-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BwfCIpZemZZ5JriFUN9+nqt8C3p+u2Nxsuc3uUpmFQwg1N//AVuxgoHPdQaXY3iW JglKr2Zknk+PAYeaL9MLCA== 0000950123-03-011417.txt : 20031016 0000950123-03-011417.hdr.sgml : 20031016 20031016163705 ACCESSION NUMBER: 0000950123-03-011417 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031016 ITEM INFORMATION: FILED AS OF DATE: 20031016 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DOUBLECLICK INC CENTRAL INDEX KEY: 0001049480 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 133870996 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-23709 FILM NUMBER: 03944166 BUSINESS ADDRESS: STREET 1: 450 W 33RD ST STREET 2: 16TH FL CITY: NEW YORK STATE: NY ZIP: 10001 BUSINESS PHONE: 2126830001 MAIL ADDRESS: STREET 1: 450 W 33RD ST STREET 2: 16TH FL CITY: NEW YORK STATE: NY ZIP: 10001 8-K 1 y90712e8vk.txt FORM 8-K ---------------------------------------------------- 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): OCTOBER 16, 2003 (OCTOBER 16, 2003) ------------- DOUBLECLICK INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE (STATE OR OTHER JURISDICTION OF INCORPORATION) 000-23709 13-3870996 (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER IDENTIFICATION NO.) 450 WEST 33RD STREET NEW YORK, NEW YORK 10001 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) (212) 683-0001 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) N.A. (FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT) ---------------------------------------------------- ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION On October 16, 2003, DoubleClick announced its financial results for the fiscal quarter ended September 30, 2003. The full text of the press release issued in connection with the announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K. 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 (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing. The attached press release discloses the Company's net cash position as of September 30, 2003, which may be considered to be a non-GAAP financial measure, and reconciles the Company's net cash position to its cash, cash equivalents, restricted cash and investments in marketable securities as of September 30, 2003, as determined in accordance with GAAP. Net cash is considered a liquidity measure and provides useful information to management and investors about the amount of cash available to the Company after taking into account the principal amount of outstanding debt and capital lease obligations. Management uses this financial measure in making operating decisions, for budget planning purposes and in considering strategic opportunities including strategic acquisitions and repurchasing stock or bonds. The attached press release also discloses EBITDA, which represents net income as presented in the statement of operations under GAAP before interest, taxes, depreciation and amortization. EBITDA, as defined above, may not be similar to EBITDA measures used by other companies and is not a measurement under generally accepted accounting principles. We believe that EBITDA provides useful information to investors about the Company's performance because it eliminates the effects of period to period changes in costs associated with capital investments and income from interest on our cash and marketable securities that are not directly attributable to the underlying performance of the Company's business operations. Management uses EBITDA in evaluating the overall performance of the Company's business operations. The non-GAAP measures included in the press release should be considered in addition to, not as a substitute for, or superior to or other measures of the Company's financial position prepared in accordance with generally accepted accounting principles. SIGNATURE 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. DOUBLECLICK INC. ----------------------------------- (Registrant) By: /s/ Bruce Dalziel ----------------------------------- Name: Bruce Dalziel Title: Chief Financial Officer Dated: October 16, 2003 EXHIBIT EXHIBIT INDEX - ------- ------------- 99.1 Press Release dated October 16, 2003 EX-99.1 3 y90712exv99w1.txt PRESS RELEASE Exhibit 99.1 [LOGO DOUBLECLICK] For Immediate Release INVESTOR CONTACT: Jason McGruder Manager, Investor