Exhibit 99.1
Citrix Reports Fourth Quarter and Fiscal Year Earnings;
Fourth Quarter Revenues of $157.7 Million; GAAP
Earnings Per Share of $0.21; Adjusted Earnings Per Share of $0.22
FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--Jan. 21, 2004--
Annual Revenues of $588.6, Up 12% over 2002; GAAP Earnings Per
Share of $0.74; Adjusted Annual Earnings Per Share of $0.78, Up 39%
Citrix Systems, Inc. (Nasdaq:CTXS), the global leader in access
infrastructure solutions, today reported results for the fourth
quarter and fiscal year ended December 31, 2003.
Financial Results
Revenues for the three months ended December 31, 2003 were $157.7
million compared to $148.8 million in the same period of the prior
year, a 6% increase. Net income was $36.3 million for the fourth
quarter of 2003, or $0.21 per share on a GAAP basis, compared to $39.6
million, or $0.23 per share on a GAAP basis, in the comparable period
of the prior year. Net income, adjusted to exclude the effect of
amortization of intangible assets primarily related to business
combinations, was $38.1 million for the fourth quarter of 2003, or
$0.22 per share, compared to $40.6 million, or $0.23 per share, in the
comparable period of the prior year.
Annual revenues for 2003 were $588.6 million, compared to $527.4
million in the previous year, a 12% increase. Annual net income for
2003 was $126.9 million, or $0.74 per share on a GAAP basis, compared
to net income for 2002 of $93.9 million, or $0.52 per share on a GAAP
basis. Annual net income, adjusted to exclude the effect of
amortization of intangible assets primarily related to business
combinations, was $134.2 million, or $0.78 per share for 2003,
compared to $100.8 million, or $0.56 per share for 2002.
"It was a solid quarter to end a very strong year," said Mark
Templeton, president and chief executive officer for Citrix. "In 2003
we saw tremendous growth in larger purchases, in our Subscription
Advantage program, and in deferred revenue as our customers made
larger and longer-term commitments to Citrix. In addition, we executed
well, improving our year-end operating margin by 6.5 percentage points
to 26.2%.
"And we've kicked off 2004 aggressively," Templeton said. "Last
week we held our first annual Global Summit Week, where we trained
more than 2,000 members of our channel community and our worldwide
sales force. They learned about new products and programs that will
help them offer more value to customers as trusted advisors,
recommending complete access solutions.
"Enthusiasm within Citrix and our partner ecosystem is at an
all-time high. It's well-founded. We have the right products, the
right partners, and the right programs working synergistically to
achieve our growth and operating goals.
"We'll continue to invest in expanding our product portfolio, to
grow in emerging countries, and to scale the organization -- both
people and infrastructure -- so that we can execute on our strategy of
making Citrix synonymous with access."
Financial Highlights
-- Total revenues for the fourth quarter grew 6% over the
comparable period last year; annual revenues grew 12%.
-- Deferred revenue grew by $20.5 million, approximately 14%,
during the quarter to a total of $165.1 million. Annually,
deferred revenue grew by 59%.
-- Operating margin was 26.8% for the quarter; adjusted operating
margin for the quarter was 28.6%, excluding the effect of
amortization of intangible assets primarily related to
business combinations. Operating margin for 2003 was 26.2%, up
from 19.7% in 2002.
-- Cash flow from operations was approximately $69.0 million for
the quarter.
-- Cash and investments totaled approximately $898.3 million at
the end of the quarter.
-- During the quarter, the company repurchased about 0.7 million
shares at an average net price per share of $23.24. For the
year, Citrix repurchased 8.9 million shares at an average
price of $15.86.
Customer Highlights
Citrix closed several large deals during the quarter, including
British Airport Authority, Blue Cross Blue Shield of South Carolina
and DaimlerChrysler.
Citrix signed a deal with the British Airport Authority (BAA),
which owns and operates seven airports including the world's busiest
international airport, London Heathrow, and has management contracts
or stakes in numerous other major transportation hubs around the
globe. Serving more than 200 million passengers worldwide, BAA has
implemented 10,000 licenses of the Citrix(R) MetaFrame(R) Access Suite
to provide secure access to more than 500 applications from the
organization's numerous airports, retail locations and the runways
themselves, enabling the company to focus on its customers' needs and
safety.
