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8-K Earnings release (RF)


 
 
 
 
 

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): July 26, 2012
 
 
 
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.)
 
 
 
 
12061 Bluemont Way, Reston, VA
 
20190
(Address of Principal Executive Offices)
 
(Zip Code)
(703) 948-3200
(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:
c
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
c
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
c
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
c
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 
 
 






REFILED SOLELY TO CORRECT A TECHNICAL ERROR IN THE EDGAR SUBMISSION CODING

Item 2.02.
Results of Operations and Financial Condition.
On July 26, 2012, VeriSign, Inc. (“VeriSign” or the “Company”) announced its financial results for the fiscal quarter ended June 30, 2012 and certain other information. A copy of this press release is attached hereto as Exhibit 99.1.
The information in this Item 2.02 of 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, stock-based compensation, amortization of other intangible assets, impairments of goodwill and other intangible assets, restructuring charges, contingent interest payments to holders of our Convertible Debentures, unrealized gain/loss on contingent interest derivative on Convertible Debentures, 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.  
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 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. In the press release attached hereto 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
 
Exhibit
Number
  
Description
 
 
99.1
  
Text of press release of VeriSign, Inc. issued on July 26, 2012.


1


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: July 26, 2012
 
By:
 
/s/ Richard H. Goshorn
 
 
Richard H. Goshorn
 
 
Senior Vice President, General Counsel and Secretary

2


Exhibit Index
 
 
 
 
Exhibit No.
  
Description
Exhibit 99.1
  
Text of press release of VeriSign, Inc. issued on July 26, 2012.


3
Press release financials (RF)

Exhibit 99.1

Verisign Reports 13 Percent Year-Over-Year Revenue Growth in Second Quarter 2012

RESTON, VA - July 26, 2012 - 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, 2012.

Second Quarter GAAP Financial Results
VeriSign, Inc. and subsidiaries (“Verisign”) reported revenue of $214 million for the second quarter of 2012, up 13 percent from the same quarter in 2011. Verisign reported net income of $68 million and diluted earnings per share (EPS) of $0.42 for the second quarter of 2012, compared to a net loss of $(11) million and diluted net loss per share of $(0.06) in the same quarter in 2011. The operating margin was 50.0 percent for the second quarter of 2012 compared to 43.2 percent for the same quarter in 2011.

Second Quarter Non-GAAP Financial Results
Verisign reported, on a non-GAAP basis, net income of $74 million and diluted EPS of $0.45 for the second quarter of 2012, compared to net income of $65 million and diluted EPS of $0.38 for the same quarter in 2011. The non-GAAP operating margin was 54.0 percent for the second quarter of 2012 compared to 51.7 percent for the same quarter in 2011. A table reconciling the GAAP to the non-GAAP results (which excludes items described below) is appended to this release.

“The second quarter results demonstrate our continued strong operating performance and financial discipline,” commented Jim Bidzos, executive chairman, president and chief executive officer of Verisign. “Our share repurchases in the quarter, of $76 million, underscore our commitment to creating and delivering shareholder value.”

Financial Highlights

•
Verisign ended the second quarter with Cash, Cash Equivalents, Marketable Securities and Restricted Cash of $1.44 billion, an increase of $92 million from year end 2011.
•
Cash flow from operations was $135 million for the second quarter compared with $13 million for the same quarter in 2011, which was reduced by a $100 million payment of contingent interest to holders of convertible debentures in the second quarter of 2011.
•
Deferred revenues ended the second quarter of 2012 totaling $804 million, an increase of $75 million from year end 2011.
•
Capital expenditures were $13 million in the second quarter of 2012.
•
During the second quarter, Verisign repurchased approximately 1.9 million shares of its common stock for a cost of $76 million. At June 30, 2012, approximately $687 million remained available and authorized under the current share repurchase program.
•
For purposes of calculating diluted EPS, the second quarter diluted share count included 5.6 million shares related to the convertible debentures, compared with 1.2 million shares in the same quarter in 2011 for the non-GAAP diluted EPS calculation.  These represent dilutive shares and not shares that have been issued.

Business Highlights

•
On June 23, 2012, the board of directors of Internet Corporation of Assigned Names and Numbers (“ICANN”) approved the renewal of Verisign's agreement to serve as the authoritative registry operator for the .com registry for the term commencing on Dec. 1, 2012, through Nov. 30, 2018. The board of directors of Verisign approved the renewal of the .com registry agreement on June 16, 2012. The U.S. Department of Commerce (the Department) is now reviewing the renewal of the .com registry agreement under the terms of the Cooperative Agreement between the Department and Verisign.
•
Verisign Registry Services added 1.81 million net new names and ended the second quarter with approximately 118.5 million active domain names in the zone for .com and .net, representing a 7.8 percent increase year-over-year.
•
In the second quarter, Verisign processed a second quarter record 8.4 million new domain name registrations, representing an increase of 4.2 percent year-over-year.




