UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 2, 2010
VERISIGN, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
| 000-23593 | 94-3221585 | |
| (Commission File Number) |
(IRS Employer Identification No.) | |
| 487 East Middlefield Road, Mountain View, CA | 94043 | |
| (Address of Principal Executive Offices) | (Zip Code) | |
(650) 961-7500
(Registrant’s Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.02. | Results of Operations and Financial Condition. |
On August 2, 2010, VeriSign, Inc. (“VeriSign” or the “Company”) announced its financial results for the fiscal quarter ended June 30, 2010 and certain other information. A copy of this press release is attached hereto as Exhibit 99.1.
The information in this Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Use of Non-GAAP Financial Information
VeriSign provides quarterly and annual financial statements that are prepared in accordance with generally accepted accounting principles (GAAP). Along with this information, we typically disclose and discuss certain non-GAAP financial information in our quarterly earnings releases, on investor conference calls and during investor conferences and related events. This non-GAAP financial information does not include the following types of financial measures that are included in GAAP: discontinued operations, non-core business in continuing operations, stock-based compensation, amortization of other intangible assets, impairments of goodwill and other intangible assets, restructuring costs and non-cash interest expense. Non-GAAP financial information is also adjusted for a 30% tax rate which differs from the GAAP tax rate. All non-GAAP figures for each period presented in Exhibit 99.1 have been conformed to exclude the foregoing items under GAAP. Prior disclosures of non-GAAP figures do not exclude these same items and as such should not be used for comparison purposes.
Management believes that this non-GAAP financial data supplements our GAAP financial data by providing investors with additional information that allows them to have a clearer picture of the company’s core operations. The presentation of this additional information is not meant to be considered in isolation or as a substitute for results prepared in accordance with GAAP. We believe that the non-GAAP information enhances the investors’ overall understanding of our financial performance and the comparability of the company’s operating results from period to period. In the press release attached hereto to as Exhibit 99.1, we have provided a reconciliation of the non-GAAP financial information that we provide each quarter with the comparable financial information reported in accordance with GAAP for the given period.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
| 99.1 | Text of press release of VeriSign, Inc. issued on August 2, 2010. | |
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| VERISIGN, INC. | ||||||||
| Date: August 2, 2010 | By: | /s/ LUCI ALTMAN | ||||||
| Luci Altman | ||||||||
| Vice President and Associate General Counsel | ||||||||
Exhibit Index
| Exhibit No. |
Description | |
| Exhibit 99.1 | Text of press release of VeriSign, Inc. issued on August 2, 2010. | |
3
Exhibit 99.1
VeriSign Reports 9% Year-Over-Year Revenue Growth in Second Quarter 2010
Company Achieves 4% Quarter-Over-Quarter Growth in Naming Services Deferred Revenue
MOUNTAIN VIEW, CA – August 2, 2010 – VeriSign, Inc. (NASDAQ: VRSN), the trusted provider of Internet infrastructure services for the networked world, today reported financial results for the second quarter ended June 30, 2010.
Second Quarter GAAP Financial Results
VeriSign, Inc. and subsidiaries (“VeriSign”) reported revenue of $169 million from continuing operations for the second quarter of 2010, up 4% from the prior quarter and up 9% from the same quarter in 2009. Continuing operations consist primarily of the results of the Naming Services business which is comprised of Registry Services and Network Intelligence and Availability (NIA) Services. NIA includes iDefense and the Distributed Denial of Service (DDoS) mitigation business. Results related to the Authentication Services business for the second quarter have been reclassified as discontinued operations following the announced sale of this business to Symantec. VeriSign reported net income attributable to VeriSign, Inc. stockholders of $35 million and earnings per share attributable to VeriSign, Inc. stockholders of $0.19 on a diluted basis for the second quarter of 2010, compared to net income attributable to VeriSign, Inc. stockholders of $35 million and earnings per share attributable to VeriSign, Inc. stockholders of $0.18 on a diluted basis in the same quarter in 2009. The operating margin was 30.0% for the second quarter of 2010 compared to 27.8% for the same quarter in 2009.
