EX-99.1 2 masi-20180502xex991.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1
masimologopressreleaseq12018.jpg
Masimo Reports First Quarter 2018 Financial Results
Q1 2018 Highlights
 
■
 
Total revenue, including royalty and other revenue was $213.0 million
 
■
 
Product revenue was $204.4 million
 
■
 
Shipments of noninvasive technology boards and monitors were 53,600
 
■
 
GAAP net income of $45.6 million, or $0.82 per diluted share. Non-GAAP net income of $41.9 million, or $0.75 per diluted share.
Irvine, California, May 2, 2018 - Masimo (NASDAQ: MASI) today announced its financial results for the first quarter ended March 31, 2018.
First Quarter 2018 Results:
First quarter 2018 total revenue, including royalty and other revenue, increased to $213.0 million. Product revenues for the first quarter of 2018 increased to $204.4 million.
The Company’s worldwide direct product revenue, which accounted for 87.5% of total product revenue, increased to $178.9 million in the first quarter of 2018. OEM sales, which accounted for 12.5% of total product revenue, increased to $25.5 million in the first quarter of 2018.
GAAP net income for the first quarter of 2018 was $45.6 million, or $0.82 per diluted share.
Non-GAAP net income for the first quarter of 2018 was $41.9 million, or $0.75 per diluted share.
As a result of the strong performance in the first quarter, Masimo is raising its fiscal year 2018 product revenue guidance from $808 million to $818 million, its GAAP EPS guidance from $2.90 to $3.01 and its non-GAAP EPS guidance from $2.80 to $2.88.
During the first quarter of 2018, the Company shipped approximately 53,600 noninvasive technology boards and monitors.
As of March 31, 2018, total cash and cash equivalents were $369.5 million. During the first quarter of 2018, the Company repurchased approximately 0.2 million shares of common stock at a total cost of $16.5 million.
Joe Kiani, Chairman and Chief Executive Officer of Masimo, said, “We had another record quarter for product revenues and earnings, demonstrating once again the clinical and economic value of our innovative technologies for improving patient care. We achieved another strong quarter of shipments of our noninvasive monitoring technologies, at 53,600. Our positive outlook is visible in our higher guidance for sales and earnings in 2018 as we introduce important new products and gain new customers around the world.”

-1-


2018 Financial Guidance
The Company provided the following updated estimates for its full year 2018 guidance:
 
 
2018 Updated Guidance1
 
Prior 2018 Guidance1
(in millions, except percentages and earnings per share)
 
GAAP
 
Non-GAAP
 
GAAP
 
Non-GAAP
Total revenue, including royalty and other revenue
 
$
846

 
$
846

 
$
836

 
$
836

Product revenue
 
$
818

 
$
818

 
$
808

 
$
808

Royalty and other revenue
 
$
28

 
$
28

 
$
28

 
$
28

Operating margin
 
24.2
%
 
24.4
%
 
24.2
%
 
24.4
%
Diluted earnings per share
 
$
3.01

 
$
2.88

 
$
2.90

 
$
2.80

EBITDA
 
26.8
%
 
29.9
%
 
26.9
%
 
29.9
%
Estimated tax rate
 
20.2
%
 
24.0
%
 
22.0
%
 
25.0
%
______________
1 
Updated guidance provided May 2, 2018. Prior guidance provided February 27, 2018.

