8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report: August 2, 2016

 (Date of earliest event reported)

Callidus Software Inc.

(Exact name of Registrant as specified in its charter)

Delaware	000-50463	77-0438629
(State or other jurisdiction of incorporation)	(Commission file number)	(I.R.S. Employer Identification No.)

4140 Dublin Blvd., Suite 400, Dublin, CA 94568

(Address of principal executive offices) (Zip Code)

(925) 251-2200

(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 obligations of the registrant under any of the following provisions (see General Instruction A.2 below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

On August 2, 2016 Callidus Software Inc. announced financial results for the quarter ended June 30, 2016.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

The following exhibit is furnished herewith:

Exhibit Number	Description
99.1	Press Release of Callidus Software Inc. dated August 2, 2016

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.

		CALLIDUS SOFTWARE INC.
Date: August 2, 2016	By:	/s/ Bob L. Corey
		Bob L. Corey
		Executive Vice President, Chief Financial Officer

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press Release of Callidus Software Inc. dated August 2, 2016

EX-99.1

Exhibit 99.1

CallidusCloud Announces Second Quarter SaaS Revenue Increases 33% to $36.2 Million

- Total Q2 Revenue of $49.8 Million

- Operating Cash Flow of $6.9 Million, up from $2.6 Million in Q2 2015

- Closed Two Multi-Year Eight-Figure Deals Based on Total Contract Value

DUBLIN, CA., August 2, 2016— Callidus Software Inc. (NASDAQ: CALD), a global leader in cloud-based sales, marketing, learning and customer experience solutions, today announced financial results for the second quarter ended June 30, 2016.

"Q2 was a strong quarter for sales execution, highlighted by closing three seven-figure ACV deals, and two multi-year eight-figure deals based on total contract value, with marquee signings across industries," said Leslie Stretch, president and CEO of CallidusCloud. "We had another strong operating cash flow quarter and continue to deliver profitability. The momentum in our business remains strong."

Financial Highlights for the Second Quarter 2016

Total reported revenue was $49.8 million for the second quarter, an increase of 20% and includes $1.0 million of revenue from the BridgeFront acquisition. Total recurring revenue was $39.3 million, which includes SaaS revenue of $36.2 million and maintenance revenue of $3.1 million. SaaS revenue increased 33% over the same quarter in the prior year, benefiting from the continued success in our Lead to Money suite and revenue from BridgeFront.  Excluding the BridgeFront revenue, SaaS revenue increased 30% over the same quarter last year.  Professional services revenue was $10.5 million. Normalized billings growth was 28% over last year. Cash and short-term investments were $94.0 million. Cash flow from operations for the quarter was $6.9 million, compared to cash flow from operations of $2.6 million in the same quarter of the prior year.

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GAAP Performance

· Recurring revenue gross margin was 74%, consistent with the corresponding period in the prior year.

· Overall gross margin was 63%, compared to 62% for the same quarter in the prior year.

· Operating loss was $5.0 million compared to $4.3 million for the same quarter in the prior year.

· Net loss was $5.7 million, or ($0.10) on a per share basis, compared to net loss of $4.7 million, or ($0.08) on a per share basis for the same quarter in the prior year.

Non-GAAP Performance

The following non-GAAP measures are described below and are reconciled to the corresponding GAAP measures at the end of this release.

· Recurring revenue gross margin was 77%, consistent with the corresponding period in the prior year.

· Overall gross margin was 66%, compared to 65% for the same quarter in the prior year.

· Operating income was $4.0 million, compared to $2.0 million for the same quarter in the prior year.

· Net income was $3.4 million, or $0.06 per fully diluted share, compared to $1.6 million, or $0.03 per fully diluted share, for the same quarter in the prior year.

Business Highlights for the Second Quarter 2016

● CallidusCloud had record attendance at its C3 user conference in Las Vegas where customers and partners experienced a roadmap full of new innovations.

● CallidusCloud received the Grand Stevie Award for 'Organization of the Year' in the world's premier business awards, the American Business Awards. CallidusCloud also received an additional 36 awards for its products and teams.

