Exhibit 99.01
CONTACTS: INVESTORS MEDIA
Linda Fellows, VP Holly Anderson
Intuit Inc. Intuit Inc.
(650) 944-5436 (650) 944-3992
or
Heather McLellan
Intuit Inc.
(650) 944-3501
FOR IMMEDIATE RELEASE
INTUIT'S FIRST-QUARTER 2004 REVENUE GROWS 14 PERCENT
Reaffirms Fiscal 2004 Guidance
MOUNTAIN VIEW, CALIF. - NOV. 19, 2003 -- Intuit Inc. (Nasdaq: INTU) today
announced results for the first quarter of fiscal 2004, which ended Oct. 31,
2003.
"Intuit is off to a good start for the fiscal year with solid
first-quarter results," said Steve Bennett, Intuit's president and chief
executive officer. "Looking forward, we're excited about the busy tax and small
business season ahead, with our new TurboTax and QuickBooks offerings hitting
retail shelves in the next few weeks."
FIRST-QUARTER 2004 HIGHLIGHTS
- Revenue of $242.5 million increased 14 percent from the year-ago
quarter. Growth was driven by strong performance in Intuit's
QuickBooks, Small Business Products and Services and Vertical
Business Management Solutions growth engines. Each of Intuit's
business segments reached or exceeded the revenue targets provided
three months ago.
- Intuit had a pro forma net loss of $47.9 million versus a pro forma
net loss of $44.5 million in the year-ago quarter. The first-quarter
per share results were a pro forma net loss of $0.24 versus a pro
forma net loss of $0.21 in the first quarter of fiscal 2003. Intuit
typically reports a loss in its first quarter when revenue from its
tax business is low but expenses remain constant. Revenue from
Intuit's large TurboTax and professional tax business is highly
seasonal and occurs in the company's second and third quarters.
- On a GAAP (Generally Accepted Accounting Principles) basis, Intuit
had a net loss of $54.0 million, better than a net loss of $54.7
million in the year-ago
quarter. This represents a net loss of $0.27 per diluted share,
versus a net loss of $0.26 per diluted share in the first quarter of
fiscal 2003.
FIRST-QUARTER BUSINESS SEGMENT REVENUE GROWTH
- QUICKBOOKS revenue grew 11 percent year-over-year to $42.8 million.
Intuit reaffirmed guidance for annual QuickBooks revenue growth of
15 percent to 25 percent in fiscal 2004.
- INTUIT'S SMALL BUSINESS PRODUCTS AND SERVICES revenue increased 22
percent over the year-ago quarter to $123.1 million. This unit
includes Intuit's payroll business as well as other non-accounting
products and services. Intuit reaffirmed guidance for annual Small
Business Services revenue growth of 15 percent to 25 percent in
fiscal 2004.
- TURBOTAX revenue of $5.2 million was down 15 percent from
first-quarter 2003, as expected. Intuit reaffirmed guidance for
annual TurboTax revenue growth of 10 percent to 20 percent in fiscal
2004.
- Revenue from Intuit's PROFESSIONAL ACCOUNTING SOLUTIONS (PAS)
business increased 7 percent over the year-ago quarter to $6.9
million. Intuit reaffirmed guidance for annual PAS revenue growth of
7 percent to 12 percent.
- Intuit's VERTICAL BUSINESS MANAGEMENT SOLUTIONS unit had organic
year-over-year revenue growth of 40 percent to $26.3 million. Intuit
reaffirmed guidance for annual Verticals revenue growth of 15
percent to 25 percent in fiscal 2004.
- Revenue from Other Businesses, which includes Quicken and Canada,
was $38.2 million, down 9 percent from the year-ago quarter, as
expected.
FORWARD-LOOKING GUIDANCE FOR SECOND-QUARTER 2004
Intuit provided its guidance for the second quarter of fiscal 2004, which will
end Jan. 31, 2004. Although financial analysts have developed their own
estimates for Intuit's second-quarter performance, Intuit had not previously
issued guidance for the quarter. Second-quarter 2004 guidance is:
- Revenue of $615 million to $640 million, or year-over-year growth of
10 percent to 15 percent.
- Pro forma operating income of $208 million to $218 million, or
year-over-year growth of 13 percent to 18 percent, and GAAP
operating income of $198 million to $208 million.
- Pro forma diluted earnings per share of $0.66 to $0.71, or
year-over-year growth of 8 percent to 16 percent, and GAAP diluted
earnings per share of $0.63 to $0.68.
FORWARD-LOOKING GUIDANCE FOR FISCAL 2004
Intuit reaffirmed its pro forma guidance for fiscal 2004, which ends July 31,
2004. Intuit has recalculated its GAAP operating income and EPS guidance to
reflect the additional amortization of intangibles associated with its October
2003 acquisition of Innovative Merchant Solutions:
- Revenue of $1.85 billion to $1.95 billion, or year-over-year organic
growth of approximately 12 percent to 18 percent.
- Pro forma operating income of $480 million to $510 million, or
growth of approximately 20 percent to 28 percent over fiscal 2003.
On a GAAP basis, operating income is expected to be $443 million to
$473 million, or growth of approximately 29 percent to 38 percent
over fiscal 2003.
