Intuit Inc. (Nasdaq: INTU) today
announced financial results for its fourth quarter and full fiscal year
2013, which ended July 31, and provided initial guidance for fiscal year
2014.
Unless otherwise noted, all growth rates refer to the current period
versus the comparable prior-year period. All reported results and fiscal
2014 guidance exclude Intuit Financial Services and Intuit Health, which
have been sold and reclassified to discontinued operations.
Fourth-quarter 2013 Highlights
-
Increased revenue 12 percent, to $634 million.
-
Delivered 13 percent higher revenue in the Small Business Group, led
by Demandforce, which was acquired in May 2012.
-
Grew QuickBooks Online subscribers 28 percent to 487,000, with
subscribers outside the U.S. growing 80 percent to 32,000.
-
Realigned Intuit’s business units effective Aug. 1 and recorded a
pretax charge of approximately $20 million to position the company for
growth.
-
Completed the divestitures of Intuit Financial Services on Aug. 1 and
Intuit Health Group on August 19.
-
Raised its quarterly cash dividend, from $0.17 per share to $0.19 per
share, to be paid on Oct. 18.
Snapshot of Fourth-quarter Results
|
|
GAAP
|
|
Non-GAAP
|
|
|
Q4 FY13
|
|
Q4 FY12
|
|
Change
|
|
Q4 FY13
|
|
Q4 FY12
|
|
Change
|
Revenue
|
|
$634
|
|
$567
|
|
12%
|
|
$634
|
|
$567
|
|
12%
|
Operating Income (Loss)
|
|
($60)
|
|
($47)
|
|
NA
|
|
$9
|
|
$13
|
|
NA
|
EPS
|
|
($0.05)
|
|
$0.01
|
|
NA
|
|
$0.00
|
|
$0.01
|
|
NA
|
Dollars are in millions, except earnings per share (EPS). See “About
Non-GAAP Financial Measures” below for more information regarding
financial measures not prepared in accordance with Generally Accepted
Accounting Principles (GAAP). All figures in the table above have been
reclassified to reflect Intuit Websites, Intuit Financial Services, and
Intuit Health as discontinued operations and to exclude their results
from non-GAAP EPS.
Fiscal Year 2013 Highlights
-
Increased revenue 10 percent, to $4.2 billion.
-
Grew GAAP diluted earnings per share 9 percent and non-GAAP diluted
earnings per share 11 percent.
-
Delivered 16 percent higher revenue in the Small Business Group,
driven by strong adoption of connected services.
-
Grew mobile usage nearly 300 percent in the 2012 tax season.
-
Finished the fiscal year with 64 percent of revenue coming from
connected services. At $1.5 billion, software as a service amounted to
37 percent of total revenue.
-
Expanded non-GAAP operating margins to over 35 percent through
divestitures of certain business units and continued revenue shift to
connected services.
-
Provided guidance for fiscal 2014, including revenue growth of 6 to 8
percent, GAAP diluted earnings per share growth of 10 to 13 percent,
and non-GAAP diluted earnings per share growth of 10 to 13 percent.
Snapshot of Full-year Results
|
|
GAAP
|
|
|
Non-GAAP
|
|
|
FY13
|
|
FY12
|
|
Change
|
|
|
FY13
|
|
FY12
|
|
Change
|
Revenue
|
|
$4,171
|
|
$3,808
|
|
10%
|
|
|
$4,171
|
|
$3,808
|
|
10%
|
Operating Income
|
|
$1,233
|
|
$1,168
|
|
6%
|
|
|
$1,470
|
|
$1,367
|
|
8%
|
EPS
|
|
$2.83
|
|
$2.60
|
|
9%
|
|
|
$3.20
|
|
$2.89
|
|
11%
|
Dollars are in millions, except earnings per share. See “About Non-GAAP
Financial Measures” below for more information regarding financial
measures not prepared in accordance with Generally Accepted Accounting
Principles. All figures in the table above have been reclassified to
reflect Intuit Websites, Intuit Financial Services, and Intuit Health as
discontinued operations and to exclude their results from non-GAAP EPS.
CEO Perspective
“Fiscal 2013 has been a year of exciting wins, as well as some
challenges. We posted strong growth in Small Business, but fell short of
our expectations in Consumer Tax. We’ve seized the opportunity to
capture lessons learned, make the necessary adjustments, and position
the company for a stronger future as we look ahead,” said Brad Smith,
Intuit’s president and chief executive officer.
“In anticipation of the next chapter of growth, we updated our connected
services strategy and reorganized our business units and functional
groups. These organizational changes have transformed Intuit from a
portfolio of businesses into an ecosystem of small businesses,
consumers, and accountants, who build durable competitive advantage by
working together.
