAP | |||||||||||||||||||
| Tekelec | Discontinued | Continuing | Continuing | |||||||||||||||||
| Total | Operations | Operations | Adjustments | Operations | ||||||||||||||||
Revenues | $ | 116,684 | $ | 6,700 | $ | 109,984 | $ | — | $ | 109,984 | ||||||||||
Costs and expenses: | ||||||||||||||||||||
| Cost of sales: | ||||||||||||||||||||
| Cost of goods sold | 51,607 | 4,833 | 46,774 | (404 | )(1) | 46,370 | ||||||||||||||
| Amortization of purchased technology | 592 | — | 592 | (592 | )(2) | — | ||||||||||||||
Total cost of sales | 52,199 | 4,833 | 47,366 | (996 | ) | 46,370 | ||||||||||||||
Gross profit | 64,485 | 1,867 | 62,618 | 996 | 63,614 | |||||||||||||||
| Research and development | 27,038 | 2,974 | 24,064 | (703 | )(1) | 23,361 | ||||||||||||||
| Sales and marketing | 20,406 | 2,097 | 18,309 | (793 | )(1) | 17,516 | ||||||||||||||
| General and administrative | 17,035 | 2,273 | 14,762 | (2,090 | )(1) | 12,629 | ||||||||||||||
| (43 | )(3) | |||||||||||||||||||
| Restructuring and other | 2,511 | — | 2,511 | (2,511 | )(4) | — | ||||||||||||||
| Amortization of intangible assets | 48 | — | 48 | (48 | )(2) | — | ||||||||||||||
Total operating expenses | 67,038 | 7,344 | 59,694 | (6,188 | ) | 53,506 | ||||||||||||||
Income (Loss) from operations | (2,553 | ) | (5,477 | ) | 2,924 | 7,184 | 10,108 | |||||||||||||
| Other discontinued operations | (7,319 | ) | (7,319 | ) | — | — | — | |||||||||||||
| Interest and other income, net | 2,366 | — | 2,366 | — | 2,366 | |||||||||||||||
Income (Loss) from continuing operations before provision for income taxes | (7,506 | ) | (12,796 | ) | 5,290 | 7,184 | 12,474 | |||||||||||||
| Provision for (benefit from) income taxes | 268 | (1,249 | ) | 1,517 | 1,942 | (5) | 3,459 | |||||||||||||
Income (Loss) from continuing operations | (7,774 | ) | (11,547 | ) | 3,773 | 5,242 | 9,015 | |||||||||||||
| Loss from discontinued operations for SSG, net of taxes | — | 11,547 | (11,547 | ) | 11,547 | (6) | — | |||||||||||||
Net Income (Loss) | $ | (7,774 | ) | $ | — | $ | (7,774 | ) | $ | 16,789 | $ | 9,015 | ||||||||
Earnings (Loss) per share from continuing operations: | ||||||||||||||||||||
| Basic | $ | (0.11 | ) | $ | 0.05 | $ | 0.13 | |||||||||||||
Diluted(7) | (0.11 | ) | 0.05 | 0.12 | ||||||||||||||||
Earnings (Loss) per share: | ||||||||||||||||||||
| Basic | $ | (0.11 | ) | $ | (0.11 | ) | $ | 0.13 | ||||||||||||
Diluted(7) | (0.11 | ) | (0.11 | ) | 0.12 | |||||||||||||||
Earnings per share weighted average number of shares outstanding: | ||||||||||||||||||||
| Basic | 69,938 | 69,938 | 69,938 | |||||||||||||||||
Diluted(7) | 71,151 | 71,151 | 77,512 | |||||||||||||||||
| (1) | The adjustments represent stock-based compensation expense recognized related to awards of stock options, restricted stock or restricted stock units and stock appreciation rights granted under our employee stock purchase plans. | |
| (2) | The adjustments represent the amortization of purchased technology, other intangibles and acquired backlog related to the acquisitions of Steleus and iptelorg. | |
| (3) | The adjustment represents the legal expenses incurred to settle the Bouygues litigation. | |
| (4) | The adjustment represents the impact of the June 2007 restructuring. | |
| (5) | The adjustment represents the income tax effect of footnotes (1), (2), (3) and (4) in order to reflect our Non-GAAP effective tax rate of 28%. | |
| (6) | The adjustment represents the elimination of the results of operations of our discontinued operations. | |