VeriSign reported segment revenue for Naming Services of $168 million for the second quarter of 2010, up 4% from the prior quarter and up 9% from the same quarter in 2009. The non-core Content Portal Services (CPS) business reported $1 million of revenue as part of continuing operations during the second quarter of 2010.
“With the expected closing of the sale of the Authentication Services business to Symantec, VeriSign will be focused on the Naming Services business where we are the market leader and where, with increasing Internet usage globally, we see opportunities for growth,” said Mark McLaughlin, president and chief executive officer of VeriSign. “Our second quarter results reflect continued positive Internet trends and continued operational discipline.”
Second Quarter Non-GAAP Financial Results
For Naming Services, VeriSign reported net income attributable to VeriSign, Inc. stockholders of $43 million and earnings per share attributable to VeriSign, Inc. stockholders of $0.24 on a diluted basis for the second quarter of 2010, compared to net income attributable to VeriSign, Inc. stockholders of $30 million and earnings per share attributable to VeriSign, Inc. stockholders of $0.16 on a diluted basis in the same quarter in 2009. The operating margin was 40.5% for the second quarter of 2010 compared to 33.9% for the same quarter in 2009. A table reconciling the GAAP to the non-GAAP results (which excludes items described below) is appended to this release.
“Continued quarter-over-quarter revenue growth in Naming Services led to a GAAP operating margin of 30% and non-GAAP operating margin of 40.5%,” said Brian Robins, chief financial officer of VeriSign. “Our recurring revenue business model helped us to maintain a healthy balance sheet, and we returned more than $275 million to shareholders in the first half of 2010 through share repurchases.”
Financial Highlights
| • | Revenue from discontinued operations, consisting of the Authentication Services business, was $102 million during the second quarter. |
| • | On July 27, 2010, the Board of Directors approved an additional authorization for share repurchases of approximately $1.1 billion, which brings the total amount authorized and remaining under the plan to $1.5 billion. |
| • | VeriSign ended the second quarter with Cash, Cash Equivalents, Marketable Securities and Restricted Cash, excluding cash included as part of assets held for sale, of $1.339 billion, a decrease of $213 million from the prior quarter and an increase of $28 million from the same quarter in 2009. |
| • | In the second quarter, VeriSign repurchased 8.1 million shares of its common stock for a cost of $227 million. |
| • | Cash flow from operations, on a consolidated basis, was $149 million for the second quarter, after giving effect to a classification of $4 million of excess tax benefits associated with stock-based compensation as financing cash flows. |
| • | Deferred revenue on June 30, 2010 totaled $641 million for Naming Services, an increase of $24 million from the prior quarter and $65 million from the same quarter in 2009. |
| • | Capital expenditures, on a consolidated basis, were $23 million in the second quarter. |
Business and Corporate Highlights
| • | On May 19, 2010, VeriSign announced a definitive agreement to sell its Authentication Services business to Symantec for approximately $1.28 billion in cash. The transaction is expected to close within 90 days of May 19, 2010. |
| • | VeriSign Naming Services ended the quarter with approximately 101.5 million active domain names in the adjusted zone for .com and .net, representing a 9% increase year-over-year. |
| • | In the second quarter, VeriSign added 7.9 million new domain name registrations, representing a 13% increase year-over-year. |
| • | VeriSign experienced an average daily query load of 63 billion in the quarter, compared to 54 billion in the prior quarter and 49 billion in the same quarter in 2009. |
| • | VeriSign ended the second quarter of 2010 with approximately 2,225 employees on a consolidated basis, compared to 2,200 employees at the end of the prior quarter. Approximately 1,100 employees were part of continuing operations as of the end of the second quarter, a number which is expected to be further reduced over approximately twelve months. |
Non-GAAP Items
Non-GAAP financial results exclude the following items that are included under GAAP: discontinued operations, non-core business in continuing operations, stock-based compensation, amortization of other intangible assets, impairments of goodwill and other intangible assets, restructuring costs and non-cash interest expense. Non-GAAP financial information is also adjusted for a 30% tax rate which differs from the GAAP tax rate. A table reconciling the GAAP to non-GAAP net income is appended to this release. All non-GAAP figures for each period presented herein have been conformed to exclude the foregoing items under GAAP. Prior disclosures of non-GAAP figures do not exclude the same items and as such should not be used for comparison purposes.
