Delaware | 001-38711 | 81-0753267 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered |
Common Stock, $0.001 par value | SWI | New York Stock Exchange |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition. |
Item 9.01 | Financial Statements and Exhibits. |
(d) | Exhibits. |
Exhibit Number | Description | |
Press release issued by SolarWinds Corporation dated August 1, 2019. |
SOLARWINDS CORPORATION | |||
Dated: | August 1, 2019 | By: | /s/ Kevin B. Thompson |
Kevin B. Thompson | |||
President and Chief Executive Officer | |||
• | Total revenue for the second quarter of $228.7 million, representing 13.4% growth on a reported basis. |
• | Total recurring revenue for the second quarter of $189.6 million, representing 15.6% growth on a reported basis. Total recurring revenue includes: |
◦ | Maintenance revenue for the second quarter of $110.8 million, representing 12.2% growth on a reported basis. |
◦ | Subscription revenue for the second quarter of $78.8 million, representing 20.8% growth on a reported basis. |
• | Net loss for the second quarter of $2.1 million. |
• | Non-GAAP total revenue for the second quarter of $230.6 million, representing 13.7% year-over-year growth and 15.4% year-over-year growth on a constant currency basis. |
• | Non-GAAP total recurring revenue for the second quarter of $191.4 million, representing 15.9% year-over-year growth and 17.8% year-over-year growth on a constant currency basis. Non-GAAP total recurring revenue includes: |
◦ | Non-GAAP maintenance revenue for the second quarter of $110.8 million, representing 11.3% growth on a reported basis. |
◦ | Non-GAAP subscription revenue for the second quarter of $80.6 million, representing 22.9% growth on a reported basis. |
• | Adjusted EBITDA for the second quarter of $110.9 million, representing a margin of 48.1% of non-GAAP total revenue. |
• | SolarWinds introduced SolarWinds Service Desk (SWSD), making IT service management (ITSM) accessible to companies of all sizes through the availability of affordable and easy to use service desk software that helps them address the mounting pressures associated with digital business transformation and process automation. SWSD is based on technology acquired from Samanage during the second quarter. |
• | SolarWinds announced the launch of SolarWinds Security Event Manager (SEM), a simple, powerful, and affordable SIEM solution designed to help IT security professional strengthen their security posture by providing increased visibility into cyber-security activity. SEM, which replaces SolarWinds Log & Event Manager, can be used to collect and normalize event logs generated across on-premises networks and systems into a central location, detect and protect against advanced cyber-threats, respond to cyber-incidents with unique user-defined actions, and help demonstrate regulatory and industry compliance. |
• | SolarWinds announced the launch of SolarWinds Passportal suite, a unified set of password management and privileged client knowledge management tools, adding to its IT security product portfolio. |
• | Non-GAAP total revenue in the range of $241.5 to $246.0 million, representing growth over the third quarter of 2018 non-GAAP total revenue of 13% to 15%, or 14% to 16% on a constant currency basis assuming the same average foreign currency exchange rates as those in the third quarter of 2018. |
• | Adjusted EBITDA in the range of $112.0 to $113.5 million, representing approximately 46% of non-GAAP total revenue. |
• | Non-GAAP diluted earnings per share of $0.19 to $0.20. |
• | Weighted average outstanding diluted shares of approximately 311.5 million. |
• | Non-GAAP total revenue in the range of $938.0 to $950.0 million, representing growth over 2018 non-GAAP revenue of 12% to 14%, or 13% to 15% on a constant currency basis assuming the same average foreign currency exchange rates as those in 2018. |
• | Adjusted EBITDA in the range of $450.0 to $453.0 million, representing approximately 48% of non-GAAP total revenue. |
• | Non-GAAP diluted earnings per share of $0.81 to $0.82. |
• | Weighted average outstanding diluted shares of approximately 311.7 million. |
• | Amortization of Acquired Intangible Assets. We provide non-GAAP information that excludes expenses related to purchased intangible assets associated with our acquisitions. We believe that eliminating this expense from our non-GAAP measures is useful to investors, because the amortization of acquired intangible assets can be inconsistent in amount and frequency and is significantly impacted by the timing and magnitude of our acquisition transactions, which also vary in frequency from period to period. Accordingly, we analyze the performance of our operations in each period without regard to such expenses. |
