|
Delaware
(State or Other Jurisdiction of Incorporation or Organization)
|
One Market Plaza, Suite 800
San Francisco, California 94105
(Address of Principal Executive Offices and Zip Code)
|
26-2990113
(I.R.S. Employer Identification No.)
|
|
|
|
(866) 779-7641
(Registrant's telephone number, including area code)
|
|
|
|
|
|
|
|
Page
|
|
||
|
|
|
Item 1.
|
|
|
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
|
||
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
|
Item1.
|
Financial Statements (unaudited)
|
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
158,323
|
|
|
$
|
100,111
|
|
Short-term investments
|
|
68,283
|
|
|
90,877
|
|
||
Restricted cash
|
|
653
|
|
|
500
|
|
||
Accounts receivable, net
|
|
37,276
|
|
|
64,395
|
|
||
Prepaid expenses and other current assets
|
|
9,020
|
|
|
4,524
|
|
||
Total current assets
|
|
273,555
|
|
|
260,407
|
|
||
Patent assets, net
|
|
204,365
|
|
|
212,999
|
|
||
Property and equipment, net
|
|
6,554
|
|
|
6,948
|
|
||
Intangible assets, net
|
|
53,894
|
|
|
56,050
|
|
||
Goodwill
|
|
152,139
|
|
|
151,322
|
|
||
Restricted cash, less current portion
|
|
965
|
|
|
965
|
|
||
Deferred tax assets
|
|
36,450
|
|
|
38,261
|
|
||
Other assets
|
|
9,595
|
|
|
8,337
|
|
||
Total assets
|
|
$
|
737,517
|
|
|
$
|
735,289
|
|
Liabilities and stockholders’ equity
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
2,436
|
|
|
$
|
3,197
|
|
Accrued liabilities
|
|
10,934
|
|
|
16,798
|
|
||
Deferred revenue
|
|
127,750
|
|
|
118,856
|
|
||
Current portion of long-term debt
|
|
7,099
|
|
|
6,474
|
|
||
Other current liabilities
|
|
1,316
|
|
|
1,484
|
|
||
Total current liabilities
|
|
149,535
|
|
|
146,809
|
|
||
Deferred revenue, less current portion
|
|
8,477
|
|
|
11,552
|
|
||
Deferred tax liabilities
|
|
3,882
|
|
|
4,023
|
|
||
Long-term debt, less current portion
|
|
86,335
|
|
|
88,110
|
|
||
Other liabilities
|
|
10,592
|
|
|
10,514
|
|
||
Total liabilities
|
|
258,821
|
|
|
261,008
|
|
||
Commitments and contingencies (Note 12)
|
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
|
||||
Common stock
|
|
5
|
|
|
5
|
|
||
Additional paid-in capital
|
|
363,317
|
|
|
360,462
|
|
||
Retained earnings
|
|
130,830
|
|
|
130,249
|
|
||
Accumulated other comprehensive loss
|
|
(15,456
|
)
|
|
(16,435
|
)
|
||
Total stockholders’ equity
|
|
478,696
|
|
|
474,281
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
737,517
|
|
|
$
|
735,289
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Revenue
|
|
$
|
82,512
|
|
|
$
|
79,735
|
|
Cost of revenue
|
|
51,298
|
|
|
47,666
|
|
||
Selling, general and administrative expenses
|
|
21,121
|
|
|
26,895
|
|
||
Operating income
|
|
10,093
|
|
|
5,174
|
|
||
Interest and other income (expense), net:
|
|
|
|
|
||||
Interest income
|
|
165
|
|
|
84
|
|
||
Interest expense
|
|
(908
|
)
|
|
(350
|
)
|
||
Other income (expense), net
|
|
210
|
|
|
2,071
|
|
||
Total interest and other income (expense), net
|
|
(533
|
)
|
|
1,805
|
|
||
Income before provision for income taxes
|
|
9,560
|
|
|
6,979
|
|
||
Provision for income taxes
|
|
3,567
|
|
|
2,742
|
|
||
Net income
|
|
$
|
5,993
|
|
|
$
|
4,237
|
|
|
|
|
|
|
||||
Net income per share:
|
|
|
|
|
||||
Basic
|
|
$
|
0.12
|
|
|
$
|
0.08
|
|
Diluted
|
|
$
|
0.12
|
|
|
$
|
0.08
|
|
Weighted-average shares used in computing net income per share:
|
|
|
|
|
||||
Basic
|
|
48,676
|
|
|
52,063
|
|
||
Diluted
|
|
49,305
|
|
|
52,616
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Net income
|
$
|
5,993
|
|
|
$
|
4,237
|
|
Other comprehensive income, net of tax:
|
|
|
|
||||
Unrealized holding gains on available-for-sale securities arising during the period, net of tax
|
51
|
|
|
151
|
|
||
Foreign currency translation adjustments
|
928
|
|
|
931
|
|
||
Comprehensive income
|
$
|
6,972
|
|
|
$
|
5,319
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Operating activities
|
|
|
|
||||
Net income
|
$
|
5,993
|
|
|
$
|
4,237
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
42,929
|
|
|
44,555
|
|
||
Stock-based compensation
|
2,734
|
|
|
4,929
|
|
||
Excess tax benefit from stock-based compensation
|
—
|
|
|
(23
|
)
|
||
Amortization of premium on investments
|
471
|
|
|
549
|
|
||
Deferred income taxes
|
2,109
|
|
|
690
|
|
||
Unrealized foreign currency gain
|
(169
|
)
|
|
(158
|
)
|
||
Fair value adjustments on deferred payment obligation
|
—
|
|
|
(1,920
|
)
|
||
Other
|
(484
|
)
|
|
152
|
|
||
Changes in assets and liabilities, net of business acquired:
|
|
|
|
||||
Accounts receivable
|
27,815
|
|
|
(19,277
|
)
|
||
Prepaid expenses and other assets
|
(5,572
|
)
|
|
4,508
|
|
||
Accounts payable
|
(819
|
)
|
|
144
|
|
||
Accrued and other liabilities
|
(5,624
|
)
|
|
(7,495
|
)
|
||
Deferred revenue
|
5,819
|
|
|
24,238
|
|
||
Net cash provided by operating activities
|
75,202
|
|
|
55,129
|
|
||
Investing activities
|
|
|
|
||||
Purchases of investments
|
(3,875
|
)
|
|
(1,000
|
)
|
||
Maturities of investments
|
25,875
|
|
|
35,136
|
|
||
Sales of investments
|
—
|
|
|
145,925
|
|
||
Business acquisition, net of cash acquired
|
—
|
|
|
(228,453
|
)
|
||
Increase in restricted cash
|
(153
|
)
|
|
(152
|
)
|
||
Purchases of property and equipment
|
(362
|
)
|
|
(983
|
)
|
||
Acquisitions of patent assets
|
(31,379
|
)
|
|
(16,048
|
)
|
||
Net cash used in investing activities
|
(9,894
|
)
|
|
(65,575
|
)
|
||
Financing activities
|
|
|
|
||||
Proceeds from issuance of term debt
|
—
|
|
|
100,000
|
|
||
Payment of debt issuance costs
|
—
|
|
|
(2,003
|
)
|
||
Repayment of principal on term debt
|
(1,250
|
)
|
|
—
|
|
||
Proceeds from exercise of stock options
|
422
|
|
|
79
|
|
||
Taxes paid related to net-share settlements of restricted stock units
|
(1,708
|
)
|
|
(993
|
)
|
||
Excess tax benefit from stock-based compensation
|
—
|
|
|
23
|
|
||
Payments of capital leases
|
(104
|
)
|
|
(99
|
)
|
||
Repurchase of common stock
|
(4,491
|
)
|
|
(23,853
|
)
|
||
Net cash provided by (used in) financing activities
|
(7,131
|
)
|
|
73,154
|
|
||
Foreign-currency effect on cash and cash equivalents
|
35
|
|
|
22
|
|
||
Net increase in cash and cash equivalents
|
58,212
|
|
|
62,730
|
|
||
Cash and cash equivalents at beginning of period
|
100,111
|
|
|
94,983
|
|
||
Cash and cash equivalents at end of period
|
$
|
158,323
|
|
|
$
|
157,713
|
|
|
|
|
|
||||
Non-cash investing and financing activities
|
|
|
|
||||
Change in patent assets purchased and accrued but not paid
|
$
|
250
|
|
|
$
|
(200
|
)
|
Change in fixed assets purchased and accrued but not paid
|
$
|
(46
|
)
|
|
$
|
—
|
|
1.
|
Nature of Business
|
2.
|
Basis of Presentation and Significant Accounting Policies
|
3.
