Nuance Announces Fiscal 2012 And Fourth Quarter Results

The Company believes that providing non-GAAP information to investors, in addition to the GAAP presentation, allows investors to view the financial results in the way management views the operating results. The Company further believes that providing this information allows investors to not only better understand the Company’s financial performance, but more importantly, to evaluate the efficacy of the methodology and information used by management to evaluate and measure such performance.

Nuance Communications, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
Unaudited
		Three months ended								Twelve months ended
		September 30,								September 30,
			2012				2011				2012				2011
Revenues:
Product and licensing		$	209,227			$	179,177			$	740,726			$	607,358
Professional services and hosting			196,886				132,063				673,943				509,141
Maintenance and support			62,668				55,801				236,840				202,242
Total revenues			468,781				367,041				1,651,509				1,318,741
Cost of revenues:
Product and licensing			21,713				17,651				74,837				65,601
Professional services and hosting			122,153				93,052				424,733				341,055
Maintenance and support			12,319				11,412				45,325				38,057
Amortization of intangible assets			15,300				14,570				60,034				55,111
Total cost of revenues			171,485				136,685				604,929				499,824
Gross profit			297,296				230,356				1,046,580				818,917
Operating expenses:
Research and development			63,311				49,479				225,441				179,377
Sales and marketing			101,298				80,622				369,205				306,439
General and administrative			47,838				43,332				163,318				147,603
Amortization of intangible assets			24,391				22,998				95,416				88,219
Acquisition-related costs, net			12,374				7,956				58,746				21,866
Restructuring and other charges, net			1,466				17,519				8,268				22,862
Total operating expenses			250,678				221,906				920,394				766,366
Income from operations			46,618				8,450				126,186				52,551
Other expense, net			(24,969	)			(6,798	)			(60,884	)			(22,534	)
Income before income taxes			21,649				1,652				65,302				30,017
(Benefit) provision for income taxes			(95,992	)			6,761				(141,833	)			(8,221	)
Net income (loss)		$	117,641			$	(5,109	)		$	207,135			$	38,238
Net income per share:
Basic		$	0.38			$	(0.02	)		$	0.67			$	0.13
Diluted		$	0.36			$	(0.02	)		$	0.65			$	0.12
Weighted average common shares outstanding:
Basic			309,307				306,541				306,371				302,277
Diluted			322,424				306,541				320,822				315,960

Nuance Communications, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
ASSETS		September 30, 2012			September 30, 2011
		Unaudited
Current assets:
Cash and cash equivalents		$	1,129,761		$	447,224
Restricted cash			-			6,799
Marketable securities			-			31,244
Accounts receivable, net			381,417			280,856
Prepaid expenses and other current assets			190,128			88,804
Total current assets			1,701,306			854,927
Land, building and equipment, net			116,134			78,218
Goodwill			2,955,477			2,347,880
Intangible assets, net			906,538			731,577
Other assets			119,585			82,691
Total assets		$	5,799,040		$	4,095,293
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt		$	148,542		$	6,905
Redeemable convertible debentures			231,552			-
Contingent and deferred acquisition payments			49,685			23,783
Accounts payable and accrued expenses			328,374			258,777
Deferred revenue			206,610			185,605
Total current liabilities			964,763			475,070
Long-term portion of debt			1,735,811			853,020
Deferred revenue, net of current portion			108,481			90,382
Other liabilities			243,279			183,450
Total liabilities			3,052,334			1,601,922
Equity component of currently redeemable convertible debentures			18,430			-
Stockholders' equity			2,728,276			2,493,371
Total liabilities and stockholders' equity		$	5,799,040		$	4,095,293

