000-23593 | 94-3221585 | |
(Commission File Number) | (IRS Employer Identification No.) |
12061 Bluemont Way, Reston, VA | 20190 | |
(Address of Principal Executive Offices) | (Zip Code) |
c | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
c | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
c | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
c | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. | Results of Operations and Financial Condition. |
Item 9.01. | Financial Statements and Exhibits. |
Exhibit Number | Description | |
99.1 | Text of press release of VeriSign, Inc. issued on July 26, 2012. |
VERISIGN, INC. | ||||
Date: July 26, 2012 | By: | /s/ Richard H. Goshorn | ||
Richard H. Goshorn | ||||
Senior Vice President, General Counsel and Secretary |
Exhibit No. | Description | |
Exhibit 99.1 | Text of press release of VeriSign, Inc. issued on July 26, 2012. |
• | Verisign ended the second quarter with Cash, Cash Equivalents, Marketable Securities and Restricted Cash of $1.44 billion, an increase of $92 million from year end 2011. |
• | Cash flow from operations was $135 million for the second quarter compared with $13 million for the same quarter in 2011, which was reduced by a $100 million payment of contingent interest to holders of convertible debentures in the second quarter of 2011. |
• | Deferred revenues ended the second quarter of 2012 totaling $804 million, an increase of $75 million from year end 2011. |
• | Capital expenditures were $13 million in the second quarter of 2012. |
• | During the second quarter, Verisign repurchased approximately 1.9 million shares of its common stock for a cost of $76 million. At June 30, 2012, approximately $687 million remained available and authorized under the current share repurchase program. |
• | For purposes of calculating diluted EPS, the second quarter diluted share count included 5.6 million shares related to the convertible debentures, compared with 1.2 million shares in the same quarter in 2011 for the non-GAAP diluted EPS calculation. These represent dilutive shares and not shares that have been issued. |
• | On June 23, 2012, the board of directors of Internet Corporation of Assigned Names and Numbers (“ICANN”) approved the renewal of Verisign's agreement to serve as the authoritative registry operator for the .com registry for the term commencing on Dec. 1, 2012, through Nov. 30, 2018. The board of directors of Verisign approved the renewal of the .com registry agreement on June 16, 2012. The U.S. Department of Commerce (the Department) is now reviewing the renewal of the .com registry agreement under the terms of the Cooperative Agreement between the Department and Verisign. |
• | Verisign Registry Services added 1.81 million net new names and ended the second quarter with approximately 118.5 million active domain names in the zone for .com and .net, representing a 7.8 percent increase year-over-year. |
• | In the second quarter, Verisign processed a second quarter record 8.4 million new domain name registrations, representing an increase of 4.2 percent year-over-year. |
June 30, 2012 | December 31, 2011 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 315,621 | $ | 1,313,349 | |||
Marketable securities | 1,122,397 | 32,860 | |||||
Accounts receivable, net | 12,653 | 14,974 | |||||
Deferred tax assets and other current assets | 79,940 | 86,598 | |||||
Total current assets | 1,530,611 | 1,447,781 | |||||
Property and equipment, net | 329,328 | 327,136 | |||||
Goodwill and other intangible assets, net | 53,202 | 53,848 | |||||
Other assets | 28,883 | 27,414 | |||||
Total long-term assets | 411,413 | 408,398 | |||||
Total assets | $ | 1,942,024 | $ | 1,856,179 | |||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | |||||||
Current liabilities: | |||||||
Accounts payable and accrued liabilities | $ | 112,508 | $ | 156,385 | |||
Deferred revenues | 560,127 | 502,538 | |||||
Total current liabilities | 672,635 | 658,923 | |||||
Long-term deferred revenues | 243,622 | 226,033 | |||||
Convertible debentures, including contingent interest derivative | 597,935 | 590,086 | |||||
Long-term debt | 100,000 | 100,000 | |||||
Long-term deferred tax liabilities | 341,733 | 325,527 | |||||
Other long-term liabilities | 45,294 | 43,717 | |||||
Total long-term liabilities | 1,328,584 | 1,285,363 | |||||