“Looking to fiscal year 2014, our momentum is rising with a robust
global strategy, new product launches, and one of the most exciting
marketing campaigns we have ever launched in our small business segment.
In tax, our teams are thinking big and looking for ways to redefine the
franchise. We are excited about our potential as we go after a global
opportunity to transform the financial lives of small businesses and
consumers, and the trusted accountants who serve them,” Smith said.
Business Segment Results and Highlights
Total Small Business Group revenue grew 13 percent for the
quarter and 16 percent for the year, including Demandforce. Connected
services offerings continued to attract online small business customers.
-
Financial Management Solutions revenue increased 18 percent for
the quarter and 20 percent for the year. Adjusted for the May 2012
acquisition of Demandforce, FMS revenue increased 13 percent for the
quarter and 10 percent for the year.
-
Employee Management Solutions revenue grew 12 percent for the
quarter and 12 percent for the year, driven by 18 percent growth in
Online Payroll subscribers for the year.
-
Payment Solutions revenue grew 7 percent for the quarter and 14
percent for the year, driven by fee structure changes and higher total
card transaction volume. Worldwide merchant customers grew 13 percent
for the year.
Consumer Tax
-
Consumer Tax grew 4 percent for the year, driven by 4 percent
growth in paid federal units.
Accounting Professionals
-
Accounting Professionals revenue grew 6 percent for the year
due to customer growth, price increases and higher QuickBooks Premier
Accountant Edition revenue.
Other Businesses
-
Other Businesses revenue was up 8 percent for the quarter and 6
percent for the year. Global growth was led by Small Business revenue,
which grew double digits. Overall revenue grew 10 percent excluding
currency impacts.
Quarterly Dividend
Intuit paid quarterly cash dividends of $0.17 per share, totaling $203
million during fiscal 2013. In August, Intuit’s board of directors
approved a new quarterly cash dividend of $0.19 per share, an increase
of 12 percent, payable on Oct. 18 to shareholders of record as of the
close of business on Oct. 10.
Stock Repurchase Program
Intuit repurchased $292 million of its common stock in fiscal 2013. At
the end of fiscal 2013 the current authorization had $1.4 billion
remaining for stock repurchases through August 2014. Intuit’s Board
approved an additional $2 billion authorization in August.
CFO Perspective
“We continue to return cash to shareholders through share
repurchases and cash dividends. We intend to use the existing cash and
proceeds of the IFS transaction to accelerate the repurchase of shares,”
said Neil Williams, Intuit’s chief financial officer.
“For fiscal 2014, we’re increasing our quarterly dividend by 12 percent.
These actions demonstrate our disciplined approach to capital allocation
as we continue to invest for growth as well as return cash to
shareholders.”
Forward-looking Guidance
Intuit announced guidance for fiscal year 2014, which ends July 31, and
expects:
-
Revenue of $4.440 billion to $4.525 billion, growth of 6 to 8 percent.
-
GAAP operating income of $1.347 billion to $1.377 billion, growth of 9
to 12 percent.
-
Non-GAAP operating income of $1.580 billion to $1.610 billion, growth
of 7 to 10 percent.
-
GAAP diluted EPS of $3.11 to $3.19, growth of 10 to 13 percent.
-
Non-GAAP diluted EPS of $3.52 to $3.60, growth of 10 to 13 percent.
With the recent restructuring to focus the company on two core outcomes,
Intuit has revised how it intends to report results next year. The
company will report revenue and segment contribution margin for these
three new segments and expects the following revenue growth for fiscal
year 2014:
-
Small Business Group: 10 to 12 percent.
-
Consumer Group, which includes TurboTax, Quicken, and Mint: 3 to 5
percent.
-
Within Consumer Group, Consumer Tax growth of 4 to 5 percent.
-
Professional Tax: 0 to 4 percent.
For the first quarter of fiscal 2014, Intuit expects:
-
Revenue of $595 million to $605 million, growth of 6 to 8 percent.
-
GAAP operating loss of $88 million to $93 million, compared to an
operating loss of $73 million in the year-ago quarter.
-
Non-GAAP operating loss of $30 million to $35 million, compared to an
operating loss of $16 million in the year-ago quarter.
-
GAAP net loss per share of $0.10 to $0.11, compared to a net loss per
share of $0.06 in the year-ago quarter.
-
Non-GAAP loss per share of $0.10 to $0.11, compared to a loss per
share of $0.05 in the year-ago quarter.
