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Supplemental Guarantor Condensed Consolidating Financials
9 Months Ended
Sep. 30, 2014
Condensed Financial Information of Parent Company Only Disclosure [Abstract]  
SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIALS
SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIALS
The Company’s debt issued in May 2010 is fully and unconditionally and jointly and severally guaranteed by Aspect Software Parent, Inc. and each of its domestic subsidiaries. Aspect Software Inc. is the issuer of the Company’s debt. Each of the guarantor subsidiaries is 100% owned, directly or indirectly by Aspect Software Parent, Inc. The following represents the supplemental condensed financial information of Aspect Software Parent, Inc. and its guarantor and non-guarantor subsidiaries, as of September 30, 2014 and December 31, 2013, and for the three and nine months ended September 30, 2014 and 2013.

Supplemental Condensed Consolidating Balance Sheet (unaudited)
September 30, 2014
 
(in thousands)
 
Issuer /
Guarantor
Subsidiaries
 
Non-guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Assets
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
424

 
$
11,819

 
$
—

 
$
12,243

Accounts receivable, net
 
60,907

 
67,158

 
(72,390
)
 
55,675

Receivable due from Aspect Software Group Holdings Ltd.
 
1,224

 
—

 
—

 
1,224

Deferred tax assets
 
7,934

 
1,726

 
—

 
9,660

Other current assets
 
14,039

 
5,664

 
—

 
19,703

Total current assets
 
84,528

 
86,367

 
(72,390
)
 
98,505

Property, plant, and equipment, net
 
17,538

 
2,692

 
—

 
20,230

Intangible assets, net
 
53,519

 
9,347

 
—

 
62,866

Goodwill
 
717,332

 
33,526

 
—

 
750,858

Investment in subsidiaries
 
62,287

 
—

 
(62,287
)
 
—

Other assets
 
8,507

 
9,036

 
—

 
17,543

Total assets
 
$
943,711

 
$
140,968

 
$
(134,677
)
 
$
950,002

Liabilities and shareholder's equity (deficit)
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
Accounts payable
 
$
53,509

 
$
30,618

 
$
(72,390
)
 
$
11,737

Current portion of long-term debt
 
10,663

 
—

 
—

 
10,663

Accrued liabilities
 
38,519

 
13,039

 
—

 
51,558

Deferred revenues
 
59,160

 
22,519

 
—

 
81,679

Total current liabilities
 
161,851

 
66,176

 
(72,390
)
 
155,637

Deferred tax liabilities
 
21,943

 
450

 
—

 
22,393

Long-term deferred revenue
 
1,924

 
945

 
—

 
2,869

Long-term debt
 
765,823

 
—

 
—

 
765,823

Other long-term liabilities
 
39,089

 
11,110

 
—

 
50,199

Total liabilities
 
990,630

 
78,681

 
(72,390
)
 
996,921

Total Aspect Software Parent, Inc. shareholders’ (deficit) equity
 
(46,919
)
 
58,272

 
(62,287
)
 
(50,934
)
Noncontrolling interest
 
—

 
4,015

 
—

 
4,015

Total shareholder's (deficit) equity
 
(46,919
)
 
62,287

 
(62,287
)
 
(46,919
)
Total liabilities and shareholder's (deficit) equity
 
$
943,711

 
$
140,968

 
$
(134,677
)
 
$
950,002

Supplemental Condensed Consolidating Balance Sheet (unaudited)
December 31, 2013
 
(in thousands)
 
Issuer /
Guarantor
Subsidiaries
 
Non-guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Assets
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
3,764

 
$
22,930

 
$
—

 
$
26,694

Accounts receivable, net
 
76,387

 
50,657

 
(68,042
)
 
59,002

Receivable due from Aspect Software Group Holdings Ltd.
 
2,621

 
—

 
—

 
2,621

Deferred tax assets
 
7,934

 
1,263

 
—

 
9,197

Other current assets
 
14,958

 
6,062

 
—

 
21,020

Total current assets
 
105,664

 
80,912

 
(68,042
)
 
118,534

Property, plant, and equipment, net
 
16,396

 
2,071

 
—

 
18,467

Intangible assets, net
 
61,922

 
10,910

 
—

 
72,832

Goodwill
 
717,334

 
33,451

 
—

 
750,785

Investment in subsidiaries
 
45,047

 
—

 
(45,047
)
 
—

Other assets
 
13,094

 
8,987

 
—

 
22,081

Total assets
 
$
959,457

 
$
136,331

 
$
(113,089
)
 