- Pro forma diluted earnings per share of $1.57 to $1.67, or growth of
approximately 13 percent to 20 percent over fiscal 2003. Intuit
expects that lower growth in Interest and Other Income will slow the
growth in EPS versus the growth in operating income. On a GAAP
basis, diluted EPS is expected to be $1.46 to $1.56, down
approximately 4 percent to 10 percent from fiscal 2003. Fiscal 2003
GAAP EPS included net income and gains from discontinued operations
of nearly $80 million, or $0.38 per diluted share, which is not
anticipated to recur in fiscal 2004.
ABOUT PRO FORMA, OR NON-GAAP, FINANCIAL MEASURES
Intuit computes its pro forma, or non-GAAP, financial measures using the same
consistent method from quarter to quarter and year to year. Pro forma operating
income excludes acquisition-related charges, such as amortization of intangibles
and impairment charges, as well as amortization of purchased software and
charges for purchased research and development. Pro forma net income and diluted
earnings per share exclude discontinued operations, gains and losses on
marketable securities and other investments, as well as the tax effects of these
transactions. These pro forma financial measures are not prepared in accordance
with generally
accepted accounting principles and likely are different from non-GAAP or pro
forma financial measures used by other companies. The accompanying tables and
fact sheet have more details on Intuit's historical performance and financial
projections, the GAAP financial measures that are most directly comparable to
Intuit's pro forma financial measures, and the reconciliation of pro forma
financial measures to GAAP.
CONFERENCE CALL SCRIPTS, WEBCAST AND CONFERENCE CALL INFORMATION
The script that accompanies the Intuit earnings conference call and a live audio
webcast of the call is available at
http://www.intuit.com/about_intuit/investors/webcast_events.html. The call
begins today at 1:30 p.m. (PST). The replay of the audio webcast will remain on
Intuit's Web site for one week after the conference call. This press release,
including the tables, is available at that site and any other supplemental
financial and statistical information required to be posted, including pro
forma reconciliation, will be posted to that site.
The conference call number is (800) 615-5585 and (706) 679-0331 from
international locations. No reservation or access code is needed. A replay of
the call will be available for one week by calling (800) 642-1687, and (706)
645-9291 for international locations. The reservation number is 3719387.
CAUTIONS ABOUT FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements about future financial
results and other events that have not yet occurred, including guidance about
our expected results for fiscal 2004. Statements about Intuit's "guidance",
statements including words such as "expect," "anticipate" or "believe," and
statements in the future tense, are forward-looking statements. Actual results
may differ materially from our expressed expectations because of risks and
uncertainties about the future. Some of the important factors that could cause
our results to differ are discussed below. More details about these and other
risks are included in our SEC filings and at
http://www.intuit.com/about_intuit/investors/consideration.html. We do not
intend to undertake any duty to update the information in this press release if
any forward-looking statement later turns out to be inaccurate.
- We face increasingly intense competitive pressures in all of our
businesses, which can have unpredictable negative effects on our
revenue, profitability and market position.
- If we do not continue to develop new products and services in a
timely manner, our future financial results will suffer.
- Expanding our product and service offerings creates risk due to the
increasing complexity and decreasing predictability of our revenue
streams.
- We are continuing to implement new information systems to enable us
to execute on our growth strategy, and problems with the design or
implementation of these new systems could interfere with our
business and operations.
- Any significant failure in our technology systems could harm our
operations and financial performance.
- Integrating acquired businesses presents several challenges and we
may not fully realize the intended benefits of our acquisitions if
we do not successfully integrate them with our operations.
- Given the nature of the products and services that we offer, our
revenue and earnings are highly seasonal.
- It is too soon to provide assurances that we will be able to
generate substantial and sustained revenue growth from new products
and services in our QuickBooks, Small Business Products and Services
and Vertical Business Management solutions segments.
- The product activation technology that we introduced into certain
TurboTax desktop products last year could have an adverse impact on
this year's results for our Consumer Tax business.
- Significant delays or problems in developing our Consumer Tax and
Professional Tax products would result in lost revenue and
customers.
- If we fail to maintain reliable and responsive service levels for
our electronic tax offerings, we could lose revenue and customers.
TABLE A1
INTUIT INC.
GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
THREE MONTHS ENDED
------------------
OCTOBER 31,
-----------
2002 2003
---- ----
Net revenue:
Product $ 141,903 $ 160,185
Service 55,604 66,267
Other 15,365 16,076
--------- ---------
Total net revenue 212,872 242,528
--------- ---------
Costs and expenses:
Cost of revenue:
Cost of product revenue 28,712 32,018
Cost of service revenue 36,612 35,836
Cost of other revenue 4,590 6,784
Amortization of purchased software [B] 2,977 3,289
Customer service and technical support 39,630 40,991
Selling and marketing 74,821 91,949
Research and development 64,127 71,331
General and administrative 39,616 43,695
Charge for purchased research and development [C] 7,789 --
Acquisition-related charges [D] 9,455 6,049
--------- ---------
Total costs and expenses 308,329 331,942
--------- ---------
Loss from continuing operations (95,457) (89,414)
Interest and other income 8,786 7,490
Gains on marketable securities and other investments, net 253 147
--------- ---------
Loss from continuing operations before income taxes (86,418) (81,777)
Income tax benefit [E] (25,969) (27,812)
--------- ---------
Net loss from continuing operations (60,449) (53,965)
Discontinued operations, net of income taxes:
Gain on disposal of Quicken Loans discontinued operations [F] 5,556 --
Net income from Intuit KK discontinued operations [G] 208 --
--------- ---------
Net income from discontinued operations 5,764 --
--------- ---------
Net loss $ (54,685) $ (53,965)
========= =========
Basic and diluted net loss per share from continuing operations $ (0.29) $ (0.27)
Basic and diluted net income per share from discontinued operations 0.03 --
--------- ---------
Basic and diluted net loss per share $ (0.26) $ (0.27)
========= =========
Shares used in basic and diluted per share amounts 207,965 198,747
========= =========
TABLE A2
INTUIT INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
THREE MONTHS ENDED
OCTOBER 31,
-----------
2002 2003
---- ----
Net revenue:
Product $ 141,903 $ 160,185
Service 55,604 66,267
Other 15,365 16,076
--------- ---------
Total net revenue 212,872 242,528
--------- ---------
Costs and expenses:
Cost of revenue:
Cost of product revenue 28,712 32,018
Cost of service revenue 36,612 35,836
Cost of other revenue 4,590 6,784
Customer service and technical support 39,630 40,991
Selling and marketing 74,821 91,949
Research and development 64,127 71,331
General and administrative 39,616 43,695
--------- ---------
Total costs and expenses 288,108 322,604
--------- ---------
Loss from operations (75,236) (80,076)
Interest and other income 8,786 7,490
--------- ---------
Loss before income taxes (66,450) (72,586)
Income tax benefit (21,929) (24,679)
--------- ---------
Net loss $ (44,521) $ (47,907)
========= =========
Basic and diluted net loss per share $ (0.21) $ (0.24)
========= =========
Shares used in basic and diluted per share amounts 207,965 198,747
========= =========
THE PRO FORMA, OR NON-GAAP, FINANCIAL MEASURES ABOVE SHOULD NOT BE CONSIDERED AS
A SUBSTITUTE FOR, OR SUPERIOR TO, MEASURES OF FINANCIAL PERFORMANCE PREPARED IN
ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP"). THESE PRO
FORMA FINANCIAL MEASURES ARE NOT PREPARED IN ACCORDANCE WITH GAAP AND LIKELY ARE
DIFFERENT FROM PRO FORMA FINANCIAL MEASURES USED BY OTHER COMPANIES. INTUIT'S
MANAGEMENT BELIEVES THAT THESE PRO FORMA FINANCIAL MEASURES PROVIDE MEANINGFUL
SUPPLEMENTAL INFORMATION REGARDING INTUIT'S CORE OPERATING RESULTS BECAUSE THEY
EXCLUDE AMOUNTS THAT ARE NOT NECESSARILY RELATED TO INTUIT'S CORE OPERATING
RESULTS. INTUIT'S MANAGEMENT REFERS TO THESE PRO FORMA FINANCIAL MEASURES IN
ASSESSING THE PERFORMANCE OF INTUIT'S ONGOING OPERATIONS AND FOR PLANNING AND
FORECASTING IN FUTURE PERIODS. THESE PRO FORMA FINANCIAL MEASURES ALSO
FACILITATE MANAGEMENT'S INTERNAL COMPARISONS TO INTUIT'S HISTORICAL OPERATING
RESULTS. IN ADDITION, INTUIT HAS HISTORICALLY REPORTED SIMILAR PRO FORMA
FINANCIAL MEASURES AND BELIEVES THAT THE INCLUSION OF COMPARATIVE NUMBERS
PROVIDES CONSISTENCY IN ITS FINANCIAL REPORTING. INTUIT COMPUTES PRO FORMA
FINANCIAL MEASURES USING THE SAME CONSISTENT METHOD FROM QUARTER TO QUARTER AND
YEAR TO YEAR. SEE TABLE B FOR A RECONCILIATION OF THESE PRO FORMA FINANCIAL
MEASURES TO GAAP.
Table B
INTUIT INC.