● CallidusCloud acquired certain assets of ViewCentral LLC, a leading provider in the extended enterprise learning market to augment the Litmos mobile learning platform with a full revenue management and e-commerce platform designed for selling and optimizing profitable training for customers and channels.

● CallidusCloud acquired certain assets of Badgeville, Inc., a leading technology provider in enterprise gamification and digital motivation. The Badgeville platform enhances audience engagement and personal reputation for industry leaders.

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Financial Outlook for 2016 – Third Quarter and Full Year

For the third quarter of 2016, the company expects total revenue to be between $51.5 million and $52.5 million. SaaS revenue is expected to be between $38.0 million and $39.0 million. GAAP operating loss is expected to be between $3.8 million and $4.3 million, with GAAP net loss per share between $0.07 and $0.08. Non-GAAP operating income is expected to be between $4.5 million and $5.5 million, with non-GAAP income per diluted share between $0.07 and $0.09.

For the full year of 2016, the company has revised revenue guidance to be between $203.0 million to $207.0 million. We are reducing full-year SaaS revenue guidance to be between $148.5 million and $151.0 million, or a 29% to 31% growth rate.  GAAP operating loss is expected to be between $16.3 million and $17.3 million, with GAAP net loss per share between $0.31 and $0.33. The company is maintaining Non-GAAP operating income of $17.0 million to $19.0 million, with non-GAAP income per diluted share between $0.25 and $0.29.

Conference Call

In conjunction with this announcement CallidusCloud will host a conference call at 1:30 p.m. Pacific Daylight Time (PDT) today to discuss second quarter results and outlook for the third quarter 2016 and full year 2016. The conference call will be available via live webcast at the Investor Relations section of CallidusCloud's website.

Webcast site: http://www.calliduscloud.com/about-us/investor-relations

Dial-in: 866-324-2828 (International callers: 678-509-7525)Passcode: 47306615Replay information:A webcast replay will be available on the Investor Relations section of our website under Calendar of Events.

For more information, please visit: http://www.calliduscloud.com/about-us/investor-relations/

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About CallidusCloud

Callidus Software Inc. (NASDAQ: CALD), doing business as CallidusCloud^®, is the global leader in cloud-based sales, marketing, learning and customer experience solutions. CallidusCloud enables organizations to accelerate and maximize their Lead to Money process with a complete suite of solutions that identify the right leads, ensure proper territory and quota distribution, enable sales forces, automate configure price quote, and streamline sales compensation – driving bigger deals, faster. Approximately 4,800 leading organizations, across all industries, rely on CallidusCloud to optimize the Lead to Money process to close more deals for more money in record time.

For more information, please visit www.calliduscloud.com.

Non-GAAP Financial Measures

In this release, CallidusCloud has provided additional financial information that has not been prepared in accordance with GAAP. This information includes non-GAAP gross margin, non-GAAP recurring revenue gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income, and non-GAAP net income per diluted share. CallidusCloud uses non-GAAP measures internally in analyzing its financial results and believes that they are useful to investors as a supplement to GAAP measures in evaluating CallidusCloud's operating performance. CallidusCloud believes that the use of these non-GAAP measures provides additional insight for investors to use in evaluation of ongoing operating results and trends and in comparing its financial measures with other companies in CallidusCloud's industry, many of which present non-GAAP financial measures that may resemble our non-GAAP financial measures. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

Our non-GAAP measures reflect adjustments based on the following items:

Stock-based compensation expense: We have excluded the effect of stock-based compensation expense from our non-GAAP gross profit, recurring revenue gross profit, operating expenses, operating income, net income and net income per diluted share. We believe the exclusion of stock-based compensation expense provides a useful comparison of our operating results to our peers.

Restructuring and other expense: We have excluded the effect of restructuring and other expense from our non-GAAP operating expenses, operating income, net income and net income per diluted share. Restructuring and other expense consists of employee severance, facility exit costs, impairment of intangible assets and incremental depreciation expense as a result of the change in the estimated useful life of assets abandoned. We feel it is useful to investors to understand the effects of these items on our financial results.