Non-GAAP Items
Non-GAAP financial results exclude the following items that are included under GAAP: discontinued operations, stock-based compensation, amortization of other intangible assets, impairments of goodwill and other intangible assets, restructuring charges, contingent interest payments to holders of our Convertible Debentures, unrealized gain/loss on contingent interest derivative on Convertible Debentures, and non-cash interest expense. Non-GAAP financial information is also adjusted for a 30 percent tax rate which differs from the GAAP tax rate. A table reconciling the GAAP to non-GAAP operating income and net income attributable to Verisign stockholders is appended to this release. All non-GAAP figures for each period presented herein have been conformed to exclude the foregoing items under GAAP.

Today's Conference Call
Verisign will host a live conference call today at 4:30 p.m. (EDT) to review the second quarter 2012 results. The call will be accessible by direct dial at (888) 676-VRSN (U.S.) or (913) 312-0402 (international). A listen-only live webcast and accompanying slide presentation of the second quarter 2012 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 (pass code: 6410522) beginning at 8:00 p.m. (EDT) on July 26, 2012, and will run through Aug. 2, 2012, at 7:00 p.m. (EDT). An audio archive of the call will be available at https://investor.verisign.com/events.cfm. This press release and the financial information discussed on today's conference call are available 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 helps companies and consumers all over the world connect between the dots. Additional news and information about the company is available at www.VerisignInc.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, pricing pressure from competing services offered at prices below our prices and changes in marketing practices including those of third-party registrars; challenging global economic conditions; challenges to ongoing privatization of Internet administration; the outcome of legal or other challenges resulting from our activities or the activities of registrars or registrants, or litigation generally; new or existing governmental laws and regulations; changes in customer behavior, Internet platforms and web-browsing patterns; the uncertainty of whether Verisign will 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; 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; the impact of the introduction of new gTLDs and whether our gTLD applications or the applicants' gTLD applications for which we have contracted to provide back-end registry services will be successful; and the uncertainty of whether the .com Registry Agreement renewal will occur on or before November 30, 2012, if at all. 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, 2011, 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: David Atchley, datchley@verisign.com, 703-948-4643
Media Relations: Deana Alvy, dalvy@verisign.com, 703-948-4179

©2012 VeriSign, Inc. All rights reserved. VERISIGN, the VERISIGN logo, and other trademarks, service marks, and designs are registered or unregistered trademarks of VeriSign, Inc. and its subsidiaries in the United States and in foreign countries. All other trademarks are property of their respective owners.


VERISIGN, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value)
(Unaudited)
 
June 30,
2012
 
December 31,
2011
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
315,621

 
$
1,313,349

Marketable securities
1,122,397

 
32,860

Accounts receivable, net
12,653

 
14,974

Deferred tax assets and other current assets
79,940

 
86,598

Total current assets
1,530,611

 
1,447,781

Property and equipment, net
329,328

 
327,136

Goodwill and other intangible assets, net
53,202

 
53,848

Other assets
28,883

 
27,414

Total long-term assets
411,413

 
408,398

Total assets
$
1,942,024

 
$
1,856,179

LIABILITIES AND STOCKHOLDERS’ DEFICIT
 
 
 
Current liabilities:
 
 
 
Accounts payable and accrued liabilities
$
112,508

 
$
156,385

Deferred revenues
560,127

 
502,538

Total current liabilities
672,635

 
658,923

Long-term deferred revenues
243,622

 
226,033

Convertible debentures, including contingent interest derivative
597,935

 
590,086

Long-term debt
100,000

 
100,000

Long-term deferred tax liabilities
341,733

 
325,527

Other long-term liabilities
45,294

 
43,717

Total long-term liabilities
1,328,584

 
1,285,363

Total liabilities
2,001,219

 
1,944,286

Commitments and contingencies
 
 
 
Stockholders’ deficit:
 
 
 
Preferred stock—par value $.001 per share; Authorized shares: 5,000; Issued and outstanding shares: none
—

 
—

Common stock—par value $.001 per share; Authorized shares: 1,000,000; Issued shares: 317,982 at June 30, 2012 and 316,781 at December 31, 2011; Outstanding shares: 156,667 at June 30, 2012 and 159,422 at December 31, 2011
318

 
317

Additional paid-in capital
20,027,665

 
20,135,237

Accumulated deficit
(20,084,096
)
 
(20,220,577
)
Accumulated other comprehensive loss
(3,082
)
 
(3,084
)
Total stockholders’ deficit
(59,195
)
 
(88,107
)
Total liabilities and stockholders’ deficit
$
1,942,024

 
$
1,856,179














VERISIGN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(In thousands, except per share data)
(Unaudited)
  
