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8-K - NESS TECHNOLOGIES INC | v199882_8k.htm |
Exhibit 99.1
Press
Release
Ness Technologies Announces Third Quarter 2010 Financial Results
Ness delivers 15% year-over-year quarterly
revenue growth
with continued sequential operating
margin expansion
Hackensack, NJ – October 27, 2010 –
Ness Technologies, Inc. (NASDAQ: NSTC and TASE: NSTC), a global provider
of IT services and solutions, announced today its financial results for the
quarter ended September 30, 2010.
Third Quarter 2010
Highlights:
|
·
|
Quarterly
revenues were $141.3 million, up 15%
year-over-year.
|
|
·
|
Quarterly
operating income was $3.7 million, down 5% year-over-year. On a non-GAAP
basis,(1)
quarterly operating income was $6.6 million, flat year-over-year. On a
GAAP and non-GAAP basis, operating income and operating margin improved
sequentially, reaching the highest level in three
quarters.
|
|
·
|
Quarterly
net income from continuing operations was $1.6 million, down 41%
year-over-year. On a non-GAAP basis, quarterly net income from continuing
operations was $4.1 million, down 17% year-over-year. On a GAAP and
non-GAAP basis, net income and net margin improved sequentially, reaching
the highest level in four quarters.
|
|
·
|
Quarterly
diluted net earnings per share from continuing operations were $0.04,
compared to $0.07 in the third quarter of 2009. On a non-GAAP basis,
quarterly diluted net earnings per share from continuing operations were
$0.11, compared to $0.13 in the third quarter of
2009.
|
|
·
|
In
Central and Eastern Europe, operating margin was the highest in five
quarters, on a non-GAAP basis.
|
|
·
|
Quarterly
operating cash flows from continuing operations were ($11.1) million,
primarily due to slower collections during the summer
quarter.
|
|
·
|
Cash,
cash equivalents and short-term bank deposits were $52.6 million as of
September 30, 2010.
|
|
·
|
Backlog
from continuing operations as of September 30, 2010 was $633 million, up
2% year-over-year, and down 4% sequentially on relatively lighter bookings
during the summer quarter.
|
|
·
|
Headcount
for continuing operations was approximately 7,825 as of September 30,
2010.
|
“We
delivered revenues and earnings on target in the third quarter,” said Sachi
Gerlitz, president and chief executive officer of Ness Technologies. “This very
solid quarter, in both our software product engineering and system integration
segments, follows the achievement of a new record billable headcount in India
and the highest operating margin in five quarters in Central and Eastern Europe,
where we remain optimistic about continued recovery. We remain focused on
operating margin expansion in 2011 with organic growth.”
|
·
|
Results
by operating segment:
|
|
§
|
The
company’s Software
Product Engineering segment, which provides outsourced software
product research and development services to companies that build or rely
on software to generate revenues, continued to perform well in the third
quarter, with in-line operating margin and sequential and year-over-year
revenue growth.
|
|
§
|
The
company’s System
Integration and Application Development segment showed significant
year-over-year revenue growth and good sequential operating margin
improvement, with strong performance in Israel and improving performance
in Central and Eastern Europe.
|
|
§
|
As
previously announced, the company no longer reports a separate Software Distribution
segment, as its European software distribution operations were
reclassified as discontinued operations and its Israeli software
distribution operations were reclassified to its System Integration and
Application Development segment, effective as of January 1,
2010.
|
“We improved the operations of our
system integration and
application development
segment, while we enjoyed the continued strong performance of our software product
engineering segment,” said Ofer Segev, executive vice president and chief
financial officer. “Bookings were a little light in the quarter, but we
expect them to return to a normal level in the fourth quarter. We are also working to improve our
collections from their temporary dip during the quarter. We anticipate a good
fourth quarter, historically our strongest quarter of the
year.”
