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MANHATTAN ASSOCIATES INC
0001056696
--12-31
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false
2011-09-30
Q3
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<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 1 - us-gaap:OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-->
<!-- xbrl,ns -->
<!-- xbrl,nx -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left">
</div>
<div align="center" style="font-size: 10pt; margin-top: 0pt"><b></b>
</div>
<div align="center" style="font-size: 10pt"><b></b></div>
<div align="center" style="font-size: 10pt"><b></b></div>
<div align="center" style="font-size: 10pt"><b></b></div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"><b>1.</b></td>
<td width="1%"> </td>
<td><b>Basis of Presentation and Principles of Consolidation</b></td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><b>Basis of Presentation</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">The accompanying unaudited condensed consolidated financial statements of Manhattan
Associates, Inc. and its subsidiaries (the “Company”) have been prepared in accordance with
accounting principles generally accepted in the United States for interim financial information
and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required for complete financial statements. In the
opinion of management, these condensed consolidated financial statements contain all normal
recurring adjustments considered necessary for a fair presentation of the Company’s financial
position at September 30, 2011, the results of operations for the three and nine months ended
September 30, 2011 and 2010 and cash flows for the nine months ended September 30, 2011 and 2010.
The results for the three and nine months ended September 30, 2011 are not necessarily indicative
of the results to be expected for the full year. These statements should be read in conjunction
with the Company’s audited consolidated financial statements and management’s discussion and
analysis included in the Company’s annual report on Form 10-K for the year ended December 31,
2010.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><b>Principles of Consolidation</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">The accompanying condensed consolidated financial statements include the Company’s accounts
and the accounts of its wholly-owned subsidiaries. All significant intercompany balances and
transactions have been eliminated in consolidation.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 2 - manh:RevenueRecognitionTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"><b>2.</b></td>
<td width="1%"> </td>
<td><b>Revenue Recognition</b></td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">The Company’s revenue consists of revenues from the licensing and hosting of software, fees
from implementation and training services (collectively, “professional services”), plus customer
support and software enhancements, and sales of hardware and other revenues (other revenues
consists of reimbursements of out-of-pocket expenses incurred in connection with its professional
services). All revenue is recognized net of any related sales taxes.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">The Company recognizes license revenue when the following criteria are met: (1) a signed
contract is obtained; (2) delivery of the product has occurred; (3) the license fee is fixed or
determinable; and (4) collection is probable. Revenue recognition for software with
multiple-element arrangements requires recognition of revenue using the “residual method” when (a)
there is vendor-specific objective evidence of the fair values of all undelivered elements in a
multiple-element arrangement that is not accounted for using long-term contract accounting; (b)
vendor-specific objective evidence of fair value does not exist for one or more of the delivered
elements in the arrangement; and (c) all other applicable revenue-recognition criteria for
software revenue recognition, other than the requirement for vendor-specific objective evidence of
the fair value of each delivered element of the arrangement, are satisfied. For those contracts
that contain significant customization or modifications, license revenue is recognized using
contract accounting.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">The Company allocates revenue to customer support and software enhancements and any other
undelivered elements of the arrangement based on vendor specific objective evidence, or VSOE, of
fair value of each element and such amounts are deferred until the applicable delivery criteria
and other revenue recognition criteria have been met. The balance of the revenue, net of any
discounts inherent in the arrangement, is recognized at the outset of the arrangement using the
residual method as the product licenses are delivered. If the Company cannot objectively determine
the fair value of each undelivered element based on the VSOE of fair value, the Company defers
revenue recognition until all elements are delivered, all services have been performed, or until
fair value can be objectively determined. The Company must apply judgment in determining all
elements of the arrangement and in determining the VSOE of fair value for each element,
considering the price charged for each product on a stand-alone basis or applicable renewal rates.
