Support.com 2009 Annual Report Download - page 35

Table of Contents
provided by investing activities in 2007 was primarily due to sales and maturities of $112.5 million in marketable securities offset by the purchase of
$106.9 million in marketable securities and $2.4 million in property and equipment purchases, primarily related to the build out of our new headquarters office.
Financing Activities
Net cash generated by financing activities was $485,000 for the year ended December 31, 2009, $381,000 for the year ended December 31, 2008, and
$4.8 million for the year ended December 31, 2007. In 2009, 2008 and 2007, cash generated by financing activities was primarily attributable to the exercise of
employee stock options and the purchase of common stock under the employee stock purchase plan.
Working Capital and Capital Expenditure Requirements
At December 31, 2009, we had working capital of $81.2 million. Our capital expenditures in 2009 were $234,000. In 2010, we expect our capital
expenditures to remain relatively consistent with 2009. We believe that our existing cash balances will be sufficient to meet our working capital and capital
expenditure requirements for at least the next 12 months.
If we require additional capital resources to grow our business internally or to acquire complementary technologies and businesses at any time in the
future, we may seek to sell additional equity or debt securities. The sale of additional equity could result in more dilution to our stockholders. Financing
arrangements that are available to us include the right to a loan from UBS at no net cost for up to the amount of the par value of our eligible auction-rate
securities. This loan option is part of the rights offer we signed with UBS in November, 2008, and is available until June 30, 2010. As of December 31, 2009, we
had not exercised our right to obtain this loan.
We plan to continue to make investments in our business during 2010. We believe these investments are essential to creating sustainable growth in our
business in the future. Because these investments will likely precede any associated revenues, we expect our working capital to decrease in the near term.
Additionally, we may choose to acquire other businesses or complimentary technologies to enhance our product capabilities and such acquisitions would likely
require the use of cash.
Acquisition
On December 7, 2009, the Company acquired substantially all of the assets of Xeriton, Inc. We acquired the Sammsoft line of consumer software products
to expand our portfolio of offerings. The acquisition enables us to offer do-it-yourself software solutions in addition to assisted online services. In addition, the
acquisition enables us to expand and deepen our relationships directly with consumers who want assistance with technology. No stock was acquired as part of the
transaction. In connection with the acquisition, we paid a total cash-only consideration of $8.5 million for the acquired assets and liabilities, and additional direct
transaction costs of approximately $542,000. The results of operations of the acquired business are included in our accompanying Consolidated Statement of
Operations from December 7, 2009, the acquisition date. The products are designed to improve and optimize the performance and security of users’ computers.
For details on this transaction, please see Note 3 to the Consolidated Financial Statements, Business Combinations.
Contractual Obligations
The following summarizes our contractual obligations at December 31, 2009 and the effect these contractual obligations are expected to have on our
liquidity and cash flows in future periods (in thousands).
Payments Due By Period
Total
1 Year
or Less
1 - 3
Years
After
3 Years
Operating leases $ 2,730 $ 1,150 $ 1,580 $ —
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Source: Support.com, Inc., 10-K, March 12, 2010 Powered by Morningstar® Document Research℠