Conference Call Information
Intuit executives will discuss the financial results on a conference
call at 1:30 p.m. Pacific time on Aug. 20. To hear the call, dial
866-731-8333 in the United States or 973-935-8686 from international
locations. No reservation or access code is needed. The conference call
can also be heard live at http://investors.intuit.com/events.cfm.
Prepared remarks for the call will be available on Intuit’s website
after the call ends.
Replay Information
A replay of the conference call will be available for one week by
calling 888-266-2081, or 703-925-2533 from international locations. The
access code for this call is 1619817.
Annual Investor Day
Intuit will host its annual Investor Day on Sept. 24 at its Mountain
View, Calif., headquarters. The half-day event will include business
segment updates and presentations from Brad Smith, chief executive
officer, Neil Williams, chief financial officer and other business
segment leaders.
About Intuit Inc.
Intuit Inc. creates business and
financial management solutions that simplify the business of life for
small businesses, consumers and accounting professionals.
Its flagship products and services include QuickBooks®, Quicken®
and TurboTax®, which make
it easier to manage small
businesses and payroll
processing, personal
finance, and tax
preparation and filing. Mint.com
provides a fresh, easy and intelligent way for people to manage their
money, while Demandforce®
offers marketing and communication tools for small businesses. ProSeries®
and Lacerte® are Intuit's
leading tax preparation offerings for professional accountants.
Founded in 1983, Intuit had revenue of $4.2 billion in its fiscal year
2013. The company has approximately 8,200 employees with major offices
in the United States, Canada,
the United Kingdom, India and
other locations. More information can be found at www.intuit.com.
Intuit and the Intuit logo, among others, are registered trademarks
and/or registered service marks of Intuit Inc. in the United States and
other countries.
About Non-GAAP Financial Measures
This press release and the accompanying tables include non-GAAP
financial measures. For a description of these non-GAAP financial
measures, including the reasons management uses each measure, and
reconciliations of these non-GAAP financial measures to the most
directly comparable financial measures prepared in accordance with
Generally Accepted Accounting Principles, please see the section of the
accompanying tables titled "About Non-GAAP Financial Measures" as well
as the related Table B and Table E. A copy of the press release issued
by Intuit today can be found on the investor relations page of Intuit's
Web site.
Cautions About Forward-looking Statements
This press release contains forward-looking statements, including
forecasts of Intuit’s future expected financial results; expectations
regarding growth from digital services and from current or future
products and services; expectations regarding Intuit’s global strategy,
product launches and marketing campaigns and their impacts on Intuit’s
business; expectations regarding the amount and timing of any future
dividends and share repurchases; Intuit’s prospects for the business in
fiscal 2014; and all of the statements under the heading
“Forward-looking Guidance.”
Because these forward-looking statements involve risks and
uncertainties, there are important factors that could cause our actual
results to differ materially from the expectations expressed in the
forward-looking statements. These factors include, without limitation,
the following: inherent difficulty in predicting consumer behavior;
difficulties in receiving, processing, or filing customer tax
submissions; consumers may not respond as we expected to our advertising
and promotional activities; product introductions and price competition
from our competitors can have unpredictable negative effects on our
revenue, profitability and market position; governmental encroachment in
our tax businesses or other governmental activities or public policy
affecting the preparation and filing of tax returns could negatively
affect our operating results and market position; we may not be able to
successfully innovate and introduce new offerings and business models to
meet our growth and profitability objectives, and current and future
offerings may not adequately address customer needs and may not achieve
broad market acceptance, which could harm our operating results and
financial condition; business interruption or failure of our information
technology and communication systems may impair the availability of our
products and services, which may damage our reputation and harm our
future financial results; as we upgrade and consolidate our customer
facing applications and supporting information technology
infrastructure, any problems with these implementations could interfere
with our ability to deliver our offerings; any failure to properly use
and protect personal customer information and data could harm our
revenue, earnings and reputation; if we are unable to develop, manage
and maintain critical third party business relationships, our business
may be adversely affected; increased government regulation of our
businesses may harm our operating results; if we fail to process
transactions effectively or fail to adequately protect against potential
fraudulent activities, our revenue and earnings may be harmed; any
significant offering quality problems or delays in our offerings could
harm our revenue, earnings and reputation; our participation in the Free
File Alliance may result in lost revenue opportunities and
cannibalization of our traditional paid franchise; the continuing global
economic downturn may continue to impact consumer and small business
spending, financial institutions and tax filings, which could negatively
affect our revenue and profitability; year-over-year changes in the
total number of tax filings that are submitted to government agencies
due to economic conditions or otherwise may result in lost revenue
opportunities; our revenue and earnings are highly seasonal and the
timing of our revenue between quarters is difficult to predict, which
may cause significant quarterly fluctuations in our financial results;
our financial position may not make repurchasing shares advisable or we
may issue additional shares in an acquisition causing our number of
outstanding shares to grow; our inability to adequately protect our
intellectual property rights may weaken our competitive position and
reduce our revenue and earnings; our acquisition and divestiture
activities may disrupt our ongoing business, may involve increased
expenses and may present risks not contemplated at the time of the
transactions; our use of significant amounts of debt to finance
acquisitions or other activities could harm our financial condition and
results of operation; and litigation involving intellectual property,
antitrust, shareholder and other matters may increase our costs. More
details about these and other risks that may impact our business are
included in our Form 10-K for fiscal 2012 and in our other SEC filings.