•
Total revenue, including royalty and other revenue, increasing to $846 million;
•
Product revenue increasing to $818 million;
•
GAAP diluted earnings per share increasing to $3.01; and
•
Non-GAAP diluted earnings per share increasing to $2.88.
Impact of Adoption of New Revenue Accounting Standard:
During the first quarter of 2018, the Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Update No. 2014-09, Revenue (Topic 606): Revenue from Contracts with Customers (ASU 2014-09). The new revenue recognition standard requires the Company to make numerous assumptions that are based upon historical trends and management judgment. These assumptions may change over time and may have a material impact on our revenue recognition, guidance and results of operations. In accordance with the full retrospective method of adoption, the Company has adjusted certain amounts previously reported in its unaudited condensed consolidated financial statements to comply with the new standard, as indicated by the notation, “As Adjusted”. For additional information with respect to the impact of the adoption of this new accounting standard and reconciliations to the prior reported amounts, please reference Note 2 to our condensed consolidated financial statements that will be included in Part I, Item 1 of our Quarterly Report on Form 10-Q (Form 10-Q) for the quarter ended March 31, 2018 once filed with the Securities and Exchange Commission (SEC) and Exhibit 99.3 that was included in our Current Report on Form 8-K that was filed with the SEC today.
Supplementary Non-GAAP Financial Information
For additional non-GAAP financial details, please visit the Investor Relations section of the Company’s website at www.masimo.com to access Supplementary Financial Information.
Non-GAAP Financial Measures
The non-GAAP financial measures contained herein are a supplement to the corresponding financial measures prepared in accordance with U.S. GAAP. The non-GAAP financial measures presented exclude the items described below. Management believes that adjustments for these items assist investors in making comparisons of period-to-period operating results. Furthermore, management also believes that these items are not indicative of the Company’s on-going core operating performance. These non-GAAP financial measures have certain limitations in that they do not reflect all of the costs associated with the operations of the Company’s business as determined in accordance with GAAP.
Therefore, investors should consider non-GAAP financial measures in addition to, and not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. The non-GAAP financial measures presented by the Company may be different from the non-GAAP financial measures used by other companies.
The Company has presented the following non-GAAP measures to assist investors in understanding the Company’s core net operating results on an on-going basis: (i) non-GAAP net income, (ii) non-GAAP diluted earnings per share, (iii) non-GAAP gross profit, (iv) non-GAAP operating income and (v) adjusted EBITDA. These non-GAAP financial measures may also assist investors in making comparisons of the Company’s core operating results with those of other companies. Management believes non-GAAP gross profit, non-GAAP operating income, non-GAAP net income, non-GAAP net income per diluted share and adjusted EBITDA are important measures in the evaluation of the Company’s performance and uses these measures to better understand and evaluate our business.

-2-


The non-GAAP financial measures reflect adjustments for the following items, as well as the related income tax effects thereof:
Acquisition-related costs, including depreciation and amortization.
Depreciation and amortization related to the revaluation of assets and liabilities (primarily intangible assets, property, plant and equipment adjustments, inventory revaluation, lease liabilities, etc.) to fair value through purchase accounting related to value created by the seller prior to the acquisition rather than ongoing costs of operating our core business. As a result, we believe that exclusion of these costs in presenting non-GAAP financial measures provides management and investors a more effective means of evaluating historical performance and projected costs and the potential for realizing cost efficiencies within our core business. Depreciation and amortization related to the revaluation of acquisition related assets and liabilities will generally recur in future periods.
Litigation damages, awards and settlements.
In connection with litigation proceedings arising in the course of our business, we have recorded expenses as a defendant in such proceedings in the form of damages, as well as gains as a plaintiff in such proceedings in the form of litigation awards and settlement proceeds; most recently in connection with our November 2016 settlement agreement with Koninklijke Philips N.V. We believe that exclusion of these expenses and gains is useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis. In this regard, we note that these expenses and gains are generally unrelated to our core business and/or infrequent in nature.
Realized and unrealized gains or losses from foreign currency transactions.
We are exposed to foreign currency gains or losses on outstanding foreign currency denominated receivables and payables related to certain customer sales agreements, product costs and other operating expenses. As the Company does not actively hedge these currency exposures, changes in the underlying currency rates relative to the U.S. Dollar may result in realized and unrealized foreign currency gains and losses between the time these receivables and payables arise and the time that they are settled in cash. Since such realized and unrealized foreign currency gains and losses are the result of macro-economic factors and can vary significantly from one period to the next, we believe that exclusion of such realized and unrealized gains and losses are useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis. Realized and unrealized foreign currency gains and losses are likely to recur in future periods.
Excess tax benefits from stock-based compensation.
Current authoritative accounting guidance requires that excess tax benefits or costs recognized on stock-based compensation expense be reflected in our provision for income taxes rather than paid-in capital. Since we cannot control or predict when stock option awards will be exercised or the price at which such awards will be exercised, the impact of such guidance can create significant volatility in our effective tax rate from one period to the next. We believe that exclusion of these excess tax benefits or costs is useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis. These excess tax benefits or costs will generally recur in future periods as long as we continue to issue equity awards to our employees.
Tax impacts that may not be representative of the ongoing results of our core operations.
The Tax Cuts and Jobs Act of 2017 (2017 Tax Act) was signed into law in December 2017, and became effective January 1, 2018. The 2017 Tax Act included a number of changes to existing U.S. federal tax law impacting businesses including, among other things, a permanent reduction in the corporate income tax rate from 35% to 21%, a one-time transition tax on the “deemed repatriation” of cumulative undistributed foreign earnings as of December 31, 2017 and changes in the prospective taxation of the foreign operations of U.S. multinational companies. We believe that exclusion of the tax charges related to the 2017 Tax Act is useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis. In this regard, we note that this tax charge is unrelated to our core business and non-recurring in nature.

