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Audience Announces Second Quarter 2013 Financial Results



Audience Announces Second Quarter 2013 Financial Results

MOUNTAIN VIEW, Calif., Aug. 1, 2013 (GLOBE NEWSWIRE) -- Audience, Inc.
(Nasdaq:ADNC), the leader in advanced voice and audio processing for mobile
devices, today announced its second quarter 2013 financial results.

Revenue for the second quarter of 2013 was $45.3 million, compared with $33.4
million for the same period in 2012. As reported under U.S. generally accepted
accounting principles (GAAP), second quarter 2013 net income was $2.7 million,
or $0.11 per diluted share based on weighted average shares outstanding of
23.2 million. This compares with GAAP net income of $4.3 million, or $0.17 per
diluted share based on weighted average shares outstanding of 14.3 million,
for the same period in 2012. Gross margin on a GAAP basis for the second
quarter of 2013 was 59.0% of revenue, compared to 62.2% of revenue for the
same period in 2012.

Using Audience's non-GAAP net income as defined below, non-GAAP net income for
the second quarter of 2013 was $5.7 million, or $0.24 per diluted share based
on weighted average shares outstanding of 23.2 million. This compares with
non-GAAP net income of $5.0 million, or $0.24 per diluted share based on
weighted average shares outstanding of 20.7 million, for the same period in
2012. Gross margin on a non-GAAP basis for the second quarter of 2013 was
59.2% of revenue, compared to 62.3% of revenue for the same period in 2012.

"In the second quarter, Audience continued to strengthen its position as the
leader in Advanced Voice with Audience technology released in a wide range of
flagship devices for customers such as Samsung, Huawei, and LG," said Peter
Santos, president and chief executive officer. "As we look ahead, we see
shifting trends in the smartphone market that will present both challenges and
opportunities. We believe the opportunities will outweigh these challenges, as
we continue to penetrate key mobile handset customers, deepen our partnership
with China Mobile and execute on our diversification strategy."

"Operationally we executed well in the second quarter as our financial results
met or exceeded expectations across all key metrics," said Kevin Palatnik,
chief financial officer. "Going forward, with near-term expected softness in
the high end of the smartphone market, we will continue to carefully manage
our business. We are confident in our diversification strategy and long term
business model."

Business Outlook

For the third quarter of 2013, Audience expects total revenue to be in the
range of $31 to $34 million. Third quarter GAAP gross margin is expected to be
in the range of 54% to 57%. Third quarter GAAP net loss, which includes $1.5
million of expected stock-based compensation expense and $0.2 million of
non-cash rent expense, is expected to be in the range of $3.8 to $4.8 million,
or ($0.16) to ($0.20) per diluted share on approximately 23.5 million diluted
weighted average shares outstanding.

Third quarter non-GAAP gross margin is expected to be in the range of 54% to
57%. Third quarter non-GAAP net loss is expected to be in the range of $2.1 to
$3.1 million, or ($0.09) to ($0.13) per share on a diluted basis.

A schedule showing a reconciliation of the business outlook from GAAP diluted
net income per share to non-GAAP diluted net income per share is included with
this release.

The above information concerning guidance represents Audience's outlook only
as of the date hereof and is subject to change as a result of amendments to
material contracts and other changes in business conditions. Audience
undertakes no obligation to update or revise any financial forecast or other
forward looking statements, as a result of new developments or otherwise.

Quarterly Conference Call Today

Peter Santos, president and chief executive officer, and Kevin Palatnik, chief
financial officer, will host a second quarter 2013 financial results
conference call today at 1:30 pm (Pacific) / 4:30 pm (Eastern). Attendees are
asked to join the conference call at least ten minutes prior to the scheduled
conference call time. The call may be accessed by dialing 1-877-212-6076 (toll
free) or 1-707-287-9331 (international). The passcode is 14496607. A live and
archived webcast of the call will be available on Audience's website at
http://investor.audience.com/ for 30 days.

Audience expects that its corporate representatives will meet privately during
the quarter with investors, the media, investment analysts and others. At
these meetings, Audience may reiterate the business outlook published in this
press release. At the same time, Audience will keep this press release,
including the business outlook, publicly available on its website.

Beginning September 13, 2013, Audience will observe a Quiet Period during
which Audience's representatives will not comment on Audience's business
outlook, financial results or expectations. The Quiet Period will extend until
the day when Audience's Third Quarter 2013 Earnings Release is published,
which is currently scheduled for October 31, 2013.

