Exhibit 99.1
Citrix Reports First Quarter Earnings Results
FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--April 20, 2005--Citrix Systems,
Inc. (Nasdaq:CTXS):
-- Year-over-year Quarterly Revenue Growth of 25%
-- Diluted Earnings Per Share of $0.22 Versus $0.05 Over
Comparable Period Last Year
-- Adjusted Diluted Earnings Per Share of $0.24 Versus $0.19 Over
Comparable Period Last Year
Citrix Systems, Inc. (Nasdaq:CTXS), the global leader in access
infrastructure solutions, today reported financial results for the first quarter
of fiscal 2005 ended March 31, 2005.
Financial Results
In the first quarter of fiscal 2005, Citrix achieved revenue of $202
million, compared to $161 million in the first quarter of fiscal 2004,
representing 25 percent revenue growth.
GAAP Results
Net income for the first quarter of fiscal 2005 was $39 million, or $0.22
per diluted share, compared to $9.3 million, or $0.05 per diluted share, for the
first quarter of fiscal 2004.
Non-GAAP Results
Adjusted net income, in the first quarter of 2005 increased 28 percent to
$42 million for the first quarter of fiscal 2005, or $0.24 per diluted share,
compared to $33 million, or $0.19 per diluted share, in the comparable period
last year. Net income in the first quarter of 2005 was adjusted to exclude the
effects of amortization of intangible assets and amortization of deferred
stock-based compensation and in the first quarter of 2004 was adjusted to
exclude the effects of amortization of intangible assets, write-off of deferred
debt issuance costs and in-process research and development.
"We posted a solid quarter with strong execution and growth across the
company, continuing the momentum into 2005," said Mark Templeton, president and
chief executive officer for Citrix.
"Compared to the first quarter of 2004, we saw double-digit growth in all
regions, including the Americas; impressive momentum from Citrix Online,
including strong growth from Citrix GoToMeeting; and growth in new product
revenue, especially with the Access Suite.
"Our results show excellent execution as well as leverage from our expanded
product portfolio.
"On April 26, at our third annual Strategy Day, we will outline additional
details of how the company plans to leverage its investments in the access
infrastructure market."
Q1 Financial Highlights
In reviewing the first quarter results of 2005, compared to the
first quarter of 2004:
-- Total revenue grew 25 percent.
-- The Americas region grew revenue 15 percent; EMEA grew 11
percent, and the Pacific region grew 27 percent.
-- Product license revenue increased 3 percent.
-- Revenue from license updates grew 31 percent.
-- Services revenue, which is comprised of consulting, education
and technical support, excluding Citrix Online, grew 17
percent.
In addition, in the first quarter:
-- Citrix Online contributed $20 million of revenue.
-- Operating margin was 22 percent; adjusted operating margin was
24 percent, excluding the effects of amortization of
intangible assets and amortization of deferred stock-based
compensation.
-- Cash flow from operations was approximately $73 million.
-- In its stock repurchase activity, the company received almost
2.6 million shares of its common stock at an average net price
per share of $22.74, for a total value of approximately $58
million. The company has over $200 million remaining under
the current repurchase authorization.
Financial Outlook for Second Fiscal Quarter 2005
Citrix management offers the following guidance for the second
fiscal quarter 2005 ending June 30, 2005:
-- Net revenue is expected to be in the range of $203 million to
$210 million.
-- Total operating expenses are expected to increase 2 percent to
4 percent sequentially.
-- Other income is expected to be $4 million.
-- The effective tax rate is expected to be consistent with first
quarter of 2005, however the tax rate will fluctuate based on
the actual geographic mix of sales in a given quarter.
-- Weighted average diluted shares outstanding is expected to be
in the range of 175 million to 177 million.
-- GAAP diluted earnings per share is expected to be in the range
of $0.22 to $0.23, and adjusted diluted earnings per share is
expected to be in the range of $0.24 to $0.25.
The above statements are based on current expectations. These
statements are forward-looking, and actual results may differ
materially.
Financial Outlook for Fiscal Year 2005
For fiscal year 2005, the company expects net revenue to be in the range of
$840 million to $855 million. The company expects GAAP diluted earnings per
share to be in the range of $0.94 to $0.99, and adjusted diluted earnings per
share to be in the range of $1.02 to $1.07. Adjusted diluted earnings per share
excludes the effects of amortization of intangible assets and amortization of
deferred stock-based compensation.
The above statements are based on current expectations. These statements
are forward-looking, and actual results may differ materially.
Company, Product and Alliance Highlights
During the first quarter 2005, Citrix:
-- appointed two new directors to its board of directors --
Murray Demo, executive vice president and chief financial
officer for Adobe Systems, Inc. and Godfrey Sullivan,
president and chief executive officer for Hyperion Solutions
Corp. Additionally, Citrix announced that Tom Bogan, a current
board member and the former president and chief operating
officer of Rational Software, will become chairman of the
Citrix board effective May 5, 2005;
-- announced that its board of directors has authorized the
company to repurchase up to an additional $200 million of
Citrix common stock;
-- strengthened its strategic alliance with SAP AG by offering a
joint solution for small and mid-size businesses (SMB) that
bundles SAP Business One with Citrix(R) Presentation Server.
