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Section 1: 8-K (REALPAGE, INC. 8-K)



UNITED STATES
   SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 ______________
 
FORM 8-K
 ______________


CURRENT REPORT

   Pursuant to Section 13 or 15(d) of
   The Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported)
   February 27, 2018

 ______________
 
REALPAGE, INC.
 (Exact name of registrant as specified in its charter)
 ______________

Delaware
001-34846
75-2788861
(State or other jurisdiction of
incorporation)
(Commission
 File Number)
(IRS Employer
Identification No.)
 
2201 Lakeside Blvd.
 Richardson, Texas
75082
(Address of principal executive offices)
(Zip Code)
 
(972) 820-3000
 (Registrant’s telephone number, including area code)

 
(Former name or former address, if changed since last report)

 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
 
Emerging growth company
 
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
 

 
Item 2.02
Results of Operations and Financial Condition.
 
On February 27, 2018, RealPage, Inc. (the “Company”) issued a press release reporting its financial results for its fiscal quarter and year ended December 31, 2017. A copy of the press release is furnished herewith as Exhibit 99.1.

Item 7.01
Regulation FD Disclosure.
 
IR Fact Sheet
 
On February 27, 2018, the Company published an updated IR Fact Sheet on the Investor Relations section of the Company’s website located at http://investor.realpage.com/.  A copy of the IR Fact Sheet is furnished herewith as Exhibit 99.2 and is incorporated herein by reference.  

Item 9.01
Financial Statements and Exhibits.
 
(d) Exhibits.

Exhibit No.
Description
99.1
RealPage, Inc. Press Release dated February 27, 2018 reporting financial results for its fiscal quarter and year ended December 31, 2017.
 
 
99.2
RealPage, Inc. IR Fact Sheet dated February 27, 2018.
 
The information furnished by this Current Report on Form 8-K under Items 2.02 and 7.01 and the Exhibits 99.1 and 99.2 attached hereto shall be deemed furnished and not “filed” for purposes of Section 18 of the Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and shall not be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
 

 
SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


 
 
 
REALPAGE, INC.
 
 
 
 
 
 
 
 
 
By:
 
/s/ Stephen T. Winn
 
 
 
Stephen T. Winn
 
 
 
Chief Executive Officer, President and Chairman
 
 
 
 
Date: February 27, 2018
 
 
 
 

 
EXHIBIT INDEX


Exhibit Number
Description
 
 
 
 
 
(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit 99.1

RealPage Reports Fourth Quarter and Full Year 2017 Financial Results

RICHARDSON, Texas--(BUSINESS WIRE)--February 27, 2018--RealPage, Inc. (NASDAQ:RP), a leading global provider of software and data analytics to the real estate industry, today announced financial results for the fourth quarter and year ended December 31, 2017.

Fourth Quarter 2017 Financial Highlights

Full Year 2017 Financial Highlights


Comments on the News

“2017 was an extremely successful year operationally and financially,” said Steve Winn, Chairman and CEO of RealPage. “During the year we continued to make progress towards our goal of empowering the real estate industry with a unique, powerful, and data-rich platform that improves operational returns through increased revenue, reduced expenses and less risk. We invested significantly in our future through new product, infrastructure and acquisition investments. As a result of these investments and other actions, we achieved significant new sales bookings growth, and are ahead of the pace needed to achieve our 2020 objective of $1 billion in revenue and $300 million in adjusted EBITDA. Our strategy for 2018 will leverage the actions we took in 2017, continue to invest in our platform for the long-term, and focus on new product innovation for our clients.”

“2017 revenue growth of 19% and adjusted EBITDA margin expansion of over 180 basis points was strong,” said Bryan Hill, CFO and Treasurer of RealPage. “This strength is particularly impressive in light of our significant acquisition activity, and investing heavily across our platform – all while exceeding the guidance we provided a year ago. During 2018, we will continue to invest in our innovation initiatives that we believe possess tremendous opportunity – such as Asset Optimization, Resident Services, and our Unity infrastructure project. I’m excited to make additional progress towards our long-term objectives.”

2018 Financial Outlook

The below guidance reflects the impact of the recently enacted Tax Cuts and Jobs Act and includes a new estimated tax rate of approximately 26%.

RealPage management expects to achieve the following results during the first quarter ended March 31, 2018:

RealPage management expects to achieve the following results during the calendar year ended December 31, 2018:


Conference Call Information; Presentation Slides

The Company will host a conference call at 5 p.m. ET today to discuss its financial results. Participants are encouraged to listen to the presentation via a live web broadcast and view the earnings presentation at www.realpage.com on the Investor Relations section. In addition, a live dial-in is available domestically at 844-889-4333 and internationally at 412-717-9596. A replay will be available at 877-344-7529 or 412-317-0088, passcode 10117315, until March 6, 2018.

About RealPage

RealPage is a leading global provider of software and data analytics to the real estate industry. Clients use our platform to improve operating performance and increase capital returns. Founded in 1998 and headquartered in Richardson, Texas, RealPage currently serves over 12,400 clients worldwide from offices in North America, Europe and Asia. For more information about the company, visit https://www.realpage.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains “forward-looking” statements relating to RealPage, Inc.’s strategy, goals and focus, expected, possible or assumed future results including its financial outlook for the first quarter ending March 31, 2018 and calendar year ending December 31, 2018, that we are ahead of the pace needed to achieve our 2020 objective of $1 billion in revenue and $300 million in adjusted EBITDA, continuing to invest in our platform and in our innovation initiatives that we believe possess tremendous opportunity, the expected results of our investments to drive innovation and future revenue growth, and RealPage’s long-term revenue and adjusted EBITDA margin goals. These forward-looking statements are based on management's beliefs and assumptions and on information currently available to management. Forward-looking statements include all statements that are not historical facts and may be identified by terms such as “expects,” “believes,” “plans,” or similar expressions and the negatives of those terms. Those forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. The company may be required to revise its results contained herein upon finalizing its review of quarterly and full-year results and completion of the annual audit, which could cause or contribute to such differences. Additional factors that could cause or contribute to such differences include, but are not limited to, the following: (a) the possibility that general economic conditions, including leasing velocity or uncertainty, could cause information technology spending, particularly in the rental housing industry, to be reduced or purchasing decisions to be delayed; (b) an increase in insurance claims; (c) an increase in client cancellations; (d) the inability to increase sales to existing clients and to attract new clients; (e) RealPage’s failure to integrate acquired businesses and any recent or future acquisitions successfully or to achieve expected synergies, including the recently completed acquisition of LRO; (f) the timing and success of new product introductions by RealPage or its competitors; (g) changes in RealPage’s pricing policies or those of its competitors; (h) legal or regulatory proceedings; (i) the inability to achieve revenue growth or to enable margin expansion; (j) changes in RealPage’s estimates with respect to its long-term corporate tax rate or any other impact from the recently enacted Tax Cuts and Jobs Act; and (k) such other risks and uncertainties described more fully in documents filed with or furnished to the Securities and Exchange Commission (“SEC”) by RealPage, including its Annual Report on Form 10-K previously filed with the SEC on March 1, 2017 and its Quarterly Report on Form 10-Q filed on November 7, 2017. All information provided in this release is as of the date hereof and RealPage undertakes no duty to update this information except as required by law.