Use of Non-GAAP Financial Measures

Audience prepares its financial statements in accordance with generally
accepted accounting principles for the United States (GAAP). The non-GAAP
financial measures, such as gross margin, net income and earnings per share
information for the three months and quarter ended June 30, 2013 and similar
periods from the prior year included in this press release are different from
those otherwise presented under GAAP. The following are explanations of each
type of adjustment that we incorporate into non-GAAP financial measures:

Stock-based compensation expense relates to equity incentive awards granted to
our employees, directors, and consultants accounted for under GAAP.
Stock-based compensation expense has been and will continue to be a
significant recurring expense for Audience. While we include the dilutive
impact of such equity awards in weighted average shares outstanding, the
expense associated with stock-based awards reflects a non-cash charge that we
exclude from non-GAAP net income.

Stock warrant revaluation expense is related to preferred stock warrants
outstanding that had to be revalued each quarter prior to our initial public
offering. We believe the comparisons of ongoing operations should exclude
effects of such revaluations as preferred stock warrant revaluation represents
a non-cash expense.

On June 5, 2012, Audience entered into a lease agreement for its future
corporate headquarters facility in Mountain View, California. The facility is
in the process of being constructed. Pursuant to the lease agreement, the
lease falls under "build-to-suit" accounting treatment and therefore, in
accordance with accounting for the effect of lessee involvement in asset
construction, the company is considered to be the owner of the real estate
project during the construction period. As such, Audience recorded an asset
for construction in progress for incurred construction costs, and a liability
for those costs that are not funded by the company. Additionally, the rent
costs associated with the ground lease during construction was recorded to the
income statement. This rent cost is a non-cash charge that the company
excluded from its non-GAAP net income.

Non-GAAP financial information is adjusted for a tax rate equal to our annual
estimated tax rate on non-GAAP income. Our estimated tax rate on non-GAAP
income is determined annually and may be adjusted during the year to take into
account events or trends that we believe materially impact the estimated
annual rate including, but not limited to, significant changes resulting from
tax legislation, material changes in the geographic mix of revenues and
expenses and other significant events. Due to the differences in the tax
treatment of items excluded from non-GAAP earnings, as well as the methodology
applied to our estimated annual tax rates, our estimated tax rate on non-GAAP
income may differ from our GAAP tax rate and from our actual tax liabilities.

The shares used to compute non-GAAP basic and diluted net income per share
include the assumed conversion of all outstanding shares of convertible
preferred stock and certain preferred stock warrants into shares of common
stock using the as-if converted method as of the beginning of each period
presented or the date of issuance, if later. In May 2012, in conjunction with
the closing of our initial public offering, all of our outstanding preferred
stock was converted into shares of our common stock.

Audience has provided these measures in addition to GAAP financial results
because management believes these non-GAAP measures help provide a consistent
basis for comparison between quarters and annual growth rates that are not
influenced by certain non-cash charges and therefore are helpful in
understanding Audience's underlying operating results. These non-GAAP measures
are some of the primary measures Audience's management uses for planning and
forecasting. These measures are not in accordance with, or an alternative to,
GAAP and these non-GAAP measures may not be comparable to information provided
by other companies. Reconciliations of the GAAP to non-GAAP results are
presented at the end of this press release.

