TEKELEC

CIK:0000790705|SEC Filings

Earnings Per Share

9 Months Ended

Sep. 30, 2011

Note 13 — Earnings Per Share

The following table provides a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for the three and nine months ended September 30, 2011 and 2010 (in thousands, except per share amounts):


	Income from Operations (Numerator)			Shares (Denominator)		Per-Share Amount
For the Three Months Ended September 30, 2011:
Basic income (loss) from operations per share	$	762			69,215	$	0.01
Effect of dilutive securities		0			145

Diluted income (loss) from operations per share	$	762			69,360	$	0.01

For the Three Months Ended September 30, 2010:
Basic income (loss) from operations per share	$	(134	)		68,526	$	(0.00	)
Effect of dilutive securities		0			0

Diluted income (loss) from operations per share	$	(134	)		68,526	$	(0.00	)

For the Nine Months Ended September 30, 2011:
Basic income (loss) from operations per share	$	(21,698	)		69,013	$	(0.31	)
Effect of dilutive securities		0			0

Diluted income (loss) from operations per share	$	(21,698	)		69,013	$	(0.31	)

For the Nine Months Ended September 30, 2010:
Basic income (loss) from operations per share	$	23,006			68,179	$	0.34
Effect of dilutive securities		0			677

Diluted income (loss) from operations per share	$	23,006			68,856	$	0.33

The computation of diluted earnings per share excludes unexercised stock options and unvested restricted stock units that are anti-dilutive. The following common stock equivalents were excluded from the earnings per share computation, as their inclusion would have been anti-dilutive (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Weighted average number of stock options, SARs and RSUs, calculated using the treasury stock method, that were excluded due to the exercise/threshold price exceeding the average market price of our common stock during the period		3,541		4,305		3,995		3,972
Weighted average number of stock options, SARs and RSUs excluded due to the reporting of a net loss for the period		0		334		172		0

Total common stock equivalents excluded from diluted net income (loss) per share computation		3,541		4,639		4,167		3,972

There were no transactions subsequent to September 30, 2011, which, had they occurred prior to the end of our third quarter, would have changed materially the number of shares in the basic or diluted earnings per share computations.

Condensed Consolidated Statements Of Cash Flows (USD $) In Thousands	9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010
Cash flows from operating activities:
Net income (loss)	$ (21,698)	$ 23,006
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Gain on investments carried at fair value, net	0	(118)
Provision for (recovery of) doubtful accounts and returns	(1,039)	1,934
Provision for (reduction of) warranty	1,550	(1,305)
Inventory write downs	5,810	3,164
Loss on disposal of fixed assets	377	51
Depreciation	13,030	12,383
Amortization of intangible assets	28,358	15,958
Amortization, other	239	612
Deferred income taxes	(10,648)	6,925
Stock-based compensation	7,813	9,914
Excess tax benefits from stock-based compensation	(12)	(872)
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable	46,911	20,112
Inventories	4,767	(5,660)
Deferred costs	13,246	15,889
Prepaid expenses	546	56
Other current assets	(275)	545
Accounts payable	(4,319)	(16,461)
Accrued expenses	24,139	(10,118)
Accrued compensation and related expenses	(5,642)	(20,062)
Deferred revenues	(35,952)	(39,079)
Income taxes receivable	(8,470)	1,617
Income taxes payable	2,606	1,711
Total adjustments	82,285	(2,804)
Net cash provided by (used in) operating activities	61,337	20,202
Cash flows from investing activities:
Proceeds from sales and maturities of investments	0	92,975
Purchase of acquired business, net of cash acquired	0	(161,953)
Purchases of property and equipment	(12,039)	(14,060)
Net cash provided by (used in) investing activities	(12,039)	(83,038)
Cash flows from financing activities:
Proceeds from issuances of common stock	1,265	10,892
Payments of net share-settled payroll taxes related to equity awards	(1,244)	(2,914)
Excess tax benefits from stock-based compensation	12	872
Net cash provided by (used in) financing activities	33	8,850
Effect of exchange rate changes on cash	187	(558)
Net change in cash and cash equivalents	49,518	(54,544)
Cash and cash equivalents, beginning of period	220,938	277,259
Cash and cash equivalents, end of period	$ 270,456	$ 222,715

Condensed Consolidated Balance Sheets (USD $) In Thousands	Sep. 30, 2011	Dec. 31, 2010
Current assets:
Cash and cash equivalents	$ 270,456	$ 220,938
Accounts receivable, net	117,305	165,019
Inventories	17,709	28,221
Income taxes receivable	11,447	3,098
Deferred income tax asset, current	21,773	19,906
Deferred costs and prepaid commissions	30,879	43,652
Prepaid expenses	7,990	8,527
Other current assets	3,761	3,687
Total current assets	481,320	493,048
Property and equipment, net	35,831	37,169
Deferred income tax asset, net, noncurrent	75,957	72,854
Other assets	1,410	1,507
Goodwill	135,620	135,564
Intangibles assets, net	64,284	92,245
Total assets	794,422	832,387
Current liabilities:
Accounts payable	13,650	17,823
Accrued expenses	38,607	20,344
Accrued compensation and related expenses	16,980	22,680
Current portion of deferred revenues	110,644	145,291
Total current liabilities	179,881	206,138
Deferred income tax liabilities, noncurrent	1,752	7,430
Long-term portion of deferred revenues	4,184	6,812
Other long-term liabilities	15,212	5,422
Total liabilities	201,029	225,802
Commitments and Contingencies (Note 10)
Shareholders' equity:
Common stock, without par value, 200,000,000 shares authorized; 69,253,624 and 68,617,232 shares issued and outstanding, respectively	359,143	351,309
Retained earnings	235,131	256,829
Accumulated other comprehensive income (loss)	(881)	(1,553)
Total shareholders' equity	593,393	606,585
Total liabilities and shareholders' equity	$ 794,422	$ 832,387