Explanation of Non-GAAP Financial Measures

The company reports its financial results in accordance with accounting principles generally accepted in the United States of America, or GAAP. However, the company believes that, in order to properly understand its short-term and long-term financial, operational and strategic trends, it may be helpful for investors to exclude certain non-cash or non-recurring items when used as a supplement to financial performance measures in accordance with GAAP. These non-cash or non-recurring items result from facts and circumstances that vary in both frequency and impact on continuing operations. The company also uses results of operations excluding such items to evaluate the operating performance of RealPage and compare it against prior periods, make operating decisions, determine executive compensation, and serve as a basis for long-term strategic planning. These non-GAAP financial measures provide the company with additional means to understand and evaluate the operating results and trends in its ongoing business by eliminating certain non-cash expenses and other items that RealPage believes might otherwise make comparisons of its ongoing business with prior periods more difficult, obscure trends in ongoing operations, reduce management’s ability to make useful forecasts, or obscure the ability to evaluate the effectiveness of certain business strategies and management incentive structures. In addition, the company also believes that investors and financial analysts find this information to be helpful in analyzing the company’s financial and operational performance and comparing this performance to the company’s peers and competitors.

The company defines “Non-GAAP Total Revenue” as total revenue plus acquisition-related and other deferred revenue adjustments. The company believes it is useful to include deferred revenue written down for GAAP purposes under purchase accounting rules and revenue deferred due to a lack of historical experience determining the settlement of the contractual obligation in order to appropriately measure the underlying performance of its business operations in the period of activity and associated expense. Further, the company believes this measure is useful to investors as a way to evaluate the company’s ongoing performance because it provides a more accurate depiction of on demand revenue arising from our strategic acquisitions.


The company defines “Adjusted Gross Profit” as gross profit, plus (1) acquisition-related and other deferred revenue adjustments, (2) depreciation, (3) amortization of intangible assets, (4) headquarters relocation costs, and (5) stock-based expense. The company believes that investors and financial analysts find these non-GAAP financial measures to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s ability to generate income from ongoing business operations.

The company defines “Adjusted EBITDA” as net income (loss), plus (1) acquisition-related and other deferred revenue adjustments, (2) depreciation, asset impairment, and the loss on disposal of assets, (3) amortization of intangible assets, (4) acquisition-related expense, (5) costs related to the Hart-Scott-Rodino review process, (6) interest expense, net, (7) income tax expense, (8) headquarters relocation costs, and (9) stock-based expense. The company believes that investors and financial analysts find these non-GAAP financial measures to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s ability to generate income from ongoing business operations.

The company defines “Non-GAAP Product Development Expense” as product development expense, excluding (1) headquarters relocation costs, and (2) stock-based expense. The company believes that investors and financial analysts find these non-GAAP financial measures to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s ongoing expenditures related to product innovation.

The company defines “Non-GAAP Sales and Marketing Expense” as sales and marketing expense, excluding (1) amortization of intangible assets, (2) headquarters relocation costs, and (3) stock-based expense. The company believes that investors and financial analysts find these non-GAAP financial measures to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s ongoing expenditures related to its sales and marketing strategies.

The company defines “Non-GAAP General and Administrative Expense” as general and administrative expense, excluding (1) loss on disposal of assets, (2) acquisition-related expense, (3) costs related to the Hart-Scott-Rodino review process, (4) headquarters relocation costs, and (5) stock-based expense. The company believes that investors and financial analysts find these non-GAAP financial measures to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s underlying expense structure to support corporate activities and processes.


The company defines “Non-GAAP Operating Expense” as operating expense, excluding (1) asset impairment and loss on disposal of assets, (2) amortization of intangible assets, (3) acquisition-related expense, (4) costs related to the Hart-Scott-Rodino review process, (5) headquarters relocation costs, and (6) stock-based expense. The company believes that investors and financial analysts find these non-GAAP financial measures to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s underlying expense structure to support ongoing operations.

The company defines “Non-GAAP Operating Income” as operating income (loss), plus (1) acquisition-related and other deferred revenue adjustments, (2) asset impairment and loss on disposal of assets, (3) amortization of intangible assets, (4) acquisition-related expense, (5) costs related to the Hart-Scott-Rodino review process, (6) headquarters relocation costs, and (7) stock-based expense. The company believes that investors and financial analysts find these non-GAAP financial measures to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s ability to generate income from ongoing business operations.

The company defines “Non-GAAP Net Income” as net income (loss), plus (1) income tax (benefit) expense, (2) acquisition-related and other deferred revenue adjustments, (3) asset impairment and loss on disposal of assets, (4) amortization of intangible assets, (5) acquisition-related expense, (6) costs related to the Hart-Scott-Rodino review process, (7) headquarters relocation costs, (8) amortization of convertible note discount, (9) stock-based expense, and (10) provision for income tax expense based on an assumed rate in order to approximate the company’s long-term effective corporate tax rate; and the company defines “Non-GAAP Net Income per Diluted Share” as Non-GAAP Net Income divided by Non-GAAP weighted average diluted shares outstanding. The company believes that investors and financial analysts find these non-GAAP financial measures to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s ability to generate income from ongoing business operations.

