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Brocade Reports Fiscal Q1 2017 Results

SAN JOSE, CA--(Marketwired - Feb 23, 2017) -  Brocade® ( NASDAQ : BRCD ) today reported financial results for its first fiscal quarter ended January 28, 2017. Brocade reported first quarter revenue of $581 million, up 1% year-over-year and down 12% quarter-over-quarter. The Company reported a GAAP loss per share of $0.01, down from diluted earnings per share (EPS) of $0.23 and $0.16 in Q1 2016 and Q4 2016, respectively. Non-GAAP diluted EPS was $0.16 for Q1 2017, down from non-GAAP diluted EPS of $0.29 and $0.33 in Q1 2016 and Q4 2016, respectively. The year-over-year decline in both GAAP and non-GAAP diluted EPS primarily reflects lower SAN revenue and lower IP Networking wired switch and router revenue, offset by the added revenue from the Ruckus Wireless acquisition. The sequential decline in both GAAP and non-GAAP diluted EPS is primarily due to lower IP Networking revenue, attributed in part to customer uncertainty surrounding the pending acquisition of Brocade by Broadcom Limited ("Broadcom") and Broadcom's publicly announced post-closing plan to divest Brocade's IP Networking business. In addition, both the year-over-year and sequential quarterly declines in GAAP diluted EPS reflect the inclusion of certain acquisition-related expenses that negatively impacted Q1 2017 results.

In light of the pending Broadcom acquisition, Brocade will not provide fiscal Q2 2017 guidance and will not hold a conference call to discuss these financial results. In addition, on February 22, 2017, Broadcom and ARRIS International plc announced that they have reached an agreement for ARRIS to acquire Brocade's Ruckus Wireless and ICX campus switch businesses. This transaction is expected to be completed after the close of Broadcom's acquisition of Brocade.

Key Financial Metrics:

    Q1 2017   Q4 2016   Q1 2016   Q1 2017 vs. Q4 2016   Q1 2017 vs. Q1 2016
Revenue   $ 581 M   $ 657 M   $ 574 M   (12 %)   1 %
GAAP earnings (loss) per share--diluted   $ (0.01 )   $ 0.16     $ 0.23     (109 %)   (106 %)
Non-GAAP EPS--diluted   $ 0.16     $ 0.33     $ 0.29     (50 %)   (43 %)
GAAP gross margin     63.1 %     63.9 %     67.7 %   (0.8 ) pts   (4.6 ) pts
Non-GAAP gross margin     66.6 %     68.2 %     68.8 %   (1.6 ) pts   (2.1 ) pts
GAAP operating margin     0.7 %     12.6 %     21.1 %   (11.9 ) pts   (20.3 ) pts
Non-GAAP operating margin     15.5 %     24.4 %     25.9 %   (8.9 ) pts   (10.4 ) pts

Please see important note of explanation about the use of non-GAAP financial measures below, including a detailed reconciliation between GAAP and non-GAAP information in the tables included herein.

Highlights:

  • SAN product revenue of $307 million was down 12% year-over-year. The decline was primarily the result of lower Fibre Channel director and embedded switch sales, which both declined 20% year-over-year. Sequentially, SAN product revenue increased 1%, with fixed-configuration switch revenue up 6%, partially offset by lower director and embedded switch revenues, which were down 2% and 8%, respectively. The year-over-year and sequential revenue performance was impacted by competition from alternative storage networking technologies and architectures, and customer uncertainty surrounding the pending acquisition of Brocade by Broadcom.
  • IP Networking product revenue of $174 million, including $72 million of product revenue from Ruckus Wireless, was up 30% year-over-year. The increase was primarily due to added wireless revenue following the acquisition of Ruckus Wireless in the third quarter of fiscal year 2016, partially offset by lower wired switch and router revenue. Sequentially, IP Networking product revenue decreased 32%, primarily due to Broadcom's planned divestiture of Brocade's IP Networking business.

Board Declares Dividend:

  • The Brocade Board of Directors has declared a regular second fiscal quarter cash dividend of $0.055 per share of the Company's common stock. The dividend payment will be made on April 4, 2017, to stockholders of record at the close of market on March 10, 2017.

Other Q1 2017 product, customer, and partner announcements are available at http://newsroom.brocade.com/.