Founded in 1946 and with more than 12,000 employees, Blue Cross
Blue Shield (BCBS) of South Carolina provides nearly one million South
Carolinians with health insurance. With Citrix access infrastructure,
BCBS of South Carolina delivers industry-specific insurance
applications instantly and reliably to more than 16,000 users at
offices throughout South Carolina, Virginia, Florida and Texas. As a
result, BCBS of South Carolina can easily transition employees
currently working in headquarter facilities to work from home. In
addition, Citrix MetaFrame Presentation Server will also enable the
company to quickly integrate newly acquired business units into its
corporate IT environment.
DaimlerChrysler, one of the world's leading automotive companies,
sells passenger cars and commercial vehicles under brands including
Mercedes-Benz, Chrysler, Jeep(R) and Dodge. To improve application
deployment, DaimlerChrysler ordered nearly 3,000 licenses of Citrix
MetaFrame Presentation Server and has already nearly 7,000 additional
seats. With Citrix access infrastructure, DaimlerChrysler benefits
from secure, easy and instant access to Microsoft(R) Office, Lotus
Notes and numerous proprietary applications.
Alliance Highlights
During the fourth quarter, Citrix strengthened relationships with
key partners including Microsoft, IBM, SAP, HP, and PeopleSoft.
-- Microsoft named Citrix its first "Global Independent Software
Vendor Partner of the Year." The honor was given to Citrix for
delivering the best customer solutions as a Microsoft(R)
Global Gold Certified Partner for Software Products. Also in
October, Citrix announced its support of the Microsoft Office
System, which includes all Microsoft Office branded programs,
servers, services and solutions. The two companies have been
working together for well over a decade in support of joint
customers' business objectives.
-- Citrix signed a systems integration agreement with IBM, which
allows IBM to offer the Citrix MetaFrame Access Suite of
products to IBM eServer(R) xSeries customers. In addition, the
two companies announced that their decade-long strategic
relationship would now include the release of a new portlet
that provides integration with IBM WebSphere Portal(R), giving
joint customers secure, easy and instant access to information
resources managed by Citrix MetaFrame Presentation Server
through their WebSphere Portal.
-- Citrix and SAP announced expanded development work
encompassing the seamless integration of Citrix MetaFrame
Presentation Server and SAP(R) Enterprise Portal, a technology
solution of the SAP NetWeaver(TM) Technology Suite.
-- Citrix announced in October its support for HP's Adaptive
Enterprise strategy with HP OpenView certification and a new
probe tool for optimizing system performance. Citrix also
joined the HP OpenView Solution Alliance Program at the
enhanced Solution Partner level.
-- Citrix announced an expanded integration agreement with
PeopleSoft. Citrix said it would make available a template
"pagelet" that will make it easier for PeopleSoft(R)
Enterprise Portal customers to deploy non-PeopleSoft
applications to the portal using the web interface feature of
Citrix MetaFrame Presentation Server.
Business Outlook
Citrix management offers the following guidance for the quarter
ending March 31, 2004:
-- Revenue is expected to be in the range of $146 million to
$156 million for the quarter ending March 31, 2004.
-- GAAP earnings per share is expected to be in the range of
$0.15 to $0.18 for the quarter ending March 31, 2004.
-- Adjusted earnings per share, which excludes the amortization
of intangible assets primarily related to business
combinations, is expected to be in the range of $0.16 to $0.19
for the quarter ending March 31, 2004.
The above statements are based on current expectations. These
statements are forward-looking, and actual results may differ
materially. These statements also do not include the effects of either
the closing of the acquisition of Expertcity, Inc., or the tender or
redemption of the company's convertible debentures if either should
occur in the quarter ending March 31, 2004. For a discussion of these
effects, please see "Definitive Agreement to Acquire Expertcity" and
"Convertible Debentures" below.