For arrangements that include future software functionality deliverables, the Company accounts
for these deliverables as a separate element of the arrangement. Because the Company does not
sell these deliverables on a standalone basis, the Company is not able to establish VSOE of fair
value of these deliverables. As a result, the Company defers all revenue under the arrangement
until the future functionality has been delivered to the customer.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Payment terms for the Company’s software licenses vary. Each contract is evaluated
individually to determine whether the fees in the contract are fixed and determinable and whether
collectibility is probable. Judgment is required in assessing the probability of collection,
which is generally based on evaluation of customer-specific information, historical collection
experience and economic market conditions. If market conditions decline, or if the financial
conditions of customers deteriorate, the Company may be unable to determine that collectibility is
probable, and the Company could be required to defer the recognition of revenue until the Company
receives customer payments. The Company has an established history of collecting under the terms
of its software license contracts without providing refunds or concessions to its customers.
Therefore, the Company has determined that the presence of payment terms which extend beyond
contract execution in a particular contract do not preclude the conclusion that the fees in the
contract are fixed and determinable. Although infrequent, when payment terms in a contract extend
beyond twelve months, the Company has determined that such fees are not fixed and determinable and
recognizes revenue as payments become due provided that all other conditions for revenue
recognition have been met.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">The Company’s services revenue consists of fees generated from professional services and
customer support and software enhancements related to the Company’s software products. Fees from
professional services performed by the Company are generally billed on an hourly basis, and revenue
is recognized as the services are performed. In certain situations, professional services are
rendered under agreements in which billings are limited to contractual maximums or based upon a
fixed-fee for portions of or all of the engagement. Revenue related to fixed-fee based contracts
is recognized on a proportional performance basis based on the hours incurred on discrete projects
within an overall services arrangement. The Company has determined that output measures, or
services delivered, approximate the input measures associated with fixed-fee services arrangements.
Project losses are provided for in their entirety in the period in which they become known.
Revenue related to customer support services and software enhancement is generally paid in advance
and recognized ratably over the term of the agreement, typically twelve months.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Hardware and other revenue is generated from the resale of a variety of hardware products,
developed and manufactured by third parties, that are integrated with and complementary to the
Company’s software solutions. As part of a complete solution, the Company’s customers
periodically purchase hardware from the Company for use with the software licenses purchased from
the Company. These products include computer hardware, radio frequency terminal networks, radio
frequency identification (RFID) chip readers, bar code printers and scanners and other
peripherals. Hardware revenue is recognized upon shipment to the customer when title passes. The
Company generally purchases hardware from the Company’s vendors only after receiving an order from
a customer. As a result, the Company does not maintain hardware inventory.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">In accordance with the other presentation matters within the Revenue Recognition Topic of the
Financial Accounting Standards Board’s (FASB) Accounting Standards Codification, the Company
recognizes amounts associated with reimbursements from customers for out-of-pocket expenses as
revenue. Such amounts have been classified as hardware and other revenue. The total amount of
expense reimbursement recorded to revenue was $2.9 million and $2.7 million for the three months
ended September 30, 2011 and 2010, respectively, and $8.0 million and $6.8 million for the nine
months ended September 30, 2011 and 2010, respectively.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 3 - us-gaap:FairValueDisclosuresTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"><b>3.</b></td>
<td width="1%"> </td>
<td><b>Fair Value Measurement</b></td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">The Company measures its investments based on a fair value hierarchy disclosure framework that
prioritizes and ranks the level of market price observability used in measuring assets and
liabilities at fair value. Market price observability is affected by a number of factors, including
the type of asset or liability and their characteristics. This hierarchy prioritizes the inputs
into three broad levels as follows:
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="4%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>Level 1—Quoted prices in active markets for identical instruments.</td>
</tr>
</table>
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="4%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>Level 2—Quoted prices for similar instruments in active markets; quoted prices for
identical or similar instruments in markets that are not active; and model-derived
valuations in which all significant inputs and significant value drivers are observable in
active markets.</td>
</tr>
</table>
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="4%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>Level 3—Valuations derived from valuation techniques in which one or more significant
inputs or significant value drivers are unobservable.</td>
</tr>
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div style="margin-top: 0pt">
</div>
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">The Company’s investments are categorized as available-for-sale securities and recorded at
fair market value. Investments with maturities of 90 days or less from the date of purchase are
classified as cash equivalents; investments with maturities of greater than 90 days from the date
of purchase but less than one year are generally classified as short-term investments; and
investments with maturities of greater than one year from the date of purchase are generally
