- Amortization expense associated with acquisition-related intangible assets.
- Restructuring charges that the Company expects to incur in 2012 associated with acquisitions, which charges were $1.3 million for the first half of 2012. In a Current Report on Form 8-K filed with the SEC on July 9, 2012, the Company reported that it had initiated an integration and reorganization plan related to the acquisition of Nicolet and further reported that it expected the cost of the plan would be approximately $6.4 million, which the Company expects to record as of the date of the plan. For the remainder of 2012, the amount and timing of other potential restructuring charges have not yet been determined.
- Direct costs associated with acquisitions that were $2.0 million in the first half of 2012, principally for pre-acquisition due diligence and outside legal costs. The Company expects that during the third quarter of 2012 it will incur additional direct costs of the Nicolet acquisition related to valuation and audit-related services.
- The incremental accelerated depreciation of previously capitalized software costs of $900,000 during the first half of the year due to the Company’s implementation of a world-wide enterprise resource planning platform in 2012, which the Company expects will reduce GAAP earnings per share by approximately $0.02 for the full year.- The impact on gross profit of the fair value adjustment to inventory associated with Embla purchase accounting that will be $56,000 for the full year 2012, and for Nicolet, the amount and timing of which have not been determined. 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. Use of Non-GAAP Financial Measures The Company's non-GAAP results for the three and six months ended June 30, 2012 exclude amortization expense associated with certain acquisition-related intangible assets, restructuring charges, direct costs associated with acquisitions, the accelerated write off of capitalized software, and the impact of inventory fair value adjustments recorded through purchase accounting, as more fully detailed below.
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