Patent litigation and settlement costs and patent litigation estimates: We have excluded the effect of patent infringement and litigation defense costs, settlement costs and patent litigation estimates from our non-GAAP gross profit, recurring revenue gross profit, operating expenses, operating income, net income and net income per diluted share. We believe patent litigation and settlement costs and patent litigation estimates are not indicative of our ongoing business operations, and are inconsistent in amount and frequency; as such we exclude these costs during our evaluation of our business performance.

4

Amortization of acquired intangible assets: We have excluded the effect of amortization and gain on sale of acquired intangibles which include developed technology, customer relationships, trade names, domain names, patents and licenses from our non-GAAP gross profit, recurring revenue gross profit, operating expenses, operating income, other income and expense, net income and net income per diluted share. Amortization of acquired intangibles are significantly affected by timing, and as such, can be inconsistent in amount and nature.

Acquisition-Related Costs: We have excluded the costs related to acquisitions from our non-GAAP operating expenses, operating income, net income and net income per diluted share. These costs include legal and transactional costs associated with acquisition activities as well as expense related to earnouts that we would not have otherwise incurred in the periods presented as part of our continuing operations. We believe the exclusion of acquisition-related costs provides a useful comparison of our operating results to our peers.

Taxes: We have excluded the tax expense related to the acquisitions from our non-GAAP operating net income and net income per diluted share.  These costs include the tax expense relating to the difference between book and tax goodwill that we would not have otherwise incurred in presenting taxes on our normal operating activities.

Note on Forward-Looking Statements

The forward-looking statements included in this press release, including for example discussion of our commercial prospects, estimates of future revenues, operating income/loss and expenses, earnings per share, stock-based compensation expenses, amortization of acquired intangible assets, restructuring and other expenses, and patent litigation and settlement costs and estimates reflect management's best judgment based on factors currently known and involve risks and uncertainties. These risks and uncertainties include, but are not limited to, potential disruption of customer purchase decisions resulting from global economic conditions, timing and size of orders, relative growth of our recurring revenue, potential decreases in customer spending, uncertainty regarding purchasing trends in the cloud software market, customer cancellations or non-renewal of maintenance contracts or on-demand services, our potential inability to manage effectively any growth we experience, our ability to develop new products and services, increased competition or new entrants in the marketplace, potential impact of acquisitions and investments, changes in staffing levels, and other risks detailed in periodic reports we file with the Securities and Exchange Commission, including our most recent Quarterly Report on Form 10-Q which may be obtained by contacting CallidusCloud's Investor Relations department at 415-445-3238, or from the Investor Relations section of CallidusCloud's website (http://www.calliduscloud.com/about-us/investor-relations/). Actual results may differ materially from those presently reported. We assume no obligation to update the information contained in this release.

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© 2016 Callidus Software Inc. All rights reserved. Callidus, Callidus Software, the Callidus Software logo, CallidusCloud, the CallidusCloud logo, 6FigureJobs, BridgeFront, Clicktools, iCentera, Lead to Money, LeadFormix, LeadRocket, Learnpass, Litmos, the Litmos logo,  Love Your LMS, Portals for Mortals, Producer Pro, SalesGenius, Surve, Syncfrog, Thunderbridge, TrueComp, ViewCentral and Badgeville are trademarks, service marks, or registered trademarks of Callidus Software Inc. and its affiliates in the United States and other countries. All other brand, service or product names are trademarks or registered trademarks of their respective companies or owners.