The company defines “Non-GAAP On Demand Revenue” as total on demand revenue plus acquisition-related and other deferred revenue adjustments. The company believes it is useful to include deferred revenue written down for GAAP purposes under purchase accounting rules and revenue deferred due to a lack of historical experience determining the settlement of the contractual obligation in order to appropriately measure the underlying performance of the company’s business operations in the period of activity and associated expense. Further, the company believes that investors and financial analysts find this measure to be useful in evaluating the company’s ongoing performance because it provides a more accurate depiction of on demand revenue arising from our strategic acquisitions.


The company defines “Ending On Demand Units” as the number of rental housing units managed by our clients with one or more of our on demand software solutions at the end of the period. We use ending on demand units to measure the success of our strategy of increasing the number of rental housing units managed with our on demand software solutions. Property unit counts are provided to us by our customers as new sales orders are processed. Property unit counts may be adjusted periodically as information related to our clients’ properties is updated or supplemented, which could result in adjustments to the number of units previously reported.

The company defines “Average On Demand Units” as the average of the beginning and ending on demand units for each quarter in the period presented. The company’s management monitors this metric to measure its success in increasing the number of on demand software solutions utilized by our clients to manage their rental housing units, our overall revenue, and profitability.

The company defines “ACV,” or Annual Client Value, as management’s estimate of the annual value of the company’s on demand revenue contracts. The company’s management monitors this metric to measure its success in increasing the number of on demand units, and the amount of software solutions utilized by its clients to manage their rental housing units.

The company defines “RPU,” or Revenue Per Unit, as ACV divided by ending on demand units. The company monitors this metric to measure its success in increasing the penetration of on demand software solutions utilized by its clients to manage their rental housing units.

The company excludes or adjusts each of the items identified below from the applicable non-GAAP financial measure referenced above for the reasons set forth with respect to each excluded item:



 
Condensed Consolidated Balance Sheets
(in thousands, except share data)
   
December 31,
2017 2016
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 69,343 $ 104,886
Restricted cash 96,002 83,654
Accounts receivable, less allowance for doubtful accounts of $3,951 and $2,468 at December 31, 2017 and 2016, respectively 124,505 92,367
Prepaid expenses 12,107 10,836
Other current assets   6,622     5,712  

Total current assets

308,579 297,455
Property, equipment, and software, net 148,428 130,428
Goodwill 751,052 259,938
Identified intangible assets, net 252,337 74,976
Deferred tax assets, net 44,887 15,665
Other assets   11,010     9,636  
Total assets $ 1,516,293   $ 788,098  
 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable $ 26,733 $ 21,421
Accrued expenses and other current liabilities 79,379 50,464
Current portion of deferred revenue 116,622 89,583
Current portion of term loans 14,116 5,469
Customer deposits held in restricted accounts   96,057     83,590  
Total current liabilities 332,907 250,527
Deferred revenue 5,538 6,308
Revolving facility 50,000 -
Term loans, net 303,261 116,657
Convertible notes, net 281,199 -
Other long-term liabilities   41,513     29,843  
Total liabilities 1,014,418 403,335
Stockholders’ equity:
Common stock, $0.001 par value: 125,000,000 shares authorized, 87,153,085 and 86,062,191 shares issued and 83,180,401 and 81,087,353 shares outstanding at December 31, 2017 and 2016, respectively 87 86
Additional paid-in capital 637,851 534,348
Treasury stock, at cost: 3,972,684 and 4,974,838 shares at December 31, 2017 and 2016, respectively (61,260 ) (30,358 )
Accumulated deficit (75,046 ) (119,260 )
Accumulated other comprehensive income (loss)   243     (53 )
Total stockholders’ equity   501,875     384,763  
Total liabilities and stockholders’ equity $ 1,516,293   $ 788,098  

       
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
 
Three Months Ended Twelve Months Ended
December 31, December 31,
2017 2016 2017 2016
Revenue:
On demand $ 180,104 $ 141,627 $ 642,622 $ 542,531
On premise 662 695 2,644 2,836
Professional and other   6,914     6,749     25,697     22,761  
Total revenue 187,680 149,071 670,963 568,128
Cost of revenue(1)   73,513     61,364     273,447     242,301  
Gross profit   114,167     87,707     397,516     325,827  
Operating expenses:
Product development(1) 25,890 18,714 89,452 73,607
Sales and marketing(1) 48,114 34,025 165,079 135,213
General and administrative(1) 30,350 23,058 112,975 85,013
Impairment of identified intangible assets   -     -     -     750  
Total operating expenses   104,354     75,797     367,506     294,583  
Operating income 9,813 11,910 30,010 31,244
Interest expense and other, net   (6,220 )   (912 )   (14,769 )   (3,758 )
Income before income taxes   3,593     10,998     15,241     27,486  
Income tax expense   24,458     3,637     14,864     10,836  
Net (loss) income $ (20,865 ) $ 7,361   $ 377   $ 16,650  
 
Net (loss) income per share attributable to common stockholders
Basic $ (0.26 ) $ 0.09 $

0.00

$ 0.22
Diluted $ (0.26 ) $ 0.09 $ 0.00 $ 0.21
Weighted average shares used in computing net (loss) income per share attributable to common stockholders
Basic 80,583 77,566 79,433 76,854
Diluted 80,583 79,116 82,398 77,843
                 
 
(1) Includes stock-based expense as follows:
Three Months Ended Twelve Months Ended
December 31, December 31,
2017 2016 2017 2016
Cost of revenue $ 899 $ 804 $ 3,842 $ 3,310
Product development 1,992 1,825 8,423 7,071
Sales and marketing 3,351 3,185 14,592 11,364
General and administrative   3,861     3,655     18,978     15,107  
$ 10,103   $ 9,469   $ 45,835   $ 36,852  

