Exhibit 99.1
Citrix Reports Fourth Quarter and Fiscal Year Earnings
FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--Jan. 27, 2005--Citrix
Systems, Inc. (Nasdaq:CTXS):
-- Year-over-year Quarterly Revenue Growth of 36% and License
Revenue Growth of 12%
-- Diluted Earnings Per Share of $0.30, Up 41% Over the Fourth
Quarter of 2003
-- Adjusted Diluted Earnings Per Share of $0.29, Up 33% Over the
Fourth Quarter of 2003
Citrix Systems, Inc. (Nasdaq:CTXS), the global leader in access
infrastructure solutions, today reported financial results for the
fourth quarter and fiscal year ended Dec. 31, 2004.
Financial Results
GAAP Results
In the fourth quarter of fiscal 2004, Citrix achieved record
revenue of $214 million, compared to $158 million in the fourth
quarter of fiscal 2003, representing 36 percent revenue growth. Annual
revenues for 2004 were $741 million, compared to $589 million in the
previous year, a 26 percent increase.
Net income for the fourth quarter of fiscal 2004 was $52 million,
or $0.30 per diluted share, compared to $36 million, or $0.21 per
diluted share, for the fourth quarter of fiscal 2003. Annual net
income for 2004 was $132 million, or $0.75 per diluted share, compared
to $127 million, or $0.74 per diluted share in fiscal 2003.
Non-GAAP Results
Net income, adjusted to exclude the effects of amortization of
intangible assets primarily related to business combinations and the
write-off of in-process research and development, was $52 million for
the fourth quarter of fiscal 2004, or $0.29 per diluted share,
compared to $38 million, or $0.22 per diluted share, in the comparable
period last year. Annual net income for 2004, adjusted to exclude the
effects of amortization of intangible assets primarily related to
business combinations and the write-offs of in-process research and
development and deferred debt issuance costs, was $162 million, or
$0.93 per diluted share, compared to $134 million, or $0.78 per
diluted share, in 2003.
"It was a strong quarter capping a great year with record
revenue," said Mark Templeton, president and chief executive officer
for Citrix. "In the quarter, we saw double-digit software license
revenue growth over last year's fourth quarter; license revenue from
new products reached the high end of our target range; and we
experienced very strong sequential growth in EMEA.
"For the year, we saw strength in three key areas: in our
subscription business, our new products, and in our core enterprise
business. In addition, we executed well, maintaining our adjusted
operating margins in the desired range of mid-to-upper 20 percent
while investing for the future.
"In addition to our strong financial results, in 2004 we made both
company and technology acquisitions to expand into adjacent markets
and double the number of offerings in our product portfolio. We also
continued to increase the company's visibility worldwide and
articulate the strategic value of access infrastructure.
"We just kicked off the year with our annual Global Summit Week,
where we trained over 2,600 members of our channel community and
worldwide sales force. We look forward to solid execution in 2005, and
we're off to a great start."
Q4 Financial Highlights
-- Total revenues for the fourth quarter grew 36 percent over the
comparable period last year.
-- Quarterly software license revenue increased 12 percent over
the comparable period in fiscal 2003.
-- Revenue from software license updates grew 49 percent over the
fourth quarter in fiscal 2003.
-- Services revenue, which is comprised of consulting, education
and technical support, grew 32 percent when compared to the
same period in the prior year.
-- The Citrix Online division contributed $17 million of revenue
during the fourth quarter, a sequential increase of 19
percent.
-- Deferred revenue grew to $225 million, or 11 percent,
sequentially.
-- Operating margin was 28 percent for the quarter; adjusted
operating margin was 27 percent, excluding the effect of
amortization of intangible assets and the write-off of
in-process research and development.
-- Cash flow from operations was over $80 million for the fourth
quarter of 2004.
-- During the fourth quarter of 2004, the company repurchased 0.4
million shares at an average net price per share of $21.21.
Annual Financial Highlights
-- Total annual revenues grew 26 percent compared to fiscal 2003.