Investor Relations Contact

Ed Keaney

Market Street Partners

(415) 445-3238

cald@marketstreetpartners.com

6

CALLIDUS SOFTWARE INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Revenue:
Recurring	$	39,290		$	30,713		$	76,896		$	59,606
Services and license		10,461			10,901			21,233			21,753
Total revenue		49,751			41,614			98,129			81,359
Cost of revenue:
Recurring		10,137			7,841			20,099			16,199
Services and license		8,332			8,062			16,593			15,723
Total cost of revenue		18,469			15,903			36,692			31,922
Gross profit		31,282			25,711			61,437			49,437
Operating expenses:
Sales and marketing		19,682			14,796			38,585			28,522
Research and development		7,248			6,002			14,490			12,040
General and administrative		9,296			9,112			17,551			16,530
Restructuring and other		86			118			402			234
Total operating expenses		36,312			30,028			71,028			57,326
Operating loss		(5,030	)		(4,317	)		(9,591	)		(7,889	)
Interest income and other income (expense), net		(277	)		(186	)		(52	)		(376	)
Interest expense		(39	)		(56	)		(82	)		(123	)
Loss before provision for income taxes		(5,346	)		(4,559	)		(9,725	)		(8,388	)
Provision for income taxes		341			165			497			379
Net loss	$	(5,687	)	$	(4,724	)	$	(10,222	)	$	(8,767	)
Net loss per share
Basic and Diluted	$	(0.10	)	$	(0.08	)	$	(0.18	)	$	(0.16	)
Weighted average shares used in computing net loss per share:
Basic and Diluted		57,098			55,595			56,894			53,166

7

CALLIDUS SOFTWARE INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
	June 30,		December 31,
	2016		2015
ASSETS
Current assets:
Cash and cash equivalents	$	74,331	$	77,232
Short-term investments		19,678		19,977
Accounts receivable, net		45,983		43,461
Prepaid and other current assets		12,169		11,385
Total current assets		152,161		152,055
Property and equipment, net		25,880		20,540
Goodwill		57,226		50,146
Intangible assets, net		19,368		14,885
Deposits and other assets		3,731		4,016
Total assets	$	258,366	$	241,642

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	5,137		$	3,636
Accrued payroll and related expenses		10,514			12,510
Accrued expenses		14,566			11,017
Deferred revenue		85,284			74,644
Total current liabilities		115,501			101,807
Deferred revenue, noncurrent		3,658			5,186
Deferred income taxes, noncurrent		1,424			1,477
Other noncurrent liabilities		6,475			4,371
Total liabilities		127,058			112,841
Stockholders' equity:
Common stock		57			56
Additional paid-in capital		442,980			428,776
Treasury stock		(14,430	)		(14,430	)
Accumulated other comprehensive loss		(3,211	)		(1,735	)
Accumulated deficit		(294,088	)		(283,866	)
Total stockholders' equity		131,308			128,801
Total liabilities and stockholders' equity	$	258,366		$	241,642

8

CALLIDUS SOFTWARE INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
	Six Months Ended June 30,
	2016			2015
Cash flows from operating activities:
Net loss	$	(10,222	)	$	(8,767	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense		3,582			2,939
Amortization of intangible assets		2,835			2,547
Provision for doubtful accounts		891			676
Stock-based compensation		14,065			9,909
Deferred income taxes		51			(235	)
Excess tax benefits from stock-based compensation		(11	)		-
Loss on disposal of property and equipment		4			6
Net amortization on investments		91			20
Changes in operating assets and liabilities:
Accounts receivable		(3,268	)		(1,437	)
Prepaid and other current assets		(846	)		941
Other noncurrent assets		251			549
Accounts payable		462			915
Accrued expenses and other liabilities		1,412			729
Accrued payroll and related expenses		(1,996	)		(946	)
Accrued restructuring and other expenses		(285	)		(32	)
Deferred revenue		5,959			2,837
Net cash provided by operating activities		12,975			10,651
Cash flows from investing activities:
Purchases of investments		(8,483	)		(17,591	)
Proceeds from maturities and sale of investments		8,751			351
Purchases of property and equipment (net)		(3,924	)		(8,285	)
Purchases of intangible assets		(444	)		(270	)
Acquisitions, net of cash acquired		(11,500	)		-
Net cash (used in) investing activities		(15,600	)		(25,795	)
Cash flows from financing activities:
Proceeds from follow-on offering, net of issuance costs		-			64,372
Proceeds from issuance of common stock		1,951			2,229
Restricted stock units acquired to settle employee withholding liability		(1,821	)		(2,356	)
Excess tax benefits from stock-based compensation		11			33
Repayment of line of credit		-			(10,481	)
Payment of consideration related to acquisitions		(104	)		(226	)
Payment of principal under capital leases		-			(333	)
Net cash provided by financing activities		37			53,238
Effect of exchange rates on cash and cash equivalents		(313	)		(22	)
Net (decrease) increase in cash and cash equivalents		(2,901	)		38,072
Cash and cash equivalents at beginning of period		77,232			34,200
Cash and cash equivalents at end of period	$	74,331		$	72,272

