EX-99.1 2 dex991.htm PRESS RELEASE Press Release

 

Exhibit 99.1

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Pegasystems Announces Thirteenth Consecutive Quarter of Record Revenue

GAAP revenue increases 39% to $90 million, Non-GAAP revenue increases 47% to $95.4 million;

GAAP net income was $3.1 million or $0.08 per share (basic), Non-GAAP net income was $9.9 million

or $0.27 per share (basic)

CAMBRIDGE, Mass. – November 9, 2010 – Pegasystems Inc. (NASDAQ: PEGA) today announced financial results for the third quarter and nine months ended September 30, 2010. These results include the operations of Chordiant Software, Inc. from the April 21, 2010 acquisition date. GAAP revenue for the third quarter of 2010 increased 39% to $90 million compared to the third quarter of 2009, and for the first nine months of 2010 increased 29% to $247 million compared to first nine months of 2009. Non-GAAP revenue for the third quarter of 2010 increased 47% to $95.4 million compared to the third quarter of 2009, and for the first nine months of 2010 increased 34% to $256.4 million compared to first nine months of 2009. GAAP net income for the third quarter of 2010 was $3.1 million or $0.08 per share (diluted), compared to GAAP net income of $6.0 million, or $0.16 per share (diluted), for the third quarter of 2009. Non-GAAP net income for the third quarter of 2010 was $9.9 million or $0.26 per share (diluted), compared to Non-GAAP net income of $6.7 million, or $0.17 per share (diluted), for the third quarter of 2009. GAAP net loss for the first nine months of 2010 was ($1.2) million, or ($0.03) per share, compared to GAAP net income of $25.9 million, or $0.68 per share (diluted) for the first nine months of 2009. Non-GAAP net income for the first nine months of 2010 was $19.9 million, or $0.51 per share (diluted), compared to Non-GAAP net income of $28.4 million, or $0.75 per share (diluted) for the first nine months of 2009.

SELECTED GAAP & NON-GAAP RESULTS (1)

     Three Months Ended September 30,      % Increase     
     2010      2010      2009      2009     

 

(Decrease)

     
($ in ‘000s)    GAAP      Non-GAAP      GAAP      Non-GAAP          GAAP        Non-GAAP     

Total Revenue

    $ 90,016       $ 95,433       $ 64,821       $ 64,821       39    %             47     %

Operating Income

    $ 1,943       $ 12,282       $ 7,465       $ 8,463       (74)   %             45     %

Net Income

    $ 3,139       $ 9,899       $ 6,001       $ 6,703       (48)   %             48     %

Basic Earnings per share

    $ 0.08       $ 0.27       $ 0.16       $ 0.18       (50)   %             50     %

Diluted Earnings per share

    $ 0.08       $ 0.26       $ 0.16       $ 0.17       (50)   %             53     %
     Nine Months Ended September 30,      % Increase     
     2010      2010      2009      2009     

 

(Decrease)

     
($ in ‘000s)    GAAP      Non-GAAP      GAAP      Non-GAAP          GAAP        Non-GAAP     

Total Revenue

    $   247,346        $  256,356       $   191,066       $   191,066       29    %             34     %

Operating Income

    $ 1,365        $ 31,920       $ 31,630       $ 35,258       (96)  %              (9)    %

Net (Loss) Income

    $ (1,198)       $ 19,854       $ 25,884       $ 28,446       (105)  %            (30)    %

Basic (Loss) Earnings per share

    $ (0.03)       $ 0.54       $ 0.72       $ 0.79       (104)  %            (32)    %

Diluted (Loss) Earnings per share

    $ (0.03)       $ 0.51       $ 0.68       $ 0.75       (104)  %            (32)    %

(1) See a reconciliation of our GAAP to Non-GAAP measures contained in the financial schedules at the end of this release.

 

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Business Perspective

“During the third quarter of 2010, we were recognized by the two leading industry analyst firms as a market-leader in the category of business process management,” said Alan Trefler, Founder and CEO of Pegasystems. “This recognition reflects the sustained success our clients are having with our software. They have achieved rapid returns on their investments and are beginning to see transformational opportunities across their organizations. We were also pleased to be recognized by Fortune Magazine as number eight on their list of ‘Fastest-Growing Companies’ for 2010.”