Business Outlook
Ness is
reiterating its full year 2010 guidance of revenues from continuing operations
in the range of $575 million to $585 million with diluted net earnings per share
from continuing operations in the range shown in the reconciliation table
below:
Full
year diluted net
earnings
per share ($)
|
||||||||
Low
|
High
|
|||||||
GAAP
basis from continuing operations
|
$ | 0.12 | $ | 0.16 | ||||
Stock-based
compensation; amortization of intangible assets; earn-out and retention
expenses related to prior acquisitions; acquisition and integration costs
of Gilon acquisition
|
0.31 | 0.31 | ||||||
Non-GAAP
basis from continuing operations
|
$ | 0.43 | $ | 0.47 |
Based on
the weakness of European currencies for much of this year, Ness currently
expects to be near the lower end of the revenue guidance range.
Ness
Technologies Third Quarter 2010
|
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of 9
|
The
company’s 2010 GAAP guidance excludes any unannounced future acquisitions or
stock-based compensation grants; and the company’s GAAP and non-GAAP guidance
further assumes that outstanding diluted shares will average approximately 39
million in 2010 and that relevant foreign currency exchange rates will remain at
their levels as of October 22, 2010.
For the
reasons set forth elsewhere in this release, Ness’ management believes that
non-GAAP financial guidance provides the best comparative basis for investors to
understand and assess the company’s on-going operations and prospects for the
future.
Conference Call
Details
Sachi
Gerlitz, president and chief executive officer of Ness Technologies, and Ofer
Segev, executive vice president and chief financial officer, will conduct a
conference call to discuss the third quarter 2010 results. The call, which will
be simultaneously webcast, will begin at 8:00 AM Eastern Time / 5:00 AM Pacific
Time / 2:00 PM Israel Time on Wednesday, October 27, 2010.
To access
the Ness Technologies third quarter 2010 earnings conference call, participants
in North America should dial 1-800-399-0427, participants in Israel should dial
1-80-924-5917 and all other international participants should dial
+1-973-200-3375. A live audio webcast of the conference call will be available
on the investor relations page of the Ness Technologies corporate web site at
http://investor.ness.com.
Please visit the web site at least 15 minutes early to register for the
teleconference webcast and download any necessary audio software. A replay of
the call will be available on the web site approximately two hours after the
conference call is completed.
About Ness Technologies
Ness
Technologies (NASDAQ: NSTC and TASE: NSTC) is a global provider of IT and
business services and solutions with specialized expertise in software product
engineering; and system integration, application development, consulting and
software distribution. Ness delivers its portfolio of solutions and services
using a global delivery model combining offshore, near-shore and local teams.
With about 7,800 employees, Ness has operations in North America, Europe, Israel
and India, has customers in over 20 countries, and partners with numerous
software and hardware vendors worldwide. For more information about Ness, visit
www.ness.com.
Use of Non-GAAP Financial
Information
In
addition to reporting financial results in accordance with generally accepted
accounting principles, or GAAP, Ness uses various non-GAAP measures of net
income and earnings per share, including adjustments from results based on GAAP
to exclude (a) non-cash stock-based compensation expenses in accordance with
Financial Accounting Standards Board (FASB) Accounting Standards Codification
Topic 718, “Stock Compensation” (formerly, FASB Statement 123R) and amortization
of intangible assets, net of taxes; (b) earn-out and retention expenses related
to prior acquisitions; (c) an insurance settlement in the first quarter of 2009
related to a 2007 arbitration expense, net of related expenses, net of taxes;
(d) severance expenses in the first quarter of 2009, net of taxes; and (e)
acquisition and integration costs of its Gilon acquisition in the second quarter
of 2010, net of taxes. Ness’ management believes the non-GAAP financial
information provided in this release is useful to investors’ understanding and
assessment of Ness’ on-going core operations and prospects for the future. The
presentation of this non-GAAP financial information is not intended to be
considered in isolation or as a substitute for results prepared in accordance
with GAAP. Management uses both GAAP and non-GAAP information in evaluating and
operating the business internally and as such has determined that it is
important to provide this information to investors.