classified as long-term investments. Unrealized holding gains and losses are reflected as a net
amount in a separate component of
shareholders’ equity until realized. For the purposes of computing realized gains and losses,
cost is determined on a specific identification basis.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">At September 30, 2011, the Company’s cash, cash equivalent and short-term investments balance
was $58.0 million, $36.2 million and $6.6 million, respectively. Cash equivalents and short-term
investments primarily consist of highly liquid money market funds and certificates of deposit.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Prior to 2008, the Company invested in auction rate securities of which certain auctions
failed during 2008 and the underlying securities were not redeemed by the issuer. During 2008, the
Company recorded an other-than-temporary impairment charge of $3.5 million for one of its
investments. The Company reduced the carrying value to zero due to credit downgrades of the
underlying issuer and the bond insurer as well as increasing publicly reported exposure to
bankruptcy risk by the issuer. However, during the quarter ended September 30, 2011, the Company
was able to sell the auction rate security and recovered 72%, or $2.5 million, of its original
investment. The $2.5 million recovery from the sale of the auction rate security is included in
the recovery of previously impaired investment line in the condensed consolidated statements of
income.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">The Company currently has one remaining auction rate security investment with a par value of
$1.0 million. The auction rate security held by the Company at September 30, 2011 was issued by a
state educational loan authority, is collateralized by federally insured student loans and matures
in 2037. At September 30, 2011, the carrying value of this investment is $0.9 million as the
Company has recorded temporary impairment charges against this investment prior to 2011. This
investment has a high credit rating, and the Company intends and has the ability to hold this
security until maturity or until redeemed. In determining the fair value of the auction rate
security, the Company considered the credit worthiness of the counterparty, estimates of interest
rates, expected holding periods, and the timing and value of expected future cash flows. Changes
in the assumptions underlying the Company’s valuation could have a significant impact on the value
of this security, which may cause losses and potentially require the Company to record
other-than-temporary impairment charges on this investment in the future. The Company will
continue to evaluate the fair value of its auction rate security investment each reporting period
for a potential other-than-temporary impairment.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">The Company’s auction rate security is classified in the fair value hierarchy as Level 3 as
its valuation technique includes significant unobservable inputs. The Company uses quoted prices
from active markets which are classified at Level 1 as a highest level observable input in the
disclosure hierarchy framework for all other available-for-sale securities. The Company has no
investments classified at Level 2.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">The following table sets forth the assets carried at fair value measured on a recurring basis
at September 30, 2011 (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>Fair Value Measurements at September 30, 2011 Using</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Significant Other</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Significant</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Quoted Prices</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Observable Inputs</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Unobservable Inputs</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>(Level 1)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>(Level 2)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>(Level 3)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Total</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Money market funds
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">29,632</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">29,632</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Auction rate security
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">908</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">908</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Total
available-for-sale
securities
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">29,632</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">908</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">30,540</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">During the first nine months of 2011, the Company’s valuation methodologies were
consistent with previous years, and there were no transfers into or out of Level 3 based on changes
in observable inputs.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 4 - us-gaap:DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"><b>4.</b></td>
<td width="1%"> </td>
<td><b>Stock-Based Compensation</b></td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">In January 2010 the Compensation Committee of the Board of Directors approved certain changes
to the Company’s historical equity incentive grant practices, with the objective to optimize its
performance and retention strength while managing program share usage to improve long-term equity
overhang. The changes eliminated stock option awards in favor of 100% restricted stock grants,
which for the 2010 and 2011 awards contain vesting provisions that are 50% service-based and 50%
performance-based for employee awards and 100% service based for non-employee members of the
Board of Directors (“Outside Directors”). The equity compensation program change for
employees was effective January 2010 and for Outside Directors was effective May 2010. The
employee awards have a four year vesting period, with the performance portion tied to annual
revenue and earnings per share targets. The awards to Outside Directors have a one year vesting
period.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">The Company recorded stock-based compensation related to stock options of $0.5 million and
$0.8 million during the three months ended September 30, 2011 and 2010, respectively, and $1.5
million and $2.9 million during the nine months ended September 30, 2011 and 2010, respectively.