Total liabilities | 2,001,219 | 1,944,286 | |||||
Commitments and contingencies | |||||||
Stockholders’ deficit: | |||||||
Preferred stock—par value $.001 per share; Authorized shares: 5,000; Issued and outstanding shares: none | — | — | |||||
Common stock—par value $.001 per share; Authorized shares: 1,000,000; Issued shares: 317,982 at June 30, 2012 and 316,781 at December 31, 2011; Outstanding shares: 156,667 at June 30, 2012 and 159,422 at December 31, 2011 | 318 | 317 | |||||
Additional paid-in capital | 20,027,665 | 20,135,237 | |||||
Accumulated deficit | (20,084,096 | ) | (20,220,577 | ) | |||
Accumulated other comprehensive loss | (3,082 | ) | (3,084 | ) | |||
Total stockholders’ deficit | (59,195 | ) | (88,107 | ) | |||
Total liabilities and stockholders’ deficit | $ | 1,942,024 | $ | 1,856,179 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Revenues | $ | 214,142 | $ | 189,844 | $ | 419,868 | $ | 371,367 | |||||||
Costs and expenses: | |||||||||||||||
Cost of revenues | 42,844 | 40,667 | 84,100 | 81,536 | |||||||||||
Sales and marketing | 26,313 | 22,179 | 54,128 | 44,570 | |||||||||||
Research and development | 15,461 | 13,074 | 30,226 | 26,668 | |||||||||||
General and administrative | 22,726 | 28,206 | 46,234 | 61,835 | |||||||||||
Restructuring charges | (182 | ) | 3,659 | (730 | ) | 9,189 | |||||||||
Total costs and expenses | 107,162 | 107,785 | 213,958 | 223,798 | |||||||||||
Operating income | 106,980 | 82,059 | 205,910 | 147,569 | |||||||||||
Interest expense | (12,580 | ) | (111,856 | ) | (24,920 | ) | (123,676 | ) | |||||||
Non-operating (loss) income, net | (2,097 | ) | 6,149 | (1,290 | ) | 11,627 | |||||||||
Income (loss) from continuing operations before income taxes | 92,303 | (23,648 | ) | 179,700 | 35,520 | ||||||||||
Income tax (expense) benefit | (23,831 | ) | 15,967 | (45,123 | ) | (908 | ) | ||||||||
Income (loss) from continuing operations, net of tax | 68,472 | (7,681 | ) | 134,577 | 34,612 | ||||||||||
(Loss) income from discontinued operations, net of tax | — | (2,929 | ) | 1,904 | (4,451 | ) | |||||||||
Net income (loss) | 68,472 | (10,610 | ) | 136,481 | 30,161 | ||||||||||
Foreign currency translation adjustments | — | 48 | — | 76 | |||||||||||
Change in unrealized gain on investments, net of tax | 42 | 1,077 | 37 | 609 | |||||||||||
Realized gain on investments, net of tax, included in net income (loss) | (30 | ) | (1,398 | ) | (35 | ) | (1,415 | ) | |||||||
Other comprehensive income (loss) | 12 | (273 | ) | 2 | (730 | ) | |||||||||
Comprehensive income (loss) | $ | 68,484 | $ | (10,883 | ) | $ | 136,483 | $ | 29,431 | ||||||
Basic income (loss) per share: | |||||||||||||||
Continuing operations | $ | 0.43 | $ | (0.05 | ) | $ | 0.85 | $ | 0.20 | ||||||
Discontinued operations | — | (0.01 | ) | 0.01 | (0.02 | ) | |||||||||
Net income (loss) | $ | 0.43 | $ | (0.06 | ) | $ | 0.86 | $ | 0.18 | ||||||
Diluted income (loss) per share: | |||||||||||||||
Continuing operations | $ | 0.42 | $ | (0.05 | ) | $ | 0.82 | $ | 0.20 | ||||||
Discontinued operations | — | (0.01 | ) | 0.01 | (0.02 | ) | |||||||||
Net income (loss) | $ | 0.42 | $ | (0.06 | ) | $ | 0.83 | $ | 0.18 | ||||||
Shares used to compute net income per share | |||||||||||||||
Basic | 157,599 | 167,471 | 158,471 | 169,751 | |||||||||||
Diluted | 164,178 | 167,471 | 163,530 | 171,850 |
Six Months Ended June 30, | |||||||
2012 | 2011 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 136,481 | $ | 30,161 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation of property and equipment and amortization of other intangible assets | 26,273 | 27,642 | |||||
Stock-based compensation | 16,584 | 29,014 | |||||
Excess tax benefit associated with stock-based compensation | (11,638 | ) | (854 | ) | |||
Other, net | 10,947 | 1,627 | |||||
Changes in operating assets and liabilities | |||||||
Accounts receivable | 2,213 | 354 | |||||
Deferred tax assets and other assets | 5,855 | (12,786 | ) | ||||
Accounts payable and accrued liabilities | (16,644 | ) | (22,736 | ) | |||
Deferred revenues | 75,178 | 50,814 | |||||
Net cash provided by operating activities | 245,249 | 103,236 | |||||
Cash flows from investing activities: | |||||||
Proceeds from maturities and sales of marketable securities | 8,101 | 369,586 | |||||
Purchases of marketable securities | (1,097,669 | ) | (44,038 | ) | |||