|
Net Income Per Share
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Numerator:
|
|
|
|
||||
Net income
|
$
|
5,993
|
|
|
$
|
4,237
|
|
Denominator:
|
|
|
|
||||
Basic shares:
|
|
|
|
||||
Weighted-average shares used in computing basic net income per share
|
48,676
|
|
|
52,063
|
|
||
Diluted shares:
|
|
|
|
||||
Weighted-average shares used in computing basic net income per share
|
48,676
|
|
|
52,063
|
|
||
Dilutive effect of stock options and restricted stock units using the treasury-stock method
|
629
|
|
|
553
|
|
||
Weighted-average shares used in computing diluted net income per share
|
49,305
|
|
|
52,616
|
|
||
Net income per share:
|
|
|
|
||||
Basic
|
$
|
0.12
|
|
|
$
|
0.08
|
|
Diluted
|
$
|
0.12
|
|
|
$
|
0.08
|
|
|
Three Months Ended March 31,
|
||||
|
2017
|
|
2016
|
||
Outstanding weighted-average:
|
|
|
|
||
Stock options
|
718
|
|
|
805
|
|
Restricted stock units
|
765
|
|
|
2,559
|
|
|
March 31, 2017
|
||||||||||||||||||||||||||
|
Amortized Cost
|
|
Unrealized
|
|
Estimated Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||||
|
|
Gains
|
|
Losses
|
|
|
|
|
|||||||||||||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial paper
|
$
|
22,992
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
22,992
|
|
|
$
|
—
|
|
|
$
|
22,992
|
|
|
$
|
—
|
|
Money market funds
|
9,934
|
|
|
—
|
|
|
—
|
|
|
9,934
|
|
|
9,934
|
|
|
—
|
|
|
—
|
|
|||||||
Municipal bonds
|
4,249
|
|
|
—
|
|
|
—
|
|
|
4,249
|
|
|
—
|
|
|
4,249
|
|
|
—
|
|
|||||||
U.S. government and agency securities
|
8,998
|
|
|
—
|
|
|
—
|
|
|
8,998
|
|
|
—
|
|
|
8,998
|
|
|
—
|
|
|||||||
|
$
|
46,173
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
46,173
|
|
|
$
|
9,934
|
|
|
$
|
36,239
|
|
|
$
|
—
|
|
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial paper
|
$
|
2,099
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,099
|
|
|
$
|
—
|
|
|
$
|
2,099
|
|
|
—
|
|
|
Corporate bonds
|
8,549
|
|
|
—
|
|
|
(6
|
)
|
|
8,543
|
|
|
—
|
|
|
8,543
|
|
|
—
|
|
|||||||
Equity securities
|
123
|
|
|
—
|
|
|
(70
|
)
|
|
53
|
|
|
53
|
|
|
—
|
|
|
—
|
|
|||||||
Municipal bonds
|
39,563
|
|
|
3
|
|
|
(22
|
)
|
|
39,544
|
|
|
—
|
|
|
39,544
|
|
|
—
|
|
|||||||
U.S. government and agency securities
|
18,052
|
|
|
—
|
|
|
(8
|
)
|
|
18,044
|
|
|
—
|
|
|
18,044
|
|
|
—
|
|
|||||||
|
$
|
68,386
|
|
|
$
|
3
|
|
|
$
|
(106
|
)
|
|
$
|
68,283
|
|
|
$
|
53
|
|
|
$
|
68,230
|
|
|
$
|
—
|
|
|
December 31, 2016
|
||||||||||||||||||||||||||
|
Amortized Cost
|
|
Unrealized
|
|
Estimated Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||||
|
|
Gains
|
|
Losses
|
|
|
|
|
|||||||||||||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Money market funds
|
$
|
30,286
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
30,286
|
|
|
$
|
30,286
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Municipal bonds
|
3,070
|
|
|
—
|
|
|
—
|
|
|
3,070
|
|
|
—
|
|
|
3,070
|
|
|
—
|
|
|||||||
|
$
|
33,356
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
33,356
|
|
|
$
|
30,286
|
|
|
$
|
3,070
|
|
|
$
|
—
|
|
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial paper
|
$
|
4,296
|
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
4,293
|
|
|
$
|
—
|
|
|
$
|
4,293
|
|
|
$
|
—
|
|
Corporate bonds
|
10,856
|
|
|
—
|
|
|
(13
|
)
|
|
10,843
|
|
|
—
|
|
|
10,843
|
|
|
—
|
|
|||||||
Equity securities
|
123
|
|
|
—
|
|
|
(78
|
)
|
|
45
|
|
|
45
|
|
|
—
|
|
|
—
|
|
|||||||
Municipal bonds
|
55,723
|
|
|
—
|
|
|
(65
|
)
|
|
55,658
|
|
|
—
|
|
|
55,658
|
|
|
—
|
|
|||||||
U.S. government and agency securities
|
20,033
|
|
|
9
|
|
|
(4
|
)
|
|
20,038
|
|
|
20,038
|
|
|
—
|
|
|
—
|
|
|||||||
|
$
|
91,031
|
|
|
$
|
9
|
|
|
$
|
(163
|
)
|
|
$
|
90,877
|
|
|
$
|
20,083
|
|
|
$
|
70,794
|
|
|
$
|
—
|
|
5.
|
Patent Assets, Net
|
|
December 31,
2016 |
|
Additions
|
|
Disposals
|
|
March 31,
2017 |
||||||||
Patent assets
|
$
|
932,283
|
|
|
$
|
31,130
|
|
|
$
|
(820
|
)
|
|
$
|
962,593
|
|
Accumulated amortization
|
(719,284
|
)
|
|
(39,758
|
)
|
|
814
|
|
|
(758,228
|
)
|
||||
Patent assets, net
|
$
|
212,999
|
|
|
|
|
|
|
$
|
204,365
|
|
2017 (remainder)
|
$
|
103,641
|
|
2018
|
75,120
|
|
|
2019
|
21,937
|
|
|
2020
|
3,667
|
|
|
Total estimated future amortization expense
|
$
|
204,365
|
|
6.
|
Property and Equipment, Net
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
Internal-use software
|
$
|
8,058
|
|
|
$
|
7,827
|
|
Leasehold improvements
|
2,169
|
|
|
2,169
|
|
||
Computer, equipment and software
|
5,400
|
|
|
5,204
|
|
||
Furniture and fixtures
|
935
|
|
|
935
|
|
||
Construction-in-progress
|
182
|
|
|
183
|
|
||
Total property and equipment, gross
|
16,744
|
|
|
16,318
|
|
||
Less: Accumulated depreciation and amortization
|
(10,190
|
)
|
|
(9,370
|
)
|
||
Total property and equipment, net
|
$
|
6,554
|
|
|
$
|
6,948
|
|
7.