• | Stock-Based Compensation Expense and Related Employer-paid Payroll Taxes. We provide non-GAAP information that excludes expenses related to stock-based compensation and related employer-paid payroll taxes. We believe that the exclusion of stock-based compensation expense provides for a better comparison of our operating results to prior periods and to our peer companies as the calculations of stock-based compensation vary from period to period and company to company due to different valuation methodologies, subjective assumptions and the variety of award types. Employer-paid payroll taxes on stock-based compensation is dependent on our stock price and the timing of the taxable events related to the equity awards, over which our management has little control, and does not correlate to the core operation of our business. Because of these unique characteristics of stock-based compensation and related employer-paid payroll taxes, management excludes these expenses when analyzing the organization’s business performance. |
• | Acquisition and Sponsor Related Costs. We exclude certain expense items resulting from our take private transaction in early 2016 and other acquisitions, such as legal, accounting and advisory fees, changes in fair value of contingent consideration, costs related to integrating the acquired businesses, deferred compensation, severance and retention expense. We consider these adjustments, to some extent, to be unpredictable and dependent on a significant number of factors that are outside of our control. Furthermore, acquisitions result in operating expenses that would not otherwise have been incurred by us in the normal course of our organic business operations. We believe that providing these non-GAAP measures that exclude acquisition and Sponsor related costs, allows users of our financial statements to better |
• | Restructuring Charges and Other. We provide non-GAAP information that excludes restructuring charges such as severance and the estimated costs of exiting and terminating facility lease commitments, as they relate to our corporate restructuring and exit activities and charges related to the separation of employment with executives of the Company. These charges are inconsistent in amount and are significantly impacted by the timing and nature of these events. Therefore, although we may incur these types of expenses in the future, we believe that eliminating these charges for purposes of calculating the non-GAAP financial measures facilitates a more meaningful evaluation of our operating performance and comparisons to our past operating performance. |
Investors: | Media: | ||
Dave Hafner Phone: 385.374.7059 ir@solarwinds.com | Tiffany Nels Phone: 512.682.9535 pr@solarwinds.com |
June 30, | December 31, | ||||||
2019 | 2018 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 155,290 | $ | 382,620 | |||
Accounts receivable, net of allowances of $3,404 and $3,196 as of June 30, 2019 and December 31, 2018, respectively | 96,293 | 100,528 | |||||
Income tax receivable | 732 | 893 | |||||
Prepaid and other current assets | 27,756 | 16,267 | |||||
Total current assets | 280,071 | 500,308 | |||||
Property and equipment, net | 37,921 | 35,864 | |||||
Deferred taxes | 6,854 | 6,873 | |||||
Goodwill | 3,990,044 | 3,683,961 | |||||
Intangible assets, net | 873,144 | 956,261 | |||||
Other assets, net | 19,328 | 11,382 | |||||
Total assets | $ | 5,207,362 | $ | 5,194,649 | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 11,492 | $ | 9,742 | |||
Accrued liabilities and other | 49,022 | 52,055 | |||||
Accrued interest payable | 846 | 290 | |||||
Income taxes payable | 9,436 | 15,682 | |||||
Current portion of deferred revenue | 289,203 | 270,433 | |||||
Current debt obligation | 19,900 | 19,900 | |||||
Total current liabilities | 379,899 | 368,102 | |||||
Long-term liabilities: | |||||||
Deferred revenue, net of current portion | 29,323 | 25,699 | |||||
Non-current deferred taxes | 128,815 | 147,144 | |||||
Other long-term liabilities | 136,996 | 133,532 | |||||
Long-term debt, net of current portion | 1,898,713 | 1,904,072 | |||||
Total liabilities | 2,573,746 | 2,578,549 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity: | |||||||
Common stock, $0.001 par value: 1,000,000,000 shares authorized and 306,747,844 and 304,942,415 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively | 307 | 305 | |||||
Preferred stock, $0.001 par value: 50,000,000 shares authorized and no shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively | — | — | |||||
Additional paid-in capital | 3,027,849 | 3,011,080 | |||||
Accumulated other comprehensive income (loss) | 10,495 | 17,043 | |||||
Accumulated deficit | (405,035 | ) | (412,328 | ) | |||
Total stockholders’ equity | 2,633,616 | 2,616,100 | |||||
Total liabilities and stockholders’ equity | $ | 5,207,362 | $ | 5,194,649 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Revenue: | |||||||||||||||
Subscription | $ | 78,780 | $ | 65,238 | $ | 150,345 | $ | 128,291 | |||||||
Maintenance | 110,793 | 98,767 | 217,085 | 195,767 | |||||||||||
Total recurring revenue | 189,573 | 164,005 | 367,430 | 324,058 | |||||||||||
License | 39,175 | 37,713 | 77,110 | 74,573 | |||||||||||