-- Annual diluted earnings per share for fiscal 2004 increased 2
percent compared to fiscal 2003. Annual adjusted diluted
earnings per share for fiscal 2004, adjusted to exclude the
effects of amortization of intangible assets, write-offs of
in-process research and development and deferred debt issuance
costs, increased 19 percent compared to fiscal 2003.
-- Deferred revenue grew to $225 million, compared to $165
million on Dec 31, 2003, representing an increase of 36
percent.
-- Operating margin was 21 percent for fiscal 2004; adjusted
operating margin was 26 percent, excluding items noted above.
-- Cash flow from operations was over $265 million for fiscal
2004.
-- During fiscal 2004, the company received 4.5 million shares
under repurchase commitments at an average net price per share
of $18.77 equating to approximately $84 million in total
expenditures.
Financial Outlook
Citrix management offers the following guidance for the first
fiscal quarter 2005 ending March 31, 2005:
-- Net revenue is expected to be in the range of $190 million to
$200 million for the first quarter of fiscal 2005.
-- GAAP diluted earnings per share is expected to be in the range
of $0.19 to $0.21 for the first quarter of fiscal 2005.
-- Adjusted diluted 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 $0.21
to $0.23 for the first quarter of fiscal 2005.
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 sales during the quarter,
including ADESA, Arla Foods, ICTRO and SHCP Servicio de Administracion
Tributaria.
ADESA, North America's largest publicly traded provider of
wholesale vehicle auctions and used-vehicle-dealer
floorplan-financing, licensed 2,900 seats of Citrix(R) MetaFrame(R)
Presentation Server 3.0. The growing company uses MetaFrame
Presentation Server to deploy all applications from its headquarters
in Indianapolis to each of its 50-plus remote auction locations,
eliminating costs associated with visiting each locale for application
upgrades and database maintenance.
The largest dairy company in Europe, Arla Foods, has licensed
6,700 seats of the Citrix(R) MetaFrame(R) Access Suite to provide its
employees with secure, instant access to business information and
centrally manage key enterprise applications. Arla Foods, a vast
co-operative owned by 11,600 Swedish and Danish milk producers,
intends to standardize on Citrix access infrastructure to maintain its
strong presence in markets spanning more than 27 countries. In
addition, by enabling the company's workforce to access supply chain
applications from any connection in real-time, Arla Foods will further
develop its position as an innovative global supplier of added value,
milk-based ingredients for consumers throughout the world.
ICTRO, the information systems organization in charge of
maintaining the information technology infrastructure and applications
for the courts and prosecution services in the Netherlands, selected
Citrix access infrastructure to streamline its datacenter, enabling
its large staff of judges, lawyers and support personnel to have
on-demand, real-time access to key agency applications. With 5,000
additional licenses of Citrix MetaFrame Presentation Server, over
15,000 ICTRO employees now have a secure, centralized platform to
protect confidential government data from unauthorized access while
being able to deploy new applications quickly and easily.
SHCP Servicio de Administracion Tributaria, the federal tax
collection agency in Mexico, recently acquired 1,000 seats of the
Citrix MetaFrame Access Suite as a part of its access strategy. With
the full suite the government agency is also fulfilling a new business
continuity initiative.
Product and Alliance Highlights
During the fourth quarter, Citrix:
-- Signed a five-year agreement with Microsoft Corporation that
enables Citrix to deliver more comprehensive access solutions
on the Microsoft(R) Windows(R) platform and will improve the
access capabilities available in the forthcoming version of
Windows Server(TM) codenamed "Longhorn."
-- Acquired privately held Net6 Inc., a leader in providing
secure access gateways. The acquisition extends Citrix's
ability to provide secure and easy access to any resource,
both data and voice, on-demand. The acquisition will enable
Citrix to offer an unrivaled end-to-end access infrastructure
system for voice, data and applications on a single, always-on
gateway that can be accessed securely from a wide range of
devices.