|
Business Combinations
|
|
Estimated Fair Value
|
|
Estimated Useful Life
|
||
Current assets
|
$
|
19,357
|
|
|
|
Intangible assets:
|
|
|
|
||
Customer relationships
|
58,000
|
|
|
9 - 10 years
|
|
Trademarks
|
3,200
|
|
|
1 - 6 years
|
|
Developed technology
|
6,400
|
|
|
3 years
|
|
Goodwill
|
145,984
|
|
|
|
|
Property, plant, equipment and other long-term assets
|
3,347
|
|
|
|
|
Deferred tax asset
|
10,595
|
|
|
|
|
Current liabilities
|
(7,280
|
)
|
|
|
|
Deferred tax liability
|
(5,477
|
)
|
|
|
|
Other long-term liabilities
|
(826
|
)
|
|
|
|
Cash purchase consideration paid
|
$
|
233,300
|
|
|
|
|
Three Months Ended March 31,
|
||
|
2016
|
||
Revenue
|
$
|
82,675
|
|
Net income
|
$
|
4,826
|
|
Basic net income per share
|
$
|
0.09
|
|
Diluted net income per share
|
$
|
0.09
|
|
8.
|
Goodwill
|
|
Patent Risk Management
|
|
Discovery Services
|
|
Total
|
||||||
Balance as of December 31, 2016
|
$
|
19,978
|
|
|
$
|
131,344
|
|
|
$
|
151,322
|
|
Foreign currency translation adjustments
|
—
|
|
|
817
|
|
|
817
|
|
|||
Balance as of March 31, 2017
|
$
|
19,978
|
|
|
$
|
132,161
|
|
|
$
|
152,139
|
|
9.
|
Intangible Assets, Net
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||||
|
Weighted-average Life (years)
|
|
Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||||||||
Covenant not to compete
|
3.0
|
|
$
|
1,900
|
|
|
$
|
(1,763
|
)
|
|
$
|
137
|
|
|
$
|
1,900
|
|
|
$
|
(1,604
|
)
|
|
$
|
296
|
|
Proprietary data and models
|
3.7
|
|
2,100
|
|
|
(2,057
|
)
|
|
43
|
|
|
2,100
|
|
|
(2,006
|
)
|
|
94
|
|
||||||
Customer relationships
|
9.3
|
|
55,905
|
|
|
(7,881
|
)
|
|
48,024
|
|
|
55,719
|
|
|
(6,323
|
)
|
|
49,396
|
|
||||||
Trademarks
|
4.9
|
|
4,882
|
|
|
(2,575
|
)
|
|
2,307
|
|
|
4,879
|
|
|
(2,439
|
)
|
|
2,440
|
|
||||||
Developed technology
|
3.0
|
|
5,842
|
|
|
(2,459
|
)
|
|
3,383
|
|
|
5,802
|
|
|
(1,978
|
)
|
|
3,824
|
|
||||||
|
|
|
$
|
70,629
|
|
|
$
|
(16,735
|
)
|
|
$
|
53,894
|
|
|
$
|
70,400
|
|
|
$
|
(14,350
|
)
|
|
$
|
56,050
|
|
2017 (remainder)
|
$
|
6,424
|
|
2018
|
8,247
|
|
|
2019
|
6,453
|
|
|
2020
|
6,340
|
|
|
2021
|
6,340
|
|
|
Thereafter
|
20,090
|
|
|
Total estimated future amortization expense
|
$
|
53,894
|
|
10.
|
Accrued Liabilities
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
Accrued payroll-related expenses
|
$
|
5,764
|
|
|
$
|
11,516
|
|
Accrued expenses
|
5,170
|
|
|
5,282
|
|
||
Total accrued liabilities
|
$
|
10,934
|
|
|
$
|
16,798
|
|
11.
|
Debt
|
2017 (remainder)
|
|
$
|
5,625
|
|
2018
|
|
9,375
|
|
|
2019
|
|
11,875
|
|
|
2020
|
|
18,125
|
|
|
2021
|
|
50,000
|
|
|
Long-term debt, gross
|
|
95,000
|
|
|
Unamortized debt issuance costs
|
|
(1,566
|
)
|
|
Long-term debt, net
|
|
$
|
93,434
|
|
|
|
|
||
Reported as:
|
|
|
||
Current portion of long-term debt
|
|
$
|
7,099
|
|
Long-term debt, less current portion
|
|
86,335
|
|
|
Total
|
|
$
|
93,434
|
|
12.
|
Commitments and Contingencies
|
13.