Ness
Technologies Third Quarter 2010
|
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Ness also
uses these non-GAAP measures in the formulation of its financial guidance. This
requires Ness management to make assumptions regarding certain factors that
could affect future net income and earnings per share, such as the timing and
size of future potential acquisitions (which could result in additional non-cash
amortization of intangibles), the timing and size of future potential
stock-based compensation grants (which could result in additional non-cash
stock-based compensation expense), and the timing and size of any one-time
income or expenses. The company discloses such assumptions in conjunction with
its financial guidance.
Forward
Looking Statement
This
press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
often are preceded by words such as “believes,” “expects,” “may,” “anticipates,”
“plans,” “intends,” “assumes,” “will” or similar expressions. Forward-looking
statements reflect management’s current expectations, as of the date of this
press release, and involve certain risks and uncertainties. Ness’ actual results
could differ materially from those anticipated in these forward looking
statements as a result of various factors. Some of the factors that could cause
future results to materially differ from the recent results or those projected
in forward-looking statements include the “Risk Factors” described in Ness’
Annual Report of Form 10-K filed with the Securities and Exchange Commission on
March 15, 2010. Ness is under no obligation, and expressly disclaims any
obligation, to update or alter its forward-looking statements, whether as a
result of such changes, new information, subsequent events or
otherwise.
Media
Contact:
|
Investor Relations
Contacts:
|
|
David
Kanaan
|
Drew Wright
|
Maya
Lustig
|
Intl:
+972-54-425-5307
|
USA:
1-201-488-3262
|
Israel:
+972-3-767-5110
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Email: media.int@ness.com
|
Email: investor@ness.com
|
Email: maya.lustig@ness.com
|
Ness
Technologies Third Quarter 2010
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Page 4
of 9
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NESS
TECHNOLOGIES, INC. AND ITS SUBSIDIARIES
|
||||||||||||||||
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
||||||||||||||||
U.S.
dollars in thousands (except per share data)
|
||||||||||||||||
Three
months ended
September
30,
|
Nine
months ended
September
30,
|
|||||||||||||||
2009
|
2010
|
2009
|
2010
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||
Revenues
|
$ | 123,202 | $ | 141,346 | $ | 376,370 | $ | 414,380 | ||||||||
Cost
of revenues
|
89,780 | 102,716 | 276,681 | 301,512 | ||||||||||||
Gross
profit
|
33,422 | 38,630 | 99,689 | 112,868 | ||||||||||||
Selling
and marketing
|
10,033 | 9,542 | 28,926 | 29,433 | ||||||||||||
General
and administrative
|
19,521 | 25,401 | 64,339 | 74,294 | ||||||||||||
Insurance
settlement related to 2007 arbitration expense, net of related
expenses
|
— | — | (2,610 | ) | — | |||||||||||
Commissions
related to the sale of Israeli SAP sales and distribution
operations
|
— | — | (2,534 | ) | — | |||||||||||
Total
operating expenses
|
29,554 | 34,943 | 88,121 | 103,727 | ||||||||||||
Operating
income
|
3,868 | 3,687 | 11,568 | 9,141 | ||||||||||||
Financial
expenses, net
|
(388 | ) | (489 | ) | (2,210 | ) | (1,140 | ) | ||||||||
Income
before taxes on income
|
3,480 | 3,198 | 9,358 | 8,001 | ||||||||||||
Taxes
on income
|
826 | 1,631 | 2,005 | 4,848 | ||||||||||||
Net
income from continuing operations
|
$ | 2,654 | $ | 1,567 | $ | 7,353 | $ | 3,153 | ||||||||
Net
loss from discontinued operations
|
(1,812 | ) | (799 | ) | (3,941 | ) | (7,031 | ) | ||||||||
Net
income (loss)
|
$ | 842 | $ | 768 | $ | 3,412 | $ | (3,878 | ) | |||||||
Basic
net earnings per share from continuing operations
|
$ | 0.07 | $ | 0.04 | $ | 0.19 | $ | 0.08 | ||||||||
Diluted
net earnings per share from continuing operations
|
$ | 0.07 | $ | 0.04 | $ | 0.19 | $ | 0.08 | ||||||||
Basic
net earnings (loss) per share
|
$ | 0.02 | $ | 0.02 | $ | 0.09 | $ | (0.10 | ) | |||||||
Diluted
net earnings (loss) per share
|
$ | 0.02 | $ | 0.02 | $ | 0.09 | $ | (0.10 | ) | |||||||
Weighted
average number of shares (in thousands) used in computing basic net
earnings per share from continuing operations, basic net earnings (loss)
per share and diluted net loss per share
|
38,451 | 38,001 | 38,653 | 38,230 | ||||||||||||
Weighted
average number of shares (in thousands) used in computing diluted net
earnings per share from continuing operations and diluted net earnings per
share
|
38,864 | 38,349 | 39,181 | 38,658 |
Ness
Technologies Third Quarter 2010
|
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of 9
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NESS
TECHNOLOGIES, INC. AND ITS SUBSIDIARIES
|
||||||||||||||||
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
||||||||||||||||
U.S.
