Citrix Reports Second Quarter Earnings Results; Year-over-year Quarterly Revenue Growth of 30%; GAAP Diluted Earnings Per Share of $0.24 Versus $0.16 Over Comparable Period Last Year.FORT LAUDERDALE Fort Lauderdale (lô`dərdāl), residential, commercial, and resort city (1990 pop. 149,377), seat of Broward co., SE Fla., on the Atlantic coast; settled around a fort built (c.1837) in the Seminole War, inc. 1911. , Fla. -- Non-GAAP Diluted Earnings Per Share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $0.33 Versus $0.27 Over Comparable Period Last Year Citrix Systems Citrix Systems' (NASDAQ: CTXS) is an American technology company, based in Fort Lauderdale, Florida, with subsidiary operations in California and Massachusetts, with additional development centers in Australia, India and the UK. , Inc. (Nasdaq:CTXS CTXS Citrix Systems (NASDAQ stock ticker symbol) ), the global leader in access infrastructure solutions, today reported financial results for the second quarter of fiscal 2006 ended June June: see month. 30, 2006. Financial Results In the second quarter of fiscal 2006, Citrix (Citrix Systems, Inc., Ft. Lauderdale, FL, www.citrix.com) The leader in access infrastructure solutions, which includes network access, single sign-on, VPN capabilities, presentation services, remote control and remote support applications. achieved revenue of $275 million, compared to $211 million in the second quarter of fiscal 2005, representing 30 percent revenue growth. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). Results Net income for the second quarter of fiscal 2006 was $46 million, or $0.24 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to $28 million, or $0.16 per diluted share, for the second quarter of fiscal 2005. Non-GAAP Results Non-GAAP net income, in the second quarter of 2006 increased 34 percent to $64 million, or $0.33 per diluted share, compared to $48 million, or $0.27 per diluted share, in the comparable period last year. Non-GAAP net income excludes the effects of the amortization of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. primarily related to business combinations, stock-based compensation expenses and the tax effects related to those items. In addition, adjusted results for the second quarter of 2005 exclude a net tax provision recorded in anticipation The performance of an act or obligation before it is legally due. In patent law, the publication of the existence of an invention that has already been patented or has a patent pending, of repatriating certain foreign earnings pursuant to the American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Jobs Creation Act of 2004 (AJCA AJCA American Jobs Creation Act of 2004 (US) AJCA American Jersey Cattle Association AJCA Association of Juvenile Compact Administrators AJCA All Japan Cooks Association AJCA Alabama Junior Cattlemen’s Association ). "I'm I'm Contraction of I am. Our Living Language Speakers of some scattered varieties of American English sometimes use I'm instead of I've or I have in present perfect constructions, as in pleased with our second quarter results," said Mark Templeton Mark Templeton (b. 1975) is Principal Trombone of the London Philharmonic Orchestra. Mark studied at the Guildhall School of Music and Drama 1994-1998 with Eric Crees, Simon Wills and Peter Gane. During this time he became principal of the Gustav Mahler Youth Orchestra. , president and chief executive officer for Citrix. "We saw across-the-board strength in our product portfolio and in our geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. segments. We are well positioned for the second half of 2006 as we continue to drive our access infrastructure strategy." Q2 Financial Highlights In reviewing the second quarter results of 2006, compared to the second quarter of 2005: --Revenue grew in the America's region by 36 percent, the EMEA (Europe, Middle East, Africa) Refers to that region of the world. For example, one might see products packaged differently for the UK, EMEA and Asia Pacific markets. region by 20 percent and the Pacific region by 24 percent; --Product license revenue increased 28 percent; --Online services contributed $35 million of revenue, up 47 percent; --Revenue from license updates grew 24 percent; and --Technical services revenue, which is comprised of consulting, education and technical support, grew 52 percent. Other financial highlights included: --Deferred revenue totaled $311 million, compared to $243 million on June 30, 2005; --Operating margin was 19 percent for the quarter; non-GAAP operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: was 27 percent for the quarter, excluding the effects of the amortization of intangible assets primarily related to business combinations, stock-based compensation expenses and the tax effects related to those items; and --Cash flow from operations was $60 million, compared to $65 million in the second quarter of 2005. This brings total twelve month trailing cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses to approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $310 million. Financial Outlook for Third Fiscal Quarter 2006 Citrix management offers the following guidance for the third fiscal quarter 2006 ending September September: see month. 