-3-


First Quarter 2018 Actuals versus First Quarter 2017 Actuals:
RECONCILIATION OF GAAP TO NON-GAAP NET INCOME AND NET INCOME PER DILUTED SHARE
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
 
March 31, 2018
 
April 1, 2017
As Adjusted
(in thousands, except per share amounts)
 
$
 
Per Diluted Share
 
$
 
Per Diluted Share
GAAP net income, as originally reported
 
$
45,630

 
$
0.82

 
$
45,334

 
$
0.82

ASC 606 adjustments
 
—

 
—

 
6,199

 
0.11

GAAP net income, as adjusted
 
45,630

 
0.82

 
51,533

 
0.93

Non-GAAP adjustments:
 
 
 
 
 
 
 
 
 
Acquisition related depreciation and amortization
 
360

 
0.01

 
427

 
—

 
Litigation damages, awards and settlements
 
—

 
—

 
—

 
—

 
Non-operating other (income) expense
 
(1,113
)
 
(0.02
)
 
(557
)
 
(0.01
)
 
Tax impact of above item
 
120

 
—

 
(102
)
 
—

 
Excess tax benefits from stock-based compensation
 
(3,148
)
 
(0.06
)
 
(15,147
)
 
(0.27
)
 
Remeasurement of deferred taxes
 
16

 
—

 
—

 
—

 
Total non-GAAP adjustments
 
(3,765
)
 
(0.07
)
 
(15,379
)
 
(0.28
)
Non-GAAP net income
 
$
41,865

 
$
0.75

 
$
36,154

 
$
0.65

Weighted average shares outstanding - diluted
 
 
 
55,496

 
 
 
55,529

Full Year 2017 Actuals versus Full Year 2018 Guidance:
RECONCILIATION OF GAAP TO NON-GAAP NET INCOME AND NET INCOME PER DILUTED SHARE
 
 
 
 
 
 
 
 
 
 
 
Full Year 2018
 Updated Guidance1
 
Full Year 2017
Actuals As Adjusted
(in thousands, except per share amounts)
 
$
 
Per Diluted Share
 
$
 
Per Diluted Share
GAAP net income, as originally reported
 
$
167,800

 
$
3.01

 
$
131,616

 
$
2.36

ASC 606 adjustments
 
—

 
—

 
(6,827
)
 
(0.13
)
GAAP net income as adjusted
 
167,800

 
3.01

 
124,789

 
2.23

Non-GAAP adjustments:
 
 
 
 
 
 
 
 
 
Acquisition related depreciation and amortization
 
1,500

 
0.03

 
1,597

 
0.03

 
Non-operating other (income) expense
 
(1,100
)
 
(0.02
)
 
270

 
0.01

 
Tax impact of above items
 
(100
)
 
—

 
(456
)
 
(0.01
)
 
Excess tax benefits from stock-based compensation
 
(8,000
)
 
(0.14
)
 
(39,241
)
 
(0.70
)
 
Tax impact of U.S. tax reform2, 3
 
—

 
—

 
41,392

 
0.74

 
Total non-GAAP adjustments
 
(7,700
)
 
(0.13
)
 
3,562

 
0.07

Non-GAAP net income
 
$
160,100

 
$
2.88

 
$
128,351

 
$
2.30

Weighted average shares outstanding - diluted
 
 
 
55,700

 
 
 
55,595

______________
1 
Estimated effective tax rate of 22% applied to GAAP earnings and 25% applied to non-GAAP earnings.
2 
As previously reported in February 2018, the 2017 Tax Act resulted in an unfavorable charge of $43.5 million in the fourth quarter of 2017. The amount recognized was a provisional estimate and subject to change, possibly materially, due to, among other things, refinements of the Company’s calculations, changes in interpretations and assumptions the Company has made or additional guidance issued by the U.S. Treasury, Securities and Exchange Commission or Financial Accounting Standards Board.
3 
Includes adjustments related to the full retrospective application of ASC 606 of $2.1 million, or $0.04 per diluted share.