Brocade (www.brocade.com)
130 Holger Way, San Jose, CA 95134
T. 408.333.8000 F. 408.333.8101

Financial Highlights and Additional Financial Information

                   
    Q1 2017     Q4 2016     Q1 2016  
Routes to market as a % of total net revenues:                  
  OEM revenues   57 %   58 %   67 %
  Channel/Direct revenues   43 %   42 %   33 %
                   
  10% or greater customer revenues   19 %   12 %   34 %
Geographic split as a % of total net revenues (1):                  
  Domestic revenues   47 %   47 %   55 %
  International revenues   53 %   53 %   45 %
Segment split as a % of total net revenues:                  
  SAN product revenues   53 %   46 %   61 %
  IP Networking product revenues   30 %   39 %   23 %
  Global Services revenues   17 %   15 %   16 %
                     
  SAN business revenues (2)   62 %   54 %   70 %
  IP Networking business revenues (2)   38 %   46 %   30 %
                   
Additional information:   Q1 2017   Q4 2016   Q1 2016
  GAAP net income (loss) attributable to Brocade   $ (6 )M   $ 67 M   $ 94 M
  Non-GAAP net income attributable to Brocade   $ 68 M   $ 134 M   $ 119 M
  GAAP operating income   $ 4 M   $ 83 M   $ 121 M
  Non-GAAP operating income   $ 90 M   $ 160 M   $ 149 M
  GAAP effective tax rate     45.6 %     1.6 %     16.2 %
  Non-GAAP effective tax rate     13.6 %     10.3 %     16.7 %
  Cash and cash equivalents   $ 1,230 M   $ 1,257 M   $ 1,392 M
  Capital expenditures   $ 12 M   $ 17 M   $ 24 M
  Cash provided by (used in) operations   $ (3 )M   $ 159 M   $ 112 M
  Days sales outstanding     41 days     39 days     28 days
  Employees at end of period     5,823     5,960     4,712
  SAN port shipments     0.9 M     0.9 M     1.0 M
  Share repurchases   $ --     $ --     $ 144.5 M

Please see important note of explanation about the use of non-GAAP financial measures below, including a detailed reconciliation between GAAP and non-GAAP information in the tables included herein.

(1) Revenues are attributed to geographic areas based on known product delivery location. Since some OEM partners take delivery of Brocade products domestically and then ship internationally to their end users, the percentage of international revenues based on end-user location would likely be higher.
(2) SAN and IP Networking business revenues include hardware and software product, support, and services revenues.

Non-GAAP Financial Measures
To supplement financial information presented on a GAAP basis, Brocade provides information presented on a non-GAAP basis. These non-GAAP financial measures include non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating margin, non-GAAP operating income, non-GAAP tax rate, non-GAAP net income, and non-GAAP EPS. These non-GAAP financial measures are not computed in accordance with, or as an alternative to, financial information presented on a GAAP basis. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measures. The most directly comparable GAAP information and a reconciliation between the GAAP and non-GAAP amounts is provided in the tables at the end of this press release.

Management believes that the non-GAAP financial measures used in this press release allow management to gain a better understanding of Brocade's comparative operating performance, both from period to period and relative to its competitors. These non-GAAP financial measures also help with the determination of Brocade's baseline performance before gains, losses or charges that are considered by management to be outside of ongoing operating results. Accordingly, management uses these non-GAAP financial measures for planning and forecasting of future periods and in making decisions regarding operations and the allocation of resources.

Management believes these non-GAAP financial measures, when read in conjunction with Brocade's GAAP financials, provide useful information to investors by offering:

  • the ability to make more meaningful period-to-period comparisons of Brocade's ongoing operating results;
  • the ability to make more meaningful comparisons of Brocade's operating performance relative to its competitors;
  • the ability to better identify trends in Brocade's underlying business and to perform related trend analyses; and
  • a better understanding of how management plans and measures Brocade's underlying business.

In determining non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating margin, non-GAAP operating income, non-GAAP tax rate, non-GAAP net income and non-GAAP EPS, management excludes certain gains or losses and benefits or costs that are the result of events that arise outside the ordinary course of Brocade's continuing operations. Management believes that it is appropriate to evaluate Brocade's operating performance by excluding those items that are not indicative of ongoing operating results or limit comparability. Such items include, but are not limited to: (i) impact to cost of revenues from purchase accounting adjustments to inventory; (ii) acquisition and integration costs; and (iii) restructuring and other related benefits.