Cautionary Note Concerning Forward-Looking Statements

Statements in the press release and certain matters to be discussed on the
second quarter conference call regarding Audience, Inc., which are not
historical facts, are "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements may be identified by terms such as believe, expect, may, will,
provide, could and should and the negative of these terms or other similar
expressions. These statements, including statements relating to expectations
of future revenue, net income and operating margin performance, future success
for various products and our leadership position in the market, the demand for
our solutions including continued demand by customers upon whom we are
substantially dependent and diversification of our customer base are based on
current expectations and assumptions that are subject to risks and
uncertainties. Our actual results could differ materially from those we
anticipate as a result of various factors, including: our dependence on a
single OEM, Samsung Electronics Co. Ltd., for a substantial portion of our
revenue; weak demand for high end smart phones and the impact on our business;
our need to maintain and expand our existing relationships with our OEMs and
to establish relationships with new OEMs in order to maintain and increase our
revenue; our ability to sustain profitable operations due to our history of
losses and accumulated deficit; quarterly fluctuations in our results due to
factors such as the timing of OEM product launches, customer purchasing
behavior in light of anticipated mobile phone launches and our assessments of
whether we have excess or obsolete inventory, among other factors; increasing
competition and new entrants in the market for our products; our need to
develop products for the lower end of the smartphone market; our need to
diversify our sources of revenue; our ability to enter new end user product
markets, such as notebooks and smart TVs, as well as new geographic markets;
pressure on the average selling prices for our products; our lengthy sales
cycle and the lack of certainty as to whether any given OEM's products will
achieve market acceptance; our OEMs' lengthy and expensive process to qualify
our products; our ability to develop new or enhanced products in a timely
manner that achieve market acceptance; our reliance on third parties to
manufacture, assemble and test our products; defects that may be present in
our products; the impact of future intellectual property litigation and claims
for indemnification; changes in tax laws or our ability to utilize our tax
structure and net operating losses and other risks inherent in fabless
semiconductor businesses. For a discussion of these and other related risks,
please refer to "Risk Factors" in our most recent Form 10-Q for the three
months ended March 31, 2013, which is available on the SEC's website at
www.sec.gov. Given these uncertainties, you should not place undue reliance on
these forward-looking statements. Also, forward-looking statements represent
our management's beliefs and assumptions only as of the date made. You should
review our SEC filings carefully and with the understanding that our actual
future results may be materially different from what we expect.

Except as required by law, we assume no obligation to update these
forward-looking statements, or to update the reasons actual results could
differ materially from those anticipated in these forward-looking statements,
even if new information becomes available in the future.

About Audience

Audience is the leader in advanced voice and audio processing for mobile
devices. Its family of earSmart™ intelligent voice processors is based on the
processes of human hearing, to suppress background noise and enhance mobile
voice quality. Audience's technology substantially improves the mobile voice
experience, while also improving the performance of speech-based services, and
enhancing audio quality for multimedia. Audience earSmart™ processors are
featured in mobile devices from leading providers in Asia-Pacific, Europe and
the U.S. The company is based in Mountain View, California. For more
information, see www.audience.com.

ADNC-F

Audience, Inc.
Condensed consolidated balance sheets
(in thousands)
(unaudited)
 
                                                  June 30,  December 31,
                                                  2013      2012
Assets                                                       
Current assets:                                              
Cash and cash equivalents                         $ 103,191 $ 109,606
Restricted cash                                    170       —
Marketable securities                              25,880    18,032
Accounts receivable, net                           12,837    12,926
Inventories                                        22,651    13,266
Other current assets                               4,806     3,669
Total current assets                               169,535   157,499
Property and equipment, net                        21,314    11,801
Other noncurrent assets                            1,134     1,389
Restricted cash - noncurrent portion               —         170
Total assets                                      $ 191,983 $ 170,859
Liabilities and stockholders' equity                         
Current liabilities:                                         
Accounts payable                                  $ 7,076   $ 9,745
Accrued and other current liabilities              10,836    9,228
Deferred credits and income                        676       285
Financing obligation for construction in progress  12,958    5,290
Total current liabilities                          31,546    24,548
Taxes payable – noncurrent                         670       376
Total liabilities                                  32,216    24,924
Stockholders' equity:                                        
Preferred stock                                    —         —
Common stock                                       21        21
Additional paid-in capital                         178,985   172,461
Accumulated other comprehensive income             (1)       3
Accumulated deficit                                (19,238)  (26,550)
Total shareholders' equity                         159,767   145,935
Total liabilities and stockholders' equity        $ 191,983 $ 170,859

 
Audience, Inc.
Condensed consolidated statements of comprehensive income
(in thousands, except per share data)
(unaudited)
 