“We have continued our efforts and investments to drive further innovation across a broadening portfolio of industry leading solutions. During the third quarter, we announced the latest release of our CRM solution, which is focused on helping organizations deliver a superior customer experience to their clients. We also released solutions that expanded our capabilities in the financial services and insurance industries, which provide opportunities for growth within our existing customers and fuel engagement with new clients,” concluded Mr. Trefler.

Craig Dynes, Pegasystems’ CFO, added, “During the third quarter, we set a new record for quarterly revenue with GAAP revenue totaling $90 million. Our financial results for the third quarter demonstrate that so far, 2010 is very back-end loaded. In fact, Q3 non-GAAP license revenue of $36.5 million was 25% higher than Q2, and Q3 non-GAAP net income of $9.9 million was almost equal to non-GAAP net income for the first six months of 2010. Our pipeline for Q4 and 2011 is both substantial and encouraging as we believe it reflects a continuing increase in both the BPM market and our market share.”

Messrs. Trefler and Dynes will be hosting a conference call and live Webcast associated with this announcement at 9:00 a.m. EDT on November 10, 2010. Dial-in information is as follows: 1 (877) 348-9349 (domestic) or 1 (678) 809-1046 (international). To listen to the Webcast log onto www.pega.com at least 5 minutes prior to the event’s broadcast and click on the Webcast icon in the Investor Relations section. A replay of the call will also be available on www.pega.com in the Investor Relations section Audio Archives link.

Discussion of Non-GAAP Measures

To supplement financial results presented on a GAAP basis, the Company provides non-GAAP measures included in this release, including the tables contained herein. Pegasystems’ management utilizes a number of different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of the business, for making operating decisions, and for forecasting and planning for future periods. The Company’s annual financial plan is prepared both on a GAAP and non-GAAP basis, and the non-GAAP annual financial plan is approved by our board of directors. In addition and as a consequence of the importance of these measures in managing the business, the Company uses non-GAAP measures and results in the evaluation process to establish management’s compensation.

 

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These measures exclude certain business combination accounting entries and expenses related to our acquisition of Chordiant, as well as other significant expenses including stock-based compensation. The Company believes that these non-GAAP measures are helpful in understanding our past financial performance and our anticipated future results. These non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. A reconciliation of the Company’s GAAP measures to non-GAAP measures is included in the financial schedules at the end of the release.

Forward-Looking Statements

Certain statements contained in this press release may be construed as “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995, including those relating to our revenue and pipeline. The words “anticipate,” “project,” “expect,” “plan,” “intend,” “believe,” “estimate,” “target,” “forecast,” “could,” “preliminary,” “guidance” and similar expressions, among others, identify forward-looking statements, which speak only as of the date the statement was made. These statements are based on current expectations and assumptions and involve various risks and uncertainties, which could cause the Company’s actual results to differ from those expressed in such forward-looking statements. These risks and uncertainties include, among others, the Company’s ability to successfully integrate the operations of Chordiant Software, Inc., variation in demand for our products and services and the difficulty in predicting the completion of product acceptance and other factors affecting the timing of our license revenue recognition, the mix of perpetual and term licenses and the level of term license renewals, our ability to develop new products and evolve existing ones, the weak global economy and the ongoing consolidation in the financial services and healthcare markets, our ability to attract and retain key personnel, reliance on key third party relationships, the potential loss of vendor specific objective evidence for our professional services, and management of the Company’s growth. Further information regarding these and other factors which could cause the Company’s actual results to differ materially from any forward-looking statements contained in this press release is contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 and other recent filings with the Securities and Exchange Commission. The forward-looking statements contained in this press release represent the Company’s views as of November 9, 2010. Investors are cautioned not to place undue reliance on such forward-looking statements and there are no assurances that the matters contained in such statements will be achieved. Although subsequent events may cause the Company’s view to change, the Company does not undertake and specifically disclaims any obligation to publicly update or revise these forward-looking statements whether as the result of new information, future events or otherwise. The statements should therefore not be relied upon as representing the Company’s view as of any date subsequent to November 9, 2010.

About Pegasystems

Pegasystems, the leader in business process management and a leading provider of CRM solutions, helps organizations enhance customer loyalty, generate new business, and improve productivity. Our patented Build for Change® technology speeds the delivery of critical business solutions by directly capturing business objectives and eliminating manual programming. Pegasystems enables clients to quickly adapt to changing business conditions in order to outperform the competition. For more information, please visit us at www.pega.com.

