Business Wire | Nov 3, 2020 04:05PM EST

Virtusa Announces Second Quarter Fiscal 2021 Consolidated Financial Results

Nov. 03, 2020

SOUTHBOROUGH, Mass.--(BUSINESS WIRE)--Nov. 03, 2020--Virtusa Corporation (NASDAQ GS: VRTU), a leading IT services provider that enables the digital transformation of Global 2000 enterprises by designing, building and implementing the end-to-end technology solutions that are essential to compete in a digital-first world, today reported consolidated financial results for the second quarter fiscal 2021, ended September 30, 2020.

Second Quarter Fiscal 2021 Consolidated Financial Results

Revenue for the second quarter of fiscal 2021 was $317.2 million, representing an increase of 5.4% sequentially and a decrease of 3.4% year-over-year. On a constant currency basis, (1) second quarter revenue increased 5.0% sequentially and decreased 3.9% year-over-year.

Virtusa reported GAAP income from operations of $12.7 million for the second quarter of fiscal 2021, compared to $7.2 million for the first quarter of fiscal 2021 and $19.2 million for the second quarter of fiscal 2020.

GAAP net income available to common shareholders for the second quarter of fiscal 2021 was $7.7 million, or $0.25 per diluted share, compared to net loss of $(0.2) million, or a loss of $(0.01) per diluted share, for the first quarter of fiscal 2021, and net income of $6.0 million, or $0.20 per diluted share, for the second quarter of fiscal 2020.

Non-GAAP Results*

Non-GAAP income from operations was $30.2 million for the second quarter of fiscal 2021, an increase from $14.0 million for the first quarter of fiscal 2021 and from $29.4 million for the second quarter of fiscal 2020.

Non-GAAP net income was $18.0 million, or $0.53 per diluted share, for the second quarter of fiscal 2021, compared to $6.0 million, or $0.20 per diluted share, for the first quarter of fiscal 2021, and $18.1 million, or $0.54 per diluted share, for the second quarter of fiscal 2020.

*Please refer to the Non-GAAP Financial Information section of this press release for definitions of our Non-GAAP financial measures and reconciliations to the most comparable GAAP financial measures.

Balance Sheet and Cash Flow

The Company ended the second quarter of fiscal 2021 with $300.8 million of cash, cash equivalents, and short-term and long-term investments (2). Total debt net of issuance costs as of September 30, 2020 was $404.0 million. Cash flow from operations was $49.4 million, or 15.6% of revenue, for the second quarter of fiscal 2021.

Management Commentary

Kris Canekeratne, Virtusa's Chairman and CEO, stated, "I would like to reiterate our excitement about the proposed acquisition of Virtusa by Baring Private Equity Asia ("BPEA"). We are confident BPEA will be a strong partner helping to solidify our position at the forefront of digital transformation for global 2000 companies. As we look forward to completing the closing conditions of our merger, we remain focused on the execution of our Three Pillar Strategy for profitable growth. Our strong fiscal second quarter results highlighted by sequential revenue growth of 5.4%, which exceeded the midpoint of our prior guidance, as well as significant sequential gross margin, non-GAAP operating margin and EPS accretion underscore that we continue to make progress against our plan."

About Virtusa

Virtusa Corporation (NASDAQ GS: VRTU) is a global provider of digital business strategy, digital engineering, and information technology (IT) services and solutions that help clients change, disrupt, and unlock new value through innovation engineering. Virtusa serves Global 2000 companies in Banking, Financial Services, Insurance, Healthcare, Communications, Media, Entertainment, Travel, Manufacturing, and Technology industries.

Virtusa helps clients grow their business with innovative products and services that create operational efficiency using digital labor, future-proof operational and IT platforms, and rationalization and modernization of IT applications infrastructure. This is achieved through a unique approach blending deep contextual expertise, empowered agile teams, and measurably better engineering to create holistic solutions that drive business forward at unparalleled velocity enabled by a culture of cooperative disruption.

(c) 2020 Virtusa Corporation. All rights reserved.

Virtusa is a registered trademark of Virtusa Corporation. All other company and brand names may be trademarks or service marks of their respective holders.

Non-GAAP Financial Information

This press release includes certain non-GAAP financial measures as defined by Regulation G by the Securities and Exchange Commission. These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures should be read in conjunction with Virtusa's financial statements prepared in accordance with GAAP.

Virtusa believes the following financial measures will provide additional insights to measure the operational performance of the business.

