0001193125-14-284514.txt : 20140729 0001193125-14-284514.hdr.sgml : 20140729 20140729153921 ACCESSION NUMBER: 0001193125-14-284514 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 20140630 FILED AS OF DATE: 20140729 DATE AS OF CHANGE: 20140729 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MANHATTAN ASSOCIATES INC CENTRAL INDEX KEY: 0001056696 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 582373424 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-23999 FILM NUMBER: 14999683 BUSINESS ADDRESS: STREET 1: 2300 WINDY RIDGE PARKWAY SUITE 700 CITY: ATLANTA STATE: GA ZIP: 30339 BUSINESS PHONE: 7709557070 MAIL ADDRESS: STREET 1: 2300 WINDY RIDGE PARKWAY SUITE 700 CITY: ATLANTA STATE: GA ZIP: 30339 10-Q 1 d732483d10q.htm 10-Q 10-Q
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

 

 

[Mark One]

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2014

OR

 

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number: 0-23999

 

 

MANHATTAN ASSOCIATES, INC.

(Exact Name of Registrant as Specified in Its Charter)

 

 

 

Georgia   58-2373424

(State or Other Jurisdiction of

Incorporation or Organization)

 

(I.R.S. Employer

Identification No.)

 

2300 Windy Ridge Parkway, Tenth Floor

Atlanta, Georgia

  30339
(Address of Principal Executive Offices)   (Zip Code)

Registrant’s Telephone Number, Including Area Code: (770) 955-7070

 

 

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer   x    Accelerated filer   ¨
Non-accelerated filer   ¨  (Do not check if a smaller reporting company)    Smaller reporting company   ¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

The number of shares of the Registrant’s class of capital stock outstanding as of July 25, 2014, the latest practicable date, is as follows: 75,093,714 shares of common stock, $0.01 par value per share.

 

 

 


Table of Contents

MANHATTAN ASSOCIATES, INC.

FORM 10-Q

Quarter Ended June 30, 2014

TABLE OF CONTENTS

 

PART I   
FINANCIAL INFORMATION   

Item 1. Financial Statements.

  

Condensed Consolidated Balance Sheets as of June 30, 2014 (unaudited) and December 31, 2013

     3   

Condensed Consolidated Statements of Income for the three and six months ended June  30, 2014 and 2013 (unaudited)

     4   

Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June  30, 2014 and 2013 (unaudited)

     5   

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2014 and 2013 (unaudited)

     6   

Notes to Condensed Consolidated Financial Statements (unaudited)

     7   

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

     14   

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

     26   

Item 4. Controls and Procedures.

     26   
PART II   
OTHER INFORMATION   

Item 1. Legal Proceedings.

     27   

Item 1A. Risk Factors.

     27   

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

     27   

Item 3. Defaults Upon Senior Securities.

     28   

Item 4. Mine Safety Disclosures.

     28   

Item 5. Other Information.

     28   

Item 6. Exhibits.

     28   

Signatures.

     29   

 

2


Table of Contents

PART I

FINANCIAL INFORMATION

 

Item 1. Financial Statements.

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

 

     June 30, 2014     December 31, 2013  
     (unaudited)        
ASSETS     

Current Assets:

    

Cash and cash equivalents

   $ 91,121      $ 124,375   

Short term investments

     10,258        8,581   

Accounts receivable, net of allowance of $3,802 and $3,156 in 2014 and 2013, respectively

     86,694        71,136   

Deferred income taxes

     7,335        7,300   

Income taxes receivable

     1,692        —     

Prepaid expenses and other current assets

     9,220        7,346   
  

 

 

   

 

 

 

Total current assets

     206,320        218,738   

Property and equipment, net

     15,037        14,342   

Goodwill, net

     62,270        62,272   

Deferred income taxes

     440        427   

Other assets

     4,551        2,049   
  

 

 

   

 

 

 

Total assets

   $ 288,618      $ 297,828   
  

 

 

   

 

 

 
LIABILITIES AND SHAREHOLDERS’ EQUITY     

Current liabilities:

    

Accounts payable

   $ 9,660      $ 11,555   

Accrued compensation and benefits

     19,787        19,465   

Accrued and other liabilities

     10,422        12,225   

Deferred revenue

     59,996        53,812   

Income taxes payable

     —          7,131   
  

 

 

   

 

 

 

Total current liabilities

     99,865        104,188   

Other non-current liabilities

     12,435        12,054   

Shareholders’ equity:

    

Preferred stock, no par value; 20,000,000 shares authorized, no shares issued or outstanding in 2014 and 2013

     —          —     

Common stock, $0.01 par value; 200,000,000 shares and 100,000,000 shares authorized at June 30, 2014 and December 31, 2013, respectively; 75,120,619 and 76,374,180 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively

     751        764   

Retained earnings

     182,071        188,604   

Accumulated other comprehensive loss

     (6,504     (7,782
  

 

 

   

 

 

 

Total shareholders’ equity

     176,318        181,586   
  

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 288,618      $ 297,828   
  

 

 

   

 

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

3


Table of Contents
Item 1. Financial Statements (continued)

 

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(in thousands, except per share amounts)

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2014      2013      2014      2013  
     (unaudited)  

Revenue:

           

Software license

   $ 17,989       $ 16,136       $ 35,096       $ 30,381   

Services

     93,519         78,203         180,432         153,090   

Hardware and other

     11,022         8,177         20,565         15,646   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total revenue

     122,530         102,516         236,093         199,117   

Costs and expenses:

           

Cost of license

     1,848         1,937         3,461         3,715   

Cost of services

     41,457         35,058         79,917         70,104   

Cost of hardware and other

     9,265         7,023         16,744         13,237   

Research and development

     11,867         11,032         23,670         22,508   

Sales and marketing

     12,848         11,888         24,868         23,322   

General and administrative

     11,256         7,932         21,905         17,440   

Depreciation and amortization

     1,489         1,459         2,977         2,943   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total costs and expenses

     90,030         76,329         173,542         153,269   
  

 

 

    

 

 

    

 

 

    

 

 

 

Operating income

     32,500         26,187         62,551         45,848   

Other income, net

     312         1,243         79         1,394   
  

 

 

    

 

 

    

 

 

    

 

 

 

Income before income taxes

     32,812         27,430         62,630         47,242   

Income tax provision

     12,218         10,023         23,324         16,480   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income

   $ 20,594       $ 17,407       $ 39,306       $ 30,762   
  

 

 

    

 

 

    

 

 

    

 

 

 

Basic earnings per share

   $ 0.27       $ 0.23       $ 0.52       $ 0.40   

Diluted earnings per share

   $ 0.27       $ 0.22       $ 0.51       $ 0.39   

Weighted average number of shares:

           

Basic

     75,274         76,888         75,544         77,096   

Diluted

     76,037         78,036         76,415         78,388   

See accompanying Notes to Condensed Consolidated Financial Statements.

 

4


Table of Contents
Item 1. Financial Statements (continued)

 

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

(in thousands)

 

     Three Months Ended June 30,     Six Months Ended June 30,  
     2014      2013     2014      2013  
     (unaudited)  

Net income

   $ 20,594       $ 17,407      $ 39,306       $ 30,762   

Foreign currency translation adjustment

     258         (2,772     1,277         (2,852
  

 

 

    

 

 

   

 

 

    

 

 

 

Comprehensive income

   $ 20,852       $ 14,635      $ 40,583       $ 27,910   
  

 

 

    

 

 

   

 

 

    

 

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

5


Table of Contents
Item 1. Financial Statements (continued)

 

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(in thousands)

 

     Six Months Ended June 30,  
     2014     2013  
     (unaudited)  

Operating activities:

    

Net income

   $ 39,306      $ 30,762   

Adjustments to reconcile net income to net cash provided by operating activities:

    

Depreciation and amortization

     2,977        2,943   

Equity-based compensation

     4,670        4,040   

(Gain) loss on disposal of equipment

     (15     1   

Tax benefit of stock awards exercised/vested

     6,954        4,987   

Excess tax benefits from equity-based compensation

     (6,916     (4,874

Deferred income taxes

     879        2,265   

Unrealized foreign currency gain

     (174     (372

Changes in operating assets and liabilities:

    

Accounts receivable, net

     (15,320     (6,971

Other assets

     (4,305     227   

Accounts payable, accrued and other liabilities

     (4,148     (7,341

Income taxes

     (8,786     887   

Deferred revenue

     5,910        7,142   
  

 

 

   

 

 

 

Net cash provided by operating activities

     21,032        33,696   
  

 

 

   

 

 

 

Investing activities:

    

Purchase of property and equipment

     (3,580     (1,633

Net purchases of investments

     (1,441     (2,055
  

 

 

   

 

 

 

Net cash used in investing activities

     (5,021     (3,688
  

 

 

   

 

 

 

Financing activities:

    

Purchase of common stock

     (58,305     (34,902

Proceeds from issuance of common stock from options exercised

     829        3,861   

Excess tax benefits from equity-based compensation

     6,916        4,874   
  

 

 

   

 

 

 

Net cash used in financing activities

     (50,560     (26,167
  

 

 

   

 

 

 

Foreign currency impact on cash

     1,295        (1,955
  

 

 

   

 

 

 

Net change in cash and cash equivalents

     (33,254     1,886   

Cash and cash equivalents at beginning of period

     124,375        96,737   
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 91,121      $ 98,623   
  

 

 

   

 

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

6


Table of Contents

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

1. Basis of Presentation, Principles of Consolidation, Stock Split and Increase of the Authorized Number of Shares of Common Stock

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Manhattan Associates, Inc. and its subsidiaries (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information, with the instructions to Form 10-Q and with Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required for complete financial statements. In the opinion of management, these condensed consolidated financial statements contain all normal recurring adjustments considered necessary for a fair presentation of the Company’s financial position at June 30, 2014, the results of operations for the three and six months ended June 30, 2014 and 2013, and cash flows for the six months ended June 30, 2014 and 2013. The results for the three and six months ended June 30, 2014 are not necessarily indicative of the results to be expected for the full year. These statements should be read in conjunction with the Company’s audited consolidated financial statements and management’s discussion and analysis included in the Company’s annual report on Form 10-K for the year ended December 31, 2013.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the Company’s accounts and the accounts of its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Stock Split and Increase of the Authorized Number of Shares of Common Stock

On December 19, 2013, the Board of Directors of the Company approved a four-for-one stock split of the Company’s common stock, effected in the form of a stock dividend. Each shareholder of record at the close of business on December 31, 2013 received three additional shares for every outstanding share held on the record date. The additional shares were distributed on January 10, 2014 and trading began on a split-adjusted basis on January 13, 2014.

On May 15, 2014, the shareholders of the Company approved an amendment to the Company’s articles of incorporation to increase the authorized number of shares of common stock from 100,000,000 to 200,000,000. The amendment was effective on May 15, 2014.

All references made to share or per share amounts in the accompanying condensed consolidated financial statements and applicable disclosures have been restated to reflect the effect of the four-for-one stock split for all periods presented. The Company retained the current par value of $0.01 per share for all shares of common stock.

 

2. Revenue Recognition

The Company’s revenue consists of fees from the licensing and hosting of software (collectively included in “Software license” revenue in the Condensed Consolidated Statements of Income), fees from implementation and training services (collectively, “professional services”) and customer support services and software enhancements (collectively with professional services revenue included in “Services” revenue in the Condensed Consolidated Statements of Income), and sales of hardware and other revenue, which consists of reimbursements of out-of-pocket expenses incurred in connection with our professional services (collectively included in “Hardware and other” revenue in the Condensed Consolidated Statements of Income). All revenue is recognized net of any related sales taxes.

The Company recognizes license revenue when the following criteria are met: (1) a signed contract is obtained covering all elements of the arrangement, (2) delivery of the product has occurred, (3) the license fee is fixed or determinable, and (4) collection is probable. Revenue recognition for software with multiple-element arrangements requires recognition of revenue using the “residual method” when (a) there is vendor-specific objective evidence (VSOE) of the fair values of all undelivered elements in a multiple-element arrangement that is not accounted for using long-term contract accounting, (b) VSOE of fair value does not exist for one or more of the delivered elements in the arrangement, and (c) all other applicable revenue-recognition criteria for software revenue recognition are satisfied. For those contracts that contain significant customization or modifications, license revenue is recognized using contract accounting.

 

7


Table of Contents

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

The Company allocates revenue to customer support services and software enhancements and any other undelivered elements of the arrangement based on VSOE of fair value of each element and such amounts are deferred until the applicable delivery criteria and other revenue recognition criteria have been met. The balance of the revenue, net of any discounts inherent in the arrangement, is recognized at the outset of the arrangement using the residual method as the product licenses are delivered. If the Company cannot objectively determine the fair value of each undelivered element based on the VSOE of fair value, the Company defers revenue recognition until all elements are delivered, all services have been performed, or until fair value can be objectively determined. The Company must apply judgment in determining all elements of the arrangement and in determining the VSOE of fair value for each element, considering the price charged for each product on a stand-alone basis or applicable renewal rates. For arrangements that include future software functionality deliverables, the Company accounts for these deliverables as a separate element of the arrangement. Because the Company does not sell these deliverables on a standalone basis, the Company is not able to establish VSOE of fair value of these deliverables. As a result, the Company defers all revenue under the arrangement until the future functionality has been delivered to the customer.

Payment terms for the Company’s software licenses vary. Each contract is evaluated individually to determine whether the fees in the contract are fixed or determinable and whether collectability is probable. Judgment is required in assessing the probability of collection, which is generally based on evaluation of customer-specific information, historical collection experience, and economic market conditions. If market conditions decline, or if the financial conditions of customers deteriorate, the Company may be unable to determine that collectability is probable, and the Company could be required to defer the recognition of revenue until the Company receives customer payments. The Company has an established history of collecting under the terms of its software license contracts without providing refunds or concessions to its customers. Therefore, the Company has determined that the presence of payment terms that extend beyond contract execution in a particular contract do not preclude the conclusion that the fees in the contract are fixed or determinable. Although infrequent, when payment terms in a contract extend beyond twelve months, the Company has determined that such fees are not fixed or determinable and recognizes revenue as payments become due provided that all other conditions for revenue recognition have been met.

The Company’s services revenue consists of fees generated from professional services and customer support and software enhancements related to the Company’s software products. Professional services include system planning, design, configuration, testing, and other software implementation support and are not typically essential to the functionality of our software. Fees from professional services performed by the Company are separately priced and are generally billed on an hourly basis, and revenue is recognized as the services are performed. In certain situations, professional services are rendered under agreements in which billings are limited to contractual maximums or based upon a fixed fee for portions of or all of the engagement. Revenue related to fixed-fee-based contracts is recognized on a proportional performance basis based on the hours incurred on discrete projects within an overall services arrangement. The Company has determined that output measures, or services delivered, approximate the input measures associated with fixed-fee services arrangements. Project losses are provided for in their entirety in the period in which they become known. Revenue related to customer support services and software enhancements is generally paid in advance and recognized ratably over the term of the agreement, typically twelve months.

Hardware and other revenue is generated from the resale of a variety of hardware products, developed and manufactured by third parties, that are integrated with and complementary to the Company’s software solutions. As part of a complete solution, the Company’s customers periodically purchase hardware from the Company for use with the software licenses purchased from the Company. These products include computer hardware, radio frequency terminal networks, radio frequency identification (RFID) chip readers, bar code printers and scanners, and other peripherals. Hardware revenue is recognized upon shipment to the customer when title passes. The Company generally purchases hardware from the Company’s vendors only after receiving an order from a customer. As a result, the Company generally does not maintain hardware inventory.

