|
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
223536104
|
(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
|
|
|
41 University Drive, Suite 202
Newtown, Pennsylvania
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18940
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(Address of principal executive offices)
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(Zip code)
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Large accelerated filer
|
x
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Accelerated filer
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¨
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Non-accelerated filer
|
¨
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
¨
|
Emerging growth company
|
¨
|
|
|
Title of Each Class
|
Outstanding as of April 28, 2017
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Common Stock, par value $0.001 per share
|
51,839,547 shares
|
|
|
Page
|
|
As of
March 31, 2017 |
|
As of
December 31, 2016 |
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
398,419
|
|
|
$
|
362,025
|
|
Restricted cash
|
268
|
|
|
2,400
|
|
||
Time deposits
|
403
|
|
|
403
|
|
||
Accounts receivable, net of allowance of $1,241 and $1,434, respectively
|
176,686
|
|
|
199,982
|
|
||
Unbilled revenues
|
102,838
|
|
|
63,325
|
|
||
Prepaid and other current assets, net of allowance of $406 and $644, respectively
|
26,702
|
|
|
15,690
|
|
||
Employee loans, net of allowance of $0 and $0, respectively
|
2,694
|
|
|
2,726
|
|
||
Total current assets
|
708,010
|
|
|
646,551
|
|
||
Property and equipment, net
|
75,962
|
|
|
73,616
|
|
||
Restricted cash
|
245
|
|
|
239
|
|
||
Employee loans, net of allowance of $0 and $0, respectively
|
2,975
|
|
|
3,252
|
|
||
Intangible assets, net
|
49,668
|
|
|
51,260
|
|
||
Goodwill
|
110,291
|
|
|
109,289
|
|
||
Deferred tax assets
|
29,211
|
|
|
31,005
|
|
||
Other long-term assets, net of allowance of $138 and $132, respectively
|
10,625
|
|
|
10,599
|
|
||
Total assets
|
$
|
986,987
|
|
|
$
|
925,811
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
||
Accounts payable
|
$
|
3,256
|
|
|
$
|
3,213
|
|
Accrued expenses and other liabilities
|
32,451
|
|
|
49,895
|
|
||
Due to employees
|
44,951
|
|
|
32,203
|
|
||
Deferred compensation due to employees
|
6,838
|
|
|
5,900
|
|
||
Taxes payable
|
35,395
|
|
|
25,008
|
|
||
Total current liabilities
|
122,891
|
|
|
116,219
|
|
||
Long-term debt
|
25,040
|
|
|
25,048
|
|
||
Other long-term liabilities
|
3,954
|
|
|
3,132
|
|
||
Total liabilities
|
151,885
|
|
|
144,399
|
|
||
Commitments and contingencies (Note 8)
|
|
|
|
|
|
||
Stockholders’ equity
|
|
|
|
|
|
||
Common stock, $0.001 par value; 160,000,000 authorized; 51,683,500 and 51,117,422 shares issued, 51,663,765 and 51,097,687 shares outstanding at March 31, 2017 and December 31, 2016, respectively
|
51
|
|
|
50
|
|
||
Additional paid-in capital
|
396,829
|
|
|
374,907
|
|
||
Retained earnings
|
469,701
|
|
|
444,320
|
|
||
Treasury stock
|
(177
|
)
|
|
(177
|
)
|
||
Accumulated other comprehensive loss
|
(31,302
|
)
|
|
(37,688
|
)
|
||
Total stockholders’ equity
|
835,102
|
|
|
781,412
|
|
||
Total liabilities and stockholders’ equity
|
$
|
986,987
|
|
|
$
|
925,811
|
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
Revenues
|
$
|
324,651
|
|
|
$
|
264,482
|
|
Operating expenses:
|
|
|
|
||||
Cost of revenues (exclusive of depreciation and amortization)
|
207,730
|
|
|
167,381
|
|
||
Selling, general and administrative expenses
|
78,453
|
|
|
61,494
|
|
||
Depreciation and amortization expense
|
6,672
|
|
|
5,102
|
|
||
Other operating expenses, net
|
830
|
|
|
174
|
|
||
Income from operations
|
30,966
|
|
|
30,331
|
|
||
Interest and other income, net
|
584
|
|
|
1,211
|
|
||
Foreign exchange loss
|
(2,955
|
)
|
|
(1,290
|
)
|
||
Income before provision for income taxes
|
28,595
|
|
|
30,252
|
|
||
Provision for income taxes
|
4,954
|
|
|
6,353
|
|
||
Net income
|
$
|
23,641
|
|
|
$
|
23,899
|
|
Foreign currency translation adjustments
|
6,386
|
|
|
4,699
|