Total revenue | 228,748 | 201,718 | 444,540 | 398,631 | |||||||||||
Cost of revenue: | |||||||||||||||
Cost of recurring revenue | 19,386 | 17,708 | 37,545 | 34,595 | |||||||||||
Amortization of acquired technologies | 43,972 | 43,967 | 87,789 | 88,286 | |||||||||||
Total cost of revenue | 63,358 | 61,675 | 125,334 | 122,881 | |||||||||||
Gross profit | 165,390 | 140,043 | 319,206 | 275,750 | |||||||||||
Operating expenses: | |||||||||||||||
Sales and marketing | 64,813 | 56,414 | 125,408 | 109,096 | |||||||||||
Research and development | 27,705 | 23,773 | 52,893 | 48,526 | |||||||||||
General and administrative | 25,241 | 21,066 | 46,977 | 40,252 | |||||||||||
Amortization of acquired intangibles | 17,301 | 16,653 | 33,803 | 33,781 | |||||||||||
Total operating expenses | 135,060 | 117,906 | 259,081 | 231,655 | |||||||||||
Operating income | 30,330 | 22,137 | 60,125 | 44,095 | |||||||||||
Other income (expense): | |||||||||||||||
Interest expense, net | (28,177 | ) | (34,387 | ) | (55,559 | ) | (76,476 | ) | |||||||
Other income (expense), net | (1,078 | ) | (26,327 | ) | 219 | (74,463 | ) | ||||||||
Total other income (expense) | (29,255 | ) | (60,714 | ) | (55,340 | ) | (150,939 | ) | |||||||
Income (loss) before income taxes | 1,075 | (38,577 | ) | 4,785 | (106,844 | ) | |||||||||
Income tax expense (benefit) | 3,194 | (11,562 | ) | 3,759 | (19,919 | ) | |||||||||
Net income (loss) | $ | (2,119 | ) | $ | (27,015 | ) | $ | 1,026 | $ | (86,925 | ) | ||||
Net income (loss) available to common stockholders | $ | (2,119 | ) | $ | (99,193 | ) | $ | 1,014 | $ | (228,938 | ) | ||||
Net income (loss) available to common stockholders per share: | |||||||||||||||
Basic earnings (loss) per share | $ | (0.01 | ) | $ | (0.97 | ) | $ | — | $ | (2.25 | ) | ||||
Diluted earnings (loss) per share | $ | (0.01 | ) | $ | (0.97 | ) | $ | — | $ | (2.25 | ) | ||||
Weighted-average shares used to compute net income (loss) available to commons stockholders per share: | |||||||||||||||
Shares used in computation of basic earnings (loss) per share | 306,587 | 102,018 | 306,122 | 101,832 | |||||||||||
Shares used in computation of diluted earnings (loss) per share | 306,587 | 102,018 | 310,353 | 101,832 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Cash flows from operating activities | |||||||||||||||
Net income (loss) | $ | (2,119 | ) | $ | (27,015 | ) | $ | 1,026 | $ | (86,925 | ) | ||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||||||
Depreciation and amortization | 65,577 | 64,399 | 130,040 | 129,614 | |||||||||||
Provision for doubtful accounts | 437 | 730 | 951 | 1,165 | |||||||||||
Stock-based compensation expense | 7,367 | 131 | 15,085 | 172 | |||||||||||
Amortization of debt issuance costs | 2,305 | 2,542 | 4,591 | 6,708 | |||||||||||
Loss on extinguishment of debt | — | — | — | 60,590 | |||||||||||
Deferred taxes | (9,069 | ) | (14,540 | ) | (20,352 | ) | (13,076 | ) | |||||||
(Gain) loss on foreign currency exchange rates | 1,208 | 26,088 | (100 | ) | 12,545 | ||||||||||
Other non-cash expenses (benefits) | 273 | 760 | (414 | ) | 1,332 | ||||||||||
Changes in operating assets and liabilities, net of assets acquired and liabilities assumed in business combinations: | |||||||||||||||
Accounts receivable | 17,857 | 788 | 7,289 | 158 | |||||||||||
Income taxes receivable | 399 | (94 | ) | 149 | (409 | ) | |||||||||
Prepaid and other assets | (1,846 | ) | 2,402 | (6,172 | ) | (1,107 | ) | ||||||||
Accounts payable | 963 | 4,705 | 1,442 | 920 | |||||||||||
Accrued liabilities and other | 5,789 | 5,940 | (5,009 | ) | 3,974 | ||||||||||
Accrued interest payable | (17 | ) | (324 | ) | 556 | (10,906 | ) | ||||||||
Income taxes payable | (6,931 | ) | (3,615 | ) | (4,385 | ) | (15,764 | ) | |||||||
Deferred revenue | (3,319 | ) | 6,512 | 16,735 | 16,004 | ||||||||||
Other long-term liabilities | (585 | ) | 2,362 | 220 | 2,130 | ||||||||||
Net cash provided by operating activities | 78,289 | 71,771 | 141,652 | 107,125 | |||||||||||
Cash flows from investing activities | |||||||||||||||
Purchases of property and equipment | (4,204 | ) | (6,310 | ) | (8,774 | ) | (9,256 | ) | |||||||
Purchases of intangible assets | (1,240 | ) | (488 | ) | (2,480 | ) | (1,301 | ) | |||||||
Acquisitions, net of cash acquired | (349,504 | ) | — | (349,504 | ) | (12,990 | ) | ||||||||
Proceeds from sale of cost method investment and other | 1,427 | — | 1,662 | 10,715 | |||||||||||
Net cash used in investing activities | (353,521 | ) | (6,798 | ) | (359,096 | ) | (12,832 | ) | |||||||
Cash flows from financing activities | |||||||||||||||
Proceeds from issuance of common stock and incentive restricted stock | — | 623 | — | 1,723 | |||||||||||
Repurchase of common stock and incentive restricted stock | (133 | ) | (7 | ) | (141 | ) | (52 | ) | |||||||
Exercise of stock options | 221 | — | 257 | 1 | |||||||||||
Premium paid on debt extinguishment | — | — | — | (22,725 | ) | ||||||||||
Proceeds from credit agreement | 35,000 | — | 35,000 | 626,950 | |||||||||||