Management also excludes the following non-cash charges in determining these non-GAAP financial measures: (i) stock-based compensation expense; (ii) amortization of purchased intangible assets; and (iii) non-cash interest expense related to the convertible debt.

Management believes that the exclusion of stock-based compensation allows for more accurate comparisons of Brocade's operating results to Brocade's peer companies. This is due to the varying use of valuation methodologies and subjective assumptions and the variety of award types. In addition, the exclusion of the expense associated with the amortization of acquisition-related intangible assets is appropriate because a significant portion of the purchase price for acquisitions may be allocated to intangible assets that have short lives, and the exclusion of amortization expense allows comparisons of operating results that are consistent over time for Brocade's newly acquired and long-held businesses. In connection with the convertible debt, under the relevant accounting guidance, a non-cash interest expense is recognized for the convertible debt as an imputed interest expense for the conversion feature. Management believes excluding the non-cash interest expense related to the convertible debt from its non-GAAP financial measures is useful for investors because the expense does not represent a cash outflow in the respective reporting periods and is not indicative of ongoing operating performance.

Finally, management believes that it is appropriate to exclude the tax effects of the items noted above and (i) tax charges and benefits related to unusual or infrequent intercompany transactions; (ii) tax charges or benefits that are a result of the implementation of restructuring plans; and (iii) tax charges resulting from the integration of intellectual property assets from acquisitions. Management believes that the exclusion of these items from its non-GAAP tax provision provides a more meaningful measure of Brocade's operational performance of non-GAAP net income and non-GAAP EPS.

Limitations: These non-GAAP financial measures have limitations because they do not include all items of income and expense that impact the company. In addition, these non-GAAP financial measures may not be comparable to similar measurements reported by other companies. Management compensates for these limitations by relying primarily on its GAAP results and using non-GAAP financial measures only supplementally. Management also provides robust and detailed reconciliations of each non-GAAP financial measure to its most directly comparable GAAP measure, and management encourages investors to review carefully those reconciliations.

Forward-Looking Statements
This press release contains forward-looking statements including, but not limited to, statements regarding Brocade's financial results, goals, plans, strategy, business outlook and prospects. These statements are based on current expectations as of the date of this press release and involve a number of risks, uncertainties and assumptions that may cause actual results to differ significantly. The risks, uncertainties and assumptions include, but are not limited to: the effect on Brocade of increasing market competition and changes in the industry; the impact on Brocade of conditions in the market for Storage Area Networking products; Brocade's ability to execute on its sales strategy and plans for future operations; the impact on Brocade of macroeconomic trends and events and changes in IT spending levels; Brocade's ability to introduce and achieve market acceptance of new products and support offerings on a timely basis; risks associated with Brocade's international operations; and integration and other risks associated with acquisitions, divestitures and strategic investments. The risks, uncertainties and assumptions also include, but are not limited to: the risk that the proposed acquisition by Broadcom may not be completed in a timely manner or at all, which may adversely affect Brocade's business and the price of the common stock of Brocade; the failure to satisfy any of the conditions to the consummation of the proposed transaction, including the receipt of certain governmental and regulatory approvals; the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement; the effect of the announcement or pendency of the proposed transaction on Brocade's business relationships, operating results and business generally; risks that the proposed transaction disrupts current plans and operations and the potential difficulties in employee retention as a result of the proposed transaction; risks related to diverting management's attention from Brocade's ongoing business operations; the outcome of legal proceedings that have been and may in the future be instituted against us related to the merger agreement or the proposed transaction; and unexpected costs, charges or expenses resulting from the proposed transaction. Certain of these and other risks are set forth in more detail in Brocade's Annual Report on Form 10-K for the fiscal year ended October 29, 2016. Brocade does not assume any obligation to update or revise any such forward-looking statements whether as the result of new developments or otherwise.

About Brocade
Brocade ( NASDAQ : BRCD ) networking solutions help the world's leading organizations turn their networks into platforms for business innovation. With solutions spanning public and private data centers to the network edge, Brocade is leading the industry in its transition to the New IP network infrastructures required for today's era of digital business. (www.brocade.com)

Brocade and the B-wing symbol are registered trademarks of Brocade Communications Systems, Inc., in the United States and many other countries. Other brands, products, or service names mentioned herein may be trademarks of Brocade or others. Additional information about Brocade's trademarks is available at: http://www.brocade.com/en/legal/brocade-Legal-intellectual-property/brocade-legal-trademarks.html.