|
||
Comprehensive income
|
$
|
30,027
|
|
|
$
|
28,598
|
|
|
|
|
|
||||
Net income per share:
|
|
|
|
||||
Basic
|
$
|
0.46
|
|
|
$
|
0.48
|
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Diluted
|
$
|
0.44
|
|
|
$
|
0.45
|
|
Shares used in calculation of net income per share:
|
|
|
|
||||
Basic
|
50,958
|
|
|
49,714
|
|
||
Diluted
|
53,889
|
|
|
52,883
|
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
23,641
|
|
|
$
|
23,899
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
6,672
|
|
|
5,102
|
|
||
Bad debt (recovery)/expense
|
(517
|
)
|
|
552
|
|
||
Deferred taxes
|
2,595
|
|
|
(482
|
)
|
||
Stock-based compensation expense
|
15,776
|
|
|
10,964
|
|
||
Excess tax benefit on stock-based compensation plans
|
—
|
|
|
(2,040
|
)
|
||
Other
|
651
|
|
|
50
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
(Increase)/decrease in operating assets:
|
|
|
|
|
|
||
Accounts receivable
|
24,635
|
|
|
16,993
|
|
||
Unbilled revenues
|
(39,485
|
)
|
|
(18,559
|
)
|
||
Prepaid expenses and other assets
|
(79
|
)
|
|
(1,383
|
)
|
||
Increase/(decrease) in operating liabilities:
|
|
|
|
|
|
||
Accounts payable
|
77
|
|
|
671
|
|
||
Accrued expenses and other liabilities
|
(18,484
|
)
|
|
(34,153
|
)
|
||
Due to employees
|
8,611
|
|
|
12,420
|
|
||
Taxes payable
|
7,135
|
|
|
(3,173
|
)
|
||
Net cash provided by operating activities
|
31,228
|
|
|
10,861
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Purchases of property and equipment
|
(5,725
|
)
|
|
(6,185
|
)
|
||
Employee housing loans issued
|
(370
|
)
|
|
—
|
|
||
Proceeds from repayments of employee housing loans
|
689
|
|
|
470
|
|
||
Decrease in restricted cash and time deposits, net
|
38
|
|
|
30,000
|
|
||
Increase in other long-term assets, net
|
(313
|
)
|
|
(774
|
)
|
||
Other investing activities, net
|
37
|
|
|
(91
|
)
|
||
Net cash (used in)/provided by investing activities
|
(5,644
|
)
|
|
23,420
|
|
||
Cash flows from financing activities:
|
|
|
|
|
|
||
Proceeds from stock option exercises
|
10,606
|
|
|
3,108
|
|
||
Excess tax benefit on stock-based compensation plans
|
—
|
|
|
2,040
|
|
||
Payments of withholding taxes related to net share settlements of restricted stock units
|
(2,694
|
)
|
|
—
|
|
||
Proceeds from debt (Note 4)
|
—
|
|
|
20,000
|
|
||
Repayment of debt (Note 4)
|
(30
|
)
|
|
(15,031
|
)
|
||
Proceeds from government grants
|
—
|
|
|
135
|
|
||
Acquisition of business, deferred consideration
|
—
|
|
|
(463
|
)
|
||
Net cash provided by financing activities
|
7,882
|
|
|
9,789
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
2,928
|
|
|
1,358
|
|
||
Net increase in cash and cash equivalents
|
36,394
|
|
|
45,428
|
|
||
Cash and cash equivalents, beginning of period
|
362,025
|
|
|
199,449
|
|
||
Cash and cash equivalents, end of period
|
$
|
398,419
|
|
|
$
|
244,877
|
|
1.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
|
Three Months Ended March 31, 2016
|
||||||||||||
|
As reported
|
|
After Reclassification
|
||||||||||
|
(in thousands except percentages)
|
||||||||||||
United States
|
$
|
135,558
|
|
|
51.3
|
%
|
|
$
|
136,639
|
|
|
51.7
|
%
|
United Kingdom
|
42,990
|
|
|
16.3
|
%
|
|
43,560
|
|
|
16.5
|
%
|
||
Switzerland
|
30,765
|
|
|
11.6
|
%
|
|
30,852
|
|
|
11.7
|
%
|
||
Canada
|
15,701
|
|
|
5.9
|
%
|
|
15,846
|
|
|
6.0
|
%
|
||
Russia
|
8,952
|
|
|
3.4
|
%
|
|
8,965
|
|
|
3.4
|
%
|
||
Germany
|
8,706
|
|
|
3.3
|
%
|
|
8,739
|
|
|
3.3
|
%
|
||
Hong Kong
|
5,754
|
|
|
2.2
|
%
|
|
5,944
|
|
|
2.2
|
%
|
||
Sweden
|
4,060
|
|
|
1.5
|
%
|
|
4,128
|
|
|
1.5
|
%
|
||
Netherlands
|
2,547
|
|
|
1.0
|
%
|
|
2,647
|
|
|
1.0
|
%
|
||
Ireland
|
1,184
|
|
|
0.4
|
%
|
|
1,186
|
|
|
0.4
|
%
|
||
Italy
|
636
|
|
|
0.2
|
%
|
|
668
|
|
|
0.3
|
%
|
||
Denmark
|
405
|
|
|
0.2
|
%
|
|
410
|
|
|
0.2
|
%
|
||
China
|
294
|
|
|
0.1
|
%
|
|
294
|
|
|
0.1
|
%
|
||
Other locations
|
4,484
|
|
|
1.7
|
%
|
|
4,604
|
|
|
1.7
|
%
|
||
Reimbursable expenses and other revenues
|
2,446
|
|
|
0.9
|
%
|
|
—
|
|
|
—
|
%
|
||
Total
|
$
|
264,482
|
|
|
100.0
|
%
|
|
$
|
264,482
|
|
|
100.0
|
%
|
2.