| (7) | For the three months ended June 30, 2007, the calculations of diluted earnings per share related to Tekelec Total and GAAP Continuing Operations exclude a potential add-back to net income of $581,000 for assumed after-tax interest cost and 6,361,000 weighted average shares related to the convertible debt using the “if-converted” method as the effect of including such amounts is anti-dilutive. The calculation of diluted earnings per share related to Non-GAAP Continuing Operations includes the add-back to net income of $581,000 for assumed after-tax interest cost and 6,361,000 weighted average shares related to the convertible debt using the “if-converted” method. |
Q2 2007 Results
TEKELEC
UNAUDITED IMPACT OF NON-GAAP ADJUSTMENTS ON NET INCOME
UNAUDITED IMPACT OF NON-GAAP ADJUSTMENTS ON NET INCOME
| Six Months Ended June 30, 2007 | ||||||||||||||||||||
| (Thousands, except per share data) | ||||||||||||||||||||
| GAAP | Non-GAAP | |||||||||||||||||||
| Tekelec | Discontinued | Continuing | Continuing | |||||||||||||||||
| Total | Operations | Operations | Adjustments | Operations | ||||||||||||||||
Revenues | $ | 246,459 | $ | 27,682 | 218,777 | $ | — | $ | 218,777 | |||||||||||
Costs and expenses: | ||||||||||||||||||||
| Cost of sales: | ||||||||||||||||||||
| Cost of goods sold | 118,234 | 19,558 | 98,676 | (923 | )(1) | 92,753 | ||||||||||||||
| (5,000 | )(2) | |||||||||||||||||||
| Amortization of purchased technology | 1,284 | 105 | 1,179 | (1,179 | )(3) | — | ||||||||||||||
Total cost of sales | 119,518 | 19,663 | 99,855 | (7,102 | ) | 92,753 | ||||||||||||||
Gross profit | 126,941 | 8,019 | 118,922 | 7,102 | 126,024 | |||||||||||||||
| Research and development | 63,250 | 16,979 | 46,271 | (1,717 | )(1) | 44,554 | ||||||||||||||
| Sales and marketing | 42,947 | 5,973 | 36,974 | (1,810 | )(1) | 35,164 | ||||||||||||||
| General and administrative | 33,732 | 5,938 | 27,794 | (4,276 | )(1) | 22,806 | ||||||||||||||
| (712 | )(4) | |||||||||||||||||||
| Restructuring and other | 2,511 | — | 2,511 | (2,511 | )(5) | — | ||||||||||||||
| Amortization of intangible assets | 164 | 70 | 94 | (94 | )(3) | — | ||||||||||||||
Total operating expenses | 142,604 | 28,960 | 113,644 | (11,120 | ) | 102,524 | ||||||||||||||
Income (Loss) from operations | (15,663 | ) | (20,941 | ) | 5,278 | 18,222 | 23,500 | |||||||||||||
| Other discontinued operations | (77,323 | ) | (77,323 | ) | — | — | — | |||||||||||||
| Interest and other income, net | 4,823 | — | 4,823 | — | 4,823 | |||||||||||||||
Income (Loss) from continuing operations before provision for income taxes | (88,163 | ) | (98,264 | ) | 10,101 | 18,222 | 28,323 | |||||||||||||
| Provision for (benefit from) income taxes | (29,917 | ) | (33,245 | ) | 3,328 | 5,377 | (6) | 8,705 | ||||||||||||
Income (Loss) from continuing operations | (58,246 | ) | (65,019 | ) | 6,773 | 12,845 | 19,618 | |||||||||||||
| Loss from discontinued operations for SSG, net of taxes | — | 65,019 | (65,019 | ) | 65,019 | (7) | — | |||||||||||||
Net Income (Loss) | $ | (58,246 | ) | $ | — | $ | (58,246 | ) | $ | 77,864 | $ | 19,618 | ||||||||
Earnings (Loss) per share from continuing operations: | ||||||||||||||||||||
| Basic | $ | (0.84 | ) | $ | 0.10 | $ | 0.28 | |||||||||||||
Diluted(8) | (0.82 | ) | 0.10 | 0.27 | ||||||||||||||||
Earnings (Loss) per share: | ||||||||||||||||||||
| Basic | $ | (0.84 | ) | $ | (0.84 | ) | $ | 0.28 | ||||||||||||
Diluted(8) | (0.82 | ) | (0.82 | ) | 0.27 | |||||||||||||||
Earnings per share weighted average number of shares outstanding: | ||||||||||||||||||||
| Basic | 69,426 | 69,426 | 69,426 | |||||||||||||||||
Diluted(8) | 70,699 | 70,699 | 77,060 | |||||||||||||||||
| (1) | The adjustments represent stock-based compensation expense recognized related to awards of stock options, restricted stock or restricted stock units and stock appreciation rights granted under our employee stock purchase plans. | |