 
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
       
Three Months Ended Twelve Months Ended
December 31, December 31,
2017 2016 2017 2016
Cash flows from operating activities:
Net (loss) income $ (20,865 ) $ 7,361 $ 377 $ 16,650
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization 21,332 13,960 67,146 54,834
Amortization of debt discount and issuance costs 2,956 119 7,296 443
Deferred taxes 24,602 2,962 13,791 8,386
Stock-based expense 10,103 9,469 45,835 36,852
Excess tax benefit from stock-based compensation - (5,998 ) - (5,998 )
Asset impairment and loss on disposal of assets 52 248 524 1,247
Acquisition-related consideration 302 (378 ) 684 (877 )
Changes in assets and liabilities, net of assets acquired and liabilities assumed in business combinations   (7,443 )   3,349     1,674     24,679  
Net cash provided by operating activities   31,039     31,092     137,327     136,216  
 
Cash flows from investing activities:
Purchases of property, equipment, and software (11,176 ) (14,236 ) (49,752 ) (75,241 )
Proceeds from disposal of property, equipment, and software - 4,500 - 4,500
Acquisition of businesses, net of cash acquired (302,461 ) - (659,322 ) (71,400 )
Purchase of cost method investments   (200 )   -     (200 )   (3,000 )
Net cash used in investing activities   (313,837 )   (9,736 )   (709,274 )   (145,141 )
 
Cash flows from financing activities:
Payments on and proceeds from debt, net 247,571 (781 ) 548,730 81,403
Payments of acquisition-related consideration (418 ) (808 ) (8,491 ) (5,684 )
Issuance of common stock 5,400 12,351 27,014 28,490
Excess tax benefit from stock-based compensation - 5,998 - 5,998
Purchase of treasury stock related to stock-based compensation (9,715 ) (2,241 ) (30,904 ) (6,020 )
Purchase of treasury stock under share repurchase program   -     -     -     (21,244 )
Net cash provided by financing activities   242,838     14,519     536,349     82,943  
Net (decrease) increase in cash and cash equivalents (39,960 ) 35,875 (35,598 ) 74,018
Effect of exchange rate on cash (31 ) (79 ) 55 (43 )
 
Cash and cash equivalents:
Beginning of period   109,334     69,090     104,886     30,911  
End of period $ 69,343   $ 104,886   $ 69,343   $ 104,886  

 
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO
COMPARABLE GAAP MEASURES
(unaudited, in thousands, except per share data)
         
The following is a reconciliation of the non-GAAP financial measures used by RealPage to describe its financial results determined in accordance with accounting principles generally accepted in the United States of America ("GAAP"). An explanation of these measures is also included under the heading “Explanation of Non-GAAP Financial Measures.”

While the company believes that these non-GAAP financial measures provide useful supplemental information to investors regarding the underlying performance of our business operations, investors are reminded to consider these non-GAAP measures in addition to, and not as a substitute for, financial performance measures prepared in accordance with GAAP. In addition, it should be noted that these non-GAAP financial measures may be different from non-GAAP measures used by other companies, and the company may utilize other measures to illustrate performance in the future. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP.

 

Non-GAAP Total Revenue

Set forth below is a presentation of the company’s “Non-GAAP total revenue.” Please reference the “Explanation of Non-GAAP Financial Measures” section.
Three Months Ended Twelve Months Ended
December 31, December 31,
2017 2016 2017 2016
Revenue (GAAP) $ 187,680 $ 149,071 $ 670,963 $ 568,128
Acquisition-related and other deferred revenue   710     (187 )   3,058   (949 )
Non-GAAP total revenue $ 188,390   $ 148,884   $ 674,021 $ 567,179  
 

Adjusted Gross Profit

Set forth below is a presentation of the company’s "Adjusted Gross Profit." Please reference the "Explanation of Non-GAAP Financial Measures" section.
Three Months Ended Twelve Months Ended
December 31, December 31,
2017 2016 2017 2016
Gross profit (GAAP) $ 114,167 $ 87,707 $ 397,516 $ 325,827
Acquisition-related and other deferred revenue 710 (187 ) 3,058 (949 )
Depreciation 2,935 2,825 11,790 11,405
Amortization of intangible assets 4,378 4,159 15,312 16,761
Headquarters relocation costs - - - 2,023
Stock-based expense   899     804     3,842   3,310  
Adjusted gross profit $ 123,089   $ 95,308   $ 431,518 $ 358,377  
 

Adjusted EBITDA

Set forth below is a presentation of the company’s "Adjusted EBITDA." Please reference the "Explanation of Non-GAAP Financial Measures" section.
Three Months Ended Twelve Months Ended
December 31, December 31,
2017 2016 2017 2016
Net (loss) income (GAAP) $ (20,865 ) $ 7,361 $ 377 $ 16,650
Acquisition-related and other deferred revenue 710 (187 ) 3,058 (949 )
Depreciation, asset impairment, and loss on disposal of assets 6,817 6,635 27,752 25,813
Amortization of intangible assets 14,567 7,573 39,918 30,268
Acquisition-related expense 2,508 695 5,557 363
Costs related to the Hart-Scott-Rodino review process 2,310 - 11,012 -
Interest expense, net 6,335 937 15,072 3,825
Income tax expense 24,458 3,637 14,864 10,836
Headquarters relocation costs - - - 3,552
Stock-based expense   10,103     9,469     45,835   36,852  
Adjusted EBITDA $ 46,943   $ 36,120   $ 163,445 $ 127,210  

 

Non-GAAP Product Development Expense

Set forth below is a presentation of the company’s "Non-GAAP Product Development Expense." Please reference the "Explanation of Non-GAAP Financial Measures" section.
  Three Months Ended   Twelve Months Ended
December 31, December 31,
2017   2016 2017   2016
Product development expense (GAAP) $ 25,890 $ 18,714 $ 89,452 $ 73,607
Less: Headquarters relocation costs - - - 541
Stock-based expense   1,992   1,825   8,423   7,071
Non-GAAP product development expense $ 23,898 $ 16,889 $ 81,029 $ 65,995
 