|
GOODWILL
|
|
North America
|
|
Europe
|
|
Total
|
||||||
Balance as of January 1, 2017
|
$
|
76,812
|
|
|
$
|
32,477
|
|
|
$
|
109,289
|
|
Other acquisitions purchase accounting adjustment
|
(352
|
)
|
|
352
|
|
|
—
|
|
|||
Effect of net foreign currency exchange rate changes
|
144
|
|
|
858
|
|
|
1,002
|
|
|||
Balance as of March 31, 2017
|
$
|
76,604
|
|
|
$
|
33,687
|
|
|
$
|
110,291
|
|
3.
|
FAIR VALUE MEASUREMENTS
|
|
|
As of March 31, 2017
|
||||||||||||||
|
|
Balance
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Performance-based equity awards
|
|
$
|
6,754
|
|
|
$
|
6,754
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cash-settled restricted stock units
|
|
84
|
|
|
84
|
|
|
—
|
|
|
—
|
|
||||
Total liabilities measured at fair value on a recurring basis
|
|
$
|
6,838
|
|
|
$
|
6,838
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
As of December 31, 2016
|
||||||||||||||
|
|
Balance
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Performance-based equity awards
|
|
$
|
3,789
|
|
|
$
|
3,789
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cash-settled restricted stock units
|
|
2,111
|
|
|
2,111
|
|
|
—
|
|
|
—
|
|
||||
Total liabilities measured at fair value on a recurring basis
|
|
$
|
5,900
|
|
|
$
|
5,900
|
|
|
$
|
—
|
|
|
$
|
—
|
|
•
|
for financial instruments that have quoted market prices, those quoted prices are used to estimate fair value;
|
•
|
for financial instruments for which no quoted market prices are available, fair value is estimated using information obtained from independent third parties, or by discounting the expected cash flows using an estimated current market interest rate for the financial instrument.
|
•
|
for financial instruments for which no quoted market prices are available and that have no defined maturity, have a remaining maturity of 360 days or less, or reprice frequently to a market rate, the Company assumes that the fair value of these instruments approximates their reported value, after taking into consideration any applicable credit risk;
|
•
|
cash and cash equivalents;
|
•
|
time deposits and restricted cash;
|
•
|
employee loans and notes receivable;
|
•
|
borrowings under the 2014 Credit Facility (Note
4
)
|
|
|
|
|
|
|
Fair Value Hierarchy
|
||||||||||||||
|
|
Balance
|
|
Estimated Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
March 31, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
398,419
|
|
|
$
|
398,419
|
|
|
$
|
398,419
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Time deposits and restricted cash
|
|
916
|
|
|
916
|
|
|
—
|
|
|
916
|
|
|
—
|
|
|||||
Employee loans
|
|
5,669
|
|
|
5,669
|
|
|
—
|
|
|
—
|
|
|
5,669
|
|
|||||
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowing under 2014 Credit Facility
|
|
$
|
25,022
|
|
|
$
|
25,022
|
|
|
$
|
—
|
|
|
$
|
25,022
|
|
|
$
|
—
|
|
|
|
|
|
|
|
Fair Value Hierarchy
|
||||||||||||||
|
|
Balance
|
|
Estimated Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
362,025
|
|
|
$
|
362,025
|
|
|
$
|
362,025
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Time deposits and restricted cash
|
|
$
|
3,042
|
|
|
$
|
3,042
|
|
|
$
|
—
|
|
|
$
|
3,042
|
|
|
$
|
—
|
|
Employee loans
|
|
$
|
5,978
|
|
|
$
|
5,978
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,978
|
|
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowing under 2014 Credit Facility
|
|
$
|
25,019
|
|
|
$
|
25,019
|
|
|
$
|
—
|
|
|
$
|
25,019
|
|
|
$
|
—
|
|
4.
|
DEBT
|
5.
|
INCOME TAXES
|
6.
