Exhibit 99.1
Citrix Reports Second Quarter Results;
Year-Over-Year Revenue Growth of 25%; Earnings Per
Share Up 5% Over Comparable Period Last Year
FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--July 21, 2004--
Adjusted Earnings Per Share Up 11% Over
Comparable Period Last Year
Citrix Systems, Inc. (Nasdaq:CTXS), the global leader in access
infrastructure solutions, today reported results for the second
quarter ended June 30, 2004.
Revenues for the second quarter of 2004 were $178.3 million,
compared to $143.0 million in the same period of the prior year,
representing a 24.6 percent increase. Deferred revenue grew to
$193.8 million, compared to $128.2 million in the same period of the
prior year, representing an increase of 51.2 percent.
GAAP Results
Net income for the second quarter of 2004 was $31.5 million, or
$0.18 per diluted share, compared to $29.3 million, or $0.17 per
diluted share, for the same period a year ago.
Adjusted Results
Net income, adjusted to exclude the effects of amortization of
intangible assets, was $35.4 million for the second quarter of 2004,
or $0.20 per diluted share, compared to $31.1 million, or $0.18 per
diluted share, in the comparable period last year.
"We delivered an excellent quarter with double-digit revenue
growth, strong deferred revenue growth, solid performance from the
Citrix Online Division, and continued momentum in our Subscription
Advantage business," said Mark Templeton, president and chief
executive officer for Citrix.
"Overall, I believe our results demonstrate that we are executing
well in elevating access from a tactical component of information
technology to a strategic element of business."
Q2 2004 Financial Highlights
-- Citrix closed five customer agreements worth more than
$1 million; all 10 of the top 10 agreements were greater than
$500,000.
-- By segment, Americas revenue grew 11 percent; EMEA revenue
grew 21 percent; and APAC revenue grew 43 percent compared to
last year.
-- License revenue was flat sequentially and down 5 percent
compared to last year.
-- License update revenue was up 14 percent sequentially and up
69 percent compared to last year.
-- Services revenue, excluding Citrix Online, was up 8 percent
sequentially and up 16 percent over last year.
-- Citrix Online revenue was $10.5 million for the quarter, the
company's first full quarter of combined operations.
-- Operating margin was 21 percent for the quarter; operating
margin adjusted to exclude the effects of amortization of
intangible assets was 24 percent.
-- Cash flow from operations for the quarter was $45 million,
compared to $54 million last year.
Financial Outlook
Citrix management offers the following expectations for the
quarter ending September 30, 2004:
-- Net revenue is expected to be in the range of $175 million to
$185 million
-- GAAP earnings per share is expected to be in the range of
$0.17 to $0.19
-- 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
$0.19 to $0.21
The financial outlook statements above are based on current
expectations and these statements are forward-looking. The actual
results may differ materially.
Customer Highlights
Citrix closed several large customer agreements during the
quarter, including France Telecom, London Borough of Haringey, and US
Air Force Personnel Command.
France Telecom, one of the world's leading telecommunications
carriers with 118.6 million customers on five continents, continued
its rollout of Citrix access infrastructure with the implementation of
more than 14,000 additional seats of Citrix(R) MetaFrame(R)
Presentation Server. This expansion of the Citrix deployment enables
secure, easy and instant access to business-critical applications,
including SAP, Vantive and many applications geared specifically to
the telecommunications industry, regardless of location or network
connection.
Haringey, one of London's 32 boroughs, has licensed 3,800 Citrix
MetaFrame Presentation Server seats. With Citrix access
infrastructure, Haringey will provide managed access to shared
resources, allowing borough employees to securely access more than
70 Microsoft(R) and proprietary applications used daily in the
ongoing management and development of the borough.
US Air Force Personnel Command has implemented 5,000 licenses of
Citrix MetaFrame Presentation Server and MetaFrame Password Manager to
facilitate centralized and cost-effective application deployment and
ensure the security of its network. With Citrix access infrastructure,
the US Air Force Personnel Command benefits from secure, easy and
instant access to its Oracle human resources applications.
Citrix Online
Since its acquisition on March 1, 2004, the Citrix Online business
has performed on plan and has generated excitement from Citrix's
customer base. Beginning this quarter, Citrix will take the next step
in its plan to integrate Citrix Online and further leverage the Citrix
brand, channel partners and installed base for its new service-based
products.
In conjunction with the next phase of the integration process,
Andreas von Blottnitz, who has successfully led Citrix Online for the
past five years, will be leaving Citrix in the fourth quarter. von
Blottnitz sees this new phase of integration as the best time for a
smooth transition. Brett Caine, senior vice president of sales for
Citrix Online, will assume the responsibilities of president beginning
August 1, 2004. von Blottnitz will continue to consult with the
company to ensure a smooth transition through October 1, 2004.
Caine has successfully run sales for Citrix Online for the past
year, helping the business reach its sales goals and providing
additional operational discipline. Caine will report to John Burris,
senior vice president of worldwide sales and services for Citrix.
