DELTEK, INC. | |||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
2009 | 2008 | 2009 | 2008 | ||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||
REVENUES: | |||||||||||||||||
Software license fees | $ | 15,758 | $ | 22,132 | $ | 26,984 | $ | 39,139 | |||||||||
Consulting services | 19,216 | 22,324 | 39,282 | 46,590 | |||||||||||||
Maintenance and support services | 30,987 | 28,286 | 61,584 | 56,351 | |||||||||||||
Other revenues | 3,408 | 4,623 | 3,512 | 4,639 | |||||||||||||
Total revenues |
69,369 | 77,365 | 131,362 | 146,719 | |||||||||||||
COST OF REVENUES: | |||||||||||||||||
Cost of software license fees | 1,835 | 1,687 | 3,223 | 3,267 | |||||||||||||
Cost of consulting services | 16,140 | 19,192 | 33,457 | 39,355 | |||||||||||||
Cost of maintenance and support services | 5,529 | 4,799 | 11,269 | 10,426 | |||||||||||||
Cost of other revenues | 4,605 | 4,875 | 4,648 | 5,107 | |||||||||||||
Total cost of revenues | 28,109 | 30,553 | 52,597 | 58,155 | |||||||||||||
GROSS PROFIT | 41,260 | 46,812 | 78,765 | 88,564 | |||||||||||||
Research and development | 10,773 | 11,558 | 21,644 | 22,949 | |||||||||||||
Sales and marketing | 10,653 | 13,413 | 22,172 | 25,716 | |||||||||||||
General and administrative | 9,412 | 8,379 | 17,317 | 15,940 | |||||||||||||
Restructuring charge | 1,135 | 1,052 | 2,548 | 1,052 | |||||||||||||
Total operating expenses | 31,973 | 34,402 | 63,681 | 65,657 | |||||||||||||
INCOME FROM OPERATIONS | 9,287 | 12,410 | 15,084 | 22,907 | |||||||||||||
Interest income | 11 | 193 | 22 | 450 | |||||||||||||
Interest expense |
(1,473 | ) | (2,480 | ) | (2,982 | ) | (5,954 | ) | |||||||||
Other income (expense), net | 24 | (164 | ) | 21 | (201 | ) | |||||||||||
INCOME BEFORE INCOME TAXES | 7,849 | 9,959 | 12,145 | 17,202 | |||||||||||||
Income tax expense | 2,948 | 4,536 | 4,590 | 7,758 | |||||||||||||
NET INCOME | $ | 4,901 | $ | 5,423 | $ | 7,555 | $ | 9,444 | |||||||||
EARNINGS PER SHARE | |||||||||||||||||
Basic | $ | 0.09 | $ | 0.12 | $ | 0.15 | $ | 0.20 | |||||||||
Diluted | $ | 0.09 | $ | 0.11 | $ | 0.15 | $ | 0.20 | |||||||||
COMMON SHARES AND EQUIVALENTS OUTSTANDING | |||||||||||||||||
Basic weighted average shares | 52,394 | 46,552 | 49,560 | 46,527 | |||||||||||||
Diluted weighted average shares | 52,914 | 47,692 | 49,940 | 47,812 | |||||||||||||
DELTEK, INC. | |||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
(in thousands, except share data) | |||||||||
June 30, |
December 31, |
||||||||
2009 | 2008 | ||||||||
(unaudited) | (unaudited) | ||||||||
ASSETS | |||||||||
CURRENT ASSETS: | |||||||||
Cash and cash equivalents | $ | 113,457 | $ | 35,788 | |||||
Accounts receivable, net of allowance of $3,632 and $2,195 at June 30, 2009 and December 31, 2008, respectively |
47,196 | 47,747 | |||||||
Deferred income taxes | 4,640 | 4,635 | |||||||
Prepaid expenses and other current assets | 6,466 | 6,874 | |||||||
Income taxes receivable | 857 | 846 | |||||||
TOTAL CURRENT ASSETS |
172,616 | 95,890 | |||||||
PROPERTY AND EQUIPMENT, NET | 12,861 | 14,639 | |||||||
CAPITALIZED SOFTWARE DEVELOPMENT COSTS, NET | 1,034 | 1,438 | |||||||
LONG-TERM DEFERRED INCOME TAXES | 5,820 | 4,125 | |||||||
INTANGIBLE ASSETS, NET | 14,982 | 17,396 | |||||||
GOODWILL | 57,763 | 57,654 | |||||||
OTHER ASSETS | 1,593 | 2,130 | |||||||
TOTAL ASSETS | $ | 266,669 | $ | 193,272 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | |||||||||
CURRENT LIABILITIES: | |||||||||
Current portion of long-term debt | $ | - | $ | 10,154 | |||||
Accounts payable and accrued expenses | 28,122 | 28,734 | |||||||
