000-23593 | 94-3221585 | |
(Commission File Number) | (IRS Employer Identification No.) |
12061 Bluemont Way, Reston, VA | 20190 | |
(Address of Principal Executive Offices) | (Zip Code) |
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)) |
Item 2.02. | Results of Operations and Financial Condition. |
Item 9.01. | Financial Statements and Exhibits. |
Exhibit Number | Description | |
99.1 | Text of press release of VeriSign, Inc. issued on April 27, 2017. |
VERISIGN, INC. | ||||
Date: April 27, 2017 | By: | /s/ Thomas C. Indelicarto | ||
Thomas C. Indelicarto | ||||
Executive Vice President, General Counsel and Secretary |
Exhibit No. | Description | |
Exhibit 99.1 | Text of press release of VeriSign, Inc. issued on April 27, 2017. |
• | Verisign ended the first quarter with cash, cash equivalents and marketable securities of $1.8 billion, a decrease of $12 million from year-end 2016. |
• | Cash flow from operations was $148 million for the first quarter of 2017, compared with $150 million for the same quarter in 2016. |
• | Deferred revenues on March 31, 2017, totaled $1.01 billion, an increase of $37 million from year-end 2016. |
• | During the first quarter, Verisign repurchased 1.8 million shares of its common stock for $150 million. At March 31, 2017, $920 million remained available and authorized under the current share repurchase program which has no expiration. |
• | For purposes of calculating diluted EPS, the first quarter diluted share count included 21.3 million shares related to subordinated convertible debentures, compared with 21.1 million shares for the same quarter in 2016. These represent dilutive shares and not shares that have been issued. |
• | Verisign ended the first quarter with 143.6 million .com and .net domain name registrations in the domain name base, a 1.0 percent increase from the end of the first quarter of 2016, and a net increase of 1.4 million during the first quarter of 2017. |
• | In the first quarter, Verisign processed 9.5 million new domain name registrations for .com and .net, as compared to 10.0 million for the same quarter in 2016. |
• | The final .com and .net renewal rate for the fourth quarter of 2016 was 67.6 percent compared with 73.3 percent for the same quarter in 2015. Renewal rates are not fully measurable until 45 days after the end of the quarter. |
March 31, 2017 | December 31, 2016 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 454,592 | $ | 231,945 | |||
Marketable securities | 1,331,780 | 1,565,962 | |||||
Other current assets | 30,852 | 44,435 | |||||
Total current assets | 1,817,224 | 1,842,342 | |||||
Property and equipment, net | 262,352 | 266,125 | |||||
Goodwill | 52,527 | 52,527 | |||||
Deferred tax assets | 20,264 | 9,385 | |||||
Deposits to acquire intangible assets | 145,000 | 145,000 | |||||
Other long-term assets | 18,152 | 19,193 | |||||
Total long-term assets | 498,295 | 492,230 | |||||
Total assets | $ | 2,315,519 | $ | 2,334,572 | |||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | |||||||
Current liabilities: | |||||||
Accounts payable and accrued liabilities | $ | 155,006 | $ | 203,920 | |||
Deferred revenues | 718,488 | 688,265 | |||||
Subordinated convertible debentures, including contingent interest derivative | 625,893 | 629,764 | |||||
Total current liabilities | 1,499,387 | 1,521,949 | |||||
Long-term deferred revenues | 293,890 | 287,424 | |||||
Senior notes | 1,237,648 | 1,237,189 | |||||
Deferred tax liabilities | 359,137 | 371,433 | |||||
Other long-term tax liabilities | 113,206 | 117,172 | |||||
Total long-term liabilities | 2,003,881 | 2,013,218 | |||||
Total liabilities | 3,503,268 | 3,535,167 | |||||
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:324,973 at March 31, 2017 and 324,118 at December 31, 2016; Outstanding shares:101,843 at March 31, 2017 and 103,091 at December 31, 2016 | 325 | 324 | |||||
Additional paid-in capital | 16,838,202 | 16,987,488 | |||||
Accumulated deficit | (18,023,169 | ) | (18,184,954 | ) | |||
Accumulated other comprehensive loss | (3,107 | ) | (3,453 | ) | |||
Total stockholders’ deficit | (1,187,749 | ) | (1,200,595 | ) | |||
Total liabilities and stockholders’ deficit | $ | 2,315,519 | $ | 2,334,572 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Revenues | $ | 288,614 | $ | 281,876 | |||
Costs and expenses: | |||||||
Cost of revenues | 50,669 | 50,582 | |||||
Sales and marketing | 18,322 | 20,027 | |||||
Research and development | 13,344 | 16,743 | |||||
General and administrative | 31,008 | 27,757 | |||||
Total costs and expenses | 113,343 | 115,109 | |||||
Operating income | 175,271 | 166,767 | |||||