For Information, contact:

Craig Dynes, Chief Financial Officer

617-866-6020

CDynes@pega.com

All trademarks are the property of their respective owners.

 

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Pegasystems Inc.

Unaudited Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)

 

    Three Months Ended
September 30,		     Nine Months Ended
September 30,		  
            2010                     2009                     2010                     2009          

Revenue:

        

  Software license

     $ 33,889         $ 28,358         $ 92,432         $ 82,045    

  Maintenance

     23,418         12,489         58,892         36,608    

  Professional services

     32,709         23,974         96,022         72,413    
                               

Total revenue

     90,016         64,821         247,346         191,066    
                               

Cost of revenue:

        

  Cost of software license

     1,571         28         2,711         90    

  Cost of maintenance

     3,187         1,558         7,839         4,452    

  Cost of professional services

     30,232         22,474         82,136         61,641    
                               

Total cost of revenue (1)

     34,990         24,060         92,686         66,183    
                               

Gross profit

     55,026         40,761         154,660         124,883    
                               

Operating expenses:

        

  Selling and marketing

     31,199         19,568         82,988         51,663    

  Research and development

     14,924         9,930         40,560         28,198    

  General and administrative

     6,442         3,798         18,246         13,392    

  Acquisition-related costs

     111         -         5,014         -    

  Restructuring costs

     407         -         6,487         -    
                               

Total operating expenses (1)

     53,083         33,296         153,295         93,253    
                               

Income from operations

     1,943         7,465         1,365         31,630    

Foreign currency transaction gain (loss)

     1,513         266         (4,103)         2,377    

Interest income, net

     129         721         761         2,404    

Installment receivable interest income

     51         74         155         224    

Other income, net

     572         -         814         17    
                               
Income (loss) before provision for income taxes     4,208         8,526         (1,008)         36,652    

Provision for income taxes

     1,069         2,525         190         10,768    
                               

Net income (loss)

     $ 3,139         $ 6,001         $ (1,198)         $ 25,884    
                               

Net earnings (loss) per share:

        

Basic

     $ 0.08         $ 0.16         $ (0.03)         $ 0.72    
                               

Diluted

     $ 0.08         $ 0.16         $ (0.03)         $ 0.68    
                               
Weighted-average number of common shares outstanding:        

Basic

     36,996         36,462         37,008         36,035    

Diluted

     38,534         38,441         37,008         37,995    

Dividends per share

     $ 0.03         $ 0.03         $ 0.09         $ 0.09    
                               
(1) Includes stock-based compensation as follows:         

Cost of revenue

     $ 447         $ 250         $ 1,328         $ 884    

Operating expenses

     $ 1,134         $ 715         $ 3,885         $ 2,639    

 

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PEGASYSTEMS INC.

RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)

($ in thousands, except per share data)

 

    Three Months Ended September 30,    

% Increase

(Decrease)

  
     2010
    GAAP    		     Adj.     2010
Non-GAAP		     2009
GAAP		     Adj.     2009
Non-GAAP		         GAAP         Non-GAAP  

TOTAL REVENUE (2) (3) (4)

     $ 90,016      $ 5,417           $ 95,433      $ 64,821      $ -                 $ 64,821        39%          47%     

 Software license (2)

     33,889        2,605        36,494        28,358        -              28,358        20%          29%     

 Maintenance (3)

     23,418        2,685        26,103        12,489        -              12,489        88%          109%     

 Professional services (4)

     32,709        127        32,836        23,974        -              23,974        36%          37%     
               

TOTAL COST OF REVENUE (5) (6)

     $ 34,990      $     (1,997)           $ 32,993      $     24,060      $     (278)           $ 23,782        45%          39%     

 Amortization of intangible assets (5)

     1,550        (1,550)        -             28        (28)        -             n/m                 0%     

 Stock-based compensation (6)

     447        (447)        -             250        (250)        -             79%          0%     
               

TOTAL OPERATING EXPENSES (5) (6)

     $ 53,083      $ (2,925)           $ 50,158      $ 33,296      $ (720)           $ 32,576        59%          54%     

 Amortization of intangible assets (5)

     1,273        (1,273)        -             5        (5)        -             n/m                 0%     

 Stock-based compensation (6)

     1,134        (1,134)        -             715        (715)        -             59%          0%     

 Acquisition-related costs

     111        (111)        -             -             -              -             100%          0%     