9

CALLIDUS SOFTWARE INC.
GAAP TO NON-GAAP ADJUSTMENT SUMMARY
(In thousands)
(unaudited)
GAAP to Non-GAAP adjustments include stock-based compensation, amortization of acquired intangible assets, patent litigation and settlement costs and estimates, acquisition-related costs, tax impact from acquisitions, restructuring and other expenses as follows:
	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
Cost of revenues:
Recurring	$	1,159	$	887	$	2,322	$	1,805
Services and license		524		247		1,036		599
Operating expenses:
Sales and marketing		2,491		1,486		4,941		3,269
Research and development		1,171		650		2,341		1,447
General and administrative		3,602		2,922		5,833		4,984
Restructuring and other		86		118		402		234
Taxes		60		-		60		-
Total	$	9,093	$	6,310	$	16,935	$	12,338

CALLIDUS SOFTWARE INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(unaudited)
(In thousands, except for percentages)
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2015			2016			2015
Non-GAAP gross profit reconciliation:
Gross profit	$	31,282		$	25,711		$	61,437		$	49,437
Gross margin		63	%		62	%		63	%		61	%
Add back:
Non-cash stock-based compensation		977			486			1,998			1,115
Non-cash amortization of acquired
intangible assets		706			649			1,360			1,290
Non-GAAP gross profit	$	32,965		$	26,846		$	64,795		$	51,842
Non-GAAP gross margin		66	%		65	%		66	%		64	%
Non-GAAP recurring revenue gross profit reconciliation:
Recurring revenue gross profit	$	29,153		$	22,872		$	56,797		$	43,407
Recurring revenue gross margin		74	%		74	%		74	%		73	%
Add back:
Non-cash stock-based compensation		453			249			962			536
Non-cash amortization of acquired
intangible assets		706			638			1,360			1,269
Non-GAAP recurring revenue gross profit	$	30,312		$	23,759		$	59,119		$	45,212
Non-GAAP recurring revenue gross margin		77	%		77	%		77	%		76	%
Non-GAAP operating expense reconciliation:
Operating expenses	$	36,312		$	30,028		$	71,028		$	57,326
Operating expenses, as a % of total
revenues		73	%		72	%		72	%		70	%
Subtract:
Non-cash stock-based compensation		(6,635	)		(4,606	)		(12,067	)		(8,793	)
Non-cash amortization of acquired
intangible assets		(429	)		(423	)		(807	)		(841	)
Patent litigation and settlement costs		(29	)		(28	)		(57	)		(65	)
Acquisition costs		(171	)		-			(184	)		-
Restructuring and other		(86	)		(118	)		(402	)		(234	)
Non-GAAP operating expenses	$	28,962		$	24,853		$	57,511		$	47,393
Non-GAAP operating expenses, as a %
of total revenues		58	%		60	%		59	%		58	%