During the nine months ended September 30, 2010 the Company granted options to purchase 17,500
shares of common stock. No stock options were granted during 2011 or during the three months
ended September 30, 2010.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">A summary of changes in outstanding options for the nine months ended September 30, 2011 is
as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="86%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Number of Options</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Outstanding at December 31, 2010</b>
</div></td>
<td> </td>
<td> </td>
<td align="right">3,846,262</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Exercised
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,252,520</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Forfeited and expired
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(99,048</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Outstanding at September 30, 2011</b>
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>2,494,694</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">The Company granted 19,840 shares and 14,524 shares of restricted stock during the three
months ended September 30, 2011 and 2010, respectively. The Company recorded stock-based
compensation related to restricted stock of $2.0 million and $1.8 million during the three months
ended September 30, 2011 and 2010, respectively. During the nine months ended September 30, 2011
and 2010, the Company granted 356,232 shares and 431,952 shares of restricted stock, respectively.
The Company recorded stock-based compensation related to restricted stock of $5.8 million and
$4.8 million during the nine months ended September 30, 2011 and 2010, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">A summary of changes in unvested shares of restricted stock for the nine months ended
September 30, 2011 is as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="86%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Number of Shares</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Outstanding at December 31, 2010</b>
</div></td>
<td> </td>
<td> </td>
<td align="right">658,146</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Granted
</div></td>
<td> </td>
<td> </td>
<td align="right">356,232</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Vested
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(251,480</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Forfeited
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(81,645</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Outstanding at September 30, 2011</b>
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>681,253</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 5 - us-gaap:IncomeTaxDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"><b>5.</b></td>
<td width="1%"> </td>
<td><b>Income Taxes</b></td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">The Company’s effective tax rate was 26.6% and 33.9% for the quarters ended September 30, 2011
and 2010, respectively, and 25.9% and 34.0% for the nine months ended September 30, 2011 and 2010,
respectively. The effective rate for the three and nine months ended September 30, 2011 is
impacted by the $2.5 million recovery of a previously impaired investment discussed in Note 3. The
Company did not record a tax benefit on the original impairment charge because it did not have any
future capital gains to offset the loss and therefore does not have tax expense related to the
reversal of the charge. The effective tax rate for the quarter and year to date also include a tax
benefit from the disqualifying disposition of incentive stock options that were previously expensed
and the reduction of U.S. federal and state income tax reserves that resulted from the expiration
of tax audit statues for tax returns filed for 2007 and prior and the settlement of an IRS audit.
In addition to the third quarter tax adjustments, the effective tax rate in the nine months ended
September 30, 2011 includes a $2.0 million tax benefit recorded in the first quarter ending March
31, 2011, resulting from the reduction of a valuation allowance associated with tax credit
carryforwards and deferred tax assets in India. The benefit is attributable to the elimination of
the tax holiday for Indian companies under the STPI “Software Technology Park of India” tax plan,
based on the February 2011 budget approved by the India Finance Ministry, which will allow us to
utilize tax assets previously reserved.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">The effective tax rate for the nine months of 2010 included a tax benefit from the
disqualifying disposition of incentive stock options that were previously expensed and the
reduction in U.S. federal income tax reserves that resulted from the expiration of tax audit
statues for tax returns filed for 2006 and prior, partially offset by the establishment of income
tax reserves for state audits.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">The Company conducts business globally and, as a result, files income tax returns in the U.S.