In accordance with the other presentation matters within the Revenue Recognition Topic of the Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC), the Company recognizes amounts associated with reimbursements from customers for out-of-pocket expenses as revenue. Such amounts have been included in “Hardware and other” revenue in the Condensed Consolidated Statements of Income. The total amount of expense reimbursement recorded to revenue was $4.9 million and $3.9 million for the three months ended June 30, 2014 and 2013, respectively, and $8.5 million and $7.2 million for the six months ended June 30, 2014 and 2013, respectively.

 

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Table of Contents

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

3. Fair Value Measurement

The Company measures its investments based on a fair value hierarchy disclosure framework that prioritizes and ranks the level of market price observability used in measuring assets and liabilities at fair value. Market price observability is affected by a number of factors, including the type of asset or liability and their characteristics. This hierarchy prioritizes the inputs into three broad levels as follows:

 

    Level 1–Quoted prices in active markets for identical instruments.

 

    Level 2–Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

 

    Level 3–Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The Company’s investments are categorized as available-for-sale securities and recorded at fair market value. Investments with maturities of 90 days or less from the date of purchase are classified as cash equivalents; investments with maturities of greater than 90 days from the date of purchase but less than one year are generally classified as short-term investments; and investments with maturities of one year or greater from the date of purchase are generally classified as long-term investments. Unrealized holding gains and losses are reflected as a net amount in a separate component of shareholders’ equity until realized. For the purposes of computing realized gains and losses, cost is determined on a specific identification basis.

At June 30, 2014, the Company’s cash, cash equivalents, and short-term investments balances were $47.9 million, $43.2 million, and $10.3 million, respectively. The Company currently has no long-term investments. Cash equivalents consist of highly liquid money market funds and certificates of deposit. Short-term investments consist of certificates of deposit. The Company uses quoted prices from active markets that are classified at Level 1 as a highest level observable input in the disclosure hierarchy framework for all available-for-sale securities. At June 30, 2014 and December 31, 2013, the Company had $30.5 million and $30.4 million in money market funds, respectively, which are classified as Level 1 and are included in cash and cash equivalents on the Condensed Consolidated Balance Sheets. The Company has no investments classified as Level 2 or Level 3.

 

4. Equity-Based Compensation

As discussed in Note 1, on December 19, 2013, the Board of Directors of the Company approved a four-for-one stock split of the Company’s common stock, effected in the form of a stock dividend. All references to stock award data have been restated to reflect the effect of the stock split for all periods presented.

The Company recorded equity-based compensation expense related to stock options of $11,000 and $159,000 during the three and six months ended June 30, 2013, respectively. No amounts were recorded for equity-based compensation expense related to stock options during the three and six months ended June 30, 2014 as all stock options became vested prior to 2014. The Company does not currently grant stock options.

A summary of changes in outstanding options for the six months ended June 30, 2014 is as follows:

 

     Number of Options  

Outstanding at December 31, 2013

     444,420   

Exercised

     (147,308

Forfeited and expired

     (1,000
  

 

 

 

Outstanding at June 30, 2014

     296,112   
  

 

 

 

The Company granted 38,384 and 17,020 restricted stock units (“RSU”) during the three months ended June 30, 2014 and 2013, respectively, and 355,927 and 211,292 RSUs during the six months ended June 30, 2014 and 2013, respectively. The Company recorded equity-based compensation expense related to restricted stock awards and RSUs of $2.4 million and $2.1 million during the three months ended June 30, 2014 and 2013, respectively, and $4.7 million and $3.9 million during the six months ended June 30, 2014 and 2013, respectively.

 

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Table of Contents

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

A summary of changes in unvested shares/units for the six months ended June 30, 2014 is as follows:

 

     Number of shares/units  

Outstanding at December 31, 2013

     1,777,384   

Granted

     355,927   

Vested

     (696,378

Forfeited

     (37,041
  

 

 

 

Outstanding at June 30, 2014

     1,399,892   
  

 

 

 

 

5. Income Taxes

The Company’s effective tax rate was 37.2% and 36.5% for the three months ended June 30, 2014 and 2013, respectively, and 37.2% and 34.9% for the six months ended June 30, 2014 and 2013 respectively. The increase in the effective tax rate for the three months ended June 30, 2014 is principally due to the expiration of the federal research and development tax credit. The effective tax rate for the three and six months ended June 30, 2013 includes the benefit of the credit for the 2013 tax year, partially offset by an increase in foreign taxes. The effective tax rate for the six months ended June 30, 2013 also includes the benefit of the credit for the 2012 tax year, partially offset by the establishment of state income tax reserves.

The Company applies the provisions for income taxes related to, among other things, accounting for uncertain tax positions and disclosure requirements in accordance with the Income Taxes Topic of the FASB Accounting Standards Codification (ASC 740). For the three months ended June 30, 2014, there were no material changes to the Company’s uncertain tax positions. There has been no change to the Company’s policy that recognizes potential interest and penalties related to uncertain tax positions within its global operations in income tax expense.

The Company currently plans to permanently reinvest all of its remaining undistributed foreign earnings. Accordingly, no provision for U.S. federal and state income taxes has been provided thereon. Upon repatriation of those earnings, in the form of dividends or otherwise, the Company would be subject to both U.S. income taxes (subject to adjustment for foreign tax credits) and withholding taxes payable to various foreign countries. It is impractical to calculate the tax impact until such repatriation occurs.

The Company conducts business globally and, as a result, files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world. The Company is no longer subject to U.S. federal, substantially all state and local income tax examinations and substantially all non-US income tax examinations for years before 2010.

 

6. Net Earnings Per Share

Basic net earnings per share is computed using net income divided by the weighted average number of shares of common stock outstanding (“Weighted Shares”) for each period presented. Diluted net earnings per share is computed using net income divided by the sum of Weighted Shares and common equivalent shares (“CESs”) outstanding for each period presented using the treasury stock method.

 

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Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

The following is a reconciliation of the net income and share amounts used in the computation of basic and diluted net earnings per common share for the three and six months ended June 30, 2014 and 2013 (in thousands, except per share data):

 

    Three Months Ended June 30,     Six Months Ended June 30,  
    2014     2013     2014     2013  
    (in thousands, except per share data)     (in thousands, except per share data)  

Net income

  $ 20,594      $ 17,407      $ 39,306      $ 30,762   
 

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share:

       

Basic

  $ 0.27      $ 0.23      $ 0.52      $ 0.40   

Effect of CESs

    —          (0.01     (0.01     (0.01
 

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

  $ 0.27      $ 0.22      $ 0.51      $ 0.39   
 

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average number of shares:

       

Basic

    75,274        76,888        75,544        77,096   

Effect of CESs

    763        1,148        871        1,292   
 

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

    76,037        78,036        76,415        78,388   
 

 

 

   

 

 

   

 

 

   

 

 

 

There were no anti-dilutive CESs during 2013 and 2014.

 

7. Contingencies

From time to time, the Company may be involved in litigation relating to claims arising out of its ordinary course of business, and occasionally legal proceedings not in the ordinary course. Many of the Company’s installations involve products that are critical to the operations of its clients’ businesses. Any failure in a Company product could result in a claim for substantial damages against the Company, regardless of the Company’s responsibility for such failure. Although the Company attempts to limit contractually its liability for damages arising from product failures or negligent acts or omissions, there can be no assurance that the limitations of liability set forth in its contracts will be enforceable in all instances. The Company is not currently a party to any legal proceedings the result of which it believes is likely to have a material adverse impact upon its business, financial position, results of operations, or cash flows. The Company expenses legal costs associated with loss contingencies as such legal costs are incurred.

 

8. Operating Segments

The Company manages the business by geographic segment. The Company has identified three geographic reportable segments: North America and Latin America (the “Americas”); Europe, Middle East and Africa (“EMEA”); and Asia Pacific (“APAC”). All segments derive revenue from the sale and implementation of the Company’s supply chain execution and planning solutions. The individual products sold by the segments are similar in nature and are all designed to help companies manage the effectiveness and efficiency of their supply chain. The Company uses the same accounting policies for each reportable segment. The chief executive officer and chief financial officer evaluate performance based on revenue and operating results for each region.

The Americas segment charges royalty fees to the other segments based on software licenses sold by those reportable segments. The royalties, which totaled approximately $0.9 million and $0.7 million for the three months ended June 30, 2014 and 2013, respectively, and approximately $2.3 million and $1.3 million for the six months ended June 30, 2014 and 2013, respectively, are included in cost of revenue for each segment with a corresponding reduction in America’s cost of revenue. The revenues represented below are from external customers only. The geographical-based costs consist of costs of professional services personnel, direct sales and marketing expenses, cost of infrastructure to support the employees and customer base, billing and financial systems, management and general and administrative support. There are certain corporate expenses included in the Americas region that are not charged to the other segments, including research and development, certain marketing and general and administrative costs that support the global organization, and the amortization of acquired developed technology. Included in the Americas’ costs are all research and development costs including the costs associated with the Company’s India operations.

 

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Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

The following table presents the revenues, expenses and operating income by reportable segment for the three and six months ended June 30, 2014 and 2013 (in thousands):

 

    Three Months Ended June 30,  
    2014     2013  
    Americas     EMEA     APAC     Consolidated     Americas     EMEA     APAC     Consolidated  

Revenue:

               

License

  $ 14,498      $ 1,621      $ 1,870      $ 17,989      $ 13,462      $ 1,118      $ 1,556      $ 16,136   

Services

    73,884        13,851        5,784        93,519        62,510        10,477        5,216        78,203   

Hardware and other

    10,251        439        332        11,022        7,628        369        180        8,177   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

    98,633        15,911        7,986        122,530        83,600        11,964        6,952        102,516   

Costs and Expenses:

               

Cost of revenue

    41,385        7,551        3,634        52,570        34,435        6,212        3,371        44,018   

Operating expenses

    30,766        4,049        1,156        35,971        26,592        2,939        1,321        30,852   

Depreciation and amortization

    1,355        72        62        1,489        1,317        77        65        1,459   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

    73,506        11,672        4,852        90,030        62,344        9,228        4,757        76,329   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

  $ 25,127      $ 4,239      $ 3,134      $ 32,500      $ 21,256      $ 2,736      $ 2,195      $ 26,187   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    Six Months Ended June 30,  
    2014     2013  
    Americas     EMEA     APAC     Consolidated     Americas     EMEA     APAC     Consolidated  

Revenue:

               

Software license

  $ 25,956      $ 6,071      $ 3,069      $ 35,096      $ 24,991      $ 2,437      $ 2,953      $ 30,381   

Services

    144,788        24,715        10,929        180,432        123,790        20,240        9,060        153,090   

Hardware and other

    19,244        804        517        20,565        14,639        718        289        15,646   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

    189,988        31,590        14,515        236,093        163,420        23,395        12,302        199,117   

Costs and Expenses:

               

Cost of revenue

    78,034        15,027        7,061        100,122        68,249        12,372        6,435        87,056   

Operating expenses

    59,986        8,119        2,338        70,443        54,289        6,383        2,598        63,270   

Depreciation and amortization

    2,708        147        122        2,977        2,662        151        130        2,943   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

    140,728        23,293        9,521        173,542        125,200        18,906        9,163        153,269   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

  $ 49,260      $ 8,297      $ 4,994      $ 62,551      $ 38,220      $ 4,489      $ 3,139      $ 45,848   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

License revenues related to the Company’s warehouse and non-warehouse product groups for the three and six months ended June 30, 2014 and 2013 are as follows (in thousands):

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2014      2013      2014      2013  

Warehouse

   $ 9,373       $ 9,375       $ 20,041       $ 18,626   

Non-Warehouse

     8,616         6,761         15,055         11,755   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total software license revenue

   $ 17,989       $ 16,136       $   35,096       $   30,381   
  

 

 

    

 

 

    

 

 

    

 

 

 

The Company’s services revenues, which consist of fees generated from professional services and customer support and software enhancements related to its software products, for the three and six months ended June 30, 2014 and 2013 are as follows (in thousands):

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2014      2013      2014      2013  

Professional services

   $ 65,702       $ 52,492       $ 125,124       $ 101,643   

Customer support and software enhancements

     27,817         25,711         55,308         51,447   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total services revenue

   $ 93,519       $ 78,203       $ 180,432       $ 153,090   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

9. New Accounting Pronouncement

In May 2014, the FASB issued guidance codified in ASC 606, Revenue Recognition – Revenue from Contracts with Customers, which will replace substantially all current revenue recognition guidance once it becomes effective. The new standard provides accounting guidance for all revenue arising from contracts with customers and affects all entities that enter into contracts to provide goods or services to their customers unless the contracts are in the scope of other standards. This guidance is effective for annual and interim periods beginning after December 15, 2016. The Company is currently evaluating the impact of the provisions of ASC 606.

 

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

Certain statements contained in this filing are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including but not limited to statements related to expectations about global macroeconomic trends and industry developments, plans for future business development activities, anticipated costs of revenues, product mix and service revenues, research and development and selling, general and administrative activities, and liquidity and capital needs and resources. When used in this report, the words “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” and similar expressions are generally intended to identify forward-looking statements. Undue reliance should not be placed on these forward-looking statements, which reflect opinions only as of the date of this quarterly report. Such forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. For further information about these and other factors that could affect our future results, please see “Risk Factors” in Item 1A of our annual report on Form 10-K for the year ended December 31, 2013. Investors are cautioned that forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. The following discussion should be read in conjunction with the condensed consolidated financial statements for the three and six months ended June 30, 2014 and 2013, including the notes to those statements, included elsewhere in this quarterly report. We also recommend the following discussion be read in conjunction with management’s discussion and analysis and consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2013.

References in this filing to the “Company,” “Manhattan,” “Manhattan Associates,” “we,” “our,” and “us” refer to Manhattan Associates, Inc., our predecessors, and our wholly-owned and consolidated subsidiaries.

Business Overview

We are a leading developer and implementer of supply chain commerce software solutions that help organizations optimize their supply chain operations from planning through execution. Our platform-based supply chain software solution portfolios – Manhattan SCOPE® and Manhattan SCALETM – are designed to deliver both business agility and total cost of ownership advantages to customers. Manhattan SCOPE (Supply Chain Optimization, Planning through Execution) leverages our Supply Chain Process Platform (SCPP) to unify the full breadth of the supply chain, while Manhattan SCALE (Supply Chain Architected for Logistics Execution) leverages Microsoft’s .NET® platform to unify logistics functions.

Early in the Company’s history, our offerings were heavily focused on warehouse management solutions. As the Company grew in size and scope, our offerings expanded across the entire supply chain, while still maintaining a significant presence in, and a relatively strong concentration of revenues from warehouse management solutions, which is a component of our distribution management solution suite. Over time, as our non-warehouse management solutions have proliferated and increased in capability, the Company’s revenue concentration in its warehouse management solutions has correspondingly decreased.

Our business model is singularly focused on the development and implementation of complex supply chain commerce software solutions that are designed to optimize supply chain effectiveness and efficiency for our customers. We have three principal sources of revenue:

 

    licenses of our supply chain software;

 

    professional services, including solutions planning and implementation, related consulting, customer training, and customer support services and software enhancements (collectively, “services”); and

 

    hardware sales and other revenue.

In the three and six months ended June 30, 2014, we generated $122.5 million and $236.1 million, in total revenue, respectively, with a revenue mix of: license revenue 15%; services revenue 76%; and hardware and other revenue 9% for the three and six months ended June 30, 2014.