dollars in thousands
|
||||||||||||||||
Three
months ended
September
30,
|
Nine
months ended
September
30,
|
|||||||||||||||
2009
|
2010
|
2009
|
2010
|
|||||||||||||
Segment Data
(1):
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||||
Revenues
from continuing operations:
|
||||||||||||||||
Software
Product Engineering
|
$ | 25,621 | $ | 28,879 | $ | 76,275 | $ | 83,336 | ||||||||
System
Integration and Application Development
|
97,581 | 112,467 | 300,095 | 331,044 | ||||||||||||
$ | 123,202 | $ | 141,346 | $ | 376,370 | $ | 414,380 | |||||||||
Operating
income (loss) from continuing operations:
|
||||||||||||||||
Software
Product Engineering
|
$ | 3,609 | $ | 3,675 | $ | 11,819 | $ | 11,916 | ||||||||
System
Integration and Application Development
|
3,159 | 4,002 | 11,698 | 9,975 | ||||||||||||
Unallocated
Expenses
|
(2,900 | ) | (3,990 | ) | (11,949 | ) | (12,750 | ) | ||||||||
$ | 3,868 | $ | 3,687 | $ | 11,568 | $ | 9,141 | |||||||||
Geographic
Data:
|
||||||||||||||||
Revenues
from continuing operations:
|
||||||||||||||||
Israel
|
$ | 41,905 | $ | 51,714 | $ | 129,546 | $ | 150,680 | ||||||||
North
America
|
42,115 | 48,557 | 128,138 | 142,187 | ||||||||||||
Europe
|
36,819 | 38,449 | 111,893 | 115,614 | ||||||||||||
Asia
and the Far East
|
2,363 | 2,626 | 6,793 | 5,899 | ||||||||||||
$ | 123,202 | $ | 141,346 | $ | 376,370 | $ | 414,380 |
(1)
|
The
company no longer reports a separate Software Distribution segment, as its
European software distribution operations were reclassified as
discontinued operations and its Israeli software distribution operations
were reclassified to its System Integration and Application Development
segment, effective as of January 1, 2010. Segment data for prior periods
has been restated to reflect the current organization of the
segments.
|
Ness
Technologies Third Quarter 2010
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Page
6 of 9
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NESS
TECHNOLOGIES, INC. AND ITS SUBSIDIARIES
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||||||||
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||
U.S.