-4-


RECONCILIATION OF GAAP TO NON-GAAP GROSS PROFIT AND OPERATING INCOME
 
 
 
 
 
 
 
 
 
 
 
Full Year 2018
 Updated Guidance
 
Full Year 2017
Actuals As Adjusted
(in thousands, except percentages)
 
$
 
% of Revenue
 
$
 
% of Revenue
GAAP gross profit, as originally reported
 
$
564,600

 
66.7
%
 
$
535,100

 
67.0
 %
ASC 606 adjustments
 
—

 
—

 
(13,068
)
 
(1.0
)
GAAP gross profit, as adjusted
 
564,600

 
66.7

 
522,032

 
66.0

Non-GAAP adjustments:
 
 
 
 
 
 
 
 
 
Acquisition related depreciation and amortization
 
500

 
0.1

 
500

 
0.1

 
Total non-GAAP adjustments
 
500

 
0.1

 
500

 
0.1

Non-GAAP gross profit
 
$
565,100

 
66.8
%
 
$
522,532

 
66.1
 %
 
 
 
 
 
 
 
 
 
 
GAAP operating income
 
$
205,000

 
24.2
%
 
$
197,361

 
24.7
 %
ASC 606 adjustments
 
—

 
—

 
(13,573
)
 
(1.4
)
GAAP operating income, as adjusted
 
205,000

 
24.2

 
183,788

 
23.3

Non-GAAP adjustments:
 
 
 
 
 
 
 
 
 
Acquisition related depreciation and amortization
 
1,500

 
0.2

 
1,597

 
0.2

 
Total non-GAAP adjustments
 
1,500

 
0.2

 
1,597

 
0.2

Non-GAAP operating income
 
$
206,500

 
24.4
%
 
$
185,385

 
23.5
 %

RECONCILIATION OF EBITDA TO ADJUSTED EBITDA
 
 
 
 
 
 
 
 
 
 
 
Full Year 2018
 Guidance
 
Full Year 2017
 Actuals As Adjusted
(in thousands, except percentages)
 
$
 
% of Revenue
 
$
 
% of Revenue
GAAP net income, as originally reported
 
$
167,800

 
19.8
 %
 
$
131,616

 
16.7
 %
ASC 606 adjustments
 
—

 
—

 
(6,827
)
 
(0.9
)
GAAP net income, as adjusted
 
167,800

 
19.8

 
124,789

 
15.8

 
Other (income)/expense1
 
(5,100
)
 
(0.6
)
 
(2,013
)
 
(0.3
)
 
Provision for income taxes
 
42,400

 
5.0

 
61,011

 
7.8

 
Depreciation and amortization
 
21,900

 
2.6

 
20,061

 
2.5

EBITDA
 
227,000

 
26.8

 
203,848

 
25.8

 
Add: Non-cash stock-based compensation expense
 
26,200

 
3.1

 
17,187

 
2.2

Adjusted EBITDA
 
$
253,200

 
29.9
 %
 
$
221,035

 
28.0
 %
______________
1 
Other (income)/expense consists primarily of interest (income)/expense and net foreign currency (gains)/losses.