We manage our business based on three geographic regions: the Americas, Europe, the Middle East and Africa (EMEA), and Asia-Pacific (APAC). Geographic revenue is based on the location of the sale. Our international revenue was

 

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approximately $37.5 million and $70.4 million for the three and six months ended June 30, 2014, respectively, which represents approximately 31% and 30% of our total revenue for the three and six months ended June 30, 2014, respectively. International revenue includes all revenue derived from sales to customers outside the United States. At June 30, 2014, we employed approximately 2,700 employees worldwide, of which 1,280 employees are based in the Americas, 180 in EMEA, and 1,240 in APAC (including India). We have offices in Australia, China, France, India, Japan, the Netherlands, Singapore, and the United Kingdom, as well as representatives in Mexico and reseller partnerships in Latin America, Eastern Europe, the Middle East, South Africa, and Asia.

Global Economic Trends and Industry Factors

Global macroeconomic trends, technology spending, and supply chain management market growth are important barometers for our business. In both the three and six months ended June 30, 2014, approximately 70% of our total revenue was generated in the United States, 13% in EMEA, and the remaining balance in APAC, Canada, and Latin America. In addition, Gartner Inc., an information technology research and advisory company, estimates that nearly 73% of every supply chain software solutions dollar invested is spent in the United States (46%) and Western Europe (27%); consequently, the health of the U.S. and Western European economies has a meaningful impact on our financial results.

We sell technology-based solutions with total pricing, including software and services, in many cases exceeding $1.0 million. Our software often is a part of our customers’ and prospects’ much larger capital commitment associated with facilities expansion and business improvement. We believe that, given the lingering uncertainty in the global macro environment, the current sales cycles for large license deals of $1.0 million or greater in our target markets have been extended. The current business climate within the United States and geographic regions in which we operate continues to affect customers’ and prospects’ decisions regarding timing of strategic capital expenditures. Delays with respect to such decisions can have a material adverse impact on our business, and may further intensify competition in our already highly competitive markets.

In July 2014, the International Monetary Fund (IMF) provided a World Economic Outlook (WEO) update lowering its previous 2014 world economic growth forecast to about 3.4 percent in 2014. The WEO update noted that “the global growth projection for 2014 has been marked down by 0.3 percent to 3.4 percent, reflecting both the legacy of the weak first quarter, particularly in the United States, and a less optimistic outlook for several emerging markets. With somewhat stronger growth expected in some advanced economies next year, the global growth projection for 2015 remains at 4 percent.” The WEO update projected that advanced economies, which represent our primary revenue markets, would grow at about 1.8 percent in 2014 and 2.4 percent in 2015, while the emerging and developing economies would continue to grow at a solid pace of about 4.6 percent in 2014 and 5.2 percent in 2015.

During 2013 and continuing into 2014, the overall trend has been steady for our large license deals, with recognized $1.0 million or larger software license sales totaling fourteen for 2013 and totaling seven in the first half of 2014. However, the large deal flow has been inconsistent from quarter to quarter, reflecting what we believe to be ongoing lackluster macroeconomic growth in the United States and Western Europe. While we are encouraged by our 2013 and first half of 2014 results, we, along with many of our customers, still remain cautious regarding the pace of global economic recovery. With global GDP growth continuing to be well below pre-2008 levels, we believe global economic volatility likely will continue to shape customers’ and prospects’ enterprise software buying decisions, making it more difficult to forecast sales cycles for our products and the timing of large enterprise software license deals.

Revenue

License revenue. License revenue, a leading indicator of our business, is primarily derived from software license fees that customers pay for supply chain solutions. License revenue totaled $18.0 million, or 15% of total revenue, with gross margins of 89.7% for the three months ended June 30, 2014, and $35.1 million, or 15% of total revenue, with gross margins of 90.1% for the six months ended June 30, 2014. Prior to the 2009 global recession, our typical license revenue percentage mix of new to existing customers historically approximated 50/50. Post 2009, the percentage mix has fluctuated more. For the three and six months ended June 30, 2014, the percentage mix of new to existing customers was approximately 30/70. We anticipate that the new to existing customer mix will return to more historical levels on a more consistent basis in improved global economic conditions.

License revenue growth is influenced by the strength of general economic and business conditions and the competitive position of our software products. Our license revenue generally has long sales cycles and the timing of the closing of a few large license transactions can have a material impact on our quarterly license revenues, operating profit, operating margins, and earnings per share. For example, $1.0 million of license revenue in the second quarter of 2014 equates to approximately one cent of diluted earnings per share impact.

 

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Our software solutions are singularly focused on the supply chain commerce planning and execution markets, which are intensely competitive and characterized by rapid technological change. We are a market leader in the supply chain management software solutions market as defined by industry analysts such as ARC Advisory Group and Gartner. Our goal is to extend our position as a leading global supply chain solutions provider by growing our license revenues faster than our competitors through investment in innovation. We expect to continue to face increased competition from Enterprise Resource Planning (ERP) and Supply Chain Management applications vendors and business application software vendors that may broaden their solution offerings by internally developing, or by acquiring or partnering with independent developers of supply chain planning and execution software. Increased competition could result in price reductions, fewer customer orders, reduced gross margins, and loss of market share.

Services revenue. Our services business consists of professional services (consulting and customer training) and customer support services and software enhancements (“CSSE”). Services revenue totaled $93.5 million, or 76% of total revenue, with gross margins of 55.7% for the three months ended June 30, 2014, and $180.4 million, or 76% of total revenue, with gross margins of 55.7% for the six months ended June 30, 2014. Professional services accounted for approximately 69% of total services revenue and approximately 53% of total revenue in the three and six months ended June 30, 2014. Our consolidated operating margin profile may be lower than those of various other technology companies due to our large services revenue mix as a percentage of total revenue. While we believe our services margins are very strong, they do lower our overall operating margin profile as services margins are inherently lower than license revenue margins.

At June 30, 2014, our professional services organization totaled approximately 1,730 employees, accounting for 64% of our total employees worldwide. Our professional services organization provides our customers with expertise and assistance in planning and implementing our solutions. To ensure a successful product implementation, consultants assist customers with the initial installation of a system, the conversion and transfer of the customer’s historical data onto our system, and ongoing training, education, and system upgrades. We believe our professional services enable customers to implement our software rapidly, ensure the customer’s success with our solution, strengthen our customer relationships, and add to our industry-specific knowledge base for use in future implementations and product innovations.

Although our professional services are optional, the majority of our customers use at least some portion of these services for their planning, implementation, or related needs. Professional services are typically rendered under time and materials-based contracts with services typically billed on an hourly basis. Professional services are sometimes rendered under fixed-fee based contracts with payments due on specific dates or milestones.

Typically, our professional services lag related license revenue by several quarters, as implementation services and related consulting are performed after the purchase of the software. Services revenue growth is contingent upon license revenue and customer upgrade cycles, which are influenced by the strength of general economic and business conditions and the competitive position of our software products. In addition, our professional services business has competitive exposure to offshore providers and other consulting companies. All of these factors potentially create the risk of pricing pressure, fewer customer orders, reduced gross margins, and loss of market share.

For CSSE, we offer a comprehensive 24 hours per day, 365 days per year program that provides our customers with software upgrades, when and if available, which include additional or improved functionality and technological advances incorporating emerging supply chain and industry initiatives. Our CSSE revenues totaled $27.8 million and $55.3 million for the three and six months ended June 30, 2014, respectively, representing approximately 31% of services revenue and approximately 23% of total revenue for both periods. The growth of CSSE revenues is influenced by: (1) new license revenue growth; (2) annual renewal of support contracts; (3) increase in customers through acquisitions; and (4) fluctuations in currency rates. Substantially all of our customers renew their annual support contracts. Over the last three years, our annual revenue renewal rate of customers subscribing to comprehensive support and enhancements has been greater than 90%. CSSE revenue is generally paid in advance and recognized ratably over the term of the agreement, typically twelve months. CSSE renewal revenue is not recognized unless payment is received from the customer.

Hardware and other revenue. Our hardware and other revenue totaled $11.0 million, representing 9% of total revenue with gross margins of 15.9% for the three months ended June 30, 2014, and $20.6 million, representing 9% of total revenue with gross margins of 18.6% for the six months ended June 30, 2014. In conjunction with the licensing of our software, and as a convenience for our customers, we resell a variety of hardware products developed and manufactured by

 

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third parties. These products include computer hardware, radio frequency terminal networks, RFID chip readers, bar code printers and scanners, and other peripherals. We resell all third-party hardware products and related maintenance pursuant to agreements with manufacturers or through distributor-authorized reseller agreements pursuant to which we are entitled to purchase hardware products and services at discount prices. We generally purchase hardware from our vendors only after receiving an order from a customer. As a result, we generally do not maintain hardware inventory.

Other revenue represents amounts associated with reimbursements from customers for out-of-pocket expenses. The total amount of expense reimbursement recorded to hardware and other revenue was $4.9 million and $8.5 million for the three and six months ended June 30, 2014, respectively.

Product Development

We continue to invest significantly in research and development (R&D) to provide leading solutions that help global manufacturers, wholesalers, distributors, retailers, and logistics providers successfully manage accelerating and fluctuating demands as well as the increasing complexity and volatility of their local and global supply chains. Our research and development expenses were $11.9 million and $23.7 million for the three and six months ended June 30, 2014, respectively. At June 30, 2014, our R&D organization totaled approximately 640 employees, located in the U.S. and India.

We expect to continue to focus our R&D resources on the development and enhancement of supply chain software solutions. We offer what we believe to be the broadest solution portfolio in the supply chain solutions marketplace, to address all aspects of inventory optimization, transportation management, distribution management, order management, store inventory & fulfillment, and planning.

We also plan to continue to enhance our existing solutions and to introduce new solutions to address evolving industry standards and market needs. We identify opportunities to further enhance our solutions and to develop and provide new solutions through our customer support organization, as well as through ongoing customer consulting engagements and implementations, interactions with our user groups, association with leading industry analysts and market research firms, and participation on industry standards and research committees. Our solutions address the needs of customers in various vertical markets, including retail, consumer goods, food and grocery, logistics service providers, industrial and wholesale, high technology and electronics, life sciences, and government.

Cash Flow and Financial Condition

For the three and six months ended June 30, 2014, we generated cash flow from operating activities of $1.9 million and $21.0 million, respectively. Our cash, cash equivalents, and investments at June 30, 2014 totaled $101.4 million, with no debt on our balance sheet. We currently have no credit facilities. Our primary uses of cash continue to be funding investment in R&D and operations to drive earnings growth and repurchases of our common stock.

We repurchased 1,477,036 shares of Manhattan Associates’ outstanding common stock under our repurchase program during the six months ended June 30, 2014. In July 2014, our Board of Directors approved raising the Company’s remaining share repurchase authority to $50.0 million of Manhattan Associates’ outstanding common stock.

For the remainder of 2014, we anticipate that our priorities for the use of cash will be in developing sales and services resources and continued investment in product development to drive and support profitable growth and extend our market leadership. We expect to continue to evaluate acquisition opportunities that are complementary to our product footprint and technology direction. We also expect to continue to weigh our share repurchase options against cash for acquisitions and investing in the business. We do not anticipate any borrowing requirements in the remainder of 2014 for general corporate purposes.

 

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Results of Operations

The following table summarizes our consolidated results for the three and six months ended June 30, 2014 and 2013.

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2014      2013      2014      2013  
     (in thousands, except per share data)  

Revenue

   $ 122,530       $ 102,516       $ 236,093       $ 199,117   

Costs and expenses

     90,030         76,329         173,542         153,269   
  

 

 

    

 

 

    

 

 

    

 

 

 

Operating income

     32,500         26,187         62,551         45,848   

Other income, net

     312         1,243         79         1,394   
  

 

 

    

 

 

    

 

 

    

 

 

 

Income before income taxes

     32,812         27,430         62,630         47,242   

Net income

   $ 20,594       $ 17,407       $ 39,306       $ 30,762   
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted earnings per share

   $ 0.27       $ 0.22       $ 0.51       $ 0.39   
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted weighted average number of shares

     76,037         78,036         76,415         78,388   
  

 

 

    

 

 

    

 

 

    

 

 

 

We manage our business based on three geographic regions: the Americas, EMEA, and APAC. Geographic revenue information is based on the location of sale. The revenues represented below are from external customers only. The geographical-based expenses include costs of personnel, direct sales, and marketing expenses, and general and administrative costs to support the business. There are certain corporate expenses included in the Americas region that are not charged to the other segments, including research and development, certain marketing and general and administrative costs that support the global organization, and the amortization of acquired developed technology. Included in the Americas costs are all research and development costs, including the costs associated with the Company’s India operations. During the three and six months ended June 30, 2014 and 2013, we derived the majority of our revenues from sales to customers within our Americas region. The following table summarizes revenue and operating profit by region:

 

     Three Months Ended June 30,     Six Months Ended June 30,  
                   % Change vs.                   % Change vs.  
     2014      2013      Prior Year     2014      2013      Prior Year  
     (in thousands)            (in thousands)         

Revenue:

    

Software license

                

Americas

   $ 14,498       $ 13,462         8   $ 25,956       $ 24,991         4

EMEA

     1,621         1,118         45     6,071         2,437         149

APAC

     1,870         1,556         20     3,069         2,953         4
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total software license

     17,989         16,136         11     35,096         30,381         16

Services

                

Americas

     73,884         62,510         18     144,788         123,790         17

EMEA

     13,851         10,477         32     24,715         20,240         22

APAC

     5,784         5,216         11     10,929         9,060         21
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total services

     93,519         78,203         20     180,432         153,090         18

Hardware and Other

                

Americas

     10,251         7,628         34     19,244         14,639         31

EMEA

     439         369         19     804         718         12

APAC

     332         180         84     517         289         79
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total hardware and other

     11,022         8,177         35     20,565         15,646         31

Total Revenue

                

Americas

     98,633         83,600         18     189,988         163,420         16

EMEA

     15,911         11,964         33     31,590         23,395         35

APAC

     7,986         6,952         15     14,515         12,302         18
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total revenue

   $ 122,530       $ 102,516         20   $ 236,093       $ 199,117         19
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Operating income:

                

Americas

   $ 25,127       $ 21,256         18   $ 49,260       $ 38,220         29

EMEA

     4,239         2,736         55     8,297         4,489         85

APAC

     3,134         2,195         43     4,994         3,139         59
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total operating income

   $ 32,500       $ 26,187         24   $ 62,551       $ 45,848         36
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

 

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Table of Contents

Summary of the Second Quarter 2014 Condensed Consolidated Financial Results

 

  Diluted earnings per share was $0.27 in the second quarter of 2014, compared to $0.22 in the second quarter of 2013.

 

  Consolidated total revenue was $122.5 million in the second quarter of 2014, compared to $102.5 million in the second quarter of 2013. License revenue was $18.0 million in the second quarter of 2014, compared to $16.1 million in the second quarter of 2013.

 

  Operating income was $32.5 million in the second quarter of 2014, compared to $26.2 million in the second quarter of 2013.

 

  Cash flow from operations was $1.9 million in the second quarter of 2014, compared to $13.6 million in the second quarter of 2013. Days Sales Outstanding was 64 days at June 30, 2014, compared to 53 days at March 31, 2014.

 

  Cash and investments on-hand were $101.4 million at June 30, 2014, compared to $125.9 million at March 31, 2014.

 

  During the three months ended June 30, 2014, we repurchased 782,489 shares of Manhattan Associates common stock under the share repurchase program authorized by the Board of Directors, for a total investment of $25.1 million. In July 2014, the Board of Directors approved raising our share repurchase authority to an aggregate of $50.0 million of our outstanding common stock.

 

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Table of Contents

The results of our operations for the second quarters of 2014 and 2013 are discussed below.