|
STOCK-BASED COMPENSATION
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
Cost of revenues
|
$
|
5,350
|
|
|
$
|
3,644
|
|
Selling, general and administrative expenses - Acquisition related
|
4,574
|
|
|
3,010
|
|
||
Selling, general and administrative expenses - All other
|
5,852
|
|
|
4,310
|
|
||
Total
|
$
|
15,776
|
|
|
$
|
10,964
|
|
|
Number of
Options
|
|
Weighted Average
Exercise Price
|
|
Aggregate
Intrinsic Value
|
|||||
Options outstanding at January 1, 2017
|
6,637,239
|
|
|
$
|
37.20
|
|
|
$
|
179,936
|
|
Options granted
|
234,990
|
|
|
73.27
|
|
|
529
|
|
||
Options exercised
|
(486,524
|
)
|
|
27.92
|
|
|
(23,159
|
)
|
||
Options forfeited/cancelled
|
(75,456
|
)
|
|
57.87
|
|
|
(1,332
|
)
|
||
Options outstanding at March 31, 2017
|
6,310,249
|
|
|
$
|
39.06
|
|
|
$
|
230,072
|
|
|
|
|
|
|
|
|||||
Options vested and exercisable at March 31, 2017
|
4,302,714
|
|
|
$
|
30.84
|
|
|
$
|
192,245
|
|
Options expected to vest
|
1,891,705
|
|
|
$
|
56.33
|
|
|
$
|
36,302
|
|
|
Equity-Classified
Restricted Stock
|
|
Equity-Classified
Equity-Settled
Restricted Stock Units
|
|
Liability-Classified
Cash-Settled
Restricted Stock Units
|
|||||||||||||||
|
Number of
Shares
|
|
Weighted Average Grant Date
Fair Value Per Share
|
|
Number of
Shares
|
|
Weighted Average Grant Date
Fair Value Per Share
|
|
Number of
Shares
|
|
Weighted Average Grant Date
Fair Value Per Share
|
|||||||||
Unvested service-based awards outstanding at January 1, 2017
|
154,125
|
|
|
$
|
40.89
|
|
|
485,188
|
|
|
$
|
67.69
|
|
|
204,501
|
|
|
$
|
70.53
|
|
Awards granted
|
—
|
|
|
—
|
|
|
380,577
|
|
|
73.27
|
|
|
138,584
|
|
|
73.27
|
|
|||
Awards modified
|
—
|
|
|
—
|
|
|
(2,570
|
)
|
|
48.49
|
|
|
2,570
|
|
|
73.27
|
|
|||
Awards vested
|
(1,437
|
)
|
|
20.64
|
|
|
(116,183
|
)
|
|
65.32
|
|
|
(51,928
|
)
|
|
70.56
|
|
|||
Awards forfeited/cancelled
|
—
|
|
|
—
|
|
|
(19,036
|
)
|
|
67.45
|
|
|
(616
|
)
|
|
70.52
|
|
|||
Unvested service-based awards outstanding at March 31, 2017
|
152,688
|
|
|
$
|
41.08
|
|
|
727,976
|
|
|
$
|
71.06
|
|
|
293,111
|
|
|
$
|
71.84
|
|
|
Equity-Classified
Restricted Stock
|
|
Liability-Classified
Restricted Stock
|
|
Equity-Classified
Equity-Settled
Restricted Stock Units
|
|||||||||||||||
|
Number of
Shares
|
|
Weighted Average Grant Date
Fair Value Per Share
|
|
Number of
Shares
|
|
Weighted Average Grant Date
Fair Value Per Share
|
|
Number of
Shares
|
|
Weighted Average Grant Date
Fair Value Per Share
|
|||||||||
Unvested performance-based awards outstanding at January 1, 2017
|
5,573
|
|
|
$
|
33.47
|
|
|
105,602
|
|
|
$
|
38.86
|
|
|
4,667
|
|
|
$
|
70.22
|
|
Awards granted
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Awards vested
|
(2,552
|
)
|
|
36.57
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Awards forfeited/cancelled
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Unvested performance-based awards outstanding at March 31, 2017
|
3,021
|
|
|
$
|
30.85
|
|
|
105,602
|
|
|
$
|
38.86
|
|
|
4,667
|
|
|
$
|
70.22
|
|
7.
|
EARNINGS PER SHARE
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
Numerator for basic and diluted earnings per share:
|
|
|
|
||||
Net income
|
$
|
23,641
|
|
|
$
|
23,899
|
|
Numerator for basic and diluted earnings per share
|
$
|
23,641
|
|
|
$
|
23,899
|
|
|
|
|
|
||||
Denominator:
|
|
|
|
|
|
||
Weighted average common shares for basic earnings per share
|
50,958
|
|
|
49,714
|
|
||
Net effect of dilutive stock options, restricted stock units and restricted stock awards
|
2,931
|
|
|
3,169
|
|
||
Weighted average common shares for diluted earnings per share
|
53,889
|
|
|
52,883
|
|
||
|
|
|
|
||||
Net income per share:
|
|
|
|
|
|
||
Basic
|
$
|
0.46
|
|
|
$
|
0.48
|
|
Diluted
|
$
|
0.44
|
|
|
$
|
0.45
|
|
8.
|
COMMITMENTS AND CONTINGENCIES
|
9.