Definitive Agreement to Acquire Expertcity
In December, Citrix announced that it signed a definitive
agreement to acquire Santa Barbara, Calif.-based Expertcity, Inc., the
market leader in Web-based desktop access as well as a leader in
Web-based training and customer assistance products. The transaction
is valued at approximately $225 million in cash and stock, and is
expected to close during the first quarter of 2004 or early in the
second quarter of 2004. A $12 million earnout will be paid to all
Expertcity stockholders if certain financial targets are achieved in
2004. The transaction is expected to be $0.03 to $0.04 dilutive to
Citrix's earnings per share in the first half of fiscal year 2004, as
adjusted to exclude the effect of amortization and an expense charge
for the value of Expertcity's in-process research and development
(which will result in an additional $0.05-$0.10 dilution to Citrix's
earnings per share on a GAAP basis), and neutral to adjusted earnings
in the second half of 2004. The impact of the acquisition is not
included in the forward-looking statements included in "Business
Outlook" above.
The acquisition expands Citrix's portfolio of access products to
include Expertcity's popular GoToMyPC(R) software service for secure,
browser-based access to desktop PCs from anywhere over the Web. The
acquisition also will add Expertcity's market-leading GoToAssist(TM)
service, which provides online help-desk and call center assistance,
as well as training and customer collaboration over the Web.
Convertible Debentures
In March 1999, Citrix sold $850 million principal amount at
maturity of the company's zero coupon convertible subordinated
debentures due in March 2019. Citrix can redeem the debentures on or
after March 22, 2004, and the holders of the debentures can require
the company to repurchase the debentures on fixed dates and at set
redemption prices (equal to the issue price plus accrued original
issue discount) beginning on March 22, 2004. If either of these two
events were to occur, the company expects to incur a non-cash charge
to earnings in the amount of approximately $7 million to account for
unamortized debt issuance costs. The effect of this potential charge
is not included in the forward-looking statements included in
"Business Outlook" above.
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 section of
the Citrix corporate website at http://www.citrix.com/investors
through February 4, 2004. In addition, an audio replay of the
conference call will be available through January 28 by dialing (800)
642-1687 or (706) 645-9291 (passcode required: 4809749).
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, 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 which are made
pursuant to the safe harbor 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, Definitive Agreement to Acquire Expertcity, Convertible
Debentures and in the reconciliation of non-GAAP measures to
comparable U.S. GAAP measures concerning management's forecast of
revenue and earnings per share, statements regarding the company's
revenue growth, existing and new products, channel programs, the
potential size of product markets, and statements concerning
acquisitions by the company, 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 possibility that acquisitions
announced by the company will not close; that the closing of any
announced acquisitions may be delayed; the company's ability to
successfully integrate the operations and employees of acquired
companies; failure to achieve anticipated revenues and profits from
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; charges in the event of the
impairment 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 consolidated financial statements
and can be found on the Investor Relations page of the Citrix
corporate web site at http://www.citrix.com/investors.
Citrix(R), and MetaFrame(R) 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 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 Twelve Months Ended
December 31, December 31,
2003 2002 2003 2002
--------- ------------------- ---------
Revenues $157,744 $148,784 $588,625 $513,366
Other revenues -- -- -- 14,082
--------- ------------------- ---------
Total net revenues 157,744 148,784 588,625 527,448
Cost of revenues 4,919 5,145 20,036 19,030
--------- ------------------- ---------
Gross margin 152,825 143,639 568,589 508,418
Operating expenses:
Research and development 17,418 15,869 64,443 68,923
Sales, marketing and
support 69,157 56,490 252,749 235,393
General and
administrative 21,208 23,298 85,672 88,946
Amortization of
intangible assets 2,795 2,708 11,336 11,296
--------- ------------------- ---------
Total operating
expenses 110,578 98,365 414,200 404,558
Income from operations 42,247 45,274 154,389 103,860
Other income, net 2,199 3,938 6,298 9,297
--------- ------------------- ---------
Income before income taxes 44,446 49,212 160,687 113,157
Income taxes 8,171 9,645 33,744 19,237
--------- ------------------- ---------
Net income $36,275 $39,567 $126,943 $93,920
========= =================== =========
Earnings per common share -
diluted $0.21 $0.23 $0.74 $0.52
========= =================== =========
Weighted average shares
outstanding -
Diluted 172,385 173,052 171,447 179,359
========= =================== =========
Adjusted net income $38,097 $40,605 $134,179 $100,807
========= =================== =========
Adjusted earnings per share -
diluted $0.22 $0.23 $0.78 $0.56
========= =================== =========
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 $2.8 million and $2.7 million for
the three months ended December 31, 2003 and 2002, respectively, and
$11.3 million and $11.3 million for the 12 months ended December 31,
2003 and 2002, respectively.