Accrued liability for redemption of stock in recapitalization | 317 | 317 | |||||||
Deferred revenues | 37,032 | 21,296 | |||||||
TOTAL CURRENT LIABILITIES | 65,471 | 60,501 | |||||||
LONG-TERM DEBT | 179,604 | 182,661 | |||||||
OTHER TAX LIABILITIES | 1,130 | 1,003 | |||||||
OTHER LONG-TERM LIABILITIES | 3,024 | 2,917 | |||||||
TOTAL LIABILITIES | 249,229 | 247,082 | |||||||
COMMITMENTS AND CONTINGENCIES | |||||||||
STOCKHOLDERS’ EQUITY (DEFICIT): | |||||||||
Preferred stock, $0.001 par value—authorized, 5,000,000 shares; none issued or outstanding at June 30, 2009 or December 31, 2008 |
– | – | |||||||
Common stock, $0.001 par value—authorized, 200,000,000 shares; issued and outstanding, 64,268,327 and 43,474,220 shares at June 30, 2009 and December 31, 2008, respectively |
64 | 43 | |||||||
Class A common stock, $0.001 par value—authorized, 100 shares; issued and outstanding, 100 shares at June 30, 2009 and December 31, 2008 |
– | – | |||||||
Additional paid-in capital | 240,450 | 177,249 | |||||||
Accumulated deficit | (222,350 | ) | (229,905 | ) | |||||
Accumulated other comprehensive deficit | (724 | ) | (1,197 | ) | |||||
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT) | 17,440 | (53,810 | ) | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ | 266,669 | $ | 193,272 | |||||
DELTEK, INC. | |||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
(in thousands) | |||||||||
Six Months Ended June 30, | |||||||||
2009 | 2008 | ||||||||
(unaudited) | (unaudited) | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||
Net income | $ | 7,555 | $ | 9,444 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||
Provision for doubtful accounts | 2,472 | 489 | |||||||
Depreciation and amortization | 5,529 | 4,597 | |||||||
Amortization of debt issuance costs | 481 | 396 | |||||||
Stock-based compensation expense | 4,179 | 3,693 | |||||||
Employee stock purchase plan expense | 162 | 130 | |||||||
Restructuring charge, net | 918 | 495 | |||||||
Loss on disposal of fixed assets | 23 | 321 | |||||||
Deferred income taxes | (1,909 | ) | (1,564 | ) | |||||
Change in assets and liabilities: | |||||||||
Accounts receivable, net | (1,675 | ) | 4,888 | ||||||
Prepaid expenses and other assets | 501 | 1,509 | |||||||
Accounts payable and accrued expenses | (1,480 | ) | (1,379 | ) | |||||
Income taxes receivable | (120 | ) | (3,768 | ) | |||||
Excess tax benefit (deficiency) benefit from exercise of stock options | 108 | (59 | ) | ||||||
Other tax liabilities | 127 | 202 | |||||||
Other long-term liabilities | (289 | ) | (303 | ) | |||||
Deferred revenues | 16,065 | 804 | |||||||
Net Cash Provided by Operating Activities |
32,647 | 19,895 | |||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||
Purchase of property and equipment | (931 | ) | (4,295 | ) | |||||
Capitalized software development costs | (150 | ) | (261 | ) | |||||
Net Cash Used in Investing Activities | (1,081 | ) | (4,556 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||
Issuance of common stock in connection with rights offering, net of issuance costs | 58,228 | – | |||||||
Proceeds from exercise of stock options | 677 | 192 | |||||||
Excess tax (deficiency) benefit from exercise of stock options | (108 | ) | 59 | ||||||
Proceeds from issuance of stock under employee stock purchase plan | 310 | 305 | |||||||
Offering costs paid for 2007 sale of common stock in initial public offering | – | (275 | ) | ||||||
Repayment of debt | (13,211 | ) | – | ||||||
Net Cash Provided by Financing Activities | 45,896 | 281 | |||||||