Relations 212-381-5182 PRESS CONTACT: Jennifer Blum VP, Public Relations 212-381-5705 DOUBLECLICK REPORTS THIRD QUARTER 2003 FINANCIAL RESULTS Company has third consecutive GAAP profitable quarter New York, NY, October 16, 2003 -- DoubleClick Inc. (NASDAQ: DCLK), the leading provider of data and technology tools for direct marketers, web publishers and advertisers, today announced financial results for the third quarter ended September 30, 2003, updated its guidance for the full year 2003, and gave a preliminary business outlook for full year 2004. DoubleClick reported revenues for the third quarter of $74.8 million versus $74.6 million in the year ago period. GAAP net income for the most recent quarter was $6.3 million, or $0.04 per share compared with $5.8 million or $0.04 in the second quarter of 2003 and a loss of $62.0 million or $0.46 per share in the third quarter of 2002. GAAP net income before interest, taxes, depreciation, and amortization, or EBITDA, was $23.8 million for the third quarter of 2003 versus $16.4 million in the second quarter of 2003. Total GAAP operating expenses were $45.7 million, versus $117.9 million in the third quarter of 2002. Total company headcount at the end of the most recent quarter was 1,214 versus 1,147 at the end of the third quarter of 2002. Third quarter 2003 GAAP earnings were negatively impacted by $8.3 million in charges related to the acceleration of amortization of the leasehold improvements and furniture and fixtures at the Company's New York and San Francisco offices due to the change in useful life of these assets. Third quarter 2003 GAAP earnings and EBITDA benefited from a net restructuring credit of $2.2 million related to the reversal of a portion of the Company's real estate reserve for its New York and San Francisco offices and the receipt of $1.4 million by the Company in connection with an insurance claim. Last year's third-quarter GAAP results included $46.2 million in charges related to the impairment of goodwill for the Company's email business and other intangible assets, a $23.8 million restructuring charge related to the Company's real estate, a $14.1 million charge relating to the impairment of some of the Company's minority investments, a $7.4 million gain related to the sale of the Company's North American Media business and a $11.9 million gain on the early extinguishment of debt. The Company used $43.4 million in cash flow from operations during the third quarter of 2003. This figure included payments by the Company of $56.5 million in connection with the termination of leases on the Company's New York and San Francisco offices. The Company ended the quarter with $662 million in cash and marketable securities, and had a net cash position of $526 million, or $3.83 per share. The Company used $158.0 million in connection with the redemption of its 4.75% convertible notes during the quarter. - ------------------------------- 1 See attached schedule for a reconciliation of EBITDA to GAAP net income. Please see the Form 8-K filed today by the Company with the SEC for a discussion of why the Company believes EBITDA is a useful financial measure to investors and how it is used by management. 2 Net cash is defined as gross cash and cash equivalents of $126.7 million, restricted cash of $27.7 million, and investments in marketable securities of $507.6 million minus zero coupon convertible subordinated notes of $135.0 million and capital lease obligations of $1.0 million. Please see the Form 8-K filed today by the Company with the SEC for a discussion of why the Company believes net cash is a useful financial measure to investors and how it is used by management. "DoubleClick's business has begun to benefit from the turnaround in marketing spending, with TechSolutions transaction volumes for the third quarter reaching their highest levels since the first quarter of 2001. In addition, our Data Segment had its best quarterly revenue to date," said Kevin Ryan, Chief Executive Officer, DoubleClick. "During the quarter, we made tremendous strides in integrating our recently acquired Data Management division. Our rich media authoring and delivery product, DART Motif, is scheduled to add multi-event ad tracking and analysis functionality in the near future. Motif is a joint development between DoubleClick and Macromedia, and market response to this product has been very favorable." 