The companies also have unveiled a go-to-market strategy for
the joint offering;
-- at its annual global partner and sales conference Citrix
Solutions Summit(TM), attended by over 1,600 partner
executives and 1,000 sales professionals, detailed how it is
targeting the $15.5 billion access infrastructure market with
a broader product portfolio and greater channel opportunities;
-- earned a PC Magazine Editor's Choice award for Citrix(R)
GoToMeeting(TM) in a competitive review of next-generation
Web-conferencing solutions.
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 May 4, 2005. In addition, an audio
replay of the conference call will be available through April 27, 2005, by
dialing (800) 642-1687 or (706) 645-9291 (passcode required: 5171306).
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. More than 160,000 organizations around the world
use Citrix every day. Our access software, services and appliances give 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 97% of the Fortune Global 100. Based in Fort Lauderdale,
Florida, Citrix has offices in 22 countries, and approximately 6,200 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,
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
March 31,
2005 2004
---------- ----------
Revenues:
Product licenses $90,062 $87,426
License updates 77,175 58,897
Services 34,653 14,987
---------- ----------
Total net revenues 201,890 161,310
Cost of revenues:
Cost of product license revenues 1,368 1,413
Cost of services revenues 4,515 2,823
Amortization of core and product technology 3,318 3,034
---------- ----------
Total cost of revenues 9,201 7,270
Gross margin 192,689 154,040
Operating expenses:
Research and development 25,065 19,038
Sales, marketing and support 94,394 74,128
General and administrative 27,308 24,751
Amortization of deferred stock-based
compensation 103 -
In-process research and development - 18,700
Amortization of other intangible assets 2,177 726
---------- ----------
Total operating expenses 149,047 137,343
---------- ----------
Income from operations 43,642 16,697
Write-off of deferred debt issuance costs - (7,219)
Other income, net 5,088 2,326
---------- ----------
Income before income taxes 48,730 11,804
Income taxes 10,170 2,479
---------- ----------
Net income $38,560 $9,325
========== ==========
Earnings per common share - diluted $0.22 $0.05
========== ==========
Weighted average shares outstanding -
diluted 175,913 172,584
========== ==========
Adjusted net income $42,066 $32,771
========== ==========
Adjusted earnings per share - diluted $0.24 $0.19
========== ==========
Note: See accompanying reconciliation of non-GAAP financial measures
to comparable U.S. GAAP measures (unaudited).
CITRIX SYSTEMS, INC.
Condensed Consolidated Balance Sheets
(In thousands - unaudited)
March 31, December 31,
2005 2004
------------- -------------
ASSETS:
Cash and cash equivalents $120,947 $73,485
Short-term investments 189,691 159,656
Accounts receivable, net 85,459 108,399
Other current assets 76,218 85,040
------------- -------------
Total current assets 472,315 426,580
Restricted cash equivalents and
investments 147,176 149,051
Long-term investments 147,385 183,974
Property and equipment, net 68,235 69,281
Goodwill and other intangible assets, net 443,796 448,624
Other long-term assets 11,318 8,574
------------- -------------
Total assets $1,290,225 $1,286,084
============= =============
LIABILITIES AND
STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses 120,037 $131,287
Current portion of deferred revenues 216,422 210,872
------------- -------------
Total current liabilities 336,459 342,159
Long-term portion of deferred revenues 13,561 14,271
Other liabilities 4,540 4,749
Stockholders' equity 935,665 924,905
------------- -------------
Total liabilities and stockholders'
equity $1,290,225 $1,286,084
============= =============
CITRIX SYSTEMS, INC.
Condensed Consolidated Statement of Cash Flows
(In thousands - unaudited)
Three Months Ended
March 31, 2005
------------------
OPERATING ACTIVITIES
Net Income $38,560
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization and depreciation 10,381
Amortization of deferred stock-based compensation 103
Provision for accounts receivable allowances 317
Tax benefit related to the exercise of non-
statutory stock options and disqualifying
dispositions of incentive stock options 4,509
Other non-cash items (22)
------------------
Total adjustments to reconcile net
income to net cash provided by
operating activities 15,288
Changes in operating assets and liabilities:
Accounts receivable 22,623
Prepaid expenses and other current assets 3,099
Other assets (1,144)
Deferred tax assets, net (237)
Accounts payable and accrued expenses (9,489)
Deferred revenues 4,840
Other liabilities (140)
------------------
Total changes in operating assets and liabilities 19,552
------------------
Net cash provided by operating activities 73,400
INVESTING ACTIVITIES
Net proceeds from sales, maturities and purchases of
available-for-sale investments 5,606
Purchases of property and equipment (4,322)
------------------
Net cash provided by investing activities 1,284
FINANCING ACTIVITIES
Proceeds from issuance of common stock 12,739
Cash paid under stock repurchase programs (39,961)
------------------
Net cash used in financing activities (27,222)
------------------
Change in cash and cash equivalents 47,462
Cash and cash equivalents at beginning of period 73,485
------------------
Cash and cash equivalents at end of period $120,947
==================
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 ("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 GAAP measure for the respective periods (in
thousands, except for per share information and percentages):
CITRIX SYSTEMS, INC.