Today’s Conference Call
VeriSign will host a live teleconference call today at 2:00 p.m. (PDT) to review the second quarter results. The call will be accessible by direct dial at (888) 676-VRSN (US) or (913) 312-1524 (international). A listen-only live web cast and accompanying slide presentation of the earnings conference call will also be available at http://investor.verisign.com. A replay of this call will be available at (888) 203-1112 or (719) 457-0820 (passcode: 5120314) beginning at 5:00 p.m. (PDT) on August 2 and will run through August 9 at 5:00 p.m (PDT). This press release and the financial information discussed on today’s conference call are available on the Investor Relations section of the VeriSign website at http://investor.verisign.com.
About VeriSign
VeriSign, Inc. (NASDAQ: VRSN) is the trusted provider of Internet infrastructure services for the networked world. Billions of times each day, VeriSign enables companies and consumers all over the world to connect online with confidence. Additional news and information about the company is available at www.verisign.com.
VRSNF
###
Statements in this announcement other than historical data and information constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended. These statements involve risks and uncertainties that could cause VeriSign’s actual results to differ materially from those stated or implied by such forward-looking statements. The potential risks and uncertainties include, among others, the uncertainty of future revenue and profitability and potential fluctuations in quarterly operating results due to such factors as increasing competition and pricing pressure from competing services offered at prices below our prices; the current global economic downturn; challenges to ongoing privatization of Internet administration; new or existing governmental laws and regulations; changes in customer behavior; the inability of VeriSign to successfully develop and market new services; the uncertainty of whether our new services will achieve market acceptance or result in any revenues; system interruptions; security breaches; attacks on the Internet by hackers, viruses, or intentional acts of vandalism; challenges to the building of trust on the Internet; the uncertainty of the expense and duration of transition services and requests for indemnification relating to completed divestitures; the uncertainty of whether Project Apollo will achieve its stated objectives; and the risk that the sale of VeriSign’s Authentication Services business to Symantec may not be consummated or may be delayed as a result of the inability of the parties to obtain required governmental approvals, the assertion of claims by third parties or other reasons. More information about potential factors that could affect the company’s business and financial results is included in VeriSign’s filings with the Securities and Exchange Commission, including in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. VeriSign undertakes no obligation to update any of the forward-looking statements after the date of this announcement.
Contacts
Investor Relations: Nancy Fazioli, ir@verisign.com, 650-426-5146
Media Relations: Brad Williams, brwilliams@verisign.com, 650-426-5298
VERISIGN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
(Unaudited)
| June 30, 2010 |
December 31, 2009 |
|||||||
| ASSETS | ||||||||
| Current assets |
||||||||
| Cash and cash equivalents |
$ | 862,923 | $ | 1,477,166 | ||||
| Marketable securities |
474,356 | 185 | ||||||
| Accounts receivable, net |
16,194 | 63,133 | ||||||
| Prepaid expenses and other current assets |
85,021 | 167,531 | ||||||
| Assets held for sale |
681,749 | 1,043 | ||||||
| Total current assets |