|
Stockholders’ Equity
|
|
|
|
Options Outstanding
|
||||||||||||
|
Shares Available for Grant
|
|
Number of Shares
|
|
Weighted-average Exercise Price
|
|
Weighted-average Remaining Contractual Life in Years
|
|
Aggregate Intrinsic Value
|
||||||
Balance - December 31, 2016
|
3,586
|
|
|
1,768
|
|
|
$
|
11.63
|
|
|
|
|
|
||
Shares authorized
(1)
|
1,000
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Options exercised
|
—
|
|
|
(91
|
)
|
|
4.64
|
|
|
|
|
|
|||
Restricted stock units granted
|
(943
|
)
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Restricted stock units forfeited
|
686
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Restricted stock units withheld related to net-share settlement of restricted stock units
|
149
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Balance - March 31, 2017
|
4,478
|
|
|
1,677
|
|
|
12.01
|
|
|
2.6
|
|
$
|
3,530
|
|
|
Vested and exercisable - March 31, 2017
|
|
|
1,677
|
|
|
12.01
|
|
|
2.6
|
|
3,530
|
|
|
Number of Shares
|
|
Weighted-Average Grant Date Fair Value
|
|
Aggregate Intrinsic Value
|
|||||
Non-vested units - December 31, 2016
|
3,424
|
|
|
$
|
11.53
|
|
|
|
||
Granted
|
943
|
|
|
10.73
|
|
|
|
|||
Vested
|
(379
|
)
|
|
12.21
|
|
|
|
|||
Forfeited
|
(686
|
)
|
|
9.46
|
|
|
|
|||
Non-vested units - March 31, 2017
|
3,302
|
|
|
11.60
|
|
|
$
|
39,637
|
|
|
Shares Repurchased
|
|
Average Price per Share
|
|
Value of Shares Repurchased
|
|||||
Cumulative repurchase activity as of December 31, 2016
|
7,917
|
|
|
$
|
10.90
|
|
|
$
|
86,276
|
|
Repurchase activity during the period
|
406
|
|
|
11.06
|
|
|
4,491
|
|
||
Cumulative repurchase activity as of March 31, 2017
|
8,323
|
|
|
$
|
10.91
|
|
|
$
|
90,767
|
|
14.
|
Income Taxes
|
15.
|
Related-Party Transactions
|
16.
|
Segment Reporting
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Patent Risk Management
|
|
|
|
||||
Revenue
|
$
|
64,486
|
|
|
$
|
69,157
|
|
Cost of revenue
|
41,440
|
|
|
42,632
|
|
||
Selling, general and administrative expenses
|
14,434
|
|
|
21,934
|
|
||
Operating income
|
8,612
|
|
|
4,591
|
|
||
Stock-based compensation, including related taxes
|
2,441
|
|
|
4,934
|
|
||
Depreciation and amortization
|
40,509
|
|
|
42,657
|
|
||
Adjusted EBITDA
|
$
|
51,562
|
|
|
$
|
52,182
|
|
|
|
|
|
||||
Discovery Services
|
|
|
|
||||
Revenue
|
$
|
18,026
|
|
|
$
|
10,578
|
|
Cost of revenue
|
9,858
|
|
|
5,034
|
|
||
Selling, general and administrative expenses
|
6,687
|
|
|
4,961
|
|
||
Operating income
|
1,481
|
|
|
583
|
|
||
Stock-based compensation, including related taxes
|
434
|
|
|
88
|
|
||
Depreciation and amortization
|
2,420
|
|
|
1,898
|
|
||
Adjusted EBITDA
|
$
|
4,335
|
|
|
$
|
2,569
|
|
|
|
|
|
||||
Consolidated
|
|
|
|
||||
Revenue
|
$
|
82,512
|
|
|
$
|
79,735
|
|
Cost of revenue
|
51,298
|
|
|
47,666
|
|
||
Selling, general and administrative expenses
|
21,121
|
|
|
26,895
|
|
||
Operating income
|
$
|
10,093
|
|
|
$
|
5,174
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Subtotal segment adjusted EBITDA
|
$
|
55,897
|
|
|
$
|
54,751
|
|
Depreciation and amortization
|
(42,929
|
)
|
|
(44,555
|
)
|
||
Stock-based compensation, including related taxes
|
(2,875
|
)
|
|
(5,022
|
)
|
||
Interest and other income (expense), net
|
(533
|
)
|
|
1,805
|
|
||
Provision for income taxes
|
(3,567
|
)
|
|
(2,742
|
)
|
||
Net income
|
$
|
5,993
|
|
|
$
|
4,237
|
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
Patent risk management
|
$
|
502,282
|
|
|
$
|
501,540
|
|
Discovery services
(1)
|
235,235
|
|
|
233,749
|
|
||
Total assets
|
$
|
737,517
|
|
|
$
|
735,289
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
•
|
the review and analysis of patents offered for sale, including analysis of patent quality, validity, and commercial significance;
|
•
|
defensive patent acquisition, through which we acquire patents and patent rights on behalf of all of our patent risk management clients;
|
•
|
facilitation of syndicated transactions;
|
•
|
prior art searches;
|
•
|
proprietary periodic analysis and publication of patent market trends;
|
•
|
the tracking of all US patent applications and issuances, patent litigation activity, and associated parties; and
|
•
|
publication and provision of patent-related data to governmental and regulatory bodies to inform public policy discussion about patent reform and trends.