Interest expense | (29,023 | ) | (28,804 | ) | |||
Non-operating income, net | 1,301 | 3,121 | |||||
Income before income taxes | 147,549 | 141,084 | |||||
Income tax expense | (31,137 | ) | (33,628 | ) | |||
Net income | 116,412 | 107,456 | |||||
Unrealized gain on investments | 365 | 935 | |||||
Realized gain on investments, included in net income | (19 | ) | (66 | ) | |||
Other comprehensive income | 346 | 869 | |||||
Comprehensive income | $ | 116,758 | $ | 108,325 | |||
Earnings per share: | |||||||
Basic | $ | 1.14 | $ | 0.98 | |||
Diluted | $ | 0.94 | $ | 0.82 | |||
Shares used to compute earnings per share | |||||||
Basic | 102,467 | 109,592 | |||||
Diluted | 124,464 | 131,581 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 116,412 | $ | 107,456 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation of property and equipment | 13,102 | 14,867 | |||||
Stock-based compensation | 12,563 | 11,759 | |||||
Payment of contingent interest | (7,719 | ) | (6,544 | ) | |||
Amortization of debt discount and issuance costs | 3,493 | 3,267 | |||||
Other, net | (1,436 | ) | (1,844 | ) | |||
Changes in operating assets and liabilities: | |||||||
Other assets | 14,196 | 2,745 | |||||
Accounts payable and accrued liabilities | (59,889 | ) | (31,537 | ) | |||
Deferred revenues | 36,689 | 30,998 | |||||
Net deferred income taxes and other long-term tax liabilities | 20,775 | 18,477 | |||||
Net cash provided by operating activities | 148,186 | 149,644 | |||||
Cash flows from investing activities: | |||||||
Proceeds from maturities and sales of marketable securities | 1,049,795 | 900,810 | |||||
Purchases of marketable securities | (813,459 | ) | (874,031 | ) | |||
Purchases of property and equipment | (9,654 | ) | (7,082 | ) | |||
Other investing activities | 12,092 | — | |||||
Net cash provided by investing activities | 238,774 | 19,697 | |||||
Cash flows from financing activities: | |||||||
Proceeds from employee stock purchase plan | 7,997 | 8,084 | |||||
Repurchases of common stock | (173,048 | ) | (172,360 | ) | |||
Net cash used in financing activities | (165,051 | ) | (164,276 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | 738 | 301 | |||||
Net increase in cash and cash equivalents | 222,647 | 5,366 | |||||
Cash and cash equivalents at beginning of period | 231,945 | 228,659 | |||||
Cash and cash equivalents at end of period | $ | 454,592 | $ | 234,025 | |||
Supplemental cash flow disclosures: | |||||||
Cash paid for interest | $ | 28,189 | $ | 27,028 | |||
Cash paid for income taxes, net of refunds received | $ | 17,861 | $ | 13,711 |
Three Months Ended March 31, | |||||||||||||||
2017 | 2016 | ||||||||||||||
Operating Income | Net Income | Operating Income | Net Income | ||||||||||||
GAAP as reported | $ | 175,271 | $ | 116,412 | $ | 166,767 | $ | 107,456 | |||||||
Adjustments: | |||||||||||||||
Stock-based compensation | 12,563 | 12,563 | 11,759 | 11,759 | |||||||||||
Unrealized loss (gain) on contingent interest derivative on the subordinated convertible debentures | 893 | (1,065 | ) | ||||||||||||
Non-cash interest expense | 3,493 | 3,267 | |||||||||||||
Contingent interest payable on subordinated convertible debentures | (3,808 | ) | (3,346 | ) | |||||||||||
Tax adjustment | (10,642 | ) | (5,813 | ) | |||||||||||
Non-GAAP | $ | 187,834 | $ | 118,911 | $ | 178,526 | $ | 112,258 | |||||||
Revenues | $ | 288,614 | $ | 281,876 | |||||||||||
Non-GAAP operating margin | 65.1 | % | 63.3 | % | |||||||||||
Diluted shares | 124,464 | 131,581 | |||||||||||||
Diluted EPS, non-GAAP | $ | 0.96 | $ | 0.85 |
Three Months Ended March 31, | Four Quarters Ended March 31, | ||||||||||
2017 | 2016 | 2017 | |||||||||
Net Income | $ | 116,412 | $ | 107,456 | $ | 449,601 | |||||
Interest expense | 29,023 | 28,804 | 115,783 | ||||||||
Income tax expense | 31,137 | 33,628 | 138,037 | ||||||||
Depreciation and amortization | 13,102 | 14,867 | 56,402 | ||||||||
Stock-based compensation | 12,563 | 11,759 | 50,848 | ||||||||
Unrealized loss (gain) on contingent interest derivative on the subordinated convertible debentures | 893 | (1,065 | ) | (444 | ) | ||||||
Unrealized loss (gain) on hedging agreements | 495 | 562 | (156 | ) | |||||||
Non-GAAP Adjusted EBITDA | $ | 203,625 | $ | 196,011 | $ | 810,071 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Cost of revenues | $ | 1,735 | $ | 1,841 | |||
Sales and marketing | 1,429 | 1,633 | |||||
Research and development | 1,496 | 1,703 | |||||
General and administrative | 7,903 | 6,582 | |||||
Total stock-based compensation expense | $ | 12,563 | $ | 11,759 |
'1) -6/;HYCOWF.