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Revenues
$
214,142

 
$
189,844

 
$
419,868

 
$
371,367

Costs and expenses:
 
 
 
 
 
 
 
Cost of revenues
42,844

 
40,667

 
84,100

 
81,536

Sales and marketing
26,313

 
22,179

 
54,128

 
44,570

Research and development
15,461

 
13,074

 
30,226

 
26,668

General and administrative
22,726

 
28,206

 
46,234

 
61,835

Restructuring charges
(182
)
 
3,659

 
(730
)
 
9,189

Total costs and expenses
107,162

 
107,785

 
213,958

 
223,798

Operating income
106,980

 
82,059

 
205,910

 
147,569

Interest expense
(12,580
)
 
(111,856
)
 
(24,920
)
 
(123,676
)
Non-operating (loss) income, net
(2,097
)
 
6,149

 
(1,290
)
 
11,627

Income (loss) from continuing operations before income taxes
92,303

 
(23,648
)
 
179,700

 
35,520

Income tax (expense) benefit
(23,831
)
 
15,967

 
(45,123
)
 
(908
)
Income (loss) from continuing operations, net of tax
68,472

 
(7,681
)
 
134,577

 
34,612

(Loss) income from discontinued operations, net of tax
—

 
(2,929
)
 
1,904

 
(4,451
)
Net income (loss)
68,472

 
(10,610
)
 
136,481

 
30,161

Foreign currency translation adjustments
—

 
48

 
—

 
76

Change in unrealized gain on investments, net of tax
42

 
1,077

 
37

 
609

Realized gain on investments, net of tax, included in net income (loss)
(30
)
 
(1,398
)
 
(35
)
 
(1,415
)
Other comprehensive income (loss)
12

 
(273
)
 
2

 
(730
)
Comprehensive income (loss)
$
68,484

 
$
(10,883
)
 
$
136,483

 
$
29,431

 
 
 
 
 
 
 
 
Basic income (loss) per share:
 
 
 
 
 
 
 
Continuing operations
$
0.43

 
$
(0.05
)
 
$
0.85

 
$
0.20

Discontinued operations
—

 
(0.01
)
 
0.01

 
(0.02
)
Net income (loss)
$
0.43

 
$
(0.06
)
 
$
0.86

 
$
0.18

Diluted income (loss) per share:
 
 
 
 
 
 
 
Continuing operations
$
0.42

 
$
(0.05
)
 
$
0.82

 
$
0.20

Discontinued operations
—

 
(0.01
)
 
0.01

 
(0.02
)
Net income (loss)
$
0.42

 
$
(0.06
)
 
$
0.83

 
$
0.18

Shares used to compute net income per share
 
 
 
 
 
 
 
Basic
157,599

 
167,471

 
158,471

 
169,751

Diluted
164,178

 
167,471

 
163,530

 
171,850
















VERISIGN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited) 
 
Six Months Ended June 30,
 
2012
 
2011
Cash flows from operating activities:
 
 
 
Net income
$
136,481

 
$
30,161

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation of property and equipment and amortization of other intangible assets
26,273

 
27,642

Stock-based compensation
16,584

 
29,014

Excess tax benefit associated with stock-based compensation
(11,638
)
 
(854
)
Other, net
10,947

 
1,627

Changes in operating assets and liabilities
 
 
 
Accounts receivable
2,213

 
354

Deferred tax assets and other assets
5,855

 
(12,786
)
Accounts payable and accrued liabilities
(16,644
)
 
(22,736
)
Deferred revenues
75,178

 
50,814

Net cash provided by operating activities
245,249

 
103,236

Cash flows from investing activities:
 
 
 
Proceeds from maturities and sales of marketable securities
8,101

 
369,586

Purchases of marketable securities
(1,097,669
)
 
(44,038
)
Purchases of property and equipment
(26,242
)
 
(29,481
)
Other investing activities
(520
)
 
(1,181
)
Net cash (used in) provided by investing activities
(1,116,330
)
 
294,886

Cash flows from financing activities:
 
 
 
Proceeds from issuance of common stock from option exercises and employee stock purchase plans
15,348

 
32,445

Repurchases of common stock
(152,725
)
 
(310,671
)
Payment of dividends to stockholders
—

 
(463,498
)
Excess tax benefit associated with stock-based compensation
11,638

 
854

Other financing activities
189

 
—

Net cash used in financing activities
(125,550
)
 
(740,870
)
Effect of exchange rate changes on cash and cash equivalents
(1,097
)
 
3,285

Net decrease in cash and cash equivalents
(997,728
)
 
(339,463
)
Cash and cash equivalents at beginning of period
1,313,349

 
1,559,628

Cash and cash equivalents at end of period
$
315,621

 
$
1,220,165

Supplemental cash flow disclosures:
 
 
 
Cash paid for interest, net of capitalized interest
$
20,476

 
$
120,082

Cash paid for income taxes, net of refunds received
$
21,193

 
$
4,737


















VERISIGN, INC.