Nuance Communications, Inc.
Consolidated Statements of Cash Flows
(in thousands)
Unaudited
		Three months ended									Twelve months ended
		September 30,									September 30,
			2012				2011					2012				2011
Cash flows from operating activities:
Net income (loss)		$	117,641			$	(5,109	)			$	207,135			$	38,238
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			47,665				45,214					187,183				170,933
Stock-based compensation			58,165				37,791					174,581				147,296
Non-cash interest expense			10,709				2,986					35,497				12,510
Non-cash restructuring and other expense			-				11,725					-				11,725
Deferred tax (benefit) provision			(92,347	)			(8,163	)				(151,547	)			(43,890	)
Gain on non-controlling strategic equity interest			-				-					(13,726	)			-
Other			504				12,233					4,016				16,492
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable			(21,880	)			(21,851	)				(55,210	)			(25,530	)
Prepaid expenses and other assets			14,861				5,302					13,881				(11,793	)
Accounts payable			153				1,806					22,645				(8,193	)
Accrued expenses and other liabilities			(2,796	)			3,175					8,939				(6,775	)
Deferred revenue			8,781				12,795					39,605				56,398
Net cash provided by operating activities			141,456				97,904					472,999				357,411
Cash flows from investing activities:
Capital expenditures			(10,901	)			(10,640	)				(62,910	)			(34,907	)
Payments for business and technology acquisitions, net of cash acquired			(229,128	)			(88,991	)				(884,945	)			(409,005	)
Purchases of marketable securities and other investments			-				-					(15,156	)			(10,776	)
Proceeds from sales and maturities of marketable securities and other investments			778				5,000					31,789				11,650
Change in restricted cash balance			-				-					6,747				17,184
Net cash used in investing activities			(239,251	)			(94,631	)				(924,475	)			(425,854	)
Cash flows from financing activities:
Payments of debt			(1,626	)			(1,671	)				(6,605	)			(7,535	)
Proceeds from long-term debt, net of issuance costs			688,908				(2,553	)				1,364,925				(2,553	)
Payments for repurchases of common stock			-				-					(199,997	)			-
Proceeds from settlement of share-based derivatives, net			-				-					9,020				9,414
Payments of other long-term liabilities			(380	)			(2,849	)				(8,525	)			(10,643	)
Excess tax benefits on employee equity awards			500				9,300					(3,583	)			17,520
Proceeds from issuance of common stock from employee stock plans			8,884				14,955					27,747				36,667
Cash used to net share settle employee equity awards			(10,822	)			(6,881	)				(49,947	)			(36,908	)
Net cash provided by financing activities			685,464				10,301					1,133,035				5,962
Effects of exchange rate changes on cash and cash equivalents			2,537				(13,331	)				978				(6,925	)
Net increase (decrease) in cash and cash equivalents			590,206				243					682,537				(69,406	)
Cash and cash equivalents at beginning of period			539,555				446,981					447,224				516,630
Cash and cash equivalents at end of period		$	1,129,761			$	447,224				$	1,129,761			$	447,224

Nuance Communications, Inc.
Supplemental Financial Information - GAAP to Non-GAAP Reconciliations
(in thousands, except per share amounts)
Unaudited
		Three months ended								Twelve months ended
		September 30								September 30
			2012				2011				2012				2011
GAAP revenue		$	468,781			$	367,041			$	1,651,509			$	1,318,741
Acquisition-related revenue adjustments: product and licensing			17,624				22,140				74,060				53,961
Acquisition-related revenue adjustments: professional services and hosting			2,775				7,844				5,864				15,429
Acquisition-related revenue adjustments: maintenance and support			908				2,510				6,632				5,807
Non-GAAP revenue		$	490,088			$	399,535			$	1,738,065			$	1,393,938
GAAP cost of revenue		$	171,485			$	136,685			$	604,929			$	499,824
Cost of revenue from amortization of intangible assets			(15,300	)			(14,570	)			(60,034	)			(55,111	)
Cost of revenue adjustments: product and licensing (1,2)			2,002				2,680				8,135				9,487
Cost of revenue adjustments: professional services and hosting (1,2)			(8,818	)			(7,300	)			(25,981	)			(26,864	)
Cost of revenue adjustments: maintenance and support (1,2)			(330	)			(641	)			(956	)			(2,186	)
Non-GAAP cost of revenue		$	149,039			$	116,854			$	526,093			$	425,150
GAAP gross profit		$	297,296			$	230,356			$	1,046,580			$	818,917
Gross profit adjustments			43,753				52,325				165,392				149,871
Non-GAAP gross profit		$	341,049			$	282,681			$	1,211,972			$	968,788
GAAP income from operations		$	46,618			$	8,450			$	126,186			$	52,551
Gross profit adjustments			43,753				52,325				165,392				149,871
Research and development (1)			10,258				6,101				29,565				24,289
Sales and marketing (1)			18,187				10,516				54,281				43,264
General and administrative (1)			20,238				13,226				63,233				49,707
Amortization of intangible assets			24,391				22,998				95,416				88,219
Costs associated with IP collaboration agreements			5,250				5,250				21,000				19,750
Acquisition-related costs, net			12,374				7,956				58,746				21,866
Restructuring and other charges, net			1,466				17,519				8,268				22,862
Non-GAAP income from operations		$	182,535			$	144,341			$	622,087			$	472,379
GAAP (benefit) provision for income taxes		$	(95,992	)		$	6,761			$	(141,833	)		$	(8,221	)
Non-cash taxes			97,741				(2,161	)			160,883				26,620
Non-GAAP provision for income taxes		$	1,749			$	4,600			$	19,050			$	18,399
GAAP net income		$	117,641			$	(5,109	)		$	207,135			$	38,238
Acquisition-related adjustment - revenue (2)			21,307				32,494				86,556				75,197
Acquisition-related adjustment - cost of revenue (2)			(2,336	)			(2,687	)			(8,700	)			(10,473	)
Acquisition-related costs, net			12,374				7,956				58,746				21,866
Cost of revenue from amortization of intangible assets			15,300				14,570				60,034				55,111
Amortization of intangible assets			24,391				22,998				95,416				88,219
Non-cash stock-based compensation (1)			58,165				37,791				174,581				147,296
Non-cash interest expense, net			10,709				2,986				35,497				12,510
Non-cash income taxes			(97,741	)			2,161				(160,883	)			(26,620	)
Costs associated with IP collaboration agreements			5,250				5,250				21,000				19,750
Change in fair value of share-based instruments			(1,647	)			(2,386	)			(7,997	)			(13,230	)
Gain on non-controlling strategic equity interest			-				-				(13,726	)			-
Restructuring and other charges, net			1,466				17,519				8,268				22,862
Non-GAAP net income		$	164,879			$	133,543			$	555,927			$	430,726
Non-GAAP diluted net income per share		$	0.51			$	0.42			$	1.73			$	1.36
Diluted weighted average common shares outstanding			322,424				319,198				320,822				315,960