* Virtusa presents constant currency revenue growth rates to provide insights into, and a framework for assessing, how Virtusa's revenue performed excluding the effect of foreign currency rate fluctuations (see footnote 1).

* Virtusa presents a reconciliation of its cash and cash equivalents to total cash, cash equivalents, short term and long term investments which Virtusa believes provides insight into its cash position and overall liquidity (see footnote 2).

* Virtusa also presents consolidated statements of income measures that exclude, when applicable, stock-based compensation expense, acquisition related charges, restructuring charges, foreign currency transaction gains and losses, impairment of investments, impairment of long-lived assets, non-recurring third party financing costs, gain on redemption of equity method investment, non-recurring fees for potential proxy deliberation, the initial impact of our election to treat certain subsidiaries as disregarded entities for US tax purposes and other non-recurring tax items to provide further insights into the comparison of Virtusa's operating results among periods.

The following table presents a reconciliation of each non-GAAP financial measure to the most comparable GAAP measure for the three and six months ended September 30:

(in thousands, except share and per share amounts) Three Months Ended September Six Months Ended September 30, 30, 2020 2019 2020 2019

GAAP income from $ 12,726 $ 19,235 $ 19,881 $ 32,663 operations Add: Stock-based 4,078 5,834 7,670 12,510 compensation expense Add: Acquisition-related 10,767 4,299 13,357 8,396 charges and restructuring charges^(a) Add: Non-recurring 2,633 - 3,339 - professional fees ^ (b)Non-GAAP income from $ 30,204 $ 29,368 $ 44,247 $ 53,569 operations GAAP operating margin 4.0 % 5.9 % 3.2 % 5.0 %

Effect of above adjustments to 5.5 % 3.0 % 4.0 % 3.3 % income from operationsNon-GAAP operating 9.5 % 8.9 % 7.2 % 8.3 %margin GAAP net income $ 7,681 $ 6,014 $ 7,488 $ 10,761 available to Virtusacommon stockholders Add: Stock-based 4,078 5,834 7,670 12,510 compensation expense Add: Acquisition-related 10,767 4,420 13,357 8,663 charges and restructuring charges^(a) Add: Non-recurring 2,633 - 3,339 - professional fees ^ (b) Less : Gain on redemption of (1,179 ) - (1,179 ) - equity method investment Add: Foreign currency (4,098 ) 3,437 (2,857 ) 2,235 transaction (gains) losses^(c) Tax adjustments ^ (2,958 ) (2,664 ) (4,866 ) (4,314 ) (d) Noncontrolling - 7 - (28 ) interest, net of taxes ^(e)Non-GAAP net income $ 16,924 $ 17,048 $ 22,952 $ 29,827 available to Virtusacommon stockholders GAAP diluted earnings $ 0.25 $ 0.20 $ 0.25 $ 0.35 per share ^(f) Effect of stock-based 0.12 0.17 0.24 0.37 compensation expense ^(g) Effect of acquisition-related 0.32 0.13 0.42 0.26 charges and restructuring charges^(a) (g) Effect of non-recurring 0.08 - 0.10 - professional fees ^ (b) (g) Effect of gain on redemption of (0.04 ) - (0.04 ) - equity method investment ^(g) Effect of foreign currency (0.12 ) 0.10 (0.09 ) 0.07 transaction (gains) losses^(c) (g) Effect of tax (0.09 ) (0.08 ) (0.15 ) (0.13 ) adjustments ^(d) (g) Effect of - - - - noncontrolling interest ^(e) (g) Effect on dividend on Series A 0.03 0.03 0.03 0.06 Convertible Preferred Stock ^ (f) (g) Effect of change in (0.02 ) (0.01 ) (0.01 ) (0.03 ) dilutive shares for non-GAAP ^(f)Non-GAAP diluted $ 0.53 $ 0.54 $ 0.75 $ 0.95 earnings per share ^(g)(h)

(a) Acquisition-related charges include, when applicable, amortization ofpurchased intangibles, external deal costs, transaction-related professionalfees, acquisition-related retention bonuses, changes in the fair value ofcontingent consideration liabilities, accreted interest related to deferredacquisition payments, charges for impairment of acquired intangible assets andother acquisition-related costs including integration expenses consisting ofoutside professional and consulting services and direct and incremental travelcosts. Restructuring charges, when applicable, include termination benefits, aswell as certain professional fees related to restructuring. The following tableprovides the details of the acquisition-related charges and restructuringcharges:

Three Months Ended September Six Months Ended September 30, 30, 2020 2019 2020 2019