|
SEGMENT INFORMATION
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
Segment revenues:
|
|
|
|
||||
North America
|
$
|
178,303
|
|
|
$
|
147,490
|
|
Europe
|
132,707
|
|
|
107,843
|
|
||
Russia
|
13,693
|
|
|
9,481
|
|
||
Total segment revenues
|
$
|
324,703
|
|
|
$
|
264,814
|
|
Segment operating profit:
|
|
|
|
|
|
||
North America
|
$
|
37,092
|
|
|
$
|
30,655
|
|
Europe
|
19,811
|
|
|
16,832
|
|
||
Russia
|
3,549
|
|
|
1,160
|
|
||
Total segment operating profit
|
$
|
60,452
|
|
|
$
|
48,647
|
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
Total segment revenues
|
$
|
324,703
|
|
|
$
|
264,814
|
|
Other revenues
|
(52
|
)
|
|
(332
|
)
|
||
Revenues
|
$
|
324,651
|
|
|
$
|
264,482
|
|
|
|
|
|
||||
Total segment operating profit:
|
$
|
60,452
|
|
|
$
|
48,647
|
|
Unallocated amounts:
|
|
|
|
||||
Other revenues
|
(52
|
)
|
|
(332
|
)
|
||
Stock-based compensation expense
|
(15,776
|
)
|
|
(10,964
|
)
|
||
Non-corporate taxes
|
(3,451
|
)
|
|
(1,080
|
)
|
||
Professional fees
|
(2,344
|
)
|
|
(1,726
|
)
|
||
Depreciation and amortization
|
(1,975
|
)
|
|
(1,691
|
)
|
||
Bank charges
|
(397
|
)
|
|
(341
|
)
|
||
One-time charges
|
(568
|
)
|
|
—
|
|
||
Other corporate expenses
|
(4,923
|
)
|
|
(2,182
|
)
|
||
Income from operations
|
30,966
|
|
|
30,331
|
|
||
Interest and other income, net
|
584
|
|
|
1,211
|
|
||
Foreign exchange loss
|
(2,955
|
)
|
|
(1,290
|
)
|
||
Income before provision for income taxes
|
$
|
28,595
|
|
|
$
|
30,252
|
|
|
As of
March 31, 2017 |
|
As of
December 31, 2016 |
||||
Belarus
|
$
|
47,124
|
|
|
$
|
46,011
|
|
Russia
|
7,853
|
|
|
7,203
|
|
||
Ukraine
|
5,847
|
|
|
5,610
|
|
||
Hungary
|
3,384
|
|
|
3,485
|
|
||
United States
|
3,013
|
|
|
2,618
|
|
||
Poland
|
2,498
|
|
|
2,213
|
|
||
China
|
1,785
|
|
|
1,887
|
|
||
India
|
1,530
|
|
|
1,650
|
|
||
Other
|
2,928
|
|
|
2,939
|
|
||
Total
|
$
|
75,962
|
|
|
$
|
73,616
|
|
|
|||||||
|
2017
|
|
2016
|
||||
United States
|
$
|
176,830
|
|
|
$
|
136,639
|
|
United Kingdom
|
46,594
|
|
|
43,560
|
|
||
Switzerland
|
29,096
|
|
|
30,852
|
|
||
Russia
|
13,209
|
|
|
8,965
|
|
||
Canada
|
12,494
|
|
|
15,846
|
|
||
Germany
|
12,094
|
|
|
8,739
|
|
||
Netherlands
|
8,671
|
|
|
2,647
|
|
||
Sweden
|
7,466
|
|
|
4,128
|
|
||
Hong Kong
|
4,777
|
|
|
5,944
|
|
||
United Arab Emirates
|
2,048
|
|
|
—
|
|
||
China
|
1,584
|
|
|
294
|
|
||
Ireland
|
1,389
|
|
|
1,186
|
|
||
Italy
|
1,280
|
|
|
668
|
|
||
Denmark
|
1,253
|
|
|
410
|
|
||
Other locations
|
5,866
|
|
|
4,604
|
|
||
Revenues
|
$
|
324,651
|
|
|
$
|
264,482
|
|
10.
|
RECENT ACCOUNTING PRONOUNCEMENTS
|
•
|
the Company prospectively recognized discrete tax benefits of
$1,695
in the provision for income taxes line item of its condensed consolidated statements of income and comprehensive income for the three months ended March 31, 2017 related to excess tax benefits upon vesting or settlement of stock-based awards in that period;
|
•
|
the Company recognized a
$1,740
increase in beginning retained earnings for previously unrecognized tax benefits using the modified retrospective method of transition, as required by the standard;
|
•
|
the Company elected to adopt the cash flow presentation of the excess tax benefits prospectively where these benefits are classified along with other income tax cash flows as operating cash flows. Accordingly, prior period information has not been restated;
|
•
|
the Company elected to continue to estimate the number of stock-based awards expected to forfeit, rather than electing to account for forfeitures as they occur to determine the amount of compensation cost to be recognized in each period;
|
•
|
the Company excluded the excess tax benefits from the assumed proceeds available to repurchase shares in the computation of our diluted earnings per share for the three months ended March 31, 2017. The adoption of this provision did not have a material impact on the Company’s diluted earnings per share for the three months ended March 31, 2017;
|
•
|
the remaining amendments to this standard, as noted above, are either not applicable, or do not change the Company's current accounting practices and thus do not impact its condensed consolidated financial statements.
