Notes to Condensed Consolidated Financial Statements
Note 1: Basis of Presentation
Company Overview
- Progress offers the leading platform for developing and deploying mission-critical business applications. Progress empowers enterprises and independent software vendors (ISVs) to build and deliver cognitive-first applications that harness big data to derive business insights and competitive advantage. Progress offers leading technologies for easily building powerful user interfaces across any type of device, a reliable, scalable and secure backend platform to deploy modern applications, leading data connectivity to all sources, and award-winning predictive analytics that brings the power of machine learning to any organization. Over
1,700
ISVs,
100,000
enterprise customers, and
2 million
developers rely on Progress to power their applications.
Our products are generally sold as perpetual licenses, but certain products also use term licensing models and our cloud-based offerings use a subscription based model. More than half of our worldwide license revenue is realized through relationships with indirect channel partners, principally application partners and original equipment manufacturers (OEMs). Application partners are ISVs that develop and market applications using our technology and resell our products in conjunction with sales of their own products that incorporate our technology. OEMs are companies that embed our products into their own software products or devices.
We operate in North America and Latin America (the Americas); Europe, the Middle East and Africa (EMEA); and the Asia Pacific region, through local subsidiaries as well as independent distributors.
Basis of Presentation and Significant Accounting Policies
- We prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (GAAP) for complete financial statements and these unaudited financial statements should be read in conjunction with the audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended
November 30, 2016
.
We made no significant changes in the application of our significant accounting policies that were disclosed in our Annual Report on Form 10-K for the fiscal year ended
November 30, 2016
. We have prepared the accompanying unaudited condensed consolidated financial statements on the same basis as the audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended
November 30, 2016
, and these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results of the interim periods presented. The operating results for the interim periods presented are not necessarily indicative of the results expected for the full fiscal year.
Recent Accounting Pronouncements
- In August 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2017-12,
Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities
(ASU 2017-12). ASU 2017-12 intends to better align an entity's risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The amendments expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. The guidance in ASU 2017-12 is required for annual reporting periods beginning after December 15, 2018, with early adoption permitted. We are currently evaluating the effect that implementation of this update will have upon adoption on our consolidated financial position and results of operations.
In May 2017, the FASB issued Accounting Standards Update No. 2017-09,
Compensation - Stock Compensation (Topic 718), Scope of Modification Accounting
(ASU 2017-09), which amends the scope of modification accounting for share-based payment awards. The guidance in ASU 2017-09 provides that modification accounting is required only if a change in the terms or conditions of an award results in a change to the fair value, the vesting conditions, or the classification of the award as equity or liability. The guidance in ASU 2017-09 is required for annual reporting periods beginning after December 15, 2017, with early adoption permitted. We do not expect the adoption of this standard to have a material impact on our consolidated financial position and results of operations.
In January 2017, the FASB issued Accounting Standards Update No. 2017-04,
Intangibles - Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment
(ASU 2017-04). ASU 2017-04 amends Topic 350 to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. This update requires the performance of an annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value. However, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The guidance in ASU 2017-04 is required for annual reporting periods beginning after December 15, 2019, with early adoption permitted. We are currently considering whether to adopt this update prior to the required adoption date.
In January 2017, the FASB issued Accounting Standards Update No. 2017-01,
Business Combinations (Topic 805), Clarifying the Definition of a Business
(ASU 2017-01). ASU 2017-01 provides a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. The guidance in ASU 2017-01 is required for annual reporting periods beginning after December 15, 2017, with early adoption permitted. We are currently considering whether to adopt this update prior to the required adoption date and, in any event, do not expect the adoption to have a material impact on our consolidated financial position and results of operations.
In August 2016, the FASB issued Accounting Standards Update No. 2016-15,
Statement of Cash Flows (Topic 230),
Classification of Certain Cash Receipts and Cash Payments
(ASU 2016-15). ASU 2016-15 is intended to add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows and to eliminate the diversity in practice related to such classifications. The guidance in ASU 2016-15 is required for annual reporting periods beginning after December 15, 2017, with early adoption permitted. We are currently evaluating the effect that implementation of this update will have upon adoption on our consolidated statement of cash flows.
In March 2016, the FASB issued Accounting Standards Update No. 2016-09,
Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting
(ASU 2016-09). ASU 2016-09 is intended to simplify various aspects of the accounting for employee share-based payment transactions, including accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The guidance in ASU 2016-09 is required for annual reporting periods beginning after December 15, 2016, with early adoption permitted. We are currently evaluating the effect that implementation of this update will have upon adoption on our consolidated financial position and results of operations.
In February 2016, the FASB issued Accounting Standards Update No. 2016-02,
Leases (Topic 842)
(ASU 2016-02), which requires lessees to record most leases on their balance sheets, recognizing a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying asset for the lease term. The guidance in ASU 2016-02 is required for annual reporting periods beginning after December 15, 2018, with early adoption permitted. We currently expect that most of our operating lease commitments will be subject to the update and recognized as operating lease liabilities and right-of-use assets upon adoption. However, we are currently evaluating the effect that implementation of this update will have upon adoption on our consolidated financial position and results of operations.
In April 2015, the FASB issued Accounting Standards Update No. 2015-03,
Interest - Imputation of Interest (Subtopic 835-30) Simplifying the Presentation of Debt Issuance Costs
(ASU 2015-03). ASU 2015-03 requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. The guidance in ASU 2015-03 is required for annual reporting periods beginning after December 15, 2015, including interim periods within the reporting period. Accordingly, upon adoption in the first quarter of fiscal 2017, we reclassified
$1.0 million
from other assets to long-term debt in our condensed consolidated balance sheet.