RECONCILIATION OF CONDENSED CONSOLIDATED STATEMENTS OF INCOME
TO THE NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data - unaudited)
Three Months Ended Three Months Ended
March 31, 2005 March 31, 2004
--------------------------- ---------------------------
GAAP Adjust- Non-GAAP GAAP Adjust- Non-GAAP
ments ments
--------- ------- --------- --------- ---------- ------
Revenues:
Product
licenses $90,062 - $90,062 $87,426 - $87,426
License
updates 77,175 - 77,175 58,897 - 58,897
Services 34,653 - 34,653 14,987 - 14,987
--------- ------- --------- --------- ---------- -------
Total
net
rev-
enues $201,890 - $201,890 $161,310 - $161,310
Cost of
revenues:
Cost of
product
license
revenues 1,368 - 1,368 1,413 - 1,413
Cost of
services
revenues 4,515 - 4,515 2,823 - 2,823
Amort- (3,318) (3,034) A
ization A
of core
and
product
technology 3,318 - 3,034 -
--------- ------- --------- --------- ---------- -------
Total
cost of
revenues 9,201 (3,318) 5,883 7,270 (3,034) 4,236
Gross margin 192,689 3,318 196,007 154,040 3,034 157,074
Operating
expenses:
Research
and
develop-
ment 25,065 - 25,065 19,038 - 19,038
Sales,
marketing
and
support 94,394 - 94,394 74,128 - 74,128
General
and admin-
istrative 27,308 - 27,308 24,751 - 24,751
Amort- (103) B
ization
of
deferred
stock-
based
compen-
sation 103 - - - -
In-process
research
and
develop-
ment 18,700 (18,700) C
--------- ------- --------- --------- ---------- -------
Amort- (2,177) (726) A
ization A
of other
intangible
assets 2,177 - 726 -
--------- ------- --------- --------- ---------- -------
Total
oper-
ating
expenses 149,047 (2,280) 146,767 137,343 (19,426) 117,917
Income from
operations 43,642 5,598 49,240 16,697 22,460 39,157
Write-off of 7,219 D
deferred debt
issuance
costs (7,219)
--------- ------- --------- --------- ---------- -------
Other income,
net 5,088 - 5,088 2,326 - 2,326
--------- ------- --------- --------- ---------- -------
Income before
income taxes 48,730 5,598 54,328 11,804 29,679 41,483
Income taxes 10,170 2,092 12,262 2,479 6,233 8,712
--------- ------- --------- --------- ---------- -------
Net Income $38,560 $3,506 $42,066 $9,325 $23,446 $32,771
========= ======= ========= ========= ========== =======
Earnings per
common share
- diluted $0.22 $0.02 $0.24 $0.05 $0.14 $0.19
========= ======= ========= ========= ========== ======
Weighted
average
shares
outstanding -
diluted 175,913 175,913 172,584 172,584
========= ======= ========= ========= ========== =======
A - To exclude the non-cash effects of the amortization of core and
product technology and other intangible assets primarily related
to business combinations.
B - To exclude the effects of amortization of deferred stock-based
compensation.
C - To exclude the effects of the write-off of in-process research
and development.
D - To exclude the effects of the write-off of deferred debt issuance
costs due to the redemption of the company's convertible
subordinated debentures.
Forward-looking Guidance
for the Three Months Ended June 30, 2005
- ----------------------------------------------------------------------
Earnings Per Share
Range - Diluted
------------------------
U.S. GAAP measure $0.22 to $0.23
Adjustments to exclude the effects of
amortization and amortization of deferred
stock-based compensation $0.02
------------------------
Adjusted figures $0.24 to $0.25
========================
Forward-looking Guidance
for Fiscal Year Ended December 31, 2005
- ----------------------------------------------------------------------
Earnings Per Share
Range - Diluted
------------------------
U.S. GAAP measure $0.94 to $0.99
Adjustments to exclude the effects of
amortization and amortization of deferred
stock-based compensation $0.05
------------------------
Adjusted figures $1.02 to $1.07
========================
Citrix(R), Citrix Strategy Day(TM) and Citrix Solutions Summit(TM) are
registered trademarks or trademarks of Citrix Systems, Inc. in the U.S. and
other countries. GoToMeeting(TM) is a trademark of Citrix Online, LLC, in the
United States and other countries. All other trademarks and registered
trademarks are property of their respective owners.
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