Revenue

 

     Three Months Ended June 30,  
                   % Change vs.     % of Total Revenue  
     2014      2013      Prior Year     2014     2013  
     (in thousands)                     

Software license

   $ 17,989       $ 16,136         11     15     16

Services

     93,519         78,203         20     76     76

Hardware and other

     11,022         8,177         35     9     8
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Total revenue

   $ 122,530       $ 102,516         20     100     100
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Our revenue consists of fees generated from the licensing and hosting of software; fees from professional services, customer support services and software enhancements; hardware sales of complementary radio frequency and computer equipment; and other revenue representing amounts associated with reimbursements from customers for out-of-pocket expenses.

License revenue. License revenue increased $1.9 million, or 11%, in the second quarter of 2014 compared to the same quarter in the prior year. We completed three large software license deals greater than $1.0 million in the second quarter of 2014. The license sales percentage mix across our product suite in the quarter ended June 30, 2014 was approximately 50/50 of warehouse management solutions to non-warehouse management solutions.

Services revenue. Services revenue increased $15.3 million, or 20%, in the second quarter of 2014 compared to the same quarter in the prior year due to a $13.2 million increase in professional services revenue and a $2.1 million increase in customer support and software enhancements. The increase in services revenue was due to customer-specific initiatives in conjunction with customer upgrade activity and large license deals signed. Services revenue for the Americas, EMEA and APAC segments increased $11.4 million, $3.4 million and $0.5 million, respectively, in the second quarter of 2014 compared to the same quarter of 2013.

Hardware and other. Hardware sales increased by $1.8 million to $6.1 million in the second quarter of 2014 compared to $4.3 million for the second quarter of 2013. The majority of hardware sales are derived from our Americas segment. Sales of hardware are largely dependent upon customer-specific desires, which fluctuate. Other revenue represents reimbursements for professional service travel expenses that are required to be classified as revenue and are included in hardware and other revenue. Reimbursements by customers for out-of-pocket expenses were approximately $4.9 million and $3.9 million for the quarters ended June 30, 2014 and 2013, respectively.

Cost of Revenue

 

     Three Months Ended June 30,  
                   % Change vs.  
     2014      2013      Prior Year  

Cost of license

   $ 1,848       $ 1,937         -5

Cost of services

     41,457         35,058         18

Cost of hardware and other

     9,265         7,023         32
  

 

 

    

 

 

    

 

 

 

Total cost of revenue

   $ 52,570       $ 44,018         19
  

 

 

    

 

 

    

 

 

 

Cost of license. Cost of license consists of the costs associated with software reproduction; hosting services; media, packaging and delivery, documentation, and other related costs; and royalties on third-party software sold with or as part of our products. Cost of license decreased by $0.1 million in the second quarter of 2014 compared to the same quarter of 2013 due to decrease in sales of third-party software over the prior year.

 

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Table of Contents

Cost of services. Cost of services consists primarily of salaries and other personnel-related expenses of employees dedicated to professional and technical services and customer support services. The $6.4 million, or 18%, increase in cost of services in the quarter ended June 30, 2014 compared to the same quarter in the prior year was principally due to a $3.8 million increase in compensation and other personnel-related expenses resulting from increased headcount in our services organization to support ongoing growth of the business and a $1.6 million increase in performance-based bonus expenses.

Cost of hardware and other. Cost of hardware increased by $1.2 million to $4.4 million in the second quarter of 2014 compared to $3.2 million in the same quarter of 2013. Cost of hardware and other includes professional services billed travel expenses reimbursed by customers of approximately $4.9 million and $3.9 million for the quarters ended June 30, 2014 and 2013, respectively.

Operating Expenses

 

     Three Months Ended June 30,  
                   % Change vs.  
     2014      2013      Prior Year  
     (in thousands)         

Research and development

   $ 11,867       $ 11,032         8

Sales and marketing

     12,848         11,888         8

General and administrative

     11,256         7,932         42

Depreciation and amortization

     1,489         1,459         2
  

 

 

    

 

 

    

 

 

 

Operating expenses

   $ 37,460       $ 32,311         16
  

 

 

    

 

 

    

 

 

 

Research and development. Research and development expenses primarily consist of salaries and other personnel-related costs for personnel involved in our research and development activities. Research and development expenses for the quarter ended June 30, 2014 increased by $0.8 million, or 8%, as compared to the quarter ended June 30, 2013. This increase is primarily due to an increase of $0.4 million in compensation and other personnel-related expenses and $0.4 million in performance-based bonus expenses.

Our principal research and development activities have focused on the enhancement of new products and releases while expanding the product footprint of our platform-based Supply Chain Commerce Solutions. These solutions are designed to help retailers, wholesalers, manufacturers and third party logistics providers seamlessly manage inventory, distribution and transportation while meeting the ever-changing customer demands created by the omni-channel driven marketplace. The Manhattan Supply Chain Process Platform provides not only a sophisticated service-oriented, architecture-based application framework, but also one that facilitates integration with Enterprise Resource Planning (ERP) and other supply chain solutions. For each of the quarters ended June 30, 2014 and 2013, we did not capitalize any research and development costs.

Sales and marketing. Sales and marketing expenses include salaries, commissions, travel and other personnel-related costs, and the costs of our marketing and alliance programs and related activities. Sales and marketing expenses increased by $1.0 million, or 8%, in the second quarter of 2014 compared to the same quarter of the prior year primarily due to a $0.6 increase in performance-based compensation expense and $0.4 million increase in compensation and other personnel-related expense.

General and administrative. General and administrative expenses consist primarily of salaries and other personnel-related costs of executive, financial, human resources, information technology, and administrative personnel, as well as facilities, legal, insurance, accounting, and other administrative expenses. General and administrative expenses increased by $3.3 million, or 42%, in the current year quarter compared to the same quarter in the prior year. The increase was primarily due to a $1.6 million reversal in 2013 of a previously expensed transaction tax resulting from the expiration of the tax audit statute, an increase of $1.3 million in compensation and other personnel-related expenses including temporary contracted personnel, and an increase of $0.4 million in performance-based bonus expense.

 

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Depreciation and amortization. Depreciation expense was $1.5 million for each of the three months ended June 30, 2014 and 2013. The intangibles associated with various acquisitions in prior years were fully amortized prior to the second quarter of 2014, and amortization expense for the three months ended June 30, 2013 was immaterial.

Operating Income

Operating income for the second quarter of 2014 was $32.5 million compared to $26.2 million for the second quarter of 2013. Operating margins were 26.5% for the second quarter of 2014 versus 25.5% for the same quarter in the prior year. Operating income and margin increased primarily due to strong revenue growth and expense management during the quarter.

Other Income and Income Taxes

 

     Three Months Ended June 30,  
                   % Change vs.  
     2014      2013      Prior Year  

Other income, net

   $ 312       $ 1,243         -75

Income tax provision

     12,218         10,023         22

Other income, net. Other income, net principally includes interest income, foreign currency gains and losses, and other non-operating expenses. Other income, net decreased $0.9 million in the second quarter of 2014 compared to the second quarter of 2013 primarily due to a $1.0 million decrease in foreign currency gains related to the fluctuation of the U.S. dollar relative to foreign currencies, principally the Indian Rupee. Net foreign currency gains were immaterial during the quarter ended June 30, 2014, but we recorded net foreign currency gains of approximately $1.0 million during the quarter ended June 30, 2013.

Income tax provision. Our effective income tax rate was 37.2% and 36.5% for the quarters ended June 30, 2014 and 2013, respectively. The increase in the effective tax rate for the quarter ended June 30, 2014 is principally due to the expiration of the federal research and development tax credit.

Summary of the First Half of 2014 Condensed Consolidated Financial Results

 

  Diluted earnings per share for the six months ended June 30, 2014 was $0.51, compared to $0.39 for the six months ended June 30, 2013.

 

  Consolidated revenue for the six months ended June 30, 2014 was $236.1 million, compared to $199.1 million for the six months ended June 30, 2013. License revenue was $35.1 million for the six months ended June 30, 2014, compared to $30.4 million for the six months ended June 30, 2013.

 

  Operating income was $62.6 million for the six months ended June 30, 2014, compared to $45.8 million for the six months ended June 30, 2013.

 

  During the six months ended June 30, 2014, we repurchased 1,477,036 shares of Manhattan Associates common stock under the share repurchase program authorized by the Board of Directors, for a total investment of $50.5 million.

 

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Table of Contents

The results of our operations for the six months ended June 30, 2014 and 2013 are discussed below.

Revenue

 

     Six Months Ended June 30,  
                   % Change vs.     % of Total Revenue  
     2014      2013      Prior Year     2014     2013  
     (in thousands)                     

Software license

   $ 35,096       $ 30,381         16     15     15

Services

     180,432         153,090         18     76     77

Hardware and other

     20,565         15,646         31     9     8
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Total revenue

   $ 236,093       $ 199,117         19     100     100
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Our revenue consists of fees generated from the licensing and hosting of software; fees from professional services, customer support services and software enhancements; hardware sales of complementary radio frequency and computer equipment; and other revenue representing amounts associated with reimbursements from customers for out-of-pocket expenses.

License revenue. License revenue increased $4.7 million, or 16%, in the six months ended June 30, 2014 over the same period in the prior year. Our license revenue performance depends heavily on the number and relative value of large deals we close in the period. We completed seven large deals greater than $1.0 million in the first six months of 2014 and 2013. Due to the sluggish economic recovery in the United States and other geographic regions in which we operate, the sales cycle on these deals remains somewhat less predictable.

The license sales percentage mix across our product suite in the six months ended June 30, 2014 was approximately 60/40 of warehouse management solutions to non-warehouse management solutions, respectively.

Services revenue. Services revenue increased $27.3 million, or 18%, in the six months ended June 30, 2014 compared to the same period in the prior year due to a $23.5 million increase in professional services revenue and a $3.8 million increase in customer support and software enhancements. The increase in services revenue was due to customer-specific initiatives in conjunction with customer upgrade activity and large license deals signed. Services revenue for the Americas, EMEA and APAC segments increased $21.0 million, $4.4 million and $1.9 million, respectively, in the six months ended June 30, 2014 compared to the same period in the prior year.

Hardware and other. Hardware sales decreased by $3.6 million, or 43%, to $12.1 million in the six months ended June 30, 2014 compared to $8.5 million for the same period in the prior year. The majority of hardware sales are derived from our Americas segment. Sales of hardware are largely dependent upon customer-specific desires, which fluctuate. Other revenue represents reimbursements for professional service travel expenses that are required to be classified as revenue and are included in hardware and other revenue. Reimbursements by customers for out-of-pocket expenses were approximately $8.5 million and $7.2 million for the six months ended June 30, 2014 and 2013, respectively.

Cost of Revenue

 

     Six Months Ended June 30,  
                   % Change vs.  
     2014      2013      Prior Year  

Cost of license

   $ 3,461       $ 3,715         -7

Cost of services

     79,917         70,104         14

Cost of hardware and other

     16,744         13,237         26
  

 

 

    

 

 

    

 

 

 

Total cost of revenue

   $ 100,122       $ 87,056         15
  

 

 

    

 

 

    

 

 

 

 

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Table of Contents

Cost of license. Cost of license consists of the costs associated with software reproduction; hosting services; media, packaging and delivery, documentation, and other related costs; and royalties on third-party software sold with or as part of our products. Cost of license decreased by $0.3 million, or 7%, in the first half of 2014 compared to the same period of 2013 principally due to decreased sales of third-party software over the prior year.

Cost of services. Cost of services consists primarily of salaries and other personnel-related expenses of employees dedicated to professional and technical services and customer support services. The $9.8 million, or 14%, increase in cost of services in the six months ended June 30, 2014 compared to the same period in the prior year was principally due to a $6.2 million increase in compensation, other personnel-related and travel expenses resulting from increased headcount in our services organization to support ongoing growth of the business, and a $2.3 million increase in performance-based compensation expense.

Cost of hardware and other. Cost of hardware increased by $2.3 million to approximately $8.4 million in the six months ended June 30, 2014 compared to $6.1 million in the same period of 2013. Cost of hardware and other includes out-of-pocket expenses to be reimbursed by customers of approximately $8.3 million and $7.1 million for the six months ended June 30, 2014 and 2013, respectively.

Operating Expenses

 

     Six Months Ended June 30,  
                   % Change vs.  
     2014      2013      Prior Year  
     (in thousands)         

Research and development

   $ 23,670       $ 22,508         5

Sales and marketing

     24,868         23,322         7

General and administrative

     21,905         17,440         26

Depreciation and amortization

     2,977         2,943         1
  

 

 

    

 

 

    

 

 

 

Operating expenses

   $ 73,420       $ 66,213         11
  

 

 

    

 

 

    

 

 

 

Research and development. Research and development expenses primarily consist of salaries and other personnel-related costs for personnel involved in our research and development activities. Research and development expenses for the six months ended June 30, 2014 increased by $1.2 million, or 5%, compared to the same period in 2013. This increase is primarily due to an increase of $0.4 million in compensation and other personnel-related expenses and an increase of $0.5 million in performance-based bonus expense. For each of the six months ended June 30, 2014 and 2013, we did not capitalize any research and development costs.

Sales and marketing. Sales and marketing expenses include salaries, commissions, travel and other personnel-related costs and the costs of our marketing and alliance programs and related activities. Sales and marketing expenses increased by $1.5 million, or 7%, in the first half of 2014 compared to the same period of the prior year. This increase was mainly attributable to the increase in performance-based compensation expense of $0.9 million and a $0.6 million increase in compensation and other personnel-related expenses, including temporary contracted personnel.

General and administrative. General and administrative expenses consist primarily of salaries and other personnel-related costs of executive, financial, human resources, information technology, and administrative personnel, as well as facilities, legal, insurance, accounting, and other administrative expenses. General and administrative expenses increased by $4.5 million, or 26%, during the six months ended June 30, 2014 compared to the same period in the prior year. The increase was primarily due to a $1.6 million reversal in 2013 of a previously expensed transaction tax resulting from the expiration of the tax audit statute, an increase of $1.9 million in compensation and other personnel-related expenses including temporary contracted personnel, and an increase of $0.4 million in performance-based bonus expense.

Depreciation and amortization. Depreciation expense amounted to $3.0 million and $2.9 million for the six months ended June 30, 2014 and 2013, respectively. Amortization expense for the six months ended June 30, 2014 and 2013 was immaterial.

 

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Table of Contents

Operating Income

Operating income for the six months ended June 30, 2014 was $62.6 million compared to $45.8 million for the same period in June 30, 2013. Operating margins were 26.5% for the first six months of 2014 versus 23.0% for the same period in 2013. Operating income and margin increased primarily due to strong revenue growth and expense management during the six month period.

Other Income and Income Taxes

 

     Six Months Ended June 30,  
                   % Change vs.  
     2014      2013      Prior Year  

Other income, net

   $ 79       $ 1,394         -94

Income tax provision

     23,324         16,480         42

Other income, net. Other income, net principally includes interest income, foreign currency gains and losses, and other non-operating expenses. Other income, net decreased $1.3 million in the six months ended June 30, 2014 compared to the same period in 2013 primarily due to a $1.3 million decrease in foreign currency gains related to the fluctuation of the U.S. dollar relative to foreign currencies, principally the Indian Rupee. We recorded net foreign currency losses of approximately $0.5 million and net foreign currency gains of $0.8 million during the six months ended June 30, 2014 and 2013, respectively.