-- Strengthened its strategic alliance with SAP AG by extending
its SAP(R) Global Technology partnership to include membership
in the SAP NetWeaver(TM) Partner Initiative. Further, in the
first quarter of 2005, Citrix and SAP announced that the
companies will offer a joint offering for small and mid-size
businesses (SMB) that bundles SAP Business One with Citrix
MetaFrame Presentation Server. The companies also have
unveiled a go-to-market strategy for the joint offering.
-- Launched the Citrix Online suite of products in Australia and
New Zealand, targeting individuals, SMB and large
organizations through channel partners in the South Pacific.
-- Formed an alliance with ViewSonic(R) Corp., a worldwide leader
in visual display products, to offer a wireless computing
solution with a 60-day free trial of Citrix(R) GoToMyPC(R)
with every ViewSonic airsync(TM) V210 wireless display.
-- Launched Citrix(R) GoToMeeting(TM) Corporate 1.1 with the
capability of hosting scheduled online meetings for up to 200
attendees.
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 Web site at http://www.citrix.com/investors through Feb. 10,
2005. In addition, an audio replay of the conference call will be
available through Feb. 1, 2005, by dialing 800-642-1687 or
706-645-9291 (passcode required: 3242940).
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. About 160,000 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 services, access capabilities of Windows Server, 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, 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
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; 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 the IT spending environment; 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
In our earnings release, conference call, slide presentation or
webcast, we may use or discuss non-GAAP financial measures as defined
by SEC Regulation G. The GAAP financial measure most directly
comparable to each non-GAAP financial measure used or discussed 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 Twelve Months Ended
December 31, December 31,
2004 2003 2004 2003
--------- --------- --------- ---------
Revenues:
Software licenses $106,229 $95,259 $369,826 $374,403
Software license updates 75,263 50,588 271,547 168,793
Services revenue 32,475 11,897 99,784 45,429
--------- --------- --------- ---------
Total net revenues 213,967 157,744 741,157 588,625
Cost of revenues (excluding
amortization, presented
separately below) 5,739 4,919 20,296 20,036
--------- --------- --------- ---------
Gross margin 208,228 152,825 720,861 568,589
Operating expenses:
Research and development 23,314 17,418 86,357 64,443
Sales, marketing and
support 100,022 69,157 337,566 252,749
General and
administrative 27,786 21,208 106,516 85,672
Amortization of
intangible assets (2,173) 2,795 12,331 11,336
In-process research and
development 400 -- 19,100 --
--------- --------- --------- ---------
Total operating
expenses 149,349 110,578 561,870 414,200
Income from operations 58,879 42,247 158,991 154,389
Write-off of deferred debt
issuance costs -- -- (7,219) --
Other income, net 4,279 2,199 12,661 6,298
--------- --------- --------- ---------
Income before income taxes 63,158 44,446 164,433 160,687
Income taxes 10,860 8,171 32,887 33,744
--------- --------- --------- ---------
Net income $52,298 $36,275 $131,546 $126,943
========= ========= ========= =========
Earnings per share - diluted $0.30 $0.21 $0.75 $0.74
========= ========= ========= =========
Weighted average shares
outstanding - Diluted 176,576 172,385 174,734 171,447
========= ========= ========= =========
Adjusted net income $51,942 $38,097 $162,466 $134,179
========= ========= ========= =========
Adjusted earnings per share -
diluted $0.29 $0.22 $0.93 $0.78
========= ========= ========= =========
Note: See accompanying reconciliation of non-GAAP financial
measures to comparable US GAAP measures (unaudited).