| (2) | The adjustments represent the charge associated with product credits issued to Bouygues Telecom, S.A. as part of our settlement of the Bouygues litigation. | |
| (3) | The adjustments represent the amortization of purchased technology, other intangibles and acquired backlog related to the acquisitions of Steleus and iptelorg. | |
| (4) | The adjustment represents legal expenses incurred to settle the Bouygues litigation. | |
| (5) | In the second quarter of 2007 we initiated a restructuring of our operations to better align with our current organizational requirements. This adjustment represents the elimination of the costs associated with the June restructuring. | |
| (6) | The adjustment represents the income tax effect of footnotes (1), (2), (3), (4) and (5) in order to reflect our Non-GAAP effective tax rate of 31%. | |
| (7) | The adjustment represents the elimination of the results of operations of our discontinued operations. | |
| (8) | For the six months ended June 30, 2007, the calculations of diluted earnings per share related to Tekelec Total and GAAP Continuing Operations exclude a potential add-back to net income of $1,162,000 for assumed after-tax interest cost and 6,361,000 weighted average shares related to the convertible debt using the “if-converted” method as the effect of including such amounts is anti-dilutive. The calculation of diluted earnings per share related to Non-GAAP Continuing Operations includes the add-back to net income of $1,162,000 for assumed after-tax interest cost and 6,361,000 weighted average shares related to the convertible debt using the “if-converted” method. |
Q2 2007 Results
TEKELEC
UNAUDITED IMPACT OF NON-GAAP ADJUSTMENTS ON NET INCOME
UNAUDITED IMPACT OF NON-GAAP ADJUSTMENTS ON NET INCOME
| Three Months Ended June 30, 2006 | ||||||||||||||||||||
| (Thousands, except per share data) | ||||||||||||||||||||
| GAAP | Non-GAAP | |||||||||||||||||||
| Tekelec | Discontinued | Continuing | Continuing | |||||||||||||||||
| Total | Operations | Operations | Adjustments | Operations | ||||||||||||||||
Revenues | $ | 149,868 | $ | 30,770 | $ | 119,098 | $ | — | $ | 119,098 | ||||||||||
Costs and expenses: | ||||||||||||||||||||
| Cost of sales: | ||||||||||||||||||||
| Cost of goods sold | 57,881 | 20,118 | 37,763 | (587 | )(1) | 37,176 | ||||||||||||||
| Amortization of purchased technology | 1,276 | 689 | 587 | (587 | )(2) | — | ||||||||||||||
Total cost of sales | 59,157 | 20,807 | 38,350 | (1,174 | ) | 37,176 | ||||||||||||||
Gross profit | 90,711 | 9,963 | 80,748 | 1,174 | 81,922 | |||||||||||||||
| Research and Development | 37,608 | 18,504 | 19,104 | (1,104 | )(1) | 18,000 | ||||||||||||||
| Sales and Marketing | 23,693 | 4,309 | 19,384 | (1,244 | )(1) | 18,140 | ||||||||||||||
| General and administrative | 18,143 | 2,104 | 16,039 | (1,495 | )(1) | 14,221 | ||||||||||||||
| (113 | )(3) | |||||||||||||||||||
| (210 | )(4) | |||||||||||||||||||
| Restructuring and other | 3,255 | 1,335 | 1,920 | (1,920 | )(5) | — | ||||||||||||||
| Amortization of intangible assets | 578 | 106 | 472 | (472 | )(2) | — | ||||||||||||||
Total operating expenses | 83,277 | 26,358 | 56,919 | (6,558 | ) | 50,361 | ||||||||||||||
Income (Loss) from operations | 7,434 | (16,395 | ) | 23,829 | 7,732 | 31,561 | ||||||||||||||
| Interest and other income, net | 1,236 | — | 1,236 | — | 1,236 | |||||||||||||||
Income (Loss) from continuing operations before provision for income taxes | 8,670 | (16,395 | ) | 25,065 | 7,732 | 32,797 | ||||||||||||||
| Provision for (benefit from) income taxes | 3,742 | (5,632 | ) | 9,374 | 2,760 | (6) | 12,134 | |||||||||||||
Income (Loss) from continuing operations | 4,928 | (10,763 | ) | 15,691 | 4,972 | 20,663 | ||||||||||||||
| Income from discontinued operations for IEX, net of taxes | 9,622 | — | 9,622 | (9,622) | (7) | — | ||||||||||||||