 Restructuring costs

     407        (407)        -             -             -              -             100%          0%     
               

INCOME FROM OPERATIONS

     $ 1,943      $ 10,339           $ 12,282      $ 7,465      $ 998           $ 8,463        -74%          45%     
               

OPERATING MARGIN %

     2.16%          12.87%        11.52%          13.06%        (0.0936)  bp      (0.0019)  bp
               

INCOME TAX EFFECTS (7)

     $ 1,069      $ 3,579           $ 4,648      $ 2,525      $ 296           $ 2,821        -58%          65%     
               

NET INCOME

     $ 3,139      $ 6,760           $ 9,899      $ 6,001      $ 702           $ 6,703        -48%          48%     

NET EARNINGS PER SHARE:

                

BASIC

     $ 0.08             $ 0.27      $ 0.16             $ 0.18        -50%          50%     

DILUTED

     $ 0.08             $ 0.26      $ 0.16             $ 0.17        -50%          53%     
               

WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING

 

              

BASIC

     36,996        -              36,996        36,462        -              36,462        1%          1%     

DILUTED

     38,534        -              38,534        38,441        -              38,441        0%          0%     

 

n/m - not meaningful

 

                        

 

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PEGASYSTEMS INC.

RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)

($ in thousands, except per share data)

 

    Nine Months Ended September 30,    

% Increase

(Decrease)

  
     2010
    GAAP    		     Adj.     2010
Non-GAAP		     2009
GAAP		     Adj.     2009
Non-GAAP		         GAAP         Non-GAAP  

TOTAL REVENUE (2) (3) (4)

     $   247,346      $ 9,010       $   256,356      $   191,066      $ -              $   191,066        29%          34%     

 Software license (2)

     92,432        3,664        96,096        82,045        -              82,045        13%          17%     

 Maintenance (3)

     58,892        5,107        63,999        36,608        -              36,608        61%          75%     

 Professional services (4)

     96,022        239        96,261        72,413        -              72,413        33%          33%     
               

TOTAL COST OF REVENUE (5) (6)

     $ 92,686      $   (3,988)       $ 88,698      $ 66,183      $     (974)        $ 65,209        40%          36%     

 Amortization of intangible assets (5)

     2,660        (2,660)        -             90        (90)        -             n/m                 0%     

 Stock-based compensation (6)

     1,328        (1,328)        -             884        (884)        -             50%          0%     
               

TOTAL OPERATING EXPENSES (5) (6)

     $ 153,295      $ (17,557)       $ 135,738      $ 93,253      $ (2,654)        $ 90,599        64%          50%     

 Amortization of intangible assets (5)

     2,171        (2,171)        -             15        (15)        -             n/m                 0%     

 Stock-based compensation (6)

     3,885        (3,885)        -             2,639        (2,639)        -             47%          0%     

 Acquisition-related costs

     5,014        (5,014)        -             -              -              -             100%          0%     

 Restructuring costs

     6,487        (6,487)        -             -              -              -             100%          0%     
               

INCOME FROM OPERATIONS

     $ 1,365      $ 30,555       $ 31,920      $ 31,630      $ 3,628        $ 35,258        -96%          -9%     
               

OPERATING MARGIN %

     1%          12%        17%          18%        (0.1600)  bp      (0.0600)  bp 
               

INCOME TAX EFFECTS (7)

     $ 190      $ 9,503       $ 9,693      $ 10,768      $ 1,066        $ 11,834        -98%          -18%     
               

NET (LOSS) INCOME

     $ (1,198)      $ 21,052       $ 19,854      $ 25,884      $ 2,562        $ 28,446        -105%          -30%     

NET (LOSS) EARNINGS PER SHARE:

                

BASIC

     $ (0.03)         $ 0.54      $ 0.72          $ 0.79        -104%          -32%     

DILUTED

     $ (0.03)         $ 0.51      $ 0.68          $ 0.75        -104%          -32%     
               

WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING

  

              

BASIC

     37,008        -             37,008        36,035        -              36,035        3%          3%     

DILUTED

     37,008        1,682        38,690        37,955        -              37,955        -2%          -2%     

 

n/m - not meaningful

 

                        

 

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PEGASYSTEMS INC.

FOOTNOTES FOR RECONCILIATION OF

SELECTED GAAP MEASURES TO NON-GAAP MEASURES

(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures see disclosure under Discussion of Non-GAAP Measures included earlier in this release and below.