|
|
Three Months Ended
March 31, |
||||||||||||
|
2017
|
|
2016
|
||||||||||
|
(in thousands, percentages and except per share data)
|
||||||||||||
Revenues
|
$
|
324,651
|
|
|
100.0
|
%
|
|
$
|
264,482
|
|
|
100.0
|
%
|
Income from operations
|
30,966
|
|
|
9.5
|
%
|
|
30,331
|
|
|
11.5
|
%
|
||
Net income
|
23,641
|
|
|
7.3
|
%
|
|
23,899
|
|
|
9.0
|
%
|
||
|
|
|
|
|
|
|
|
||||||
Effective tax rate
|
17.3
|
%
|
|
|
|
21.0
|
%
|
|
|
||||
Diluted earnings per share
|
$
|
0.44
|
|
|
|
|
$
|
0.45
|
|
|
|
|
•
|
Revenues for the first quarter were
$324.7 million
, or a
22.7%
increase from
$264.5 million
reported last year, despite
1.2%
, or
$3.1 million
, of currency headwinds.
|
•
|
Income from operations grew
2.1%
during the
three
months ended
March 31, 2017
. Expressed as a percentage of revenues, income from operations was
9.5%
compared to
11.5%
last year. The decrease of
2.0%
was mainly driven by an increase in selling, general and administrative expenses relative to the growth in revenues.
|
•
|
Our effective tax rate was
17.3%
in the first quarter of fiscal 2017, compared to
21.0%
in the first quarter of last year. The income tax provision for the first quarter of 2017 included
$1.7 million
of credits associated with excess tax benefits upon vesting or exercise of equity awards in the first quarter of fiscal 2017 bringing the effective tax rate down by
6.0%
.
|
•
|
Net income decreased
1.1%
to
$23.6 million
compared to
$23.9 million
reported in the corresponding period last year. Expressed as a percentage of revenues, net income was
7.3%
, a decrease of 1.7% compared to
9.0%
reported in the corresponding periods of
2016
. The decrease in net income as a percentage of revenues was primarily driven by a decrease in income from operations as a percentage of revenues.
|
•
|
Diluted earnings per share decreased by
$0.01
to
$0.44
in the first quarter of 2017.
|
•
|
Cash provided by operations increased
$20.4 million
, or
187.5%
, to
$31.2 million
during the
first
quarter of
2017
.
|
|
Three Months Ended March 31, 2016
|
||||||||||||
|
As reported
|
|
After Reclassification
|
||||||||||
Client Location
|
(in thousands except percentages)
|
||||||||||||
North America
|
$
|
151,259
|
|
|
57.2
|
%
|
|
$
|
152,485
|
|
|
57.7
|
%
|
Europe
|
94,564
|
|
|
35.8
|
%
|
|
95,580
|
|
|
36.1
|
%
|
||
CIS
|
10,147
|
|
|
3.8
|
%
|
|
10,162
|
|
|
3.8
|
%
|
||
APAC
|
6,066
|
|
|
2.3
|
%
|
|
6,255
|
|
|
2.4
|
%
|
||
Reimbursable expenses and other revenues
|
2,446
|
|
|
0.9
|
%
|
|
—
|
|
|
—
|
%
|
||
Revenues
|
$
|
264,482
|
|
|
100.0
|
%
|
|
$
|
264,482
|
|
|
100.0
|
%
|
|
Three Months Ended March 31, 2016
|
||||||||||||
|
As reported
|
|
After Reclassification
|
||||||||||
Vertical
|
(in thousands except percentages)
|
||||||||||||
Financial Services
|
$
|
70,890
|
|
|
26.9
|
%
|
|
$
|
71,509
|
|
|
27.0
|
%
|
Travel & Consumer
|
59,604
|
|
|
22.5
|
%
|
|
60,402
|
|
|
22.8
|
%
|
||
Software & Hi-Tech
|
55,911
|
|
|
21.1
|
%
|
|
56,268
|
|
|
21.3
|
%
|
||
Media & Entertainment
|
37,733
|
|
|
14.3
|
%
|
|
38,144
|
|
|
14.4
|
%
|
||
Life Sciences & Healthcare
|
20,875
|
|
|
7.9
|
%
|
|
21,026
|
|
|
7.9
|
%
|
||
Emerging Verticals
|
17,023
|
|
|
6.4
|
%
|
|
17,133
|
|
|
6.6
|
%
|
||
Reimbursable expenses and other revenues
|
2,446
|
|
|
0.9
|
%
|
|
—
|
|
|
—
|
%
|
||
Revenues
|
$
|
264,482
|
|
|
100.0
|
%
|
|
$
|
264,482
|
|
|
100.0
|
%
|
|
Three Months Ended
March 31, |
||||||||||||
|
2017
|
|
2016
|
||||||||||
|
(in thousands, except percentages and per share data)
|
||||||||||||
Revenues
|
$
|
324,651
|
|
|
100.0
|
%
|
|
$
|
264,482
