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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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Emerging growth company
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Yes
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☒
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No
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Item 1.
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||
Item 2.
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||
Item 3.
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||
Item 4.
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Item 1.
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||
Item 1A.
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Item 2.
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Item 3.
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Item 4.
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||
Item 5.
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Item 6.
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||
March 31,
2020 |
September 30, 2019
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||||||
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(In thousands, except par value data)
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||||||
Assets
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|||||||
Current assets:
|
|||||||
Cash and cash equivalents
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$
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|
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$
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|
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Accounts receivable, net
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|||
Prepaid expenses and other current assets
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|||
Total current assets
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|||
Marketable securities
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|||
Other investments
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|||
Property and equipment, net
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|||
Operating lease right-of-use assets
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—
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|||
Goodwill
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|
|||
Intangible assets, net
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|
|||
Deferred income taxes
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|||
Other assets
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|||
Total assets
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$
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|
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$
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|
|
|
Liabilities and Stockholders’ Equity
|
|||||||
Current liabilities:
|
|||||||
Accounts payable
|
$
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|
|
$
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|
|
|
Accrued compensation and employee benefits
|
|
|
|
|
|||
Other accrued liabilities
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|
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|
|||
Deferred revenue
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|
|||
Current maturities on debt
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|
|||
Total current liabilities
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|||
Long-term debt
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|
|||
Operating lease liabilities
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—
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|
|||
Other liabilities
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|
|||
Total liabilities
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|
|||
Commitments and contingencies
|
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|
|||||
Stockholders’ equity:
|
|||||||
Preferred stock ($0.01 par value; 1,000 shares authorized; none issued and outstanding)
|
|
|
|
|
|||
Common stock ($0.01 par value; 200,000 shares authorized, 88,857 shares issued and 29,082 and 28,944 shares outstanding at March 31, 2020 and September 30, 2019, respectively)
|
|
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|
|||
Additional paid-in-capital
|
|
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|
|||
Treasury stock, at cost (59,775 and 59,913 shares at March 31, 2020 and September 30, 2019, respectively)
|
(
|
)
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(
|
)
|
|||
Retained earnings
|
|
|
|
|
|||
Accumulated other comprehensive loss
|
(
|
)
|
(
|
)
|
|||
Total stockholders’ equity
|
|
|
|
|
|||
Total liabilities and stockholders’ equity
|
$
|
|
|
$
|
|
|
|
Quarter Ended March 31,
|
Six Months Ended March 31,
|
|||||||||||||
|
2020
|
2019
|
2020
|
2019
|
|||||||||||
|
(In thousands, except per share data)
|
||||||||||||||
Revenues:
|
|||||||||||||||
Transactional and maintenance
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|||
Professional services
|
|
|
|
|
|
|
|
|
|||||||
License
|
|
|
|
|
|
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|
|||||||