Non-GAAP Sales and Marketing Expense

Set forth below is a presentation of the company’s "Non-GAAP Sales and Marketing Expense." Please reference the "Explanation of Non-GAAP Financial Measures" section.
Three Months Ended Twelve Months Ended
December 31, December 31,
2017 2016 2017 2016
Sales and marketing expense (GAAP) $ 48,114 $ 34,025 $ 165,079 $ 135,213
Less: Amortization of intangible assets 10,189 3,414 24,606 13,507
Headquarters relocation costs - - - 574
Stock-based expense   3,351   3,185   14,592   11,364
Non-GAAP sales and marketing expense $ 34,574 $ 27,426 $ 125,881 $ 109,768
 

Non-GAAP General and Administrative Expense

Set forth below is a presentation of the company’s "Non-GAAP General and Administrative Expense." Please reference the "Explanation of Non-GAAP Financial Measures" section.
Three Months Ended Twelve Months Ended
December 31, December 31,
2017 2016 2017 2016
General and administrative expense (GAAP) $ 30,350 $ 23,058 $ 112,975 $ 85,013
Less: Loss on disposal of assets 52 248 524 497
Acquisition-related expense 2,508 695 5,557 363
Costs related to the Hart-Scott-Rodino review process 2,310 - 11,012 -
Headquarters relocation costs - - - 414
Stock-based expense   3,861   3,655   18,978   15,107
Non-GAAP general and administrative expense $ 21,619 $ 18,460 $ 76,904 $ 68,632
 

Non-GAAP Operating Expense

Set forth below is a presentation of the company’s "Non-GAAP Operating Expense." Please reference the "Explanation of Non-GAAP Financial Measures" section.
Three Months Ended Twelve Months Ended
December 31, December 31,
2017 2016 2017 2016
Operating expense (GAAP) $ 104,354 $ 75,797 $ 367,506 $ 294,583
Less: Asset impairment and loss on disposal of assets 52 248 524 1,247
Amortization of intangible assets 10,189 3,414 24,606 13,507
Acquisition-related expense 2,508 695 5,557 363
Costs related to the Hart-Scott-Rodino review process 2,310 - 11,012 -
Headquarters relocation costs - - - 1,529
Stock-based expense   9,204   8,665   41,993   33,542
Non-GAAP operating expense $ 80,091 $ 62,775 $ 283,814 $ 244,395

 

Non-GAAP Operating Income

Set forth below is a presentation of the company’s "Non-GAAP Operating Income." Please reference the "Explanation of Non-GAAP Financial Measures" section.
    Three Months Ended   Twelve Months Ended
December 31, December 31,
2017   2016 2017   2016
Operating income (GAAP) $ 9,813 $ 11,910 $ 30,010 $ 31,244
Acquisition-related and other deferred revenue 710 (187 ) 3,058 (949 )
Asset impairment and loss on disposal of assets 52 248 524 1,247
Amortization of intangible assets 14,567 7,573 39,918 30,268
Acquisition-related expense 2,508 695 5,557 363
Costs related to the Hart-Scott-Rodino review process 2,310 - 11,012 -
Headquarters relocation costs - - - 3,552
Stock-based expense   10,103     9,469     45,835     36,852  
Non-GAAP operating income $ 40,063   $ 29,708   $ 135,914   $ 102,577  
 

Non-GAAP Net Income

Set forth below is a presentation of the company’s "Non-GAAP Net Income" and "Non-GAAP Net Income per Diluted Share." Please reference the "Explanation of Non-GAAP Financial Measures" section.
Three Months Ended Twelve Months Ended
December 31, December 31,
2017 2016 2017 2016
Net (loss) income (GAAP) $ (20,865 ) $ 7,361 $ 377 $ 16,650
Income tax expense   24,458     3,637     14,864     10,836  
Income before income taxes 3,593 10,998 15,241 27,486
 
Acquisition-related and other deferred revenue 710 (187 ) 3,058 (949 )
Asset impairment and loss on disposal of assets 52 248 524 1,247
Amortization of intangible assets 14,567 7,573 39,918 30,268
Acquisition-related expense 2,508 695 5,557 363
Costs related to the Hart-Scott-Rodino review process 2,310 - 11,012 -
Headquarters relocation costs - - - 3,552
Amortization of convertible note discount 2,488 - 5,991 -
Stock-based expense   10,103     9,469     45,835     36,852  
Non-GAAP income before income taxes 36,331 28,796 127,136 98,819
Assumed rate for income tax expense (1) 40.0 % 40.0 % 40.0 % 40.0 %
Assumed provision for non-GAAP income tax expense   14,532     11,518     50,854     39,528  
Non-GAAP net income $ 21,799   $ 17,278   $ 76,282   $ 59,291  
 
Net (loss) income per diluted share $ (0.26 ) $ 0.09 $ 0.00 $ 0.21
Non-GAAP net income per non-GAAP diluted share $ 0.26 $ 0.22 $ 0.93 $ 0.76
 

Weighted average outstanding shares - basic

80,583 77,566 79,433 76,854
Non-GAAP adjusted diluted weighted average shares outstanding:

Weighted average outstanding shares - diluted

83,464

79,116 82,398 77,843

Dilution offset from convertible note hedge transactions

  (321 )   -     (81 )   -  

Non-GAAP diluted weighted average shares outstanding (2)

  83,143     79,116     82,317     77,843  

 

Non-GAAP On Demand Revenue

Set forth below is a presentation of the company’s "Non-GAAP On Demand Revenue." Please reference the "Explanation of Non-GAAP Financial Measures" section.
  Three Months Ended   Twelve Months Ended
December 31, December 31,
2017   2016 2017   2016
On demand revenue (GAAP) $ 180,104 $ 141,627 $ 642,622 $ 542,531
Acquisition-related and other deferred revenue   710   (187 )   3,058   (949 )
Non-GAAP on demand revenue $ 180,814 $ 141,440   $ 645,680 $ 541,582  
 

Ending On Demand Units, Average On Demand Units, RPU, and ACV

Set forth below is a presentation of the company’s "Ending On Demand Units," "Average On Demand Units," "RPU," and "ACV." Please reference the "Explanation of Non-GAAP Financial Measures" section.
Three Months Ended Twelve Months Ended
December 31, December 31,
2017 2016 2017 2016
Ending on demand units 13,003 10,989 13,003 10,989
Average on demand units 12,628 11,120 11,711 11,042
 
ACV $ 751,183 $ 566,263
RPU $ 57.77 $ 51.53
 

Non-GAAP Total Revenue Guidance

Set forth below is a presentation of the company’s "Non-GAAP total revenue" guidance for the three months ending March 31, 2018, and the twelve months ending December 31, 2018. Please reference the "Explanation of Non-GAAP Financial Measures" section.

