Citrix Reports Third Quarter Earnings; Reports Revenue of $144 Million; Year-Over-Year Revenue Growth of 21%; Earnings Per Share of $0.18, Up 89% Over Comparable Period Last Year.Business Editors/High-Tech Writers 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.--(BUSINESS WIRE)--Oct. 22, 2003 Adjusted Earnings Per Share of $0.19, Up 94% 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 results for the third quarter ended September September: see month. 30, 2003. Financial Results Revenues for the three months ended September 30, 2003 were $144.3 million compared to $118.9 million in the same period of the prior year. Net income was $31.0 million for the third quarter of 2003, or $0.18 per share, as compared to $16.8 million, or $0.10 per share, in the comparable period of the prior year. Net income, adjusted to exclude the effect of 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, was $32.8 million for the third quarter of 2003, or $0.19 per share, as compared to $17.4 million, or $0.10 per share, in the comparable period of the prior year. "We had a solid quarter, and 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 quite pleased with our performance," 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 (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. . "We saw strong demand from large enterprises, which contributed to the strength in our top-line and an increase in deferred revenue. "Overall, I believe our results demonstrate that we are executing well in selling to large enterprises, and that our customers see great value in access infrastructure for the 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 enterprise." Financial Highlights -- Total revenue grew about 21% over the comparable period last year. -- Deferred revenue balance grew by $16.4 million, about 13%, during the quarter to approximately $144.6 million. -- Operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: was 26.8% for the quarter; adjusted operating margin was 28.8%, excluding the effect of amortization of intangible assets primarily relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc business combinations. -- 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 was approximately $72.6 million for the quarter. -- Cash and investments totaled approximately $810.7 million at the end of the quarter. -- During the quarter, the company repurchased about 1.9 million shares at an average net price per share of $19.79. Global Branding and Advertising Campaign In September, Citrix launched a $14 million global advertising campaign designed to raise the company's overall visibility and build the Citrix brand as the leading provider of access infrastructure for the on-demand enterprise. The campaign marks the first global branding initiative in Citrix history and builds on the company's introduction of a complete suite of access infrastructure software. Leveraging the strong loyalty Citrix has secured from its installed base of more than 120,000 customers globally, the company enlisted en·list·ed adj. Of, relating to, or being a member of a military rank below a commissioned officer or warrant officer. enlisted Adjective the help of customer CIOs to participate in the campaign and explain how Citrix software helps grow their businesses. Among the customer participants in the integrated campaign, which comprises print, online, billboard and radio advertising, are Delta Air Lines, AutoNation AutoNation is a chain of auto dealerships founded by entrepreneur H. Wayne Huizenga,[2] also founder of Blockbuster and Waste Management.[3] The company, founded in 1996, is headquartered in Fort Lauderdale. Company operations AutoNation, Inc. and smart, a brand of DaimlerChrysler. Customer Highlights Citrix closed several large deals during the quarter in the financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , insurance, telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. , medical, government and technology sectors. In the financial services sector, Citrix signed a deal with Bankdata, one of the leading suppliers of banking information technology in Denmark Denmark (dĕn`märk), Dan. Danmark, officially Kingdom of Denmark, kingdom (2005 est. pop. 5,432,000), 16,629 sq mi (43,069 sq km), N Europe. . Bankdata will implement Citrix(R) MetaFrame See Citrix Presentation Server. (R) Presentation Server for Windows(R), Enterprise Edition, to centralize cen·tral·ize v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es v.tr. 1. To draw into or toward a center; consolidate. 