EZchip Semiconductor Ltd.
Reconciliation of GAAP to Non-GAAP Measures
(U.S. Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
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June 30, March 31, June 30, June 30, June 30,
2012 2012 2011 2012 2011
----------- ----------- ----------- ----------- -----------
GAAP gross profit $ 12,911 $ 12,236 $ 13,473 $ 25,147 $ 23,374
Stock-based
compensation 74 77 73 151 213
Amortization of
purchased technology - - 298 - 597
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Non-GAAP gross
profit $ 12,985 $ 12,313 $ 13,844 $ 25,298 $ 24,184
=========== =========== =========== =========== ===========
GAAP gross profit
as percentage
of revenues 81.7% 84.9% 77.9% 83.2% 76.7%
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Non-GAAP gross
profit as
percentage of
revenues 82.2% 85.4% 80.0% 83.7% 79.3%
=========== =========== =========== =========== ===========
GAAP operating
expenses $ 8,040 $ 7,701 $ 6,954 $ 15,741 $ 14,297
Stock-based
compensation:
Research and
development (1,545) (1,361) (1,119) (2,906) (2,245)
Selling, general
and administrative (1,216) (1,144) (908) (2,360) (1,738)
Amortization of
intangible assets
Selling, general
and administrative (51) (51) (95) (102) (190)
----------- ----------- ----------- ----------- -----------
Non-GAAP
operating
expenses $ 5,228 $ 5,145 $ 4,832 $ 10,373 $ 10,124
=========== =========== =========== =========== ===========
GAAP operating
income $ 4,871 $ 4,535 $ 6,519 $ 9,406 $ 9,077
----------- ----------- ----------- ----------- -----------
Non-GAAP
operating
income $ 7,757 $ 7,168 $ 9,012 $ 14,925 $ 14,060
=========== =========== =========== =========== ===========
GAAP net income $ 5,553 $ 5,132 $ 4,772 $ 10,685 $ 6,245
Stock-based
compensation 2,835 2,582 2,100 5,417 4,196
Amortization
of purchased
intangible assets 51 51 393 102 787
Taxes on income* - - 2,116 - 3,527
----------- ----------- ----------- ----------- -----------
Non-GAAP net
income $ 8,439 $ 7,765 $ 9,381 $ 16,204 $ 14,755
=========== =========== =========== =========== ===========
Non-GAAP net
income per share
- Diluted $ 0.29 $ 0.27 $ 0.33 $ 0.55 $ 0.52
Non-GAAP weighted
average shares
- Diluted** 29,540,537 29,144,661 28,455,818 29,343,540 28,297,526
* Taxes on income represent the non-cash utilization of a deferred tax
asset with respect to the Company's estimate of its accumulated taxable
income in accordance with FASB ASC 740. During 2011, EZchip Technologies,
the Company's main subsidiary completed the utilization of the deferred
tax asset, and started to enjoy the ten year period of exemption from
Israeli corporate taxes due to benefits provided pursuant to its Israeli
approved and privileged enterprise programs.
** In calculating diluted non-GAAP net income per share, the diluted
weighted average number of shares outstanding excludes the effects of
stock-based compensation expenses in accordance with FASB ASC 718.