Amortization of $ 4,957 $ 3,440 $ 9,125 $ 6,661 intangible assets Acquisition cost $ - $ 859 $ - $ 1,735 and integration costs Transaction costs $ 4,997 $ - $ 4,997 $ - related to the Barings Transaction Changes in fair $ 813 $ - $ (765 ) $ - value of contingent consideration Acquisition-related charges included in $ 10,767 $ 4,299 $ 13,357 $ 8,396 costs of revenue and operating expense Accreted interest related to deferred $ - $ 121 $ - $ 267 acquisition payments Total acquisition-related $ 10,767 $ 4,420 $ 13,357 $ 8,663 charges and restructuring charges (b) Non-recurring fees for advisory, legal, consulting and proxy solicitationservices in connection with a contested proxy solicitation with respect to ourannual shareholder meeting and the election of directors. (c) Foreign currency transaction gains and losses are inclusive of gains andlosses on related foreign exchange forward contracts not designated as hedginginstruments for accounting purposes. (d) Tax adjustments reflect the tax effect of the non-GAAP adjustments usingthe tax rates at which these adjustments are expected to be realized for therespective periods. For fiscal year 2020, tax adjustments exclude BEAT taximpact in contemplation of a reorganization of our Indian legal entities andassume application of foreign tax credit benefits in the United States. (e) Noncontrolling interest represents the minorityshareholders interest of Polaris. (f) During the three and six months ended September 30, 2020 and 2019, all ofthe 3,000,000 shares of Series A Convertible Preferred Stock were excluded fromthe calculations of GAAP diluted earnings per share as their effect would havebeen anti-dilutive using the if-converted method.

The following table provides the non-GAAP net income available to Virtusacommon stockholders and non-GAAP dilutive weighted average shares outstandingusing the if-converted method to calculate the non-GAAP diluted earnings pershare for the three and six months ended September 30, 2020: Three Months Ended September Six Months Ended September 30, 30, 2020 2019 2020 2019

Non-GAAP net income $ 16,924 $ 17,048 $ 22,952 $ 29,827 available to Virtusacommon stockholders Dividends andAdd: accretion on Series $ 1,088 $ 1,088 $ 1,088 $ 2,175 A Convertible Preferred StockNon-GAAP net incomeavailable to Virtusa $ 18,012 $ 18,136 $ 24,040 $ 32,002 common stockholders andassumed conversion GAAP dilutive weighted 30,679,578 30,708,162 30,548,916 30,821,287 average sharesoutstanding Incremental effectAdd: of Series A 3,000,000 3,000,000 1,500,000 3,000,000 Convertible Preferred Stock as convertedNon-GAAP dilutive 33,679,578 33,708,162 32,048,916 33,821,287 weighted average sharesoutstanding

(g) To the extent the Series A Convertible Preferred Stock is dilutive usingthe if-converted method, the Series A Convertible Preferred Stock is includedin the weighted average shares outstanding to determine non-GAAP dilutedearnings per share. (h) Non-GAAP diluted earnings per share is subject torounding. Footnotes

(1) To determine sequential revenue change in constant currency for the Company's second quarter of fiscal 2021, revenue from entities reporting in U.K. Pounds (GBP), Euros, and Swedish Krona (SEK) were converted into U.S. dollars at the average exchange rates in effect for the three months ended June 30, 2020, rather than the actual exchange rate in effect for the three months ended September 30, 2020. To determine year-over-year revenue change in constant currency for the Company's second quarter of fiscal 2021, revenue from entities reporting in U.K. Pounds (GBP), Euros, and Swedish Krona (SEK) were converted into U.S. dollars at the average exchange rates in effect for the three months ended September 30, 2019, rather than the actual exchange rate in effect for the three months ended September 30, 2020. The average exchange rates for the three months ended September 30, 2019, June 30, 2020, and September 30, 2020 are included in the table below:

Average U.S. Dollar Exchange Rate For the Three Months Ended September 30, 2019 June 30, 2020 September 30, 2020 GBP 1.23 1.24 1.27

Euro 1.11 1.09 1.17

SEK 0.10 0.10 0.11

(2) The Company considers the total measure of cash, cash equivalents, short-term and long-term investments to be an important indicator of the Company's overall liquidity. All of the Company's investments are classified as time deposits, available-for-sale debt securities and equity securities, including the Company's long-term investments, which meet the credit rating and diversification requirements of the Company's investment policy as approved by the Company's audit committee and board of directors.

