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Ariba Reports Results For Third Quarter Of Fiscal Year 2012

Ariba, the Ariba logo, AribaLIVE, Ariba.com, Ariba.com Network, Ariba Spend Management. Find it. Get it. Keep it. and PO-Flip are registered trademarks of Ariba, Inc. Ariba Procure-to-Pay, Ariba Buyer, Ariba eForms, Ariba PunchOut, Ariba Services Procurement, Ariba Travel and Expense, Ariba Procure-to-Order, Ariba Procurement Content, Ariba Sourcing, Ariba Savings and Pipeline Tracking, Ariba Category Management, Ariba Category Playbooks, Ariba StartSourcing, Ariba Spend Visibility, Ariba Analysis, Ariba Data Enrichment, Ariba Contract Management, Ariba Contract Compliance, Ariba Electronic Signatures, Ariba StartContracts, Ariba Invoice Management, Ariba Payment Management, Ariba Working Capital Management, Ariba Settlement, Ariba Supplier Information and Performance Management, Ariba Supplier Information Management, Ariba Discovery, Ariba Invoice Automation, Ariba PO Automation, Ariba Express Content, Ariba Ready, and Ariba LIVE are trademarks or service marks of Ariba, Inc. All other brand or product names may be trademarks or registered trademarks of their respective companies or organizations in the United States and/or other countries.

Ariba Safe Harbor

Safe Harbor Statement under the Private Securities Litigation Reform Act 1995: Information and announcements in this release involve Ariba's expectations, beliefs, hopes, plans, intentions or strategies regarding the future and are forward-looking statements that involve risks and uncertainties. All forward-looking statements included in this release are based upon information available to Ariba as of the date of the release, and we assume no obligation to update any such forward-looking statements. These statements are not guarantees of future performance and actual results could differ materially from our current expectations. Factors that could cause or contribute to Ariba's operating and financial results to differ materially from current expectations include, but are not limited to: the pendency of our agreement to be acquired by SAP or the failure to complete the merger with SAP; the impact of adverse economic conditions on Ariba’s results of operations and financial condition; delays in development or shipment of new versions of Ariba's products and services; lack of market acceptance of Ariba's existing or future products or services; inability to continue to develop competitive new products and services on a timely basis; introduction of new products or services by major competitors; the impact of any acquisitions, including difficulties with the integration process or the realization of benefits of a transaction; the impact of our disposition, including the potential disruption of our ongoing business; the ability to attract and retain qualified employees; long and unpredictable sales cycles and the deferrals of anticipated orders; declining economic conditions, including the impact of a recession; inability to control costs; changes in the company's pricing or compensation policies; significant fluctuations in our stock price; the outcome of and costs associated with pending or potential future regulatory or legal proceedings; the impact of our acquisitions and dispositions, including the disruption or loss of customer, business partner, supplier or employee relationships; and the level of costs and expenses incurred by Ariba as a result of such transactions. Factors and risks associated with its business, including a number of the factors and risks described above, are discussed in Ariba's Form 10-Q filed with the SEC on May 4, 2012.
 
Ariba, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited; in thousands)
   
June 30, September 30,
2012 2011
ASSETS
Current assets:
Cash and cash equivalents $ 194,530 $ 196,399
Short-term investments 23,086 28,319
Restricted cash 29,280 196
Accounts receivable, net 36,748 32,256
Prepaid expenses and other current assets   19,480     16,191  
Total current assets 303,124 273,361
 
Property and equipment, net 32,365 32,806
Long-term investments 39,425 26,581
Restricted cash, less current portion 269 29,174
Goodwill 518,011 482,825
Other intangible assets, net 57,489 61,653
Other assets   8,635     6,741  
Total assets $ 959,318   $ 913,141  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 14,015 $ 8,873
Accrued compensation and related liabilities 46,284 45,169
Accrued liabilities 26,316 24,293
Restructuring obligations 14,495 23,461
Deferred revenue   129,312     114,505  
Total current liabilities 230,422 216,301
 
Restructuring obligations, less current portion - 8,346
Deferred revenue, less current portion 9,255 9,181
Contingent liability for acquisition 23,974 23,486
Other long-term liabilities   7,592     7,873  
Total liabilities   271,243     265,187  
 
Stockholders' equity:
Common stock 204 199
Additional paid-in capital 5,397,181 5,353,514
Accumulated other comprehensive loss (8,681 ) (3,396 )
Accumulated deficit   (4,700,629 )   (4,702,363 )
Total stockholders' equity   688,075     647,954  
Total liabilities and stockholders' equity $ 959,318   $ 913,141  
 
 
Ariba, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited; in thousands, except per share data)
       
Three Months Ended Nine Months Ended
June 30, June 30,
2012 2011 2012 2011
Revenues:
Subscription and maintenance $ 108,011 $ 91,017 $ 307,283 $ 239,724
Services and other   28,953     30,900     86,805     81,378  
Total revenues   136,964     121,917     394,088     321,102  
 