Repayments of borrowings from credit agreement | (39,975 | ) | (4,975 | ) | (44,950 | ) | (689,950 | ) | |||||||
Payment of debt issuance costs | — | — | — | (5,561 | ) | ||||||||||
Payment for deferred offering costs | — | (1,009 | ) | — | (1,009 | ) | |||||||||
Net cash used in financing activities | (4,887 | ) | (5,368 | ) | (9,834 | ) | (90,623 | ) | |||||||
Effect of exchange rate changes on cash and cash equivalents | 944 | (5,046 | ) | (52 | ) | (3,308 | ) | ||||||||
Net increase (decrease) in cash and cash equivalents | (279,175 | ) | 54,559 | (227,330 | ) | 362 | |||||||||
Cash and cash equivalents | |||||||||||||||
Beginning of period | 434,465 | 223,519 | 382,620 | 277,716 | |||||||||||
End of period | $ | 155,290 | $ | 278,078 | $ | 155,290 | $ | 278,078 | |||||||
Supplemental disclosure of cash flow information | |||||||||||||||
Cash paid for interest | $ | 26,326 | $ | 32,444 | $ | 51,749 | $ | 81,161 | |||||||
Cash paid for income taxes | $ | 17,832 | $ | 5,818 | $ | 26,467 | $ | 7,857 |
Three Months Ended June 30, 2019 | Six Months Ended June 30, 2019 | ||||||||||||||||||||||
As reported (ASC 606) | ASC 606 impact | Without adoption of ASC 606 (ASC 605) | As reported (ASC 606) | ASC 606 impact | Without adoption of ASC 606 (ASC 605) | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Revenue: | |||||||||||||||||||||||
Subscription | $ | 78,780 | $ | 230 | $ | 79,010 | $ | 150,345 | $ | 354 | $ | 150,699 | |||||||||||
Maintenance | 110,793 | 244 | 111,037 | 217,085 | 479 | 217,564 | |||||||||||||||||
Total recurring revenue | 189,573 | 474 | 190,047 | 367,430 | 833 | 368,263 | |||||||||||||||||
License | 39,175 | (472 | ) | 38,703 | 77,110 | (664 | ) | 76,446 | |||||||||||||||
Total revenue | $ | 228,748 | $ | 2 | $ | 228,750 | $ | 444,540 | $ | 169 | $ | 444,709 | |||||||||||
Total operating expenses(1) | 135,060 | 1,191 | 136,251 | 259,081 | 2,591 | 261,672 | |||||||||||||||||
Net income (loss) | $ | (2,119 | ) | $ | (1,189 | ) | $ | (3,308 | ) | $ | 1,026 | $ | (2,422 | ) | $ | (1,396 | ) |
(1) | Adjustment represents the impact of the capitalization and amortization of sales commissions related to ASC 606. These adjustments are recorded in the sales and marketing line item in our condensed consolidated statements of operations. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||||||||||
ASC 606 | ASC 606 impact | ASC 605 | ASC 605 | ASC 606 | ASC 606 impact | ASC 605 | ASC 605 | ||||||||||||||||||||||||
(in thousands, except margin data) | |||||||||||||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||||||||
GAAP subscription revenue | $ | 78,780 | $ | 230 | $ | 79,010 | $ | 65,238 | $ | 150,345 | $ | 354 | $ | 150,699 | $ | 128,291 | |||||||||||||||
Impact of purchase accounting | 1,819 | — | 1,819 | 328 | 1,819 | — | 1,819 | 962 | |||||||||||||||||||||||
Non-GAAP subscription revenue | 80,599 | 230 | 80,829 | 65,566 | 152,164 | 354 | 152,518 | 129,253 | |||||||||||||||||||||||
GAAP maintenance revenue | 110,793 | 244 | 111,037 | 98,767 | 217,085 | 479 | 217,564 | 195,767 | |||||||||||||||||||||||
Impact of purchase accounting | — | — | — | 786 | — | — | — | 1,599 | |||||||||||||||||||||||
Non-GAAP maintenance revenue | 110,793 | 244 | 111,037 | 99,553 | 217,085 | 479 | 217,564 | 197,366 | |||||||||||||||||||||||
GAAP total recurring revenue | 189,573 | 474 | 190,047 | 164,005 | 367,430 | 833 | 368,263 | 324,058 | |||||||||||||||||||||||
Impact of purchase accounting | 1,819 | — | 1,819 | 1,114 | 1,819 | — | 1,819 | 2,561 | |||||||||||||||||||||||
Non-GAAP total recurring revenue | 191,392 | 474 | 191,866 | 165,119 | 369,249 | 833 | 370,082 | 326,619 | |||||||||||||||||||||||
GAAP license revenue | 39,175 | (472 | ) | 38,703 | 37,713 | 77,110 | (664 | ) | 76,446 | 74,573 | |||||||||||||||||||||
Impact of purchase accounting | — | — | — | — | — | — | — | — | |||||||||||||||||||||||
Non-GAAP license revenue | 39,175 | (472 | ) | 38,703 | 37,713 | 77,110 | (664 | ) | 76,446 | 74,573 | |||||||||||||||||||||
Total GAAP revenue | $ | 228,748 | $ | 2 | $ | 228,750 | $ | 201,718 | $ | 444,540 | $ | 169 | $ | 444,709 | $ | 398,631 | |||||||||||||||
Impact of purchase accounting | $ | 1,819 | $ | — | $ | 1,819 | $ | 1,114 | $ | 1,819 | $ | — | $ | 1,819 | $ | 2,561 | |||||||||||||||
Total non-GAAP revenue | $ | 230,567 | $ | 2 | $ | 230,569 | $ | 202,832 | $ | 446,359 | $ | 169 | $ | 446,528 | $ | 401,192 | |||||||||||||||
GAAP cost of revenue | $ | 63,358 | $ | 63,358 | $ | 61,675 | $ | 125,334 | $ | 125,334 | $ | 122,881 | |||||||||||||||||||
Stock-based compensation expense and related employer-paid payroll taxes | (414 | ) | (414 | ) | (4 | ) | (786 | ) | (786 | ) | (5 | ) | |||||||||||||||||||
Amortization of acquired technologies | (43,972 | ) | (43,972 | ) | (43,967 | ) | (87,789 | ) | (87,789 | ) | (88,286 | ) | |||||||||||||||||||
Acquisition and Sponsor related costs | (38 | ) | (38 | ) | (78 | ) | (98 | ) | (98 | ) | (162 | ) | |||||||||||||||||||