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Revenue
|
|
|
|
|
||||
Patent risk management
|
|
$
|
64,486
|
|
|
$
|
69,157
|
|
Discovery services
|
|
18,026
|
|
|
10,578
|
|
||
Total revenue
|
|
82,512
|
|
|
79,735
|
|
||
Cost of revenue
|
|
|
|
|
||||
Patent risk management
|
|
41,440
|
|
|
42,632
|
|
||
Discovery services
|
|
9,858
|
|
|
5,034
|
|
||
Total cost of revenue
|
|
51,298
|
|
|
47,666
|
|
||
Selling, general and administrative expenses
|
|
|
|
|
||||
Patent risk management
|
|
14,434
|
|
|
21,934
|
|
||
Discovery services
|
|
6,687
|
|
|
4,961
|
|
||
Total selling, general and administrative expenses
|
|
21,121
|
|
|
26,895
|
|
||
Operating income
|
|
|
|
|
||||
Patent risk management
|
|
8,612
|
|
|
4,591
|
|
||
Discovery services
|
|
1,481
|
|
|
583
|
|
||
Total operating income
|
|
10,093
|
|
|
5,174
|
|
||
Interest and other income (expense), net
|
|
(533
|
)
|
|
1,805
|
|
||
Income before provision for income taxes
|
|
9,560
|
|
|
6,979
|
|
||
Provision for income taxes
|
|
3,567
|
|
|
2,742
|
|
||
Net income
|
|
$
|
5,993
|
|
|
$
|
4,237
|
|
|
|
Three Months Ended March 31,
|
||||
|
|
2017
|
|
2016
|
||
Revenue
|
|
|
|
|
||
Patent risk management
|
|
78
|
%
|
|
87
|
%
|
Discovery services
|
|
22
|
|
|
13
|
|
Total revenue
|
|
100
|
|
|
100
|
|
Cost of revenue
|
|
|
|
|
|
|
Patent risk management
|
|
50
|
|
|
53
|
|
Discovery services
|
|
12
|
|
|
6
|
|
Total cost of revenue
|
|
62
|
|
|
59
|
|
Selling, general and administrative expenses
|
|
|
|
|
||
Patent risk management
|
|
17
|
|
|
28
|
|
Discovery services
|
|
8
|
|
|
6
|
|
Total selling, general and administrative expenses
|
|
25
|
|
|
34
|
|
Operating income
|
|
|
|
|
|
|
Patent risk management
|
|
11
|
|
|
6
|
|
Discovery services
|
|
2
|
|
|
1
|
|
Total operating income
|
|
13
|
|
|
7
|
|
Interest and other income (expense), net
|
|
(1
|
)
|
|
2
|
|
Income before provision for income taxes
|
|
12
|
|
|
9
|
|
Provision for income taxes
|
|
4
|
|
|
3
|
|
Net income
|
|
8
|
%
|
|
6
|
%
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Revenue
|
|
|
|
|
||||
Subscription revenue
|
|
$
|
63,367
|
|
|
$
|
67,112
|
|
Fee-related revenue
|
|
1,119
|
|
|
2,045
|
|
||
Total patent risk management revenue
|
|
64,486
|
|
|
69,157
|
|
||
Discovery services
|
|
18,026
|
|
|
10,578
|
|
||
Total revenue
|
|
$
|
82,512
|
|
|
$
|
79,735
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Net income
|
|
$
|
5,993
|
|
|
$
|
4,237
|
|
Provision for income taxes
|
|
3,567
|
|
|
2,742
|
|
||
Interest and other (income) expense, net
|
|
533
|
|
|
(1,805
|
)
|
||
Stock-based compensation, including related taxes
|
|
2,875
|
|
|
5,022
|
|
||
Depreciation and amortization
|
|
42,929
|
|
|
44,555
|
|
||
Non-GAAP adjusted EBITDA
|
|
55,897
|
|
|
54,751
|
|
||
Net patent spend
|
|
(31,130
|
)
|
|
(16,249
|
)
|
||
Non-GAAP adjusted EBITDA less net patent spend
|
|
$
|
24,767
|
|
|
$
|
38,502
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Net cash provided by operating activities
|
$
|
75,202
|
|
|
$
|
55,129
|
|
Net cash used in investing activities
|
(9,894
|
)
|
|
(65,575
|
)
|
||
Net cash provided by (used in) financing activities
|
(7,131
|
)
|
|
73,154
|
|
||
Foreign-currency effect on cash and cash equivalents
|
35
|
|
|
22
|
|
||
Net increase in cash and cash equivalents
|
$
|
58,212
|
|
|
$
|
62,730
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
Item 4.
|
Controls and Procedures.
|
Item 1.
|
Legal Proceedings.
|
Item 1A.
|
Risk Factors.