STATEMENTS OF OPERATIONS RECONCILIATION
(In thousands, except per share data)
(Unaudited)
 
Three Months Ended
 
Three Months Ended
 
June 30, 2012
 
June 30, 2011
 
Operating Income
 
Net Income
 
Operating Income
 
Net (Loss) Income
 
 
 
 
 
 
 
 
GAAP as reported
$
106,980

 
$
68,472

 
$
82,059

 
$
(10,610
)
Discontinued operations
 
 
—

 
 
 
2,929

Adjustments:
 
 
 
 
 
 
 
Stock-based compensation
8,454

 
8,454

 
12,075

 
12,075

Amortization of other intangible assets
325

 
325

 
322

 
322

Restructuring charges
(182
)
 
(182
)
 
3,659

 
3,659

Contingent interest payment to holders of Convertible Debentures
 
 
—

 
 
 
100,020

Unrealized loss (gain) on contingent interest derivative on Convertible Debentures
 
 
3,147

 
 
 
(700
)
Non-cash interest expense
 
 
1,871

 
 
 
1,679

Tax adjustment
 
 
(7,944
)
 
 
 
(43,989
)
Non-GAAP as adjusted
$
115,577

 
$
74,143

 
$
98,115

 
$
65,385

 
 
 
 
 
 
 
 
Revenues
$
214,142

 
 
 
$
189,844

 
 
Non-GAAP operating margin
54.0
%
 
 
 
51.7
%
 
 
Diluted shares
 
 
164,178

 
 
 
169,882

Per diluted share, non-GAAP as adjusted
 
 
$
0.45

 
 
 
$
0.38


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, stock-based compensation, amortization of other intangible assets, impairments of goodwill and other intangible assets, restructuring charges, contingent interest payments to holders of our Convertible Debentures, unrealized gain/loss on contingent interest derivative on Convertible Debentures, 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.
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 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
The following table presents the classification of stock-based compensation:
 
Three Months Ended June 30,
 
2012
 
2011
     Cost of revenues
$
1,451

 
$
1,846

     Sales and marketing
1,833

 
1,697

     Research and development
1,327

 
1,353

     General and administrative
3,843

 
7,179

     Restructuring charges
—

 
1,989

Total stock-based compensation expense
$
8,454

 
$
14,064



VERISIGN, INC.

STATEMENTS OF OPERATIONS RECONCILIATION
(In thousands, except per share data)
(Unaudited)
 
Six Months Ended
 
Six Months Ended
 
June 30, 2012
 
June 30, 2011
 
Operating Income
 
Net Income
 
Operating Income
 
Net Income
 
 
 
 
 
 
 
 
GAAP as reported
$
205,910

 
$
136,481

 
$
147,569

 
$
30,161

Discontinued operations
 
 
(1,904
)
 
 
 
4,451

Adjustments:
 
 
 
 
 
 
 
Stock-based compensation
16,584

 
16,584

 
24,036

 
24,036

Amortization of other intangible assets
648

 
648

 
645

 
645

Restructuring charges
(730
)
 
(730
)
 
9,189

 
9,189

Contingent interest payment to holders of Convertible Debentures
 
 
—

 
 
 
100,020

Unrealized loss (gain) on contingent interest derivative on Convertible Debentures
 
 
3,960

 
 
 
(250
)
Non-cash interest expense
 
 
3,491

 
 
 
3,343

Tax adjustment
 
 
(15,972
)
 
 
 
(50,843
)
Non-GAAP as adjusted
$
222,412

 
$
142,558

 
$
181,439

 
$
120,752

 
 
 
 
 
 
 
 
Revenues
$
419,868

 
 
 
$
371,367

 
 
Non-GAAP operating margin
53.0
%
 
 
 
48.9
%
 
 
Diluted shares
 
 
163,530

 
 
 
171,850

Per diluted share, non-GAAP as adjusted
 
 
$
0.87

 
 
 
$
0.70


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, stock-based compensation, amortization of other intangible assets, impairments of goodwill and other intangible assets, restructuring charges, contingent interest payments to holders of our Convertible Debentures, unrealized gain/loss on contingent interest derivative on Convertible Debentures, 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.
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 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
The following table presents the classification of stock-based compensation:
 
Six Months Ended June 30,
 
2012
 
2011
     Cost of revenues
$
2,988

 
$
3,836

     Sales and marketing
3,349

 
3,551

     Research and development
2,569

 
2,871

     General and administrative
7,678

 
13,778

     Restructuring charges
—

 
4,978

Total stock-based compensation expense
$
16,584

 
$
29,014