2,120,243 | 1,709,058 | ||||||
| Property and equipment, net |
190,807 | 403,821 | ||||||
| Goodwill |
52,527 | 289,980 | ||||||
| Other intangible assets, net |
3,266 | 22,420 | ||||||
| Other assets |
25,122 | 44,865 | ||||||
| Total long-term assets |
271,722 | 761,086 | ||||||
| Total assets |
$ | 2,391,965 | $ | 2,470,144 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: |
||||||||
| Accounts payable and accrued liabilities |
$ | 165,043 | $ | 243,967 | ||||
| Deferred revenues |
437,288 | 642,507 | ||||||
| Liabilities related to assets held for sale |
340,515 | — | ||||||
| Total current liabilities |
942,846 | 886,474 | ||||||
| Long-term deferred revenues |
203,911 | 245,734 | ||||||
| Convertible debentures, including contingent interest derivative |
575,933 | 574,378 | ||||||
| Other long-term liabilities |
193,133 | 164,894 | ||||||
| Total long-term liabilities |
972,977 | 985,006 | ||||||
| Total liabilities |
1,915,823 | 1,871,480 | ||||||
| Commitments and contingencies |
||||||||
| Stockholders’ equity: |
||||||||
| VeriSign, Inc. stockholders’ equity: |
||||||||
| Preferred stock—par value $.001 per share; Authorized shares: 5,000,000; Issued and outstanding shares: none |
— | — | ||||||
| Common stock—par value $.001 per share; Authorized shares: 1,000,000,000; Issued and outstanding shares: 174,907,760 excluding 134,801,346 held in treasury, at June 30, 2010; and 183,299,463, excluding 124,434,684 held in treasury, at December 31, 2009 |
310 | 308 | ||||||
| Additional paid-in capital |
21,519,042 | 21,736,209 | ||||||
| Accumulated deficit |
(21,107,866 | ) | (21,194,435 | ) | ||||
| Accumulated other comprehensive income |
12,404 | 7,659 | ||||||
| Total VeriSign, Inc. stockholders’ equity |
423,890 | 549,741 | ||||||
| Noncontrolling interest in subsidiary |
52,252 | 48,923 | ||||||
| Total stockholders’ equity |
476,142 | 598,664 | ||||||
| Total liabilities and stockholders’ equity |
$ | 2,391,965 | $ | 2,470,144 | ||||
VERISIGN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Revenues |
$ | 168,684 | $ | 154,338 | $ | 331,178 | $ | 303,990 | ||||||||
| Costs and expenses: |
||||||||||||||||
| Cost of revenues |
40,590 | 42,977 | 80,322 | 88,221 | ||||||||||||
| Sales and marketing |
23,182 | 18,116 | 44,630 | 34,075 | ||||||||||||
| Research and development |
13,824 | 12,985 | 26,194 | 26,805 | ||||||||||||
| General and administrative |
32,957 | 37,339 | 67,980 | 75,881 | ||||||||||||
| Restructuring and other charges, net |
7,539 | (61 | ) | 7,838 | 2,814 | |||||||||||
| Total costs and expenses |
118,092 | 111,356 | 226,964 | 227,796 | ||||||||||||
| Operating income |
50,592 | 42,982 | 104,214 | 76,194 | ||||||||||||
| Other loss, net |
(8,116 | ) | (10,485 | ) | (15,276 | ) | (15,433 | ) | ||||||||
| Income from continuing operations before income taxes |
42,476 | 32,497 | 88,938 | 60,761 | ||||||||||||
| Income tax expense |
(16,211 | ) | (15,593 | ) | (32,905 | ) | (22,812 | ) | ||||||||
| Income from continued operations, net of tax |
26,265 | 16,904 | 56,033 | 37,949 | ||||||||||||
| Income from discontinued operations, net of tax |
10,109 | 18,868 | 32,781 | 63,338 | ||||||||||||
| Net income |
36,374 | 35,772 | 88,814 | 101,287 | ||||||||||||
| Less: Income from discontinued operations, net of tax, attributable to noncontrolling interest in subsidiary |
(1,161 | ) | (898 | ) | (2,245 | ) | (1,393 | ) | ||||||||
| Net income attributable to VeriSign, Inc. stockholders |
$ | 35,213 | $ | 34,874 | $ | 86,569 | $ | 99,894 | ||||||||
| Basic income per share attributable to VeriSign, Inc. stockholders from: |
||||||||||||||||
| Continuing operations |
$ | 0.15 | $ | 0.09 | $ | 0.31 | $ | 0.20 | ||||||||
| Discontinued operations |