IMPACT OF FOREIGN EXCHANGE RATES ON CASH AND CASH EQUIVALENTS | 207 | 148 | |||||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 77,669 | 15,768 | |||||||
CASH AND CASH EQUIVALENTS––Beginning of period | 35,788 | 17,091 | |||||||
CASH AND CASH EQUIVALENTS––End of period | $ | 113,457 | $ | 32,859 | |||||
DELTEK, INC. | |||||||||||||||||||||||||||
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME | |||||||||||||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||||
2009 | 2008 | 2009 | 2008 | ||||||||||||||||||||||||
Net Income (GAAP Basis) | $ | 4,901 | $ | 5,423 | $ | 7,555 | $ | 9,444 | |||||||||||||||||||
Income Tax Expense | 2,948 | 4,536 | 4,590 | 7,758 | |||||||||||||||||||||||
Pre-Tax Income (GAAP Basis) | $ | 7,849 | $ | 9,959 | $ | 12,145 | $ | 17,202 | |||||||||||||||||||
Adjustments: | |||||||||||||||||||||||||||
Stock-based Compensation | 2,221 | 1,459 | 4,341 | 3,823 | |||||||||||||||||||||||
Recapitalization Retention Expense | 7 | 125 | 152 | 294 | |||||||||||||||||||||||
Amortization of Acquired Intangibles | 1,173 | 831 | 2,437 | 1,835 | |||||||||||||||||||||||
Restructuring Charge | 1,135 | 1,052 | 2,548 | 1,052 | |||||||||||||||||||||||
Adjusted Pre-Tax Income | 12,385 | 13,426 | 21,623 | 24,206 | |||||||||||||||||||||||
Less: Adjusted Income Tax Expense | 4,735 | 5,902 | 8,324 | 10,518 | |||||||||||||||||||||||
Non-GAAP Net Income | $ | 7,650 | $ | 7,524 | $ | 13,299 | $ | 13,688 | |||||||||||||||||||
Non-GAAP Earnings Per Share (diluted) | $ | 0.14 | $ | 0.16 | $ | 0.27 | $ | 0.29 | |||||||||||||||||||
Weighted Average Shares | 52,914 | 47,692 | 49,940 | 47,812 | |||||||||||||||||||||||
RECONCILIATION OF GAAP OPERATING INCOME AND OPERATING MARGIN TO NON-GAAP OPERATING INCOME AND OPERATING MARGIN | |||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||||
2009 | 2008 | 2009 | 2008 | ||||||||||||||||||||||||
Operating Income and Margin - GAAP | $ | 9,287 | 13 | % | $ | 12,410 | 16 | % | $ | 15,084 | 11 | % | $ | 22,907 | 16 | % | |||||||||||
Plus: Stock-based Compensation and Recapitalization Retention Expense | 2,228 | 1,584 | 4,493 | 4,117 | |||||||||||||||||||||||
Plus: Amortization of Acquired Intangibles | 1,173 | 831 | 2,437 | 1,835 | |||||||||||||||||||||||
Plus: Restructuring Charge | 1,135 | 1,052 | 2,548 | 1,052 | |||||||||||||||||||||||
Operating Income and Margin - Non-GAAP | $ | 13,823 | 20 | % | $ | 15,877 | 21 | % | $ | 24,562 | 19 | % | $ | 29,911 | 20 | % | |||||||||||
Total Revenues | $ | 69,369 | $ | 77,365 | $ | 131,362 | $ | 146,719 | |||||||||||||||||||
RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA | |||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||||
2009 | 2008 | 2009 | 2008 | ||||||||||||||||||||||||
Net Income (GAAP Basis) | $ | 4,901 | $ | 5,423 | $ | 7,555 | $ | 9,444 | |||||||||||||||||||
Stock-based Compensation | 2,221 | 1,459 | 4,341 | 3,823 | |||||||||||||||||||||||
Recapitalization Retention Expense | 7 | 125 | 152 | 294 | |||||||||||||||||||||||
Depreciation | 1,294 | 1,104 | 2,541 | 2,124 | |||||||||||||||||||||||
Amortization | 1,381 | 1,150 | 2,992 | 2,473 | |||||||||||||||||||||||
Interest Expense, net | 1,462 | 2,287 | 2,960 | 5,504 | |||||||||||||||||||||||
Income Tax Provision | 2,948 | 4,536 | 4,590 | 7,758 | |||||||||||||||||||||||
Restructuring Charge | 1,135 | 1,052 | 2,548 | 1,052 | |||||||||||||||||||||||
Adjusted EBITDA | $ | 15,349 | $ | 17,136 | $ | 27,679 | $ | 32,472 | |||||||||||||||||||
STOCK-BASED COMPENSATION AND RECAPITALIZATION RETENTION EXPENSES | |||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||||
2009 | 2008 | 2009 | 2008 | ||||||||||||||||||||||||