Guidance Range for the

Three Months Ending

Guidance Range for the

Twelve Months Ending

March 31, 2018 December 31, 2018

Low (3)

High (3)

Low (3)

High (3)

Revenue (GAAP) $ 199,800 $ 201,800 $ 834,570 $ 844,570
Acquisition-related and other deferred revenue   200   200     430   430  
Non-GAAP total revenue $ 200,000 $ 202,000   $ 835,000 $ 845,000  

 

Non-GAAP Net Income Guidance

Set forth below is a presentation of the company’s "Non-GAAP net income" and "Non-GAAP net income per diluted share" guidance for the three months ending March 31, 2018, and the twelve months ending December 31, 2018. Please reference the "Explanation of Non-GAAP Financial Measures" section.
   

Guidance Range for the

Three Months Ending

 

Guidance Range for the

Twelve Months Ending

March 31, 2018 December 31, 2018

Low (3)

 

High (3)

Low (3)

 

High (3)

Non-GAAP net income:
Net income (GAAP) $ 6,400 $ 7,660 $ 29,920 $ 36,420
Income tax expense   2,250     2,690     10,500     12,800  
Income before income taxes 8,650 10,350 40,420 49,220
 
Acquisition-related and other deferred revenue 200 200 430 430
Amortization of intangible assets 16,650 16,450 65,100 64,300
Amortization of convertible note discount 2,500 2,500 10,250 10,250
Stock-based expense   10,500     10,300     46,650     45,850  
Non-GAAP income before income taxes 38,500 39,800 162,850 170,050

Expected effective tax rate (4)

26.0 % 26.0 % 26.0 % 26.0 %
Assumed provision for income tax expense   10,010     10,348     42,341     44,213  
Non-GAAP net income $ 28,490   $ 29,452   $ 120,509   $ 125,837  
 
Net income per diluted share $ 0.08 $ 0.09 $ 0.35 $ 0.42
Non-GAAP net income per diluted share $ 0.34 $ 0.35 $ 1.41 $ 1.47
 

Weighted average outstanding shares - diluted (2)

84,200 84,200 85,700 85,700
 

Adjusted EBITDA Guidance

Set forth below is a presentation of the company’s "Adjusted EBITDA" guidance for the three months ending March 31, 2018, and the twelve months ending December 31, 2018. Please reference the "Explanation of Non-GAAP Financial Measures" section.

Guidance Range for the

Three Months Ending

Guidance Range for the

Twelve Months Ending

March 31, 2018 December 31, 2018

Low (3)

High (3)

Low (3)

High (3)

Adjusted EBITDA:
Net income (GAAP) $ 6,400 $ 7,660 $ 29,920 $ 36,420
Acquisition-related and other deferred revenue 200 200 430 430
Depreciation, asset impairment, and loss on disposal of assets 7,300 7,100 31,000 30,200
Amortization of intangible assets 16,650 16,450 65,100 64,300
Interest expense, net 7,700 7,600 31,400 31,000
Income tax expense 2,250 2,690 10,500 12,800
Stock-based expense   10,500     10,300     46,650     45,850  
Adjusted EBITDA $ 51,000   $ 52,000   $ 215,000   $ 221,000  

 
(1)   A 40.0% tax rate is assumed in order to approximate the Company's long-term effective corporate tax rate. Please reference the “Explanation of Non-GAAP Financial Measures” section.
 
(2) For periods with GAAP net losses and non-GAAP net income, the weighted-average outstanding shares used to calculate non-GAAP net income per share includes potentially dilutive securities that were excluded from the calculation of GAAP net income per share as the effect was anti-dilutive.
 
It is the current intent of the Company to settle conversions of the Convertible Notes through combination settlement, which involves repayment of the principal portion in cash and any excess of the conversion value over the principal amount in shares of our common stock. We exclude these shares that are issuable upon conversions of our convertible notes because we expect that the dilution from such shares will be offset by the convertible note hedge transactions entered into in May 2017 in connection with the issuance of the convertible notes.
 
(3) Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. The company may be required to revise its results upon finalizing its review of quarterly and full year results, which could cause or contribute to such differences. All information provided in this release is as of the date hereof and RealPage, Inc. undertakes no duty to update this information except as required by law. See additional discussion under "Cautionary Statement Regarding Forward-Looking Statements" above.
 
(4) Among the major provisions contained in the Tax Cuts & Jobs Act of 2017 was a reduction in our federal corporate tax rate. We have revised our estimate of our effective tax rate to 26.0% in order to approximate the Company's long-term effective corporate tax rate. Please reference the "Explanation of Non-GAAP Financial Measures" section.

CONTACT:
RealPage, Inc.
Investor Relations
Rhett Butler, 972-820-3773
rhett.butler@realpage.com

(Back To Top)

Section 3: EX-99.2 (EXHIBIT 99.2)

Exhibit 99.2
 
 
RealPage, Inc.
IR Fact Sheet (as of 02/27/2018)

*Please read in conjunction with the Company's 10-Q previously filed with the Securities and Exchange Commission on November 7, 2017 as well as the "Explanation of Non-GAAP Financial Measures".