Income tax provision. Our effective income tax rate was 37.2% and 34.9% for the six months ended June 30, 2014 and 2013, respectively. The increase in the effective tax rate for the quarter ended June 30, 2014 is principally due to the expiration of the federal research and development tax credit. The effective tax rate for the six months ended June 30, 2013 includes the benefit of the credit for the 2013 tax year, partially offset by an increase in foreign taxes. The effective tax rate for the six months ended June 30, 2013 also includes the benefit of the credit for the 2012 tax year, partially offset by the establishment of state income tax reserves.

Liquidity and Capital Resources

In the first half of 2014, we funded our business through cash flow generated from operations. Our cash and investments as of June 30, 2014 included $49.1 million held in the U.S. and $52.3 million held by our foreign subsidiaries. We believe that our cash balances in the U.S. are sufficient to fund our U.S. operations. In the future, if we elect to repatriate the unremitted earnings of our foreign subsidiaries in the form of dividends or otherwise, we would be subject to additional U.S. income taxes which would result in a higher effective tax rate. However, our current intent is to indefinitely reinvest these funds outside of the U.S. and we do not have a current cash requirement need to repatriate them to the U.S.

Our operating activities generated cash flow of approximately $21.0 million and $33.7 million for the six months ended June 30, 2014 and 2013, respectively. Two consecutive quarters of record revenue growth in 2014 combined with higher taxable earnings in 2013 and 2014 impacted our 2014 year-to-date results versus the prior year. The decrease in operating cash flow for 2014 versus 2013 is timing related, primarily driven by second quarter 2014 performance. The increase in revenue combined with large license deal closings in June 2014 resulted in a $19.9 million increase in trade receivables compared to March 31, 2014 and a $15.6 million increase compared to December 31, 2013 and also contributed to an increase in Days Sales Outstanding to 64 days at June 30, 2014 compared to 53 days at March 31, 2014 and 61 days at December 31, 2013. Further, we paid $24.3 million in estimated income taxes in the first half of 2014, compared to $8.6 million in the first half of 2013. Included in the first half of 2014 estimated income taxes paid was a $6.5 million estimated payment for 2013 U.S. income taxes. Of the $24.3 million in estimated income taxes paid year-to-date in 2014, $16.4 million was paid in the second quarter of 2014 representing a $12.1 million increase compared to the same period in the prior year.

Our investing activities used cash of approximately $5.0 million and $3.7 million during the six months ended June 30, 2014 and 2013, respectively. The primary use of cash for investing activities for the six months ended June 30, 2014 was $3.6 million in capital expenditures and $1.4 million in net purchases of short-term investments. The primary use of cash for investing activities for the six months ended June 30, 2013 was $1.6 million in capital expenditures and $2.1 million in net purchases of short-term investments.

 

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Table of Contents

Our financing activities used cash of approximately $50.6 million and $26.2 million for the six months ended June 30, 2014 and 2013, respectively. The principal use of cash for financing activities for the six months ended June 30, 2014 was to purchase approximately $58.3 million of our common stock, including $7.8 million of shares withheld for taxes due upon vesting of restricted stock and restricted stock units, partially offset by proceeds generated from options exercised of $0.8 million and a $6.9 million excess tax benefit from equity-based compensation. The principal use of cash for financing activities for the six months ended June 30, 2013 was to purchase approximately $34.9 million of our common stock, including $4.6 million of shares withheld for taxes due upon vesting of restricted stock and restricted stock units, partially offset by proceeds generated from options exercised of $3.9 million and a $4.9 million excess tax benefit from equity-based compensation.

Periodically, opportunities may arise to grow our business through the acquisition of complementary and synergistic companies, products, and technologies. Any material acquisition could result in a decrease to our working capital depending on the amount, timing, and nature of the consideration to be paid. We believe that existing balances of cash and investments will be sufficient to meet our working capital and capital expenditure needs at least for the next twelve months, although there can be no assurance that this will be the case. In the remainder of 2014, we expect that our priorities for the use of cash will be our share repurchase program, developing sales and services resources and continued investment in product development to drive and support profitable growth and to extend our market leadership. We expect to continue to weigh our share repurchase options against using cash for investing in the business and acquisition opportunities that are complementary to our product footprint and technology direction. We do not anticipate any borrowing requirements in the remainder of 2014 for general corporate purposes.

Critical Accounting Policies and Estimates

In the first six months of 2014, there were no significant changes to our critical accounting policies and estimates from those disclosed in the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our annual report on Form 10-K for the year ended December 31, 2013.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

There were no material changes to the Quantitative and Qualitative Disclosures about Market Risk previously disclosed in our annual report on Form 10-K for the year ended December 31, 2013.

 

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

No system of controls, no matter how well designed and operated, can provide absolute assurance that the objectives of the system of controls are met, and no evaluation of controls can provide absolute assurance that the system of controls has operated effectively in all cases. Our disclosure controls and procedures however are designed to provide reasonable assurance that the objectives of disclosure controls and procedures are met.

As of the end of the period covered by this report, our management evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures. Based on the evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective to provide reasonable assurance that the objectives of disclosure controls and procedures are met.

 

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Table of Contents

Changes in Internal Control over Financial Reporting

During the three months ended June 30, 2014, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, including any corrective actions with regard to material weaknesses.

PART II

OTHER INFORMATION

 

Item 1. Legal Proceedings.

From time to time, we may be a party to legal proceedings arising in the ordinary course of business, and we could be a party to legal proceedings not in the ordinary course of business. The Company is not currently a party to any legal proceeding the result of which it believes could have a material adverse impact upon its business, financial position, results of operations, or cash flows.

Many of our product installations involve software products that are critical to the operations of our customers’ businesses. Any failure in our products could result in a claim for substantial damages against us, regardless of our responsibility for such failure. Although we attempt to contractually limit our liability for damages arising from product failures or negligent acts or omissions, there can be no assurance that the limitations of liability set forth in our contracts will be enforceable in all instances.

 

Item 1A. Risk Factors.

In addition to the other information set forth in this report, you should carefully consider the risk factors disclosed in Item 1A, “Risk Factors,” of the Company’s annual report on Form 10-K for the year ended December 31, 2013.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

The following table provides information regarding our common stock repurchases under our publicly-announced repurchase program and shares withheld for taxes due upon vesting of restricted stock for the quarter ended June 30, 2014. All repurchases related to the repurchase program were made on the open market.

 

Period

   Total
Number of
Shares
Purchased(a)
     Average
Price Paid
per
Share(b)
     Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs
     Maximum Number
(or Approximate
Dollar Value) of
Shares that May Yet
Be Purchased Under
the Plans or
Programs
 

April 1 - April 30, 2014

     115,044       $ 31.82         114,101       $ 46,375,069   

May 1 - May 31, 2014

     483,621         31.48         483,426         31,150,437   

June 1 - June 30, 2014

     184,962         33.74         184,962         24,909,332   
  

 

 

       

 

 

    

Total

     783,627         32.06         782,489      
  

 

 

       

 

 

    

 

(a) Includes 1,138 shares withheld for taxes due upon vesting of restricted stock during the quarter ended June 30, 2014.
(b) The average price paid per share for shares withheld for taxes due upon vesting of restricted stock was $31.72 in the three months ended June 30, 2014.

In July 2014, our Board of Directors approved raising our repurchase authority for the Company’s common stock to a total of $50.0 million.

 

27


Table of Contents
Item 3. Defaults Upon Senior Securities.

No events occurred during the quarter covered by the report that would require a response to this item.

 

Item 4. Mine Safety Disclosures.

Not applicable.

 

Item 5. Other Information.

No events occurred during the quarter covered by the report that would require a response to this item.

 

Item 6. Exhibits.

 

Exhibit 3.1    Articles of Incorporation of the Company, including Articles of Amendment to the Articles of Incorporation of the Company dated May 15, 2014.
Exhibit 31.1    Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 31.2    Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32*    Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit 101.INS    XBRL Instance Document
Exhibit 101.SCH    XBRL Taxonomy Extension Schema Document
Exhibit 101.CAL    XBRL Taxonomy Extension Calculation Linkbase Document
Exhibit 101.DEF    XBRL Taxonomy Extension Definition Linkbase Document
Exhibit 101.LAB    XBRL Taxonomy Extension Label Linkbase Document
Exhibit 101.PRE    XBRL Taxonomy Extension Presentation Linkbase Document

 

* In accordance with Item 601(b)(32)(ii) of the SEC’s Regulation S-K, this Exhibit is hereby furnished to the SEC as an accompanying document and is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933.

 

28


Table of Contents

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 thereunto duly authorized.

 

    MANHATTAN ASSOCIATES, INC.
Date: July 29, 2014    

/s/ Eddie Capel

    Eddie Capel
    President and Chief Executive Officer
    (Principal Executive Officer)
Date: July 29, 2014    

/s/ Dennis B. Story

    Dennis B. Story
    Executive Vice President, Chief Financial Officer and Treasurer
    (Principal Financial and Accounting Officer)

 

29


Table of Contents

EXHIBIT INDEX

 

Exhibit 3.1    Articles of Incorporation of the Company, including Articles of Amendment to the Articles of Incorporation of the Company dated May 15, 2014.
Exhibit 31.1    Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 31.2    Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 32*    Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 101.INS    XBRL Instance Document
Exhibit 101.SCH    XBRL Taxonomy Extension Schema Document
Exhibit 101.CAL    XBRL Taxonomy Extension Calculation Linkbase Document
Exhibit 101.DEF    XBRL Taxonomy Extension Definition Linkbase Document
Exhibit 101.LAB    XBRL Taxonomy Extension Label Linkbase Document
Exhibit 101.PRE    XBRL Taxonomy Extension Presentation Linkbase Document

 

* In accordance with Item 601(b)(32)(ii) of the SEC’s Regulation S-K, this Exhibit is hereby furnished to the SEC as an accompanying document and is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933.
EX-3.1 2 d732483dex31.htm EX-3.1 EX-3.1

EXHIBIT 3.1

ARTICLES OF AMENDMENT

TO THE

ARTICLES OF INCORPORATION

OF

MANHATTAN ASSOCIATES, INC.

Pursuant to the provisions of Section 14-2-1006 of the Georgia Business Corporation Code (the “Code”), the undersigned, Manhattan Associates, Inc., a Georgia corporation (the “Corporation”), delivers these Articles of Amendment to its Articles of Incorporation to the Secretary of State of Georgia for filing.

1. The name of the Corporation is Manhattan Associates, Inc.

2. The Articles of Incorporation are amended by deleting Article Two in its entirety and inserting in lieu thereof the following:

“Article Two

The Corporation shall have authority, exercisable by its Board of Directors, to issue up to 200,000,000 shares of common stock, $.01 par value per share (“Common Stock”), and 20,000,000 shares of preferred stock, no par value per share (“Preferred Stock”), any part or all of which shares of Preferred Stock may be established and designated from time to time by the Board of Directors, in such series and with such preferences, limitations and relative rights as may be determined by the Board of Directors.”

3. The adoption of the foregoing amendment was duly recommended by the Board of Directors of the Corporation to the shareholders of the Corporation in accordance with the provisions of Section 14-2-1003 of the Code on January 30, 2014.

4. The foregoing amendment was duly approved and adopted by the shareholders of the Corporation in accordance with the provisions of Section 14-2-1003 of the Code on May 15, 2014.

5. The foregoing amendment shall become effective upon filing with the Secretary of State of Georgia.

(Remainder of Page Left Blank, Signature Page Follows)


IN WITNESS WHEREOF, the undersigned has executed these Articles of Amendment to the Articles of Incorporation of Manhattan Associates, Inc. this 15th day of May, 2014.

 

MANHATTAN ASSOCIATES, INC.
By:  

/s/ Bruce S. Richards

  Bruce S. Richards, Secretary


ARTICLES OF INCORPORATION

OF

MANHATTAN ASSOCIATES, INC.

ARTICLE ONE

NAME

The name of the corporation is Manhattan Associates, Inc. (the “Corporation”).

ARTICLE TWO

CAPITALIZATION

The Corporation shall have authority, exercisable by its Board of Directors, to issue up to 100,000,000 shares of common stock, $.01 par value per share (“Common Stock”), and 20,000,000 shares of preferred stock, no par value per share (“Preferred Stock”), any part or all of which shares of Preferred Stock may be established and designated from time to time by the Board of Directors, in such series and with such preferences, limitations and relative rights as may be determined by the Board of Directors.

ARTICLE THREE

INITIAL REGISTERED OFFICE

The initial registered office of the Corporation shall be at 2300 Windy Ridge Parkway, Suite 700, Atlanta, Fulton County, Georgia 30339. The initial registered agent of the Corporation shall be Michael J. Casey.

ARTICLE FOUR

INITIAL PRINCIPAL OFFICE

The mailing address of the initial principal office of the Corporation shall be 2300 Windy Ridge Parkway, Suite 700, Atlanta, Georgia 30339.

ARTICLE FIVE

INCORPORATOR

The name and address of the incorporator is Larry W. Shackelford, Esq., Morris, Manning & Martin, L.L.P., 1600 Atlanta Financial Center, 3343 Peachtree Road, N.E., Atlanta, Georgia 30326.

ARTICLE SIX

DIRECTORS

The initial Board of Directors of the Corporation is composed of the following Directors: Alan J. Dabbiere and Deepak Raghavan.

ARTICLE SEVEN

STAGGERED BOARD OF DIRECTORS

The Board of Directors shall be divided into three classes to be known as Class I, Class II and Class III, which shall be as nearly equal in number as possible. Except in case of death, resignation, disqualification or removal, each Director shall serve for a term ending on the date of the third annual meeting of shareholders following the annual meeting at which the Director was elected; provided, however, that each initial Director in Class I shall hold office until the 1999 annual meeting of shareholders; each initial Director in Class II shall hold


office until the 2000 annual meeting of shareholders; and each initial Director in Class III shall hold office until the 2001 annual meeting of shareholders. In the event of any increase or decrease in the authorized number of Directors, the newly created or eliminated directorships resulting from such an increase or decrease shall be apportioned among the three classes of Directors so that the three classes remain as nearly equal in size as possible; provided, however, that there shall be no classification of additional Directors elected by the Board of Directors until the next meeting of shareholders called for the purposes of electing Directors, at which meeting the terms of all such additional Directors shall expire, and such additional Director positions, if they are to be continued, shall be apportioned among the classes of Directors, and nominees therefor shall be submitted to the shareholders for their vote.

ARTICLE EIGHT

LIMITATION ON DIRECTOR LIABILITY

No Director of the Corporation shall be personally liable to the Corporation or its shareholders for monetary damages for breach of the duty of care or any other duty as a Director, except that such liability shall not be eliminated for:

 

  (i) any appropriation, in violation of the Director’s duties, of any business opportunity of the Corporation;

 

  (ii) acts or omissions that involve intentional misconduct or a knowing violation of law;

 

  (iii) liability under Section 14-2-832 (or any successor provision or redesignation thereof) of the Georgia Business Corporation Code (the “Code”); and

 

  (iv) any transaction from which the Director received an improper personal benefit.

If at any time the Code shall have been amended to authorize the further elimination or limitation of the liability of a Director, then the liability of each Director of the Corporation shall be eliminated or limited to the fullest extent permitted by the Code, as so amended, without further action by the shareholders, unless the provisions of the Code, as amended, require further action by the shareholders.

Any repeal or modification of the foregoing provisions of this Article Eight shall not adversely affect the elimination or limitation of liability or alleged liability pursuant hereto of any Director of the Corporation for or with respect to any alleged act or omission of the Director occurring prior to such a repeal or modification.