Cost of Software License Fees | $ | - | $ | 1 | $ | - | $ | 2 | |||||||||||||||||||
Cost of Consulting Services | 401 | 363 | 846 | 789 | |||||||||||||||||||||||
Cost of Maintenance and Support Services | 102 | (360 | ) | 205 | (91 | ) | |||||||||||||||||||||
Research and Development | 421 | 401 | 996 | 951 | |||||||||||||||||||||||
Sales and Marketing | 416 | 415 | 801 | 892 | |||||||||||||||||||||||
General and Administrative | 888 | 764 | 1,645 | 1,574 | |||||||||||||||||||||||
Total | $ | 2,228 | $ | 1,584 | $ | 4,493 | $ | 4,117 | |||||||||||||||||||
AMORTIZATION OF ACQUIRED INTANGIBLE ASSETS | |||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||||
2009 | 2008 | 2009 | 2008 | ||||||||||||||||||||||||
Cost of Software License Fees | $ | 263 | $ | 255 | $ | 618 | $ | 685 | |||||||||||||||||||
Cost of Consulting Services | 19 | 20 | 39 | 39 | |||||||||||||||||||||||
Sales and Marketing | 872 | 537 | 1,743 | 1,074 | |||||||||||||||||||||||
General and Administrative | 19 | 19 | 37 | 37 | |||||||||||||||||||||||
Total | $ | 1,173 | $ | 831 | $ | 2,437 | $ | 1,835 | |||||||||||||||||||
AMORTIZATION AND DEPRECIATION EXPENSES | |||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||||
2009 | 2008 | 2009 | 2008 | ||||||||||||||||||||||||
Cost of Software License Fees | $ | 475 | $ | 576 | $ | 1,181 | $ | 1,327 | |||||||||||||||||||
Cost of Consulting Services | 433 | 395 | 851 | 753 | |||||||||||||||||||||||
Cost of Maintenance and Support Services | 213 | 125 | 425 | 254 | |||||||||||||||||||||||
Research and Development | 292 | 264 | 575 | 520 | |||||||||||||||||||||||
Sales and Marketing | 1,093 | 763 | 2,188 | 1,494 | |||||||||||||||||||||||
General and Administrative | 169 | 131 | 313 | 249 | |||||||||||||||||||||||
Total | $ | 2,675 | $ | 2,254 | $ | 5,533 | $ | 4,597 | |||||||||||||||||||
RECONCILIATION OF GAAP EPS TO EPS EXCLUDING THE RIGHTS OFFERING | |||||||||||||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||||
2009 | 2008 | 2009 | 2008 | ||||||||||||||||||||||||
Net Income (GAAP Basis) | $ | 4,901 | $ | 5,423 | $ | 7,555 | $ | 9,444 | |||||||||||||||||||
GAAP Earnings Per Share (diluted) | $ | 0.09 | $ | 0.11 | $ | 0.15 | $ | 0.20 | |||||||||||||||||||
Rights Offering | $ | 0.02 | $ | 0.01 | $ | 0.02 | $ | 0.01 | |||||||||||||||||||
Earnings Per Share Excluding the Rights Offering (diluted) | $ | 0.11 | $ | 0.12 | $ | 0.17 | $ | 0.21 | |||||||||||||||||||
Weighted Average Shares | 52,914 | 47,692 | 49,940 | 47,812 | |||||||||||||||||||||||
Rights Offering | 8,926 | 3,448 | 6,217 | 3,446 | |||||||||||||||||||||||
Weighted Average Shares (Excluding the Rights Offering) | 43,988 | 44,244 | 43,723 | 44,366 | |||||||||||||||||||||||
RECONCILIATION OF NON-GAAP EPS TO NON-GAAP EPS EXCLUDING THE RIGHTS OFFERING | |||||||||||||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||||
2009 | 2008 | 2009 | 2008 | ||||||||||||||||||||||||
Net Income (Non-GAAP Basis) | $ | 7,650 | $ | 7,524 | $ | 13,299 | $ | 13,688 | |||||||||||||||||||
Non-GAAP Earnings Per Share (diluted) | $ | 0.14 | $ | 0.16 | $ | 0.27 | $ | 0.29 | |||||||||||||||||||
Rights Offering | $ | 0.03 | $ | 0.01 | $ | 0.03 | $ | 0.02 | |||||||||||||||||||
Non-GAAP Earnings Per Share Excluding the Rights Offering (diluted) | $ | 0.17 | $ | 0.17 | $ | 0.30 | $ | 0.31 | |||||||||||||||||||
Weighted Average Shares | 52,914 | 47,692 | 49,940 | 47,812 | |||||||||||||||||||||||
Rights Offering | 8,926 | 3,448 | 6,217 | 3,446 | |||||||||||||||||||||||
Weighted Average Shares (Excluding the Rights Offering) | 43,988 | 44,244 | 43,723 | 44,366 | |||||||||||||||||||||||