(3) Earnings per share amounts for each quarter may not necessarily total to the yearly earnings per share due to the weighting of shares outstanding on a quarterly and year to date basis.

(4) In accordance with US GAAP, Virtusa applies the if-converted method to its convertible preferred shares when reporting its fiscal year 2021 results. The if-converted method is used to calculate the share impact of convertible securities. Under this method, only when the convertible securities are considered dilutive are they then included in the computation of weighted average shares outstanding in reported results and full year guidance. Second quarter GAAP EPS was calculated by including the impact of dividends and accretion on the convertible preferred shares in net income available to common stockholders and excluding the impact of the convertible preferred shares from the weighted average shares outstanding as these shares were anti-dilutive on a GAAP basis. Second quarter non-GAAP EPS was calculated by excluding the impact of dividends and accretion on the convertible preferred shares from net income available to common stockholders and including the impact of the convertible preferred shares in the weighted average shares outstanding as these shares were dilutive on a non-GAAP basis.

Forward-Looking Statements

This press release contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding, the impact of the COVID-19 pandemic and related economic conditions on our business and results of operations, the growth of our business and management's plans, long-term objectives of better than industry revenue growth and EPS accretion faster than revenue, and strategies. These forward-looking statements include, but are not limited to, plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts, and statements identified by words such as "expects," "anticipates," "intends," "plans," "believes," "see," "seeks," "estimates," "will," "should," "may," "confident," "positions," "look forward to," and variations of such words or words of similar meaning and the use of future dates. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, and our growth rate, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that these plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation: the impact of the outbreak of COVID-19 on our business and operations; ability to timely complete the proposed acquisition by Baring Private Equity Asia of Virtusa (the "Baring Acquisition"); the impact of the announcement and pendency of Baring Acquisition on our business, financial results and/or operations; the impact of certain restrictions on our business activities prior to the closing of the Baring Acquisition; increases in direct and indirect costs as a result of the Baring Acquisition; the outcomes of legal proceedings filed in connection with the Baring Acquisition; inability of Virtusa to service its debt obligations under its loan facility or to maintain compliance with certain financial covenants under the loan facility; the inability to pay cash dividends on the convertible preferred stock in connection with the Orogen convertible preferred stock financing, thus increasing the dilutive impact of the financing; the inability of Virtusa to redeem the convertible preferred stock at maturity, if there has been no conversion event prior to maturity; Virtusa's ability to sustain profitability or maintain profitable engagements; the potential material assessment by the Indian government of certain statutory defined contribution obligations of employees and employers; the potential material assessment by the IRS in connection with a notice of proposed adjustment related to the employment tax treatment of certain payments made to certain Company employees; currency exchange rate fluctuations of the Indian and Sri Lankan rupee, the U.S. dollar, the U.K pound sterling, the Swedish krona, and the euro; the international nature of our business; restrictions on immigration or changes in immigration laws; Virtusa's ability to integrate the operations of, and achieve expected synergies and operating efficiencies in connection with, acquired businesses; unanticipated acquisition related costs and negative effects on Virtusa's reported results of operations from previous acquisitions; Virtusa's dependence on a limited number of clients as well as clients located principally in the United States and United Kingdom and in concentrated industries; Virtusa's ability to hire and retain enough sufficiently trained IT professionals to support its operations; Virtusa's ability to expand its business or effectively manage growth; increasing competition in the IT services outsourcing industry; Virtusa's ability to attract and retain clients and meet their expectations; demand for digital and cloud transformation services; quarterly fluctuations in Virtusa's earnings; client terminations or contracting delays, or delays in revenue recognition in any reporting period; Virtusa's ability to successfully manage its billing and utilization rates and its targeted on-site to offshore delivery mix; technological innovation; Virtusa's ability to effectively manage its facility, infrastructure and capacity needs; regulatory, legislative and judicial developments in Virtusa's operations areas and Virtusa's ability to comply with changing or complex laws and maintain effective internal controls to ensure ongoing compliance; the loss of any key member of Virtusa's senior management team, political or economic instability in India or Sri Lanka; any reduction or withdrawal of tax benefits provided to Virtusa by the governments of India and Sri Lanka, or new legislation by such governments which could be harmful to Virtusa; wage inflation and increases in government mandated benefits in India and Sri Lanka; telecommunications or technology disruptions; worldwide economic and business conditions; and the volatility of the market price of Virtusa's common stock. For additional disclosure regarding these and other risks faced by Virtusa, see the disclosure contained in Virtusa's public filings with the Securities and Exchange Commission, including Virtusa's Annual Report on Form 10-K for the fiscal year ended March 31, 2020 and subsequent Quarterly Reports on Form 10-Q, as filed with the Securities and Exchange Commission.

