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Shoretel, Inc. has a market cap of $238.233 million; its shares were traded at around $4.09 with and P/S ratio of 0.8115.
Highlight of Business Operations:Sales and marketing. Sales and marketing expenses increased by $10.1 million or 47% in the three months ended December 31, 2012 as compared to the three months ended December 31, 2011. The increase in sales and marketing expenses from the prior period is primarily due to an increase in personnel related costs including, benefits, bonus and commissions of $4.6 million due to an increase in headcount related primarily to the M5 acquisition in March 2012 as well as the expansion of our sales force associated with our premise business, advertising and promotional activities of $2.9 million, amortization expense of $0.8 million related to addition of intangible assets as part of the M5 acquisition on March 23, 2012, consulting and outside services of $0.8 million and increased facilities and office expenses of $0.4 million.
General and administrative. General and administrative expenses increased by $2.9 million or 46% in the three months ended December 31, 2012 as compared to the three months ended December 31, 2011. The increase in general and administrative expenses from the prior period is primarily due to an increase in personnel related costs including benefits and variable compensation of $1.1 million, a $0.7 million charge in the three months ended December 31, 2012 related to the change in estimate of sales, use and telecommunications taxes with no corresponding charge during the three months ended December 31, 2011, an increase in software license fees of $0.3 million, an increase in consulting and outside service fees of $0.3 million, as well as an increase in audit and tax service fees of $0.4 million. These increases are due to the increase in overall expenses to support a growing business including the addition of facilities and headcount resulting from the acquisition of M5 in March 2012.
Sales and marketing. Sales and marketing expenses increased by $19.7 million or 46% in the six months ended December 31, 2012 as compared to the six months ended December 31, 2011. The increase in sales and marketing expenses from the prior period is primarily due to an increase in personnel related costs including, benefits, bonus and commissions of $10.1 million due to an increase in headcount related to the M5 acquisition in March 2012 as well as the expansion of our sales force associated with our premise business, advertising and promotional activities of $4.8 million, amortization expense of $1.6 million related to addition of intangible assets as part of the M5 acquisition in March 2012, consulting and outside services of $1.2 million and increased facilities and office expenses of $0.6 million.
Cash provided by operating activities during the six months ended December 31, 2012 also reflects net changes in operating assets and liabilities, which provided $7.4 million of cash consisting primarily of a decrease in accounts receivable of $2.4 million due to improved collections coupled with lower revenue, increase in deferred revenue of $2.4 million due to higher support contracts and increased billings through our value-added distributors, an increase in accrued taxes and surcharges of $3.2 million due to a change in estimate of sales, use and telecommunication taxes, an increase in accounts payable of $2.2 million, an increase in accrued employee compensation of $0.9 million and a decrease in other assets of $0.2 million. These cash inflows were offset by an increase in indemnification asset of $0.4 million, an increase in prepaid expenses and other current assets of $0.2 million, an increase in inventory of $0.2 million and a decrease in accrued and other liabilities of $3.0 million.
Cash provided by operating activities during the six months ended December 31, 2011 also reflects net changes in operating assets and liabilities, which provided $7.4 million of cash consisting primarily of a decrease in accounts receivable of $2.9 million due to a decrease in the days sales outstanding, increase in deferred revenue of $7.5 million due to higher support contracts and increased volume through our two-tier value-added distributors, increase in accounts payable of $1.5 million and increase in accrued liabilities and other of $1.8 million. These cash inflows were offset by increases in inventory of $3.5 million, and prepaid expenses and other current assets of $1.0 million and decrease in accrued employee compensation of $1.5 million.
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