dollars in thousands
|
||||||||
Nine
months ended
September
30,
|
||||||||
2009
|
2010
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
Cash flows from operating
activities:
|
||||||||
Net
income (loss)
|
$ | 3,412 | $ | (3,878 | ) | |||
Adjustments
required to reconcile net income (loss) to net cash provided by (used in)
operating activities:
|
||||||||
Net
loss from discontinued operations
|
3,941 | 7,031 | ||||||
Stock-based
compensation
|
2,619 | 2,357 | ||||||
Currency
fluctuation of restricted cash and short-term bank
deposits
|
— | (999 | ) | |||||
Depreciation
and amortization
|
12,937 | 13,387 | ||||||
Loss
(gain) on sale of property and equipment and impairment and sale of cost
investments
|
(138 | ) | 108 | |||||
Commissions
related to the sale of Israeli SAP sales and distribution
operations
|
(2,534 | ) | — | |||||
Decrease
(increase) in trade receivables, net
|
53,444 | (9,255 | ) | |||||
Decrease
(increase) in unbilled receivables
|
3,549 | (11,298 | ) | |||||
Increase
in other accounts receivable and prepaid expenses
|
(4,293 | ) | (1,982 | ) | ||||
Decrease
(increase) in work-in-progress
|
(754 | ) | 2,612 | |||||
Increase
in long-term prepaid expenses
|
(414 | ) | (825 | ) | ||||
Deferred
income taxes, net
|
395 | 1,437 | ||||||
Increase
(decrease) in trade payables
|
(17,174 | ) | 2,372 | |||||
Decrease
in advances from customers and deferred revenues
|
(2,210 | ) | (9,518 | ) | ||||
Decrease
in other accounts payable and accrued expenses
|
(15,508 | ) | (15 | ) | ||||
Increase
in other long-term liabilities
|
677 | 902 | ||||||
Increase
(decrease) in accrued severance pay, net
|
(2,570 | ) | 114 | |||||
Net
cash used in discontinued operations
|
(1,279 | ) | (6,109 | ) | ||||
Net
cash provided by (used in) operating activities
|
34,100 | (13,559 | ) | |||||
Cash flows from investing
activities:
|
||||||||
Consideration
from sale of a consolidated subsidiary
|
— | 1,711 | ||||||
Net
cash paid for acquisition of a consolidated subsidiary
|
— | (17,197 | ) | |||||
Cash
paid for acquisition of intangible assets
|
— | (513 | ) | |||||
Additional
payments in connection with acquisitions of subsidiaries in prior
periods
|
(13,643 | ) | (1,330 | ) | ||||
Proceeds
from maturity of (investment in) short-term bank deposits,
net
|
(16,822 | ) | 12,031 | |||||
Proceeds
from sale of property and equipment
|
796 | — | ||||||
Purchase
of property and equipment and capitalization of software developed for
internal use
|
(9,395 | ) | (6,906 | ) | ||||
Net
cash used in discontinued operations
|
(1,808 | ) | — | |||||
Net
cash used in investing activities
|
(40,872 | ) | (12,204 | ) | ||||
Cash flows from financing
activities:
|
||||||||
Exercise
of options
|
— | 4 | ||||||
Repurchase
of shares
|
(2,037 | ) | (2,169 | ) | ||||
Acquired
subsidiary’s dividend to its former shareholder
|
(1,430 | ) | — | |||||
Short-term
bank loans and credit, net
|
(2,960 | ) | 26,622 | |||||
Proceeds
from long-term debt
|
15,000 | 13,364 | ||||||
Principal
payments of long-term debt
|
(4,411 | ) | (14,659 | ) | ||||
Net
cash provided by financing activities
|
4,162 | 23,162 | ||||||
Effect
of exchange rate changes on cash and cash equivalents
|
(1,038 | ) | (2,385 | ) | ||||
Decrease
in cash and cash equivalents
|
(3,648 | ) | (4,986 | ) | ||||
Cash
and cash equivalents at the beginning of the period
|
44,585 | 40,218 | ||||||
Cash
and cash equivalents at the end of the period
|
$ | 40,937 | $ | 35,232 |
Ness
Technologies Third Quarter 2010
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NESS
TECHNOLOGIES, INC. AND ITS SUBSIDIARIES
|
||||||||
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
||||||||
U.S.