In May 2014, the FASB issued Accounting Standards Update No. 2014-09,
Revenue from Contracts with Customers (Topic 606)
(ASU 2014-09). ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The guidance provided in Topic 606 requires entities to use a five-step model to recognize revenue by allocating the consideration from contracts to performance obligations on a relative standalone selling price basis. The standard also requires new disclosures regarding the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. This new guidance was initially effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016 and early adoption was not permitted. However, in July 2015, the FASB voted to defer the effective date of this ASU by one year for reporting periods beginning after December 15, 2017, with early adoption permitted as of the original effective date. As a result, the effective date for the Company will be December 1, 2018.
Entities have the option of using either a full retrospective or a modified approach to adopt the guidance. The Company plans to adopt this ASU in accordance with the full retrospective approach, effective December 1, 2018. Fiscal year 2019 quarterly results, and comparative prior periods, will be prepared in accordance with ASC 606. The first Annual Report on Form 10-K issued in accordance with ASC 606 will be for the period ended November 30, 2019.
Management is currently assessing the impact the adoption of this standard will have on the Company’s consolidated financial statements, but anticipates that the revenue recognition related to accounting for the following transactions will be most impacted:
|
|
•
|
Revenue from term licenses with extended payment terms over the term of the agreement within our Data Connectivity and Integration segment
- These transactions are typically recognized when the amounts are billed to the customer under current revenue recognition guidance. In accordance with ASU 2014-09, revenue from term license performance obligations is expected to be recognized upon delivery and revenue from maintenance performance obligations is expected to be recognized over the contract term. To the extent the Company enters into future term licenses with extended payment terms after the adoption of ASU 2014-09, revenue from term licenses with extended payment terms will be recognized prior to the customer being billed and the Company will recognize a net contract asset on the balance sheet. Accordingly, license revenue will be accelerated under ASU 2014-09 as the Company currently does not recognize revenue until the amounts have been billed to the customer.
|
|
|
•
|
Revenue from transactions with multiple elements within our Application Development and Deployment segment (i.e., sales of perpetual licenses with maintenance and/or support)
- These transactions are currently recognized ratably over the associated maintenance period as the Company does not have vendor specific objective evidence (VSOE) for maintenance or support. Under ASU 2014-09, the requirement to have VSOE for undelivered elements that exists under current guidance is eliminated. Accordingly, the Company will recognize a portion of the sales price as revenue upon delivery of the license instead of recognizing the entire sales price ratably over the maintenance period.
|
Note 2: Cash, Cash Equivalents and Investments
A summary of our cash, cash equivalents and available-for-sale investments at
August 31, 2017
is as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortized Cost Basis
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair Value
|
Cash
|
$
|
137,911
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
137,911
|
|
Money market funds
|
5,846
|
|
|
—
|
|
|
—
|
|
|
5,846
|
|
State and municipal bond obligations
|
37,690
|
|
|
45
|
|
|
—
|
|
|
37,735
|
|
U.S. treasury bonds
|
3,523
|
|
|
—
|
|
|
(17
|
)
|
|
3,506
|
|
Corporate bonds
|
6,319
|
|
|
—
|
|
|
(1
|
)
|
|
6,318
|
|
Total
|
$
|
191,289
|
|
|
$
|
45
|
|
|
$
|
(18
|
)
|
|
$
|
191,316
|
|
A summary of our cash, cash equivalents and available-for-sale investments at
November 30, 2016
is as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortized Cost Basis
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair Value
|
Cash
|
$
|
196,863
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
196,863
|
|
Money market funds
|
10,173
|
|
|
—
|
|
|
—
|
|
|
10,173
|
|
State and municipal bond obligations
|
32,831
|
|
|
—
|
|
|
(107
|
)
|
|
32,724
|
|
U.S. treasury bonds
|
6,542
|
|
|
—
|
|
|
(29
|
)
|
|
6,513
|
|
Corporate bonds
|
3,485
|
|
|
—
|
|
|
(4
|
)
|
|
3,481
|
|
Total
|
$
|
249,894
|
|
|
$
|
—
|
|
|
$
|
(140
|
)
|
|
$
|
249,754
|
|
Such amounts are classified on our condensed consolidated balance sheets as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
August 31, 2017
|
|
November 30, 2016
|
|
Cash and
Equivalents
|
|
Short-Term
Investments
|
|
Cash and
Equivalents
|
|
Short-Term
Investments
|
Cash
|
$
|
137,911
|
|
|
$
|
—
|
|
|
$
|
196,863
|
|
|
$
|
—
|
|
Money market funds
|
5,846
|
|
|
—
|
|
|
10,173
|
|
|
—
|
|
State and municipal bond obligations
|
1,000
|
|
|
36,735
|
|
|
—
|
|
|
32,724
|
|
U.S. treasury bonds
|
—
|
|
|
3,506
|
|
|
—
|
|
|
6,513
|
|
Corporate bonds
|
—
|
|
|
6,318
|
|
|
—
|
|
|
3,481
|
|
Total
|
$
|
144,757
|
|
|
$
|
46,559
|
|
|
$
|
207,036
|
|
|
$
|
42,718
|
|
The fair value of debt securities by contractual maturity is as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
August 31,
2017
|
|
November 30,
2016
|
Due in one year or less
|
$
|
20,881
|
|
|
$
|
21,172
|
|
Due after one year
(1)
|
25,678
|
|
|
21,546
|
|
Total
|
$
|
46,559
|
|
|
$
|
42,718
|
|
|
|
(1)
|
Includes state and municipal bond obligations, U.S. treasury bonds, and corporate bonds, which are securities representing investments available for current operations and are classified as current in the consolidated balance sheets.
|
We did not hold any investments with continuous unrealized losses as of
August 31, 2017
or
November 30, 2016
.
Note 3: Derivative Instruments
We generally use forward contracts that are not designated as hedging instruments to hedge economically the impact of the variability in exchange rates on intercompany accounts receivable and loans receivable denominated in certain foreign currencies. We generally do not hedge the net assets of our international subsidiaries.