$
982,699

Liabilities and shareholder's equity (deficit)
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
Accounts payable
 
$
35,963

 
$
39,937

 
$
(68,042
)
 
$
7,858

Current portion of long-term debt
 
37,851

 
—

 
—

 
37,851

Accrued liabilities
 
49,354

 
12,613

 
—

 
61,967

Deferred revenues
 
52,330

 
24,340

 
—

 
76,670

Total current liabilities
 
175,498

 
76,890

 
(68,042
)
 
184,346

Deferred tax liabilities
 
31,425

 
451

 
—

 
31,876

Long-term deferred revenue
 
3,047

 
1,408

 
—

 
4,455

Long-term debt
 
770,079

 
—

 
—

 
770,079

Other long-term liabilities
 
24,068

 
12,535

 
—

 
36,603

Total liabilities
 
1,004,117

 
91,284

 
(68,042
)
 
1,027,359

Total Aspect Software Parent, Inc. shareholders’ (deficit) equity
 
(44,660
)
 
39,777

 
(45,047
)
 
(49,930
)
Noncontrolling interest
 
—

 
5,270

 
—

 
5,270

Total shareholder's (deficit) equity
 
(44,660
)
 
45,047

 
(45,047
)
 
(44,660
)
Total liabilities and shareholder's (deficit) equity
 
$
959,457

 
$
136,331

 
$
(113,089
)
 
$
982,699



Supplemental Condensed Consolidating Statement of Operations (unaudited)
For the Three Months Ended September 30, 2014

(in thousands)
 
Issuer /
Guarantor
Subsidiaries
 
Non-guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net revenues
 
$
74,048

 
$
49,156

 
$
(9,754
)
 
$
113,450

Cost of revenues
 
35,233

 
23,218

 
(9,754
)
 
48,697

Gross profit
 
38,815

 
25,938

 
—

 
64,753

Operating expenses:
 
 
 
 
 
 
 
 
Research and development
 
9,290

 
3,210

 
—

 
12,500

Selling, general and administrative
 
17,327

 
12,234

 
—

 
29,561

Amortization expense for acquired intangible assets
 
1,741

 
294

 
—

 
2,035

Total operating expenses
 
28,358

 
15,738

 
—

 
44,096

Income from operations
 
10,457

 
10,200

 
—

 
20,657

Interest and other income (expense), net
 
(15,109
)
 
(4,099
)
 
—

 
(19,208
)
(Loss) income before income taxes
 
(4,652
)
 
6,101

 
—

 
1,449

(Benefit from) provision for income taxes
 
(1,897
)
 
1,051

 
—

 
(846
)
Equity in earnings of subsidiaries
 
5,559

 
—

 
(5,559
)
 
—

Net income (loss)
 
2,804

 
5,050

 
(5,559
)
 
2,295

Less: Net loss attributable to noncontrolling interest
 
—

 
(509
)
 
—

 
(509
)
Net income (loss) attributable to Aspect Software Parent, Inc.
 
$
2,804

 
$
5,559

 
$
(5,559
)
 
$
2,804

  
For the Three Months Ended September 30, 2013
(in thousands)
 
Issuer /
Guarantor
Subsidiaries
 
Non-guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net revenues
 
$
74,703

 
$
39,412

 
$
(5,603
)
 
$
108,512

Cost of revenues
 
32,895

 
17,332

 
(5,603
)
 
44,624

Gross profit
 
41,808

 
22,080

 
—

 
63,888

Operating expenses:
 
 
 
 
 
 
 
 
Research and development
 
11,409

 
2,234

 
—

 
13,643

Selling, general and administrative
 
22,617

 
11,358

 
—

 
33,975

Amortization expense for acquired intangible assets
 
6,540

 
256

 
—

 
6,796

Total operating expenses
 
40,566

 
13,848

 
—

 
54,414

Income from operations
 
1,242

 
8,232

 
—

 
9,474

Interest and other income (expense), net
 
54

 
(18,744
)
 
—

 
(18,690
)
Income (loss) before income taxes
 
1,296

 
(10,512
)
 
—

 
(9,216
)
Provision for (benefit from) income taxes
 
(19,308
)
 
2,173

 
—

 
(17,135
)
Equity in earnings of subsidiaries
 
(12,513
)
 
—

 
12,513

 
—

Net income (loss)
 
$
8,091

 
$
(12,685
)
 