0.04 | 0.09 | 0.17 | 0.32 | ||||||||||||
| Net income |
$ | 0.19 | $ | 0.18 | $ | 0.48 | $ | 0.52 | ||||||||
| Diluted income per share attributable to VeriSign, Inc. stockholders from: |
||||||||||||||||
| Continuing operations |
$ | 0.14 | $ | 0.09 | $ | 0.31 | $ | 0.20 | ||||||||
| Discontinued operations |
0.05 | 0.09 | 0.16 | 0.32 | ||||||||||||
| Net income |
$ | 0.19 | $ | 0.18 | $ | 0.47 | $ | 0.52 | ||||||||
| Shares used to compute net income per share attributable to VeriSign, Inc. stockholders: |
||||||||||||||||
| Basic |
181,120 | 192,649 | 182,121 | 192,481 | ||||||||||||
| Diluted |
182,753 | 193,426 | 183,480 | 193,116 | ||||||||||||
| Amounts attributable to VeriSign, Inc. stockholders: |
||||||||||||||||
| Income from continuing operations, net of tax |
$ | 26,265 | $ | 16,904 | $ | 56,033 | $ | 37,949 | ||||||||
| Income from discontinued operations, net of tax |
8,948 | 17,970 | 30,536 | 61,945 | ||||||||||||
| Net income attributable to VeriSign, Inc. stockholders |
$ | 35,213 | $ | 34,874 | $ | 86,569 | $ | 99,894 | ||||||||
| The following table presents the classification of stock-based compensation: |
||||||||||||||||
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| (In thousands) | ||||||||||||||||
| Stock-based compensation: |
||||||||||||||||
| Cost of revenues |
$ | 1,365 | $ | 995 | $ | 2,311 | $ | 1,887 | ||||||||
| Sales and marketing |
1,488 | 1,171 | 2,624 | 2,102 | ||||||||||||
| Research and development |
1,240 | 774 | 2,316 | 1,532 | ||||||||||||
| General and administrative |
5,256 | 5,547 | 10,494 | 10,692 | ||||||||||||
| Restructuring and other charges, net |
— | 38 | 133 | 548 | ||||||||||||
| Stock-based compensation for continuing operations |
9,349 | 8,525 | 17,878 | 16,761 | ||||||||||||
| Discontinued operations |
3,876 | 5,644 | 7,432 | 11,335 | ||||||||||||
| Total stock-based compensation |
$ | 13,225 | $ | 14,169 | $ | 25,310 | $ | 28,096 | ||||||||
VERISIGN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| Six Months
Ended June 30, |
||||||||
| 2010 | 2009 | |||||||
| Cash flows from operating activities: |
||||||||
| Net income |
$ | 88,814 | $ | 101,287 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation of property and equipment and amortization of other intangible assets |
39,806 | 41,398 | ||||||
| Stock-based compensation |
25,310 | 28,096 | ||||||
| Excess tax benefit associated with stock-based compensation |
(12,453 | ) | (94,529 | ) | ||||
| Other, net |
12,949 | 17,406 | ||||||
| Changes in operating assets and liabilities, excluding the effects of acquisitions and divestitures: |
||||||||
| Accounts receivable |
10,084 | 8,802 | ||||||
| Prepaid expenses and other assets |
27,397 | (27,559 | ) | |||||
| Accounts payable and accrued liabilities |
(2,867 | ) | 14,284 | |||||
| Deferred revenues |
61,280 | 32,080 | ||||||
| Net cash provided by operating activities |
250,320 | 121,265 | ||||||
| Cash flows from investing activities: |
||||||||
| Proceeds from maturities and sales of marketable securities and investments |
196,045 | 117,901 | ||||||
| Purchases of marketable securities and investments |
(662,275 | ) | (750 | ) | ||||
| Purchase of property and equipment |
(42,772 | ) | (40,815 | ) | ||||
| Proceeds received from divestiture of businesses, net of cash contributed |
15,583 | 235,500 | ||||||
| Other investing activities |
(3,773 | ) | (2,716 | ) | ||||
| Net cash (used in) provided by investing activities |
(497,192 | ) | 309,120 | |||||
| Cash flows from financing activities: |
||||||||
| Proceeds from issuance of common stock from option exercises and employee stock purchase plans |
28,002 | 20,945 | ||||||
| Repurchases of common stock |
(281,943 | ) | (22,637 | ) | ||||