dollars in thousands
|
||||||||
December
31,
2009
|
September
30,
2010
|
|||||||
(Unaudited)
|
||||||||
CURRENT
ASSETS:
|
||||||||
Cash
and cash equivalents
|
$ | 40,218 | $ | 35,232 | ||||
Restricted
cash
|
2,470 | 2,572 | ||||||
Short-term
bank deposits
|
25,939 | 14,802 | ||||||
Trade
receivables, net of allowance for doubtful accounts
|
131,452 | 146,683 | ||||||
Unbilled
receivables
|
28,012 | 42,307 | ||||||
Other
accounts receivable and prepaid expenses
|
27,832 | 30,451 | ||||||
Work
in progress
|
9,690 | 6,877 | ||||||
Total
assets attributed to discontinued operations
|
43,212 | 30,616 | ||||||
Total
current assets
|
308,825 | 309,540 | ||||||
LONG-TERM
ASSETS:
|
||||||||
Long-term
prepaid expenses and other assets
|
6,083 | 7,209 | ||||||
Unbilled
receivables
|
4,654 | 3,508 | ||||||
Deferred
income taxes, net
|
3,608 | 2,704 | ||||||
Severance
pay fund
|
53,145 | 57,074 | ||||||
Property
and equipment, net
|
35,739 | 33,813 | ||||||
Intangible
assets, net
|
10,016 | 11,129 | ||||||
Goodwill
|
263,541 | 279,875 | ||||||
Total
long-term assets
|
376,786 | 395,312 | ||||||
Total
assets
|
$ | 685,611 | $ | 704,852 | ||||
CURRENT
LIABILITIES:
|
||||||||
Short-term
bank credit
|
$ | 500 | $ | 30,379 | ||||
Current
maturities of long-term debt
|
21,332 | 26,303 | ||||||
Trade
payables
|
30,914 | 33,796 | ||||||
Advances
from customers and deferred revenues
|
40,639 | 31,640 | ||||||
Other
accounts payable and accrued expenses
|
99,464 | 106,300 | ||||||
Total
liabilities attributed to discontinued operations
|
25,461 | 12,779 | ||||||
Total
current liabilities
|
218,310 | 241,197 | ||||||
LONG-TERM
LIABILITIES:
|
||||||||
Long-term
debt, net of current maturities
|
50,836 | 43,351 | ||||||
Other
long-term liabilities
|
6,689 | 7,722 | ||||||
Deferred
income taxes
|
2,045 | 2,477 | ||||||
Accrued
severance pay
|
56,443 | 60,670 | ||||||
Total
long-term liabilities
|
116,013 | 114,220 | ||||||
Total
stockholders’ equity
|
351,288 | 349,435 | ||||||
Total
liabilities and stockholders’ equity
|
$ | 685,611 | $ | 704,852 |
Ness
Technologies Third Quarter 2010
|
Page 8
of 9
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NESS
TECHNOLOGIES, INC. AND ITS SUBSIDIARIES
|
||||||||||||||||
RECONCILIATION
OF SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION
|
||||||||||||||||
EXCLUDING
STOCK-BASED COMPENSATION; AMORTIZATION OF INTANGIBLE ASSETS; EARN-OUT AND
RETENTION EXPENSES RELATED TO PRIOR ACQUISITIONS; INSURANCE SETTLEMENT
RELATED TO 2007 ARBITRATION EXPENSE, NET OF RELATED EXPENSES; SEVERANCE
EXPENSES; ACQUISITION AND INTEGRATION COSTS OF GILON ACQUISITION; ALL NET
OF TAXES
|
||||||||||||||||
U.S.