Virtusa Corporation and SubsidiariesCondensed Consolidated Balance Sheets(In thousands, unaudited) September March 31, 30, 2020 2020Assets:Cash and cash equivalents $ 297,459 $ 290,837

Short-term investments 3,287 9,785

Accounts receivable, net 134,825 148,950

Unbilled accounts receivable 93,259 137,839

Prepaid expenses 62,853 55,574

Restricted cash 2,653 659

Assets held for sale 10,718 8,334

Other current assets 26,590 29,214

Total current assets 631,644 681,192

Property and equipment, net 98,248 101,250

Operating lease right-of-use assets 42,295 48,684

Investments accounted for using equity method - 1,336

Long-term investments 15 4

Deferred income taxes 30,158 30,225

Goodwill 293,583 296,493

Intangible assets, net 123,714 130,903

Other long-term assets 35,369 46,980

Total assets $ 1,255,026 $ 1,337,067

Liabilities, Series A Convertible Preferred Stockand Stockholders' equity:Accounts payable $ 31,940 $ 38,537

Accrued employee compensation and benefits 75,667 79,373

Deferred revenue 9,340 8,054

Accrued expenses and other 87,095 95,124

Current portion of long-term debt 40,138 16,043

Operating lease liabilities 11,522 11,543

Income taxes payable 7,704 3,233

Total current liabilities 263,406 251,907

Deferred income taxes 15,175 16,067

Operating lease liabilities, noncurrent 36,303 41,697

Long-term debt, less current portion 363,823 480,154

Long-term liabilities 45,765 42,475

Total liabilities 724,472 832,300

Series A Convertible Preferred Stock 107,408 107,326

Total stockholders' equity 423,146 397,441

Total liabilities, Series A convertible preferred $ 1,255,026 $ 1,337,067stock and stockholders' equity Virtusa Corporation and SubsidiariesConsolidated Statements of Income(In thousands except share and per share amounts, unaudited)Three Months EndedSix Months EndedSeptember 30,September 30,2020

2019

2020

2019

Revenue$

317,188

$

328,501

$

618,252

$

647,525

Costs of revenue233,170

238,584

465,630

473,319

Gross profit84,018

89,917

152,622

174,206

Selling, general and administrative expenses71,292

70,682

132,741

141,543

Income from operations12,726

19,235

19,881

32,663

Other income (expense):Interest income192

551

468

1,224

Interest expense(5,736

)

(4,835

)

(11,035

)

(9,743

)

Foreign currency transaction gains (losses), net4,098

(3,437

)

2,857

(2,235

)

Other, net1,235

564

1,542

928

Total other expense(211

)

(7,157

)

(6,168

)

(9,826

)

Income before income tax expense12,515

12,078

13,713

22,837

Income tax expense3,746

4,830

4,050

9,569

Net income8,769

7,248

9,663

13,268

Less: net income attributable to noncontrolling interests, net of tax-

146

-

332

Net income available to Virtusa stockholders8,769

7,102

9,663

12,936

Less: Series A Convertible Preferred Stock dividends and accretion1,088

1,088

2,175

2,175

Net income available to Virtusa common stockholders7,681

6,014

7,488

10,761

Basic earnings per share available to Virtusa common stockholders$

0.25

$

0.20

$

0.25

$

0.36

Diluted earnings per share available to Virtusa common stockholders$

0.25

$

0.20

$

0.25

$

0.35

Weighted average number of common shares outstanding:Basic30,269,003

30,107,942

30,218,589

30,137,926

Diluted30,679,578

30,708,162

30,548,916

30,821,287

Virtusa Corporation and SubsidiariesConsolidated Statements of Income(In thousands except share and per share amounts, unaudited) Three Months Ended Six Months Ended September 30, September 30, 2020 2019 2020 2019

Revenue $ 317,188 $ 328,501 $ 618,252 $ 647,525

Costs of 233,170 238,584 465,630 473,319 revenueGross profit 84,018 89,917 152,622 174,206

Selling,general and 71,292 70,682 132,741 141,543 administrativeexpenses Income from 12,726 19,235 19,881 32,663 operations Other income(expense):Interest income 192 551 468 1,224

Interest (5,736 ) (4,835 ) (11,035 ) (9,743 )expenseForeigncurrency 4,098 (3,437 ) 2,857 (2,235 )transactiongains (losses),netOther, net 1,235 564 1,542 928