Restructuring costs and other | (8 | ) | (8 | ) | — | (8 | ) | (8 | ) | — | |||||||||||||||||||||
Non-GAAP cost of revenue | $ | 18,926 | $ | 18,926 | $ | 17,626 | $ | 36,653 | $ | 36,653 | $ | 34,428 | |||||||||||||||||||
GAAP gross profit | $ | 165,390 | $ | 2 | $ | 165,392 | $ | 140,043 | $ | 319,206 | $ | 169 | $ | 319,375 | $ | 275,750 | |||||||||||||||
Impact of purchase accounting | 1,819 | — | 1,819 | 1,114 | 1,819 | — | 1,819 | 2,561 | |||||||||||||||||||||||
Stock-based compensation expense and related employer-paid payroll taxes | 414 | — | 414 | 4 | 786 | — | 786 | 5 | |||||||||||||||||||||||
Amortization of acquired technologies | 43,972 | — | 43,972 | 43,967 | 87,789 | — | 87,789 | 88,286 | |||||||||||||||||||||||
Acquisition and Sponsor related costs | 38 | — | 38 | 78 | 98 | — | 98 | 162 | |||||||||||||||||||||||
Restructuring costs and other | 8 | — | 8 | — | 8 | — | 8 | — | |||||||||||||||||||||||
Non-GAAP gross profit | $ | 211,641 | $ | 2 | $ | 211,643 | $ | 185,206 | $ | 409,706 | $ | 169 | $ | 409,875 | $ | 366,764 | |||||||||||||||
GAAP gross margin | 72.3 | % | 72.3 | % | 69.4 | % | 71.8 | % | 71.8 | % | 69.2 | % | |||||||||||||||||||
Non-GAAP gross margin | 91.8 | % | 91.8 | % | 91.3 | % | 91.8 | % | 91.8 | % | 91.4 | % | |||||||||||||||||||
GAAP sales and marketing expense | $ | 64,813 | $ | 1,191 | $ | 66,004 | $ | 56,414 | $ | 125,408 | $ | 2,591 | $ | 127,999 | $ | 109,096 | |||||||||||||||
Stock-based compensation expense and related employer-paid payroll taxes | (2,463 | ) | — | (2,463 | ) | (94 | ) | (5,268 | ) | — | (5,268 | ) | (119 | ) | |||||||||||||||||
Acquisition and Sponsor related costs | (509 | ) | — | (509 | ) | (656 | ) | (1,229 | ) | — | (1,229 | ) | (1,325 | ) | |||||||||||||||||
Restructuring costs and other | (8 | ) | — | (8 | ) | 4 | (333 | ) | — | (333 | ) | (45 | ) | ||||||||||||||||||
Non-GAAP sales and marketing expense | $ | 61,833 | $ | 1,191 | $ | 63,024 | $ | 55,668 | $ | 118,578 | $ | 2,591 | $ | 121,169 | $ | 107,607 | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||||||||||
ASC 606 | ASC 606 impact | ASC 605 | ASC 605 | ASC 606 | ASC 606 impact | ASC 605 | ASC 605 | ||||||||||||||||||||||||
GAAP research and development expense | $ | 27,705 | $ | 27,705 | $ | 23,773 | $ | 52,893 | $ | 52,893 | $ | 48,526 | |||||||||||||||||||
Stock-based compensation expense and related employer-paid payroll taxes | (2,019 | ) | (2,019 | ) | (19 | ) | (3,651 | ) | (3,651 | ) | (27 | ) | |||||||||||||||||||
Acquisition and Sponsor related costs | (306 | ) | (306 | ) | (593 | ) | (553 | ) | (553 | ) | (1,445 | ) | |||||||||||||||||||
Restructuring costs and other | (116 | ) | (116 | ) | (95 | ) | (121 | ) | (121 | ) | (201 | ) | |||||||||||||||||||
Non-GAAP research and development expense | $ | 25,264 | $ | 25,264 | $ | 23,066 | $ | 48,568 | $ | 48,568 | $ | 46,853 | |||||||||||||||||||
GAAP general and administrative expense | $ | 25,241 | $ | 25,241 | $ | 21,066 | $ | 46,977 | $ | 46,977 | $ | 40,252 | |||||||||||||||||||
Stock-based compensation expense and related employer-paid payroll taxes | (2,644 | ) | (2,644 | ) | (14 | ) | (5,553 | ) | (5,553 | ) | (21 | ) | |||||||||||||||||||
Acquisition and Sponsor related costs | (2,646 | ) | (2,646 | ) | (4,232 | ) | (3,877 | ) | (3,877 | ) | (7,815 | ) | |||||||||||||||||||
Restructuring costs and other | (1,740 | ) | (1,740 | ) | (728 | ) | (1,934 | ) | (1,934 | ) | (967 | ) | |||||||||||||||||||
Non-GAAP general and administrative expense | $ | 18,211 | $ | 18,211 | $ | 16,092 | $ | 35,613 | $ | 35,613 | $ | 31,449 | |||||||||||||||||||
GAAP operating expenses | $ | 135,060 | $ | 1,191 | $ | 136,251 | $ | 117,906 | $ | 259,081 | $ | 2,591 | $ | 261,672 | $ | 231,655 | |||||||||||||||
Stock-based compensation expense and related employer-paid payroll taxes | (7,126 | ) | — | (7,126 | ) | (127 | ) | (14,472 | ) | — | (14,472 | ) | (167 | ) | |||||||||||||||||
Amortization of acquired intangibles | (17,301 | ) | — | (17,301 | ) | (16,653 | ) | (33,803 | ) | — | (33,803 | ) | (33,781 | ) | |||||||||||||||||
Acquisition and Sponsor related costs | (3,461 | ) | — | (3,461 | ) | (5,481 | ) | (5,659 | ) | — | (5,659 | ) | (10,585 | ) | |||||||||||||||||
Restructuring costs and other | (1,864 | ) | — | (1,864 | ) | (819 | ) | (2,388 | ) | — | (2,388 | ) | (1,213 | ) | |||||||||||||||||
Non-GAAP operating expenses | $ | 105,308 | $ | 1,191 | $ | 106,499 | $ | 94,826 | $ | 202,759 | $ | 2,591 | $ | 205,350 | $ | 185,909 | |||||||||||||||
GAAP operating income | $ | 30,330 | $ | (1,189 | ) | $ | 29,141 | $ | 22,137 | $ | 60,125 | $ | (2,422 | ) | $ | 57,703 | $ | 44,095 | |||||||||||||
Impact of purchase accounting | 1,819 | — | 1,819 | 1,114 | 1,819 | — | 1,819 | 2,561 | |||||||||||||||||||||||
Stock-based compensation expense and related employer-paid payroll taxes | 7,540 | — | 7,540 | 131 | 15,258 | — | 15,258 | 172 | |||||||||||||||||||||||
Amortization of acquired technologies | 43,972 | — | 43,972 | 43,967 | 87,789 | — | 87,789 | 88,286 | |||||||||||||||||||||||