federal jurisdiction and in many state and foreign jurisdictions. The Company is no longer subject
to income tax examinations for the years before 2008 in the U.S. federal, substantially all state
and local, and substantially all non-US jurisdictions. The Company experienced a net decrease in
unrecognized tax benefits of $0.5 million during the quarter ended September 30, 2011, due to the
expiration of statutes of limitations in multiple jurisdictions globally. The Internal Revenue
Service completed its examination of the Company’s 2008 tax return during the quarter ended
September 30, 2011 which resulted in an additional $0.2 million decrease in unrecognized tax
benefits. As of September 30, 2011, the Company’s unrecognized tax benefits totaled $1.8 million,
all of which, if recognized, would affect the effective tax rate. Further, the Company anticipates
it is reasonably possible that unrecognized tax benefits may decrease within twelve months by $0.2
million related primarily to the expiration of statutes of limitation.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">The Company recognizes potential accrued interest and penalties to unrecognized tax benefits
within its global operations in income tax expense. The Company’s liability for the potential
payment of interest and penalties totaled $0.4 million at September 30, 2011.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 6 - us-gaap:ComprehensiveIncomeNoteTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"><b>6.</b></td>
<td width="1%"> </td>
<td><b>Comprehensive Income</b></td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Comprehensive income includes net income, foreign currency translation adjustments and
unrealized gains and losses on investments that are excluded from net income and reflected in
shareholders’ equity.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">The following table sets forth the calculation of comprehensive income for the three and nine
months ended September 30, 2011 (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Three Months Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Nine Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>September 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>September 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net income
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>14,877</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">6,232</td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>34,382</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">21,616</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Other comprehensive (loss) income, net
of tax:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Foreign currency translation adjustment
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,418</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td> </td>
<td align="right">1,219</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,241</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td> </td>
<td align="right">1,124</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Unrealized loss on investments
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(107</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Other comprehensive (loss) income
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,418</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td> </td>
<td align="right">1,219</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,241</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td> </td>
<td align="right">1,017</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Comprehensive income
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>12,459</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">7,451</td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>32,141</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">22,633</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 7 - us-gaap:EarningsPerShareTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"><b>7.</b></td>
<td width="1%"> </td>
<td><b>Net Earnings Per Share</b></td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Basic net earnings per share is computed using net income divided by the weighted average
number of shares of common stock outstanding (“Weighted Shares”) for the period presented.
Diluted net earnings per share is computed using net income divided by the sum of Weighted Shares
and common equivalent shares (“CESs”) outstanding for each period presented using the treasury
stock method.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">The following is a reconciliation of the net income and share amounts used in the computation
of basic and diluted net earnings per common share for the three and nine months ended September
30, 2011 and 2010 (in thousands, except per share data):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Three Months Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Nine Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>September 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>September 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net income
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>14,877</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">6,232</td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>34,382</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">21,616</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Earnings per share:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Basic
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>0.74</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.29</td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>1.67</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1.00</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Effect of CESs
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(0.04</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.01</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(0.08</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.04</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Diluted
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>0.70</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.28</td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>1.59</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.96</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Weighted average
number of shares:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Basic
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>20,156</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">21,248</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>20,623</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">21,638</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Effect of CESs
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>969</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">803</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>1,033</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">818</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Diluted
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>21,125</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,051</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>21,656</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,456</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Weighted average shares issuable upon the exercise of stock options that were not
included in the calculation of diluted earnings per share were 2,000 shares and 2,031,924 shares
for the three months ended September 30, 2011 and 2010, respectively, and 17,000 shares and
2,060,724 shares for the nine months ended September 30, 2011 and 2010, respectively. Such shares
were not included because they were anti-dilutive.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 8 - us-gaap:CommitmentsAndContingenciesDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"><b>8.</b></td>
<td width="1%"> </td>
<td><b>Contingencies</b></td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">From time to time, the Company may be involved in litigation relating to claims arising out
of its ordinary course of business. Many of the Company’s installations involve products that are
critical to the operations of its clients’ businesses. Any failure in a product could result in a
claim for substantial damages against the Company, regardless of its responsibility for such
failure. Although the Company attempts to limit contractually its liability for damages arising
from product failures or negligent acts or omissions, there can be no assurance that the
limitations of liability set forth in the Company’s contracts will be enforceable in all
instances. The Company is not presently involved in any material litigation. However, it is
involved in various legal proceedings. The Company believes that any liability that may arise as
a result of these proceedings will not have a material adverse effect on its financial condition,
results of operations or cash flows. The Company expenses legal costs associated with loss
contingencies as such legal costs are incurred.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 9 - us-gaap:SegmentReportingDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"><b>9.</b></td>
<td width="1%"> </td>
<td><b>Operating Segments</b></td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">The Company operates its business in three geographical segments: the Americas (North America
and Latin America), Europe, Middle East and Africa (EMEA) and Asia Pacific (APAC). The
information for the periods presented below reflects these segments. All segments derive revenue
from the sale and implementation of the Company’s supply chain execution and planning solutions.
