The Company's quarterly and full year 2012 non-GAAP earnings per share guidance exclude the following charges:
- Amortization expense associated with acquisition-related intangible assets, which the Company expects to be approximately $1.3 million and $5.2 million for the first quarter and full year, respectively, and which the Company expects will reduce GAAP earnings per share by approximately $0.03 and $0.11 for the respective periods.
- The incremental accelerated depreciation of previously capitalized internally developed software costs due to the Company’s implementation of a world-wide enterprise resource planning platform in 2012, which the Company expects to be approximately $450,000 in each of the first and second quarters, and $900,000 for the full year, and which the Company expects will reduce GAAP earnings per share by approximately $0.01 in each of the quarterly periods and $0.02 for the full year. The Company had earlier expected the charge would be recorded in the second half of 2012.
In addition, the non-GAAP earnings per share guidance excludes the effects of restructuring charges that the Company expects to incur in 2012 associated with recent acquisitions, the amount and timing of which have not yet been determined, as well as the impact any future acquisitions might have on its results of operations.
The Company’s non-GAAP guidance includes the impact of expensing employee share based compensation. All earnings per share amounts are on a diluted basis.
Goodwill Impairment Charge
The Company recorded a $20 million goodwill impairment charge in the fourth quarter of 2011. The charge resulted from the Company's annual goodwill impairment testing required under generally accepted accounting principles and was related to the Company's European reporting unit. The outcome of the Company’s annual impairment test as of October 1, 2011 was impacted primarily by the significant drop in the market capitalization of the Company as of the measurement date and the continuing deterioration of economic conditions in the fourth quarter 2011 within member states of the European Union, in particular the impact that expected austerity measures may have on future healthcare spending by ministries of health within the Union. The Company does not expect the non-cash charge will have a significant impact on its ongoing business operations, nor will it affect liquidity, cash flow from operations, or financial covenant compliance of the Company's credit facility.