2. information technology management and deploy applications more quickly to around 4,000 users at more than 100 locations. Product and Alliance Highlights -- In September, Citrix shipped MetaFrame 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. , the most efficient single sign-on An identification system that lets users log into multiple Web sites on the Internet with one username and password. Single sign-on systems are also used within an enterprise, enabling users to access all authorized resources in the local network using the same username and password. and password security solution for accessing password-protected applications. MetaFrame Password Manager is a key part of the Citrix MetaFrame Access Suite, which gives users a single point of access to enterprise applications and information on demand anywhere, anytime, using any device, over any connection. Citrix also announced broad support for the new product from customers including Rockford Rockford, industrial city (1990 pop. 139,426), seat of Winnebago co., N Ill., on the Rock River near the Wis. line; inc. 1839 with the merger of two settlements on opposite sides of the river. Health System and Pressley Ridge, and partners including RSA (1) (Rural Service Area) See MSA. (2) (Rivest-Shamir-Adleman) A highly secure cryptography method by RSA Security, Inc., Bedford, MA (www.rsa.com), a division of EMC Corporation since 2006. It uses a two-part key. , SAFLINK Corporation and Secure Computing computing - computer . -- In other product news, Citrix announced international versions of MetaFrame Secure Access Manager for French, German and Spanish Spanish, river, c.150 mi (240 km) long, issuing from Spanish Lake, S Ont., Canada, NW of Sudbury, and flowing generally S through Biskotasi and Agnew lakes to Lake Huron opposite Manitoulin island. There are several hydroelectric stations on the river. customers. MetaFrame Secure Access Manager is the most cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. way to get secure, remote, single-point access over the Web to any enterprise information resource, including client/server An architecture in which the user's PC (the client) is the requesting machine and the server is the supplying machine, both of which are connected via a local area network (LAN) or wide area network (WAN). , legacy and Web applications, Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the and intranet sites, streaming media See streaming audio, streaming video and digital media hub. , documents, network file services, and XML-based Web services (1) Loosely, any online service delivered over the Web. Such usage appears in articles from non-technical sources, but not in IT-oriented publications, because definition #2 below describes the correct use of the term. . -- At Citrix iForum(TM) 2003 held October October: see month. 13 - 15, Citrix announced that: -- It was named by Microsoft (Microsoft Corporation, Redmond, WA, www.microsoft.com) The most successful and influential software company. Microsoft's software and Intel's hardware pioneered the PC and revolutionized the computer industry. as its first ever Global Independent Software Vendor Partner of the Year for delivering the best customer solutions as a Microsoft Global Gold Certified See certification. Partner for Software Products; -- It has signed a systems integration agreement with IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) , which will allow IBM sales personnel to offer the Citrix MetaFrame Access Suite of products to IBM eServer This article is about the IBM family of computer servers. For the open access electronic text archive, see EServer.org. IBM eServer was a family of computer servers from IBM Corporation. (R) xSeries The renaming of IBM's Intel-based servers under the eServer brand. A Linux or Windows-based server is an xSeries eServer. Prices for the xSeries ranged from $10,000 to $50,000 in 2000, when the name change occurred. See IBM server series and Netfinity. customers; and, -- Customers now have the option to purchase the entire Citrix MetaFrame Access Suite as a bundle package for one price. Business Outlook Citrix management offers the following guidance for the quarter and year ending December December: see month. 31, 2003: -- Revenue is expected to be in the range of $147 million to $157 million for the quarter ending December 31, 2003; for the full year 2003, revenue is expected to be in the range of $577 million to $587 million. -- Earnings per share is expected to be in the range of $0.17 to $0.19 for the quarter ending December 31, 2003; for the full year 2003, earnings per share is expected to be in the range of $0.70 to $0.72. -- Adjusted earnings per share, which excludes the effect of amortization of intangible assets primarily related to business combinations, is expected to be in the range of $0.18 to $0.20 for the quarter ending December 31, 2003; for the full year 2003, adjusted earnings per share is expected to be in the range of $0.74 to $0.76. 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. 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 through November November: see month. 