Nuance Communications, Inc. (NASDAQ: NUAN) today announced that
it has appointed Bill Robbins as executive vice president,
Worldwide Sales.
In this role, Mr. Robbins will oversee all aspects of sales
globally, including customer and partner relationships, sales
strategy, and operations of the Nuance sales organization. He
brings to Nuance a history of strong sales and business achievement
through 25 years of executive leadership in sales, operations,
market development and process improvement. He joins Nuance from
[24]7 where he served as Chief Operating Officer and from Symantec
where he served for ten years as executive vice president,
Worldwide Sales & Services, in addition to other leadership
roles.
“Bill brings to Nuance a rich combination of sales and
operational experience that makes him ideal to scale and lead our
global sales force,” said Paul Ricci, chairman and CEO of Nuance.
“His leadership and demonstrated ability to execute will be key to
increasing revenue, bookings and sales productivity across our
business.”
Bill completed a distinguished, ten-year tenure at Symantec
where most recently he served as executive vice president,
Worldwide Sales & Services. In this role, he led the company’s
enterprise sales, professional services and consulting
organizations of more than 4,500 people. Drawing on his expertise
in sales operations, methodology and international markets, Bill
drove revenue growth in each of Symantec’s markets and delivered
record bookings of more than $4 billion in his last fiscal year.
Prior to Symantec, he held a variety of executive sales and
operations roles with Comdisco, MCI Systemhouse and EDS
Corporation. Bill earned Economics and Finance degrees from
Southern Methodist University.
Preliminary Fiscal First Quarter Results Ahead of
Expectations
In conjunction with today’s announcement, Nuance announced
preliminary revenue, EPS and cash flow from operations results for
the first quarter fiscal 2014, ended December 31, 2013.
Based on preliminary financial data, Nuance expects Q1 14
non-GAAP revenues between $487 million and $491 million; GAAP
revenues between $467 million and $471 million; non-GAAP EPS
between $0.23 and $0.24 per diluted share; GAAP EPS between ($0.19)
and ($0.18) per share; and cash flow from operations of
approximately $78 million. The preliminary expectations are subject
to revision until the Company reports final Q1 14 results on
February 10, 2014.
On November 25, 2013, Nuance provided initial guidance for Q1 14
of non-GAAP revenues between $477 and $487 million; GAAP revenues
between $458 and $468 million; non-GAAP EPS between $0.18 and
$0.21; and GAAP EPS between ($0.22) and ($0.19).
Nuance to Announce Fiscal First Quarter Results on February
10, 2014
The Company will release results for its first quarter ended
December 31, 2013, after the market close on Monday, February 10,
2014. Nuance will provide a copy of prepared conference call
remarks in combination with its press release. This process and
these remarks are offered to provide shareholders and analysts
additional time and detail for analyzing Nuance’s results. The
remarks will be available at www.nuance.com/earnings-results in
conjunction with the press release.
The conference call will begin at 5:00 p.m. EST and will include
only brief comments followed by questions and answers. The prepared
remarks will not be read on the call. To access the live broadcast,
please visit the Investor Relations section of Nuance’s Website at
www.nuance.com. The call can also be heard by dialing (800)
553-0327 or (612) 332-0632 at least five minutes prior to the call
and referencing code 316887. A replay will be available within 24
hours of the announcement by dialing (800) 475-6701 or (320)
365-3844 and using the access code 316887.
About Nuance Communications
Nuance Communications, Inc. (NASDAQ: NUAN) is a leading provider
of voice and language solutions for businesses and consumers around
the world. Its technologies, applications and services make the
user experience more compelling by transforming the way people
interact with devices and systems. Every day, millions of users and
thousands of businesses experience Nuance’s proven applications.
For more information, please visit www.nuance.com.