Our non-GAAP financial measures reflect adjustments based on the following items, as well as the related income tax effects:

Revenue: Business combination rules require that we determine the fair value of the deferred revenue liability for contractual obligations assumed from Chordiant. The fair value represents an amount equal to the estimated costs of fulfilling the assumed contracts plus a reasonable profit margin. In post-acquisition reporting periods, we recognize revenue for the fair value of these contracts, when all the revenue recognition criteria are satisfied, instead of the revenue that would have been recognized by Chordiant as an independent company. We add back the affect of the deferred revenue fair value adjustment in non-GAAP revenue to reflect the full amount of these revenues to provide a more complete comparison of the revenue guidance to peer companies.

Amortization of intangible assets: We have excluded the effect of amortization of intangible assets acquired from Chordiant from our non-GAAP operating expenses and net earnings measures. Amortization of intangible assets is inconsistent in amount and frequency and is significantly affected by the timing and size of our acquisitions. Investors should note that the use of intangible assets contributed to our revenues earned during the periods presented and will contribute to our future period revenues as well. Amortization of intangible assets will recur in future periods.

Stock-based compensation expenses: We have excluded the effect of stock-based compensation expenses from our non-GAAP operating expenses and net earnings measures. Although stock-based compensation is a key incentive offered to our employees, and we believe such compensation contributed to the revenues earned during the periods presented and also believe it will contribute to the generation of future period revenues, we continue to evaluate our business performance excluding stock-based compensation expense.

Acquisition-related costs and restructuring costs: We have excluded the effect of acquisition- related costs and restructuring costs from our non-GAAP operating expenses and non-GAAP net earnings measures. We incurred direct and incremental costs associated with the Chordiant acquisition. These acquisition-related costs were primarily due diligence costs, advisory and legal transaction fees, and valuation and tax consulting fees. We have also incurred restructuring costs related to the integration of the acquisition, which we generally would not have otherwise incurred in the periods presented as a part of our continuing operations. Restructuring costs consist of employee severance and other exit costs. We believe it is useful for investors to understand the effects of these items on our total operating expenses.

(2) As of April 21, 2010, approximately $4.0 million, $0.6 million, $0.5 million and $0.2 million in estimated revenues related to assumed software license contracts will not be recognized for the remainder of fiscal 2010, fiscal 2011, fiscal 2012 and fiscal 2013, respectively, due to business combination accounting rules.
(3) As of April 21, 2010, approximately $7.3 million, $3.0 million and $0.5 million in estimated revenues related to assumed software support contracts will not be recognized for the remainder of fiscal 2010, fiscal 2011 and fiscal 2012, respectively, due to business combination accounting rules.
(4)

As of April 21, 2010, approximately $0.3 million, $0.3 million, $0.3 million and $0.1 million in estimated revenues related to assumed software installation services contracts will not be recognized for the remainder of

 

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fiscal 2010, fiscal 2011, fiscal 2012 and fiscal 2013, respectively, due to business combination accounting rules.

 

(5) Estimated future annual amortization expense related to intangible assets as of September 30, 2010 is as follows:

 

Remainder of Fiscal 2010

      $      2,870   

Fiscal 2011

      11,315   

Fiscal 2012

      11,137   

Fiscal 2013

      11,095   

Fiscal 2014

      9,489   

Fiscal 2015

      8,688   

Fiscal 2016 and thereafter

      28,960   
        

Total intangible assets subject to amortization

       $    83,554   
        

 

(6) Stock-based compensation is included in operating expense as follows:

 

    Three Months Ended     Three Months Ended  
    September 30, 2010     September 30, 2009  
     GAAP     Adj.     Non-GAAP     GAAP     Adj.     Non-GAAP  

Cost of revenue

   $ 447      $ (447 )    $ -           $ 250      $ (250 )    $ -        

Selling and Marketing

     520        (520 )      -             228        (228 )      -        

Research and development

     251        (251 )      -             170        (170 )      -        

General and administrative

     363        (363 )      -             317        (317 )      -        
                                               

Total stock-based compensation

   $      1,581      $   (1,581 )    $ -           $ 965      $ (965 )    $ -        
                                               
    Nine Months Ended     Nine Months Ended  
    September 30, 2010     September 30, 2009  
     GAAP     Adj.     Non-GAAP     GAAP     Adj.     Non-GAAP  