-5-


Conference Call
Masimo will hold a conference call today at 1:30 p.m. PT (4:30 p.m. ET) to discuss the results. A live webcast of the call will be available online from the investor relations page of the Company’s website at www.masimo.com. The dial-in numbers are (888) 520-7182 for domestic callers and +1 (706) 758-3929 for international callers. The reservation code for both dial-in numbers is 4776719. After the live webcast, the call will be available on Masimo’s website through May 30, 2018. In addition, a telephonic replay of the call will be available through May 9, 2018. The replay dial-in numbers are (855) 859-2056 for domestic callers and +1 (404) 537-3406 for international callers. Please use reservation code 4776719.
About Masimo
Masimo (NASDAQ: MASI) is a global leader in innovative noninvasive monitoring technologies. Our mission is to improve patient outcomes and reduce the cost of care by taking noninvasive monitoring to new sites and applications. In 1995, the Company debuted Masimo SET® Measure-through Motion and Low Perfusion® pulse oximetry, which has been shown in multiple studies to significantly reduce false alarms and accurately monitor for true alarms. Masimo SET® is estimated to be used on more than 100 million patients in leading hospitals and other healthcare settings around the world. In 2005, Masimo introduced rainbow® Pulse CO-Oximetry technology, allowing noninvasive and continuous monitoring of blood constituents that previously could only be measured invasively, including total hemoglobin (SpHb®), oxygen content (SpOC), carboxyhemoglobin (SpCO®), methemoglobin (SpMet®), Pleth Variability Index (PVi®) and more recently, Oxygen Reserve Index (ORi™), in addition to SpO2, pulse rate and perfusion index (PI). In 2014, Masimo introduced Root™, an intuitive patient monitoring and connectivity platform with the Masimo Open Connect® (MOC-9®) interface. Masimo is also taking an active leadership role in mobile health applications (mHealth) with products such as the Radius-7® wearable patient monitor and the MightySat™ fingertip pulse oximeter. Additional information about Masimo and its products may be found at www.masimo.com.
Forward-Looking Statements
All statements other than statements of historical facts included in this press release that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements including, in particular, the statements about our expectations for full fiscal year GAAP and non-GAAP 2018 total, product, royalty and other revenues, earnings per diluted share, operating margin, EBITDA, and estimated tax rate, and our long-term outlook; demand for our products; anticipated revenue and earnings growth; our financial condition, results of operations and business generally; expectations regarding our ability to design and deliver innovative new noninvasive technologies and reduce the cost of care; and demand for our technologies. These forward-looking statements are based on management’s current expectations and beliefs and are subject to uncertainties and factors, all of which are difficult to predict and many of which are beyond our control and could cause actual results to differ materially and adversely from those described in the forward-looking statements. These risks include, but are not limited to, those related to: our dependence on Masimo SET® and Masimo rainbow SET™ products and technologies for substantially all of our revenue; any failure in protecting our intellectual property exposure to competitors’ assertions of intellectual property claims; the highly competitive nature of the markets in which we sell our products and technologies; any failure to continue developing innovative products and technologies; the lack of acceptance of any of our current or future products and technologies; obtaining regulatory approval of our current and future products and technologies; the risk that the implementation of our international realignment will not continue to produce anticipated operational and financial benefits, including a continued lower effective tax rate; the loss of our customers; the failure to retain and recruit senior management; product liability claims exposure; a failure to obtain expected returns from the amount of intangible assets we have recorded; the maintenance of our brand; the amount and type of equity awards that we may grant to employees and service providers in the future; our ongoing litigation and related matters; and other factors discussed in the “Risk Factors” section of our most recent periodic reports filed with the Securities and Exchange Commission (“SEC”), including our most recent Form 10-K and Form 10-Q, all of which you may obtain for free on the SEC’s website at www.sec.gov. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we do not know whether our expectations will prove correct. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, even if subsequently made available by us on our website or otherwise. We do not undertake any obligation to update, amend or clarify these forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

# # #
Investor Contact: Eli Kammerman
 
Media Contact: Irene Paigah
(949) 297-7077
 
(858) 859-7001
ekammerman@masimo.com
 
irenep@masimo.com
Masimo, SET, Signal Extraction Technology, Improving Patient Outcome and Reducing Cost of Care... by Taking Noninvasive Monitoring to New Sites and Applications, rainbow, SpHb, SpOC, SpCO, SpMet, PVI and ORI are trademarks or registered trademarks of Masimo Corporation.

-6-


MASIMO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)

 
March 31,
2018
 
December 30,
2017
As Adjusted
ASSETS
 
 
 
Current assets
 
 
 
Cash and cash equivalents
$
369,498

 
$
315,302

Accounts receivable, net of allowance for doubtful accounts
101,093

 
118,532

Inventories
91,062

 
92,259

Other current assets
34,663

 
33,601

Total current assets
596,316

 
559,694

Deferred costs and other contract assets
114,958

 
109,256

Property and equipment, net
164,236

 
164,096

Intangible assets, net
29,453

 
27,123

Goodwill
20,477

 
20,617

Deferred tax assets
20,026

 
19,981

Other non-current assets
4,093

 
4,668

Total assets
$
949,559

 
$
905,435

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current liabilities
 
 
 
Accounts payable
$
36,893

 
$
33,780

Accrued compensation
28,704

 
39,515

Accrued and other current liabilities
48,472

 
41,150

Deferred revenue and other contract-related liabilities, current
16,861

 
15,209

Total current liabilities
130,930

 
129,654

Other non-current liabilities
52,118

 
51,757

Total liabilities
183,048

 
181,411

Commitments and contingencies
 
 
 