The individual products sold by the segments are similar in nature and are all designed to help
companies manage the effectiveness and efficiency of their supply chain. The Company uses the
same accounting policies for each operating segment. The Chief Executive Officer and Chief
Financial Officer evaluate performance based on revenue and operating results for each region.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">The Americas segment charges royalty fees to the EMEA and APAC segments based on software
licenses sold by those operating segments. The royalties, which totaled approximately $0.5
million for each of the quarters ended September 30, 2011 and 2010 and $1.7 million and $1.9
million for the nine months ended September 30, 2011 and 2010, respectively, are included in cost
of revenue in EMEA and APAC with a corresponding reduction in the Americas cost of revenue. The
revenues represented below are from external customers only. The geographical-based costs consist
of costs of personnel, direct sales and marketing expenses, and general and administrative costs
to support the business. There are certain corporate expenses included in the Americas region
that are not charged to the other segments, including research and development, certain marketing
and general and administrative costs that support the global organization, and the amortization of
acquired developed technology. Included in the Americas costs are all research and development
costs including the costs associated with the Company’s India operations.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">The following table presents the revenues, expenses and operating income by reporting segment
for the three and nine months ended September 30, 2011 and 2010 (in thousands):
</div>
<div align="center">
<table style="font-size: 8pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="20%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="30" style="border-bottom: 1px solid #000000"><b>Three Months Ended September 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Americas</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>EMEA</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>APAC</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Consolidated</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Americas</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>EMEA</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>APAC</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Consolidated</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Revenue:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">License
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>11,450</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>1,833</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>282</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>13,565</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">10,036</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,693</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">363</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">12,092</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Services
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>51,226</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>7,945</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>4,423</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>63,594</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">44,369</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,344</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,773</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">53,486</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Hardware and other
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>7,987</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>263</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>193</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>8,443</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,150</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">229</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">57</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,436</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Total revenue
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>70,663</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>10,041</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>4,898</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>85,602</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">62,555</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,266</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,193</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">74,014</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Costs and Expenses:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Cost of revenue
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>27,988</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>5,461</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>2,496</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>35,945</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">26,962</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,475</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,787</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">33,224</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Operating expenses
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>26,451</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>3,159</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>1,474</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>31,084</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">25,325</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,505</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,086</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">28,916</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Depreciation and amortization
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>1,560</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>87</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>51</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>1,698</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,147</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">72</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">43</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,262</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Recovery of previously
impaired investment
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,519</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,519</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Total costs and expenses
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>53,480</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>8,707</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>4,021</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>66,208</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">54,434</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,052</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,916</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">64,402</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Operating income
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>17,183</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>1,334</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>877</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>19,394</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">8,121</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,214</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">277</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">9,612</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="center">
<table style="font-size: 8pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="20%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="30" style="border-bottom: 1px solid #000000"><b>Nine Months Ended September 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Americas</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>EMEA</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>APAC</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Consolidated</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Americas</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>EMEA</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>APAC</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Consolidated</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Revenue:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Software license
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>30,829</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>5,192</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>1,653</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>37,674</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">33,935</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4,565</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3,284</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">41,784</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Services
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>149,254</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>23,477</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>10,715</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>183,446</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">134,103</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">19,611</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,013</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">161,727</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Hardware and other
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>23,399</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>783</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>412</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>24,594</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">21,281</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">666</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">146</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,093</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Total revenue