Cost of revenue

   $ 1,328      $ (1,328 )    $ -           $ 884      $ (884 )    $ -        

Selling and Marketing

     1,594        (1,594 )      -             579        (579 )      -        

Research and development

     764        (764 )      -             559        (559 )      -        

General and administrative

     1,527        (1,527 )      -             1,501        (1,501 )      -        
                                               

Total stock-based compensation

   $ 5,213      $ (5,213 )    $       -           $      3,523      $     (3,523 )    $       -        
                                               

 

(7) Income tax effects were calculated using an effective GAAP tax rate of 25.4% and 29.6% in the third quarter of 2010 and 2009, respectively, and an effective non-GAAP tax rate of 31.9% and 29.6% in the third quarter of 2010 and 2009, respectively. The difference between our GAAP and non-GAAP tax rates in the third quarter of 2010 was due to the differences in allowable acquisition-related deductions for income tax purposes.

Income tax effects were calculated using an effective GAAP tax rate of 18.8% and 29.4% in the first nine months of 2010 and 2009, respectively, and an effective non-GAAP tax rate of 32.8% and 29.4% in the first nine months of 2010 and 2009, respectively. The difference between our GAAP and non-GAAP tax rates in the first nine months of 2010 was due to the differences in allowable acquisition-related deductions for income tax purposes.

 

(8) The diluted weighted-average common shares used for the calculation of Non-GAAP diluted earnings per share for the first nine months of 2010 include the dilutive effect of outstanding options, restricted stock units, and warrants, and the average market price of our common stock during the first three quarters of 2010 using the treasury stock method.

 

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Pegasystems Inc.

Unaudited Condensed Consolidated Balance Sheets

 

    

As of
September 30,
2010

           

As of
December 31,
2009

     (in thousands)

Current Assets:

          

Cash and cash equivalents

    $      52,777          $      63,857  

Marketable securities

    16,076          138,796  
             

Total cash, cash equivalents, and marketable securities

    68,853          202,653  

Trade accounts receivable, net

    75,952          39,396  

Short-term license installments

    2,447          2,829  

Deferred income taxes

    6,516          2,523  

Income taxes receivable and other current assets

    17,010          8,840  
             

Total current assets

    170,778          256,241  

Long-term license installments, net

    1,383          2,976  

Property and equipment, net

    10,769          8,931  

Long-term deferred income taxes

    30,521          7,515  

Other assets

    2,489          1,195  

Intangible assets, net

    83,554          336  

Goodwill

    21,613          2,391  
             

Total assets

    $    321,107          $    279,585  
             

Current liabilities:

          

Accounts payable

    $        5,445          $        4,791  

Accrued expenses

    26,417          6,748  

Accrued compensation and related expenses

    23,746          23,280  

Deferred revenue

    48,773          32,870  
             

Total current liabilities

    104,381          67,689  

Income taxes payable

    6,134          4,828  

Other long-term liabilities

    5,192          1,849  
             

Total liabilities

    115,707          74,366  

Stockholders’ equity:

    205,400          205,219  
             

Total liabilities and stockholders’ equity

    $    321,107          $    279,585  
             

 

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Pegasystems Inc.

Unaudited Condensed Consolidated Statements of Cash Flows

 

     Nine Months Ended
September 30,
             2010                    2009        
         
     (in thousands)

Operating activities:

      

Net (loss) income

      $            (1,198)      $            25,884

Adjustments to reconcile net (loss) income to cash (used in) provided by operating activities:

      

Excess tax benefit from equity awards and deferred income taxes

    (7,544)    (15,310)

Depreciation, amortization, and other non-cash items

    7,013    2,021

Foreign currency transaction loss

    3,775    -

Amortization of investments and realized gain on sale of investments

    671    2,963

Stock-based compensation expense

    5,213    3,523

Change in operating assets and liabilities, and other, net

    (17,436)    19,758
         

Cash (used in) provided by operating activities

    (9,506)    38,839
         

Cash provided by (used in) investing activities

    8,725    (17,650)
         

Cash used in financing activities

    (6,919)    (2,071)
         

Effect of exchange rate on cash and cash equivalents

    (3,380)    1,214
         

Net (decrease) increase in cash and cash equivalents

    (11,080)    20,332

Cash and cash equivalents, beginning of period

    63,857    36,087
         

Cash and cash equivalents, end of period

      $            52,777      $            56,419
         

 

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