Total revenues
|
|
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|
|||||||
Operating expenses:
|
|||||||||||||||
Cost of revenues
|
|
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|
|||||||
Research and development
|
|
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|
|||||||
Selling, general and administrative
|
|
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|
|||||||
Amortization of intangible assets
|
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|
|||||||
Restructuring and acquisition-related
|
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|
|
|
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|
|||||||
Total operating expenses
|
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|
|||||||
Operating income
|
|
|
|
|
|
|
|
|
|||||||
Interest expense, net
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||
Other income (expense), net
|
(
|
)
|
|
|
(
|
)
|
(
|
)
|
|||||||
Income before income taxes
|
|
|
|
|
|
|
|
|
|||||||
Income tax provision (benefit)
|
|
|
|
|
(
|
)
|
|
|
|||||||
Net income
|
|
|
|
|
|
|
|
|
|||||||
Other comprehensive gain (loss):
|
|||||||||||||||
Foreign currency translation adjustments
|
(
|
)
|
|
|
(
|
)
|
(
|
)
|
|||||||
Comprehensive income
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|||
Earnings per share:
|
|||||||||||||||
Basic
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|||
Diluted
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|||
Shares used in computing earnings per share:
|
|||||||||||||||
Basic
|
|
|
|
|
|
|
|
|
|||||||
Diluted
|
|
|
|
|
|
|
|
|
Common Stock
|
Additional
Paid-in-Capital |
Treasury Stock
|
Retained Earnings
|
Accumulated Other
Comprehensive Loss
|
Total
Stockholders’ Equity
|
|||||||||||||||||||||
(In thousands)
|
Shares
|
Par Value
|
||||||||||||||||||||||||
Balance at December 31, 2019
|
|
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
||||||
Share-based compensation
|
—
|
|
—
|
|
|
|
—
|
|
—
|
|
—
|
|
|
|
||||||||||||
Issuance of treasury stock under employee stock plans
|
|
|
|
|
(
|
)
|
|
|
—
|
|
—
|
|
|
|
||||||||||||
Repurchases of common stock
|
(
|
)
|
(
|
)
|
—
|
|
(
|
)
|
—
|
|
—
|
|
(
|
)
|
||||||||||||
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
|
|
||||||||||||
Foreign currency translation adjustments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(
|
)
|
(
|
)
|
||||||||||||
Balance at March 31, 2020
|
|
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
||||||
Common Stock
|
Additional
Paid-in-Capital |
Treasury Stock
|
Retained Earnings
|
Accumulated Other
Comprehensive Loss
|
Total
Stockholders’ Equity
|
|||||||||||||||||||||
(In thousands)
|
Shares
|
Par Value
|
||||||||||||||||||||||||
Balance at December 31, 2018
|
|
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
||||||
Share-based compensation
|
—
|
|
—
|
|
|
|
—
|
|
—
|
|
—
|
|
|
|
||||||||||||
Issuance of treasury stock under employee stock plans
|
|
|
|
|
(
|
)
|
|
|
—
|
|
—
|
|
(
|
)
|
||||||||||||
Repurchases of common stock
|
(
|
)
|
(
|
)
|
—
|
|
(
|
)
|
—
|
|
—
|
|
(
|
)
|
||||||||||||
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
|
|
||||||||||||
Foreign currency translation adjustments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
||||||||||||
Balance at March 31, 2019
|
|
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
||||||
Common Stock
|
Additional
Paid-in-Capital |
Treasury Stock
|
Retained Earnings
|
Accumulated Other
Comprehensive Loss
|
Total
Stockholders’ Equity
|
|||||||||||||||||||||
(In thousands)
|
Shares
|
Par Value
|
||||||||||||||||||||||||
Balance at September 30, 2019
|
|
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
||||||
Share-based compensation
|
—
|
|
—
|
|
|
|
—
|
|
—
|
|
—
|
|
|
|
||||||||||||
Issuance of treasury stock under employee stock plans
|
|
|
|
|
(
|
)
|
|
|
—
|
|
—
|
|
(
|
)
|
||||||||||||
Repurchases of common stock
|
(
|
)
|
(
|
)
|
—
|
|
(
|
)
|
—
|
|
—
|
|
(
|
)
|
||||||||||||
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
|
|
||||||||||||
Foreign currency translation adjustments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(
|
)
|
(
|
)
|
||||||||||||
Balance at March 31, 2020
|
|
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
||||||
Common Stock
|
Additional
Paid-in-Capital |
Treasury Stock
|
Retained Earnings
|
Accumulated Other
Comprehensive Loss
|
Total
Stockholders’ Equity
|
|||||||||||||||||||||
(In thousands)
|
Shares
|
Par Value
|
||||||||||||||||||||||||
Balance at September 30, 2018 (As Adjusted)
|
|
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
||||||
Share-based compensation
|
—
|
|
—
|
|
|
|
—
|
|
—
|
|
—
|
|
|
|
||||||||||||
Issuance of treasury stock under employee stock plans
|
|
|
|
|
(
|
)
|
|
|
—
|
|
—
|
|
(
|
)
|
||||||||||||
Repurchases of common stock
|
(
|
)
|
(
|
)
|
—
|
|
(
|
)
|
—
|
|
—
|
|
(
|
)
|
||||||||||||
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
|
|
||||||||||||
Foreign currency translation adjustments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(
|
)
|
(
|
)
|
||||||||||||
Balance at March 31, 2019
|
|
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
|
Six Months Ended March 31,
|
||||||
|
2020
|
2019
|
|||||
|
(In thousands)
|
||||||
Cash flows from operating activities:
|
|||||||
Net income
|
$