M_P"^_GK13)*?/L_I>=TQY-HWTS#X0
M0"*(L=B\+;]5L2S7'R+*OY+P+!_G#TG(0^J.03IF51YL>NNL^J^=6?T5S'C^
M4',/X>HU1'1.KM[,_P __P Q4PYK,/T_M 83RN$Z\'V6\Y1]3*9!R,QSAW;5
M6&_].QS_ /SVMWIO2.E].(LQ: +A_A[#OL_LV/\ YK_K+:U=JZ)U)Q]]CR
M)T%N[1KW;RWV[]M?]M+
MHG6*.L89RJ6.JVO=6^M\2'-@_F%S? HQDC(,FA Z5E!7?I]7].?P>/\ 7]ZZ]TL**L''/_(_]>]N??NO=*JDJ?\ :C_O
MA_K^_=>Z45-/^+\'^E_S[]U[IYAE_P >;"W^Q_%_S[]U[ISCDU6(_P!B/]]_
M3W[KW4M6M_B#_OO]O[]U[K-[]U[KWOW7NLRFX_Q'U]^Z]UR]^Z]U[W[KW7O?
MNO=>]^Z]U[W[KW7O?NO=>]^Z]U[W[KW7O?NO=>]^Z]U[W[KW7O?NO=>]^Z]U
M[W[KW7O?NO=>]^Z]U[W[KW7O?NO=>]^Z]U[W[KW7O?NO=>]^Z]U[W[KW7O?N
MO=>]^Z]U[W[KW7O?NO=>]^Z]U[W[KW7O?NO=>]^Z]U[W[KW7O?NO=>]^Z]U[
MW[KW7O?NO=>]^Z]U[W[KW7O?NO=?_]/?X]^Z]U[W[KW7O?NO=>]^Z]U[W[KW
M7O?NO=>]^Z]U[W[KW7O?NO=>]^Z]U[W[KW7O?NO=>]^Z]U[W[KW7O?NO=>]^
MZ]U[W[KW7O?NO=>]^Z]U[W[KW7O?NO=>]^Z]U[W[KW7O?NO=>]^Z]U[W[KW7
MO?NO=>]^Z]U[W[KW7O?NO=>]^Z]U[W[KW6%FN?\ ?3W[KW7'W[KW6-V_ _V
M/OW7NH[M8$?[?W[KW3?/+<0?[W_C_K>_=>Z:*B<*+ \G_;W_K[]U[I/U=3
M;B_^(MR?\??NO=)BMJ[7Y/Y/''^M_7W[KW2/KZ[@\_2_)/'_ !//OW7ND1D*
M_P#58W_J?^-?T]^Z]T!.[MUU-?6?W I2
MK>U^/]MQQ]/;@I7/#IAWX@=9@/I[=5?/IDGK*!8>W.FR:]9%4L?IQ_C_ ,:Y
M]V45/RZJ305ZD ?TO;_8/5:^G7*Q)XM[\ //CU6HZR@6]VZH37KE[WUKKL GZ>_=:)IQZR! /
M\3_O'MU$I0GCU4M4= ^*VR'D]09*>$AQ6LC(0T?6J$H_ '^^^OO-U,
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M1Y<>N86_/^'_&K^]UIGJI4^G7,2_BX/^)O?_;^]AR#\752GGUWY/\ @O\
MOO\ 8^[>(?EUK1]O7A)_P7_??[?WXR$\>MZ/EUR#@_CC^M[_ /$>]ZS0TZT5
M_;UR#?T:W^QM_P 4]WU+2M>JZ3UD#D#ZW_WK_BO^\^[ XQP/52/4=9@X_K?_
M _XU]?;@8 '&>JE:C'60-Q];?X?\CO[N*TSTR5(XCKF&!][ZI3KE[]UKKWO