|
|
|
100.0
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
||||||
Cost of revenues (exclusive of depreciation and amortization)
(1)
|
207,730
|
|
|
64.0
|
%
|
|
167,381
|
|
|
63.3
|
%
|
||
Selling, general and administrative expenses
(2)
|
78,453
|
|
|
24.2
|
%
|
|
61,494
|
|
|
23.3
|
%
|
||
Depreciation and amortization expense
|
6,672
|
|
|
2.1
|
%
|
|
5,102
|
|
|
1.9
|
%
|
||
Other operating expenses, net
|
830
|
|
|
0.2
|
%
|
|
174
|
|
|
—
|
%
|
||
Income from operations
|
30,966
|
|
|
9.5
|
%
|
|
30,331
|
|
|
11.5
|
%
|
||
Interest and other income, net
|
584
|
|
|
0.2
|
%
|
|
1,211
|
|
|
0.4
|
%
|
||
Foreign exchange loss
|
(2,955
|
)
|
|
(0.9
|
)%
|
|
(1,290
|
)
|
|
(0.5
|
)%
|
||
Income before provision for income taxes
|
28,595
|
|
|
8.8
|
%
|
|
30,252
|
|
|
11.4
|
%
|
||
Provision for income taxes
|
4,954
|
|
|
1.5
|
%
|
|
6,353
|
|
|
2.4
|
%
|
||
Net income
|
$
|
23,641
|
|
|
7.3
|
%
|
|
$
|
23,899
|
|
|
9.0
|
%
|
|
|
|
|
|
|
|
|
||||||
Effective tax rate
|
17.3
|
%
|
|
|
|
21.0
|
%
|
|
|
||||
Diluted earnings per share
|
$
|
0.44
|
|
|
|
|
$
|
0.45
|
|
|
|
|
|
|
(1)
|
Includes
$5,350
and
$3,644
of stock-based compensation expense for the three months ended
March 31, 2017
and
2016
, respectively.
|
(2)
|
Includes
$10,426
and
$7,320
of stock-based compensation expense for the three months ended
March 31, 2017
and
2016
, respectively.
|
|
Three Months Ended
March 31, |
||||||||||||
|
2017
|
|
2016
|
||||||||||
|
(in thousands, except percentages and per share data)
|
||||||||||||
North America
|
$
|
189,324
|
|
|
58.3
|
%
|
|
$
|
152,485
|
|
|
57.7
|
%
|
Europe
|
114,312
|
|
|
35.2
|
%
|
|
95,580
|
|
|
36.1
|
%
|
||
CIS
(1)
|
14,541
|
|
|
4.5
|
%
|
|
10,162
|
|
|
3.8
|
%
|
||
APAC
(1)
|
6,474
|
|
|
2.0
|
%
|
|
6,255
|
|
|
2.4
|
%
|
||
Revenues
(2)
|
$
|
324,651
|
|
|
100.0
|
%
|
|
$
|
264,482
|
|
|
100.0
|
%
|
|
|
(1)
|
CIS, which stands for the Commonwealth of Independent States, is comprised of constituents of the former U.S.S.R., including Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine and Uzbekistan. APAC, which stands for Asia Pacific, includes all of Asia (including India) and Australia.
|
(2)
|
Includes reimbursable expenses of
$3,925
and
$2,446
for the three months ended
March 31, 2017
and
2016
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Segment revenues:
|
|
|
|
||||
North America
|
$
|
178,303
|
|
|
$
|
147,490
|
|
Europe
|
132,707
|
|
|
107,843
|
|
||
Russia
|
13,693
|
|
|
9,481
|
|
||
Total segment revenues
|
$
|
324,703
|
|
|
$
|
264,814
|
|
Segment operating profit:
|
|
|
|
|
|
||
North America
|
$
|
37,092
|
|
|
$
|
30,655
|
|
Europe
|
19,811
|
|
|
16,832
|
|
||
Russia
|
3,549
|
|
|
1,160
|
|
||
Total segment operating profit
|
$
|
60,452
|
|
|
$
|
48,647
|
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
(1)
|
||||
|
(in thousands)
|
||||||
Condensed Consolidated Statements of Cash Flow Data:
|
|
|
|
||||
Net cash provided by operating activities
|
$
|
31,228
|
|
|
$
|
10,861
|
|
Net cash (used in)/ provided by investing activities
|
(5,644
|
)
|
|
23,420
|
|
||
Net cash provided by financing activities
|
7,882
|
|
|
9,789
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
2,928
|
|
|
1,358
|
|
||
Net increase in cash and cash equivalents
|
36,394
|
|
|
45,428
|
|
||
Cash and cash equivalents, beginning of period
|
362,025
|
|
|
199,449
|
|
||
Cash and cash equivalents, end of period
|
$
|
398,419
|
|
|
$
|
244,877
|
|
|
|
(1)
|
Prior period amounts have not been adjusted for the impact of the adoption of ASU 2016-09, as permitted by the standard.