| Loss from discontinued operations for SSG, net of taxes | — | 10,763 | (10,763 | ) | 10,763 | (7) | — | |||||||||||||
Net Income | $ | 14,550 | $ | — | $ | 14,550 | $ | 6,113 | $ | 20,663 | ||||||||||
Earnings per share from continuing operations: | ||||||||||||||||||||
| Basic | $ | 0.07 | $ | 0.23 | $ | 0.31 | ||||||||||||||
Diluted(8) | 0.07 | 0.22 | 0.28 | |||||||||||||||||
Earnings per share: | ||||||||||||||||||||
| Basic | $ | 0.22 | $ | 0.22 | $ | 0.31 | ||||||||||||||
Diluted(8) | 0.21 | 0.20 | 0.28 | |||||||||||||||||
Earnings per share weighted average number of shares outstanding: | ||||||||||||||||||||
| Basic | 66,933 | 66,933 | 66,933 | |||||||||||||||||
Diluted(8) | 68,202 | 74,563 | 74,563 | |||||||||||||||||
| (1) | The adjustments represent stock-based compensation expense recognized related to awards of stock options, restricted stock or restricted stock units and stock purchase rights granted under our employee stock purchase plans. | |
| (2) | The adjustments represent the amortization of purchased technology, other intangibles and acquired backlog related to the acquisitions of Steleus and iptelorg. | |
| (3) | The adjustment represents legal expenses incurred to settle the IEX vs. Blue Pumpkin litigation. | |
| (4) | The adjustment represents costs associated with the restatement of our consolidated financial statements. | |
| (5) | The adjustment represents restructuring and other costs related to our 2006 restructuring and changes in estimates relating to the restructuring of our manufacturing and corporate headquarters relocations in 2005 and 2004. | |
| (6) | The adjustment represents the income tax effect of footnotes (1), (2), (3), (4) and (5) in order to reflect our Non-GAAP effective tax rate of 37%. | |
| (7) | The adjustment represents the elimination of the results of operations of our discontinued operations. | |
| (8) | For the three months ended June 30, 2006, the calculations of diluted earnings per share for Tekelec Total exclude a potential add-back to net income of $581,000 for assumed after-tax interest cost and 6,361,000 weighted average shares related to the convertible debt using the “if-converted” method of accounting for earnings per diluted share as the effects of including such amount is anti-dilutive. GAAP Continuing Operations and Non-GAAP Continuing Operations diluted earnings per share include the potential add-back to net income of $581,000 for assumed after-tax interest cost and 6,361,000 weighted average shares related to the convertible debt using the “if-converted” method. |
Q2 2007 Results
TEKELEC
UNAUDITED IMPACT OF NON-GAAP ADJUSTMENTS ON NET INCOME
UNAUDITED IMPACT OF NON-GAAP ADJUSTMENTS ON NET INCOME
| Six Months Ended June 30, 2006 | ||||||||||||||||||||
| (Thousands, except per share data) | ||||||||||||||||||||
| GAAP | Non-GAAP | |||||||||||||||||||
| Tekelec | Discontinued | Continuing | Continuing | |||||||||||||||||
| Total | Operations | Operations | Adjustments | Operations | ||||||||||||||||
Revenues | $ | 243,972 | $ | 60,022 | $ | 183,950 | $ | — | $ | 183,950 | ||||||||||
Costs and expenses: | ||||||||||||||||||||
| Cost of sales: | ||||||||||||||||||||
| Cost of goods sold | 110,320 | 40,298 | 70,022 | (1,293 | )(1) | 68,729 | ||||||||||||||
| Amortization of purchased technology | 2,552 | 1,378 | 1,174 | (1,174 | )(2) | — | ||||||||||||||
Total cost of sales | 112,872 | 41,676 | 71,196 | (2,467 | ) | 68,729 | ||||||||||||||
Gross profit | 131,100 | 18,346 | 112,754 | 2,467 | 115,221 | |||||||||||||||
| Research and Development | 72,312 | 35,210 | 37,102 | (2,611 | )(1) | 34,491 | ||||||||||||||
| Sales and Marketing | 45,777 | 8,840 | 36,937 | (2,759 | )(1) | 34,178 | ||||||||||||||