"Brett has delivered outstanding results since joining the
division," said Klaus Schauser, founder and chief technology officer
for Citrix Online. "Brett has the full support of the management team
in Santa Barbara as well as the executive team at Citrix to lead the
division and drive a smooth hand-off. We look forward to much closer
sales and marketing coordination to gain partner and customer synergy
and leverage."
Product Highlights
During the second quarter, Citrix introduced MetaFrame Access
Suite 3.0, delivering to customers a complete and integrated access
infrastructure solution. This new version of the MetaFrame Access
Suite delivers security, mobility, flexibility, productivity and
performance, including the comprehensive management of MetaFrame
Presentation Server, the mobility and flexibility benefits of
MetaFrame Secure Access Manager, the single sign-on (SSO) and password
security offered by MetaFrame Password Manager, and the collaborative
resources of MetaFrame Conferencing Manager. One of the most important
advances of the Citrix MetaFrame Access Suite 3.0 is SmoothRoaming, a
new capability that ensures consistent mobile access that is always
on, and allows computing environments to follow users across
locations, devices and access outages.
In other product news of the quarter, the popular products of the
Citrix Online Division continued to draw industry accolades. In April,
Citrix GoToMyPC(R) Corporate was chosen as a finalist in eWeek's
Excellence Awards program in the Personal Productivity category. The
finalists were selected from hundreds of high-quality entries by teams
composed of eWeek Labs analysts, eWeek Corporate Partners, and senior
IT professionals who represent eWeek's readers. Citrix GoToMyPC also
received PC World's 2004 World Class Award for best remote-access
software for the second consecutive year, clearly establishing itself
as the market leader in the Web-based remote access software category
for its fast, easy and secure access to desktop PCs. Additionally,
Citrix GoToAssist(TM) earned top distinctions from Customer
Interaction Solutions magazine, which awarded GoToAssist the 2004 CRM
Excellence Award, and CRM Advocate, which named GoToAssist the winner
in The Sixth Annual Users Choice Awards in the service and support
category.
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 the 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 August 4, 2004. In addition,
an audio replay of the conference call will be available through
July 28, 2004 by dialing (800) 642-1687 or (706) 645-9291
(passcode required: 8494672).
About Citrix
Citrix Systems, Inc. (Nasdaq:CTXS) is the global leader in access
infrastructure solutions and the most trusted name in secure access
for enterprises and individuals. Nearly 50 million people in more than
120,000 organizations around the world use Citrix every day. Our
software gives people secure and well-managed access to business
information wherever it resides -- on demand. 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 Financial
Outlook, and in the reconciliation of non-GAAP financial measures to
comparable U.S. GAAP measures concerning management's forecast of
revenue and earnings per share, statements regarding existing and new
products, and management's plans, objectives and strategies, including
integration plans, 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 company's ability to successfully
integrate the operations and employees of acquired companies, and the
possible 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; the effect of new
accounting pronouncements on revenue and expense recognition; 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 Advisor Rewards
program; 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; competition and other risks associated with the
market for our Web-based access, training and customer assistance
products; as well as risks of downturns in economic conditions
generally; political and social turmoil; and the uncertainty in and
the effects of a weakened 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.
Citrix(R), MetaFrame(R) and Subscription Advantage(TM) are
registered trademarks or trademarks of Citrix Systems, Inc. in the
U.S. and other countries. GoToMyPC(R) and GoToAssist(TM) are
registered trademarks or trademarks of Citrix Online LLC in the U.S.
and other countries. Microsoft(R) is a registered trademark of
Microsoft Corporation in the U.S. and/or other countries. All product
and company names herein may be trademarks of their respective owners.
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 SYSTEMS, INC.