|
|
Total
|
|
Less than 1
Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More than 5
Years
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Operating lease obligations
|
$
|
102,521
|
|
|
$
|
33,348
|
|
|
$
|
41,984
|
|
|
$
|
17,009
|
|
|
$
|
10,180
|
|
Long-term debt obligation
(1)
|
26,230
|
|
|
503
|
|
|
25,727
|
|
|
—
|
|
|
—
|
|
|||||
Long-term incentive plan payouts
(2)
|
22,136
|
|
|
6,505
|
|
|
13,009
|
|
|
2,622
|
|
|
—
|
|
|||||
Total contractual obligations
|
$
|
150,887
|
|
|
$
|
40,356
|
|
|
$
|
80,720
|
|
|
$
|
19,631
|
|
|
$
|
10,180
|
|
|
|
(1)
|
We estimate our future obligations for interest on our floating rate 2014 Credit Facility by assuming the weighted average interest rates in effect on each floating rate debt obligation at March 31, 2017 remain constant into the future. This is an estimate, as actual rates will vary over time. In addition, for the 2014 Credit Facility, we assume that the balance outstanding as of March 31, 2017 remains the same for the remaining term of the agreement. The actual balance outstanding under our Revolving Credit Facility may fluctuate significantly in future periods, depending on the availability of cash flow from operations and future investing and financing considerations.
|
(2)
|
We estimate our future obligations for long-term incentive plan payouts by assuming the price per share of our common stock in effect at March 31, 2017 remains constant into the future. This is an estimate, as actual prices will vary over time.
|
Exhibit
Number
|
|
Description
|
|
|
|
10.1
|
|
Amended Non-Employee Director Compensation Policy
|
10.2
|
|
Non-Employee Directors Deferral Plan
|
10.3
|
|
Form of Non-Employee Director RSU Agreement
|
10.4
|
|
Form of Director Deferral Election Form
|
31.1
|
|
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934
|
31.2
|
|
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934
|
31.3
|
|
Certification of the Chief Accounting Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934
|
32.1
|
|
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
32.2
|
|
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
32.3
|
|
Certification of the Chief Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
EPAM SYSTEMS, INC.
|
|
|
|
|
|
By:
|
/s/ Arkadiy Dobkin
|
|
|
Name: Arkadiy Dobkin
|
|
|
Title: Chairman, Chief Executive Officer and President
(principal executive officer)
|
|
|
|
|
By:
|
/s/ Gary Abrahams
|
|
|
Name: Gary Abrahams
|
|
|
Title: Vice President, Corporate Controller, Chief Accounting Officer
(principal accounting officer)
|
|
EPAM SYSTEMS, INC.
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
Title:
|
|
|
|
|
|
|
Rn
|
|
□
|
Option #1 – Lump Sum Distribution
: On the July 15th following my having a “separation from service” as a director of the Company (within the meaning given in Treasury Regulation §1.409A-1(h) or successor guidance thereto).
|
|
|
|
|
□
|
Option #2 – Distribution in Annual Installments
: As indicated below, in substantially equal annual installments, each on July 15th, over a period of up to five years commencing with the July 15th following my having a “separation from service” as a director of the Company (within the meaning given in Treasury Regulation §1.409A-1(h) or successor guidance thereto). Please select one of the following:
|
|
|
□
|
2 Installments
: On the July 15th following my “separation from service” and the following July 15th.
|
|
□
|
3 Installments
: On the July 15th following my “separation from service” and on the July 15th of each of the following two years.
|
|
□
|
4 Installments
: On the July 15th following my “separation from service” and on the July 15th of each of the following three years.
|
|
□
|
5 Installments
: On the July 15th following my “separation from service” and on the July 15th of each of the following four years.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of EPAM Systems, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Arkadiy Dobkin
|
|
Arkadiy Dobkin
|
|
|
|
Chairman, Chief Executive Officer and President
(principal executive officer)
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of EPAM Systems, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Anthony J. Conte
|
|
Anthony J. Conte
|
|
|
|
Senior Vice President, Chief Financial Officer and Treasurer
(principal financial officer)
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of EPAM Systems, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Gary Abrahams
|
|
Name: Gary Abrahams
|
|
|
|
Title: Vice President, Corporate Controller, Chief Accounting Officer
(principal accounting officer)
|
|
/s/ Arkadiy Dobkin
|
|
Arkadiy Dobkin
|
|
|
|
Chairman, Chief Executive Officer and President
(principal executive officer)
|
|
/s/ Anthony J. Conte
|
|
Anthony J. Conte
|
|
|
|
Senior Vice President, Chief Financial Officer and Treasurer
(principal financial officer)
|
|
/s/ Gary Abrahams
|
|
Name: Gary Abrahams
|
|
|
|
Title: Vice President, Corporate Controller, Chief Accounting Officer
(principal accounting officer)
|
|