Because management uses them, management believes that the disclosure of these non-GAAP financial measures to investors provides greater transparency and useful information to help the investor better understand the Company’s operating performance and to evaluate the methodology used by management to evaluate and measure such performance. Notwithstanding their utility to investors in understanding operational trends, these non-GAAP measures should not be considered measures of the Company’s liquidity. In addition, the Company cautions that its definition of “non-GAAP net income”, “non-GAAP EPS” and “non-GAAP net income per share” may differ from similar measures used by other companies and may differ from period to period. Also, in future periods, management may make other adjustments for expenses and gains that it does not consider reflective of core operating performance in a particular period thereby modifying its definition of “non-GAAP net income”, “non-GAAP EPS” and “non-GAAP net income per share” by excluding these other or additional expenses and gains.

Reconciliation of Expected Non-GAAP Results for the Three Months Ending December 31, 2011 (unaudited):
   
Three Months Ending

December 31, 2011

(unaudited)

(in thousands, except per share data)
Low   High
 
Revenue $ 84,000 $ 86,000
 
Reconciliation of non-GAAP gross margin:
Gross margin 82 % 82 %
Adjustments:
Stock-based compensation expense and related payroll taxes 1 % 1 %
Amortization of acquired intangible assets - % - %
Merger and integration-related costs   - %     - %
Non-GAAP gross margin   83 %     83 %
 
Reconciliation of diluted non-GAAP net income per share:
Net income per share $ 0.16 $ 0.18
Adjustments:
Stock-based compensation expense and related payroll taxes, net of taxes 0.10 0.10
Amortization of acquired intangible assets, net of taxes - -
Merger and integration-related costs   -       -  
Non-GAAP net income per share $ 0.26     $ 0.28  

Reconciliation of Expected Non-GAAP Net Income and Non-GAAP Net Income Per Share for the Twelve Months Ending December 31, 2011 (unaudited):
   
Twelve Months Ending

December 31, 2011

(unaudited)

(in thousands, except per share data)
Low   High
 
Revenue $ 308,000 $ 310,000
 
Reconciliation of diluted non-GAAP net income per share:
Net income per share $ 0.66 $ 0.68
Adjustments:
Stock-based compensation expense and related payroll taxes, net of taxes 0.35 0.35
Amortization of acquired intangible assets, net of taxes 0.02 0.02
Merger and integration-related costs   -     -
Non-GAAP net income per share $ 1.03   $ 1.05

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