30, 2006: --Net revenue is expected to be in the range of $275 million to $280 million, compared to $227 million in the third quarter of 2005. --GAAP diluted earnings per share is expected to be in the range of $0.24 to $0.26, compared to $0.23 in the third quarter of 2005. Non-GAAP diluted earnings per share is expected to be in the range of $0.33 to $0.34, excluding $0.03 related to the effects of amortization of intangible assets primarily related to business combinations and $0.05 to $0.06 related to the effects of stock-based compensation expenses. This compares to $0.29 in the same quarter of the previous year, adjusted to exclude the effects of the amortization of intangible assets primarily related to business combinations, stock-based compensation expenses, the write off of in-process research and development and the tax effects related to those items. The above statements are based on current expectations. These statements are forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. , and actual results may differ materially. Financial Outlook for Fiscal Year 2006 Citrix management offers the following guidance for the fiscal year 2006 ending December December: see month. 31, 2006: --The company expects net revenue to be in the range of $1.105 billion to $1.120 billion, compared to $909 million in fiscal year 2005. --The company expects GAAP diluted earnings per share to be in the range of $1.00 to $1.05, compared to $0.93 in fiscal year 2005. Non-GAAP diluted earnings per share to be in the range of $1.36 to $1.39, excluding $0.14 related to the effects of the amortization of intangible assets primarily related to business combinations and $0.20 to $0.22 related to the effects of stock-based compensation expenses. This compares to $1.17 for fiscal year 2005, when adjusted to exclude the effects of the amortization of intangible assets primarily related to business combinations, stock-based compensation expenses, the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of in process research and development, the related tax effects of these items and the tax provision related to the repatriation Repatriation The process of converting a foreign currency into the currency of one's own country. Notes: If you are American, converting British Pounds back to U.S. dollars is an example of repatriation. of foreign earnings under the AJCA. The above statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. Company, Product and Alliance Highlights During the second quarter of 2006, Citrix announced: --Citrix(R) GoToWebinar(TM), the company's next-generation collaboration Working together on a project. See collaborative software. offering, giving marketing professionals a simple and affordable solution available for conducting online events, such as large sales presentations and marketing events over the Web. --Citrix(R) NetScaler(R) 12000, the new system designed for large-scale large-scale adj. 1. Large in scope or extent. 2. Drawn or made large to show detail. large-scale Adjective 1. wide-ranging or extensive 2. Web applications handling millions of simultaneous users conducting hundreds of thousands of transactions per second In a very generic sense, the term Transactions Per Second refers to the number of atomic actions performed by certain entity per second. In a more restrictied view, the term is usually used by DBMS vendor and user community to refer to the number of database transactions performed . --Citrix(R) GoToMyPC GoToMyPC is a remote control software service that enables the user to operate his or her computer from another computer, via the Internet. Citrix Online, a division of Citrix Systems, produces GoToMyPC. (R) won PC World's 2006 World Class Award for best remote-access software for the fourth consecutive year citing its "unbeatable speed, security and hassle-free approach." --Citrix Password Manager A password manager is software that helps a user organize passwords and PIN codes. The software typically has a local database or files that holds the encrypted password data. (TM) won the prestigious SC Magazine Awards 2006 Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). in the Reader Trust category "Best Password A secret word or code used to serve as a security measure against unauthorized access to data. It is normally managed by the operating system or DBMS. However, the computer can only verify the legitimacy of the password, not the legitimacy of the user. See NCSC. Management."