                                          Three months ended Six months ended
                                          June 30,           June 30,
                                          2013      2012     2013     2012
Revenue:                                                               
Hardware                                  $ 42,788  $ 21,144 $ 86,456 $ 40,553
Licensing                                  2,521     12,213   6,082    23,912
Total revenue                              45,309    33,357   92,538   64,465
Cost of revenue                            18,562    12,618   40,282   26,037
Gross profit                               26,747    20,739   52,256   38,428
Operating expenses:                                                    
Research and development                   10,349    7,878    19,799   13,546
Selling, general and administrative        10,793    8,147    21,138   15,671
Total operating expenses                   21,142    16,025   40,937   29,217
Income from operations                     5,605     4,714    11,319   9,211
Interest income, net                       37        10       91       13
Other expense, net                         (84)      (257)    (159)    (465)
Income before income taxes                 5,558     4,467    11,251   8,759
Income tax expense                         2,891     142      3,939    265
Net income                                $ 2,667   $ 4,325  $ 7,312  $ 8,494
Net income per share:                                                  
Basic                                     $ 0.13    $ 0.20   $ 0.35   $ 0.39
Diluted                                   $ 0.11    $ 0.17   $ 0.32   $ 0.33
Weighted average shares used in computing                              
net income per share:
Basic                                      21,240    11,343   21,101   6,202
Diluted                                    23,230    14,330   23,157   9,211
Other comprehensive income:                                            
Foreign currency translation adjustments, $ —       $ 83     $ —      $ 31
net of tax
Unrealized loss on marketable securities,  (4)       —        (4)      —
net
Net comprehensive income                  $ 2,663   $ 4,408  $ 7,308  $ 8,525

 
Audience, Inc.
Consolidated statements of operations
GAAP to Non-GAAP net income reconciliation
(in thousands)
 
                                 Three months ended Six months ended
                                 June 30,           June 30,
                                 2013      2012     2013     2012
GAAP net income                  $ 2,667   $ 4,325  $ 7,312  $ 8,494
Stock-based compensation          1,326     591      2,643    1,128
Non-cash rent expense             183       —        431      —
Revaluation of warrant liability  —         123      —        290
Tax adjustment                    1,478     —        1,478    —
Non-GAAP net income              $ 5,654   $ 5,039  $ 11,864 $ 9,912

 
Audience, Inc.
Unaudited computation of GAAP earnings per share
(in thousands, except for per share amounts)
 
                                           Three months ended Six months ended
                                           June 30,           June 30,
                                           2013     2012      2013    2012
Computation of GAAP net income per share:                              
GAAP net income                            $ 2,667  $ 4,325   $ 7,312 $ 8,494
Non-cumulative dividends to preferred       —        (749)     —       (2,248)
stockholders
Undistributed earnings allocated to         —        (1,307)   —       (3,835)
preferred stockholders
Net income – basic                          2,667    2,269     7,312   2,411
Adjustment for undistributed earnings       —        187       —       604
reallocated to the holders of common stock
Net income – diluted                       $ 2,667  $ 2,456   $ 7,312 $ 3,015
Weighted average shares used in computing                              
net income per share:
Basic                                       21,240   11,343    21,101  6,202
Diluted                                     23,230   14,330    23,157  9,211
Net income per share:                                                  
Basic                                      $ 0.13   $ 0.20    $ 0.35  $ 0.39
Diluted                                    $ 0.11   $ 0.17    $ 0.32  $ 0.33

 
Audience, Inc.
Unaudited reconciliation of GAAP to non-GAAP diluted earnings per share
(in thousands, except per share data)
 
                            Three months ended       Six months ended
                            June 30,                 June 30,
                            2013        2012         2013       2012
GAAP net income             $ 2,667     $ 4,325      $ 7,312    $ 8,494
Non-cumulative dividends to  —           (749) (B)    —          (2,248) (B)
preferred stockholders
Undistributed earnings
allocated to preferred       —           (1,307)      —          (3,835)
stockholders
GAAP net income – basic      2,667       2,269        7,312      2,411
Adjustment for
undistributed earnings       —           187          —          604
reallocated to the holders
of common stock
GAAP net income – diluted   $ 2,667     $ 2,456      $ 7,312    $ 3,015
Non-GAAP adjustments:                                            
Stock-based compensation     1,326       591          2,643      1,128
Non-cash rent expense        183         —            431        —
Revaluation of warrant       —           123          —          290
liability
Non-GAAP as if converted     —           1,869 (A)    —          5,479 (A)
method
Tax adjustment               1,478       —            1,478      —
Non-GAAP net income –       $ 5,654     $ 5,039      $ 11,864   $ 9,912
diluted
GAAP - diluted weighted      23,230      14,330       23,157     9,211
average shares
Non-GAAP - diluted weighted  23,230      20,715       23,157     19,006
average shares.
GAAP - diluted net income   $ 0.11      $ 0.17       $ 0.32     $ 0.33
per share
Non-GAAP adjustments:                                            
Stock-based compensation     0.06        0.03         0.11       0.06
Non-cash rent expense        0.01        —            0.02       —
Revaluation of warrant       —           0.01         —          0.02
liability
Non-GAAP as if converted     —           0.03 (B)     —          0.12 (B)
method
Tax adjustment               0.06        —            0.06       —
Non-GAAP - diluted net      $ 0.24      $ 0.24       $ 0.51     $ 0.52
income per share
                                                                 
(A) Non-GAAP net income was adjusted by $1,869 and $5,479 for the three and
six months ended June 30, 2012, respectively to give effect to the conversion
of our convertible preferred stock and certain preferred stock warrants using
the as-if converted method into common shares as if the conversion had
occurred as of the beginning of the period presented.
 