Condensed Consolidated Balance Sheets
(In thousands - unaudited)
December 31, December 31,
2004 2003
------------- -------------
ASSETS:
Cash and short-term investments $233,141 $568,400
Accounts receivable, net 108,399 87,464
Other current assets 85,040 109,707
------------- -------------
Total current assets 426,580 765,571
Restricted cash equivalents and
investments 149,051 146,460
Long-term investments 183,974 183,411
Property and equipment, net 69,281 65,837
Goodwill and other intangible assets, net 448,624 173,664
Other long-term assets 8,574 9,996
------------- -------------
Total assets $1,286,084 $1,344,939
============= =============
LIABILITIES AND
STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $131,287 $114,456
Current portion of deferred revenues 210,872 152,938
Convertible subordinated debentures -- 351,423
------------- -------------
Total current liabilities 342,159 618,817
Long-term portion of deferred revenues 14,271 12,137
Other liabilities 4,749 7,187
Stockholders' equity 924,905 706,798
------------- -------------
Total liabilities and stockholders'
equity $1,286,084 $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 December 31, 2004
------------------------------------
Earnings
Per
Operating Operating Operating Net Share -
Expenses Income Margin Income Diluted
--------- --------- --------- -------- --------
U.S. GAAP measure $149,349 $58,879 27.5% $52,298 $0.30
Adjustments to
exclude the
following:
Amortization 2,173 (2,173) (1.0) (436) (0.01)
In-process research
and development (400) 400 0.2 80 --
--------- --------- --------- -------- --------
Adjusted figures $151,122 $57,106 26.7% $51,942 $0.29
========= ========= ========= ======== ========
Three Months Ended December 31, 2003
------------------------------------
Earnings
Per
Operating Operating Operating Net Share -
Expenses Income Margin Income Diluted
--------- --------- --------- -------- --------
U.S. GAAP measure $110,578 $42,247 26.8% $36,275 $0.21
Adjustments to
exclude the effects
of amortization (2,795) 2,795 1.8 1,822 0.01
--------- --------- --------- -------- --------
Adjusted figures $107,783 $45,042 28.6% $38,097 $0.22
========= ========= ========= ======== ========
Twelve Months Ended December 31, 2004
-------------------------------------
Tax
Net Income Earnings Per Share - Diluted Rate
---------- ---------------------------- ------
U.S. GAAP measure $131,546 $0.75 20%
Adjustments to
exclude the
following, net of
tax:
Amortization 9,865 0.06 1%
Write-off of
deferred debt
issuance
costs 5,775 0.03 1%
In-process
research and
development 15,280 0.09 (2)%
---------- ------ ------
Adjusted figures $162,466 $0.93 20%
========== ====== ======
Twelve Months Ended December 31, 2003
-------------------------------------
Tax
Net Income Earnings Per Share - Diluted Rate
---------- ---------------------------- ------
U.S. GAAP measure $126,943 $0.74 21%
Adjustments to
exclude the effects
of amortization 7,236 0.04 1%
---------- ------ ------
Adjusted figures $134,179 $0.78 22%
========== ====== ======
Forward-looking Guidance for the Three Months Ended March 31, 2005
------------------------------------------------------------------
Earnings Per Share Range -
Diluted Tax Rate
---------------------------- ----------
U.S. GAAP measure $0.19 to $0.21 21% - 23%
Adjustments to
exclude the effects
of amortization $0.02 1%
------- ------
Adjusted figures $0.21 to $0.23 22% - 24%
=============== ==========
Citrix(R), MetaFrame(R) and Citrix Solutions Summit(TM) are
registered trademarks or trademarks of Citrix Systems, Inc. in the
U.S. and other countries. GoToMyPC(R) and GoToMeeting(TM) are
trademarks or registered trademarks of Citrix Online, LLC, in the
United States and other countries. Microsoft(R), Windows(R) and
Windows Server(TM) are registered trademarks or trademarks of
Microsoft Corporation in the U.S. and/or other countries. All other
trademarks and registered trademarks are property of their respective
owners.
CONTACT: Citrix Systems, Inc., Fort Lauderdale
For media inquiries, contact:
Eric Armstrong, 954-267-2977
eric.armstrong@citrix.com
or
A&R Partners
Eric Jones, 212-905-6154
ejones@arpartners.com
or
For investor inquiries, contact:
Citrix Systems, Inc.
Jeff Lilly, 954-267-2886
jeff.lilly@citrix.com