   
FY 2015
     
Q1 2016
     
Q2 2016
     
Q3 2016
     
Q4 2016
   
FY 2016
     
Q1 2017
     
Q2 2017
     
Q3 2017
     
Q4 2017
   
FY 2017
 
Revenue ($000's)
                                                                                 
Total GAAP Revenue
 
$
468,520
   
$
128,383
   
$
142,719
   
$
147,955
   
$
149,071
   
$
568,128
   
$
152,919
   
$
161,306
   
$
169,058
   
$
187,680
   
$
670,963
 
Growth %
   
16
%
   
16
%
   
24
%
   
22
%
   
22
%
   
21
%
   
19
%
   
13
%
   
14
%
   
26
%
   
18
%
                                                                                         
Acquisition-related and other deferred revenue
   
(2,157
)
   
(343
)
   
(258
)
   
(161
)
   
(187
)
   
(949
)
   
705
     
945
     
698
     
710
     
3,058
 
Total Non-GAAP Revenue
 
$
466,363
   
$
128,040
   
$
142,461
   
$
147,794
   
$
148,884
   
$
567,179
   
$
153,624
   
$
162,251
   
$
169,756
   
$
188,390
   
$
674,021
 
Growth %
   
15
%
   
16
%
   
25
%
   
22
%
   
23
%
   
22
%
   
20
%
   
14
%
   
15
%
   
27
%
   
19
%
                                                                                         
GAAP On Demand Revenue
 
$
450,962
   
$
123,411
   
$
136,610
   
$
140,883
   
$
141,627
   
$
542,531
   
$
146,213
   
$
154,727
   
$
161,578
   
$
180,104
   
$
642,622
 
Growth %
   
15
%
   
16
%
   
23
%
   
21
%
   
21
%
   
20
%
   
18
%
   
13
%
   
15
%
   
27
%
   
18
%
                                                                                         
Acquisition-related and other deferred revenue
   
(2,157
)
   
(343
)
   
(258
)
   
(161
)
   
(187
)
   
(949
)
   
705
     
945
     
698
     
710
     
3,058
 
Non-GAAP On Demand Revenue
 
$
448,805
   
$
123,068
   
$
136,352
   
$
140,722
   
$
141,440
   
$
541,582
   
$
146,918
   
$
155,672
   
$
162,276
   
$
180,814
   
$
645,680
 
Growth %
   
15
%
   
16
%
   
24
%
   
21
%
   
21
%
   
21
%
   
19
%
   
14
%
   
15
%
   
28
%
   
19
%
                                                                                         
On Premise Revenue
 
$
2,970
   
$
772
   
$
687
   
$
682
   
$
695
   
$
2,836
   
$
675
   
$
659
   
$
648
   
$
662
   
$
2,644
 
Professional & Other Revenue
 
$
14,588
   
$
4,200
   
$
5,422
   
$
6,390
   
$
6,749
   
$
22,761
   
$
6,031
   
$
5,920
   
$
6,832
   
$
6,914
   
$
25,697
 
                                                                                         
Expenses ($000's)
                                                                                       
Cost of Revenue
                                                                                       
GAAP View
 
$
198,613
   
$
54,748
   
$
62,078
   
$
64,111
   
$
61,364
   
$
242,301
   
$
63,042
   
$
67,544
   
$
69,348
   
$
73,513
   
$
273,447
 
Stock-based expense
   
(4,046
)
   
(751
)
   
(826
)
   
(929
)
   
(804
)
   
(3,310
)
   
(853
)
   
(1,050
)
   
(1,040
)
   
(899
)
   
(3,842
)
Amortization of intangible assets
   
(14,213
)
   
(4,165
)
   
(4,141
)
   
(4,296
)
   
(4,159
)
   
(16,761
)
   
(3,689
)
   
(3,691
)
   
(3,554
)
   
(4,378
)
   
(15,312
)
Headquarters relocation costs
   
-
     
(584
)
   
(679
)
   
(760
)
   
-
     
(2,023
)
   
-
     
-
     
-
     
-
     
-
 
Non-GAAP View
 
$
180,354
   
$
49,248
   
$
56,432
   
$
58,126
   
$
56,401
   
$
220,207
   
$
58,500
   
$
62,803
   
$
64,754
   
$
68,236
   
$
254,293
 
Depreciation
   
(9,802
)
   
(2,692
)
   
(3,054
)
   
(2,834
)
   
(2,825
)
   
(11,405
)
   
(2,883
)
   
(3,063
)
   
(2,909
)
   
(2,935
)
   
(11,790
)
Adjusted EBITDA View
 
$
170,552
   
$
46,556
   
$
53,378
   
$
55,292
   
$
53,576
   
$
208,802
   
$
55,617
   
$
59,740
   
$
61,845
   
$
65,301
   
$
242,503
 
                                                                                         
Product Development
                                                                                       
GAAP View
 
$
68,799
   
$
17,272
   
$
18,878
   
$
18,743
   
$
18,714
   
$
73,607
   
$
20,387
   
$
21,290
   
$
21,885
   
$
25,890
   
$
89,452
 
Stock-based expense
   
(8,585
)
   
(1,449
)
   
(1,897
)
   
(1,900
)
   
(1,825
)
   
(7,071
)
   
(1,879
)
   
(2,454
)
   
(2,098
)
   
(1,992
)
   
(8,423
)
Asset impairment and loss on disposal of assets
   
(1,418
)
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
 
Headquarters relocation costs
   
-
     
(154
)
   
(176
)
   
(211
)
   
-
     
(541
)
   
-
     
-
     
-
     
-
     
-
 
Non-GAAP View
 
$
58,796
   
$
15,669
   
$
16,805
   
$
16,632
   
$
16,889
   
$
65,995
   
$
18,508
   
$
18,836
   
$
19,787
   
$
23,898
   
$
81,029
 
Depreciation
   
(5,279
)
   
(1,200
)
   
(1,462
)
   
(1,502
)
   
(1,572
)
   
(5,736
)
   
(1,530
)
   
(1,561
)
   
(1,698
)
   
(1,819
)
   