RECONCILIATION OF PRO FORMA FINANCIAL MEASURES
TO GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS [A]-[G]
(In thousands, except per share amounts)
(Unaudited)
THREE MONTHS ENDED THREE MONTHS ENDED
OCTOBER 31, 2002 OCTOBER 31, 2003
-------------------------------------- -------------------------------------
PRO PRO
FORMA ADJMTS [A] GAAP FORMA ADJMTS [A] GAAP
----- ------ ---- ----- ------ ----
Net revenue:
Product $ 141,903 $ -- $ 141,903 $ 160,185 $ -- $ 160,185
Service 55,604 -- 55,604 66,267 -- 66,267
Other 15,365 -- 15,365 16,076 -- 16,076
--------- --------- --------- --------- --------- ---------
Total net revenue 212,872 -- 212,872 242,528 -- 242,528
--------- --------- --------- --------- --------- ---------
Costs and expenses:
Cost of revenue:
Cost of product revenue 28,712 -- 28,712 32,018 -- 32,018
Cost of service revenue 36,612 -- 36,612 35,836 -- 35,836
Cost of other revenue 4,590 -- 4,590 6,784 -- 6,784
Amortization of purchased
software -- 2,977 [B] 2,977 -- 3,289 [B] 3,289
Customer service and technical
support 39,630 -- 39,630 40,991 -- 40,991
Selling and marketing 74,821 -- 74,821 91,949 -- 91,949
Research and development 64,127 -- 64,127 71,331 -- 71,331
General and administrative 39,616 -- 39,616 43,695 -- 43,695
Charge for purchased research and
development -- 7,789 [C] 7,789 -- -- --
Acquisition-related charges -- 9,455 [D] 9,455 -- 6,049 [D] 6,049
--------- --------- --------- --------- --------- ---------
Total costs and expenses 288,108 20,221 308,329 322,604 9,338 331,942
--------- --------- --------- --------- --------- ---------
Loss from continuing operations (75,236) (20,221) (95,457) (80,076) (9,338) (89,414)
Interest and other income 8,786 -- 8,786 7,490 -- 7,490
Gains on marketable securities and
other investments, net -- 253 253 -- 147 147
--------- --------- --------- --------- --------- ---------
Loss from continuing operations
before income taxes (66,450) (19,968) (86,418) (72,586) (9,191) (81,777)
Income tax benefit (21,929) (4,040) (25,969) (24,679) (3,133) (27,812)
--------- --------- --------- --------- --------- ---------
Net loss from continuing operations (44,521) (15,928) (60,449) (47,907) (6,058) (53,965)
Discontinued operations, net of
income taxes:
Gain on disposal of Quicken Loans
discontinued operations -- 5,556 [F] 5,556 -- -- --
Net income from Intuit KK
discontinued operations -- 208 [G] 208 -- -- --
--------- --------- --------- --------- --------- ---------
Net income from discontinued
operations -- 5,764 5,764 -- -- --
--------- --------- --------- --------- --------- ---------
Net loss $ (44,521) $ (10,164) $ (54,685) $ (47,907) $ (6,058) $ (53,965)
========= ========= ========= ========= ========= =========
Basic and diluted net loss per
share from continuing operations $ (0.21) $ (0.29) $ (0.24) $ (0.27)
Basic and diluted net income per
share from discontinued operations -- 0.03 -- --
--------- --------- --------- ---------
Basic and diluted net loss per share $ (0.21) $ (0.26) $ (0.24) $ (0.27)
========= ========= ========= =========
Shares used in basic and diluted
per share amounts 207,965 207,965 198,747 198,747
========= ========= ========= =========
THE PRO FORMA, OR NON-GAAP, FINANCIAL MEASURES ABOVE SHOULD NOT BE CONSIDERED AS
A SUBSTITUTE FOR, OR SUPERIOR TO, MEASURES OF FINANCIAL PERFORMANCE PREPARED IN
ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP"). THESE PRO
FORMA FINANCIAL MEASURES ARE NOT PREPARED IN ACCORDANCE WITH GAAP AND LIKELY ARE
DIFFERENT FROM PRO FORMA FINANCIAL MEASURES USED BY OTHER COMPANIES. INTUIT'S
MANAGEMENT BELIEVES THAT THESE PRO FORMA FINANCIAL MEASURES PROVIDE MEANINGFUL
SUPPLEMENTAL INFORMATION REGARDING INTUIT'S CORE OPERATING RESULTS BECAUSE THEY
EXCLUDE AMOUNTS THAT ARE NOT NECESSARILY RELATED TO INTUIT'S CORE OPERATING
RESULTS. INTUIT'S MANAGEMENT REFERS TO THESE PRO FORMA FINANCIAL MEASURES IN
ASSESSING THE PERFORMANCE OF INTUIT'S ONGOING OPERATIONS AND FOR PLANNING AND
FORECASTING IN FUTURE PERIODS. THESE PRO FORMA FINANCIAL MEASURES ALSO
FACILITATE MANAGEMENT'S INTERNAL COMPARISONS TO INTUIT'S HISTORICAL OPERATING
RESULTS. IN ADDITION, INTUIT HAS HISTORICALLY REPORTED SIMILAR PRO FORMA
FINANCIAL MEASURES AND BELIEVES THAT THE INCLUSION OF COMPARATIVE NUMBERS
PROVIDES CONSISTENCY IN ITS FINANCIAL REPORTING. INTUIT COMPUTES PRO FORMA
FINANCIAL MEASURES USING THE SAME CONSISTENT METHOD FROM QUARTER TO QUARTER AND
YEAR TO YEAR. SEE NOTES [A] THROUGH [G] FOR DETAILS.
NOTES TO TABLES A1 AND B:
[A] Table B reconciles the differences between the pro forma or non-GAAP
financial measures, which are not prepared in accordance with generally
accepted accounting principles ("GAAP"), and the GAAP condensed
consolidated statements of operations for the three months ended October
31, 2002 and 2003. Pro forma operating income (loss) excludes certain cost
and expense line items that are in the GAAP statement of operations. For
example, for the line item "acquisition-related charges," the number in
the GAAP column is subtracted out of the pro forma column in calculating
pro forma operating income or loss. Eliminating cost or expense items
improves pro forma results compared to GAAP results. Pro forma net income
(loss) starts with pro forma operating income or loss and then excludes
certain non-operating gains and losses that are in the GAAP statement of
operations. For example, for the line item "gains on marketable securities
and other investments, net" the number in the GAAP column is taken out of
the pro forma column in calculating pro forma net income or loss.