Amortization of acquired intangibles | 17,301 | — | 17,301 | 16,653 | 33,803 | — | 33,803 | 33,781 | |||||||||||||||||||||||
Acquisition and Sponsor related costs | 3,499 | — | 3,499 | 5,559 | 5,757 | — | 5,757 | 10,747 | |||||||||||||||||||||||
Restructuring costs and other | 1,872 | — | 1,872 | 819 | 2,396 | — | 2,396 | 1,213 | |||||||||||||||||||||||
Non-GAAP operating income | $ | 106,333 | $ | (1,189 | ) | $ | 105,144 | $ | 90,380 | $ | 206,947 | $ | (2,422 | ) | $ | 204,525 | $ | 180,855 | |||||||||||||
GAAP operating margin | 13.3 | % | 12.7 | % | 11.0 | % | 13.5 | % | 13.0 | % | 11.1 | % | |||||||||||||||||||
Non-GAAP operating margin | 46.1 | % | 45.6 | % | 44.6 | % | 46.4 | % | 45.8 | % | 45.1 | % | |||||||||||||||||||
GAAP net income (loss) | $ | (2,119 | ) | $ | (1,189 | ) | $ | (3,308 | ) | $ | (27,015 | ) | $ | 1,026 | $ | (2,422 | ) | $ | (1,396 | ) | $ | (86,925 | ) | ||||||||
Impact of purchase accounting | 1,819 | — | 1,819 | 1,114 | 1,819 | — | 1,819 | 2,561 | |||||||||||||||||||||||
Stock-based compensation expense and related employer-paid payroll taxes | 7,540 | — | 7,540 | 131 | 15,258 | — | 15,258 | 172 | |||||||||||||||||||||||
Amortization of acquired technologies | 43,972 | — | 43,972 | 43,967 | 87,789 | — | 87,789 | 88,286 | |||||||||||||||||||||||
Amortization of acquired intangibles | 17,301 | — | 17,301 | 16,653 | 33,803 | — | 33,803 | 33,781 | |||||||||||||||||||||||
Acquisition and Sponsor related costs | 3,499 | — | 3,499 | 5,559 | 5,757 | — | 5,757 | 10,747 | |||||||||||||||||||||||
Restructuring costs and other | 1,872 | — | 1,872 | 819 | 2,396 | — | 2,396 | 1,213 | |||||||||||||||||||||||
Loss on extinguishment of debt | — | — | — | — | — | — | — | 60,590 | |||||||||||||||||||||||
Tax benefits associated with above adjustments | (13,760 | ) | — | (13,760 | ) | (12,326 | ) | (26,809 | ) | — | (26,809 | ) | (38,492 | ) | |||||||||||||||||
Non-GAAP net income | $ | 60,124 | $ | (1,189 | ) | $ | 58,935 | $ | 28,902 | $ | 121,039 | $ | (2,422 | ) | $ | 118,617 | $ | 71,933 | |||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||||||||||
ASC 606 | ASC 606 impact | ASC 605 | ASC 605 | ASC 606 | ASC 606 impact | ASC 605 | ASC 605 | ||||||||||||||||||||||||
GAAP diluted earnings (loss) per share | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.97 | ) | — | $ | — | $ | (2.25 | ) | ||||||||||||||||
Non-GAAP diluted earnings (loss) per share, pro forma | $ | 0.20 | $ | 0.19 | $ | 0.09 | $ | 0.39 | $ | 0.38 | $ | 0.24 | |||||||||||||||||||
Weighted-average shares used to compute GAAP diluted earnings (loss) per share | 306,587 | 306,587 | 102,018 | 310,353 | 310,353 | 101,832 | |||||||||||||||||||||||||
Weighted-average shares used to compute Non-GAAP diluted earnings (loss) per share, pro forma(1) | 306,587 | 306,587 | 304,830 | 310,353 | 310,353 | 304,644 |
(1) | For an explanation of the pro forma calculation, please see "Reconciliation of GAAP to Non-GAAP Weighted-Average Outstanding Diluted Common Shares" below. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
(in thousands) | |||||||||||
GAAP weighted-average shares used in computing diluted earnings (loss) per share available to common shareholders | 306,587 | 102,018 | 310,353 | 101,832 | |||||||
Pro forma dilutive shares: | |||||||||||
Weighted-average pro forma adjustment to reflect conversion of redeemed convertible Class A Common Stock and shares issued for accrued dividends(1) | — | 177,812 | — | 177,812 | |||||||
Shares issued at offering(2) | — | 25,000 | — | 25,000 | |||||||
Non-GAAP weighted-average shares used in computing diluted earnings (loss) per share, pro forma | 306,587 | 304,830 | 310,353 | 304,644 |
(1) | Adjustment to give effect to the conversion of 2,661,015 shares of Class A Common Stock that were outstanding immediately prior to the closing of the initial public offering into 140,053,370 shares of common stock and the conversion of $717.4 million of accrued and unpaid dividends on the Class A Common Stock into 37,758,109 shares of common stock equal to the result of the accrued and unpaid dividends on each share of Class A Common Stock, divided by $19.00 per share, as if the shares had been issued at the beginning of the period. |
(2) | Adjustment to give effect to 25.0 million shares issued in connection with the initial public offering retroactively applied as if the shares had been issued at the beginning of the period. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||||||||||
ASC 606 | ASC 606 impact | ASC 605 | ASC 605 | ASC 606 | ASC 606 impact | ASC 605 | ASC 605 | ||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||
Net income (loss) | $ | (2,119 | ) | $ | (1,189 | ) | $ | (3,308 | ) | $ | (27,015 | ) | $ | 1,026 | $ | (2,422 | ) | $ | (1,396 | ) | $ | (86,925 | ) | ||||||||
Amortization and depreciation | 65,577 | — | 65,577 | 64,399 | 130,040 | — | 130,040 | 129,614 | |||||||||||||||||||||||