All forward contracts are recorded at fair value on the consolidated balance sheets at the end of each reporting period and expire from
30
days to
one year
. At
August 31, 2017
,
$3.5 million
was recorded in other accrued liabilities. At
November 30, 2016
,
$6.6 million
was recorded in other noncurrent liabilities. In the three and
nine
months ended
August 31, 2017
, realized and unrealized gains of
$5.2 million
and
$9.6 million
, respectively, from our forward contracts were recognized in foreign currency (loss) gain, net, in the condensed consolidated statements of operations. In the three and
nine
months ended
August 31, 2016
, realized and unrealized gains of
$2.2 million
and
$1.4 million
, respectively, from our forward contracts were recognized in foreign currency (loss) gain, net, in the condensed consolidated statements of operations. The gains were substantially offset by realized and unrealized losses on the offsetting positions.
The table below details outstanding foreign currency forward contracts where the notional amount is determined using contract exchange rates (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
August 31, 2017
|
|
November 30, 2016
|
|
Notional Value
|
|
Fair Value
|
|
Notional Value
|
|
Fair Value
|
Forward contracts to sell U.S. dollars
|
$
|
117,499
|
|
|
$
|
(3,539
|
)
|
|
$
|
74,690
|
|
|
$
|
(6,597
|
)
|
Forward contracts to purchase U.S. dollars
|
220
|
|
|
(1
|
)
|
|
1,673
|
|
|
(19
|
)
|
Total
|
$
|
117,719
|
|
|
$
|
(3,540
|
)
|
|
$
|
76,363
|
|
|
$
|
(6,616
|
)
|
Note 4: Fair Value Measurements
Recurring Fair Value Measurements
The following table details the fair value measurements within the fair value hierarchy of our financial assets and liabilities at
August 31, 2017
(in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements Using
|
|
Total Fair
Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
Assets
|
|
|
|
|
|
|
|
Money market funds
|
$
|
5,846
|
|
|
$
|
5,846
|
|
|
$
|
—
|
|
|
$
|
—
|
|
State and municipal bond obligations
|
37,735
|
|
|
—
|
|
|
37,735
|
|
|
—
|
|
U.S. treasury bonds
|
3,506
|
|
|
—
|
|
|
3,506
|
|
|
—
|
|
Corporate bonds
|
6,318
|
|
|
—
|
|
|
6,318
|
|
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
Foreign exchange derivatives
|
$
|
(3,540
|
)
|
|
$
|
—
|
|
|
$
|
(3,540
|
)
|
|
$
|
—
|
|
The following table details the fair value measurements within the fair value hierarchy of our financial assets and liabilities at
November 30, 2016
(in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements Using
|
|
Total Fair
Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
Assets
|
|
|
|
|
|
|
|
Money market funds
|
$
|
10,173
|
|
|
$
|
10,173
|
|
|
$
|
—
|
|
|
$
|
—
|
|
State and municipal bond obligations
|
32,724
|
|
|
—
|
|
|
32,724
|
|
|
—
|
|
U.S. treasury bonds
|
6,513
|
|
|
—
|
|
|
6,513
|
|
|
—
|
|
Corporate bonds
|
3,481
|
|
|
—
|
|
|
3,481
|
|
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
Foreign exchange derivatives
|
$
|
(6,616
|
)
|
|
$
|
—
|
|
|
$
|
(6,616
|
)
|
|
$
|
—
|
|
When developing fair value estimates, we maximize the use of observable inputs and minimize the use of unobservable inputs. When available, we use quoted market prices to measure fair value. The valuation technique used to measure fair value for our Level 1 and Level 2 assets is a market approach, using prices and other relevant information generated by market transactions involving identical or comparable assets. If market prices are not available, the fair value measurement is based on models that use primarily market based parameters including yield curves, volatilities, credit ratings and currency rates. In certain cases where market rate assumptions are not available, we are required to make judgments about assumptions market participants would use to estimate the fair value of a financial instrument.
We did not have any nonrecurring fair value measurements during the
nine
months ended
August 31, 2017
.
Note 5: Intangible Assets and Goodwill
Intangible Assets
Intangible assets are comprised of the following significant classes (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
August 31, 2017
|
|
November 30, 2016
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Book
Value
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Book
Value
|
Purchased technology
|
$
|
151,886
|
|
|
$
|
(82,245
|
)
|
|
$
|
69,641
|
|
|
$
|
109,886
|
|
|
$
|
(68,116
|
)
|
|
$
|
41,770
|
|
Customer-related
|
67,802
|
|
|
(43,632
|
)
|
|
24,170
|
|
|
67,602
|
|
|
(35,852
|
)
|
|
31,750
|
|
Trademarks and trade names
|
17,740
|
|
|
(9,774
|
)
|
|
7,966
|
|
|
15,140
|
|
|
(7,833
|
)
|
|
7,307
|
|
Total
|
$
|
237,428
|
|
|
$
|
(135,651
|
)
|
|
$
|
101,777
|
|
|
$
|
192,628
|
|
|
$
|
(111,801
|
)
|
|
$
|
80,827
|
|
The increase in intangible assets during the second and
third
quarters of fiscal year 2017 is related to the acquisitions of DataRPM Corporation (DataRPM) in March 2017 and Kinvey Inc. (Kinvey) in June 2017, respectively (Note 6).
In the three and
nine
months ended
August 31, 2017
, amortization expense related to intangible assets was
$9.1 million
and
$23.9 million
, respectively. In the three and nine months ended
August 31, 2016
, amortization expense related to intangible assets was
$7.1 million
and
$21.4 million
, respectively.