MW7NNC[LK:37RZ]UU:WMX-J..'6^NO=^M]>]^Z]U[W[KW7O?NO=>]Z) %3U[K
MG[3,:DGJO7O>NO=>]^Z]UT3_ $/^Q_'OW6Z>O6(M_4\^ZMPI6AZ<"'R&.L;-
M8?X_["_^\W]MAJ?;TZ$ SY]8BQ/Y/^\?[V /=217YGJW6,L!_C[H6H0*XZV
M?3KB9!_3C_7]T\0^8ZOI_;UQ\G]+?[$W_P"*>]^)\NO:/EU[R_\ !?\ ??['
MW4N:<>MZ:XIUQ:0'ZD ?T%[>ZZJXU=;"D8IUC+C\?7_'\_[8_P!/>CC/5@I\
M^'76MOZ+_O/_ !7WK4.MZ5^?7@[?D#_??['WO4/7KVD>O7%GOQ>UO]\:]U
MUC\^MA:9ZXWL?KQ[UJ^0ZM3'#/7M2C\C_6MS[U4GSZ]I)\NO:Q[UUO0WIUP+
MB]KVO_B??NK>&?3KK5_K?[[_ !^OO51ZCK80UR,==7_Q'OU5]>K:/D?Y=='_
M %_]]_MO?B0O'JX]*==$\'_;'\_[?W4M4$CAUOJ!41ZP64>K_ 6U '_>_:>1
M"W<.(Z?B?2:$XZ;3]3_A_O'^!]I7%>'ETL%*=8F'/_$_[[_'VW2M>K@UZQL!
M_CSQ[K3IQ2:]1'7F]N+<_P"PO_0BW^O[;;# ]*5/ ^?6Q7_PGM^?[?'[OB;X
MG]C9DP=1_(S.T8V94UU3,*+9O>#P18O"&",%HX:3L^GAIL-4$(6;(P8TWCB6
M=C /OOR,-]V0 7D?^N/*LLUG"6WVQK+#09=:?JP_:ZC
M4M!5I$C4$ M6>/8OGT\GI9982&-$[
M6[G,:]VZQW\VMO\ \;/ZQ?\ G=M(OIU:@/J![V*5SPZ]UPI\H#8ZO\?J.#^>/QP/>NO=*"FR? ]7X_
M!^GT_P ??NO=/U-D?IZO]B/^1W_/OW7NGVGK[V);\<$$_=>Z>8*P&QU
K5ILWM?-Q0L&--6T\,C):1 T3*YQ'Y@Y;WOE>_;;M\V^2WN.
M*ZAVNM::HV%5=:^:D_.A'68?+_,NQJD
M^?6JGUZ[]Z K@=:Z];W8(?/KW7K>[>'\^M5Z[M[L$ ->O=>]VZ]U[W[KW7O?
MNO=>]^Z]U[W[KW7O?NO=>]^Z]U[W4J#Y=>Z];WK0/7KU>NK>ZE/0]>KU[W4J
M1DCK?77O7#KW7O>]3>O6P2//KWNZN20#2G5@V<]>]W[3Z5ZO4>O7$@_C_>?=
M"E.'#K?7#2;W(7_>?^1>Z]>ZZ*"W%[_T]ZZ]UC]^Z]UW>WO3*&X]>ZX%0;GZ
M'_>/=/#R*<.K!B*>G6,BWO3( ">KUZZ]M];ZQLOY'U]Z_P '5@?(]]?Z^Z
M$4^SJW7$_P")_P!M]/\ 8CW[37AU8?+K$Z![AA]?]]Q[H0#@CIQ7*\.FJ> Q
M_P#!"?J/QS_Q7VC>,I]G1C%*' 'GU$9;
WY3
MW*:FU[C(/")I2.YII7C3_<@!8\5.M8@ S'K>P5K\'ZV_P!O]>1^/I[PK_9_
MAZSA\Z=