--The acquisition of privately held Reflectent Re`flect´ent a. 1. Bending or flying back; reflected. 2. Reflecting; as, a reflectent body s>. Software, Inc., provider of one of the industry's most widely deployed solutions to monitor the performance of client-server (programming) client-server - A common form of distributed system in which software is split between server tasks and client tasks. A client sends requests to a server, according to some protocol, asking for information or action, and the server responds. , Web and desktop applications from an end-user (job) end-user - The person who uses a computer application, as opposed to those who developed or support it. The end-user may or may not know anything about computers, how they work, or what to do if something goes wrong. perspective. --The appointment of Asiff Hirji, Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. for TD Ameritrade TD AMERITRADE Holding Corporation (NASDAQ: AMTD) is the owner of TD AMERITRADE Inc., the largest online brokerage in the world in number of online equity trades placed per day. , to its Board of Directors. Conference Call Information Citrix will host a conference call today at 4:45 p.m. ET to discuss its financial results, quarterly highlights and business outlook. The call will include a slide presentation, and participants are encouraged to listen to and view the presentation via webcast at http://www.citrix.com/investors. The conference call may also be accessed by dialing: (888) 799-0519 or (706) 634-0155, using passcode: CITRIX. A replay of the webcast can be viewed by visiting the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of the Citrix corporate website at http://www.citrix.com/investors for approximately 30 days. In addition, an audio replay of the conference call will be available through July July: see month. 21, 2006, by dialing (800) 642-1687 or (706) 645-9291 (passcode required: 2350219). About Citrix Citrix Systems, Inc. (Nasdaq:CTXS) is the global leader and most trusted name in on-demand On-Demand refers to a service or feature which addresses the user's need for instant gratification and immediacy of use. In most cases the value proposition for an on-demand service is wrapped up in the fact that the user or consumer of the service avoids a significant up-front access. More than 180,000 organizations around the world rely on Citrix to provide the best possible access experience to any application for any user. Citrix customers include 100% of the Fortune 100 companies and 98% of the Fortune Global 500, as well as hundreds of thousands of small businesses and individuals. Citrix has approximately 6,200 channel and alliance partners in more than 100 countries. Citrix annual revenues in 2005 were $909 million. Learn more at http://www.citrix.com. For Citrix Investors This release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. which are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of Section 21E of the Securities Exchange Act of 1934. The forward-looking statements in this release do not constitute guarantees of future performance. Investors are cautioned that statements in this press release, which are not strictly historical statements, including, without limitation, statements by management, the statements contained in the Financial Outlook for Third Fiscal Quarter 2006, Financial Outlook for Fiscal Year 2006, and in the reconciliation of non-GAAP financial measures to comparable U.S. GAAP measures concerning management's forecast of revenues and earnings per share, and statements regarding management's plans, objectives and strategies, constitute forward-looking statements. Such forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated by the forward-looking statements, including, without limitation, the success of the company's product lines; the company's product concentration and its ability to develop and commercialize new products and services; the success of investments in its product groups, foreign operations and vertical and geographic markets; the company's ability to successfully integrate the operations and employees of acquired companies, and the possible failure to achieve or maintain anticipated revenues and profits from acquisitions; the company's ability to maintain and expand its core business in large enterprise accounts; the company's ability to attract and retain small sized customers; the size, timing and recognition of revenue from significant orders; the effect of new accounting pronouncements on revenue and expense recognition, including the effects of SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 123R on certain of the company's GAAP financial measures due to the variability of the factors used to estimate the value of stock-based compensation; the company's reliance on and the success of the company's independent distributors and resellers for the marketing and distribution of the company's products and the success of the company's marketing and licensing programs; increased competition; changes in the company's pricing policies or those of its competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. ; management of operations and operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. ; charges in the event of the impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of assets acquired through business combinations and licenses; the management of anticipated future growth and the recruitment recruitment /re·cruit·ment/ (re-krldbomact´ment) 1. the gradual increase to a maximum in a reflex when a stimulus of unaltered intensity is prolonged. 2. and retention of qualified employees; competition and other risks associated with the market for our Web-based access, training and customer assistance products and appliance A stand-alone hardware device or software environment dedicated to a specific task. See hardware appliance and software appliance. products; as well as risks of downturns in economic conditions generally; political and social turmoil; and the uncertainty in the IT spending environment; and other risks detailed in the company's filings with the Securities and Exchange Commission. Citrix assumes no obligation to update any forward-looking information contained in this press release or with respect to the announcements described herein. Use of Non-GAAP Financial Measures In our earnings release, conference call, slide presentation or webcast, we may use or discuss non-GAAP financial measures as defined by SEC Regulation G. The GAAP financial measure most directly comparable to each non-GAAP financial measure used or discussed and a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure are included in this press release after the condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge and can be found on the Investor Relations page of the Citrix corporate Web site at http://www.citrix.com/investors. Citrix(R), NetScaler(R), GoToMyPC(R), Citrix Password Manager(TM) and GoToWebinar(TM) are trademarks of Citrix Systems, Inc. and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. one or more of its subsidiaries, and may be registered in the U.S. Patent and Trademark Office and in other countries. All other trademarks and registered trademarks are property of their respective owners.
CITRIX SYSTEMS, INC.