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CALLIDUS SOFTWARE INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(unaudited)
(In thousands, except for percentages and per share data)
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2015			2016			2015
Non-GAAP operating income (loss) reconciliation:
Operating loss	$	(5,030	)	$	(4,317	)	$	(9,591	)	$	(7,889	)
Operating loss, as a % of total
revenues		(10	)%		(10	)%		(10	)%		(10	)%
Add back:
Non-cash stock-based compensation		7,612			5,092			14,065			9,908
Non-cash amortization of acquired
intangible assets		1,135			1,072			2,167			2,131
Patent litigation and settlement costs		29			28			57			65
Acquisition costs		171			-			184			-
Restructuring and other		86			118			402			234
Non-GAAP operating income	$	4,003		$	1,992		$	7,284		$	4,449
Non-GAAP operating income as a %
of total revenues		8	%		5	%		7	%		5	%
Non-GAAP net income (loss) reconciliation:
Net loss	$	(5,687	)	$	(4,724	)	$	(10,222	)	$	(8,767	)
Net loss, as a % of total
revenues		(11	)%		(11	)%		(10	)%		(11	)%
Add back:
Non-cash stock-based compensation		7,612			5,092			14,065			9,908
Non-cash amortization of acquired
intangible assets		1,135			1,072			2,167			2,131
Patent litigation and settlement costs		29			28			57			65
Acquisition costs		171			-			184			-
Restructuring and other		86			118			402			234
Taxes		60			-			60			-
Non-GAAP net income	$	3,406		$	1,585		$	6,713		$	3,571
Non-GAAP net income as a %
of total revenues		7	%		4	%		7	%		4	%
Non-GAAP net income (loss) per share reconciliation:
Net loss per basic and diluted share	$	(0.10	)	$	(0.08	)	$	(0.18	)	$	(0.16	)
Add back:
Non-cash stock-based compensation		0.13			0.09			0.24			0.19
Non-cash amortization of acquired
intangible assets		0.02			0.02			0.04			0.04
Patent litigation and settlement costs		-			-			-			-
Acquisition costs		0.01			-			-			-
Restructuring and other		-			-			0.01			0.01
Taxes		-			-			-			-
Non-GAAP net income per diluted share	$	0.06		$	0.03		$	0.11		$	0.07
Basic and fully diluted shares reconciliation:
Basic shares		57,098			55,595			56,894			53,166
Add back:
Weighted average effect of dilutive securities		2,002			1,225			1,800			1,620
Diluted shares		59,100			56,820			58,694			54,786

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CALLIDUS SOFTWARE INC.

FINANCIAL OUTLOOK

The guidance figures provided below and elsewhere in this press release are forward-looking statements, reflect a number of estimates, assumptions and other uncertainties, and are approximate in nature because the Company's future performance is difficult to predict. Such guidance is based on information available on the date of this press release, and the company assumes no obligation to update.

RECONCILIATION OF GAAP TO NON-GAAP FORWARD LOOKING GUIDANCE MEASURES
(In thousands, except for per share data)
(unaudited)
	Three Months Ended						Twelve Months Ended
	September 30, 2016						December 31, 2016
	From			To			From			To
Non-GAAP operating income (loss) reconciliation:
GAAP operating loss	$	(3,800	)	$	(4,300	)	$	(16,300	)	$	(17,300	)
Add back:
Non-cash stock-based compensation		6,600			7,100			27,000			28,000
Non-cash amortization of acquired
intangible assets		1,400			1,800			5,100			5,900
Acquisition, patent litgation, restructuring and other costs		300			900			1,200			2,400
Non-GAAP operating income	$	4,500		$	5,500		$	17,000		$	19,000
	Three Months Ended						Twelve Months Ended
	September 30, 2016						December 31, 2016
Non-GAAP net income (loss) per share reconciliation:	From			To			From			To
GAAP net loss per basic and diluted share	$	(0.07	)	$	(0.08	)	$	(0.31	)	$	(0.33	)
Non-cash stock-based compensation		0.11			0.12			0.45			0.46
Non-cash amortization of acquired
intangible assets		0.02			0.03			0.08			0.10
Acquisition, patent litgation, restructuring and other		0.01			0.02			0.02			0.04
Diluted share impact on GAAP earnings		-			-			0.01			0.02
Non-GAAP net income per diluted share	$	0.07		$	0.09		$	0.25		$	0.29
Shares used to calculate guidance:
Basic shares		57,000			57,500			57,000			58,000
Diluted shares		59,000			59,500			59,500			60,500

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