Nuance Communications, Inc.
Supplemental Financial Information - GAAP to Non-GAAP Reconciliations, continued
(in thousands)
Unaudited
		Three months ended								Twelve months ended
		September 30								September 30
			2012				2011				2012				2011
(1) Non-Cash Stock-Based Compensation
Cost of product and licensing		$	19			$	7			$	137			$	36
Cost of professional services and hosting			9,133				7,300				26,409				27,814
Cost of maintenance and support			330				641				956				2,186
Research and development			10,258				6,101				29,565				24,289
Sales and marketing			18,187				10,516				54,281				43,264
General and administrative			20,238				13,226				63,233				49,707
Total		$	58,165			$	37,791			$	174,581			$	147,296
(2) Acquisition-Related Revenue and Cost of Revenue
Revenue		$	21,307			$	32,494			$	86,556			$	75,197
Cost of product and licensing			(2,021	)			(2,687	)			(8,272	)			(9,523	)
Cost of professional services and hosting			(315	)			-				(428	)			(950	)
Total		$	18,971			$	29,807			$	77,856			$	64,724

Nuance Communications, Inc.
Supplemental Financial Information – GAAP to Non-GAAP Reconciliations, continued
(in millions)
Unaudited
Healthcare		Q1			Q2			Q3			Q4			FY			Q1			Q2			Q3			Q4			FY
			2011			2011			2011			2011			2011			2012			2012			2012			2012			2012
GAAP Revenue		$	117.4		$	120.7		$	135.4		$	141.7		$	515.2		$	145.1		$	149.7		$	184.5		$	189.3		$	668.6
Adjustment		$	0.4		$	0.3		$	3.9		$	7.0		$	11.6		$	0.2		$	0.2		$	0.0		$	0.4		$	0.8
Non-GAAP Revenue		$	117.8		$	121.0		$	139.3		$	148.7		$	526.8		$	145.3		$	149.9		$	184.5		$	189.7		$	669.4
Mobile & Consumer		Q1			Q2			Q3			Q4			FY			Q1			Q2			Q3			Q4			FY
			2011			2011			2011			2011			2011			2012			2012			2012			2012			2012
GAAP Revenue		$	86.1		$	93.1		$	91.6		$	107.9		$	378.7		$	103.4		$	110.3		$	126.0		$	143.2		$	483.0
Adjustment		$	1.6		$	0.6		$	1.5		$	10.9		$	14.6		$	5.1		$	4.8		$	6.4		$	9.0		$	25.3
Non-GAAP Revenue		$	87.7		$	93.7		$	93.1		$	118.7		$	393.3		$	108.5		$	115.1		$	132.4		$	152.2		$	508.3
Enterprise		Q1			Q2			Q3			Q4			FY			Q1			Q2			Q3			Q4			FY
			2011			2011			2011			2011			2011			2012			2012			2012			2012			2012
GAAP Revenue		$	71.1		$	72.3		$	68.5		$	79.9		$	291.8		$	72.2		$	79.6		$	74.1		$	89.1		$	315.0
Adjustment		$	1.4		$	1.7		$	1.4		$	0.1		$	4.6		$	3.6		$	11.8		$	0.4		$	1.2		$	17.0
Non-GAAP Revenue		$	72.5		$	74.0		$	69.9		$	80.0		$	296.4		$	75.8		$	91.4		$	74.5		$	90.3		$	332.0
Imaging		Q1			Q2			Q3			Q4			FY			Q1			Q2			Q3			Q4			FY
			2011			2011			2011			2011			2011			2012			2012			2012			2012			2012
GAAP Revenue		$	29.2		$	32.9		$	33.4		$	37.6		$	133.0		$	39.9		$	50.7		$	47.1		$	47.2		$	184.9
Adjustment		$	10.0		$	10.4		$	9.4		$	14.6		$	44.4		$	12.5		$	10.6		$	9.7		$	10.7		$	43.5
Non-GAAP Revenue		$	39.3		$	43.3		$	42.8		$	52.1		$	177.4		$	52.4		$	61.3		$	56.8		$	57.9		$	228.4
Schedules may not add due to rounding.

« First ‹ Previous 1 2 3 4 5 6 7 8 Next › Last »