Income tax expense (benefit) | 3,194 | — | 3,194 | (11,562 | ) | 3,759 | — | 3,759 | (19,919 | ) | |||||||||||||||||||||
Interest expense, net | 28,177 | — | 28,177 | 34,387 | 55,559 | — | 55,559 | 76,476 | |||||||||||||||||||||||
Impact of purchase accounting on total revenue | 1,819 | — | 1,819 | 1,114 | 1,819 | — | 1,819 | 2,561 | |||||||||||||||||||||||
Unrealized foreign currency (gains) losses(1) | 1,208 | — | 1,208 | 26,088 | (100 | ) | — | (100 | ) | 13,502 | |||||||||||||||||||||
Acquisition and Sponsor related costs | 3,499 | — | 3,499 | 5,559 | 5,757 | — | 5,757 | 10,747 | |||||||||||||||||||||||
Debt related costs(2) | 95 | — | 95 | 144 | 196 | — | 196 | 61,733 | |||||||||||||||||||||||
Stock-based compensation expense and related employer-paid payroll taxes | 7,540 | — | 7,540 | 131 | 15,258 | — | 15,258 | 172 | |||||||||||||||||||||||
Restructuring costs and other | 1,872 | — | 1,872 | 819 | 2,396 | — | 2,396 | 1,213 | |||||||||||||||||||||||
Adjusted EBITDA | $ | 110,862 | $ | (1,189 | ) | $ | 109,673 | $ | 94,064 | $ | 215,710 | $ | (2,422 | ) | $ | 213,288 | $ | 189,174 | |||||||||||||
Adjusted EBITDA margin | 48.1 | % | 47.6 | % | 46.4 | % | 48.3 | % | 47.8 | % | 47.2 | % |
(1) | Unrealized foreign currency (gains) losses primarily relate to the remeasurement of our intercompany loans and to a lesser extent, unrealized foreign currency (gains) losses on selected assets and liabilities. |
(2) | Debt related costs include fees related to our credit agreements, debt refinancing costs and the related write-off of debt issuance costs. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||
2019 | 2018 | Growth Rate | 2019 | 2018 | Growth Rate | ||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||
GAAP subscription revenue | $ | 78,780 | $ | 65,238 | 20.8 | % | $ | 150,345 | $ | 128,291 | 17.2 | % | |||||||||
Impact of purchase accounting | 1,819 | 328 | 2.1 | 1,819 | 962 | 0.5 | |||||||||||||||
Non-GAAP subscription revenue | 80,599 | 65,566 | 22.9 | 152,164 | 129,253 | 17.7 | |||||||||||||||
Estimated foreign currency impact(1) | 1,931 | — | 2.9 | 4,546 | — | 3.5 | |||||||||||||||
Non-GAAP subscription revenue on a constant currency basis | $ | 82,530 | $ | 65,566 | 25.9 | % | $ | 156,710 | $ | 129,253 | 21.2 | % | |||||||||
GAAP maintenance revenue | $ | 110,793 | $ | 98,767 | 12.2 | % | $ | 217,085 | $ | 195,767 | 10.9 | % | |||||||||
Impact of purchase accounting | — | 786 | (0.9 | ) | — | 1,599 | (0.9 | ) | |||||||||||||
Non-GAAP maintenance revenue | 110,793 | 99,553 | 11.3 | 217,085 | 197,366 | 10.0 | |||||||||||||||
Estimated foreign currency impact(1) | 1,112 | — | 1.1 | 2,532 | — | 1.3 | |||||||||||||||
Non-GAAP maintenance revenue on a constant currency basis | $ | 111,905 | $ | 99,553 | 12.4 | % | $ | 219,617 | $ | 197,366 | 11.3 | % | |||||||||
GAAP total recurring revenue | $ | 189,573 | $ | 164,005 | 15.6 | % | $ | 367,430 | $ | 324,058 | 13.4 | % | |||||||||
Impact of purchase accounting | 1,819 | 1,114 | 0.3 | 1,819 | 2,561 | (0.3 | ) | ||||||||||||||
Non-GAAP total recurring revenue | 191,392 | 165,119 | 15.9 | 369,249 | 326,619 | 13.1 | |||||||||||||||
Estimated foreign currency impact(1) | 3,043 | — | 1.8 | 7,078 | — | 2.2 | |||||||||||||||
Non-GAAP total recurring revenue on a constant currency basis | $ | 194,435 | $ | 165,119 | 17.8 | % | $ | 376,327 | $ | 326,619 | 15.2 | % | |||||||||
GAAP license revenue | $ | 39,175 | $ | 37,713 | 3.9 | % | $ | 77,110 | $ | 74,573 | 3.4 | % | |||||||||
Impact of purchase accounting | — | — | — | — | — | — | |||||||||||||||
Non-GAAP license revenue | 39,175 | 37,713 | 3.9 | 77,110 | 74,573 | 3.4 | |||||||||||||||
Estimated foreign currency impact(1) | 483 | — | 1.3 | 1,061 | — | 1.4 | |||||||||||||||
Non-GAAP license revenue on a constant currency basis | $ | 39,658 | $ | 37,713 | 5.2 | % | $ | 78,171 | $ | 74,573 | 4.8 | % | |||||||||
Total GAAP revenue | $ | 228,748 | $ | 201,718 | 13.4 | % | $ | 444,540 | $ | 398,631 | 11.5 | % | |||||||||
Impact of purchase accounting | 1,819 | 1,114 | 0.3 | 1,819 | 2,561 | (0.2 | ) | ||||||||||||||
Non-GAAP total revenue | 230,567 | 202,832 | 13.7 | 446,359 | 401,192 | 11.3 | |||||||||||||||
Estimated foreign currency impact(1) | 3,526 | — | 1.7 | 8,139 | — | 2.0 | |||||||||||||||
Non-GAAP total revenue on a constant currency basis | $ | 234,093 | $ | 202,832 | 15.4 | % | $ | 454,498 | $ | 401,192 | 13.3 | % |
(1) | The estimated foreign currency impact is calculated using the average foreign currency exchange rates in the comparable prior year monthly periods and applying those rates to foreign-denominated revenue in the corresponding monthly periods in the three and six months ended June 30, 2019. |
Three Months Ended June 30, 2019 | |||
(in thousands) | |||
Total non-GAAP revenue | $ | 230,567 | |
Estimated foreign currency impact(2) | 368 | ||
Total adjusted non-GAAP revenue assuming foreign currency exchange rates used in previously issued outlook | $ | 230,935 |