(B) Non-GAAP diluted EPS for the three and six months ended June 30, 2012 was
computed to give effect to the conversion of our convertible preferred stocks
and certain preferred stock warrants using the as-if converted method into
common shares as if the conversion had occurred as of the beginning of the
period. Therefore to bridge the GAAP to non-GAAP EPS the non-cumulative
dividends to preferred stockholders should not be allocated to stockholders
for the three and six months ended June 30, 2012 of $749 and $2,248,
respectively.

 
Audience, Inc.
Non-GAAP condensed consolidated statements of operations
Impact of Non-GAAP adjustments on reported GAAP net income
(in thousands, except per share data)
(unaudited)
 
               Three months ended June 30,   Three months ended June 30,
               2013                          2012
               Reported Adjustments Non-GAAP Reported Adjustments Non-GAAP
               GAAP                          GAAP
Revenue:                                                           
Hardware       $ 42,788 $ —         $ 42,788 $ 21,144 $ —         $ 21,144
Licensing       2,521    —           2,521    12,213   —           12,213
Total revenue   45,309   —           45,309   33,357   —           33,357
Cost of         18,562   (75) (A)    18,487   12,618   (29) (B)    12,589
revenue
Gross profit    26,747   75          26,822   20,739   29          20,768
Operating                                                          
expenses:
Research and    10,349   (600) (A)   9,749    7,878    (208) (B)   7,670
development
Selling,
general and     10,793   (834) (A)   9,959    8,147    (354) (B)   7,793
administrative
Total
operating       21,142   (1,434)     19,708   16,025   (562)       15,463
expenses
Income from     5,605    1,509       7,114    4,714    591         5,305
operations
Interest        37       —           37       10       —           10
income, net
Other expense,  (84)     —           (84)     (257)    123 (C)     (134)
net
Income before   5,558    1,509       7,067    4,467    714         5,181
income taxes
Income tax      2,891    (1,478)     1,413    142      —           142
expense                 (D)
Net income     $ 2,667  $ 2,987     $ 5,654  $ 4,325  $ 714       $ 5,039
Net income per                                                     
share:
Basic          $ 0.13               $ 0.27   $ 0.20               $ 0.28
                                             (E)
Diluted        $ 0.11               $ 0.24   $ 0.17               $ 0.24
                                             (E)
Weighted
average shares
used in                                                            
computing net
income per
share:
Basic           21,240               21,240   11,343               17,728
                                                                  (F)
Diluted         23,230               23,230   14,330               20,715
                                                                  (F)
                                                                                      
(A) Stock-based compensation expense total - $1,326 and Non-cash rent                 
expense total $183
(B) Stock-based compensation expense total - $591
(C) Quarterly warrant revaluation - $123
(D) Non-GAAP tax adjustments for the three months ended June 30, 2013 are
adjusted for a tax rate equal to our annual estimated tax rate on non-GAAP
income. Our estimated tax rate on non-GAAP income is determined annually
and may be adjusted during the year to take into account events or trends
that we believe materially impact the estimated annual rate including, but
not limited to, significant changes resulting from tax legislation,
material changes in the geographic mix of revenues and expenses and other
significant events. Due to the differences in the tax treatment of items
excluded from non-GAAP earnings, as well as the methodology applied to our
estimated annual tax rates, our estimated tax rate on non-GAAP income may
differ from our GAAP tax rate and from our actual tax liabilities
(E) GAAP basic and diluted EPS was calculated using the two-class method
until our convertible preferred stock converted to common stock upon the
closure of our initial public offering. Therefore, our GAAP net income was
adjusted by a decrease of $2,056 and $1,869 in arriving to "net income"
for the calculation of basic and diluted GAAP EPS, respectively
(F) Non-GAAP basic and diluted EPS was computed to give effect to the
conversion of our convertible preferred stocks and certain preferred stock
warrants using the as-if converted method into common shares as if the
conversion had occurred as of the beginning of period presented