Condensed Consolidated Balance Sheets
(In thousands - unaudited)
December 31, December 31,
2003 2002
------------ --------------
ASSETS:
Cash and short-term investments $612,314 $219,913
Accounts receivable, net 87,464 69,471
Other current assets 109,707 85,915
------------ --------------
Total current assets 809,485 375,299
Long-term investments 285,957 499,491
Property and equipment, net 65,837 76,534
Goodwill and other intangible assets, net 173,664 183,213
Other long-term assets 9,996 26,994
------------ --------------
Total assets $1,344,939 $1,161,531
============ ==============
LIABILITIES AND
STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $121,643 $92,926
Current portion of deferred revenues 152,938 95,963
Convertible subordinated debentures 351,423 --
------------ --------------
Total current liabilities 626,004 188,889
Convertible subordinated debentures -- 333,549
Long-term portion of deferred revenues 12,137 8,028
Put warrants and common stock subject to
Repurchase -- 16,475
Stockholders' equity 706,798 614,590
------------ --------------
Total liabilities and stockholders' equity $1,344,939 $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, 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 ("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 December 31, 2003
------------------------------------
Earnings
Per
Operating Operating Operating Net Share - Tax
Expenses Income Margin Income Diluted Rate
---------- --------- --------- --------- -------- ------
U.S. GAAP
measure $110,578 $42,247 26.8% $36,275 $0.21 18.4%
Adjustments
to exclude
the effects
of
amortization (2,795) 2,795 1.8 1,822 0.01 1.0
---------- --------- --------- --------- -------- ------
Adjusted
figures $107,783 $45,042 28.6% $38,097 $0.22 19.4%
========== ========= ========= ========= ======== ======
Three Months Ended December 31, 2002
------------------------------------
Earnings
Per
Operating Operating Operating Net Share - Tax
Expenses Income Margin Income Diluted Rate
---------- --------- --------- --------- -------- ------
U.S. GAAP
measure $98,365 $45,274 30.4% $39,567 $0.23 19.6%
Adjustments
to exclude
the effects
of
amortization (2,708) 2,708 1.8 1,038 -- 2.2
---------- --------- --------- --------- -------- ------
Adjusted
figures $95,657 $47,982 32.2% $40,605 $0.23 21.8%
========== ========= ========= ========= ======== ======
Twelve Months Ended December 31, 2003
-------------------------------------
Earnings Per
Net Income Share - Diluted
----------- -----------------
U.S. GAAP measure $126,943 $0.74
Adjustments to exclude the effects of
amortization 7,236 0.04
----------- -----------------
Adjusted figures $134,179 $0.78
=========== =================
Twelve Months Ended December 31, 2002
-------------------------------------
Net Income Earnings Per
Share - Diluted
----------- -----------------
U.S. GAAP measure $93,920 $0.52
Adjustments to exclude the effects of
amortization 6,887 0.04
----------- -----------------
Adjusted figures $100,807 $0.56
=========== =================
Forward-looking Guidance for the Three Months Ended March 31, 2004
------------------------------------------------------------------
Earnings Per Share
Range - Diluted Tax Rate
Range
------------------- --------
U.S. GAAP measure $0.15 to $0.18 21%
Adjustments to exclude the effects of
amortization
$0.01 1%
------------------- --------
Adjusted figures $0.16 to $0.19 22%
=================== ========
This reconciliation does not include the effects of either the
closing of the acquisition of Expertcity, Inc., or the tender or
redemption of the company's convertible debentures if either should
occur in the quarter ending March 31, 2004.
Anticipated Earnings Per Share Dilution for the 6 Months Ended
June 30, 2004 Associated with the Closing of the Expertcity
Acquisition
Dilution to Earnings
Per Share
Range - Diluted
U.S. GAAP measure $0.08 to $0.14
Adjustment to exclude the effect of amortization
and an expense charge for the value of
Expertcity's in-process research and development 0.05 to 0.10
Adjusted figures $0.03 to $0.04
CONTACT: Citrix Systems, Inc., Fort Lauderdale
Media inquiries:
Eric Armstrong, 954-267-2977
eric.armstrong@citrix.com
or
Investor inquiries:
Jeff Lilly, 954-267-2886
jeff.lilly@citrix.com