Cost of revenues:
Subscription and maintenance 21,171 19,507 64,068 51,477
Services and other 23,961 22,274 69,775 56,798
Amortization of acquired technology and customer intangible assets   4,326     3,954     12,942     8,054  
Total cost of revenues   49,458     45,735     146,785     116,329  
Gross profit   87,506     76,182     247,303     204,773  
 
Operating expenses:
Sales and marketing 47,515 43,019 138,095 118,566
Research and development 18,321 16,661 52,605 44,157
General and administrative 18,604 13,708 47,941 38,859
Amortization of other intangible assets 394 331 1,175 573
Restructuring costs   -     13,396     -     10,704  
Total operating expenses   84,834     87,115     239,816     212,859  
 
Operating income (loss) 2,672 (10,933 ) 7,487 (8,086 )
Interest and other (expense) income, net   (351 )   671     (437 )   1,766  
Income (loss) from continuing operations before income taxes 2,321 (10,262 ) 7,050 (6,320 )
Provision for (benefit from) income taxes   3,411     2,021     7,018     (930 )
(Loss) income from continuing operations (1,090 ) (12,283 ) 32 (5,390 )
 
Discontinued operations, net of tax:
Income (loss) from discontinued operations 330 349 1,702 (3,608 )
Gain on sale of discontinued operations   -     -     -     39,164  
Total discontinued operations   330     349     1,702     35,556  
 
Net (loss) income $ (760 ) $ (11,934 ) $ 1,734   $ 30,166  
 
Basic earnings (loss) per share:
(Loss) income from continuing operations $ (0.01 ) $ (0.13 ) $ 0.00 $ (0.06 )
Discontinued operations, net of tax   0.00     0.00     0.02     0.39  
Net (loss) income per basic common share $ (0.01 ) $ (0.13 ) $ 0.02   $ 0.33  
 
Diluted earnings (loss) per share:
(Loss) income from continuing operations $ (0.01 ) $ (0.13 ) $ 0.00 $ (0.06 )
Discontinued operations, net of tax   0.00     0.00     0.02     0.39  
Net (loss) income per diluted common share $ (0.01 ) $ (0.13 ) $ 0.02   $ 0.33  
 
Weighted average shares - basic 96,244 93,101 95,284 91,193
Weighted average shares - diluted 96,244 93,101 98,694 91,193
 
 
Ariba, Inc. and Subsidiaries
Cash Flows
(Unaudited; in thousands)
           
Three Months Ended Nine Months Ended
June 30, June 30,
2012 2011 2012 2011
Operating activities:
Net (loss) income $ (760 ) $ (11,934 ) $ 1,734 $ 30,166
Less income from discontinued operations, net of tax   (330 )   (349 )   (1,702 )   (35,556 )
(Loss) income from continuing operations (1,090 ) (12,283 ) 32 (5,390 )
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
Provision for doubtful accounts 316 200 698 472
Depreciation 3,360 2,806 9,646 7,434
Amortization of intangible assets 4,720 4,285 14,117 8,627
Stock-based compensation 18,782 13,999 55,078 41,044
Restructuring costs - 13,396 - 10,704
Changes in operating assets and liabilities:
Accounts receivable (2,136 ) (1,952 ) (4,463 ) (3,248 )
Prepaid expense and other assets (4,429 ) 1,146 (5,645 ) (3,516 )
Accounts payable 1,886 763 3,242 (658 )
Accrued compensation and related liabilities 11,545 11,943 1,551 4,376
Accrued liabilities 2,899 (28 ) 430 (8,684 )
Deferred revenue (3,276 ) (7,655 ) 15,092 25,187
Restructuring obligations   (6,015 )   (4,210 )   (17,312 )   (12,485 )
Net cash provided by continuing operations 26,562 22,410 72,466 63,863
Net cash provided by (used in) discontinued operations   288     (2,787 )   1,269     (4,497 )
Net cash provided by operating activities   26,850     19,623     73,735     59,366  
 
Investing activities:
Cash paid for acquisition, net of cash acquired - (1,626 ) (47,728 ) (64,288 )
Proceeds from sale of discontinued operations - 7,851 - 51,000
Purchases of property and equipment (1,969 ) (12,415 ) (8,586 ) (22,809 )
Purchases of investments, net of maturities   (3,061 )   (8,390 )   (7,311 )   (8,163 )
Net cash used in investing activities   (5,030 )   (14,580 )   (63,625 )   (44,260 )
 
Financing activities:
Proceeds from issuance of common stock, net 299 627 5,334 4,035
Repurchase of common stock   -     -     (16,740 )   (12,802 )
Net cash provided by (used in) financing activities   299     627     (11,406 )   (8,767 )
 
Effect of exchange rates on cash and cash equivalents (1,011 ) (285 ) (573 ) (510 )
 
Net change in cash and cash equivalents 21,108 5,385 (1,869 ) 5,829
 
Cash and cash equivalents at beginning of period 173,422 182,837 196,399 182,393
       
Cash and cash equivalents at end of period $ 194,530   $ 188,222   $ 194,530   $ 188,222  

Non-GAAP Financial Measures

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