| General and administrative | 33,869 | 3,750 | 30,119 | (3,531 | )(1) | 26,036 | ||||||||||||||
| (342 | )(3) | |||||||||||||||||||
| (210 | )(4) | |||||||||||||||||||
| Restructuring and other | 3,419 | 1,337 | 2,082 | (2,082 | )(5) | — | ||||||||||||||
| Amortization of intangible assets | 1,156 | 212 | 944 | (944 | )(2) | — | ||||||||||||||
Total operating expenses | 156,533 | 49,349 | 107,184 | (12,479 | ) | 94,705 | ||||||||||||||
Income (Loss) from operations | (25,433 | ) | (31,003 | ) | 5,570 | 14,946 | 20,516 | |||||||||||||
| Interest and other income, net | 3,188 | — | 3,188 | (1,793 | ) | 1,395 | ||||||||||||||
Income (Loss) from continuing operations before provision for income taxes | (22,245 | ) | (31,003 | ) | 8,758 | 13,153 | 21,911 | |||||||||||||
| Provision for (benefit from) income taxes | (7,711 | ) | (11,044 | ) | 3,333 | 4,773 | (6) | 8,106 | ||||||||||||
Income (Loss) from continuing operations | (14,534 | ) | (19,959 | ) | 5,425 | 8,380 | 13,805 | |||||||||||||
| Income from discontinued operations for IEX, net of taxes | 12,575 | — | 12,575 | (12,575) | (7) | — | ||||||||||||||
| Loss from discontinued operations for SSG, net of taxes | — | 19,959 | (19,959 | ) | 19,959 | (7) | — | |||||||||||||
Net Income (Loss) | $ | (1,959 | ) | $ | — | $ | (1,959 | ) | $ | 15,764 | $ | 13,805 | ||||||||
Earnings (Loss) per share from continuing operations: | ||||||||||||||||||||
| Basic | $ | (0.22 | ) | $ | 0.08 | $ | 0.21 | |||||||||||||
Diluted(8) | (0.22 | ) | 0.08 | 0.20 | ||||||||||||||||
Earnings (Loss) per share: | ||||||||||||||||||||
| Basic | $ | (0.03 | ) | $ | (0.03 | ) | $ | 0.21 | ||||||||||||
Diluted(8) | (0.03 | ) | (0.03 | ) | 0.20 | |||||||||||||||
Earnings per share weighted average number of shares outstanding: | ||||||||||||||||||||
| Basic | 66,883 | 66,883 | 66,883 | |||||||||||||||||
Diluted(8) | 66,883 | 68,219 | 74,580 | |||||||||||||||||
| (1) | The adjustments represent stock-based compensation expense recognized related to awards of stock options, restricted stock or restricted stock units and stock purchase rights granted under our employee stock purchase plans. | |
| (2) | The adjustments represent the amortization of purchased technology, other intangibles and acquired backlog related to the acquisitions of Steleus and iptelorg. | |
| (3) | The adjustment represents legal expenses incurred to settle the IEX vs. Blue Pumpkin litigation. | |
| (4) | The adjustment represents costs associated with the restatement of our consolidated financial statements. | |
| (5) | The adjustment represents restructuring and other costs related to our 2006 restructuring and changes in estimates relating to the restructuring of our manufacturing and corporate headquarters relocations in 2005 and 2004. | |
| (6) | The adjustment represents the income tax effect of footnotes (1), (2), (3), (4) and (5) in order to reflect our Non-GAAP effective tax rate of 37%. | |
| (7) | The adjustment represents the elimination of the results of operations of our discontinued operations. | |
| (8) | For the six months ended June 30, 2006, the calculations of diluted earnings per share for Tekelec Total and GAAP Continuing Operations exclude a potential add-back to net income of $1,162,000 for assumed after-tax interest cost and 6,361,000 weighted average shares related to the convertible debt using the “if-converted” method of accounting for earnings per diluted share as the effects of including such amount is anti-dilutive. Non-GAAP Continuing Operations diluted earnings per share include the potential add-back to net income of $1,162,000 for assumed after-tax interest cost and 6,361,000 weighted average shares related to the convertible debt using the “if-converted” method. |