$
12,513

 
$
7,919

Supplemental Condensed Consolidating Statement of Operations (unaudited)
For the Nine Months Ended September 30, 2014
 
(in thousands)
 
Issuer /
Guarantor
Subsidiaries
 
Non-guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net revenues
 
$
219,090

 
$
129,284

 
$
(19,652
)
 
$
328,722

Cost of revenues
 
104,685

 
57,767

 
(19,652
)
 
142,800

Gross profit
 
114,405

 
71,517

 
—

 
185,922

Operating expenses:
 
 
 
 
 
 
 
 
Research and development
 
29,894

 
9,297

 
—

 
39,191

Selling, general and administrative
 
59,987

 
34,134

 
—

 
94,121

Amortization expense for acquired intangible assets
 
5,324

 
881

 
—

 
6,205

Total operating expenses
 
95,205

 
44,312

 
—

 
139,517

Income from operations
 
19,200

 
27,205

 
—

 
46,405

Interest and other income (expense), net
 
(48,703
)
 
(8,388
)
 
—

 
(57,091
)
(Loss) income before income taxes
 
(29,503
)
 
18,817

 
—

 
(10,686
)
(Benefit from) provision for income taxes
 
(4,037
)
 
2,804

 
—

 
(1,233
)
Equity in earnings of subsidiaries
 
17,268

 
—

 
(17,268
)
 
—

Net (loss) income
 
(8,198
)
 
16,013

 
(17,268
)
 
(9,453
)
Less: Net loss attributable to noncontrolling interest
 
—

 
(1,255
)
 
—

 
(1,255
)
Net (loss) income attributable to Aspect Software Parent, Inc.
 
$
(8,198
)
 
$
17,268

 
$
(17,268
)
 
$
(8,198
)
For the Nine Months Ended September 30, 2013
 
(in thousands)
 
Issuer /
Guarantor
Subsidiaries
 
Non-guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net revenues
 
$
214,392

 
$
114,935

 
$
(15,844
)
 
$
313,483

Cost of revenues
 
93,146

 
48,538

 
(15,844
)
 
125,840

Gross profit
 
121,246

 
66,397

 
—

 
187,643

Operating expenses:
 
 
 
 
 
 
 
 
Research and development
 
31,270

 
6,225

 
—

 
37,495

Selling, general and administrative
 
63,742

 
30,738

 
—

 
94,480

Amortization expense for acquired intangible assets
 
20,692

 
795

 
—

 
21,487

Restructuring credits
 
(44
)
 
(2
)
 
—

 
(46
)
Total operating expenses
 
115,660

 
37,756

 
—

 
153,416

Income from operations
 
5,586

 
28,641

 
—

 
34,227

Interest and other income (expense), net
 
(17,750
)
 
(33,064
)
 
—

 
(50,814
)
Loss before income taxes
 
(12,164
)
 
(4,423
)
 
—

 
(16,587
)
 (Benefit from) provision for income taxes
 
(18,686
)
 
456

 
—

 
(18,230
)
Equity in earnings of subsidiaries
 
(4,879
)
 
—

 
4,879

 
—

Net income (loss)
 
$
1,643

 
$
(4,879
)
 
$
4,879

 
$
1,643


Supplemental Condensed Consolidating Statement of Comprehensive Income (Loss) (unaudited)
For the Three Months Ended September 30, 2014

(in thousands)
 
Issuer /
Guarantor
Subsidiaries
 
Non-guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net income (loss)
 
$
2,804

 
$
5,050

 
$
(5,559
)
 
$
2,295

Change in cumulative translation adjustment
 
(151
)
 
918

 
(8
)
 
759

Comprehensive income (loss)
 
2,653

 
5,968

 
(5,567
)
 
3,054

Comprehensive loss attributable to noncontrolling interest
 
—

 
(509
)
 
—

 
(509
)
Comprehensive (loss) income attributable to Aspect Software Parent, Inc.
 
