Exhibit 99.1
Citrix Reports Third Quarter Earnings
FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--Oct. 20, 2004--
Year-Over-Year Revenue Growth of 30%; Earnings Per Share of $0.22,
Up 23% Over Comparable Period Last Year; Adjusted Earnings Per Share
of $0.24, Up 28% Over Comparable Period Last Year
Citrix Systems Inc. (Nasdaq:CTXS), the global leader in access
infrastructure solutions, today reported results for the third quarter
ended September 30, 2004.
Revenues for the third quarter of 2004 were $187.6 million,
compared to $144.3 million in the same period of the prior year,
representing a 30 percent increase. Deferred revenue grew to $202.3
million, compared to $144.6 million in the same period of the prior
year, representing an increase of 40 percent.
GAAP Results
Net income for the third quarter of 2004 was $38.4 million, or
$0.22 per diluted share, compared to $31.0 million, or $0.18 per
diluted share, for the same period a year ago.
Adjusted Results
Net income, adjusted to exclude the effect of amortization of
intangible assets, was $42.3 million for the third quarter of 2004, or
$0.24 per diluted share, compared to $32.8 million, or $0.19 per
diluted share, in the comparable period last year.
"The third quarter was a record quarter for revenue," said Mark
Templeton, president and chief executive officer for Citrix.
"Additionally, we saw strong performance from the Citrix Online
division, double-digit revenue growth year-over-year and improved
operating margins sequentially.
"We saw strength in three key areas: in our core enterprise
business; in new products, especially the Access Suite; and in our
subscription businesses. Enterprise customers are expanding their use
of Citrix software and services as they see more strategic value in
access infrastructure as a core business system."
Q3 Financial Highlights
- Total revenues grew 30 percent over the comparable period last
year.
- By segment, Americas revenue grew 15 percent; EMEA revenue grew
25 percent; and APAC revenue grew 31 percent, compared to last
year.
- License revenue increased 1 percent sequentially and declined 2
percent year-over-year.
- Revenue from license updates grew 62 percent over last year.
- The Citrix Online division contributed $14.1 million of revenue
during the quarter, a sequential increase of 35 percent.
- Services revenue, which is comprised of consulting, education
and technical support, grew 35 percent year-over-year.
- Operating margin was 24.7 percent for the quarter; adjusted
operating margin was 27.5 percent, excluding the effect of
amortization of intangible assets.
- Cash flow from operations was approximately $62 million for the
quarter.
- During the quarter, the company repurchased 3.0 million shares
at an average net price per share of $17.75.
Financial Outlook
Citrix management offers the following guidance for the quarter
and year ending December 31, 2004:
Net revenues are expected to be in the range of $195 million to
$205 million for the quarter ending December 31, 2004; for the full
year 2004, net revenues are expected to be in the range of $722
million to $732 million.
GAAP earnings per share is expected to be in the range of $0.23 to
$0.25 for the quarter ending December 31, 2004; for the full year
2004, GAAP earnings per share is expected to be in the range of $0.69
to $0.71.
Adjusted earnings per share, which excludes the effect of
amortization of intangible assets related to business combinations, is
expected to be in the range of $0.25 to $0.27 for the quarter ending
December 31, 2004; for the full year 2004, adjusted earnings per
share, which excludes the effects of amortization of intangible assets
related to business combinations, in-process research and development,
and the write-off of deferred debt issuance costs is expected to be in
the range of $0.89 to $0.91.
The above statements are based on current expectations. These
statements are forward-looking, and actual results may differ
materially.
Customer Highlights
Citrix closed several large customer agreements during the
quarter, including Ayuntamiento de Madrid, Computer Associates
International Inc., German Armed Forces, Huawei Technologies, Junta de
Andalucia - Servicio Andaluz de la Salud, and the Syracuse City School
District.
The city government of Madrid, Spain, Ayuntamiento de Madrid,
licensed 1,500 seats of the Citrix(R) MetaFrame(R) Access Suite,
including the MetaFrame Presentation Server component product.