© 2017 Brocade Communications Systems, Inc. All Rights Reserved.

 
BROCADE COMMUNICATIONS SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
    Three Months Ended  
    January 28,
2017
    January 30,
2016
 
    (In thousands, except per share amounts)  
Net revenues:            
  Product   $ 480,617     $ 481,167  
  Service     100,846       93,117  
    Total net revenues     581,463       574,284  
Cost of revenues:                
  Product     166,655       144,097  
  Service     47,685       41,372  
    Total cost of revenues     214,340       185,469  
Gross margin     367,123       388,815  
Operating expenses:                
  Research and development     123,503       93,257  
  Sales and marketing     180,201       151,827  
  General and administrative     33,497       22,429  
  Amortization of intangible assets     7,594       902  
  Acquisition and integration costs     18,037       -  
  Restructuring and other related benefits     -       (566 )
    Total operating expenses     362,832       267,849  
Income from operations     4,291       120,966  
Interest expense     (15,493 )     (9,865 )
Interest and other income, net     458       669  
Income (loss) before income tax     (10,744 )     111,770  
Income tax expense (benefit)     (4,900 )     18,124  
Net income (loss)   $ (5,844 )   $ 93,646  
Less: Net loss attributable to noncontrolling interest   $ 163     $ -  
Net income (loss) attributable to Brocade Communications Systems, Inc.   $ (5,681 )   $ 93,646  
Net income (loss) per share--basic attributable to Brocade Communications Systems, Inc. stockholders   $ (0.01 )   $ 0.23  
Net income (loss) per share--diluted attributable to Brocade Communications Systems, Inc. stockholders   $ (0.01 )   $ 0.23  
Shares used in per share calculation--basic     404,995       407,902  
Shares used in per share calculation--diluted     404,995       415,085  
                 
Cash dividends declared per share   $ 0.055     $ 0.045  
 
 
BROCADE COMMUNICATIONS SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
 
    Three Months Ended  
    January 28,
2017
    January 30,
2016
 
    (In thousands)  
Net income (loss)   $ (5,844 )   $ 93,646  
Other comprehensive income and loss, net of tax:                
  Unrealized gains (losses) on cash flow hedges:                
    Change in unrealized gains and losses     (409 )     (2,300 )
    Net gains and losses reclassified into earnings     185       626  
  Net unrealized losses on cash flow hedges     (224 )     (1,674 )
  Foreign currency translation adjustments     (1,360 )     (2,203 )
Total other comprehensive loss     (1,584 )     (3,877 )
Total comprehensive income (loss)   $ (7,428 )   $ 89,769  
Less: Net loss attributable to noncontrolling interest     163       -  
Less: Total other comprehensive loss attributable to noncontrolling interest     68       -  
Total comprehensive income (loss) attributable to Brocade Communications Systems, Inc.   $ (7,659 )   $ 89,769  
 
 
BROCADE COMMUNICATIONS SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
    January 28,
2017
    October 29,
2016
 