|
•
|
changes in our subscription fee rates or changes in our own pricing and discounting policies or those of our competitors;
|
•
|
decreases in our clients’ and prospective clients’ costs of litigating patent infringement claims;
|
•
|
our inability to effectively develop and implement new services that meet client requirements in a timely manner;
|
•
|
changes in patent law and regulations and other legislation, as well as United States Patent and Trademark Office procedures or court rulings, that reduce the value of our services to our existing and potential clients;
|
•
|
lower subscription fees from clients whose annual subscription fees decrease due to declining operating income or revenue of such clients or the effects of changes in foreign exchange rates;
|
•
|
our lengthy and unpredictable membership sales cycle, including delays in potential clients’ decisions whether to subscribe to our patent risk management services;
|
•
|
the addition or loss of discovery services clients and projects which are difficult to predict and may result in material changes in quarterly revenue and costs;
|
•
|
changes in the accounting treatment associated with our acquisitions of patent assets, how we amortize those patent assets and how we recognize revenue under subscription agreements;
|
•
|
our acquisition of patent assets with a shorter estimated useful life that increases our near-term patent asset amortization expense and decreases our earnings;
|
•
|
non-renewals from existing clients for any reason;
|
•
|
loss of clients, including through acquisitions or consolidations;
|
•
|
losses incurred as a result of claims made on insurance policies underwritten or assumed by us;
|
•
|
our inability to retain key personnel;
|
•
|
our inability to acquire patent assets that are being asserted or may be asserted against our clients due to lack of availability, unfavorable pricing terms or otherwise;
|
•
|
increases in operating expenses, including those attributable to additional headcount, the costs of new business initiatives, and our acquisition of Inventus;
|
•
|
other matters related to our acquisition of Inventus and the expansion of our business into discovery services;
|
•
|
any significant changes in the competitive dynamics of our market, including new competitors or substantial discounting of services that are viewed by our target market as competitive to ours;
|
•
|
increases in the prices we need to pay to acquire patent assets;
|
•
|
gains or losses realized as a result of our sale of patents, including upon the exercise by any of our clients of their limited right to purchase certain of our patent assets for defensive purposes in the event of a patent infringement suit brought against such client by a third party;
|
•
|
outstanding debt service obligations and repayment thereof; and
|
•
|
adverse economic conditions in the industries that we serve, particularly as they affect the intellectual property risk management and/or litigation budgets of our existing or potential clients.
|
•
|
reduced assertions from non-practicing entities ("NPEs") or decreased patent licensing fees owed to NPEs;
|
•
|
limitations on the ability of NPEs to bring patent claims or limitations on the potential damages recoverable from such claims;
|
•
|
reduced cost to our clients of defending patent assertion claims;
|
•
|
uncertainty about our ability to significantly reduce patent litigation costs for a particular company;
|
•
|
lack of perceived relevance and value in our existing patent asset portfolio by existing or potential clients;
|
•
|
concerns by existing or potential clients about our future ability to obtain rights to patent assets that are being or may be asserted against them;
|
•
|
reduced incentives to renew memberships if clients have vested into perpetual licenses in all patent assets that they believe are materially relevant to their businesses;
|
•
|
lack of sufficient interest by mid- and small-size companies in our patent risk management or insurance offerings;
|
•
|
reduced incentive for companies to become clients because we do not assert our patent assets in litigation;
|
•
|
concerns that we might change our current business model and assert our patent assets in litigation;
|
•
|
budgetary limitations for existing or potential clients; and
|
•
|
the belief that adequate coverage for the risks and expenses we attempt to reduce is available from alternative products or services.
|
•
|
difficulties in integrating operations, technologies, services and personnel;
|
•
|
the need to integrate the operations, systems (including accounting, management, information, human resources and other administrative systems), technologies, products, and personnel of each acquired company, which is an inherently risky and potentially lengthy and costly process;
|
•
|
the need to implement or improve controls, procedures, and policies appropriate for a public company at companies that prior to our acquisition may have lacked such controls, procedures, and policies or whose controls, procedures, and policies did not meet applicable legal and other standards;
|
•
|
our dependence on the accounting, financial reporting, operating metrics and similar systems, controls and processes of an acquired business, and the risk that errors or irregularities in those systems, controls, and processes will lead to errors in our consolidated financial statements or make it more difficult to manage the acquired business;
|
•
|
the potential loss of key customers, vendors, and other business partners of the companies we acquire following the announcement of our transaction plans;
|
•
|
the inefficiencies and lack of control that may result if such integration is delayed or not implemented, and unforeseen difficulties and expenditures that may arise as a result;
|
•
|
derivative lawsuits resulting from the acquisition;
|
•
|
risks associated with our expansion into new international markets;
|
•
|
unanticipated costs or liabilities associated with the acquisition;
|
•
|
incurrence of acquisition-related costs;
|
•
|
diversion of management’s attention from other business concerns;
|
•
|
potential loss of key employees;
|
•
|
additional legal, financial and accounting challenges and complexities in areas such as tax planning and cash management;
|
•
|
use of resources that are needed in other parts of our business; and
|
•
|
use of substantial portions of our available cash to consummate the acquisition.