6, 2003. In addition, an audio replay of the conference call will be available through October 29, 2003, by dialing 800/642-1687 or 706/645-9291 (passcode required: 3090750). About Citrix Citrix Systems, Inc. (Nasdaq:CTXS) is the global leader in access infrastructure solutions and the most trusted name in enterprise access. Citrix software enables people in businesses, government agencies, and educational institutions to securely, easily and instantly access the on-demand enterprise, from anywhere, anytime, using any device, over any connection. Nearly 50 million people in more than 120,000 organizations rely on the Citrix MetaFrame Access Suite to do their jobs. Citrix customers include 100% of the Fortune 100 companies, 99% of the Fortune 500, and 92% of the Fortune Global 500. Based in Fort Lauderdale, Florida Fort Lauderdale, known as the "Venice of America" due to its expansive and intricate canal system, is a city in Broward County, Florida, United States. The city's population is described as metropolitan, where diverse culture is commonplace. According to 2006 U.S. , Citrix has offices in 22 countries, and more than 7,000 channel and alliance partners in more than 100 countries. For more information visit 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 Business Outlook and in the reconciliation of non-GAAP measures to comparable U.S. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). measures concerning management's forecast of revenue and earnings per share, statements regarding the company's existing and new products, the potential size of product markets, and statements concerning internal operations, marketing, management's plans, objectives and strategies, and management's assessment of market factors, 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 foreign operations and markets; the success of acquisitions; the company's success in expanding into new geographic and vertical markets; the company's ability to maintain and expand its core business in large enterprise accounts; the size, timing and recognition of revenue from significant orders and other revenue recognition changes, including increases in deferred revenue; 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; increased competition, including potential competition from Microsoft and other companies; changes in the company's pricing policies or those of its competitors; 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 and retention of qualified employees, as well as risks of downturns in economic conditions generally; political and social turmoil; and the uncertainty in and the effects of a weak IT spending environment which has impacted the overall demand for software and related services; 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 This press release contains non-GAAP financial measures as defined by SEC Regulation G. These non-GAAP financial measures should not be construed as superior to GAAP financial measures. The GAAP financial measure most directly comparable to each non-GAAP financial measure used or discussed in this press release (if available) 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), MetaFrame(R) and Citrix iForum(TM) are registered trademarks or trademarks of Citrix Systems, Inc. in the U.S. and other countries. Microsoft(R) and Windows(R) are registered trademarks of Microsoft Corporation (company) Microsoft Corporation - The biggest supplier of operating systems and other software for IBM PC compatibles. Software products include MS-DOS, Microsoft Windows, Windows NT, Microsoft Access, LAN Manager, MS Client, SQL Server, Open Data Base Connectivity (ODBC), MS Mail, in the U.S. and/or 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 Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
-------------------------------------
License revenue $133,475 $108,423 $397,349 $332,175
Technical services revenue 10,866 10,475 33,532 32,407
Royalty revenue - - - 14,082
-------------------------------------
Total net revenues 144,341 118,898 430,881 378,664
Cost of revenues 5,350 4,375 15,117 13,885
-------------------------------------
Gross margin 138,991 114,523 415,764 364,779
Operating expenses:
Research and development 15,656 17,146 47,025 53,054
Sales, marketing and support 61,331 56,291 183,592 178,902
General and administrative 20,420 21,072 64,464 65,649
Amortization of intangible
assets 2,868 2,646 8,541 8,588
-------------------------------------
Total operating expenses 100,275 97,155 303,622 306,193
Income from operations 38,716 17,368 112,142 58,586
Other income, net 1,021 1,944 4,099 5,359
-------------------------------------
Income before income taxes 39,737 19,312 116,241 63,945
Income taxes 8,742 2,497 25,573 9,592
-------------------------------------
Net income $30,995 $16,815 $90,668 $54,353
=====================================
Earnings per common share -
diluted $0.18 $0.10 $0.53 $0.30
=====================================
Weighted average shares
outstanding - diluted 171,111 175,891 171,135 181,503
=====================================
Adjusted net income $32,806 $17,422 $96,082 $60,202
=====================================
Adjusted net income per share -
diluted $0.19 $0.10 $0.56 $0.33
=====================================
Note: The above presentation of adjusted net income and adjusted earnings per share has been adjusted to exclude the effects of amortization of core technology and other intangible assets primarily related to business combinations of $2.9 million and $2.6 million for the three months ended September 30, 2003 and 2002, respectively, and $8.5 million and $8.6 million for the nine months ended September 30, 2003 and 2002, respectively.