    (In thousands, except par value)  
ASSETS            
Current assets:            
  Cash and cash equivalents   $ 1,230,253     $ 1,257,075  
  Accounts receivable, net of allowances for doubtful accounts of $1,858, and $1,736 as of January 28, 2017, and October 29, 2016, respectively     262,413       284,344  
  Inventories     79,452       69,355  
  Prepaid expenses and other current assets     66,888       62,236  
    Total current assets     1,639,006       1,673,010  
Property and equipment, net     447,209       455,326  
Goodwill     2,290,205       2,295,184  
Core/developed technology intangible assets, net     239,879       248,938  
Other intangible assets, net     189,987       200,840  
Non-current deferred tax assets     25,634       12,736  
Other assets     48,902       53,777  
    Total assets   $ 4,880,822     $ 4,939,811  
LIABILITIES AND STOCKHOLDERS' EQUITY                
Current liabilities:                
  Accounts payable   $ 85,049     $ 128,685  
  Accrued employee compensation     138,829       154,165  
  Deferred revenue     220,555       221,940  
  Current portion of long-term debt     76,720       76,692  
  Other accrued liabilities     108,335       113,170  
    Total current liabilities     629,488       694,652  
Long-term debt, net of current portion     1,487,229       1,502,063  
Non-current deferred revenue     90,429       90,051  
Non-current income tax liability     92,910       102,100  
Other non-current liabilities     4,739       5,370  
    Total liabilities     2,304,795       2,394,236  
Commitments and contingencies                
Stockholders' equity:                
  Preferred stock, $0.001 par value, 5,000 shares authorized, no shares issued and outstanding     -       -  
  Common stock, $0.001 par value, 800,000 shares authorized:                
    Issued and outstanding: 407,514 and 401,748 shares as of January 28, 2017, and October 29, 2016, respectively     408       402  
  Additional paid-in capital     1,574,949       1,514,730  
  Accumulated other comprehensive loss     (28,997 )     (27,413 )
  Retained earnings     1,027,168       1,055,194  
    Total Brocade stockholders' equity     2,573,528       2,542,913  
Noncontrolling interest     2,499       2,662  
    Total stockholders' equity   $ 2,576,027     $ 2,545,575  
    Total liabilities and stockholders' equity   $ 4,880,822     $ 4,939,811  
 
 
BROCADE COMMUNICATIONS SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
    Three Months Ended  
    January 28,
2017
    January 30,
2016
 
    (In thousands)  
Cash flows from operating activities:            
  Net income (loss)   $ (5,844 )   $ 93,646  
  Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:                
    Excess tax benefits from stock-based compensation     (3,401 )     (7,352 )
    Depreciation and amortization     41,866       22,812  
    Loss on disposal of property and equipment     167       207  
    Amortization of debt issuance costs and debt discount     5,194       4,325  
    Provision (recovery) for doubtful accounts receivable and sales allowances     905       (96 )
    Non-cash purchase accounting adjustments to inventory     1,537       -  
    Non-cash stock-based compensation expense     44,520       24,044  
  Changes in assets and liabilities, net of acquisitions:                
    Accounts receivable     21,026       61,222  
    Inventories     (10,669 )     (2,000 )
    Prepaid expenses and other assets     (4,362 )     609  
    Deferred tax assets     142       16  
    Accounts payable     (39,601 )     (23,859 )
    Accrued employee compensation     (29,284 )     (38,993 )
    Deferred revenue     (2,007 )     (13,535 )
    Other accrued liabilities     (22,847 )     (7,991 )
    Restructuring liabilities     (148 )     (855 )
      Net cash provided by (used in) operating activities     (2,806 )     112,200  
Cash flows from investing activities:                
  Purchases of property and equipment     (12,341 )     (23,839 )
  Proceeds from collection of note receivable     250       250  
      Net cash used in investing activities     (12,091 )     (23,589 )
Cash flows from financing activities:                
  Payment of principal related to the term loan     (20,000 )     -  
  Payment of principal related to capital leases     -       (83 )
  Common stock repurchases     -       (144,490 )
  Proceeds from issuance of common stock     28,028       19,482  
  Payment of cash dividends to stockholders     (22,346 )     (18,429 )
  Excess tax benefits from stock-based compensation     3,401       7,352  
      Net cash used in financing activities     (10,917 )     (136,168 )
  Effect of exchange rate fluctuations on cash and cash equivalents     (1,008 )     (1,316 )
  Net decrease in cash and cash equivalents     (26,822 )     (48,873 )
  Cash and cash equivalents, beginning of period     1,257,075       1,440,882  
  Cash and cash equivalents, end of period   $ 1,230,253     $ 1,392,009  
 
 
BROCADE COMMUNICATIONS SYSTEMS, INC.
RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL MEASURES
(Unaudited)
 
    Three Months Ended  
    January 28,
2017
    October 29,
2016
    January 30,
2016
 
    (In thousands, except per share amounts)  
Non-GAAP adjustments                  
  Stock-based compensation expense included in cost of revenues   $ 5,650     $ 4,481     $ 2,905  
  Amortization of intangible assets expense included in cost of revenues     13,060       13,518       3,154  
  Purchase accounting adjustments to inventory     1,537       9,790       -  
    Total gross margin impact from non-GAAP adjustments     20,247       27,789       6,059  
                         