Eliminating loss line items improves pro forma results compared to GAAP
results. Eliminating gain line items decreases pro forma results compared
to GAAP results.
[B] We amortize the value of software and other technology assets that we
receive in connection with certain acquisitions over their estimated
useful lives.
[C] In connection with certain acquisitions we determine the value of
in-process projects under development for which technological feasibility
has not been established. The value of each project is recorded as a
charge for purchased research and development at the time of the
acquisition. In the first quarter of fiscal 2003, we recorded a charge for
purchased research and development of $7.8 million in connection with our
acquisition of Blue Ocean Software, Inc.
[D] Acquisition-related charges include amortization of purchased intangible
assets and deferred compensation related to acquisitions as well as
impairment charges. For the three months ended October 31, 2002 and 2003,
amortization of purchased intangible assets and deferred compensation was
$9.5 million and $6.0 million and there were no impairment charges.
[E] Our effective tax rate for the first quarter of fiscal 2003 differed from
the federal statutory rate primarily due to the net effect of the benefit
received from tax exempt interest income and various tax credits offset by
non-deductible merger and divestiture related charges. Our effective tax
rate for the first quarter of fiscal 2004 differed from the federal
statutory rate primarily due to the net effect of the benefit received
from tax-exempt interest income and various tax credits offset by state
taxes.
[F] On July 31, 2002, we sold our Quicken Loans mortgage business to Rock
Acquisition Corporation and accounted for the sale as discontinued
operations. In the first quarter of fiscal 2003, we sold our residual
minority equity interest in Rock and recorded a gain of $5.6 million.
[G] On February 7, 2003, we sold our wholly owned Japanese subsidiary, Intuit
KK, and accounted for the sale as discontinued operations. Accordingly, we
have segregated the operating results of Intuit KK from continuing
operations on our statement of operations for all periods prior to the
sale. Net income from Intuit KK discontinued operations for the three
months ended October 31, 2002 was net of income tax expense of $0.2
million.
TABLE C
INTUIT INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
JULY 31, OCTOBER 31,
2003 2003
---- ----
ASSETS
Current assets:
Cash and cash equivalents $ 170,043 $ 147,607
Short-term investments 1,036,758 770,008
Marketable securities 865 1,028
Customer deposits 306,007 283,154
Accounts receivable, net 88,156 76,828
Deferred income taxes 34,824 34,741
Prepaid expenses and other current assets 32,217 52,831
---------- ----------
Total current assets 1,668,870 1,366,197
Property and equipment, net 188,253 188,997
Goodwill, net 591,091 691,322
Purchased intangible assets, net 125,445 132,467
Long-term deferred income taxes 183,061 183,061
Loans to executive officers and other
employees 19,690 19,410
Other assets 13,857 18,229
---------- ----------
Total assets $2,790,267 $2,599,683
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 56,786 $ 84,633
Accrued compensation and related liabilities 118,678 68,293
Payroll service obligations 306,007 283,154
Deferred revenue 178,840 183,189
Income taxes payable 76,725 42,248
Other current liabilities 59,129 58,767
---------- ----------
Total current liabilities 796,165 720,284
Long-term obligations 29,265 31,058
Stockholders' equity 1,964,837 1,848,341
---------- ----------
Total liabilities and stockholders' equity $2,790,267 $2,599,683
========== ==========
Note: Cash and short-term investments declined during the first quarter of
fiscal 2004 due to our use of cash for normal seasonal operating needs,
for our stock repurchase programs and for the acquisition of Innovative
Merchant Solutions.
TABLE D1
INTUIT INC.
RECONCILIATION OF GUIDANCE FOR PRO FORMA FINANCIAL MEASURES
TO PROJECTED GAAP REVENUE, OPERATING INCOME, AND EPS
(In thousands, except per share amounts)
(Unaudited)
THREE MONTHS ENDING JANUARY 31, 2004
------------------------------------
Pro Forma GAAP
Range of Estimate Range of Estimate
----------------- -----------------
From To Adjustments From To
---- -- ----------- ---- --
Revenue $615,000 $640,000 $ -- $615,000 $640,000
Operating income 208,000 218,000 (9,900) [a] 198,100 208,100
Interest and other income 3,000 5,000 -- 3,000 5,000
Diluted earnings per share $ 0.66 $ 0.71 $ (0.03) [b] $ 0.63 $ 0.68
Shares 208,000 212,000 -- 208,000 212,000
TWELVE MONTHS ENDING JULY 31, 2004
----------------------------------
Pro Forma GAAP
Range of Estimate Range of Estimate
----------------- -----------------
From To Adjustments From To
---- -- ----------- ---- --
Revenue $1,850,000 $1,950,000 $ -- $1,850,000 $1,950,000
Operating income 480,000 510,000 (37,000) [c] 443,000 473,000
Interest and other income 20,000 25,000 -- 20,000 25,000
Diluted earnings per share $ 1.57 $ 1.67 $ (0.11) [d] $ 1.46 $ 1.56
Shares 210,000 215,000 -- 210,000 215,000
[a] Reflects estimated adjustments for amortization of purchased software of
approximately $3.3 million and amortization of purchased intangible assets
of approximately $6.6 million for the three months ending January 31,
2004.