ARTICLE NINE

SHAREHOLDER ACTION WITHOUT MEETING

BY LESS THAN UNANIMOUS CONSENT

The shareholders, without a meeting, may take any action required or permitted to be taken at a meeting of the shareholders, if written consent setting forth the action to be taken is signed by those persons who would be entitled to vote at a meeting who hold those shares having voting power to cast not less than the minimum number (or numbers, in the case of voting by classes) of votes that would be necessary to authorize or take the action at a meeting at which all shares entitled to vote were present and voted. An action by less than unanimous consent may not be taken with respect to any election of Directors as to which shareholders would be entitled to cumulative voting.

ARTICLE TEN

CONSIDERATION OF INTERESTS OF

NON-SHAREHOLDER CONSTITUENCIES

The Board of Directors, any committee of the Board of Directors and any individual Director, in discharging the duties of its, his or her respective positions and in determining what is believed to be in the best


interest of the Corporation, may in its, his or her sole discretion consider the interests of the employees, customers, suppliers and creditors of the Corporation and its subsidiaries, the communities in which offices or other establishments of the Corporation and its subsidiaries are located and all other factors such Director or Directors consider pertinent, in addition to considering the effects of any action on the Corporation and its shareholders. Notwithstanding the foregoing, this Article Ten shall not be deemed to provide any of the foregoing constituencies any right to be considered in any such discharging of duties or determination.

ARTICLE ELEVEN

AMENDMENTS

Notwithstanding any other provision of these Articles of Incorporation, the Corporation’s Bylaws or law, neither Articles Seven, Eight, Nine or Ten hereof nor this Article Eleven may be amended or repealed except upon the affirmative vote of holders of at least 66-2/3% of the total number of votes of the then outstanding shares of capital stock of the Company that are entitled to vote generally in the election of Directors, voting together as a single class.

IN WITNESS WHEREOF, the undersigned executes these Articles of Incorporation on February 24, 1998.

 

/s/ Larry W. Shackelford

Larry W. Shackelford,
Incorporator
EX-31.1 3 d732483dex311.htm EX-31.1 EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO RULE 13a-14(a)/15d-14(a), AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Eddie Capel, certify that:

1. I have reviewed this quarterly report on Form 10-Q of the registrant;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

  (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated this 29th day of July, 2014

 

/s/ Eddie Capel

Eddie Capel, President and Chief Executive Officer
EX-31.2 4 d732483dex312.htm EX-31.2 EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO RULE 13a-14(a)/15d-14(a), AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Dennis B. Story, certify that:

1. I have reviewed this quarterly report on Form 10-Q of the registrant;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

  (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated this 29th day of July, 2014

 

/s/ Dennis B. Story

Dennis B. Story, Executive Vice President, Chief Financial Officer and Treasurer
EX-32 5 d732483dex32.htm EX-32 EX-32

EXHIBIT 32

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

This Certificate is being delivered pursuant to the requirements of Section 1350 of Chapter 63 (Mail Fraud) of Title 18 (Crimes and Criminal Procedures) of the United States Code and shall not be relied on by any person for any other purpose.

The undersigned, who are the Chief Executive Officer and Chief Financial Officer, respectively, of Manhattan Associates, Inc. (the “Company”), hereby each certify that, to the undersigned’s knowledge:

The Quarterly Report on Form 10-Q of the Company for the quarterly period ended June 30, 2014 (the “Report”), which accompanies this Certification, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and all information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated this 29th day of July, 2014

 

/s/ Eddie Capel

Eddie Capel, President and Chief Executive Officer

/s/ Dennis B. Story

Dennis B. Story, Executive Vice President, Chief Financial Officer and Treasurer

In accordance with SEC Release No. 34-47986, this Exhibit is furnished to the SEC as an accompanying document and is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933. A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the registrant and will be retained by the registrant and furnished to the Securities and Exchange Commission or its staff upon request.