| Excess tax benefit associated with stock-based compensation |
12,453 | 94,529 | ||||||
| Other financing activities |
(736 | ) | (101 | ) | ||||
| Net cash (used in) provided by financing activities |
(242,224 | ) | 92,736 | |||||
| Effect of exchange rate changes on cash and cash equivalents |
(1,791 | ) | (3,837 | ) | ||||
| Cash and cash equivalents included in assets held for sale |
(123,356 | ) | — | |||||
| Net (decrease) increase in cash and cash equivalents |
(614,243 | ) | 519,284 | |||||
| Cash and cash equivalents at beginning of period |
1,477,166 | 789,068 | ||||||
| Cash and cash equivalents at end of period |
$ | 862,923 | $ | 1,308,352 | ||||
| Supplemental cash flow disclosures: |
||||||||
| Cash paid for interest, net of capitalized interest |
$ | 19,811 | $ | 19,521 | ||||
VERISIGN, INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS RECONCILIATION
(In thousands, except per share data)
(Unaudited)
| Three Months Ended June 30, 2010 |
Three Months Ended June 30, 2009 |
||||||||||||||
| Operating Income |
Net Income attributable to VeriSign, Inc. |
Operating Income |
Net Income attributable to VeriSign, Inc. |
||||||||||||
| GAAP as reported |
$ | 50,592 | $ | 35,214 | $ | 42,982 | $ | 34,874 | |||||||
| Discontinued operations |
(8,948 | ) | (17,970 | ) | |||||||||||
| Non-core business in continuing operations (1) (2) |
231 | 300 | 559 | 633 | |||||||||||
| Adjustments: |
|||||||||||||||
| Stock-based compensation |
9,302 | 9,302 | 8,323 | 8,323 | |||||||||||
| Amortization of other intangible assets |
323 | 323 | 85 | 85 | |||||||||||
| Restructuring costs |
7,539 | 7,539 | (13 | ) | (13 | ) | |||||||||
| Non-cash interest expense |
1,810 | 1,648 | |||||||||||||
| Tax adjustment (3) |
(2,362 | ) | 2,642 | ||||||||||||
| Non-GAAP as adjusted |
$ | 67,987 | $ | 43,178 | $ | 51,936 | $ | 30,222 | |||||||
| Diluted shares |
182,753 | 193,426 | |||||||||||||
| Per diluted share, non-GAAP as adjusted |
$ | 0.24 | $ | 0.16 | |||||||||||
| (1) | As of June 30, 2010, the Company’s business consists of the following reportable segments: (a) Naming Services, which consists of Registry Services and Network Intelligence and Availability (“NIA”) Services; and (b) Other Services, which consists of the continuing operations of Content Portal Services (“CPS”), our remaining non-core business. NIA Services was formerly known as VeriSign Internet Defense Services. |
| (2) | Results of the non-core business in continuing operations during the three months ended June 30, 2010 and 2009 includes stock-based compensation of $47 and $145, respectively. |
| (3) | Non-GAAP tax is calculated as 30% of income from continuing operations. |
VeriSign provides quarterly and annual financial statements that are prepared in accordance with generally accepted accounting principles (GAAP). Along with this information, we typically disclose and discuss certain non-GAAP financial information in our quarterly earnings release, on investor conference calls and during investor conferences and related events. This non-GAAP financial information does not include the following types of financial measures that are included in GAAP: discontinued operations, non-core business in continuing operations, stock-based compensation, amortization of other intangible assets, impairments of goodwill and other intangible assets, restructuring costs and non-cash interest expense. Non-GAAP financial information is also adjusted for a 30% tax rate which differs from the GAAP tax rate. All non-GAAP figures for each period presented above have been conformed to exclude the foregoing items under GAAP. Prior disclosures of non-GAAP figures do not exclude the same items and as such should not be used for comparison purposes.
