(5) Non-GAAP Diluted Earnings Per Share Item. We provide non-GAAP diluted earnings per share. The non-GAAP diluted earnings per share amount was calculated based on our non-GAAP net income and the shares used in the computation of GAAP diluted earnings per share.
SolarWinds, Inc. Reconciliation of Free Cash Flow to GAAP Cash Flows From Operating Activities (In thousands) (Unaudited) Three months ended March 31, ------------------------ 2013 2012 ----------- -----------Reconciliation of free cash flow to GAAP cash flows from operating activities:GAAP cash flows from operating activities $ 30,887 $ 28,171Excess tax benefit from stock-based compensation 4,730 3,309Purchases of property and equipment (782) (771) ----------- -----------Free cash flow (1) $ 34,835 $ 30,709 =========== ===========
(1) Free Cash Flow. We define free cash flow as cash flows from operating activities plus the excess tax benefit from stock-based compensation and less the purchases of property and equipment. We believe free cash flow is an important liquidity measure that reflects the cash generated by the business after the purchase of property and equipment that can then be used for, among other things, strategic acquisitions and investments in the business, stock repurchases and funding ongoing operations.
SolarWinds, Inc. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Three months ended March 31, ------------------------ 2013 2012 ----------- -----------Cash flows from operating activities Net income $ 22,999 $ 17,131 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 5,322 4,296 Provision for doubtful accounts 73 40 Stock-based compensation expense 6,341 3,865 Deferred taxes (1,879) (495) Excess tax benefit from stock-based compensation (4,730) (3,309) Discount (premium) on investments 21 (168) Other non-cash expenses (benefits) (14) 382 Changes in operating assets and liabilities, net of assets acquired and liabilities assumed in business combinations: Accounts receivable (1,995) (814) Income taxes receivable 15 50 Prepaid and other assets 570 73 Accounts payable (278) 362 Accrued liabilities (6,053) (1,394) Income taxes payable 3,074 3,216 Deferred revenue 7,421 4,936 ----------- ----------- Net cash provided by operating activities 30,887 28,171Cash flows from investing activities Purchases of investments -- (11,780) Maturities of investments 9,279 9,540 Purchases of property and equipment (782) (771) Purchases of intangible assets (113) (141) Acquisition of businesses, net of cash acquired -- (11,034) ----------- ----------- Net cash provided by (used in) investing activities 8,384 (14,186)Cash flows from financing activities Repurchase of common stock (4,347) (1,334) Exercise of stock options 3,738 3,256 Excess tax benefit from stock-based compensation 4,730 3,309 Earnout payments for acquisitions -- (3,203) ----------- ----------- Net cash provided by financing activities 4,121 2,028Effect of exchange rate changes on cash and cash equivalents (1,769) 616 ----------- ----------- Net increase in cash and cash equivalents 41,623 16,629Cash and cash equivalents Beginning of period 179,702 122,707 ----------- ----------- End of period $ 221,325 $ 139,336 =========== ===========Supplemental disclosure of cash flow information Cash paid for income taxes $ 5,009 $ 3,812 =========== ===========Non-cash financing transactions Accrued earnout $ -- $ 951 =========== ===========
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CONTACTS:
Investors:
Dave Hafner
Phone: 512.682.9867
ir@solarwinds.com
Media:
Tiffany Nels
Phone: 512.682.9545
pr@solarwinds.com