dollars in thousands (except per share data)
|
||||||||||||||||
Three
months ended
September
30,
|
Nine
months ended
September
30,
|
|||||||||||||||
2009
|
2010
|
2009
|
2010
|
|||||||||||||
Statements
of Income Data:
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||||
GAAP
gross profit
|
$ | 33,422 | $ | 38,630 | $ | 99,689 | $ | 112,868 | ||||||||
Stock-based
compensation
|
63 | 49 | 183 | 204 | ||||||||||||
Amortization
of intangible assets
|
205 | 140 | 581 | 329 | ||||||||||||
Severance
expenses
|
— | — | 966 | — | ||||||||||||
Non-GAAP
gross profit
|
$ | 33,690 | $ | 38,819 | $ | 101,419 | $ | 113,401 | ||||||||
GAAP
operating income
|
$ | 3,868 | $ | 3,687 | $ | 11,568 | $ | 9,141 | ||||||||
Stock-based
compensation
|
863 | 751 | 2,619 | 1,911 | ||||||||||||
Amortization
of intangible assets
|
1,860 | 1,571 | 5,225 | 4,291 | ||||||||||||
Earn-out
and retention expenses related to prior acquisitions
|
— | 557 | — | 1,534 | ||||||||||||
Insurance
settlement related to 2007 arbitration expense, net of related
expenses
|
— | — | (2,610 | ) | — | |||||||||||
Severance
expenses
|
— | — | 2,646 | — | ||||||||||||
Acquisition
and integration costs of Gilon acquisition
|
— | — | — | 728 | ||||||||||||
Non-GAAP
operating income
|
$ | 6,591 | $ | 6,566 | $ | 19,448 | $ | 17,605 | ||||||||
GAAP
operating margin
|
3.1 | % | 2.6 | % | 3.1 | % | 2.2 | % | ||||||||
Non-GAAP
operating margin
|
5.3 | % | 4.6 | % | 5.2 | % | 4.2 | % | ||||||||
GAAP
net income from continuing operations
|
$ | 2,654 | $ | 1,567 | $ | 7,353 | $ | 3,153 | ||||||||
Stock-based
compensation; amortization of intangible assets; earn-out and retention
expenses related to prior acquisitions; insurance settlement in respect of
2007 arbitration expense, net of related expenses; severance expenses;
acquisition and integration costs of Gilon acquisition; all net of
taxes
|
2,223 | 2,505 | 6,505 | 8,023 | ||||||||||||
Non-GAAP
net income from continuing operations
|
$ | 4,877 | $ | 4,072 | $ | 13,858 | $ | 11,176 | ||||||||
GAAP
diluted net earnings per share from continuing operations
|
$ | 0.07 | $ | 0.04 | $ | 0.19 | $ | 0.08 | ||||||||
Stock-based
compensation; amortization of intangible assets; earn-out and retention
expenses related to prior acquisitions; insurance settlement in respect of
2007 arbitration expense, net of related expenses; severance expenses;
acquisition and integration costs of Gilon acquisition; all net of
taxes
|
0.06 | 0.07 | 0.17 | 0.21 | ||||||||||||
Non-GAAP
diluted net earnings per share from continuing operations
|
$ | 0.13 | $ | 0.11 | $ | 0.35 | $ | 0.29 | ||||||||
Segment
Data:
|
||||||||||||||||
Software
Product Engineering:
|
||||||||||||||||
GAAP
operating income
|
$ | 3,609 | $ | 3,675 | $ | 11,819 | $ | 11,916 | ||||||||
Amortization
of intangible assets
|
38 | 38 | 115 | 114 | ||||||||||||
Non-GAAP
operating income
|
$ | 3,647 | $ | 3,713 | $ | 11,934 | $ | 12,030 | ||||||||
System
Integration and Application Development:
|
||||||||||||||||
GAAP
operating income
|
$ | 3,159 | $ | 4,002 | $ | 11,698 | $ | 9,975 | ||||||||
Amortization
of intangible assets
|
1,821 | 1,533 | 5,110 | 4,177 | ||||||||||||
Earn-out
and retention expenses related to prior acquisitions
|
— | 557 | — | 1,534 | ||||||||||||
Insurance
settlement related to 2007 arbitration expense, net of related
expenses
|
— | — | (2,610 | ) | — | |||||||||||
Severance
expenses
|
— | — | 1,293 | — | ||||||||||||
Acquisition
and integration costs of Gilon acquisition
|
— | — | — | 728 | ||||||||||||
Non-GAAP
operating income
|
$ | 4,980 | $ | 6,092 | $ | 15,491 | $ | 16,414 |
Ness
Technologies Third Quarter 2010
|
Page 9
of 9
|