Safe Harbor and Forward-Looking Statements
Statements in this document regarding Nuance's preliminary
revenue, EPS and cash flow from operations results for the first
quarter fiscal 2014 constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Any statements that are not statements of historical fact
(including statements containing the words “believes,” “plans,”
“anticipates,” “expects,” or “estimates” or similar expressions)
should be considered to be forward-looking statements. There are
number of important factors that could cause actual results or
events to differ materially from those indicated by such
forward-looking statements, including: fluctuations in demand for
Nuance's existing and future products; economic conditions in the
United States and abroad; Nuance's ability to control and
successfully manage its expenses and cash position; the effects of
competition, including pricing pressures; possible defects in
Nuance’s products and technologies; the ability of Nuance to
successfully integrate operations and employees of acquired
businesses; the ability to realize anticipated synergies from
acquired businesses; and other factors described in Nuance's annual
report on Form 10-K for the fiscal year ended September 30, 2013
and Nuance’s quarterly reports on Form 10-Q filed with the
Securities and Exchange Commission. Nuance disclaims any obligation
to update any forward-looking statements as a result of
developments occurring after the date of this document.
The information included in this press release should not be
viewed as a substitute for full GAAP financial statements.
Discussion of Non-GAAP Financial Measures
We utilize 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. Our 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. Continuous
budgeting and forecasting for revenue and expenses are conducted on
a consistent non-GAAP basis (in addition to GAAP) and actual
results on a non-GAAP basis are assessed against the annual
financial plan. The board of directors and management utilize these
non-GAAP measures and results (in addition to the GAAP results) to
determine our allocation of resources. In addition and as a
consequence of the importance of these measures in managing the
business, we use non-GAAP measures and results in the evaluation
process to establish management’s compensation. For example, our
annual bonus program payments are based upon the achievement of
consolidated non-GAAP revenue and consolidated non-GAAP earnings
per share financial targets. We consider the use of non-GAAP
revenue helpful in understanding the performance of our business,
as it excludes the purchase accounting impact on acquired deferred
revenue and other acquisition-related adjustments to revenue. We
also consider the use of non-GAAP earnings per share helpful in
assessing the organic performance of the continuing operations of
our business. By organic performance we mean performance as if we
had owned an acquired business in the same period a year ago. By
continuing operations we mean the ongoing results of the business
excluding certain unplanned costs. While our management uses these
non-GAAP financial measures as a tool to enhance their
understanding of certain aspects of our financial performance, our
management does not consider these measures to be a substitute for,
or superior to, the information provided by GAAP revenue and
earnings per share. Consistent with this approach, we believe that
disclosing non-GAAP revenue and non-GAAP earnings per share to the
readers of our financial statements provides such readers with
useful supplemental data that, while not a substitute for GAAP
revenue and earnings per share, allows for greater transparency in
the review of our financial and operational performance. In
assessing the overall health of the business during the three
months ended December 31, 2013 and 2012, and, in particular, in
evaluating our revenue and earnings per share, our management has
either included or excluded items in six general categories, each
of which is described below.
Acquisition-Related Revenue and Cost of Revenue.
We provide supplementary non-GAAP financial measures of revenue,
which include revenue related to acquisitions, primarily from
Equitrac, Quantim and SafeCom for the three months ended December
31, 2013, that would otherwise have been recognized but for the
purchase accounting treatment of these transactions. Non-GAAP
revenue also includes revenue that we would have otherwise
recognized had we not acquired intellectual property and other
assets from the same customer. Because GAAP accounting requires the
elimination of this revenue, GAAP results alone do not fully
capture all of our economic activities. These non-GAAP adjustments
are intended to reflect the full amount of such revenue. We include
non-GAAP revenue and cost of revenue to allow for more complete
comparisons to the financial results of historical operations,
forward-looking guidance and the financial results of peer
companies. We believe these adjustments are useful to management
and investors as a measure of the ongoing performance of the
business because, although we cannot be certain that customers will
renew their contracts, we have historically experienced high
renewal rates on maintenance and support agreements and other
customer contracts. Additionally, although acquisition-related
revenue adjustments are non-recurring with respect to past
acquisitions, we generally will incur these adjustments in
connection with any future acquisitions.
Acquisition-Related Costs, Net.