3Q03 2Q03 3Q02 Revenue (000's) $74,790 $63,556 $74,625 GAAP Net Income (Loss) (000's) $6,340 $5,831 ($61,951) GAAP EPS $0.04 $0.04 ($0.46) Data DoubleClick Data revenue grew 16.7% to an all-time high of $31.3 million in 3Q03 versus $26.8 million in 3Q02. Abacus revenue was up 7.3% year over year to $28.8 million, while the remaining $2.5 million in revenues came from DoubleClick's new Data Management business. Gross margins were 71.7%, a slight decrease from the year ago period. The third quarter has traditionally been the highest revenue period for the Company's Data business as cataloguers prepare for the holiday season. During the quarter, DoubleClick's Data Management business implemented a new data processing platform, and several large Data Management clients began the process of migrating away from outsourced processing services to this new platform. DoubleClick is combining its data and technology solutions in order to reduce the effort and cost clients expend while planning, executing, tracking and refining multi-channel marketing campaigns. "We have seen a great deal of interest on the part of existing DoubleClick customers in our Data Management offerings, as well as interest from Data Management clients in other DoubleClick products, including the Abacus Alliances, DARTmail, Ensemble, and SiteAdvance," said David Rosenblatt, President of DoubleClick. "Bringing these products together in one platform will allow clients to more easily utilize sophisticated and specific targeting in their marketing campaigns." TechSolutions The global TechSolutions division reported third quarter revenues of $43.5 million versus $45.1 million in 3Q02. Total TechSolutions gross margins were 61.9%, a decrease from 62.3% in the third quarter of 2002. DoubleClick's global DART and DARTmail platforms delivered approximately 174 billion impressions in the third quarter of 2003. The Company's Ad Management products had revenues of $31.0 million in 3Q03, versus $35.4 million in the year ago period. Both DoubleClick's DART for Advertisers and DART for Publishers products saw sequential and year-over-year volume increase in the third quarter of 2003, stemming from existing customers increasing their activity and from the enrollment of new clients. During the third quarter of 2003, AT&T Wireless, Fox Sports, CondeNet, and Internet Broadcast Systems all signed deals to use DoubleClick's ad management solutions. With the recent signing of OMD Digital, DoubleClick now claims all ten of Advertising Age's top-ten agency brands as DART for Advertisers and MediaVisor clients. DART Motif, the new rich media product from DoubleClick in conjunction with Macromedia, has gained quick acceptance. More than two dozen clients have chosen DART Motif, including Viacom's CBS and MTV Networks sites, Cox Newspapers, and Ogilvy Interactive UK. DART Motif is also being tested by DoubleClick's largest agency customers and by almost all of Nielsen/NetRating's top-ten rated web sites. DART Motif is scheduled to have full tracking and analysis functionality in the fourth quarter of 2003. DoubleClick's email management and delivery platform and related strategic services reported revenues of $9.6 million for 3Q03, down slightly against $9.7 million in the year ago period. New client wins 2 included EMC, Luxury Cruise Lines, Viking River Cruises, as well as a greatly expanded relationship with one of world's largest financial services companies. This week DoubleClick introduced DARTmail 4.0, the most significant upgrade to its email product since its introduction in 2001. In September, DoubleClick released its first Quarterly ISP and Policy Update Report and held an Anti-Spam Summit in New York. During this event, representatives of over 200 marketers, the Federal Trade Commission, and the major ISPs discussed strategies for combating unwanted and unsolicited email. In addition to the Summit, DoubleClick is actively involved in fighting spam with industry bodies such as the Direct Marketing Association. DoubleClick's multi-channel Marketing Automation and Analytics products are Ensemble and SiteAdvance. Revenues for these products were $2.9 million in the third quarter of 2003, up almost 80% from 