Condensed Consolidated Statements of Income
(In thousands, except per share data - unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
---------------------------------------
Revenues:
Product licenses $117,799 $91,980 $231,984 $182,042
License updates 99,750 80,455 193,621 157,630
Online services 35,128 23,844 66,766 44,209
Technical services 22,791 14,950 43,095 29,238
---------------------------------------
Total net revenues 275,468 211,229 535,466 413,119
Cost of revenues:
Cost of product license
revenues 8,116 2,277 14,747 3,645
Cost of services revenues 11,421 5,395 21,811 9,910
Amortization of core and
product technology 4,585 3,693 9,586 7,011
---------------------------------------
Total cost of
revenues 24,122 11,365 46,144 20,566
Gross margin 251,346 199,864 489,322 392,553
Operating expenses:
Research and development 38,222 26,402 71,882 51,467
Sales, marketing and
support 117,002 92,035 225,939 186,429
General and administrative 40,796 30,150 79,414 57,561
Amortization of other
intangible assets 4,150 2,214 8,182 4,391
---------------------------------------
Total operating
expenses 200,170 150,801 385,417 299,848
---------------------------------------
Income from operations 51,176 49,063 103,905 92,705
Other income, net 10,340 4,983 16,796 10,071
---------------------------------------
Income before income taxes 61,516 54,046 120,701 102,776
Income taxes 15,066 26,160 29,572 36,330
---------------------------------------
Net income $46,450 $27,886 $91,129 $66,446
=======================================
Earnings per common share -
diluted $0.24 $0.16 $0.48 $0.38
=======================================
Weighted average shares
outstanding - diluted 191,500 175,146 188,762 175,541
=======================================
Adjusted net income $63,831 $47,753 $124,918 $89,819
=======================================
Adjusted earnings per share -
diluted $0.33 $0.27 $0.66 $0.51
=======================================
Note: See accompanying reconciliation of non-GAAP financial measures
to comparable U.S. GAAP measures (unaudited).
CITRIX SYSTEMS, INC.
Condensed Consolidated Balance Sheets
(In thousands - unaudited)
June 30, 2006 December 31, 2005
----------------------------------
ASSETS:
Cash and cash equivalents $344,589 $484,035
Short-term investments 276,244 18,900
Accounts receivable, net 136,175 142,015
Other current assets 105,723 81,507
----------------------------------
Total current assets 862,731 726,457
Restricted cash equivalents and
investments 63,779 63,728
Long-term investments 214,892 51,286
Property and equipment, net 81,314 73,727
Goodwill and other intangible
assets, net 727,059 729,327
Other long-term assets 42,158 37,131
----------------------------------
Total assets $1,991,933 $1,681,656
==================================
LIABILITIES AND
STOCKHOLDERS' EQUITY
Accounts payable and accrued
expenses $160,363 $159,853
Current portion of deferred revenues 290,097 266,223
----------------------------------
Total current liabilities 450,460 426,076
Long-term debt -- 31,000
Long-term portion of deferred
revenues 20,628 19,803
Other liabilities 1,379 1,297
Stockholders' equity 1,519,466 1,203,480
----------------------------------
Total liabilities and
stockholders' equity $1,991,933 $1,681,656
==================================
CITRIX SYSTEMS, INC.
Condensed Consolidated Statement of Cash Flows
(In thousands - unaudited)
Six Months Ended
June 30, 2006
--------------------
OPERATING ACTIVITIES
Net Income $91,129
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization and depreciation 30,425
Stock-based compensation expense 25,631
Provision for accounts receivable allowances 3,174
Other non-cash items 1,019
--------------------
Total adjustments to reconcile net
income to net cash provided by
operating activities 60,249
Changes in operating assets and liabilities,
net of the effects of acquisition:
Accounts receivable 3,578
Prepaid expenses and other current assets (21,340)
Other assets (938)
Deferred tax asset (2,432)
Accounts payable and accrued expenses 788
Deferred revenues 24,374
Other liabilities 57
--------------------
Total changes in operating assets and liabilities,
net of the effects of acquisition 4,087
--------------------
Net cash provided by operating activities 155,465
INVESTING ACTIVITIES
Purchases of available-for-sale investments, net
of proceeds (421,902)
Cash paid for acquisition, net of cash acquired (13,448)
Purchases of property and equipment (21,417)
--------------------
Net cash used in investing activities (456,767)
FINANCING ACTIVITIES
Proceeds from issuance of common stock 196,526
Payments on term loan (31,000)
Excess tax benefit from stock-based compensation 34,634
Cash paid under stock repurchase programs, net of
premiums received (38,304)
--------------------
Net cash provided in financing activities 161,856
--------------------
Change in cash and cash equivalents (139,446)
Cash and cash equivalents at beginning of period 484,035
--------------------
Cash and cash equivalents at end of period $344,589
====================
Reconciliation of Non-GAAP Financial Measures to Comparable U.S. GAAP Measures (Unaudited) We utilize certain non-GAAP financial measures to evaluate our performance and for internal planning and forecasting purposes. We consider these measures important indicators of our success. In addition, Citrix provides these non-GAAP measures of the Company's performance to investors to enable them to, among other things, better compare Citrix's most recent results of operations against financial models prepared by the company's investors and securities analysts, and to provide additional information concerning the impact of business acquisitions on Citrix's results of operations. These measures should not be considered an alternative to measurements required by accounting principles generally accepted in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. ("GAAP") such as net income and earnings per share and should not be considered measures of our liquidity. In addition, our non-GAAP financial measures may not be comparable to similar measures reported by other companies. The following tables reconcile non-GAAP financial measures used in this release to the most comparable GAAP measure for the respective periods (in thousands, except for per share information and percentages):
CITRIX SYSTEMS, INC.
