If we are talking valuation, here is the place to start. I'll comment later about the implications.
YEAR ENDED DECEMBER 31
--------------------------------
1999 1998 1997
-------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE
INFORMATION)
Revenues:
Net revenues............................................. $363,455 $216,901 $114,308
Net revenues -- related party............................ 39,830 31,735 9,625
-------- -------- --------
Net revenues.......................................... 403,285 248,636 123,933
-------- -------- --------
Cost of revenues:
Cost of revenues (excluding amortization presented
separately below)..................................... 13,745 13,422 11,265
Cost of revenues -- related party........................ 834 3,260 1,039
-------- -------- --------
Total cost of revenues........................... 14,579 16,682 12,304
-------- -------- --------
Gross margin............................................... 388,706 231,954 111,629
Operating expenses:
Research and development................................. 37,363 22,858 6,948
Sales, marketing and support............................. 121,302 74,855 35,352
General and administrative............................... 37,757 20,131 10,651
Amortization of intangible assets........................ 18,480 10,190 --
In-process research and development...................... 2,300 18,416 3,950
-------- -------- --------
Total operating expenses......................... 217,202 146,450 56,901
-------- -------- --------
Income from operations..................................... 171,504 85,504 54,728
Interest and other income.................................. 23,843 10,043 9,903
Interest expense........................................... (12,622) (75) (9)
-------- -------- --------
Income before income taxes................................. 182,725 95,472 64,622
Income taxes............................................... 65,781 34,370 23,264
-------- -------- --------
Net income................................................. $116,944 $ 61,102 $ 41,358
======== ======== ========
Earnings per common share:
Basic earnings per share................................. $ 0.66 $ 0.36 $ 0.25
======== ======== ========
Weighted average shares outstanding...................... 176,260 168,473 163,444
======== ======== ========
Earnings per common share -- assuming dilution:
Diluted earnings per share............................... $ 0.61 $ 0.33 $ 0.24
======== ======== ========
Weighted average shares outstanding...................... 192,566 182,594 174,524
======== ======== ========
YEAR ENDED DECEMBER 31
--------------------------------
1999 1998 1997
-------- --------- ---------
(IN THOUSANDS)
OPERATING ACTIVITIES
Net income.................................................. $116,944 $ 61,102 $ 41,358
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization.......................... 27,563 15,173 1,712
Tax benefit related to the exercise of non-statutory
stock options and disqualified dispositions of
incentive stock options.............................. 50,843 24,174 10,675
In-process research and development.................... 2,300 18,416 3,950
Provision for doubtful accounts........................ 584 620 1,399
Provision for product returns.......................... 17,996 8,580 5,809
Provision for inventory obsolescence................... 1,982 417 --
Accretion of original issue discount and amortization
of financing cost.................................... 12,592 -- --
Changes in operating assets and liabilities, net of
effects of acquisitions:
Accounts receivable.................................. (41,110) (28,924) (15,249)
Inventories.......................................... (5,641) (2,216) (1,550)
Prepaid expenses..................................... (32,762) (5,352) (2,733)
Other assets......................................... (7,277) (91) --
Deferred tax assets.................................. (14,674) (14,536) (24,362)
Accounts payable and other accrued expenses.......... 27,526 9,492 8,472
Accrued royalties and other accounts payable to
stockholder....................................... (2,464) (153) 1,520
Deferred revenues.................................... 17,800 6,960 1,073
Deferred revenues on contract with stockholder....... 5,170 23,265 65,375
Income taxes payable................................. 6,649 2,391 236
-------- --------- ---------
Net cash provided by operating activities................... 184,021 119,318 97,685
INVESTING ACTIVITIES
Purchases of investments.................................... (547,510) (284,793) (126,536)
Proceeds from sale of investments........................... 151,284 219,861 75,632
Cash paid for acquisitions, net of cash acquired............ (35,006) (63,549) (2,611)
Cash paid for licensing agreement........................... -- (7,000) --
Purchases of property and equipment......................... (26,313) (11,420) (6,104)
Purchase of trademark....................................... -- (250) --
-------- --------- ---------
Net cash used in investing activities....................... (457,545) (147,151) (59,619) |