Management believes that this non-GAAP financial data supplements our GAAP financial data by providing investors with additional information that allows them to have a clearer picture of the company's core operations. The presentation of this additional information is not meant to be considered in isolation nor as a substitute for results prepared in accordance with GAAP. We believe that the non-GAAP information enhances the investors’ overall understanding of our financial performance and the comparability of the company’s operating results from period to period. Above, we have provided a reconciliation of the non-GAAP financial information that we provide each quarter with the comparable financial information reported in accordance with GAAP for the given period.
SUPPLEMENTAL FINANCIAL INFORMATION
| Three months ended | |||||||||||||||
| June 30, 2010 |
March 31, 2010 |
December 31, 2009 |
September 30, 2009 |
June 30, 2009 | |||||||||||
| Revenues from Naming Services (1) |
$ | 167,881 | $ | 161,583 | $ | 158,741 | $ | 155,480 | $ | 153,418 | |||||
VERISIGN, INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS RECONCILIATION
(In thousands, except per share data)
(Unaudited)
| Six Months Ended June 30, 2010 |
Six Months Ended June 30, 2009 |
|||||||||||||
| Operating Income |
Net Income attributable to VeriSign, Inc. |
Operating Income |
Net Income attributable to VeriSign, Inc. |
|||||||||||
| GAAP as reported |
$ | 104,214 | $ | 86,570 | $ | 76,194 | $ | 99,894 | ||||||
| Discontinued operations |
(30,536 | ) | (61,945 | ) | ||||||||||
| Non-core business in continuing operations (1) (2) |
1,392 | 1,383 | 242 | (574 | ) | |||||||||
| Adjustments: |
||||||||||||||
| Stock-based compensation |
17,623 | 17,623 | 15,868 | 15,868 | ||||||||||
| Amortization of other intangible assets |
647 | 647 | 730 | 730 | ||||||||||
| Restructuring costs |
7,773 | 7,773 | 3,474 | 3,474 | ||||||||||
| Non-cash interest expense |
3,651 | 3,298 | ||||||||||||
| Tax adjustment (3) |
(3,101 | ) | (2,255 | ) | ||||||||||
| Non-GAAP as adjusted |
$ | 131,649 | $ | 84,010 | $ | 96,508 | $ | 58,490 | ||||||
| Diluted shares |
183,480 | 193,116 | ||||||||||||
| Per diluted share, non-GAAP as adjusted |
$ | 0.46 | $ | 0.30 | ||||||||||
| (1) | As of June 30, 2010, the Company’s business consists of the following reportable segments: (a) Naming Services, which consists of Registry Services and Network Intelligence and Availability (“NIA”) Services; and (b) Other Services, which consists of the continuing operations of Content Portal Services (“CPS”), our remaining non-core business. NIA Services was formerly known as VeriSign Internet Defense Services. |
| (2) | Results of the non-core business in continuing operations during the six months ended June 30, 2010 and 2009 includes stock-based compensation of $135 and $297, respectively. |
| (3) | Non-GAAP tax is calculated as 30% of income from continuing operations. |
VeriSign provides quarterly and annual financial statements that are prepared in accordance with generally accepted accounting principles (GAAP). Along with this information, we typically disclose and discuss certain non-GAAP financial information in our quarterly earnings release, on investor conference calls and during investor conferences and related events. This non-GAAP financial information does not include the following types of financial measures that are included in GAAP: discontinued operations, non-core business in continuing operations, stock-based compensation, amortization of other intangible assets, impairments of goodwill and other intangible assets, restructuring costs and non-cash interest expense. Non-GAAP financial information is also adjusted for a 30% tax rate which differs from the GAAP tax rate. All non-GAAP figures for each period presented above have been conformed to exclude the foregoing items under GAAP. Prior disclosures of non-GAAP figures do not exclude the same items and as such should not be used for comparison purposes.