|
|
|
$
|
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|||||||
Depreciation and amortization
|
|
|
|
|
|||
Share-based compensation
|
|
|
|
|
|||
Deferred income taxes
|
(
|
)
|
|
|
|||
Net loss on marketable securities
|
|
|
|
|
|||
Non-cash operating lease costs
|
|
|
|
|
|||
Provision for doubtful accounts, net
|
|
|
|
|
|||
Net (gain) loss on sales of property and equipment
|
|
|
(
|
)
|
|||
Changes in operating assets and liabilities:
|
|||||||
Accounts receivable
|
(
|
)
|
(
|
)
|
|||
Prepaid expenses and other assets
|
(
|
)
|
(
|
)
|
|||
Accounts payable
|
|
|
(
|
)
|
|||
Accrued compensation and employee benefits
|
(
|
)
|
(
|
)
|
|||
Other liabilities
|
(
|
)
|
(
|
)
|
|||
Deferred revenue
|
|
|
|
|
|||
Net cash provided by operating activities
|
|
|
|
|
|||
Cash flows from investing activities:
|
|||||||
Purchases of property and equipment
|
(
|
)
|
(
|
)
|
|||
Proceeds from sales of marketable securities
|
|
|
|
|
|||
Purchases of marketable securities
|
(
|
)
|
(
|
)
|
|||
Distribution from other investments
|
|
|
|
|
|||
Net cash used in investing activities
|
(
|
)
|
(
|
)
|
|||
Cash flows from financing activities:
|
|||||||
Proceeds from revolving line of credit
|
|
|
|
|
|||
Payments on revolving line of credit
|
(
|
)
|
(
|
)
|
|||
Proceeds from issuance of senior notes
|
|
|
|
|
|||
Payments on debt issuance costs
|
(
|
)
|
|
|
|||
Payments on finance leases
|
(
|
)
|
|
|
|||
Proceeds from issuance of treasury stock under employee stock plans
|
|
|
|
|
|||
Taxes paid related to net share settlement of equity awards
|
(
|
)
|
(
|
)
|
|||
Repurchases of common stock
|
(
|
)
|
(
|
)
|
|||
Net cash used in financing activities
|
(
|
)
|
(
|
)
|
|||
Effect of exchange rate changes on cash
|
(
|
)
|
|
|
|||
Increase (decrease) in cash and cash equivalents
|
|
|
(
|
)
|
|||
Cash and cash equivalents, beginning of period
|
|
|
|
|
|||
Cash and cash equivalents, end of period
|
$
|
|
|
$
|
|
|
|
Supplemental disclosures of cash flow information:
|
|||||||
Cash paid for income taxes, net of refunds
|
$
|
|
|
$
|
|
|
|
Cash paid for interest
|
$
|
|
|
$
|
|
|
|
Supplemental disclosures of non-cash investing and financing activities:
|
|||||||
Purchase of property and equipment included in accounts payable
|
$
|
|
|
$
|
|
|
|
Unsettled repurchases of common stock
|
$
|
|
|
$
|
|
|
|
Finance lease obligations incurred
|
$
|
|
|
$
|
|
|
•
|
Level 1 - uses unadjusted quoted prices that are available in active markets for identical assets or liabilities. Our Level 1 assets are comprised of money market funds and certain marketable securities. We do not have any liabilities that are valued using inputs identified under a Level 1 hierarchy as of
March 31, 2020
and
September 30, 2019
.
|
•
|
Level 2 - uses inputs other than quoted prices included in Level 1 that are either directly or indirectly observable through correlation with market data. These include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs to valuation models or other pricing methodologies that do not require significant judgment because the inputs used in the model, such as interest rates and volatility, can be corroborated by readily observable market data. We do not have any assets that are valued using inputs identified under a Level 2 hierarchy as of
March 31, 2020
and
September 30, 2019
. We measure the fair value of the Senior Notes (as defined in Note 7) based on Level 2 inputs, which include quoted market prices and interest rate spreads of similar securities.
|
•
|
Level 3 - uses one or more significant inputs that are unobservable and supported by little or no market activity, and that reflect the use of significant management judgment. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, and significant management judgment or estimation. We do not have any assets or liabilities that are valued using inputs identified under a Level 3 hierarchy as of
March 31, 2020
and
September 30, 2019
.
|
March 31, 2020
|
Active Markets for
Identical Instruments
(Level 1)
|
Fair Value as of March 31, 2020
|
|||||
(In thousands)
|
|||||||
Assets:
|
|||||||
Cash equivalents (1)
|
$
|
|
|
$
|
|
|
|
Marketable securities (2)
|
|
|
|
|
|||
Total
|
$
|
|
|
$
|
|
|
|
September 30, 2019
|
Active Markets for
Identical Instruments (Level 1) |
Fair Value as of September 30, 2019
|
|||||
(In thousands)
|
|||||||
Assets:
|
|||||||
Cash equivalents (1)
|
$
|
|
|
$
|
|
|
|
Marketable securities (2)
|
|
|
|
|
|||
Total
|
$
|
|
|
$
|
|
|
(1)
|
Included in cash and cash equivalents on our condensed consolidated balance sheets at
March 31, 2020
and
September 30, 2019
. Not included in these tables are cash deposits of
$
|
(2)
|
Represents securities held under a supplemental retirement and savings plan for senior management employees, which are distributed upon termination or retirement of the employees. Included in marketable securities on our condensed consolidated balance sheets at
March 31, 2020
and
September 30, 2019
.
|
|
March 31, 2020
|
||||||||||
|
Contract Amount
|
Fair Value
|
|||||||||
|
Foreign
Currency
|
USD
|
USD
|
||||||||
|
(In thousands)
|
||||||||||
Sell foreign currency:
|
|||||||||||
Euro (EUR)
|
EUR
|
|
|
$
|
|
|
$
|
|
|
||
Buy foreign currency:
|
|||||||||||
British pound (GBP)
|
GBP
|
|
|
$
|
|
|
$
|
|
|
||
S |