RECONCILIATION OF CONDENSED CONSOLIDATED STATEMENTS OF INCOME
TO THE NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data - unaudited)
Three Months Ended June 30, 2006
--------------------------------
GAAP Adjustments Non-GAAP
--------------------------------
Revenues:
Product licenses $117,799 - $117,799
License updates 99,750 - 99,750
Online services 35,128 - 35,128
Technical services 22,791 - 22,791
--------------------------------
Total net revenues 275,468 - 275,468
--------------------------------
Cost of revenues:
Cost of product license revenues 8,116 - 8,116
Cost of services revenues 11,421 (387) B 11,034
Amortization of core and product
technology 4,585 (4,585) A -
--------------------------------
Total cost of revenues 24,122 (4,972) 19,150
Gross margin 251,346 4,972 256,318
Operating expenses:
Research and development 38,222 (4,723) B 33,499
Sales, marketing and support 117,002 (5,871) B 111,131
General and administrative 40,796 (3,101) B 37,695
Amortization of other intangible
assets 4,150 (4,150) C -
--------------------------------
Total operating expenses 200,170 (17,845) 182,325
--------------------------------
Income from operations 51,176 22,817 73,993
Other income, net 10,340 - 10,340
--------------------------------
Income before income taxes 61,516 22,817 84,333
Income taxes 15,066 5,436 D 20,502
--------------------------------
Net Income $46,450 $17,381 $63,831
================================
Earnings per common share - diluted $0.24 $0.09 $0.33
================================
Weighted average shares outstanding -
diluted 191,500 191,500
================================
Three Months Ended June 30, 2005
--------------------------------
GAAP Adjustments Non-GAAP
--------------------------------
Revenues:
Product licenses $91,980 - $91,980
License updates 80,455 - 80,455
Online services 23,844 - 23,844
Technical services 14,950 - 14,950
--------------------------------
Total net revenues 211,229 - 211,229
--------------------------------
Cost of revenues:
Cost of product license revenues 2,277 - 2,277
Cost of services revenues 5,395 - 5,395
Amortization of core and product
technology 3,693 (3,693) A -
--------------------------------
Total cost of revenues 11,365 (3,693) 7,672
Gross margin 199,864 3,693 203,557
Operating expenses:
Research and development 26,402 - 26,402
Sales, marketing and support 92,035 - 92,035
General and administrative 30,150 (94) B 30,056
Amortization of other intangible
assets 2,214 (2,214) C -
--------------------------------
Total operating expenses 150,801 (2,308) 148,493
--------------------------------
Income from operations 49,063 6,001 55,064
Other income, net 4,983 - 4,983
--------------------------------
Income before income taxes 54,046 6,001 60,047
Income taxes 26,160 (13,866) E 12,294
--------------------------------
Net Income $27,886 $19,867 $47,753
================================
Earnings per common share - diluted $0.16 $0.11 $0.27
================================
Weighted average shares outstanding -
diluted 175,146 175,146
================================
A - To exclude the effects of the amortization of core and product
technology.
B - To exclude the effects of stock-based compensation expenses.
C - To exclude the effects of the amortization of other intangible
assets primarily related to business combinations.
D - To exclude the tax effects of the amortization of core and
product technology, stock-based compensation and the amortization of
other intangible assets primarily related to business combinations.
E - To exclude the tax effects of the amortization of core and
product technology, stock-based compensation expenses, the
amortization of other intangible assets primarily related to business
combinations and the tax provision recorded related to the AJCA.