Informatica del Ayuntamiento de Madrid, via Citrix access
infrastructure, will provide its municipal workers with secure, easy
and instant access to enterprise applications such as SAP, no matter
where they are located, from anywhere, at anytime, using any device,
over any connection.
Computer Associates International Inc., (CA) one of the world's
largest management software companies, selected Citrix GoToAssist(TM)
to enable it to deliver secure, on-demand, remote technical-support
service to millions of customers around the world. With
industry-leading Citrix GoToAssist, CA has increased productivity,
reduced backlog and the time required to resolve issues, and
significantly enhanced customer satisfaction.
The German Armed Forces selected Citrix MetaFrame Presentation
Server for highly secure access to mission-critical applications. To
manage the transfer of confidential information, the German Armed
Forces needed a solution that would enhance the customized security
solutions it already had in place in which no active content is
delivered through the Local Area Network (LAN) or wireless connection.
By licensing 4,000 seats of the MetaFrame Presentation Server, a
number of German Armed Forces personnel can now have secure, reliable,
on-demand access to the required applications.
Huawei Technologies, headquartered in Shenzhen, China and
specializing in R&D, production and marketing of telecom equipment,
customized network solutions in fixed, mobile, optical and data
communications networks, has licensed 1,000 seats of Citrix MetaFrame
Presentation Server. The company is quickly emerging as a key player
in China's telecom industry, in addition to becoming an active
participant in the global telecom market. Using Citrix access
infrastructure, hundreds of Huawei Technologies employees will have
safe anytime, anywhere access to Oracle and SAP and 30 other
frequently used enterprise applications.
Junta de Andalucia - Servicio Andaluz de la Salud, a regional
healthcare organization serving Andalucia, Spain, licensed 2,600
Citrix MetaFrame Presentation Server and MetaFrame Password Manager
seats. With Citrix access infrastructure, Junta de Andalucia will
continue to enhance its consistent track record of excellent patient
care by providing its healthcare employees with fast, company-wide
access to a variety of critical office and medical applications.
Located in Syracuse, N.Y., the Syracuse City School District
currently oversees 38 individual schools, ranging from elementary to
high school grade levels. The Syracuse City School District holds a
common set of core values, which include excellence in learning and
teaching, cultural diversity and public accountability. The district
is also actively committed to utilizing technology advancements to
improve the learning environment for its vast student body. To ensure
that its facility and administrative staff have convenient, secure
access to applications like their student information systems,
Syracuse City School District licensed 2,500 seats of Citrix MetaFrame
Presentation Server.
Product and Alliance Highlights
During the third quarter, Citrix and SAP announced that Citrix
MetaFrame Presentation Server will be offered for SAP upgrades in
North America, which will result in faster upgrades, increased
productivity, and reduced costs.
During the quarter, Citrix and Siebel reported that Citrix joined
the Siebel Alliance Program as one of only five elite Siebel Strategic
Platform Partners. The relationship validates the Citrix MetaFrame
Access Suite, and specifically Citrix MetaFrame Password Manager, as
an enterprise single sign-on (SSO) solution for Siebel 7.5.3 and
Siebel 7.7.
Citrix held its iForum(TM) Global 2004 conference from October 4
to 7 in Orlando, Florida. The conference, which hosted more than 2,300
IT professionals, and featured a 40- percent increase in the number of
sponsors and a 60-percent increase in new attendees. At iForum, Citrix
announced it:
- Expanded its partnering with IBM to further integrate Citrix
MetaFrame Presentation Server with WebSphere's Portal v5, and to
bundle and market Citrix MetaFrame Presentation Server with several
key IBM technologies including WebSphere, Tivoli and Blade Center.
This agreement will help propel both companies' "On Demand" strategic
visions.
- Licensed technology from Aurema and RTO Software to enhance the
access experience of end users by optimizing processor use and virtual
memory in future MetaFrame Presentation Server deployments.