In recent years, we have completed a number of acquisitions,
which result in operating expenses which would not otherwise have
been incurred. We provide supplementary non-GAAP financial
measures, which exclude certain transition, integration and other
acquisition-related expense items resulting from acquisitions, to
allow more accurate comparisons of the financial results to
historical operations, forward-looking guidance and the financial
results of less acquisitive peer companies. We consider these types
of costs and adjustments, to a great extent, to be unpredictable
and dependent on a significant number of factors that are outside
of our control. Furthermore, we do not consider these
acquisition-related costs and adjustments to be related to the
organic continuing operations of the acquired businesses and are
generally not relevant to assessing or estimating the long-term
performance of the acquired assets. In addition, the size,
complexity and/or volume of past acquisitions, which often drives
the magnitude of acquisition-related costs, may not be indicative
of the size, complexity and/or volume of future acquisitions. By
excluding acquisition-related costs and adjustments from our
non-GAAP measures, management is better able to evaluate our
ability to utilize our existing assets and estimate the long-term
value that acquired assets will generate for us. We believe that
providing a supplemental non-GAAP measure which excludes these
items allows management and investors to consider the ongoing
operations of the business both with, and without, such
expenses.
These acquisition-related costs are included in the following
categories: (i) transition and integration costs; (ii) professional
service fees; and (iii) acquisition-related adjustments. Although
these expenses are not recurring with respect to past acquisitions,
we generally will incur these expenses in connection with any
future acquisitions. These categories are further discussed as
follows:
(i) Transition and integration costs. Transition and integration
costs include retention payments, transitional employee costs,
earn-out payments treated as compensation expense, as well as the
costs of integration-related services, including services provided
by third parties.
(ii) Professional service fees. Professional service fees
include third party costs related to the acquisition, and legal and
other professional service fees associated with disputes and
regulatory matters related to acquired entities.
(iii) Acquisition-related adjustments. Acquisition-related
adjustments include adjustments to acquisition-related items that
are required to be marked to fair value each reporting period, such
as contingent consideration, and other items related to
acquisitions for which the measurement period has ended, such as
gains or losses on settlements of pre-acquisition
contingencies.
Amortization of Acquired Intangible Assets.
We exclude the amortization of acquired intangible assets from
non-GAAP expense and income measures. These amounts are
inconsistent in amount and frequency and are significantly impacted
by the timing and size of acquisitions. Providing a supplemental
measure which excludes these charges allows management and
investors to evaluate results “as-if” the acquired intangible
assets had been developed internally rather than acquired and,
therefore, provides a supplemental measure of performance in which
our acquired intellectual property is treated in a comparable
manner to our internally developed intellectual property. Although
we exclude amortization of acquired intangible assets from our
non-GAAP expenses, we believe that it is important for investors to
understand that such intangible assets contribute to revenue
generation. Amortization of intangible assets that relate to past
acquisitions will recur in future periods until such intangible
assets have been fully amortized. Future acquisitions may result in
the amortization of additional intangible assets.
Costs Associated with IP Collaboration Agreement.
In order to gain access to a third party's extensive speech
recognition technology and natural language and semantic processing
technology, we have entered into IP collaboration agreements, with
terms ranging between five and six years. Depending on the
agreement, some or all intellectual property derived from these
collaborations will be jointly owned by the two parties. For the
majority of the developed intellectual property, we will have sole
rights to commercialize such intellectual property for periods
ranging between two to six years, depending on the agreement. For
non-GAAP purposes, we consider these long-term contracts and the
resulting acquisitions of intellectual property from this
third-party over the agreements’ terms to be an investing activity,
outside of our normal, organic, continuing operating activities,
and are therefore presenting this supplemental information to show
the results excluding these expenses. We do not exclude from our
non-GAAP results the corresponding revenue, if any, generated from
these collaboration efforts. Although our bonus program and other
performance-based incentives for executives are based on the
non-GAAP results that exclude these costs, certain engineering
senior management are responsible for execution and results of the
collaboration agreement and have incentives based on those
results.
Non-Cash Expenses.