Stockholders’ equity
 
 
 
Common stock
52

 
52

Treasury stock
(489,026
)
 
(472,536
)
Additional paid-in capital
475,538

 
461,494

Accumulated other comprehensive loss
(3,212
)
 
(2,941
)
Retained earnings
783,159

 
737,955

Total stockholders’ equity
766,511

 
724,024

Total liabilities and stockholders’ equity
$
949,559

 
$
905,435




-7-


MASIMO CORPORATION
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share amounts)

 
 
Three Months Ended
 
 
March 31,
2018
 
April 1,
2017
As Adjusted
Revenue:
 
 
 
 
Product
 
$
204,389

 
$
182,466

Royalty and other revenue
 
8,564

 
14,177

Total revenue
 
212,953

 
196,643

Cost of goods sold
 
69,292

 
64,229

Gross profit
 
143,661

 
132,414

Operating expenses:
 
 
 
 
Selling, general and administrative
 
71,175

 
66,087

Research and development
 
18,601

 
14,176

Total operating expenses
 
89,776

 
80,263

Operating income
 
53,885

 
52,151

Non-operating income
 
1,647

 
874

Income before provision for income taxes
 
55,532

 
53,025

Provision for income taxes
 
9,902

 
1,492

Net income
 
$
45,630

 
$
51,533

 
 
 
 
 
Net income per share:
 
 
 
 
Basic
 
$
0.88

 
$
1.02

Diluted
 
$
0.82

 
$
0.93

 
 
 
 
 
Weighted-average shares used in per share calculations:
 
 
 
 
Basic
 
51,709

 
50,652

Diluted
 
55,496

 
55,529

The following table presents details of the stock-based compensation expense that is included in each functional line item in the condensed consolidated statements of operations (in thousands):
 
 
Three Months Ended
 
 
March 31,
2018
 
April 1,
2017
As Adjusted
Cost of goods sold
 
$
78

 
$
93

Selling, general and administrative
 
4,036

 
2,071

Research and development
 
1,218

 
725

Total
 
$
5,332

 
$
2,889



-8-


MASIMO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)

 
Three Months Ended
 
March 31, 2018
 
April 1,
2017
As Adjusted
Cash flows from operating activities:
 
 
 
Net income
$
45,630

 
$
51,533

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
5,241

 
4,736

Stock-based compensation
5,332

 
2,889

Loss on disposal of property, equipment and intangibles
429

 
144

Provision for doubtful accounts
(730
)
 
60

Changes in operating assets and liabilities:
 
 
 
Decrease (increase) in accounts receivable
18,113

 
(2,687
)
Decrease (increase) in inventories
1,139

 
(7,381
)
Increase in other current assets
(1,471
)
 
(3,125
)
Increase in deferred costs and other contract assets
(5,214
)
 
(7,643
)
Decrease in other non-current assets
644

 
878

Increase in accounts payable
2,363

 
1,470

Decrease in accrued compensation
(11,074
)
 
(19,088
)
Increase in accrued liabilities
3,298

 
2,643

Increase (decrease) income tax payable
6,318

 
(4,845
)
Increase (decrease) in deferred revenue and other contract-related liabilities
784

 
(6,780
)
(Decrease) increase in other non-current liabilities
(73
)
 
1,094

Net cash provided by operating activities
70,729

 
13,898

Cash flows from investing activities:
 
 
 
Purchases of property and equipment, net
(3,788
)
 
(4,394
)
Increase in intangible assets
(3,583
)
 
(833
)
Net cash used in investing activities
(7,371
)
 
(5,227
)
Cash flows from financing activities:
 
 
 
Repayments of capital lease obligations
—

 
(69
)
Proceeds from issuance of common stock
9,682

 
27,290

Payroll tax withholdings on behalf of employees for vested equity awards
(168
)
 
—

Repurchases of common stock
(18,479
)
 
—

Net cash provided by (used in) financing activities
(8,965
)
 
27,221

Effect of foreign currency exchange rates on cash
(226
)
 
413

Net increase in cash, cash equivalents, and restricted cash
54,167

 
36,305

Cash, cash equivalents and restricted cash at beginning of period
315,483

 
308,198

Cash, cash equivalents and restricted cash at end of period
$
369,650

 
$
344,503



-9-