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>203,482</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>29,452</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>12,780</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>245,714</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">189,319</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">24,842</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,443</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">225,604</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Costs and Expenses:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Cost of revenue
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>81,070</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>15,655</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>7,460</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>104,185</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">76,981</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13,605</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,042</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">96,628</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Operating expenses
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>79,404</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>9,321</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>4,241</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>92,966</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">77,430</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,829</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,610</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">88,869</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Depreciation and amortization
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>5,508</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>270</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>144</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>5,922</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,618</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">246</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">131</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,995</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Recovery of previously
impaired investment
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,519</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,519</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Total costs and expenses
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>163,463</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>25,246</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>11,845</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>200,554</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">161,029</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">21,680</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,783</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">192,492</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Operating income
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>40,019</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>4,206</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>935</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>45,160</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">28,290</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3,162</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,660</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">33,112</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">The Company’s services revenues, which consist of fees generated from professional
services and customer support and software enhancements related to its software products, for the
three and nine months ended September 30, 2011 and 2010 are as follows (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Three Months Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Nine Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>September 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>September 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Professional services
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>41,403</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">33,349</td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>118,737</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">101,658</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Customer support and
software enhancements
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>22,191</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">20,137</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>64,709</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">60,069</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Total services revenue
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>63,594</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">53,486</td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>183,446</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">161,727</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">License revenues related to the Company’s warehouse and non-warehouse product groups for
the three and nine months ended September 30, 2011 and 2010 are as follows (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Three Months Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Nine Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>September 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>September 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Warehouse
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>7,002</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">7,020</td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>22,462</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">22,375</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Non-Warehouse
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>6,563</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,072</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>15,212</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">19,409</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Total software
license revenue
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>13,565</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">12,092</td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>37,674</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">41,784</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
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<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"><b>10.</b></td>
<td width="1%"> </td>
<td><b>New Accounting Pronouncements</b></td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">In September 2011, the FASB issued an Accounting Standards Update on testing goodwill for
impairment to simplify the goodwill impairment test. The standard update is intended to reduce cost
and complexity of the annual goodwill impairment test by permitting companies to first assess
qualitative factors to determine whether further impairment testing is necessary. Under this
standard update, a company is not required to calculate the fair value of a reporting unit unless
the company determines that it is more likely than not that its fair value is less than its
carrying amount. The more likely than not threshold is defined as having a likelihood of more than
50 percent. This guidance is effective for interim and annual goodwill impairment tests performed
for the fiscal years beginning after December 15, 2011. The Company does not expect the adoption
of this guidance to have a material impact on its financial statements.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">In June 2011, the FASB issued an Accounting Standards Update on the presentation of
comprehensive income. This guidance requires the presentation of comprehensive income, the
components of net income and the components of other comprehensive income either in a single
continuous statement of comprehensive income or in two separate but consecutive statements. This
guidance also requires presentation of adjustments for items that are reclassified from other
comprehensive income to net income in the statement where the components of net income and the
components of other comprehensive income are presented. This guidance is effective for interim and
annual periods beginning after December 15, 2011. The adoption of this guidance will only impact
the presentation of the Company’s financial statements.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">In May 2011, the FASB issued an Accounting Standards Update on fair value measurements that
clarifies the application of existing guidance and disclosure requirements, changes certain fair
value measurement principles and requires additional disclosures about fair value measurements.
This guidance is effective for interim and annual periods beginning after December 15, 2011. The
Company does not expect the adoption of this guidance to have a material impact on its financial
statements.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">In January 2010, the FASB issued an Accounting Standard Update to improve disclosures about
fair value measurements. This guidance requires enhanced disclosures regarding transfers in and
out of the levels within the fair value hierarchy. Separate disclosures are required for
significant transfers in and out of Level 1 and 2 in the fair value hierarchy and the reasons for
the transfers. This guidance also requires disclosures relating to the reconciliation of fair
value measurements using significant unobservable inputs (Level 3) investments. The new
disclosures and clarifications of existing disclosures are effective for interim and annual
reporting periods beginning after December 15, 2009 except Level 3 reconciliation disclosures which
are effective for the fiscal years and interim periods beginning after December 15, 2010. The
Company adopted the enhanced disclosures for Level 1 and 2 in its first quarter of 2010 reporting,
which did not have a material impact on its financial statements. The Company also adopted the
enhanced disclosures for Level 3 reconciliation disclosures in its first quarter of 2011 reporting,
which also did not have a material impact on its financial statements.
</div>
</div>