Condensed Consolidated Statements of Income
(In thousands, except per share data - unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
------------------ ------------------
Revenues:
Software licenses $87,716 $92,200 $175,142 $189,074
Software license updates 66,981 39,560 125,878 74,800
Services 23,605 11,289 38,592 22,666
--------- -------- -------- ---------
Total net revenues 178,302 143,049 339,612 286,540
Cost of revenues 4,925 5,036 9,161 9,767
--------- -------- -------- ---------
Gross margin 173,377 138,013 330,451 276,773
Operating expenses:
Research and development 22,173 16,244 41,211 31,369
Sales, marketing and support 80,804 60,550 154,932 122,261
General and administrative 27,837 23,022 52,588 44,044
In-process research and
development -- -- 18,700 --
Amortization of intangible
assets 5,471 2,699 9,231 5,673
--------- -------- -------- ---------
Total operating
expenses 136,285 102,515 276,662 203,347
Income from operations 37,092 35,498 53,789 73,426
Write-off of deferred debt
issuance costs -- -- (7,219) --
Other income, net 2,749 1,618 5,075 3,078
--------- -------- -------- ---------
Income before income taxes 39,841 37,116 51,645 76,504
Income taxes 8,366 7,772 10,845 16,831
--------- -------- -------- ---------
Net income $31,475 $29,344 $40,800 $59,673
========= ======== ======== =========
Earnings per common share -
diluted $0.18 $0.17 $0.23 $0.35
========= ======== ======== =========
Weighted average shares
outstanding -
diluted 176,273 171,925 174,428 171,158
========= ======== ======== =========
Adjusted net income $35,433 $31,081 $68,204 $63,276
========= ======== ======== =========
Adjusted earnings per share -
diluted $0.20 $0.18 $0.39 $0.37
========= ======== ======== =========
Note: The above presentation of adjusted net income and adjusted
earnings per share has been adjusted to exclude the effect of
amortization of core technology and other intangible assets primarily
related to business combinations of $5.5 million and $2.7 million for
the three months ended June 30, 2004 and 2003, respectively, and
$9.2 million and $5.7 million for the six months ended June 30, 2004
and 2003, respectively. For the six months ended June 30, 2004,
adjusted net income and adjusted diluted earnings per share have also
been adjusted to exclude the effects of the write-off of deferred
debt issuance costs of $7.2 million and in-process research and
development of $18.7 million.
Condensed Consolidated Balance Sheets
(In thousands - unaudited)
June 30, 2004 December 31, 2003
--------------- -----------------
ASSETS:
Cash and short-term investments $240,365 $612,314
Accounts receivable, net 86,479 87,464
Other current assets 83,492 109,707
--------------- -----------------
Total current assets 410,336 809,485
Long-term investments 281,491 285,957
Property and equipment, net 68,932 65,837
Goodwill and other intangible assets,
net 388,582 173,664
Other long-term assets 8,762 9,996
--------------- -----------------
Total assets $1,158,103 $1,344,939
=============== =================
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable and accrued expenses $107,682 $114,456
Current portion of deferred revenues 184,002 152,938
Convertible subordinated debentures -- 351,423
--------------- -----------------
Total current liabilities 291,684 618,817
Long-term portion of deferred
revenues 9,777 12,137
Other liabilities 9,447 7,187
Stockholders' equity 847,195 706,798
--------------- -----------------
Total liabilities and stockholders'
equity $1,158,103 $1,344,939
=============== =================
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 June 30, 2004
- ----------------------------------------------------------------------
Earnings
Per
Operating Operating Operating Net Share -
Expenses Income Margin Income Diluted
---------- --------- --------- --------- --------
U.S. GAAP measure $136,285 $37,092 20.8% $31,475 $0.18
Adjustments to
exclude the effects
of amortization (5,471) 5,471 3.1 3,958 0.02
---------- --------- --------- --------- --------
Adjusted figures $130,814 $42,563 23.9% $35,433 $0.20
========== ========= ========= ========= ========
Three Months Ended June 30, 2003
- ----------------------------------------------------------------------
Earnings
Per
Operating Operating Operating Net Share -
Expenses Income Margin Income Diluted
---------- --------- --------- --------- --------
U.S. GAAP measure $102,515 $35,498 24.8% $29,344 $0.17
Adjustments to
exclude the effects
of amortization (2,699) 2,699 1.9 1,737 0.01
---------- --------- --------- --------- --------
Adjusted figures $99,816 $38,197 26.7% $31,081 $0.18
========== ========= ========= ========= ========
Six Months Ended June 30, 2004
- ----------------------------------------------------------------------
Earnings Per Share -
Net Income Diluted
--------------- ---------------------
U.S. GAAP measure $40,800 $0.23
Adjustments to exclude the
effects of the following:
Amortization 6,928 0.04
Write-off of deferred debt
issuance costs 5,703 0.03
In-process research and
development 14,773 0.08
--------------- ---------------------
Adjusted figures $68,204 $0.39(a)
=============== =====================
Six Months Ended June 30, 2003
- ----------------------------------------------------------------------
Earnings Per Share -
Net Income Diluted
-------------------------------------
U.S. GAAP measure $59,673 $0.35
Adjustments to exclude the
effects of amortization 3,603 0.02
--------------- ---------------------
Adjusted figures $63,276 $0.37
=============== =====================
Forward-looking Guidance
for the Three Months Ended September 30, 2004
- ----------------------------------------------------------------------
Earnings Per Share
Range - Diluted
-------------------
U.S. GAAP measure $0.17 to $0.19
Adjustments to exclude the effects of amortization $0.02
-------------------
Adjusted figures $0.19 to $0.21
===================
(a) Amounts may not add due to rounding.
CONTACT: Citrix Systems, Inc., Fort Lauderdale
Media Inquiries:
Eric Armstrong, 954-267-2977
eric.armstrong@citrix.com
or
Citrix Systems, Inc., Fort Lauderdale
Investor Inquiries:
Jeff Lilly, 954-267-2886
jeff.lilly@citrix.com