Future amortization expense for intangible assets as of
August 31, 2017
is as follows (in thousands):
|
|
|
|
|
Remainder of 2017
|
$
|
9,096
|
|
2018
|
35,573
|
|
2019
|
34,449
|
|
2020
|
9,669
|
|
2021
|
9,550
|
|
Thereafter
|
3,440
|
|
Total
|
$
|
101,777
|
|
Goodwill
Changes in the carrying amount of goodwill in the nine months ended
August 31, 2017
are as follows (in thousands):
|
|
|
|
|
Balance, November 30, 2016
|
$
|
278,067
|
|
Additions
|
37,794
|
|
Translation adjustments
|
52
|
|
Balance, August 31, 2017
|
$
|
315,913
|
|
The additions to goodwill during the second and third quarters of fiscal year 2017 are related to the acquisitions of DataRPM in March 2017 and Kinvey in June 2017, respectively (Note 6).
Changes in the goodwill balances by reportable segment in the
nine
months ended
August 31, 2017
are as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
November 30, 2016
|
|
Additions
|
|
Translation Adjustments
|
|
August 31, 2017
|
OpenEdge
|
$
|
212,062
|
|
|
$
|
37,794
|
|
|
$
|
52
|
|
|
$
|
249,908
|
|
Data Connectivity and Integration
|
19,040
|
|
|
—
|
|
|
—
|
|
|
19,040
|
|
Application Development and Deployment
|
46,965
|
|
|
—
|
|
|
—
|
|
|
46,965
|
|
Total goodwill
|
$
|
278,067
|
|
|
$
|
37,794
|
|
|
$
|
52
|
|
|
$
|
315,913
|
|
During the quarter ending
August 31, 2017
, no triggering events have occurred that would indicate that it is more likely than not that the carrying values of any of our reporting units exceeded their fair values.
Note 6: Business Combinations
Kinvey Acquisition
On June 1, 2017, we acquired by merger
100%
of the outstanding securities of Kinvey for an aggregate sum of
$49.2 million
, which includes approximately
$0.3 million
held-back from the founder of Kinvey as an incentive to remain with the Company for at least two years following the acquisition. The
$0.3 million
held-back will be recorded to expense over the service period. Kinvey is a privately-held company providing Backend-as-a-Service (BaaS), which allows developers to set up, use, and operate a cloud backend for any native, hybrid, web, or IoT app built using any development tools. This acquisition, in combination with our existing frontend technologies, cognitive capabilities from DataRPM, our strong business logic and rules capabilities, and our strong data connectivity technologies, enables us to offer a premier platform for building and delivering cognitive business applications. The acquisition was accounted for as a business combination, and accordingly, the results of operations of Kinvey are included in our operating results as part of the OpenEdge business segment from the date of acquisition. We paid the purchase price in cash from available funds.
The total consideration, less the
$0.3 million
held-back discussed above, which is considered to be a compensation arrangement, has been preliminarily allocated to Kinvey's tangible assets, identifiable intangible assets and assumed liabilities based on their estimated fair values. The preliminary fair value estimates of the net assets acquired are based upon preliminary calculations and valuations, and those estimates and assumptions are subject to change as we obtain additional information for those estimates during the measurement period (up to one year from the acquisition date). The areas of the preliminary estimates that are not yet finalized relate to identifiable intangible assets and deferred taxes. The excess of the total consideration, less the amount held-back from the founder, over the tangible assets, identifiable intangible assets and assumed liabilities was recorded as goodwill.
The preliminary allocation of the purchase price is as follows (in thousands):
|
|
|
|
|
|
|
|
Total
|
|
Life
|
Net working capital
|
$
|
(891
|
)
|
|
|
Property, plant and equipment
|
26
|
|
|
|
Purchased technology
|
22,100
|
|
|
5 Years
|
Trade name
|
1,800
|
|
|
5 Years
|
Customer relationships
|
100
|
|
|
5 Years
|
Net deferred tax assets
|
533
|
|
|
|
Goodwill
|
25,211
|
|
|
|
Net assets acquired
|
$
|
48,879
|
|
|
|
The preliminary fair value of the intangible assets has been estimated using the income approach in which the after-tax cash flows are discounted to present value. The cash flows are based on estimates used to price the acquisition, and the discount rates applied were benchmarked with reference to the implied rate of return from the transaction model as well as the weighted average cost of capital.
Deferred taxes include deferred tax liabilities resulting from the tax effects of fair value adjustments related to identifiable intangible assets, partially offset by the value of deferred tax assets acquired from Kinvey. Tangible assets acquired and assumed liabilities were recorded at fair value.
We recorded the excess of the purchase price over the identified tangible and intangible assets as goodwill. We believe that the investment value of the future enhancement of our product and solution offerings created as a result of this acquisition has principally contributed to a purchase price that resulted in the recognition of
$25.2 million
of goodwill, which is not deductible for tax purposes.
Acquisition-related transaction costs (e.g., legal, due diligence, valuation, and other professional fees) are not included as a component of consideration paid, but are required to be expensed as incurred. We incurred
$0.4 million
of acquisition-related costs, which are included in acquisition-related expenses in our condensed consolidated statement of operations for the three months ended August 31, 2017.
We have not disclosed the amount of revenues and earnings of Kinvey since acquisition, nor pro forma financial information, as those amounts are not significant to our condensed consolidated financial statements.
Data RPM Acquisition
On March 1, 2017, we acquired by merger
100%
of the outstanding securities of DataRPM for an aggregate sum of
$30.0 million
. Approximately
$1.7 million
of the purchase price was paid to DataRPM’s founders in the form of restricted stock units, subject to a
two
-year vesting schedule and continued employment. This will be recorded as stock-based compensation over the vesting term. DataRPM is a privately-held company and leader in cognitive predictive maintenance for the industrial IoT (IIoT) market. This acquisition is a key part of the Company's strategy to provide the best platform to build and deliver cognitive-first applications. The acquisition was accounted for as a business combination, and accordingly, the results of operations of DataRPM are included in our operating results as part of the OpenEdge business segment from the date of acquisition. We paid the purchase price in cash from available funds.