Management believes that this non-GAAP financial data supplements our GAAP financial data by providing investors with additional information that allows them to have a clearer picture of the company's core operations. The presentation of this additional information is not meant to be considered in isolation nor as a substitute for results prepared in accordance with GAAP. We believe that the non-GAAP information enhances the investors’ overall understanding of our financial performance and the comparability of the company’s operating results from period to period. Above, we have provided a reconciliation of the non-GAAP financial information that we provide each quarter with the comparable financial information reported in accordance with GAAP for the given period.
VERISIGN, INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS RECONCILIATION
(In thousands, except per share data)
(Unaudited)
| Three Months Ended March 31, 2010 |
Three Months Ended March 31, 2009 |
||||||||||||||
| Operating Income |
Net Income attributable to VeriSign, Inc. |
Operating Income |
Net Income attributable to VeriSign, Inc. |
||||||||||||
| GAAP as reported |
$ | 53,622 | $ | 51,356 | $ | 33,212 | $ | 65,020 | |||||||
| Discontinued operations |
(21,588 | ) | (43,975 | ) | |||||||||||
| Non-core business in continuing operations (1) (2) |
1,161 | 1,083 | (317 | ) | (1,207 | ) | |||||||||
| Adjustments: |
|||||||||||||||
| Stock-based compensation |
8,321 | 8,321 | 7,545 | 7,545 | |||||||||||
| Amortization of other intangible assets |
324 | 324 | 645 | 645 | |||||||||||
| Restructuring costs |
234 | 234 | 3,487 | 3,487 | |||||||||||
| Non-cash interest expense |
1,841 | 1,650 | |||||||||||||
| Tax adjustment (3) |
(739 | ) | (4,897 | ) | |||||||||||
| Non-GAAP as adjusted |
$ | 63,662 | $ | 40,832 | $ | 44,572 | $ | 28,268 | |||||||
| Diluted shares |
184,259 | 192,804 | |||||||||||||
| Per diluted share, non-GAAP as adjusted |
$ | 0.22 | $ | 0.15 | |||||||||||
| (1) | As of March 31, 2010, the Company’s business consists of the following reportable segments: (a) Naming Services, which consists of Registry Services and Network Intelligence and Availability (“NIA”) Services; and (b) Other Services, which consists of the continuing operations of Content Portal Services (“CPS”), our remaining non-core business. NIA Services was formerly known as VeriSign Internet Defense Services. |
| (2) | Results of the non-core business in continuing operations during the three months ended March 31, 2010 and 2009 includes stock-based compensation of $88 and $152, respectively. |
| (3) | Non-GAAP tax is calculated as 30% of income from continuing operations. |
VeriSign provides quarterly and annual financial statements that are prepared in accordance with generally accepted accounting principles (GAAP). Along with this information, we typically disclose and discuss certain non-GAAP financial information in our quarterly earnings release, on investor conference calls and during investor conferences and related events. This non-GAAP financial information does not include the following types of financial measures that are included in GAAP: discontinued operations, non-core business in continuing operations, stock-based compensation, amortization of other intangible assets, impairments of goodwill and other intangible assets, restructuring costs and non-cash interest expense. Non-GAAP financial information is also adjusted for a 30% tax rate which differs from the GAAP tax rate. All non-GAAP figures for each period presented above have been conformed to exclude the foregoing items under GAAP. Prior disclosures of non-GAAP figures do not exclude the same items and as such should not be used for comparison purposes.
Management believes that this non-GAAP financial data supplements our GAAP financial data by providing investors with additional information that allows them to have a clearer picture of the company's core operations. The presentation of this additional information is not meant to be considered in isolation nor as a substitute for results prepared in accordance with GAAP. We believe that the non-GAAP information enhances the investors’ overall understanding of our financial performance and the comparability of the company’s operating results from period to period. Above, we have provided a reconciliation of the non-GAAP financial information that we provide each quarter with the comparable financial information reported in accordance with GAAP for the given period.