Total other (211 ) (7,157 ) (6,168 ) (9,826 )expense Income before 12,515 12,078 13,713 22,837 income taxexpenseIncome tax 3,746 4,830 4,050 9,569 expenseNet income 8,769 7,248 9,663 13,268

Less: netincomeattributable to - 146 - 332 noncontrollinginterests, netof taxNet incomeavailable to 8,769 7,102 9,663 12,936 VirtusastockholdersLess: Series AConvertible 1,088 1,088 2,175 2,175 Preferred Stockdividends andaccretionNet incomeavailable to 7,681 6,014 7,488 10,761 Virtusa commonstockholders Basic earningsper share $ 0.25 $ 0.20 $ 0.25 $ 0.36 available toVirtusa commonstockholdersDilutedearnings pershare available $ 0.25 $ 0.20 $ 0.25 $ 0.35 to VirtusacommonstockholdersWeightedaverage numberof commonsharesoutstanding:Basic 30,269,003 30,107,942 30,218,589 30,137,926

Diluted 30,679,578 30,708,162 30,548,916 30,821,287

Virtusa Corporation and SubsidiariesConsolidated Statements of Cash Flows(In thousands, unaudited)Six Months EndedSeptember 30,2020

2019

Cash flows from operating activities:Net income$

9,663

$

13,268

Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization17,257

15,711

Share-based compensation expense7,670

12,510

Gain on redemption of equity method investment(1,179

)

-

Provision (recovery) for doubtful accounts94

(313

)

Loss (gain) on disposal of property and equipment171

(351

)

Foreign currency transaction (gains) losses, net(2,857

)

2,235

Amortization of discounts and premiums on investments-

(6

)

Impairment of operating lease right-of-use asset1,413

-

Amortization of debt issuance cost749

546

Deferred income taxes, net250

62

Net changes in operating assets and liabilities:Accounts receivable and unbilled receivable62,168

4,221

Prepaid expenses and other current assets9,652

(7,735

)

Other long-term assets166

(12,673

)

Accounts payable(7,295

)

(8,298

)

Accrued employee compensation and benefits(4,562

)

(1,144

)

Accrued expenses and other current liabilities7,235

7,782

Operating lease liabilities(459

)

141

Income taxes payable1,739

(2,748

)

Other long-term liabilities3,599

596

Net cash provided by operating activities105,474

23,804

Cash flows from investing activities:Proceeds from sale of property and equipment250

651

Purchase of short-term investments(42

)

(20,279

)

Proceeds from sale or maturity of short-term investments6,568

38,240

Payment for asset acquisitions(27

)

(7,251

)

Payment of deferred consideration related to business acquisitions(8,313

)

(17,500

)

Purchase of property and equipment(4,027

)

(8,479

)

Net cash used in investing activities(5,591

)

(14,618

)

Cash flows from financing activities:Proceeds from exercise of common stock options564

194

Proceeds from exercise of subsidiary stock options-

93

Proceeds from debt-

27,500

Payment of debt(8,672

)

(6,250

)

Repurchase of common stock-

(18,680

)

Payments of withholding taxes related to net share settlements of restricted stock(2,082

)

(3,658

)

Purchase of redeemable noncontrolling interest related to Polaris-

(8,675

)

Principal payments on capital lease obligation-

(32

)

Payment of dividend on Series A Convertible Preferred Stock(2,092

)

(2,092

)

Payment of debt issuance costs(813

)

-

Payment of revolving credit facility(83,500

)

-

Payment of contingent consideration related to acquisitions(5,423

)

-

Net cash used in financing activities(102,018

)

(11,600

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash10,744

(4,012

)

Net increase (decrease) in cash, cash equivalents and restricted cash8,609

(6,426

)

Cash, cash equivalents and restricted cash, beginning of year291,601

190,113

Cash, cash equivalents and restricted cash, end of period300,210

$

183,687

Supplemental Non-GAAP Financial Information as of September 30, 2020 and 2019:Reconciliation from cash, cash equivalents and restricted cash to total cash and cash equivalents, short-term investments and long-term investments:Cash, cash equivalents and restricted cash, end of period$

300,210

$

183,687

Less : Restricted cash(2,751

)

(315

)

Total Cash and cash equivalents end of period297,459

183,372

Short-term investments3,287

14,908

Long-term investments15

198

Total short-term and long-term investments, end of period3,302

15,106

Total cash and cash equivalents, short-term and long-term investments$

300,761

198,478

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