The total consideration, less the fair value of the granted restricted stock units discussed above, which are considered compensation arrangements, has been allocated to DataRPM’s tangible assets, identifiable intangible assets and assumed liabilities based on their estimated fair values. The preliminary fair value estimates of the net assets acquired are based upon preliminary calculations and valuations, and those estimates and assumptions are subject to change as we obtain additional information for those estimates during the measurement period (up to one year from the acquisition date). The areas of the preliminary estimates that are not yet finalized relate to identifiable intangible assets and deferred taxes. The excess of the total consideration, less the fair value of the restricted stock units, over the tangible assets, identifiable intangible assets and assumed liabilities was recorded as goodwill.
The preliminary allocation of the purchase price is as follows (in thousands):
|
|
|
|
|
|
|
|
Total
|
|
Life
|
Net working capital
|
$
|
(174
|
)
|
|
|
Property, plant and equipment
|
68
|
|
|
|
Purchased technology
|
19,900
|
|
|
5 Years
|
Trade name
|
800
|
|
|
5 Years
|
Customer relationships
|
100
|
|
|
5 Years
|
Deferred taxes
|
(5,006
|
)
|
|
|
Goodwill
|
12,583
|
|
|
|
Net assets acquired
|
$
|
28,271
|
|
|
|
The preliminary fair value of the intangible assets has been estimated using the income approach in which the after-tax cash flows are discounted to present value. The cash flows are based on estimates used to price the acquisition, and the discount rates applied were benchmarked with reference to the implied rate of return from the transaction model as well as the weighted average cost of capital.
Deferred taxes include deferred tax liabilities resulting from the tax effects of fair value adjustments related to identifiable intangible assets, partially offset by the fair value of deferred tax assets acquired from DataRPM. Tangible assets acquired and assumed liabilities were recorded at fair value.
We recorded the excess of the purchase price over the identified tangible and intangible assets as goodwill. We believe that the investment value of the future enhancement of our product and solution offerings created as a result of this acquisition has principally contributed to a purchase price that resulted in the recognition of
$12.6 million
of goodwill, which is not deductible for tax purposes.
As discussed above, approximately
$1.7 million
of the total consideration was paid to DataRPM’s founders in restricted stock units, subject to a vesting schedule and continued employment. We concluded that the restricted stock units are compensation arrangements and we have been recognizing stock-based compensation expense in accordance with the vesting schedule over the service period of the awards, which is
2 years
. We recorded
$0.2 million
of stock-based compensation expense related to these restricted stock units as operating expenses in our condensed consolidated statement of operations for the three and nine months ended August 31, 2017.
Acquisition-related transaction costs (e.g., legal, due diligence, valuation, and other professional fees) are not included as a component of consideration transferred, but are required to be expensed as incurred. We incurred
$0.3 million
and
$0.4 million
of acquisition-related costs during the three and nine months ended August 31, 2017, respectively, which are included in acquisition-related expenses in our condensed consolidated statement of operations.
We have not disclosed the amount of revenues and earnings of DataRPM since acquisition, nor pro forma financial information, as those amounts are not significant to our condensed consolidated financial statements.
Note 7: Term Loan and Line of Credit
Our credit agreement provides for a
$150 million
secured term loan and a
$150 million
secured revolving credit facility, which may be made available in U.S. Dollars and certain other currencies. The revolving credit facility may be increased by up to an additional
$75 million
if the existing or additional lenders are willing to make such increased commitments. We borrowed the
$150 million
term loan included in our credit agreement to partially fund our acquisition of Telerik AD in December 2014. The revolving credit facility has sublimits for swing line loans up to
$25.0 million
and for the issuance of standby letters of credit in a face amount up to
$25.0 million
. We expect to use the revolving credit facility for general corporate purposes and may also use it for working capital.
The credit facility matures on December 2, 2019, when all amounts outstanding will be due and payable in full. The revolving credit facility does not require amortization of principal. The outstanding balance of the
$150 million
term loan as of
August 31, 2017
was
$123.8 million
, with
$15.0 million
due in the next 12 months. The term loan requires repayment of principal at the end of each fiscal quarter, beginning with the fiscal quarter ended February 28, 2015. The first eight payments were in the principal amount of
$1.9 million
each, the following eight payments are in the principal amount of
$3.8 million
each, the next three payments are in the principal amount of
$5.6 million
each, and the last payment is of the remaining principal amount. Any amounts outstanding under the term loan thereafter would be due on the maturity date. The term loan may be prepaid before maturity in whole or in part at our option without penalty or premium. As of
August 31, 2017
, the carrying value of the term loan approximates the fair value, based on Level 2 inputs (observable market prices in less than active markets), as the interest rate is variable over the selected interest period and is similar to current rates at which we can borrow funds. The interest rate of the credit facility as of
August 31, 2017
was
3.00%
.
Costs incurred to obtain our long-term debt of
$1.8 million
are being amortized over the term of the debt agreement using the effective interest rate method. Amortization expense related to debt issuance costs of
$0.1 million
for the three months ended
August 31, 2017
and
August 31, 2016
and
$0.3 million
for the
nine
months ended
August 31, 2017
and
August 31, 2016
, respectively, is recorded within interest expense in our condensed consolidated statements of operations. The unamortized portion of debt issuance costs of
$0.8 million
is recorded as a direct deduction from the carrying value of the debt liability in our condensed consolidated balance sheet as of
August 31, 2017
, with
$0.4 million
deducted from the current portion of long-term debt balance and
$0.4 million
deducted from the long-term debt balance. Prior to fiscal year 2017 and the adoption of ASU 2015-03, the unamortized portion of debt issuance costs were recorded in other assets in our condensed consolidated balance sheet (Note 1).