We provide non-GAAP information relative to the following
non-cash expenses: (i) stock-based compensation; (ii) certain
accrued interest; and (iii) certain accrued income taxes. These
items are further discussed as follows:
(i) Stock-based compensation. Because of varying available
valuation methodologies, subjective assumptions and the variety of
award types, we believe that the exclusion of stock-based
compensation allows for more accurate comparisons of operating
results to peer companies, as well as to times in our history when
stock-based compensation was more or less significant as a portion
of overall compensation than in the current period. We evaluate
performance both with and without these measures because
compensation expense related to stock-based compensation is
typically non-cash and the options and restricted awards granted
are influenced by the Company’s stock price and other factors such
as volatility that are beyond our control. The expense related to
stock-based awards is generally not controllable in the short-term
and can vary significantly based on the timing, size and nature of
awards granted. As such, we do not include such charges in
operating plans. Stock-based compensation will continue in future
periods.
(ii) and (iii) Certain accrued interest and income taxes. We
also exclude certain accrued interest and certain accrued income
taxes because we believe that excluding these non-cash expenses
provides senior management, as well as other users of the financial
statements, with a valuable perspective on the cash-based
performance and health of the business, including the current
near-term projected liquidity. These non-cash expenses will
continue in future periods.
Other Expenses.
We exclude certain other expenses that are the result of
unplanned events to measure operating performance and current and
future liquidity both with and without these expenses; and
therefore, by providing this information, we believe management and
the users of the financial statements are better able to understand
the financial results of what we consider to be our organic,
continuing operations. Included in these expenses are items such as
restructuring charges, asset impairments and other charges
(credits), net. These events are unplanned and arose outside of the
ordinary course of continuing operations. These items also include
adjustments from changes in fair value of share-based instruments
relating to the issuance of our common stock with security price
guarantees payable in cash. Other items such as gains or losses on
non-controlling strategic equity interests and contributions of
$5.0 million to the Nuance Foundation, which was established to
provide grants to educational institutions and other non-profit
organizations to advance charitable, scientific, literary or
educational purposes, are also excluded.
We believe that providing the non-GAAP information to investors,
in addition to the GAAP presentation, allows investors to view the
financial results in the way management views the operating
results. We further believe that providing this information allows
investors to not only better understand our financial performance,
but more importantly, to evaluate the efficacy of the methodology
and information used by management to evaluate and measure such
performance.
Financial Table Follows
Nuance Communications, Inc. Reconciliation of Supplemental
Financial Information GAAP and non-GAAP Revenue and Net Income per
Share Guidance (in thousands, except per share amounts) Unaudited
Three
months ended December 31, 2013 Low High
GAAP revenue
$ 467,000 $ 471,000 Acquisition-related adjustment - revenue
20,000 20,000
Non-GAAP revenue $
487,000 $ 491,000
GAAP net loss per
share $ (0.19 ) $ (0.18 ) Acquisition-related adjustment -
revenue 0.06 0.06 Acquisition-related adjustment - cost of revenue
(0.00 ) (0.00 ) Acquisition-related costs, net 0.01 0.01 Cost of
revenue from amortization of intangible assets 0.05 0.05
Amortization of intangible assets 0.09 0.09 Non-cash stock-based
compensation 0.15 0.15 Non-cash interest expense 0.03 0.03 Non-cash
income taxes (0.01 ) (0.01 ) Costs associated with IP collaboration
agreements 0.02 0.02 Change in fair value of share-based
instruments 0.01 0.01 Restructuring and other charges, net 0.01
0.01 Other (0.00 ) (0.00 )
Non-GAAP net income per
share $ 0.23 $ 0.24 Shares used in
computing GAAP and non-GAAP net income per share: Weighted
average common shares: basic
314,500
314,500 Weighted average common shares:
diluted
317,500
317,500
Nuance Communications, Inc.Richard Mack,
781-565-5000richard.mack@nuance.comorFor InvestorsKevin
Faulkner,
408-992-6100kevin.faulkner@nuance.com
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