 

Audience, Inc.
Non-GAAP condensed consolidated statements of operations
Impact of Non-GAAP adjustments on reported GAAP net income
(in thousands, except per share data)
(unaudited)
 
                 Six months ended June 30, 2013  Six months ended June 30,
                                                 2012
                 Reported  Adjustments  Non-GAAP Reported Adjustments Non-GAAP
                 GAAP                            GAAP
Revenue:                                                               
Hardware         $ 86,456  $ —          $ 86,456 $ 40,553 $ —         $ 40,553
Licensing         6,082     —            6,082    23,912   —           23,912
Total revenue     92,538    —            92,538   64,465   —           64,465
Cost of revenue   40,282    (144) (A)    40,138   26,037   (54) (B)    25,983
Gross profit      52,256    144          52,400   38,428   54          38,482
Operating                                                              
expenses:
Research and      19,799    (1,212) (A)  18,587   13,546   (350) (B)   13,196
development
Selling, general
and               21,138    (1,718) (A)  19,420   15,671   (724) (B)   14,947
administrative
Total operating   40,937    (2,930)      38,007   29,217   (1,074)     28,143
expenses
Income from       11,319    3,074        14,393   9,211    1,128       10,339
operations
Interest income,  91        —            91       13       —           13
net
Other expense,    (159)     —            (159)    (465)    290 (C)     (175)
net
Income before     11,251    3,074        14,325   8,759    1,418       10,177
income taxes
Income tax        3,939     (1,478) (D)  2,461    265      —           265
expense
Net income       $ 7,312   $ 4,552      $ 11,864 $ 8,494  $ 1,418     $ 9,912
Net income per                                                         
share:
Basic            $ 0.35                 $ 0.56   $ 0.39               $ 0.62
                                                 (E)
Diluted          $ 0.32                 $ 0.51   $ 0.33               $ 0.52
                                                 (E)
Weighted average
shares used in
computing net                                                          
income per
share:
Basic             21,101                  21,101  6,202                15,997
                                                                      (F)
Diluted           23,157                 23,157   9,211                19,006
                                                                      (F)
 
(A) Stock-based compensation expense total - $2,643 and Non-cash rent expense
total - $431
(B) Stock-based compensation expense total - $1,128
(C) Six months ended June 30, 2012 warrant revaluation - $290
(D) Non-GAAP tax adjustments for the six months ended June 30, 2013 are
adjusted for a tax rate equal to our annual estimated tax rate on non-GAAP
income. Our estimated tax rate on non-GAAP income is determined annually and
may be adjusted during the year to take into account events or trends that we
believe materially impact the estimated annual rate including, but not limited
to, significant changes resulting from tax legislation, material changes in
the geographic mix of revenues and expenses and other significant events. Due
to the differences in the tax treatment of items excluded from non-GAAP
earnings, as well as the methodology applied to our estimated annual tax
rates, our estimated tax rate on non-GAAP income may differ from our GAAP tax
rate and from our actual tax liabilities
(E) GAAP basic and diluted EPS was calculated using the two-class method until
our convertible preferred stock converted to common stock upon the closure of
our initial public offering. Therefore, our GAAP net income was adjusted by a
decrease of $6,083 and $5,479 in arriving to "net income" for the calculation
of basic and diluted GAAP EPS, respectively
(F) Non-GAAP basic and diluted EPS was computed to give effect to the
conversion of our convertible preferred stock and certain preferred stock
warrants using the as-if converted method into common shares as if the
conversion had occurred as of the beginning of each period presented

 

Audience, Inc.
Estimated computation of GAAP to non-GAAP diluted earnings per share
 
                                                     Three months
                                                     ending
                                                     September 30,
                                                     2013
Estimated GAAP diluted net loss per share            ($0.16) - ($0.20)
Estimated stock-based compensation expense per share $0.06
Estimated non-cash rent expense per share             $0.01 
Non-GAAP - diluted net loss per share                ($0.09) - ($0.13)

CONTACT: Investors
         The Blueshirt Group
         Suzanne Schmidt
         415-217-4962
         suzanne@blueshirtgroup.com
        
         or
        
         Melanie Friedman
         415-217-4964
         melanie@blueshirtgroup.com
        
         Media and Industry Analysts
         Diane Vanasse
         408-242-0027
         dvanasse@audience.com

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