[b] Net of related income tax expense, the pro forma adjustments in item [a]
result in a $0.03 per diluted share adjustment for the three months ending
January 31, 2004.
[c] Reflects estimated adjustments for amortization of purchased software of
approximately $13.0 million and amortization of purchased intangible
assets of approximately $24.0 million for the twelve months ending July
31, 2004.
[d] Net of related income tax expense, the pro forma adjustments in item [c]
result in a $0.11 per diluted share adjustment for the twelve months
ending July 31, 2004.
THE PRO FORMA, OR NON-GAAP, FINANCIAL MEASURES ABOVE SHOULD NOT BE CONSIDERED AS
A SUBSTITUTE FOR, OR SUPERIOR TO, MEASURES OF FINANCIAL PERFORMANCE PREPARED IN
ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP"). THESE PRO
FORMA FINANCIAL MEASURES ARE NOT PREPARED IN ACCORDANCE WITH GAAP AND LIKELY ARE
DIFFERENT FROM PRO FORMA FINANCIAL MEASURES USED BY OTHER COMPANIES. INTUIT'S
MANAGEMENT BELIEVES THAT THESE PRO FORMA FINANCIAL MEASURES PROVIDE MEANINGFUL
SUPPLEMENTAL INFORMATION REGARDING INTUIT'S CORE OPERATING RESULTS BECAUSE THEY
EXCLUDE AMOUNTS THAT ARE NOT NECESSARILY RELATED TO INTUIT'S CORE OPERATING
RESULTS. INTUIT'S MANAGEMENT REFERS TO THESE PRO FORMA FINANCIAL MEASURES IN
ASSESSING THE PERFORMANCE OF INTUIT'S ONGOING OPERATIONS AND FOR PLANNING AND
FORECASTING IN FUTURE PERIODS. THESE PRO FORMA FINANCIAL MEASURES ALSO
FACILITATE MANAGEMENT'S INTERNAL COMPARISONS TO INTUIT'S HISTORICAL OPERATING
RESULTS. IN ADDITION, INTUIT HAS HISTORICALLY REPORTED SIMILAR PRO FORMA
FINANCIAL MEASURES AND BELIEVES THAT THE INCLUSION OF COMPARATIVE NUMBERS
PROVIDES CONSISTENCY IN ITS FINANCIAL REPORTING. INTUIT COMPUTES PRO FORMA
FINANCIAL MEASURES USING THE SAME CONSISTENT METHOD FROM QUARTER TO QUARTER AND
YEAR TO YEAR.
THE RECONCILIATIONS OF THE FORWARD-LOOKING PRO FORMA FINANCIAL MEASURES TO GAAP
IN THIS TABLE D1 INCLUDE ALL INFORMATION REASONABLY AVAILABLE TO INTUIT AT THE
DATE OF THIS PRESS RELEASE. THE ADJUSTMENTS IN THIS TABLE ARE THOSE THAT
MANAGEMENT CAN PREDICT. INTUIT'S PRO FORMA FINANCIAL MEASURES EXCLUDE
ACQUISITION-RELATED CHARGES, DISCONTINUED OPERATIONS AND GAINS AND LOSSES ON
MARKETABLE SECURITIES. EVENTS THAT COULD CAUSE THE RECONCILIATION TO CHANGE
INCLUDE ACQUISITIONS AND DIVESTITURES OF BUSINESSES, GOODWILL AND OTHER ASSET
IMPAIRMENTS AND SALES OF MARKETABLE SECURITIES.
TABLE D2
INTUIT INC.
RECONCILIATION OF SUPPLEMENTAL PRO FORMA FINANCIAL MEASURES
TO MOST DIRECTLY COMPARABLE GAAP MEASURES
(In thousands, except per share amounts)
(Unaudited)
THREE MONTHS ENDED JANUARY 31, 2003
-----------------------------------
Pro
Forma Adjustments GAAP
----- ----------- ----
Revenue $558,076 $ -- $ 558,076
Operating income 184,421 (13,742) [a] 170,679
Diluted earnings per share $ 0.61 $ (0.01) [b] $ 0.60
TWELVE MONTHS ENDED JULY 31, 2003
---------------------------------
Pro
Forma Adjustments GAAP
----- ----------- ----
Revenue $1,650,743 $ -- $1,650,743
Operating income $ 399,834 $ (56,602) [c] $ 343,232
Operating margin 24.2% -3.4% [c] 20.8%
Diluted earnings per share $ 1.39 $ 0.24 [d] $ 1.63
TWELVE MONTHS ENDED JULY 31, 2000
---------------------------------
Pro
Forma Adjustments GAAP
----- ----------- ----
Revenue $ 981,718 $ -- $ 981,718
Operating income $ 170,937 $(158,523) [e] $ 12,414
Operating margin 17.4% -16.1% [e] 1.3%
Diluted earnings per share $ 0.69 $ 0.76 [f] $ 1.45
[a] Reflects adjustments for amortization of purchased software of $3.5
million, charges for purchased research and development of $1.1 million
and amortization of purchased intangible assets of $9.1 million for the
three months ended January 31, 2003.