2Q03. The Company completed customer installations of the Ensemble product for several clients during the third quarter, including Terra Lycos, and remains on schedule with its planned December release of the DARTmail-enabled version 6.5. Moreover, Epsilon, a leading relationship marketing company, agreed to offer Ensemble to its customers. SiteAdvance continued to gain momentum, and new customer wins include J Crew, Viking River Cruises, and Verio, as well as a major airline. "Consumer behavior is driving the need for our clients and prospects to seek tools for marketing over multiple channels as well as to analyze the results of these campaigns," noted Rosenblatt. "As a result, we have had sustained success in selling bundled solutions to our customers. For example, 24% of DoubleClick TechSolutions clients used more than one product, up from 21% sequentially and 16% in the third quarter of 2002." Fourth Quarter 2003 Outlook DoubleClick is expecting fourth quarter revenues to be between $69 million and $71 million. GAAP earnings for the fourth quarter are projected to be between $0.00 and $0.03 per share. Segment projections for the fourth quarter of 2003 are as follows: o Data revenues are estimated to be between $24 million and $25.5 million, with gross margins in the mid 60s percentage range, including $3 million from Data Management. o TechSolutions revenues are estimated to be between $44 million and $46 million, with gross margins in the mid 60s percentage range. o Within TechSolutions, Email technology and related strategic services are expected to generate revenues between $10 million and $11 million and Automation and Analytics are expected to account for about $1.5 million of revenues. Total company gross margins are expected to be in the mid 60s percentage range. Total company GAAP operating expenses are expected to be between $45 million and $48 million. Gross margin and operating cost estimates include the impact of a $5.3 million charge for leasehold improvements and accelerated leasehold amortizations associated with the planned exit of the Company's New York office. Items in interest and other, net and taxes are expected to be roughly $2.5 million. Preliminary 2004 Outlook The Company expects GAAP earnings for the full year 2004 to be in the mid $30 million range, assuming a modest increase in total revenue. "With the improving business climate as well as the successful actions we have taken to reduce our cost structure, we expect very strong net income growth in 2004" said Bruce Dalziel, Chief Financial Officer, DoubleClick. "Even more importantly, we will continue to invest in new product lines, which will position us for accelerated revenue growth." Conference Call Today The DoubleClick Conference Call to discuss this earnings press release is scheduled for today at 4:30pm EST. This call will be available live via Webcast, and on a replay basis afterward on the Company's website www.doubleclick.net under Investor Relations or at http://ir.doubleclick.net. 3 About DoubleClick DoubleClick (www.doubleclick.net) is the leading provider of data and technology for advertisers, direct marketers and web publishers to plan, execute and analyze their marketing programs. DoubleClick's online advertising, email marketing and database marketing solutions help clients yield the highest return on their marketing dollar. In addition, the Company's marketing analytics tools help clients measure performance within and across channels. DoubleClick Inc. has global headquarters in New York City and maintains 22 offices around the world. Note: This press release includes forward-looking statements, including earnings and revenue projections and future plans set forth under the sections titled "Fourth Quarter 2003 Outlook" and "Preliminary 2004 Outlook" above. The results or events predicted in these statements may vary materially from actual future events or results. Factors that could cause actual events or results to differ from anticipated events or results include: lack of growth or decline in online advertising or marketing, changes in government regulation, intense competition in DoubleClick's industry, failure to manage the integration of acquired companies, failure to successfully manage the Company's international operations and other risks that are contained in documents which the Company files from time to time with the Securities and Exchange Commission, including the Company's most recent reports on Form 10-K and Form 10-Q. In addition, any forward-looking statements represent the Company's estimates only as of today and should not be relied upon as representing the Company's estimates as of any subsequent date. While the Company may elect to update forward-looking statements at some point in the future, it may choose not to do so, even if the Company's estimates change. # # # - - Continued - - 4 DOUBLECLICK INC. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Three Months Ended Nine Months Ended September 30, September 30, ------------- ------------- 2003 2002 2003 2002 ---- ---- ---- ---- REVENUE: Technology $ 43,514 $ 45,098 $ 128,511 $ 143,534 Data 31,276 26,811 69,889 62,921 Media -- 3,130 -- 30,250 Intersegment elimination -- (414) -- (2,773) --------- --------- --------- --------- Total revenue 74,790 74,625 198,400 233,932 Cost of revenue 25,383 26,248 69,778 86,113 --------- --------- --------- --------- Gross profit 49,407 48,377 128,622 147,819 Operating expenses: Sales and marketing 27,175 23,225 67,683 78,685 General and administrative 8,459 12,228 25,685 36,311 Product development 10,685 9,364 27,258 30,684 Amortization of intangibles 1,561 3,127 4,880 9,281 Goodwill impairment -- 45,185 -- 45,185 Impairment of intangible assets -- 975 -- 975 Restructuring (credits) charges, net (2,221) 23,838 (9,092) 32,596 --------- --------- --------- --------- Total operating expenses 45,659 117,942 116,414 233,717 Income (loss) from operations 3,748 (69,565) 12,208 (85,898) Other income (expense) Equity in (losses) income of affiliates (126) -- (2,439) 219 Impairment of investments in affiliates -- (14,147) -- (14,147) Gain (loss) on early extinguishment of debt -- 11,855 (4,406) 11,855 Gain on sale of businesses, net -- 7,437 -- 17,946 Interest and other, net 3,491 4,574 9,123 10,772 --------- --------- --------- --------- Total other income (expense) 3,365 9,719 2,278 26,645 Income (loss) before income taxes 7,113 (59,846) 14,486 (59,253) Provision for income taxes (773) (2,620) (1,409) (6,020) --------- --------- --------- --------- Income (loss) before minority interest 6,340 (62,466) 13,077 (65,273) Minority interest in results of consolidated subsidiaries -- 515 -- 1,352 --------- --------- --------- --------- NET INCOME (LOSS) $ 6,340 $ (61,951) $ 13,077 $ (63,921) ========= ========= ========= ========= Basic net income (loss) per share $ 0.05 $ (0.46) $ 0.10 $ (0.47) ========= ========= ========= ========= Weighted average shares used in basic net income (loss) per share 137,366 135,945 136,908 135,702 ========= ========= ========= ========= Diluted net income (loss) per share $ 0.04 $ (0.46) $ 0.09 $ (0.47) ========= ========= ========= ========= Weighted average shares used in diluted net income (loss) per share 142,351 135,945 140,515 135,702 ========= ========= ========= =========
5 DOUBLECLICK INC. CONSOLIDATED BALANCE SHEETS (UNAUDITED, IN THOUSANDS, EXCEPT SHARE AMOUNTS)
September 30, December 31, 2003 2002 ---- ---- ASSETS Cash and cash equivalents $ 126,692 $ 123,671 Investments in marketable securities 185,741 306,974 Restricted cash 13,750 2,500 Accounts receivable, net of allowances of $8,929 and $13,704, respectively 53,345 48,850 Prepaid expenses and other current assets 22,235 24,324 ----------- ----------- Total current assets 401,763 506,319 Investments in marketable securities 321,824 294,249 Restricted cash 27,741 25,091 Property and equipment, net 77,939 98,545 Goodwill 19,044 20,572 Intangible assets, net 12,783 13,378 Investment in affiliates 12,822 12,125 Other assets 11,395 9,128 ----------- ----------- Total assets $ 871,561 $ 976,907 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 6,287 $ 7,218 Accrued expenses and other current liabilities 73,599 117,320 Current portion of capital lease obligations 989 6,163 Deferred revenue 7,874 6,245 ----------- ----------- Total current liabilities 88,749 136,946 Convertible subordinated notes - 0% Coupon, due 2023 135,000 -- Convertible subordinated notes - 4.75% Coupon, due 2006 -- 154,800 Long term portion of capital lease obligations -- 852 Other long term liabilities 14,916 73,747 STOCKHOLDERS' EQUITY: Preferred stock, par value $0.001; 5,000,000 shares authorized, none outstanding -- -- Common stock, par value $0.001; 400,000,000 shares authorized, 139,226,681 and 137,854,385 shares issued, respectively 139 138 Treasury stock, 1,680,670 shares (8,949) (8,949) Additional paid-in capital 1,286,920 1,281,244 Accumulated deficit (653,364) (666,441) Other accumulated comprehensive income 8,150 4,570 ----------- ----------- Total stockholders' equity 632,896 610,562 ----------- ----------- Total liabilities and stockholders' equity $ 871,561 $ 976,907 =========== ===========