Purchases of property and equipment | (26,242 | ) | (29,481 | ) | |||
Other investing activities | (520 | ) | (1,181 | ) | |||
Net cash (used in) provided by investing activities | (1,116,330 | ) | 294,886 | ||||
Cash flows from financing activities: | |||||||
Proceeds from issuance of common stock from option exercises and employee stock purchase plans | 15,348 | 32,445 | |||||
Repurchases of common stock | (152,725 | ) | (310,671 | ) | |||
Payment of dividends to stockholders | — | (463,498 | ) | ||||
Excess tax benefit associated with stock-based compensation | 11,638 | 854 | |||||
Other financing activities | 189 | — | |||||
Net cash used in financing activities | (125,550 | ) | (740,870 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (1,097 | ) | 3,285 | ||||
Net decrease in cash and cash equivalents | (997,728 | ) | (339,463 | ) | |||
Cash and cash equivalents at beginning of period | 1,313,349 | 1,559,628 | |||||
Cash and cash equivalents at end of period | $ | 315,621 | $ | 1,220,165 | |||
Supplemental cash flow disclosures: | |||||||
Cash paid for interest, net of capitalized interest | $ | 20,476 | $ | 120,082 | |||
Cash paid for income taxes, net of refunds received | $ | 21,193 | $ | 4,737 |
Three Months Ended | Three Months Ended | ||||||||||||||
June 30, 2012 | June 30, 2011 | ||||||||||||||
Operating Income | Net Income | Operating Income | Net (Loss) Income | ||||||||||||
GAAP as reported | $ | 106,980 | $ | 68,472 | $ | 82,059 | $ | (10,610 | ) | ||||||
Discontinued operations | — | 2,929 | |||||||||||||
Adjustments: | |||||||||||||||
Stock-based compensation | 8,454 | 8,454 | 12,075 | 12,075 | |||||||||||
Amortization of other intangible assets | 325 | 325 | 322 | 322 | |||||||||||
Restructuring charges | (182 | ) | (182 | ) | 3,659 | 3,659 | |||||||||
Contingent interest payment to holders of Convertible Debentures | — | 100,020 | |||||||||||||
Unrealized loss (gain) on contingent interest derivative on Convertible Debentures | 3,147 | (700 | ) | ||||||||||||
Non-cash interest expense | 1,871 | 1,679 | |||||||||||||
Tax adjustment | (7,944 | ) | (43,989 | ) | |||||||||||
Non-GAAP as adjusted | $ | 115,577 | $ | 74,143 | $ | 98,115 | $ | 65,385 | |||||||
Revenues | $ | 214,142 | $ | 189,844 | |||||||||||
Non-GAAP operating margin | 54.0 | % | 51.7 | % | |||||||||||
Diluted shares | 164,178 | 169,882 | |||||||||||||
Per diluted share, non-GAAP as adjusted | $ | 0.45 | $ | 0.38 |
Three Months Ended June 30, | |||||||
2012 | 2011 | ||||||
Cost of revenues | $ | 1,451 | $ | 1,846 | |||
Sales and marketing | 1,833 | 1,697 | |||||
Research and development | 1,327 | 1,353 | |||||
General and administrative | 3,843 | 7,179 | |||||
Restructuring charges | — | 1,989 | |||||
Total stock-based compensation expense | $ | 8,454 | $ | 14,064 |
Six Months Ended | Six Months Ended | ||||||||||||||
June 30, 2012 | June 30, 2011 | ||||||||||||||
Operating Income | Net Income | Operating Income | Net Income | ||||||||||||
GAAP as reported | $ | 205,910 | $ | 136,481 | $ | 147,569 | $ | 30,161 | |||||||
Discontinued operations | (1,904 | ) | 4,451 | ||||||||||||
Adjustments: | |||||||||||||||
Stock-based compensation | 16,584 | 16,584 | 24,036 | 24,036 | |||||||||||
Amortization of other intangible assets | 648 | 648 | 645 | 645 | |||||||||||
Restructuring charges | (730 | ) | (730 | ) | 9,189 | 9,189 | |||||||||
Contingent interest payment to holders of Convertible Debentures | — | 100,020 | |||||||||||||
Unrealized loss (gain) on contingent interest derivative on Convertible Debentures | 3,960 | (250 | ) | ||||||||||||
Non-cash interest expense | 3,491 | 3,343 | |||||||||||||
Tax adjustment | (15,972 | ) | (50,843 | ) | |||||||||||
Non-GAAP as adjusted | $ | 222,412 | $ | 142,558 | $ | 181,439 | $ | 120,752 | |||||||
Revenues | $ | 419,868 | $ | 371,367 | |||||||||||
Non-GAAP operating margin | 53.0 | % | 48.9 | % | |||||||||||
Diluted shares | 163,530 | 171,850 | |||||||||||||
Per diluted share, non-GAAP as adjusted | $ | 0.87 | $ | 0.70 |
Six Months Ended June 30, | |||||||
2012 | 2011 | ||||||
Cost of revenues | $ | 2,988 | $ | 3,836 | |||
Sales and marketing | 3,349 | 3,551 | |||||
Research and development | 2,569 | 2,871 | |||||
General and administrative | 7,678 | 13,778 | |||||
Restructuring charges | — | 4,978 | |||||
Total stock-based compensation expense | $ | 16,584 | $ | 29,014 |