CITRIX SYSTEMS, INC.
RECONCILIATION OF CONDENSED CONSOLIDATED STATEMENTS OF INCOME
TO THE NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data - unaudited)
Six Months Ended June 30, 2006
--------------------------------
GAAP Adjustments Non-GAAP
--------------------------------
Revenues:
Product licenses $231,984 - $231,984
License updates 193,621 - 193,621
Online services 66,766 - 66,766
Technical services 43,095 - 43,095
--------------------------------
Total net revenues 535,466 - 535,466
--------------------------------
Cost of revenues:
Cost of product license revenues 14,747 - 14,747
Cost of services revenues 21,811 (747) B 21,064
Amortization of core and product
technology 9,586 (9,586) A -
--------------------------------
Total cost of revenues 46,144 (10,333) 35,811
Gross margin 489,322 10,333 499,655
Operating expenses:
Research and development 71,882 (8,380) B 63,502
Sales, marketing and support 225,939 (10,646) B 215,293
General and administrative 79,414 (5,858) B 73,556
Amortization of other intangible
assets 8,182 (8,182) C -
--------------------------------
Total operating expenses 385,417 (33,066) 352,351
--------------------------------
Income from operations 103,905 43,399 147,304
Other income, net 16,796 - 16,796
--------------------------------
Income before income taxes 120,701 43,399 164,100
Income taxes 29,572 9,610 D 39,182
--------------------------------
Net Income $91,129 $33,789 $124,918
================================
Earnings per common share - diluted $0.48 $0.18 $0.66
================================
Weighted average shares outstanding -
diluted 188,762 188,762
================================
Six Months Ended June 30, 2005
--------------------------------
GAAP Adjustments Non-GAAP
--------------------------------
Revenues:
Product licenses $182,042 - $182,042
License updates 157,630 - 157,630
Online services 44,209 - 44,209
Technical services 29,238 - 29,238
--------------------------------
Total net revenues 413,119 - 413,119
--------------------------------
Cost of revenues:
Cost of product license revenues 3,645 - 3,645
Cost of services revenues 9,910 - 9,910
Amortization of core and product
technology 7,011 (7,011) A -
--------------------------------
Total cost of revenues 20,566 (7,011) 13,555
Gross margin 392,553 7,011 399,564
Operating expenses:
Research and development 51,467 - 51,467
Sales, marketing and support 186,429 - 186,429
General and administrative 57,561 (197) B 57,364
Amortization of other intangible
assets 4,391 (4,391) C -
--------------------------------
Total operating expenses 299,848 (4,588) 295,260
--------------------------------
Income from operations 92,705 11,599 104,304
Other income, net 10,071 - 10,071
--------------------------------
Income before income taxes 102,776 11,599 114,375
Income taxes 36,330 (11,774) E 24,556
--------------------------------
Net Income $66,446 $23,373 $89,819
================================
Earnings per common share - diluted $0.38 $0.13 $0.51
================================
Weighted average shares outstanding -
diluted 175,541 175,541
================================
A - To exclude the effects of the amortization of core and product
technology.
B - To exclude the effects of stock-based compensation expenses.
C - To exclude the effects of the amortization of other intangible
assets primarily related to business combinations.
D - To exclude the tax effects of the amortization of core and product
technology, stock-based compensation and the amortization of other
intangible assets primarily related to business combinations.
E - To exclude the tax effects of the amortization of core and product
technology, stock-based compensation expenses, the amortization of
other intangible assets primarily related to business combinations and
the tax provision recorded related to the AJCA.
Forward-looking Guidance
for the Three Months Ended September 30, 2006
---------------------------------------------
Earnings Per Share
Range - Diluted
--------------------
U.S. GAAP measure $0.24 to $0.26
Adjustments to exclude the effects of amortization
of intangible assets $0.03
--------------------
Adjustments to exclude the effects of expenses
related to stock-based compensation $0.05 to $0.06
====================
Non-GAAP figures $0.33 to $0.34
====================
Forward-looking Guidance
for Fiscal Year Ended December 31, 2006
----------------------------------------
Earnings Per Share
Range - Diluted
-------------------
U.S. GAAP measure $1.00 to $1.05
Adjustments to exclude the effects of
amortization of intangible assets $0.14
-------------------
Adjustments to exclude the effects of expenses
related to stock-based compensation $0.20 to $0.22
===================
Non-GAAP figures $1.36 to $1.39
===================
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