(2) | Estimated foreign currency impact represents the impact of the difference between the actual foreign currency exchange rates in the period used to calculate our three months ended June 30, 2019 actual non-GAAP results and the rates assumed in our previously issued outlook dated April 24, 2019. |
Full Year 2019 | |||||||||||||
Low | High | Low(2) | High(2) | ||||||||||
(in millions, except year-over-year percentages) | |||||||||||||
Total non-GAAP revenue | $ | 938 | $ | 950 | 12 | % | 14 | % | |||||
Estimated foreign currency impact | 10 | 10 | 1 | 1 | |||||||||
Non-GAAP total revenue on a constant currency basis(1) | $ | 948 | $ | 960 | 13 | % | 15 | % |
Q3 2019 | |||||||||||||
Low | High | Low(2) | High(2) | ||||||||||
(in millions, except year-over-year percentages) | |||||||||||||
Total non-GAAP revenue | $ | 241.5 | $ | 246 | 13 | % | 15 | % | |||||
Estimated foreign currency impact | 1.5 | 2 | 1 | 1 | |||||||||
Non-GAAP total revenue on a constant currency basis(1) | $ | 243 | $ | 248 | 14 | % | 16 | % |
Full Year 2019(2) | Q3 2019(2) | ||||||||||
Low | High | Low | High | ||||||||
Non-GAAP subscription revenue growth | 23 | % | 24 | % | 25 | % | 27 | % | |||
Estimated foreign currency impact | 1 | 2 | — | 1 | |||||||
Non-GAAP subscription revenue growth on a constant currency basis(1) | 24 | % | 26 | % | 25 | % | 28 | % | |||
Non-GAAP license and maintenance revenue growth | 7 | % | 9 | % | 7 | % | 9 | % | |||
Estimated foreign currency impact | 1 | 1 | 2 | 1 | |||||||
Non-GAAP license and maintenance revenue growth on a constant currency basis(1) | 8 | % | 10 | % | 9 | % | 10 | % |
(1) | Non-GAAP revenue on a constant currency basis is calculated using the average foreign currency exchange rates in the comparable prior year periods and applying those rates to the estimated foreign-denominated revenue in the corresponding periods rather than the forecasted foreign currency exchange rates for the future periods. |
(2) | Revenue growth rates are calculated using non-GAAP revenue from the comparable prior period. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(in thousands) | |||||||||||||||
Net cash provided by operating activities | $ | 78,289 | $ | 71,771 | $ | 141,652 | $ | 107,125 | |||||||
Capital expenditures(1) | (5,444 | ) | (6,798 | ) | (11,254 | ) | (10,557 | ) | |||||||
Free cash flow | 72,845 | 64,973 | 130,398 | 96,568 | |||||||||||
Cash paid for interest and other debt related items | 25,984 | 32,313 | 50,608 | 81,817 | |||||||||||
Cash paid for acquisition and Sponsor related costs, restructuring costs, employer-paid payroll taxes on stock awards and other one time items | 6,234 | 6,487 | 10,620 | 13,058 | |||||||||||
Unlevered free cash flow (excluding forfeited tax shield) | 105,063 | 103,773 | 191,626 | 191,443 | |||||||||||
Forfeited tax shield related to interest payments(2) | (5,923 | ) | (7,300 | ) | (11,644 | ) | (18,261 | ) | |||||||
Unlevered free cash flow | $ | 99,140 | $ | 96,473 | $ | 179,982 | $ | 173,182 |
(1) | Includes purchases of property and equipment and purchases of intangible assets. |
(2) | Forfeited tax shield related to interest payments assumes a statutory rate of 22.5% for the three and six months ended June 30, 2019 and 2018. |
,]
M!UP "LDRH@V4LN7SG(/8=, ^9GA*2039==+Z #_\0 +!
M 4$ @$#! ,! 0$ @,$!08 0<0(#44%C V$Q5 8!$2%W S4/_: @!
M 0 !!0+_ (2>I+3W_P"%+G$I"%KN8XNG[V-Q2EA^]HJ]1IJ')";!]34G,$:3
MS4*BDH5XK[M:XKMC*%/R.
M7$)Z/D1(*5/BE15[W%>D*6ZQ5:U@V_KO\ C,;=]8?[
M@<>6G LD-''F*!_CM;<)<;:U@V_;KWL&RV0!*N<>8H'^0W-!BZBB@DE_MRYT
M)0V6.)R[\FUKBNW,/];VM8-OVYQ&M%2A.>5?\A"SG+*1H"4(?W(U&0=1\?3F
M4H8E)-# (L7X2-G/5TC9R$G[P ,^FGT][S>7S<*=\U"=M-EOT
M[_B?X6_3O^)_A]2%AOEXS4A7&!@8Z/0/);]._P")_A9H;G>,[(%QD8&&CTCR
M_0FO,0J-;KS>7N>%%+-S"P,S"->8:3;M:4/C'6?_ $-^]3?7ZE0=&7>;)/T9
MMY?H1!%0=AM51VAN]/-Y.X844LW,+5O#8!XJZ[88D"#B+&6&-M2[?I]^]3?7
MZE0=&7>;)/T9MY?H;1/WK ^?! 6K@4,2N _GX$B0]"!A B(\B>
M.AT^5,E4\(V6WR4CUWV;3F*P-<%_77Y9^+AN_(S0ICTPY<#=U*6%2K+GHHSO
MG ?("-G*2W^? 2) P,F (B(_(@[F:)G01ZC,48:XA\L:.CZ3H0<(, #E7QU^
M6?BX;OR,T*8],.7 W=2EA4JRYZ.$)="M"_@"I%X8]7C4J 401I!L$UG#U#P!
M@ !<%@ !['"BX90;K?TIH6_;7
M0LP)H.&3G$)BFHRB^XO^IW\4YP$L((MPG?RNL9=]J0=#J/\ 0\Y^B\.25BY2
M(22?K?,DE8T;KIVG;FA$V.%0Q;YT;<%7G+ZAB+P8WN0=#J/]#K)O?5!/E?')
MO?5!/E>LCHO'?ZQ\N"BD?')O?5C+OO8R&B*1R&L8F"L]>V,H)G!0W)U0B2"T
MX/<2RYG6<9^\DHF:BRQ&CU*&F[TR:@
<9-6S2&+66DT>Q&V&GVWQ5LU]\M
M:6Q59I#UK-IP:%3LA^=>F,%G#5T\2I2#>2:&)>UOI?'[WWZH0M+B0M!P]T]:
M,NSSU_$.VNZK!L4VPM:G#59KV ,3#DLJ\V8EIUJ9P&!U
=$(HIMRU$BR#_H]__\0 3! @$! P8@)! ,! 0(#
M$0 $$A 3(3%!L@4@(E%TD10C,#)"4F%Q@8*AL=$S-4!@DI/"\#1#8G*BI,'A
MXB13H](54'"#_]H " $! 8_ O\ X2@
!CX:2M4==1:MPOA!IWEX&L_O#X6N;WB[G,@R#.
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M!>HU]!.6Y,2F*-
/
5+>)*6BV-N9:A$6O:D5Q9:X6=XYO5KZ4_,S0(+$
ML=
ME'DRCG71G'"NK%T^RB+Z,]\J'UD7LOK//5YC7+MMW_P]#O/1\(, 8 - =2#D
M4MRDPO*ZUG72B :0!,[J#.%]@]!7MBE?4?PGOT!:&]%^0/M9T#46*E9VK_"4
M9^98VEKN1L*=K.B36.#!TJ5I-",Y1\):LT6Q56>[V['UU5Q9&,$\J&\*3_
M ):(*DS4/<<':"L[NNI R*68283A=;SO^,^%6 ,JN@.H!>B\M8.SE@TO6!WT
MRIJ0@$2C.69]>F-5DC7<38[Y#='0!^0,[:[*9&QBFY"RY+*U:
M^8,)60/K]^%6$
MUYF,Y!)A#Y