6 DOUBLECLICK INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED, IN THOUSANDS)
Three Months Ended Nine Months Ended September 30, September 30, ------------- ------------- 2003 2002 2003 2002 ---- ---- ---- ---- OPERATING ACTIVITIES Net income (loss) $ 6,340 $ (61,951) $ 13,077 $ (63,921) Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: Depreciation and leasehold amortization 17,112 10,501 37,465 31,473 Amortization of intangible assets 2,503 3,755 7,483 10,793 Equity in losses (income) of affiliates 126 -- 2,439 (219) Gain on sale of businesses -- (7,437) -- (19,318) Lease termination and related payments (56,474) -- (70,874) -- Impairment of investments in affiliates -- 14,147 14,147 Goodwill impairment -- 45,185 45,185 Gain (loss) on early extinguishment of debt -- (11,855) 4,406 (11,855) Other non-cash items 3,214 6,205 7,674 20,435 Other changes in working capital (16,202) 13,467 (40,703) 3,178 --------- --------- --------- --------- Cash (used in) provided by operating activities (43,381) 12,017 (39,033) 29,898 INVESTING ACTIVITIES Purchases of property and equipment (6,007) (4,005) (17,234) (10,021) Purchases of investments in marketable securities (98,000) (49,018) (334,195) (283,005) Maturities of investments in marketable securities 89,347 111,517 424,486 336,846 Restricted cash 28,161 (6,000) (2,650) (6,000) Proceeds placed in escrow for acquisition of Protagona -- (12,900) -- (12,900) Acquisition of businesses and intangible assets, net of cash acquired -- (1,102) (2,757) (6,280) Proceeds from sale of businesses -- 2,967 0 16,927 Proceeds from sale of investment in affiliates -- -- 656 -- Proceeds from sale of intangible asset, net -- -- 900 -- --------- --------- --------- --------- Cash provided by investing activities 13,501 41,459 69,206 35,567 FINANCING ACTIVITIES Proceeds from the issuance of common stock and the exercise of stock options, net 2,184 988 4,450 4,865 Proceeds from issuance of convertible subordinated notes, net -- -- 131,963 -- Repurchase of convertible subordinated notes (157,952) (53,578) (157,952) (53,578) Purchases of treasury stock -- (4,483) -- (4,483) Payments under capital lease obligations and notes payable (4,627) (1,806) (8,308) (14,381) Other -- -- -- (1,000) --------- --------- --------- --------- Cash used in financing activities (160,395) (58,879) (29,847) (68,577) Effect of exchange rate changes on cash 2 (1,060) 2,695 4,234 --------- --------- --------- --------- Net (decrease) increase in cash* and cash equivalents (190,273) (6,463) 3,021 1,122 *Cash and cash equivalents at beginning of period $ 316,965 $ 107,096 $ 123,671 $ 99,511 --------- --------- --------- --------- *Cash and cash equivalents at end of period $ 126,692 $ 115,338 $ 126,692 $ 100,633 ========= ========= ========= =========
*Cash and cash equivalents excludes restricted cash and investments in marketable securities which consists of government and corporate debt obligations and money market funds. 7 DOUBLECLICK INC. RECONCILIATION OF NET INCOME TO GAAP EBITDA (Unaudited, in thousands) Three Months Ended September 30, June 30, 2003 2003 ------------- -------- Net income 6,340 5,831 Plus tax provision 773 303 Less interest income, net (2,904) (1,925) Plus amortization of intangibles(1) 2,503 2,031 Plus depreciation and leasehold amortization 17,112 10,164 ------ ------ GAAP EBITDA 23,824 16,404 ====== ====== (1) For the three months ended September 30 and June 30, 2003, $942 thousand and $791 thousand, respectively, of amortization expense of intangible assets relating to purchased technology has been included as a component of cost revenue in the Consolidated Statements of Operations. 8 -----END PRIVACY-ENHANCED MESSAGE-----