Revolving loans may be borrowed, repaid and reborrowed until December 2, 2019, at which time all amounts outstanding must be repaid. As of
August 31, 2017
, there were
no
amounts outstanding under the revolving line and
$1.4 million
of letters of credit.
As of
August 31, 2017
, aggregate principal payments of long-term debt for the remainder of the contract term are (in thousands):
|
|
|
|
|
Remainder of 2017
|
$
|
3,750
|
|
2018
|
15,000
|
|
2019
|
16,875
|
|
2020
|
88,125
|
|
Total
|
$
|
123,750
|
|
Note 8: Common Stock Repurchases
We repurchased and retired
0.6 million
shares of our common stock for
$19.0 million
in the three months ended
August 31, 2017
and
1.5 million
shares for
$43.9 million
in the
nine
months ended
August 31, 2017
. In the three and
nine
months ended
August 31, 2016
, we repurchased and retired
0.4 million
shares for
$11.5 million
and
2.8 million
shares for
$71.5 million
, respectively. The shares were repurchased in all periods as part of our Board of Directors authorized share repurchase program.
In March 2016, our Board of Directors authorized a
$100.0 million
share repurchase program, which increased the total authorization to
$214.5 million
. As of
August 31, 2017
, there was
$91.4 million
remaining under this authorization. In September 2017, our Board of Directors increased the total share repurchase authorization from the
$91.4 million
remaining under the previous authorization to
$250 million
.
Note 9: Stock-Based Compensation
Stock-based compensation expense reflects the fair value of stock-based awards, less the present value of expected dividends, measured at the grant date and recognized over the relevant service period. We estimate the fair value of each stock-based award on the measurement date using the current market price of the stock or the Black-Scholes option valuation model.
In addition, during each fiscal year from 2014 through 2017 we granted performance-based restricted stock units that include a
three
-year market condition under a Long-Term Incentive Plan (“LTIP”) where the performance measurement period is
three years
. Vesting of the LTIP awards is based on our level of attainment of specified total shareholder return (TSR) targets relative to the percentage appreciation of a specified index of companies for the respective
three
year periods and is also subject to the continued employment of the grantees. In order to estimate the fair value of such awards, we used a Monte Carlo Simulation valuation model.
The Black-Scholes and Monte Carlo Simulation valuation models incorporate assumptions as to stock price volatility, the expected life of options or awards, a risk-free interest rate and dividend yield. We recognize stock-based compensation expense related to options and restricted stock units on a straight-line basis over the service period of the award, which is generally
4
years for options and
3
years for restricted stock units. We recognize stock-based compensation expense related to performance stock units and our employee stock purchase plan using an accelerated attribution method.
The following table provides the classification of stock-based compensation as reflected in our condensed consolidated statements of operations (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
August 31,
2017
|
|
August 31,
2016
|
|
August 31,
2017
|
|
August 31,
2016
|
Cost of maintenance and services
|
$
|
239
|
|
|
$
|
223
|
|
|
$
|
790
|
|
|
$
|
599
|
|
Sales and marketing
|
808
|
|
|
751
|
|
|
1,371
|
|
|
2,792
|
|
Product development
|
1,645
|
|
|
2,524
|
|
|
2,699
|
|
|
7,600
|
|
General and administrative
|
1,604
|
|
|
2,281
|
|
|
4,699
|
|
|
8,018
|
|
Total stock-based compensation
|
$
|
4,296
|
|
|
$
|
5,779
|
|
|
$
|
9,559
|
|
|
$
|
19,009
|
|
Note 10: Accumulated Other Comprehensive Loss
The following table summarizes the changes in accumulated balances of other comprehensive loss during the
nine
months ended
August 31, 2017
(in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign Currency Translation Adjustment
|
|
Unrealized Gains (Losses) on Investments
|
|
Accumulated Other Comprehensive Loss
|
Balance, December 1, 2016
|
$
|
(28,425
|
)
|
|
$
|
(136
|
)
|
|
$
|
(28,561
|
)
|
Other comprehensive loss before reclassifications, net of tax
|
11,291
|
|
|
105
|
|
|
11,396
|
|
Balance, August 31, 2017
|
$
|
(17,134
|
)
|
|
$
|
(31
|
)
|
|
$
|
(17,165
|
)
|
The tax effect on accumulated unrealized gains (losses) on investments was minimal as of
August 31, 2017
and
November 30, 2016
.
Note 11: Restructuring Charges
The following table provides a summary of activity for all of the restructuring actions, the most significant of which are detailed further below (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excess
Facilities and
Other Costs
|
|
Employee Severance and Related Benefits
|
|
Total
|
Balance, December 1, 2016
|
$
|
107
|
|
|
$
|
1,443
|
|
|
$
|
1,550
|
|
Costs incurred
|
2,426
|
|
|
16,298
|
|
|
18,724
|
|
Cash disbursements
|
(1,194
|
)
|
|
(15,677
|
)
|
|
(16,871
|
)
|
Asset impairment
|
(762
|
)
|
|
—
|
|
|
(762
|
)
|
Translation adjustments and other
|
24
|
|
|
335
|
|
|
359
|
|
Balance, August 31, 2017
|
$
|
601
|
|
|
$
|
2,399
|
|
|
$
|
3,000
|
|
2017 Restructuring
During the first quarter of fiscal year 2017, we undertook certain operational restructuring initiatives intended to significantly reduce annual costs. As part of this action, management committed to a new strategic plan highlighted by a new product strategy and a streamlined operating approach. To execute these operational restructuring initiatives, we reduced our global workforce by approximately
20%
. These workforce reductions commenced in the first fiscal quarter of 2017 and were substantially completed by the end of the second fiscal quarter of 2017. These workforce reductions occurred in substantially all functional units and across all geographies in which we operate. We also consolidated offices in various locations during the first three quarters of fiscal year of 2017 and expect additional expenses related to facility closures during the remainder of fiscal year 2017. We do not expect these additional costs to be material.