[b] Reflects the adjustments in item [a] and adjustments for net gains on
marketable securities of $2.8 million and net income from discontinued
operations of $3.1 million. Net of related income tax expense, these pro
forma adjustments resulted in a $0.01 per diluted share adjustment for the
three months ended January 31, 2003.
[c] Reflects adjustments for amortization of purchased software of $13.8
million, charges for purchased research and development of $8.9 million
and amortization of purchased intangible assets of $33.9 million,
resulting in a 3.4% adjustment to operating margin for the twelve months
ended July 31, 2003.
[d] Reflects the adjustments in item [c] and adjustments for net gains on
marketable securities of $10.9 million and net income from discontinued
operations of $79.8 million. Net of related income tax expense, these pro
forma adjustments resulted in a $0.24 per diluted share adjustment for the
twelve months ended July 31, 2003.
[e] Reflects adjustments for amortization of purchased software of $7.0
million, charges for purchased research and development of $1.3 million
and amortization of goodwill and purchased intangible assets of $150.2
million, resulting in a 16.1% adjustment to operating margin for the
twelve months ended July 31, 2000.
[f] Reflects the adjustments in item [e] and adjustments for net gains on
marketable securities of $481.1 million and net income from discontinued
operations of $20.0 million. Net of related income tax expense, these pro
forma adjustments resulted in a $0.76 per diluted share adjustment for the
twelve months ended July 31, 2000.
THE PRO FORMA, OR NON-GAAP, FINANCIAL MEASURES ABOVE SHOULD NOT BE CONSIDERED AS
A SUBSTITUTE FOR, OR SUPERIOR TO, MEASURES OF FINANCIAL PERFORMANCE PREPARED IN
ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP"). THESE PRO
FORMA FINANCIAL MEASURES ARE NOT PREPARED IN ACCORDANCE WITH GAAP AND LIKELY ARE
DIFFERENT FROM PRO FORMA FINANCIAL MEASURES USED BY OTHER COMPANIES. INTUIT'S
MANAGEMENT BELIEVES THAT THESE PRO FORMA FINANCIAL MEASURES PROVIDE MEANINGFUL
SUPPLEMENTAL INFORMATION REGARDING INTUIT'S CORE OPERATING RESULTS BECAUSE THEY
EXCLUDE AMOUNTS THAT ARE NOT NECESSARILY RELATED TO INTUIT'S CORE OPERATING
RESULTS. INTUIT'S MANAGEMENT REFERS TO THESE PRO FORMA FINANCIAL MEASURES IN
ASSESSING THE PERFORMANCE OF INTUIT'S ONGOING OPERATIONS AND FOR PLANNING AND
FORECASTING IN FUTURE PERIODS. THESE PRO FORMA FINANCIAL MEASURES ALSO
FACILITATE MANAGEMENT'S INTERNAL COMPARISONS TO INTUIT'S HISTORICAL OPERATING
RESULTS. IN ADDITION, INTUIT HAS HISTORICALLY REPORTED SIMILAR PRO FORMA
FINANCIAL MEASURES AND BELIEVES THAT THE INCLUSION OF COMPARATIVE NUMBERS
PROVIDES CONSISTENCY IN ITS FINANCIAL REPORTING. INTUIT COMPUTES PRO FORMA
FINANCIAL MEASURES USING THE SAME CONSISTENT METHOD FROM QUARTER TO QUARTER AND
YEAR TO YEAR.
INTUIT FACTS... INTUIT INC.
Q1/FY04 INVESTOR RELATIONS (650) 944-5436
NASDAQ: INTU
FINANCIAL OUTLOOK[A]
(ACTUAL) (guidance) (in future) (in future) (GUIDANCE) (actual)
(MILLIONS) Q1 FY04 Q2 FY04 Q3 FY04 Q4 FY04 FY04 FY03
---------- ------- ------- ------- ------- ---- ----
QuickBooks $ 42.8 $110-$120 $ 242.8
% of change YOY 11% 15%-25% 24%
Small Business Products &
Services $ 123.1 $142-$152 $ 454.9
% of change YOY 22% 15%-25% 35%
TurboTax $ 5.2 $114-$124 $ 422.9
% of change YOY (15%) 10%-20% 20%
Vertical Businesses $ 26.3 $26-$29 $ 94.8
% of change YOY 40% 15%-25% New
Prof. Accounting Solutions $ 6.9 $150-$160 $ 243.4
% of change YOY 7% 7%-12% 8%
All Other $ 38.2 $67-$72 $ 191.9
% of change YOY (9%) 0%-5% 2%
-------- ----------- ----------- ----------- ----------- --------
Total Revenue $ 242.5 $615-$640 $1850-$1950 $1,650.7
% of change YOY 14% 12%-18% 26%
Operating Income[B] ($ 80.1) $208-$218 $480-$510 $ 399.8
% of change YOY NA 20%-28% 46%
Interest & Other Income $ 7.5 $3-$5 $20-$25 $ 38.7
% of change YOY NA (48%)-(35%) 42%
EPS[B] [not in millions] ($ 0.24) $0.66-$0.71 $1.57-$1.67 $ 1.39
% of change YOY NA 13%-20% 51%
Weighted Shares 198.7 208-212 210-215 211
Tax Rate 34% 34% 34% 33%
[A] As of November 19, 2003, this contains forward looking information that
is subject to risks and uncertainties. Actual results may differ
materially due to the factors included in Intuit's November 19, 2003
earnings press release and SEC filings and at
http://www.intuit.com/about_intuit/investors/considerations.html.