- Implemented MetaFrame Password Manager at more than 250
organizations, giving users single sign-on access to
password-protected applications. Customers that have implemented
MetaFrame Password Manager include ABM Industries, March of Dimes,
Masco, Olympus America, U.S. Air Force and various government
agencies.
During the quarter, Citrix Online announced:
- Citrix GoToAssist 6.0 with new features that enable technical
support organizations to rapidly resolve support incidents, achieve
greater increases in end-user productivity, and make dramatic
improvements in customer loyalty.
- Citrix GoToAssist doubled its customers in 2004, building on its
100 percent year-over-year growth. The industry-leading solution now
enables remote support for more than 2,300 on-demand enterprises.
- A strategic alliance between Citrix GoToMyPC(R) and Verizon
Online to provide special pricing for Verizon Online's customers.
- A strategic alliance with Sharp Systems of America to provide
Sharp notebook customers with a free three-month trial of Citrix
GoToMeeting(TM). The alliance extends the successful 2003 promotion
during which the two companies offered Citrix GoToMyPC with Sharp's
Actius notebooks.
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 November 17, 2004. In addition, an audio replay of the
conference call will be available through October 26, 2004, by dialing
(800) 642-1687 or (706) 645-9291 (passcode required: 1162564).
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 lives-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 approximately 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
revenues and earnings per share, statements regarding existing and new
products, and management's plans, objectives and strategies,
constitute forward-looking statements. Such forward-looking statements
are subject to a number of risks and uncertainties that could cause
actual results to differ materially from those anticipated by the
forward-looking statements, includ ing, 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 vertical and geographic 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 ability to maintain and
expand its core business in large enterprise accounts; the company's
ability to attract and retain small sized customers; the size, timing
and recognition of revenue from significant orders; the effect of new
accounting pronouncements on revenue and expense recognition; the
company's reliance on and the success of the company's independent
distributors and resellers for the marketing and distribution of the
company's products and the success of the company's marketing and
licensing programs, including the 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 that 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 Citrix iForum(TM) are registered
trademarks or trademarks of Citrix Systems, Inc. in the U.S. and other
countries. GoToMyPC(R), GoToAssist(TM), and GoToMeeting 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 Nine Months
Ended Ended
September 30, September 30,
2004 2003 2004 2003
-----------------------------------
Revenues:
Software licenses $88,455 $90,069 $263,597 $279,144
Software license updates 70,406 43,406 196,284 118,205
Services revenue 28,717 10,866 67,309 33,532
-----------------------------------
Total net revenues 187,578 144,341 527,190 430,881
Cost of revenues 5,396 5,350 14,557 15,117
-----------------------------------
Gross margin 182,182 138,991 512,633 415,764
Operating expenses:
Research and development 21,832 15,656 63,043 47,025
Sales, marketing and support 82,612 61,331 237,544 183,592
General and administrative 26,142 20,420 78,730 64,464
Amortization of intangible assets 5,273 2,868 14,504 8,541
In-process research and development - - 18,700 -
-----------------------------------
Total operating expenses 135,859 100,275 412,521 303,622
Income from operations 46,323 38,716 100,112 112,142
Write-off of deferred debt issuance
costs - - (7,219) -
Other income, net 3,307 1,021 8,382 4,099
-----------------------------------
Income before income taxes 49,630 39,737 101,275 116,241
Income taxes 11,182 8,742 22,027 25,573
-----------------------------------
Net income $38,448 $30,995 $79,248 $90,668
===================================
Earnings per common share - diluted $0.22 $0.18 $0.46 $0.53
===================================
Weighted average shares outstanding