Condensed Consolidated Balance Sheets
(In thousands - unaudited)
September 30, December 31,
2003 2002
-------------------------
ASSETS:
Cash and short-term investments $515,077 $219,913
Accounts receivable, net 85,563 69,471
Other current assets 90,690 85,915
-------------------------
Total current assets 691,330 375,299
Long-term investments 295,607 499,491
Property and equipment, net 66,927 76,534
Goodwill and other intangible assets, net 174,768 183,213
Other long-term assets 15,184 26,994
-------------------------
Total assets $1,243,816 $1,161,531
=========================
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable and accrued expenses $102,638 $92,926
Current portion of deferred revenue 133,768 95,963
Convertible subordinated debentures 346,876 --
-------------------------
Total current liabilities 583,282 188,889
Long-term portion of deferred revenue 10,797 8,028
Convertible subordinated debentures -- 333,549
Put warrants and common stock
subject to repurchase -- 16,475
-------------------------
Stockholders' equity 649,737 614,590
-------------------------
Total liabilities and
stockholders' equity $1,243,816 $1,161,531
=========================
Reconciliation of Non-GAAP Financial Measures to Comparable U.S. GAAP Measures (Unaudited) We utilize certain non-GAAP financial measures to evaluate our performance. 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 better compare Citrix's most recent results of operations against financial models prepared by the company's investors and securities analysts. 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. ("U.S. 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 U.S. GAAP measure for the respective periods (in thousands, except for per share information and percentages):
Three Months Ended September 30, 2003
-------------------------------------
Earnings
Per
Operating Operating Operating Net Share - Tax
Expenses Income Margin Income Diluted Rate
--------- --------- --------- ------ ------- ----
U.S. GAAP measure $100,275 $38,716 26.8% $30,995 $0.18 22.0%
Adjustments to
exclude the
effects of
amortization 2,868 2,868 2.0 1,811 0.01 1.0
----- ----- --- ----- ---- ---
Adjusted figures $97,407 $41,584 28.8% $32,806 $0.19 23.0%
======= ======= ===== ======= ===== =====
Three Months Ended September 30, 2002
-------------------------------------
Earnings
Per
Operating Operating Operating Net Share - Tax
Expenses Income Margin Income Diluted Rate
--------- --------- --------- ------ ------- ----
U.S. GAAP measure $97,155 $17,368 14.6% $16,815 $0.10 12.9%
Adjustments to
exclude the
effects of
amortization 2,646 2,646 2.2 607 0.00 7.8
----- ----- --- ----- ---- ---
Adjusted figures $94,509 $20,014 16.8% $17,422 $0.10 20.7%
======= ======= ===== ======= ===== =====
Nine Months Ended September 30, 2003
------------------------------------
Net Earnings Per
Income Share - Diluted
-------------------------
U.S. GAAP measure $90,668 $0.53
Adjustments to exclude the effects
of amortization 5,414 0.03
------- -----
Adjusted figures $96,082 $0.56
======= =====
Nine Months Ended September 30, 2002
------------------------------------
Net Earnings Per
Income Share - Diluted
-------------------------
U.S. GAAP measure $54,353 $0.30
Adjustments to exclude the effects
of amortization 5,849 0.03
------- -----
Adjusted figures $60,202 $0.33
======= =====
Forward-looking Guidance for the Three Months
Ended December 31, 2003
---------------------------------------------------
Earnings Per Share
Range - Diluted
---------------------
U.S. GAAP measure $0.17 to $0.19
Adjustments to exclude the
effects of amortization 0.01
----
Adjusted figures $0.18 to $0.20
==============
Forward-looking Guidance for the 12 Months Ended
December 31, 2003
---------------------------------------------------
Earnings Per Share
Range - Diluted
---------------------
U.S. GAAP measure $0.70 to $0.72
Adjustments to exclude the
effects of amortization 0.04
----
Adjusted figures $0.74 to $0.76
==============
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