Restructuring expenses are related to employee costs, including severance, health benefits and outplacement services (but excluding stock-based compensation), facilities costs, which include fees to terminate lease agreements and costs for unused space, net of sublease assumptions, and other costs, which include asset impairment charges.
As part of this first quarter of fiscal year 2017 restructuring, for the three and
nine
months ended
August 31, 2017
, we incurred expenses of
$0.9 million
and
$18.6 million
, respectively, which are recorded as restructuring expenses in the consolidated statements of operations.
A summary of the first
nine
months of fiscal year
2017
activity for this restructuring action is as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excess
Facilities and
Other Costs
|
|
Employee Severance and Related Benefits
|
|
Total
|
Balance, December 1, 2016
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Costs incurred
|
2,334
|
|
|
16,298
|
|
|
18,632
|
|
Cash disbursements
|
(1,015
|
)
|
|
(14,543
|
)
|
|
(15,558
|
)
|
Asset impairment
|
(762
|
)
|
|
—
|
|
|
(762
|
)
|
Translation adjustments and other
|
24
|
|
|
335
|
|
|
359
|
|
Balance, August 31, 2017
|
$
|
581
|
|
|
$
|
2,090
|
|
|
$
|
2,671
|
|
Cash disbursements for expenses incurred to date under this restructuring are expected to be made through the third quarter of fiscal year 2018. The short-term portion of the restructuring reserve of
$2.4 million
is included in other accrued liabilities and the long-term portion of
$0.3 million
is included in other noncurrent liabilities on the condensed consolidated balance sheet at
August 31, 2017
.
2016 Restructuring
During the fourth quarter of fiscal year 2016, our management approved, committed to and initiated plans to make strategic changes to our organization as a result of the appointment of our new Chief Executive Officer during the period. In connection with the new organizational structure, we eliminated the positions of Chief Product Officer and Chief Revenue Officer.
Restructuring expenses are related to employee costs, including severance, health benefits and outplacement services (but excluding stock-based compensation).
As part of this fourth quarter of fiscal year 2016 restructuring, for the three and
nine
months ended
August 31, 2017
, we incurred
no
additional expenses.
A summary of the first
nine
months of fiscal year
2017
activity for this restructuring action is as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excess
Facilities and
Other Costs
|
|
Employee Severance and Related Benefits
|
|
Total
|
Balance, December 1, 2016
|
$
|
—
|
|
|
$
|
1,415
|
|
|
$
|
1,415
|
|
Cash disbursements
|
—
|
|
|
(1,114
|
)
|
|
(1,114
|
)
|
Balance, August 31, 2017
|
$
|
—
|
|
|
$
|
301
|
|
|
$
|
301
|
|
Cash disbursements for expenses incurred to date under this restructuring are expected to be made through the fourth quarter of fiscal year 2017. As a result, the total amount of the restructuring reserve of
$0.3 million
is included in other accrued liabilities on the consolidated balance sheet at
August 31, 2017
.
Note 12: Income Taxes
Our income tax provision for the third quarter of fiscal years 2017 and 2016 reflects our estimates of the effective tax rates expected to be applicable for the full fiscal years, adjusted for any discrete events which are recorded in the period they occur. The estimates are reevaluated each quarter based on our estimated tax expense for the full fiscal year.
Our effective income tax rate was
44%
in the first nine months of fiscal year 2017 compared to
36%
in the same period last year. The increase in our effective tax rate in the nine months ended August 31, 2017 compared to the same period in the prior year is primarily because during the preparation of our condensed consolidated financial statements for the three months ended May 31, 2016, we identified an error in our prior year income tax provision in which income tax expense was overstated for the year ended November 30, 2015 by
$2.7 million
related to our tax treatment of an intercompany gain. We determined that the error was not material to the prior year financial statements. We also concluded that recording an out-of-period correction would not be material and therefore corrected this error by recording an out-of-period
$2.7 million
tax benefit in our interim financial statements for the period ended May 31, 2016.
Our federal income tax returns have been examined or are closed by statute for all years prior to fiscal year 2015. Our state income tax returns have been examined or are closed by statute for all years prior to fiscal year 2012.
Tax authorities for certain non-U.S. jurisdictions are also examining returns, none of which are material to our consolidated balance sheets, cash flows or statements of income. With some exceptions, we are generally no longer subject to tax examinations in non-U.S. jurisdictions for years prior to fiscal year 2012.
Note 13: Earnings Per Share
We compute basic earnings per share using the weighted average number of common shares outstanding. We compute diluted earnings per share using the weighted average number of common shares outstanding plus the effect of outstanding dilutive stock options, restricted stock units and deferred stock units, using the treasury stock method. The following table sets forth the calculation of basic and diluted earnings per share on an interim basis (in thousands, except per share data):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
August 31,
2017
|
|
August 31,
2016
|
|
August 31,
2017
|
|
August 31,
2016
|
Net income
|
$
|
11,172
|
|
|
$
|
7,576
|
|
|
$
|
20,988
|
|
|
$
|
18,067
|
|
Weighted average shares outstanding
|
48,071
|
|
|
48,611
|
|
|
48,342
|
|
|
49,765
|
|
Dilutive impact from common stock equivalents
|
299
|
|
|
524
|
|
|
289
|
|
|
545
|
|
Diluted weighted average shares outstanding
|
48,370
|
|
|
49,135
|
|
|
48,631
|
|
|
50,310
|
|
Basic earnings per share
|
$
|
0.23
|
|
|
$
|
0.16
|
|
|
$
|
0.43
|
|
|
$
|
0.36
|
|
Diluted earnings per share
|
$
|
0.23
|
|
|
$
|
0.15
|
|
|
$
|
0.43
|
|
|
$
|
0.36
|
|
We excluded stock awards representing approximately
905,000
shares and
648,000
shares of common stock from the calculation of diluted earnings per share in the three and
nine
months ended
August 31, 2017
, respectively, because these awards were anti-dilutive. In the three and nine months ended
August 31, 2016
, we excluded stock awards representing
287,000
shares and
423,000
shares of common stock, respectively, from the calculation of diluted earnings per share as they were anti-dilutive.