$
2,653

 
$
6,477

 
$
(5,567
)
 
$
3,563

For the Three Months Ended September 30, 2013

(in thousands)
 
Issuer /
Guarantor
Subsidiaries
 
Non-guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net income (loss)
 
$
8,091

 
$
(12,685
)
 
$
12,513

 
$
7,919

Change in cumulative translation adjustment
 
559

 
(1,389
)
 
(5
)
 
(835
)
Comprehensive income (loss)
 
$
8,650

 
$
(14,074
)
 
$
12,508

 
$
7,084


For the Nine Months Ended September 30, 2014
(in thousands)
 
Issuer /
Guarantor
Subsidiaries
 
Non-guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net (loss) income
 
$
(8,198
)
 
$
16,013

 
$
(17,268
)
 
$
(9,453
)
Change in cumulative translation adjustment
 
(248
)
 
183

 
(15
)
 
(80
)
Comprehensive (loss) income
 
(8,446
)
 
16,196

 
(17,283
)
 
(9,533
)
Comprehensive loss attributable to noncontrolling interest
 
—

 
(1,255
)
 
—

 
(1,255
)
Comprehensive (loss) income attributable to Aspect Software Parent, Inc.
 
$
(8,446
)
 
$
17,451

 
$
(17,283
)
 
$
(8,278
)
For the Nine Months Ended September 30, 2013
 
(in thousands)
 
Issuer /
Guarantor
Subsidiaries
 
Non-guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net income (loss)
 
$
1,643

 
$
(4,879
)
 
$
4,879

 
$
1,643

Change in cumulative translation adjustment
 
830

 
(1,535
)
 
(53
)
 
(758
)
Comprehensive income (loss)
 
$
2,473

 
$
(6,414
)
 
$
4,826

 
$
885


Supplemental Condensed Consolidating Statement of Cash Flows (unaudited)
For the Nine Months Ended September 30, 2014
 
(in thousands)
 
Issuer /
Guarantor
Subsidiaries
 
Non-guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Operating activities:
 
 
 
 
 
 
 
 
Net cash provided by (used in ) operating activities
 
$
28,480

 
$
(9,349
)
 
$
—

 
$
19,131

Investing activities:
 
 
 
 
 
 
 
 
Purchases of property and equipment
 
$
(7,024
)
 
$
(1,636
)
 
$
—

 
$
(8,660
)
Net cash used in investing activities
 
(7,024
)
 
(1,636
)
 
—

 
(8,660
)
Financing activities:
 
 
 
 
 
 
 
 
Repayment of borrowings
 
(46,800
)
 
—

 
—

 
(46,800
)
Borrowings under debt facilities
 
15,000

 
 
 
 
 
15,000

Proceeds received from capital contribution
 
7,004

 
 
 
 
 
7,004

Net cash used in by financing activities
 
(24,796
)
 
—

 
—

 
(24,796
)
Effect of exchange rate changes on cash
 
—

 
(126
)
 
—

 
(126
)
Net change in cash and cash equivalents
 
(3,340
)
 
(11,111
)
 
—

 
(14,451
)
Cash and cash equivalents:
 
 
 
 
 
 
 
 
Beginning of period
 
3,764

 
22,930

 
—

 
26,694

End of period
 
$
424

 
$
11,819

 
$
—

 
$
12,243


Supplemental Condensed Consolidating Statement of Cash Flows (unaudited)
For the Nine Months Ended September 30, 2013
 
(in thousands)
 
Issuer /
Guarantor
Subsidiaries
 
Non-guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Operating activities:
 
 
 
 
 
 
 
 
Net cash provided by operating activities
 
$
47,758

 
$
(32,361
)
 
$
—

 
$
15,397

Investing activities:
 
 
 
 
 
 
 
 
Cash paid for acquisitions, net of cash acquired
 
(135,163
)
 
(6,901
)
 
—

 
(142,064
)
Purchases of property and equipment
 
(7,981
)
 
(972
)
 
—

 
(8,953
)
Purchase of investment
 
$
—

 
$
(1,852
)
 
$
—

 
$
(1,852
)
Net cash used in investing activities
 
(143,144
)
 
(9,725
)
 
—

 
(152,869
)
Financing activities:
 
 
 
 
 
 
 
 
Repayment of borrowings
 
(16,100
)
 
—

 
—

 
(16,100
)
Borrowings under debt facilities
 
110,000

 
—

 
—

 
110,000

Debt issuance costs in connection with borrowings
 
(5,538
)
 


 


 
(5,538
)
Net cash provided by financing activities
 
88,362

 
—

 
—

 
88,362

Effect of exchange rate changes on cash
 
—

 
(1,034
)
 
—

 
(1,034
)
Net change in cash and cash equivalents
 
(7,024
)
 
(43,120
)
 
—

 
(50,144
)
Cash and cash equivalents:
 
 
 
 
 
 
 
 
Beginning of period
 
11,093

 
69,745

 
—

 
80,838

End of period
 
$
4,069

 
$
26,625

 
$
—

 
$
30,694