[B] These are pro forma, or non-GAAP, financial measures. They exclude
acquisition related costs, pre-tax gains and losses related to marketable
securities and other investments, and other similar items. See Tables B,
D1 and D2 of the accompanying press release.
CORPORATE METRICS
FYE/03 Q1/03 Q1/04
------ ----- -----
Capital expenditure $84.7M $27.8M $21.1M
Depreciation $73.8M $18.4M $19.7M
Common Stock Outst. 199.5M 206.4M 198.4M
Full Time Employees 6,624 6,790 7,080
SEGMENT COMPOSITION
QUICKBOOKS
Core (Basic, Pro, 5-Pack, Mac)
Premier (incl. POS)
Enterprise
Online Edition
OEM and Royalties
SMALL BUSINESS PRODUCTS & SERVICES
Payroll (DIY, OSP)
IT Solutions
Support Programs
Supplies
Merchant Account Services
Customer Manager
TURBOTAX
Basic, Deluxe, Premier
PROFESSIONAL ACCOUNTING SOLUTIONS
ProSeries, Lacerte
EasyACCT
PAP
Client Manager
Financial Statement Reporter
VERTICAL BUSINESSES
Intuit Construction Business Solutions
Intuit Public Sector Solutions
Intuit Real Estate Solutions (MRI)
Intuit Distribution Management Solutions (Eclipse)
November 19, 2003
INTUIT FACTS... INTUIT INC.
Investor Relations (650) 944-5436 NASDAQ: INTU
BUSINESS METRICS
Q1/FY02 Q2/FY02 Q3/FY02 Q4/FY02 Q1/FY03 Q2/FY03 Q3/FY03 Q4/FY03 Q1/FY04
------- ------- ------- ------- ------- ------- ------- ------- -------
QUICKBOOKS
Basic & Pro units 160K 302K 325K 217K 195K 308K 285K 217K 163K
Premier units 0 16K 23K 17K 15K 37K 35K 35K 26K
Enterprise units 0 0 0 1K 1K 1K 1K 1K 1K
---- ---- ---- ---- ---- ---- ---- ---- ----
Total QuickBooks units sold[D] 160K 318K 348K 235K 211K 346K 321K 253K 190K
Average Sales Price $176 $207 $203 $223 $217 $238 $241 $255 $253
Sell Thru Channel Mix[E]
% of units at retail 80% 65% 60% 64% 65% 56% 56% 49% 64%
% of dollars at retail 79% 61% 63% 64% 63% 54% 55% 47% 59%
QuickBooks Retail Share[C]
Unit share FYTD 76% 82% 83% 84% 76% 80% 82% 82% 81%
Dollar share FYTD 81% 87% 89% 89% 83% 87% 89% 89% 87%
SMALL BUSINESS PRODUCTS & SERVICES (SELECTED)
Payroll Customers (000)
DIY (Basic) 594 619 661 675 665 681 711 739 753
Outsourced 42 47 48 60 63 66 66 67 69
CONSUMER TAX
Federal TurboTax (millions)
Desktop units retail NM 1.7 2.4 NM NM 1.8 2.4 NM NM
Desktop units direct NM 1.2 0.2 NM NM 1.0 0.9 NM NM
Web units paid NM 0.2 2.0 NM NM 0.3 2.1 0.1 NM
Web units unpaid NM 0.1 0.9 NM NM 0.2 1.1 NM NM
---- ---- ---- ---- ---- ---- ---- ---- ----
Total TurboTax units[D] NM 3.2 5.5 NM NM 3.3 6.5 0.1 NM
TurboTax Efile returns (millions) NM 0.6 11.0 NM NM 0.8 12.1 0.2 NM
Sell Thru Channel Mix[E]
% of dollars at retail NM 54% 37% NM NM 50% 32% NM NM
Federal TurboTax Retail Share[C]
Unit share FYTD NM 72% 71% 71% NM 72% 71% 71% NM
Dollar share FYTD NM 81% 81% 81% NM 80% 79% 79% NM
PROFESSIONAL ACCOUNTING SOLUTIONS
Professional Accounting Tax units NM 86K 9K NM NM 89K 7K NM NM
Efile returns NM 0.3M 6.0M NM NM 0.5M 7.8M NM NM
[C] Source: NPD Group NPD Techworld Monthly Retail Software Report through
July 2003 for FY02 and FY03. NPD Group Monthly Retail Software Report
through September plus the NPD Group NPD Techworld weekly Retail Software
Report for the month of October through 10/26/03.
[D] End-user purchases -- or products customers have acquired and/or paid for
at both retail and direct.
[E] Estimate based on subset of retailers reporting.
NM: Not Meaningful