(6,608
)
Adjusted EBITDA View
 
$
53,517
   
$
14,469
   
$
15,343
   
$
15,130
   
$
15,317
   
$
60,259
   
$
16,978
   
$
17,275
   
$
18,089
   
$
22,079
   
$
74,421
 
                                                                                         
Sales & Marketing
                                                                                       
GAAP View
 
$
123,108
   
$
32,199
   
$
35,129
   
$
33,860
   
$
34,025
   
$
135,213
   
$
35,147
   
$
39,235
   
$
42,583
   
$
48,114
   
$
165,079
 
Stock-based expense
   
(12,996
)
   
(2,974
)
   
(3,799
)
   
(1,406
)
   
(3,185
)
   
(11,364
)
   
(3,128
)
   
(4,266
)
   
(3,847
)
   
(3,351
)
   
(14,592
)
Amortization of intangible assets
   
(11,164
)
   
(2,946
)
   
(3,596
)
   
(3,551
)
   
(3,414
)
   
(13,507
)
   
(4,100
)
   
(4,536
)
   
(5,781
)
   
(10,189
)
   
(24,606
)
Headquarters relocation costs
   
-
     
(170
)
   
(184
)
   
(220
)
   
-
     
(574
)
   
-
     
-
     
-
     
-
     
-
 
Non-GAAP View
 
$
98,948
   
$
26,109
   
$
27,550
   
$
28,683
   
$
27,426
   
$
109,768
   
$
27,919
   
$
30,433
   
$
32,955
   
$
34,574
   
$
125,881
 
Depreciation
   
(2,170
)
   
(606
)
   
(615
)
   
(593
)
   
(586
)
   
(2,400
)
   
(588
)
   
(663
)
   
(601
)
   
(635
)
   
(2,487
)
Adjusted EBITDA View
 
$
96,778
   
$
25,503
   
$
26,935
   
$
28,090
   
$
26,840
   
$
107,368
   
$
27,331
   
$
29,770
   
$
32,354
   
$
33,939
   
$
123,394
 
                                                                                         
General & Administrative
                                                                                       
GAAP View
 
$
68,814
   
$
18,346
   
$
21,932
   
$
21,677
   
$
23,058
   
$
85,013
   
$
24,251
   
$
27,370
   
$
31,004
   
$
30,350
   
$
112,975
 
Stock-based expense
   
(12,495
)
   
(3,217
)
   
(4,215
)
   
(4,020
)
   
(3,655
)
   
(15,107
)
   
(4,232
)
   
(6,106
)
   
(4,779
)
   
(3,861
)
   
(18,978
)
Asset impairment and loss on disposal of assets
   
(1,652
)
   
-
     
(85
)
   
(164
)
   
(248
)
   
(497
)
   
(24
)
   
(63
)
   
(385
)
   
(52
)
   
(524
)
Acquisition-related income (expense)
   
1,841
     
57
     
9
     
266
     
(695
)
   
(363
)
   
(1,210
)
   
(1,354
)
   
(485
)
   
(2,508
)
   
(5,557
)
Cost related to Hart-Scott-Rodino review process
 
  -       -       -       -       -       -       (481 )     (2,228 )     (5,993 )    
(2,310
)
   
(11,012
)
Headquarters relocation costs
   
-
     
(117
)
   
(135
)
   
(162
)
   
-
     
(414
)
   
-
     
-
     
-
     
-
     
-
 
Litigation-related expense
   
(2
)
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
 
Non-GAAP View
 
$
56,506
   
$
15,069
   
$
17,506
   
$
17,597
   
$
18,460
   
$
68,632
   
$
18,304
   
$
17,619
   
$
19,362
   
$
21,619
   
$
76,904
 
Depreciation
   
(3,263
)
   
(998
)
   
(1,347
)
   
(1,276
)
   
(1,404
)
   
(5,025
)
   
(1,650
)
   
(1,579
)
   
(1,738
)
   
(1,376
)
   
(6,343
)
Other (income) expense
   
82
     
(11
)
   
(16
)
   
(15
)
   
(25
)
   
(67
)
   
(34
)
   
(18
)
   
(136
)
   
(115
)
   
(303
)
Adjusted EBITDA View
 
$
53,325
   
$
14,060
   
$
16,143
   
$
16,306
   
$
17,031
   
$
63,540
   
$
16,620
   
$
16,022
   
$
17,488
   
$
20,128
   
$
70,258
 
                                                                                         
Profitability ($000's)
                                                                                       
GAAP Net Income (Loss)
 
$
(9,218
)
 
$
2,996
   
$
2,083
   
$
4,210
   
$
7,361
   
$
16,650
   
$
8,195
   
$
6,213
   
$
6,834
   
$
(20,865
)
 
$
377
 
Acquisition-related and other deferred revenue
   
(2,157
)
   
(343
)
   
(258
)
   
(161
)
   
(187
)
   
(949
)
   
705
     
945
     
698
     
710
     
3,058
 
Depreciation, asset impairment, and loss on disposal of assets
   
44,385
     
5,496
     
6,563
     
7,119
     
6,635
     
25,813
     
6,675
     
6,929
     
7,331
     
6,817
     
27,752
 
Amortization of intangible assets
   
25,377
     
7,111
     
7,737
     
7,847
     
7,573
     
30,268
     
7,789
     
8,227
     
9,335
     
14,567
     
39,918
 
Acquisition-related expense (income)
   
(1,841
)
   
(57
)
   
(9
)
   
(266
)
   
695
     
363
     
1,210
     
1,354
     
485
     
2,508
     
5,557
 
Cost related to Hart-Scott-Rodino review process
 
  -       -       -     -       -       -       481       2,228       5,993      
2,310
     
11,012
 
Interest expense, net
   
1,367
     
719
     
1,090
     
1,079
     
937
     
3,825
     
1,120
     
2,804
     
4,813
     
6,335
     
15,072
 
Income tax (benefit) expense
   
(3,846
)
   
2,114
     
1,545
     
3,540
     
3,637
     
10,836
     
811
     
(3,132
)
   
(7,273
)
   
24,458
     
14,864
 
Litigation-related expense
   
2
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
 
Headquarters relocation costs