|
•
|
variations in our financial condition and operating results;
|
•
|
the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections;
|
•
|
changes in the estimates of our operating results or changes in recommendations by any securities analysts that elect to follow our common stock;
|
•
|
addition or loss of significant clients;
|
•
|
adoption or modification of laws, regulations, policies, procedures or programs applicable to our business, including those related to the enforcement of patent claims;
|
•
|
announcements of technological innovations, new products and services, acquisitions, strategic alliances or significant agreements by us or by our competitors;
|
•
|
recruitment or departure of members of our Board of Directors, management team or other key personnel;
|
•
|
market conditions in our industry;
|
•
|
the impact of macroeconomic, market, and political factors and trends, including in light of Brexit, the outcome of the United States Presidential election, and other recent political developments;
|
•
|
price and volume fluctuations in the overall stock market or resulting from inconsistent trading volume levels of our shares;
|
•
|
lawsuits threatened or filed against us;
|
•
|
any change in our stock repurchase program;
|
•
|
sales of our common stock by us or our stockholders;
|
•
|
outstanding debt service obligations and repayment thereof; and
|
•
|
the opening or closing of our employee trading window.
|
•
|
authorize the issuance of “blank check” preferred stock that could be issued by our Board of Directors to thwart a takeover attempt;
|
•
|
establish a classified Board of Directors, as a result of which the successors to the directors whose terms have expired will be elected to serve from the time of election and qualification until the third annual meeting following their election;
|
•
|
require that directors only be removed from office for cause and only upon a majority stockholder vote;
|
•
|
provide that vacancies on our Board of Directors, including newly created directorships, may be filled only by a majority vote of directors then in office;
|
•
|
limit who may call special meetings of stockholders;
|
•
|
prohibit stockholder action by written consent, requiring all actions to be taken at a meeting of the stockholders;
|
•
|
do not provide stockholders with the ability to cumulate their votes;
|
•
|
require supermajority stockholder voting to effect certain amendments to our amended and restated certificate of incorporation and amended and restated bylaws; and
|
•
|
require advance notification of stockholder nominations and proposals.
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds.
|
Period Ended
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Programs
|
|
Approximate Dollar Value that May Yet be Purchased Under the Programs
(1)
|
||||||
January 31, 2017
|
|
159,534
|
|
|
$
|
10.91
|
|
|
159,534
|
|
|
$
|
61,984,239
|
|
February 28, 2017
|
|
164,538
|
|
|
11.02
|
|
|
164,538
|
|
|
60,171,562
|
|
||
March 31, 2017
|
|
81,850
|
|
|
11.46
|
|
|
81,850
|
|
|
59,233,254
|
|
||
|
|
405,922
|
|
|
|
|
405,922
|
|
|
|
Item 3.
|
Defaults Upon Senior Securities.
|
Item 4.
|
Mine Safety Disclosures.
|
Item 5.
|
Other Information.
|
Item 6.
|
Exhibits.
|
|
|
|
|
Incorporated by Reference
|
|
|
||||||
Exhibit
Number |
|
Exhibit Title
|
|
Form
|
|
File No.
|
|
Exhibit
No. |
|
Filing
Date |
|
Provided
Herewith |
|
|
|
|
|
|
|
||||||
|
Amended and Restated Certificate of Incorporation of RPX Corporation
|
|
S-1
|
|
333-171817
|
|
3.2
|
|
1/21/2011
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Amended and Restated Bylaws of RPX Corporation
|
|
S-1/A
|
|
333-171817
|
|
3.4
|
|
4/18/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.1
*
|
|
Employment Offer Letter by and between the Registrant and Steve Swank, dated as of June 7, 2010
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certification of Chief Executive Officer Pursuant to Rule 13-14(a) or 15(d)-14(a) of the Securities Exchange Act of 1934 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
||||||
|
Certification of Chief Financial Officer Pursuant to Rule 13-14(a) or 15(d)-14(a) of the Securities Exchange Act of 1934 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
||||||
|
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
||||||
|
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
||||||
101.INS
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
RPX CORPORATION
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
Date:
|
May 4, 2017
|
|
By:
|
/s/ MARTIN E. ROBERTS
|
|
|
|
|
Martin E. Roberts
|
|
|
|
|
Chief Executive Officer
|
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
|
|
|
Date:
|
May 4, 2017
|
|
By:
|
/s/ ROBERT H. HEATH
|
|
|
|
|
Robert H. Heath
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(Principal Financial Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of RPX Corporation;
|
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 officer(s) 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 officer(s) 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.
|
Date:
|
May 4, 2017
|
|
|
|
/s/ MARTIN E. ROBERTS
|
|
|
Martin E. Roberts
|
|
|
Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of RPX Corporation;
|
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 officer(s) 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 officer(s) 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.
|
Date:
|
May 4, 2017
|
|
|
|
/s/ ROBERT H. HEATH
|
|
|
Robert H. Heath
|
|
|
Senior Vice President & Chief Financial Officer
(Principal Financial Officer)
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
May 4, 2017
|
|
|
|
/s/ MARTIN E. ROBERTS
|
|
|
Martin E. Roberts
|
|
|
Chief Executive Officer
(Principal Executive Officer)
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
May 4, 2017
|
|
|
|
/s/ ROBERT H. HEATH
|
|
|
Robert H. Heath
|
|
|
Senior Vice President & Chief Financial Officer
(Principal Financial Officer)
|