Note 14: Business Segments and International Operations
Operating segments are components of an enterprise that engage in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and assess performance. Our chief operating decision maker is our Chief Executive Officer.
The changes made to our organization during the fourth quarter of fiscal year 2016 and first quarter of fiscal year 2017, as discussed in Note 11, did not change our determination of the three reportable segments as our organizational structure maintains the focus of the
three
business segments.
We do not manage our assets or capital expenditures by segment or assign other income (expense) and income taxes to segments. We manage and report such items on a consolidated company basis.
The following table provides revenue and contribution from our reportable segments and reconciles to the consolidated income before income taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
(In thousands)
|
August 31, 2017
|
|
August 31, 2016
|
|
August 31, 2017
|
|
August 31, 2016
|
Segment revenue:
|
|
|
|
|
|
|
|
OpenEdge
|
$
|
68,135
|
|
|
$
|
67,534
|
|
|
$
|
198,533
|
|
|
$
|
198,595
|
|
Data Connectivity and Integration
|
8,987
|
|
|
14,251
|
|
|
22,911
|
|
|
30,852
|
|
Application Development and Deployment
|
20,188
|
|
|
20,233
|
|
|
60,049
|
|
|
58,170
|
|
Total revenue
|
97,310
|
|
|
102,018
|
|
|
281,493
|
|
|
287,617
|
|
Segment costs of revenue and operating expenses:
|
|
|
|
|
|
|
|
OpenEdge
|
18,374
|
|
|
18,180
|
|
|
52,538
|
|
|
53,539
|
|
Data Connectivity and Integration
|
2,200
|
|
|
2,828
|
|
|
6,531
|
|
|
8,863
|
|
Application Development and Deployment
|
6,369
|
|
|
11,021
|
|
|
19,896
|
|
|
29,555
|
|
Total costs of revenue and operating expenses
|
26,943
|
|
|
32,029
|
|
|
78,965
|
|
|
91,957
|
|
Segment contribution:
|
|
|
|
|
|
|
|
OpenEdge
|
49,761
|
|
|
49,354
|
|
|
145,995
|
|
|
145,056
|
|
Data Connectivity and Integration
|
6,787
|
|
|
11,423
|
|
|
16,380
|
|
|
21,989
|
|
Application Development and Deployment
|
13,819
|
|
|
9,212
|
|
|
40,153
|
|
|
28,615
|
|
Total contribution
|
70,367
|
|
|
69,989
|
|
|
202,528
|
|
|
195,660
|
|
Other unallocated expenses (1)
|
50,068
|
|
|
56,383
|
|
|
160,723
|
|
|
163,005
|
|
Income from operations
|
20,299
|
|
|
13,606
|
|
|
41,805
|
|
|
32,655
|
|
Other (expense) income, net
|
(1,400
|
)
|
|
(1,288
|
)
|
|
(4,299
|
)
|
|
(4,474
|
)
|
Income before income taxes
|
$
|
18,899
|
|
|
$
|
12,318
|
|
|
$
|
37,506
|
|
|
$
|
28,181
|
|
|
|
|
|
|
|
|
|
(1) The following expenses are not allocated to our segments as we manage and report our business in these functional areas on a consolidated basis only: product development, corporate marketing, administration, amortization of acquired intangibles, stock-based compensation, restructuring, and acquisition related expenses.
|
Our revenues are derived from licensing our products and from related services, which consist of maintenance, hosting services, and consulting and education. Information relating to revenue from customers by revenue type is as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
(In thousands)
|
August 31,
2017
|
|
August 31,
2016
|
|
August 31,
2017
|
|
August 31,
2016
|
Software licenses
|
$
|
28,529
|
|
|
$
|
33,624
|
|
|
$
|
78,443
|
|
|
$
|
86,366
|
|
Maintenance
|
60,536
|
|
|
60,368
|
|
|
179,572
|
|
|
178,189
|
|
Professional services
|
8,245
|
|
|
8,026
|
|
|
23,478
|
|
|
23,062
|
|
Total
|
$
|
97,310
|
|
|
$
|
102,018
|
|
|
$
|
281,493
|
|
|
$
|
287,617
|
|
In the following table, revenue attributed to North America includes sales to customers in the U.S. and sales to certain multinational organizations. Revenue from Europe, the Middle East and Africa (EMEA), Latin America and the Asia Pacific region includes sales to customers in each region plus sales from the U.S. to distributors in these regions. Information relating to revenue from external customers from different geographical areas is as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
(In thousands)
|
August 31,
2017
|
|
August 31,
2016
|
|
August 31,
2017
|
|
August 31,
2016
|
North America
|
$
|
55,703
|
|
|
$
|
58,275
|
|
|
$
|
157,438
|
|
|
$
|
160,732
|
|
EMEA
|
31,830
|
|
|
32,719
|
|
|
92,320
|
|
|
95,517
|
|
Latin America
|
5,009
|
|
|
4,667
|
|
|
15,669
|
|
|
12,749
|
|
Asia Pacific
|
4,768
|
|
|
6,357
|
|
|
16,066
|
|
|
18,619
|
|
Total
|
$
|
97,310
|
|
|
$
|
102,018
|
|
|
$
|
281,493
|
|
|
$
|
287,617
|
|