- diluted 172,870 171,111 173,911 171,135
===================================
Adjusted net income $42,320 $32,806 $110,524 $96,082
===================================
Adjusted earnings per share -
diluted $0.24 $0.19 $0.64 $0.56
===================================
Note: The above presentation of adjusted net income and adjusted
diluted 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 $5.3 million and $2.9 million for
the three months ended September 30, 2004 and 2003, respectively, and
$14.5 million and $8.5 million for the nine months ended September 30,
2004 and 2003, respectively. For the nine months ended September 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)
September 30, 2004 December 31, 2003
--------------------------------------
ASSETS:
Cash and short-term investments $265,995 $612,314
Accounts receivable, net 90,115 87,464
Other current assets 77,745 109,707
--------------------------------------
Total current assets 433,855 809,485
Long-term investments 274,927 285,957
Property and equipment, net 70,419 65,837
Goodwill and other intangible
assets, net 387,432 173,664
Other long-term assets 7,197 9,996
--------------------------------------
Total assets $1,173,830 $1,344,939
======================================
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable and accrued
expenses $102,661 $114,456
Current portion of deferred
revenues 190,894 152,938
Convertible subordinated
debentures - 351,423
--------------------------------------
Total current liabilities 293,555 618,817
Long-term portion of deferred
revenues 11,418 12,137
Other liabilities 9,338 7,187
Stockholders' equity 859,519 706,798
--------------------------------------
Total liabilities and
stockholders' equity $1,173,830 $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 September 30, 2004
-------------------------------------
Earnings
Per
Operating Operating Operating Net Share -
Expenses Income Margin Income Diluted
-------- ------ ------ ------ -------
U.S. GAAP measure $135,859 $46,323 24.7% $38,448 $0.22
Adjustments to exclude
the effects of
amortization (5,273) 5,273 2.8 3,872 0.02
------- ----- --- ----- ----
Adjusted figures $130,586 $51,596 27.5% $42,320 $0.24
======== ======= ===== ======= =====
Three Months Ended September 30, 2003
-------------------------------------
Earnings
Per
Operating Operating Operating Net Share -
Expenses Income Margin Income Diluted
-------- ------ ------ ------ -------
U.S. GAAP measure $100,275 $38,716 26.8% $30,995 $0.18
Adjustments to exclude
the effect of
amortization (2,868) 2,868 2.0 1,811 0.01
------- ----- --- ----- ----
Adjusted figures $97,407 $41,584 28.8% $32,806 $0.19
======= ======= ===== ======= =====
Nine Months Ended September 30, 2004
------------------------------------
Earnings
Net Per Share
Income - Diluted
------ ---------
U.S. GAAP measure $79,248 $0.46
Adjustments to exclude the effects of
the following, net of tax:
Amortization 10,800 0.06
Write-off of deferred debt issuance costs 5,703 0.03
In-process research and development 14,773 0.08
------ ----
Adjusted figures $110,524 $0.64(1)
======== ========
Nine Months Ended September 30, 2003
------------------------------------
Earnings
Net Per Share
Income - Diluted
------ ---------
U.S. GAAP measure $90,668 $0.53
Adjustments to exclude the effect
of amortization, net of tax 5,414 0.03
----- ----
Adjusted figures $96,082 $0.56
======= =====
(1) Amounts may not add due to rounding.
Forward-looking Guidance
------------------------
for the Three Months Ended December 31, 2004
--------------------------------------------
Earnings Per Share Range
- Diluted
------------------------
U.S. GAAP measure $0.23 to $0.25
Adjustments to exclude the
effect of amortization,
net of tax $0.02
-----
Adjusted figures $0.25 to $0.27
==============
Forward-looking Guidance
------------------------
for the Twelve Months Ended December 31, 2004
---------------------------------------------
Earnings Per Share Range
- Diluted
------------------------
U.S. GAAP measure $0.69 to $0.71
Adjustments to exclude the
effects, net of tax, of
amortization, in process
research and development
and debt issuance costs $0.20
-----
Adjusted figures $0.89 to $0.91
==============
CONTACT: Citrix Systems, Inc., Fort Lauderdale
For media inquiries:
Eric Armstrong, 954-267-2977
eric.armstrong@citrix.com
or
For investor inquiries:
Jeff Lilly, 954-267-2886
jeff.lilly@citrix.com