Ancestry.com Inc.

CIK:0001469433|SEC Filings

NET INCOME PER COMMON SHARE

9 Months Ended

Sep. 30, 2012

7. NET INCOME PER COMMON SHARE

Basic net income per common share is computed using the weighted average number of outstanding shares of common stock during the period. Diluted net income per common share is computed using the weighted average number of outstanding shares of common stock and, when dilutive, potential shares of common stock outstanding during the period. Potential shares of common stock consist primarily of incremental shares issuable upon the assumed vesting and exercise or settlement of stock-based awards using the treasury stock method.

The following table sets forth the computations of basic and diluted net income per common share (in thousands, except per share data):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Basic net income per common share:
Net income	$	24,900	$	19,051	$	58,424	$	44,579
Shares used in computation:
Weighted average common shares outstanding		43,094		44,670		42,877		45,209

Basic net income per common share	$	0.58	$	0.43	$	1.36	$	0.99

Diluted net income per common share:
Net income	$	24,900	$	19,051	$	58,424	$	44,579
Shares used in computation:
Weighted average common shares outstanding		43,094		44,670		42,877		45,209
Dilutive stock-based awards		2,880		3,503		2,873		4,227

Weighted average number of diluted common shares		45,974		48,173		45,750		49,436

Diluted net income per common share	$	0.54	$	0.40	$	1.28	$	0.90

The computation of diluted net income per common share for the three and nine months ended September 30, 2012 excluded 1.2 million shares and 1.8 million shares, respectively, as their impact was anti-dilutive. The computation of diluted net income per common share for the three and nine months ended September 30, 2011 excluded 0.6 million shares as their impact was anti-dilutive.

Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Operating activities:
Net income	$ 24,900	$ 19,051	$ 58,424	$ 44,579
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	3,754	3,341	10,907	9,793
Amortization of content databases	2,977	2,377	8,114	6,792
Amortization of acquired intangible assets	4,577	4,304	10,362	12,871
Amortization of deferred financing costs	69	66	207	204
Deferred income taxes	(1,134)	156	491	(2,833)
Stock-based compensation expense	4,083	2,942	11,086	6,868
Changes in operating assets and liabilities:
Accounts receivable	(3,314)	(785)	(2,341)	523
Restricted cash, net	200	53	205	589
Other assets	(270)	(2,066)	(1,567)	(2,299)
Income taxes, net	5,669	7,331	(511)	20,824
Accounts payable and other liabilities	13,016	(4,763)	9,665	(2,376)
Excess tax benefits from stock-based awards activity	(1,701)	(4,061)	(4,048)	(24,510)
Deferred revenues	795	(1,774)	25,639	23,132
Net cash provided by operating activities	53,621	26,172	126,633	94,157
Investing activities:
Capitalization of content databases	(6,288)	(4,673)	(18,966)	(14,624)
Purchases of property and equipment	(7,326)	(4,573)	(17,443)	(8,991)
Acquisition of businesses	(102,775)		(114,506)
Net cash used in investing activities	(116,389)	(9,246)	(150,915)	(23,615)
Financing activities:
Proceeds from exercise of stock options	2,141	2,045	5,947	12,067
Taxes paid related to net share settlement of stock-based awards	(1,115)	(232)	(2,283)	(747)
Proceeds from debt	70,000		70,000
Principal payments on debt	(15,000)		(25,000)
Excess tax benefits from stock-based awards activity	1,701	4,061	4,048	24,510
Repurchases of common stock		(46,905)	(12,832)	(125,000)
Net cash provided by (used in) financing activities	57,727	(41,031)	39,880	(89,170)
Effect of changes in foreign currency exchange rates on cash and cash equivalents	51	(18)	29	5
Net increase (decrease) in cash and cash equivalents	(4,990)	(24,123)	15,627	(18,623)
Cash and cash equivalents at beginning of period	69,615	71,019	48,998	65,519
Cash and cash equivalents at end of period	64,625	46,896	64,625	46,896
Supplemental disclosures of cash flow information:
Cash paid for interest	337	107	537	333
Cash paid for income taxes	6,537	126	27,061	3,683
Supplemental disclosures of noncash investing and financing activities:
Capitalization of stock-based compensation	$ 29	$ 11	$ 88	$ 29

Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 64,625	$ 48,998
Restricted cash	16,157	1,702
Accounts receivable, net of allowances of $769 and $527 at September 30, 2012 and December 31, 2011, respectively	9,854	7,599
Income tax receivable	4,784	1,763
Deferred income taxes	4,911	4,823
Prepaid expenses and other current assets	7,692	7,945
Total current assets	108,023	72,830
Property and equipment, net	28,272	21,701
Content databases, net	95,787	76,646
Intangible assets, net	52,731	17,594
Goodwill	372,901	302,422
Other assets	12,367	2,656
Total assets	670,081	493,849
Current liabilities:
Accounts payable	13,363	9,817
Accrued expenses	37,904	33,428
Escrow liability	15,957	1,297
Deferred revenues	143,418	108,654
Debt	55,000	10,000
Total current liabilities	265,642	163,196
Deferred income taxes	15,527	14,925
Other long-term liabilities	14,199	5,219
Total liabilities	295,368	183,340
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value; 5,000 shares authorized; no shares issued and outstanding
Common stock, $0.001 par value; 175,000 shares authorized; 48,879 shares issued and 43,233 shares outstanding at September 30, 2012 and 47,898 shares issued and 42,793 shares outstanding at December 31, 2011	49	48
Additional paid-in capital	393,250	374,948
Treasury stock, at cost; 5,646 and 5,105 shares at September 30, 2012 and December 31, 2011, respectively	(175,000)	(162,168)
Accumulated other comprehensive income	873	564
Retained earnings	155,541	97,117
Total stockholders' equity	374,713	310,509
Total liabilities and stockholders' equity	$ 670,081	$ 493,849