  Stock-based compensation expense included in research and development     12,074       9,493       5,476  
  Stock-based compensation expense included in sales and marketing     16,815       13,471       11,078  
  Stock-based compensation expense included in general and administrative     10,975       10,085       4,585  
  Amortization of intangible assets expense included in operating expenses     7,594       8,359       902  
  Acquisition and integration costs     18,037       8,297       -  
  Restructuring and other related benefits     -       (37 )     (566 )
    Total operating income impact from non-GAAP adjustments     85,742       77,457       27,534  
                         
  Convertible debt interest     3,968       3,919       3,776  
  Effects of certain intercompany transactions on the tax provision     -       6,759       -  
  Income tax effect of non-GAAP adjustments     (15,639 )     (21,104 )     (5,770 )
    Total net income impact from non-GAAP adjustments   $ 74,071     $ 67,031     $ 25,540  
                         
Gross margin reconciliation                        
  GAAP gross margin   $ 367,123     $ 420,314     $ 388,815  
  Total gross margin impact from non-GAAP adjustments     20,247       27,789       6,059  
    Non-GAAP gross margin   $ 387,370     $ 448,103     $ 394,874  
  GAAP gross margin, as a percentage of total net revenues     63.1 %     63.9 %     67.7 %
  Non-GAAP gross margin, as a percentage of total net revenues     66.6 %     68.2 %     68.8 %
                         
Operating income reconciliation                        
  GAAP operating income   $ 4,291     $ 82,868     $ 120,966  
  Total operating income impact from non-GAAP adjustments     85,742       77,457       27,534  
    Non-GAAP operating income   $ 90,033     $ 160,325     $ 148,500  
  GAAP operating income, as a percentage of total net revenues     0.7 %     12.6 %     21.1 %
  Non-GAAP operating income, as a percentage of total net revenues     15.5 %     24.4 %     25.9 %
                         
Net income (loss) and net income (loss) per share attributable to Brocade reconciliation                        
  Net income (loss) attributable to Brocade on a GAAP basis   $ (5,681 )   $ 66,589     $ 93,646  
  Total net income impact from non-GAAP adjustments     74,071       67,031       25,540  
    Non-GAAP net income attributable to Brocade   $ 68,390     $ 133,620     $ 119,186  
                         
  GAAP net income (loss) per share--basic attributable to Brocade   $ (0.01 )   $ 0.17     $ 0.23  
  Total impact on net income (loss) per share--basic from non-GAAP adjustments     0.18       0.16       0.06  
    Non-GAAP net income per share--basic attributable to Brocade   $ 0.17     $ 0.33     $ 0.29  
                         
  GAAP net income (loss) per share--diluted attributable to Brocade   $ (0.01 )   $ 0.16     $ 0.23  
  Total impact on net income (loss) per share--diluted from non-GAAP adjustments     0.17       0.17       0.06  
    Non-GAAP net income per share--diluted attributable to Brocade   $ 0.16     $ 0.33     $ 0.29  
                         
  Shares used in GAAP and non-GAAP per share calculation--basic     404,995       401,103       407,902  
  Shares used in GAAP per share calculation--diluted     404,995       410,123       415,085  
  Shares used in non-GAAP per share calculation--diluted     415,861       410,123       415,085  
                         
Effective tax rate reconciliation                        
  GAAP income (loss) before income tax     (10,744 )     67,778       111,770  
  Total operating income impact from non-GAAP adjustments     85,742       77,457       27,534  
  Convertible debt interest     3,968       3,919       3,776  
    Non-GAAP income before income tax     78,966       149,154       143,080  
                         
  GAAP income tax expense (benefit)     (4,900 )     1,077       18,124  
  Effects of certain intercompany transactions on the tax provision     -       (6,759 )     -  
  Income tax effect of non-GAAP adjustments     15,639       21,104       5,770  
    Non-GAAP income tax expense     10,739       15,422       23,894  
                         
  GAAP income (loss) before income tax     (10,744 )     67,778       111,770  
  GAAP income tax expense (benefit)     (4,900 )     1,077       18,124  
  GAAP effective tax rate     45.6 %     1.6 %     16.2 %
                         
  Non-GAAP income before income tax     78,966       149,154       143,080  
  Non-GAAP income tax expense     10,739       15,422       23,894  
  Non-GAAP effective tax rate     13.6 %     10.3 %     16.7 %