EX-101.INS 6 manh-20140630.xml XBRL INSTANCE DOCUMENT 100000000 75093714 98623000 75120619 296112 200000000 0.01 20000000 75120619 99865000 -6504000 19787000 9660000 12435000 176318000 182071000 59996000 0 3802000 751000 288618000 62270000 1692000 86694000 47900000 7335000 43200000 15037000 4551000 440000 288618000 91121000 10258000 9220000 206320000 10422000 30500000 1399892 96737000 76374180 444420 100000000 0.01 20000000 76374180 104188000 -7782000 19465000 11555000 12054000 181586000 188604000 53812000 0 3156000 764000 297828000 7131000 62272000 71136000 7300000 14342000 2049000 427000 297828000 124375000 8581000 7346000 218738000 12225000 30400000 1777384 0.40 0.39 78388000 33696000 1292000 0.349 77096000 7200000 199117000 1633000 30381000 101643000 -227000 -1000 1394000 4874000 153090000 2055000 372000 47242000 -2852000 6971000 51447000 27910000 45848000 34902000 30762000 -26167000 153269000 17440000 3900000 70104000 4040000 1886000 23322000 -3688000 63270000 3715000 16480000 -1955000 7142000 887000 87056000 3861000 2943000 2265000 4874000 22508000 -7341000 159000 13237000 -0.01 15646000 4987000 18626000 11755000 211292 163420000 24991000 123790000 38220000 125200000 54289000 68249000 2662000 14639000 1300000 23395000 2437000 20240000 4489000 18906000 6383000 12372000 151000 718000 12302000 2953000 9060000 3139000 9163000 2598000 6435000 130000 289000 MANH MANHATTAN ASSOCIATES INC false Large Accelerated Filer 2014 10-Q 2014-06-30 0001056696 --12-31 Q2 0.52 0.51 76415000 <div> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 8%"> A summary of changes in outstanding options for the&#xA0;six months ended June&#xA0;30, 2014 is as follows:</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="68%" align="center" border="0"> <tr> <td width="79%"></td> <td valign="bottom" width="13%"></td> <td></td> <td></td> <td></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Number&#xA0;of&#xA0;Options</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> <b>Outstanding at December&#xA0;31, 2013</b></p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">444,420</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> Exercised</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(147,308</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> Forfeited and expired</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(1,000</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> <b>Outstanding at June&#xA0;30, 2014</b></p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>296,112</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> </div> 21032000 871000 <div> <table style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" border="0" cellpadding="0" cellspacing="0" width="100%"> <tr> <td width="4%" valign="top" align="left"><b>3.</b></td> <td align="left" valign="top"><b>Fair Value Measurement</b></td> </tr> </table> <p style="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman"> The Company measures its investments based on a fair value hierarchy disclosure framework that prioritizes and ranks the level of market price observability used in measuring assets and liabilities at fair value. Market price observability is affected by a number of factors, including the type of asset or liability and their characteristics. This hierarchy prioritizes the inputs into three broad levels as follows:</p> <p style="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> &#xA0;</p> <table style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" border="0" cellpadding="0" cellspacing="0" width="100%"> <tr> <td width="5%">&#xA0;</td> <td width="2%" valign="top" align="left">&#x2022;</td> <td width="1%" valign="top">&#xA0;</td> <td align="left" valign="top">Level 1&#x2013;Quoted prices in active markets for identical instruments.</td> </tr> </table> <p style="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> &#xA0;</p> <table style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" border="0" cellpadding="0" cellspacing="0" width="100%"> <tr> <td width="5%">&#xA0;</td> <td width="2%" valign="top" align="left">&#x2022;</td> <td width="1%" valign="top">&#xA0;</td> <td align="left" valign="top">Level 2&#x2013;Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.</td> </tr> </table> <p style="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> &#xA0;</p> <table style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" border="0" cellpadding="0" cellspacing="0" width="100%"> <tr> <td width="5%">&#xA0;</td> <td width="2%" valign="top" align="left">&#x2022;</td> <td width="1%" valign="top">&#xA0;</td> <td align="left" valign="top">Level 3&#x2013;Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.</td> </tr> </table> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman"> The Company&#x2019;s investments are categorized as available-for-sale securities and recorded at fair market value. Investments with maturities of 90&#xA0;days or less from the date of purchase are classified as cash equivalents; investments with maturities of greater than 90&#xA0;days from the date of purchase but less than one year are generally classified as short-term investments; and investments with maturities of one year or greater from the date of purchase are generally classified as long-term investments. Unrealized holding gains and losses are reflected as a net amount in a separate component of shareholders&#x2019; equity until realized. For the purposes of computing realized gains and losses, cost is determined on a specific identification basis.</p> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman"> At June&#xA0;30, 2014, the Company&#x2019;s cash, cash equivalents, and short-term investments balances were $47.9 million, $43.2&#xA0;million, and $10.3 million, respectively. The Company currently has no long-term investments. Cash equivalents consist of highly liquid money market funds and certificates of deposit. Short-term investments consist of certificates of deposit. The Company uses quoted prices from active markets that are classified at Level 1 as a highest level observable input in the disclosure hierarchy framework for all available-for-sale securities. At June&#xA0;30, 2014 and December&#xA0;31, 2013, the Company had $30.5 million and $30.4&#xA0;million in money market funds, respectively, which are classified as Level 1 and are included in cash and cash equivalents on the Condensed Consolidated Balance Sheets. The Company has no investments classified as Level 2 or Level 3.</p> </div> 0.372 <div> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt; TEXT-INDENT: 8%"> The following table presents the revenues, expenses and operating income by reportable segment for the three and six months ended June&#xA0;30, 2014 and 2013 (in thousands):</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0"> <tr> <td width="56%"></td> <td valign="bottom" width="1%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="1%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="1%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="1%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="1%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="1%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="1%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="1%"></td> <td></td> <td></td> <td></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="30" align="center"><b>Three Months Ended June&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="14" align="center"><b>2014</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="14" align="center"><b>2013</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Americas</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>EMEA</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>APAC</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Consolidated</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Americas</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>EMEA</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>APAC</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Consolidated</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> <b>Revenue:</b></p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; TEXT-INDENT: -1em"> License</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>14,498</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>1,621</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>1,870</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>17,989</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">13,462</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,118</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,556</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">16,136</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; TEXT-INDENT: -1em"> Services</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>73,884</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>13,851</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>5,784</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>93,519</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">62,510</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">10,477</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">5,216</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">78,203</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; TEXT-INDENT: -1em"> Hardware and other</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>10,251</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>439</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>332</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>11,022</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">7,628</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">369</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">180</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">8,177</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 5em; TEXT-INDENT: -1em"> Total revenue</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>98,633</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>15,911</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>7,986</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>122,530</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">83,600</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">11,964</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">6,952</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">102,516</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 1pt"> <td height="8"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> <b>Costs and Expenses:</b></p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; TEXT-INDENT: -1em"> Cost of revenue</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>41,385</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>7,551</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>3,634</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>52,570</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">34,435</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">6,212</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">3,371</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">44,018</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; TEXT-INDENT: -1em"> Operating expenses</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>30,766</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>4,049</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>1,156</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>35,971</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">26,592</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">2,939</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,321</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">30,852</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; TEXT-INDENT: -1em"> Depreciation and amortization</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>1,355</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>72</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>62</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>1,489</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,317</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">77</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">65</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,459</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 5em; TEXT-INDENT: -1em"> Total costs and expenses</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>73,506</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>11,672</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>4,852</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>90,030</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">62,344</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">9,228</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">4,757</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">76,329</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> Operating income</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>25,127</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>4,239</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>3,134</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>32,500</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">$</td> <td valign="bottom" align="right">21,256</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">$</td> <td valign="bottom" align="right">2,736</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">$</td> <td valign="bottom" align="right">2,195</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">$</td> <td valign="bottom" align="right">26,187</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 1pt"> <td height="16"></td> <td height="16" colspan="32"></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="30" align="center"><b>Six Months Ended June&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="14" align="center"><b>2014</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="14" align="center"><b>2013</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Americas</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>EMEA</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>APAC</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Consolidated</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Americas</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>EMEA</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>APAC</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Consolidated</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> <b>Revenue:</b></p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; TEXT-INDENT: -1em"> Software license</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>25,956</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>6,071</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>3,069</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>35,096</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">24,991</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">2,437</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">2,953</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">30,381</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; TEXT-INDENT: -1em"> Services</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>144,788</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>24,715</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>10,929</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>180,432</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">123,790</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">20,240</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">9,060</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">153,090</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; TEXT-INDENT: -1em"> Hardware and other</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>19,244</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>804</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>517</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>20,565</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">14,639</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">718</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">289</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">15,646</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 5em; TEXT-INDENT: -1em"> Total revenue</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>189,988</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>31,590</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>14,515</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>236,093</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">163,420</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">23,395</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">12,302</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">199,117</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 1pt"> <td height="8"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> <b>Costs and Expenses:</b></p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; TEXT-INDENT: -1em"> Cost of revenue</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>78,034</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>15,027</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>7,061</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>100,122</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">68,249</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">12,372</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">6,435</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">87,056</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; TEXT-INDENT: -1em"> Operating expenses</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>59,986</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>8,119</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>2,338</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>70,443</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">54,289</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">6,383</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">2,598</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">63,270</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; TEXT-INDENT: -1em"> Depreciation and amortization</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>2,708</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>147</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>122</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>2,977</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">2,662</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">151</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">130</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">2,943</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 5em; TEXT-INDENT: -1em"> Total costs and expenses</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>140,728</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>23,293</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>9,521</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>173,542</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">125,200</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">18,906</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">9,163</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">153,269</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> Operating income</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>49,260</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>8,297</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>4,994</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>62,551</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">$</td> <td valign="bottom" align="right">38,220</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">$</td> <td valign="bottom" align="right">4,489</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">$</td> <td valign="bottom" align="right">3,139</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">$</td> <td valign="bottom" align="right">45,848</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> </div> <div> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt; TEXT-INDENT: 8%"> The following is a reconciliation of the net income and share amounts used in the computation of basic and diluted net earnings per common share for the three and six months ended June&#xA0;30, 2014 and 2013 (in thousands, except per share data):</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0"> <tr> <td width="56%"></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"> <b>Three&#xA0;Months&#xA0;Ended&#xA0;June&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"> <b>Six&#xA0;Months&#xA0;Ended&#xA0;June&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2014</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2013</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2014</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2013</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" colspan="6" align="center"> <b>(in&#xA0;thousands,&#xA0;except&#xA0;per&#xA0;share&#xA0;data)</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" colspan="6" align="center"> <b>(in&#xA0;thousands,&#xA0;except&#xA0;per&#xA0;share&#xA0;data)</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> Net income</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>20,594</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">17,407</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>39,306</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">30,762</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> <b>Earnings per share:</b></p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> Basic</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>0.27</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">$</td> <td valign="bottom" align="right">0.23</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>0.52</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">$</td> <td valign="bottom" align="right">0.40</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> Effect of CESs</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;</b></td> <td valign="bottom" nowrap="nowrap" align="right"> <b>&#x2014;&#xA0;&#xA0;</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(0.01</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>(0.01</b></td> <td valign="bottom" nowrap="nowrap"><b>)&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(0.01</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> Diluted</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>0.27</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">$</td> <td valign="bottom" align="right">0.22</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>0.51</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">$</td> <td valign="bottom" align="right">0.39</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 1pt"> <td height="8"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> <b>Weighted average number of shares:</b></p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> Basic</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>75,274</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">76,888</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>75,544</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">77,096</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> Effect of CESs</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>763</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,148</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>871</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,292</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> Diluted</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>76,037</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">78,036</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>76,415</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">78,388</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> </div> <div> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td valign="top" width="4%" align="left"><b>9.</b></td> <td valign="top" align="left"><b>New Accounting Pronouncement</b></td> </tr> </table> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt; TEXT-INDENT: 8%"> In May 2014, the FASB issued guidance codified in ASC 606, <i>Revenue Recognition &#x2013; Revenue from Contracts with Customers</i>, which will replace substantially all current revenue recognition guidance once it becomes effective. The new standard provides accounting guidance for all revenue arising from contracts with customers and affects all entities that enter into contracts to provide goods or services to their customers unless the contracts are in the scope of other standards. This guidance is effective for annual and interim periods beginning after December&#xA0;15, 2016. The Company is currently evaluating the impact of the provisions of ASC 606.</p> </div> <div> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td valign="top" width="4%" align="left"><b>6.</b></td> <td valign="top" align="left"><b>Net Earnings Per Share</b></td> </tr> </table> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt; TEXT-INDENT: 8%"> Basic net earnings per share is computed using net income divided by the weighted average number of shares of common stock outstanding (&#x201C;Weighted Shares&#x201D;) for each period presented. Diluted net earnings per share is computed using net income divided by the sum of Weighted Shares and common equivalent shares (&#x201C;CESs&#x201D;) outstanding for each period presented using the treasury stock method.</p> <p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px"> &#xA0;</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt; TEXT-INDENT: 8%"> The following is a reconciliation of the net income and share amounts used in the computation of basic and diluted net earnings per common share for the three and six months ended June&#xA0;30, 2014 and 2013 (in thousands, except per share data):</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0"> <tr> <td width="56%"></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"> <b>Three&#xA0;Months&#xA0;Ended&#xA0;June&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"> <b>Six&#xA0;Months&#xA0;Ended&#xA0;June&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2014</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2013</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2014</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2013</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" colspan="6" align="center"> <b>(in&#xA0;thousands,&#xA0;except&#xA0;per&#xA0;share&#xA0;data)</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" colspan="6" align="center"> <b>(in&#xA0;thousands,&#xA0;except&#xA0;per&#xA0;share&#xA0;data)</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> Net income</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>20,594</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">17,407</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>39,306</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">30,762</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> <b>Earnings per share:</b></p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> Basic</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>0.27</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">$</td> <td valign="bottom" align="right">0.23</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>0.52</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">$</td> <td valign="bottom" align="right">0.40</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> Effect of CESs</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;</b></td> <td valign="bottom" nowrap="nowrap" align="right"> <b>&#x2014;&#xA0;&#xA0;</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(0.01</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>(0.01</b></td> <td valign="bottom" nowrap="nowrap"><b>)&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(0.01</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> Diluted</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>0.27</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">$</td> <td valign="bottom" align="right">0.22</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>0.51</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">$</td> <td valign="bottom" align="right">0.39</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 1pt"> <td height="8"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> <b>Weighted average number of shares:</b></p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> Basic</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>75,274</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">76,888</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>75,544</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">77,096</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> Effect of CESs</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>763</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,148</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>871</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,292</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> Diluted</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>76,037</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">78,036</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>76,415</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">78,388</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 8%"> There were no anti-dilutive CESs during 2013 and 2014.</p> </div> 147308 0 <div> <table style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" border="0" cellpadding="0" cellspacing="0" width="100%"> <tr> <td width="4%" valign="top" align="left"><b>1.</b></td> <td align="left" valign="top"><b>Basis of Presentation, Principles of Consolidation, Stock Split and Increase of the Authorized Number of Shares of Common Stock</b></td> </tr> </table> <p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> <b>Basis of Presentation</b></p> <p style="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman"> The accompanying unaudited condensed consolidated financial statements of Manhattan Associates, Inc. and its subsidiaries (the &#x201C;Company&#x201D;) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information, with the instructions to Form 10-Q and with Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required for complete financial statements. In the opinion of management, these condensed consolidated financial statements contain all normal recurring adjustments considered necessary for a fair presentation of the Company&#x2019;s financial position at June&#xA0;30, 2014, the results of operations for the three and six months ended June&#xA0;30, 2014 and 2013, and cash flows for the six months ended June&#xA0;30, 2014 and 2013. The results for the three and six months ended June&#xA0;30, 2014 are not necessarily indicative of the results to be expected for the full year. These statements should be read in conjunction with the Company&#x2019;s audited consolidated financial statements and management&#x2019;s discussion and analysis included in the Company&#x2019;s annual report on Form 10-K for the year ended December&#xA0;31, 2013.</p> <p style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> <b>Principles of Consolidation</b></p> <p style="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman"> The accompanying condensed consolidated financial statements include the Company&#x2019;s accounts and the accounts of its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.</p> <p style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> <b>Stock Split and Increase of the Authorized Number of Shares of Common Stock</b></p> <p style="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman"> On December&#xA0;19, 2013, the Board of Directors of the Company approved a four-for-one stock split of the Company&#x2019;s common stock, effected in the form of a stock dividend. Each shareholder of record at the close of business on December&#xA0;31, 2013 received three additional shares for every outstanding share held on the record date. The additional shares were distributed on January&#xA0;10, 2014 and trading began on a split-adjusted basis on January&#xA0;13, 2014.</p> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman"> On May&#xA0;15, 2014, the shareholders of the Company approved an amendment to the Company&#x2019;s articles of incorporation to increase the authorized number of shares of common stock from 100,000,000 to 200,000,000. The amendment was effective on May&#xA0;15, 2014.</p> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman"> All references made to share or per share amounts in the accompanying condensed consolidated financial statements and applicable disclosures have been restated to reflect the effect of the four-for-one stock split for all periods presented.&#xA0;The Company retained the current par value of $0.01 per share for all shares of common stock.</p> </div> 75544000 <div> <table style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" border="0" cellpadding="0" cellspacing="0" width="100%"> <tr> <td width="4%" valign="top" align="left"><b>5.</b></td> <td align="left" valign="top"><b>Income Taxes</b></td> </tr> </table> <p style="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman"> The Company&#x2019;s effective tax rate was 37.2% and 36.5% for the three months ended June&#xA0;30, 2014 and 2013, respectively, and 37.2% and 34.9% for the six months ended June&#xA0;30, 2014 and 2013 respectively. The increase in the effective tax rate for the three months ended June&#xA0;30, 2014 is principally due to the expiration of the federal research and development tax credit. The effective tax rate for the three and six months ended June&#xA0;30, 2013 includes the benefit of the credit for the 2013 tax year, partially offset by an increase in foreign taxes. The effective tax rate for the six months ended June&#xA0;30, 2013 also includes the benefit of the credit for the 2012 tax year, partially offset by the establishment of state income tax reserves.</p> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman"> The Company applies the provisions for income taxes related to, among other things, accounting for uncertain tax positions and disclosure requirements in accordance with the Income Taxes Topic of the FASB Accounting Standards Codification (ASC 740). For the three months ended June&#xA0;30, 2014, there were no material changes to the Company&#x2019;s uncertain tax positions. There has been no change to the Company&#x2019;s policy that recognizes potential interest and penalties related to uncertain tax positions within its global operations in income tax expense.</p> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman"> The Company currently plans to permanently reinvest all of its remaining undistributed foreign earnings. Accordingly, no provision for U.S. federal and state income taxes has been provided thereon. Upon repatriation of those earnings, in the form of dividends or otherwise, the Company would be subject to both U.S. income taxes (subject to adjustment for foreign tax credits) and withholding taxes payable to various foreign countries. It is impractical to calculate the tax impact until such repatriation occurs.</p> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman"> The Company conducts business globally and, as a result, files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world. The Company is no longer subject to U.S. federal, substantially all state and local income tax examinations and substantially all non-US income tax examinations for years before 2010.</p> </div> 1000 <div> <table style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman'; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; WORD-SPACING: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td valign="top" width="4%" align="left"><b>4.</b></td> <td valign="top" align="left"><b>Equity-Based Compensation</b></td> </tr> </table> <p style="MARGIN-BOTTOM: 0pt; WHITE-SPACE: normal; TEXT-TRANSFORM: none; WORD-SPACING: 0px; COLOR: rgb(0,0,0); FONT: 10pt 'Times New Roman'; MARGIN-TOP: 6pt; LETTER-SPACING: normal; TEXT-INDENT: 8%; -webkit-text-stroke-width: 0px"> As discussed in Note 1, on December&#xA0;19, 2013, the Board of Directors of the Company approved a four-for-one stock split of the Company&#x2019;s common stock, effected in the form of a stock dividend.&#xA0;All references to stock award data have been restated to reflect the effect of the stock split for all periods presented.</p> <p style="MARGIN-BOTTOM: 0pt; WHITE-SPACE: normal; TEXT-TRANSFORM: none; WORD-SPACING: 0px; COLOR: rgb(0,0,0); FONT: 10pt 'Times New Roman'; MARGIN-TOP: 12pt; LETTER-SPACING: normal; TEXT-INDENT: 8%; -webkit-text-stroke-width: 0px"> The Company recorded equity-based compensation expense related to stock options of $11,000 and $159,000 during the three and six months ended June&#xA0;30, 2013, respectively.&#xA0;No amounts were recorded for equity-based compensation expense related to stock options during the three and six months ended June&#xA0;30, 2014 as all stock options became vested prior to 2014. The Company does not currently grant stock options.</p> <p style="MARGIN-BOTTOM: 0pt; WHITE-SPACE: normal; TEXT-TRANSFORM: none; WORD-SPACING: 0px; COLOR: rgb(0,0,0); FONT: 10pt 'Times New Roman'; MARGIN-TOP: 12pt; LETTER-SPACING: normal; TEXT-INDENT: 8%; -webkit-text-stroke-width: 0px"> A summary of changes in outstanding options for the six months ended June&#xA0;30, 2014 is as follows:</p> <p style="MARGIN-BOTTOM: 0pt; WHITE-SPACE: normal; TEXT-TRANSFORM: none; WORD-SPACING: 0px; COLOR: rgb(0,0,0); FONT: 12pt 'Times New Roman'; MARGIN-TOP: 0pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman'; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; WORD-SPACING: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="68%" align="center" border="0"> <tr> <td width="79%"></td> <td valign="bottom" width="13%"></td> <td></td> <td></td> <td></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman'"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: rgb(0,0,0) 1pt solid" valign="bottom" colspan="2" align="center"><b>Number&#xA0;of&#xA0;Options</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman'" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman'; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> <b>Outstanding at December&#xA0;31, 2013</b></p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">444,420</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman'"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman'; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> Exercised</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(147,308</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman'" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman'; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> Forfeited and expired</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(1,000</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: rgb(0,0,0) 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: rgb(0,0,0) 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman'"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman'; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> <b>Outstanding at June&#xA0;30, 2014</b></p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>296,112</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: rgb(0,0,0) 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: rgb(0,0,0) 3px double">&#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> <p style="MARGIN-BOTTOM: 0pt; WHITE-SPACE: normal; TEXT-TRANSFORM: none; WORD-SPACING: 0px; COLOR: rgb(0,0,0); FONT: 10pt 'Times New Roman'; MARGIN-TOP: 12pt; LETTER-SPACING: normal; TEXT-INDENT: 8%; -webkit-text-stroke-width: 0px"> The Company granted 38,384 and 17,020 restricted stock units (&#x201C;RSU&#x201D;) during the three months ended June&#xA0;30, 2014 and 2013, respectively, and 355,927 and 211,292 RSUs during the six months ended June&#xA0;30, 2014 and 2013, respectively. The Company recorded equity-based compensation expense related to restricted stock awards and RSUs of $2.4 million and $2.1 million during the three months ended June&#xA0;30, 2014 and 2013, respectively, and $4.7 million and $3.9 million during the six&#xA0;months ended June&#xA0;30, 2014 and 2013, respectively.</p> <p style="MARGIN-BOTTOM: 0px; WHITE-SPACE: normal; TEXT-TRANSFORM: none; WORD-SPACING: 0px; COLOR: rgb(0,0,0); FONT: 1px 'Times New Roman'; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px"> &#xA0;</p> <p style="MARGIN-BOTTOM: 0pt; WHITE-SPACE: normal; TEXT-TRANSFORM: none; WORD-SPACING: 0px; COLOR: rgb(0,0,0); FONT: 10pt 'Times New Roman'; MARGIN-TOP: 0pt; LETTER-SPACING: normal; TEXT-INDENT: 8%; -webkit-text-stroke-width: 0px"> A summary of changes in unvested shares/units for the six months ended June&#xA0;30, 2014 is as follows:</p> <p style="MARGIN-BOTTOM: 0pt; WHITE-SPACE: normal; TEXT-TRANSFORM: none; WORD-SPACING: 0px; COLOR: rgb(0,0,0); FONT: 12pt 'Times New Roman'; MARGIN-TOP: 0pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman'; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; WORD-SPACING: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="68%" align="center" border="0"> <tr> <td width="81%"></td> <td valign="bottom" width="10%"></td> <td></td> <td></td> <td></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman'"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: rgb(0,0,0) 1pt solid" valign="bottom" colspan="2" nowrap="nowrap" align="center"> <b>Number&#xA0;of&#xA0;shares/units</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman'" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman'; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> <b>Outstanding at December 31, 2013</b></p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,777,384</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman'"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman'; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> Granted</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">355,927</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman'" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman'; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> Vested</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(696,378</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman'"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman'; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> Forfeited</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(37,041</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: rgb(0,0,0) 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: rgb(0,0,0) 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman'" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman'; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> <b>Outstanding at June 30, 2014</b></p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>1,399,892</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: rgb(0,0,0) 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: rgb(0,0,0) 3px double">&#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> <br class="Apple-interchange-newline" /></div> <div> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt; TEXT-INDENT: 8%"> A summary of changes in unvested shares/units for the six months ended June&#xA0;30, 2014 is as follows:</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="68%" align="center" border="0"> <tr> <td width="81%"></td> <td valign="bottom" width="10%"></td> <td></td> <td></td> <td></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" nowrap="nowrap" align="center"> <b>Number&#xA0;of&#xA0;shares/units</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> <b>Outstanding at December 31, 2013</b></p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,777,384</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> Granted</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">355,927</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> Vested</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(696,378</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> Forfeited</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(37,041</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> <b>Outstanding at June 30, 2014</b></p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>1,399,892</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> </div> 3 <div> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td valign="top" width="4%" align="left"><b>8.</b></td> <td valign="top" align="left"><b>Operating Segments</b></td> </tr> </table> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt; TEXT-INDENT: 8%"> The Company manages the business by geographic segment. The Company has identified three geographic reportable segments: North America and Latin America (the &#x201C;Americas&#x201D;); Europe, Middle East and Africa (&#x201C;EMEA&#x201D;); and Asia Pacific (&#x201C;APAC&#x201D;). All segments derive revenue from the sale and implementation of the Company&#x2019;s supply chain execution and planning solutions. The individual products sold by the segments are similar in nature and are all designed to help companies manage the effectiveness and efficiency of their supply chain.&#xA0;The Company uses the same accounting policies for each reportable segment. The chief executive officer and chief financial officer evaluate performance based on revenue and operating results for each region.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 8%"> The Americas segment charges royalty fees to the other segments based on software licenses sold by those reportable segments. The royalties, which totaled approximately $0.9 million and $0.7 million for the three months ended June&#xA0;30, 2014 and 2013, respectively, and approximately $2.3 million and $1.3 million for the six months ended June&#xA0;30, 2014 and 2013, respectively, are included in cost of revenue for each segment with a corresponding reduction in America&#x2019;s cost of revenue. The revenues represented below are from external customers only. The geographical-based costs consist of costs of professional services personnel, direct sales and marketing expenses, cost of infrastructure to support the employees and customer base, billing and financial systems, management and general and administrative support. There are certain corporate expenses included in the Americas region that are not charged to the other segments, including research and development, certain marketing and general and administrative costs that support the global organization, and the amortization of acquired developed technology. Included in the Americas&#x2019; costs are all research and development costs including the costs associated with the Company&#x2019;s India operations.</p> <p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px"> &#xA0;</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt; TEXT-INDENT: 8%"> The following table presents the revenues, expenses and operating income by reportable segment for the three and six months ended June&#xA0;30, 2014 and 2013 (in thousands):</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0"> <tr> <td width="56%"></td> <td valign="bottom" width="1%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="1%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="1%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="1%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="1%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="1%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="1%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="1%"></td> <td></td> <td></td> <td></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="30" align="center"><b>Three Months Ended June&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="14" align="center"><b>2014</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="14" align="center"><b>2013</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Americas</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>EMEA</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>APAC</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Consolidated</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Americas</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>EMEA</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>APAC</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Consolidated</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> <b>Revenue:</b></p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; TEXT-INDENT: -1em"> License</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>14,498</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>1,621</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>1,870</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>17,989</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">13,462</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,118</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,556</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">16,136</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; TEXT-INDENT: -1em"> Services</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>73,884</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>13,851</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>5,784</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>93,519</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">62,510</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">10,477</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">5,216</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">78,203</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; TEXT-INDENT: -1em"> Hardware and other</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>10,251</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>439</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>332</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>11,022</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">7,628</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">369</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">180</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">8,177</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 5em; TEXT-INDENT: -1em"> Total revenue</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>98,633</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>15,911</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>7,986</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>122,530</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">83,600</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">11,964</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">6,952</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">102,516</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 1pt"> <td height="8"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> <b>Costs and Expenses:</b></p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; TEXT-INDENT: -1em"> Cost of revenue</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>41,385</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>7,551</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>3,634</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>52,570</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">34,435</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">6,212</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">3,371</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">44,018</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; TEXT-INDENT: -1em"> Operating expenses</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>30,766</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>4,049</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>1,156</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>35,971</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">26,592</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">2,939</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,321</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">30,852</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; TEXT-INDENT: -1em"> Depreciation and amortization</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>1,355</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>72</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>62</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>1,489</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,317</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">77</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">65</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,459</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 5em; TEXT-INDENT: -1em"> Total costs and expenses</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>73,506</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>11,672</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>4,852</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>90,030</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">62,344</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">9,228</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">4,757</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">76,329</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> Operating income</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>25,127</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>4,239</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>3,134</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>32,500</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">$</td> <td valign="bottom" align="right">21,256</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">$</td> <td valign="bottom" align="right">2,736</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">$</td> <td valign="bottom" align="right">2,195</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">$</td> <td valign="bottom" align="right">26,187</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 1pt"> <td height="16"></td> <td height="16" colspan="32"></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="30" align="center"><b>Six Months Ended June&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="14" align="center"><b>2014</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="14" align="center"><b>2013</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Americas</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>EMEA</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>APAC</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Consolidated</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Americas</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>EMEA</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>APAC</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Consolidated</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> <b>Revenue:</b></p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; TEXT-INDENT: -1em"> Software license</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>25,956</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>6,071</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>3,069</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>35,096</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">24,991</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">2,437</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">2,953</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">30,381</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; TEXT-INDENT: -1em"> Services</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>144,788</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>24,715</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>10,929</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>180,432</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">123,790</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">20,240</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">9,060</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">153,090</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; TEXT-INDENT: -1em"> Hardware and other</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>19,244</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>804</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>517</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>20,565</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">14,639</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">718</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">289</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">15,646</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 5em; TEXT-INDENT: -1em"> Total revenue</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>189,988</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>31,590</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>14,515</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>236,093</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">163,420</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">23,395</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">12,302</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">199,117</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 1pt"> <td height="8"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> <b>Costs and Expenses:</b></p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; TEXT-INDENT: -1em"> Cost of revenue</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>78,034</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>15,027</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>7,061</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>100,122</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">68,249</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">12,372</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">6,435</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">87,056</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; TEXT-INDENT: -1em"> Operating expenses</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>59,986</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>8,119</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>2,338</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>70,443</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">54,289</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">6,383</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">2,598</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">63,270</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; TEXT-INDENT: -1em"> Depreciation and amortization</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>2,708</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>147</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>122</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>2,977</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">2,662</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">151</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">130</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">2,943</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 5em; TEXT-INDENT: -1em"> Total costs and expenses</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>140,728</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>23,293</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>9,521</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>173,542</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">125,200</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">18,906</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">9,163</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">153,269</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> Operating income</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>49,260</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>8,297</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>4,994</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>62,551</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">$</td> <td valign="bottom" align="right">38,220</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">$</td> <td valign="bottom" align="right">4,489</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">$</td> <td valign="bottom" align="right">3,139</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;</font></td> <td valign="bottom">$</td> <td valign="bottom" align="right">45,848</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 8%"> License revenues related to the Company&#x2019;s warehouse and non-warehouse product groups for the three and six months ended June&#xA0;30, 2014 and 2013 are as follows (in thousands):</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0"> <tr> <td width="66%"></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"> <b>Three&#xA0;Months&#xA0;Ended&#xA0;June&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"> <b>Six&#xA0;Months&#xA0;Ended&#xA0;June&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2014</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2013</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2014</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2013</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> Warehouse</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>9,373</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">9,375</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>20,041</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">18,626</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> Non-Warehouse</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>8,616</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">6,761</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>15,055</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">11,755</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; TEXT-INDENT: -1em"> Total software license revenue</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;&#xA0;</font></td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>17,989</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;&#xA0;</font></td> <td valign="bottom">$</td> <td valign="bottom" align="right">16,136</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;&#xA0;</font></td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>&#xA0;&#xA0;35,096</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;&#xA0;</font></td> <td valign="bottom">$</td> <td valign="bottom" align="right">&#xA0;&#xA0;30,381</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 8%"> The Company&#x2019;s services revenues, which consist of fees generated from professional services and customer support and software enhancements related to its software products, for the three and six months ended June&#xA0;30, 2014 and 2013 are as follows (in thousands):</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0"> <tr> <td width="66%"></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"> <b>Three&#xA0;Months&#xA0;Ended&#xA0;June&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"> <b>Six&#xA0;Months&#xA0;Ended&#xA0;June&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2014</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2013</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2014</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2013</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> Professional services</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>65,702</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">52,492</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>125,124</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">101,643</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> Customer support and software enhancements</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>27,817</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">25,711</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>55,308</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">51,447</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; TEXT-INDENT: -1em"> Total services revenue</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;&#xA0;</font></td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>93,519</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;&#xA0;</font></td> <td valign="bottom">$</td> <td valign="bottom" align="right">78,203</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;&#xA0;</font></td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>180,432</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;&#xA0;</font></td> <td valign="bottom">$</td> <td valign="bottom" align="right">153,090</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> </div> <div> <table style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" border="0" cellpadding="0" cellspacing="0" width="100%"> <tr> <td width="4%" valign="top" align="left"><b>7.</b></td> <td align="left" valign="top"><b>Contingencies</b></td> </tr> </table> <p style="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman"> From time to time, the Company may be involved in litigation relating to claims arising out of its ordinary course of business, and occasionally legal proceedings not in the ordinary course. Many of the Company&#x2019;s installations involve products that are critical to the operations of its clients&#x2019; businesses. Any failure in a Company product could result in a claim for substantial damages against the Company, regardless of the Company&#x2019;s responsibility for such failure. Although the Company attempts to limit contractually its liability for damages arising from product failures or negligent acts or omissions, there can be no assurance that the limitations of liability set forth in its contracts will be enforceable in all instances. The Company is not currently a party to any legal proceedings the result of which it believes is likely to have a material adverse impact upon its business, financial position, results of operations, or cash flows. The Company expenses legal costs associated with loss contingencies as such legal costs are incurred.</p> </div> 8500000 236093000 3580000 35096000 125124000 4305000 15000 79000 6916000 180432000 1441000 174000 62630000 1277000 15320000 55308000 40583000 62551000 58305000 39306000 -50560000 173542000 21905000 4700000 79917000 4670000 -33254000 24868000 -5021000 70443000 3461000 23324000 1295000 5910000 -8786000 100122000 829000 2977000 879000 6916000 23670000 -4148000 0 16744000 -0.01 20565000 2014-01-13 <div> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td valign="top" width="4%" align="left"><b>2.</b></td> <td valign="top" align="left"><b>Revenue Recognition</b></td> </tr> </table> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt; TEXT-INDENT: 8%"> The Company&#x2019;s revenue consists of fees from the licensing and hosting of software (collectively included in &#x201C;Software license&#x201D; revenue in the Condensed Consolidated Statements of Income), fees from implementation and training services (collectively, &#x201C;professional services&#x201D;) and customer support services and software enhancements (collectively with professional services revenue included in &#x201C;Services&#x201D; revenue in the Condensed Consolidated Statements of Income), and sales of hardware and other revenue, which consists of reimbursements of out-of-pocket expenses incurred in connection with our professional services (collectively included in &#x201C;Hardware and other&#x201D; revenue in the Condensed Consolidated Statements of Income). All revenue is recognized net of any related sales taxes.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 8%"> The Company recognizes license revenue when the following criteria are met: (1)&#xA0;a signed contract is obtained covering all elements of the arrangement, (2)&#xA0;delivery of the product has occurred, (3)&#xA0;the license fee is fixed or determinable, and (4)&#xA0;collection is probable. Revenue recognition for software with multiple-element arrangements requires recognition of revenue using the &#x201C;residual method&#x201D; when (a)&#xA0;there is vendor-specific objective evidence (VSOE) of the fair values of all undelivered elements in a multiple-element arrangement that is not accounted for using long-term contract accounting, (b)&#xA0;VSOE of fair value does not exist for one or more of the delivered elements in the arrangement, and (c)&#xA0;all other applicable revenue-recognition criteria for software revenue recognition are satisfied. For those contracts that contain significant customization or modifications, license revenue is recognized using contract accounting.</p> <p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px"> &#xA0;</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt; TEXT-INDENT: 8%"> The Company allocates revenue to customer support services and software enhancements and any other undelivered elements of the arrangement based on VSOE of fair value of each element and such amounts are deferred until the applicable delivery criteria and other revenue recognition criteria have been met. The balance of the revenue, net of any discounts inherent in the arrangement, is recognized at the outset of the arrangement using the residual method as the product licenses are delivered. If the Company cannot objectively determine the fair value of each undelivered element based on the VSOE of fair value, the Company defers revenue recognition until all elements are delivered, all services have been performed, or until fair value can be objectively determined. The Company must apply judgment in determining all elements of the arrangement and in determining the VSOE of fair value for each element, considering the price charged for each product on a stand-alone basis or applicable renewal rates. For arrangements that include future software functionality deliverables, the Company accounts for these deliverables as a separate element of the arrangement. Because the Company does not sell these deliverables on a standalone basis, the Company is not able to establish VSOE of fair value of these deliverables. As a result, the Company defers all revenue under the arrangement until the future functionality has been delivered to the customer.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 8%"> Payment terms for the Company&#x2019;s software licenses vary. Each contract is evaluated individually to determine whether the fees in the contract are fixed or determinable and whether collectability is probable. Judgment is required in assessing the probability of collection, which is generally based on evaluation of customer-specific information, historical collection experience, and economic market conditions. If market conditions decline, or if the financial conditions of customers deteriorate, the Company may be unable to determine that collectability is probable, and the Company could be required to defer the recognition of revenue until the Company receives customer payments. The Company has an established history of collecting under the terms of its software license contracts without providing refunds or concessions to its customers. Therefore, the Company has determined that the presence of payment terms that extend beyond contract execution in a particular contract do not preclude the conclusion that the fees in the contract are fixed or determinable. Although infrequent, when payment terms in a contract extend beyond twelve months, the Company has determined that such fees are not fixed or determinable and recognizes revenue as payments become due provided that all other conditions for revenue recognition have been met.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 8%"> The Company&#x2019;s services revenue consists of fees generated from professional services and customer support and software enhancements related to the Company&#x2019;s software products. Professional services include system planning, design, configuration, testing, and other software implementation support and are not typically essential to the functionality of our software. Fees from professional services performed by the Company are separately priced and are generally billed on an hourly basis, and revenue is recognized as the services are performed. In certain situations, professional services are rendered under agreements in which billings are limited to contractual maximums or based upon a fixed fee for portions of or all of the engagement. Revenue related to fixed-fee-based contracts is recognized on a proportional performance basis based on the hours incurred on discrete projects within an overall services arrangement. The Company has determined that output measures, or services delivered, approximate the input measures associated with fixed-fee services arrangements. Project losses are provided for in their entirety in the period in which they become known. Revenue related to customer support services and software enhancements is generally paid in advance and recognized ratably over the term of the agreement, typically twelve months.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 8%"> Hardware and other revenue is generated from the resale of a variety of hardware products, developed and manufactured by third parties, that are integrated with and complementary to the Company&#x2019;s software solutions. As part of a complete solution, the Company&#x2019;s customers periodically purchase hardware from the Company for use with the software licenses purchased from the Company. These products include computer hardware, radio frequency terminal networks, radio frequency identification (RFID) chip readers, bar code printers and scanners, and other peripherals. Hardware revenue is recognized upon shipment to the customer when title passes. The Company generally purchases hardware from the Company&#x2019;s vendors only after receiving an order from a customer. As a result, the Company generally does not maintain hardware inventory.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 8%"> In accordance with the other presentation matters within the Revenue Recognition Topic of the Financial Accounting Standards Board&#x2019;s (FASB) Accounting Standards Codification (ASC), the Company recognizes amounts associated with reimbursements from customers for out-of-pocket expenses as revenue. Such amounts have been included in &#x201C;Hardware and other&#x201D; revenue in the Condensed Consolidated Statements of Income. The total amount of expense reimbursement recorded to revenue was $4.9 million and $3.9 million for the three months ended June&#xA0;30, 2014 and 2013, respectively, and $8.5 million and $7.2 million for the six&#xA0;months ended June&#xA0;30, 2014 and 2013, respectively.</p> </div> 6954000 2014-01-10 <div> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 8%"> The Company&#x2019;s services revenues, which consist of fees generated from professional services and customer support and software enhancements related to its software products, for the three and six months ended June&#xA0;30, 2014 and 2013 are as follows (in thousands):</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0"> <tr> <td width="66%"></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"> <b>Three&#xA0;Months&#xA0;Ended&#xA0;June&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"> <b>Six&#xA0;Months&#xA0;Ended&#xA0;June&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2014</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2013</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2014</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2013</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> Professional services</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>65,702</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">52,492</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>125,124</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">101,643</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em"> Customer support and software enhancements</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>27,817</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">25,711</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"><b>&#xA0;</b></td> <td valign="bottom" align="right"><b>55,308</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">51,447</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF"> <td valign="top"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; TEXT-INDENT: -1em"> Total services revenue</p> </td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;&#xA0;</font></td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>93,519</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;&#xA0;</font></td> <td valign="bottom">$</td> <td valign="bottom" align="right">78,203</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;&#xA0;</font></td> <td valign="bottom"><b>$</b></td> <td valign="bottom" align="right"><b>180,432</b></td> <td valign="bottom" nowrap="nowrap"><b>&#xA0;&#xA0;</b></td> <td valign="bottom"><font style="FONT-SIZE: 8pt">&#xA0;&#xA0;</font></td> <td valign="bottom">$</td> <td valign="bottom" align="right">153,090</td> <td valign="bottom" nowrap="nowrap">&#xA0;&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> </div> 20041000 15055000 <div> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 8%"> License revenues related to the Company&#x2019;s warehouse and non-warehouse product groups for the three and six months ended June&#xA0;30, 2014 and 2013 are as follows (in thousands):</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" 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