You can locate these reports through our website at http://investors.intuit.com.
Forward-looking statements are based on information as of August 20,
2013, and we do not undertake any duty to update any forward-looking
statement or other information in these materials.
|
|
|
|
|
|
|
|
|
|
|
|
|
TABLE A
|
INTUIT INC.
|
GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In millions, except per share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Twelve Months Ended
|
|
|
|
|
|
|
|
|
|
|
July 31, 2013
|
|
|
July 31, 2012
|
|
|
July 31, 2013
|
|
|
July 31, 2012
|
Net revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Product
|
|
|
$
|
248
|
|
|
|
$
|
240
|
|
|
|
$
|
1,515
|
|
|
|
$
|
1,479
|
|
Service and other
|
|
|
|
386
|
|
|
|
|
327
|
|
|
|
|
2,656
|
|
|
|
|
2,329
|
|
Total net revenue
|
|
|
|
634
|
|
|
|
|
567
|
|
|
|
|
4,171
|
|
|
|
|
3,808
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product revenue
|
|
|
|
28
|
|
|
|
|
29
|
|
|
|
|
130
|
|
|
|
|
146
|
|
Cost of service and other revenue
|
|
|
|
95
|
|
|
|
|
113
|
|
|
|
|
429
|
|
|
|
|
429
|
|
Amortization of acquired technology
|
|
|
|
4
|
|
|
|
|
4
|
|
|
|
|
18
|
|
|
|
|
10
|
|
Selling and marketing
|
|
|
|
256
|
|
|
|
|
198
|
|
|
|
|
1,219
|
|
|
|
|
1,033
|
|
Research and development
|
|
|
|
182
|
|
|
|
|
166
|
|
|
|
|
685
|
|
|
|
|
618
|
|
General and administrative
|
|
|
|
115
|
|
|
|
|
98
|
|
|
|
|
422
|
|
|
|
|
381
|
|
Amortization of other acquired intangible assets
|
|
|
|
14
|
|
|
|
|
6
|
|
|
|
|
35
|
|
|
|
|
23
|
|
Total costs and expenses [A]
|
|
|
|
694
|
|
|
|
|
614
|
|
|
|
|
2,938
|
|
|
|
|
2,640
|
|
Operating income (loss) from continuing operations
|
|
|
|
(60
|
)
|
|
|
|
(47
|
)
|
|
|
|
1,233
|
|
|
|
|
1,168
|
|
Interest expense
|
|
|
|
(7
|
)
|
|
|
|
(8
|
)
|
|
|
|
(30
|
)
|
|
|
|
(50
|
)
|
Interest and other income, net
|
|
|
|
—
|
|
|
|
|
1
|
|
|
|
|
7
|
|
|
|
|
20
|
|
Income (loss) from continuing operations before income taxes
|
|
|
|
(67
|
)
|
|
|
|
(54
|
)
|
|
|
|
1,210
|
|
|
|
|
1,138
|
|
Income tax provision (benefit) [B]
|
|
|
|
(21
|
)
|
|
|
|
(22
|
)
|
|
|
|
387
|
|
|
|
|
374
|
|
Net income (loss) from continuing operations
|
|
|
|
(46
|
)
|
|
|
|
(32
|
)
|
|
|
|
823
|
|
|
|
|
764
|
|
Net income from discontinued operations [C]
|
|
|
|
30
|
|
|
|
|
36
|
|
|
|
|
35
|
|
|
|
|
28
|
|
Net income (loss)
|
|
|
$
|
(16
|
)
|
|
|
$
|
4
|
|
|
|
$
|
858
|
|
|
|
$
|
792
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) per share from continuing operations
|
|
|
$
|
(0.15
|
)
|
|
|
$
|
(0.11
|
)
|
|
|
$
|
2.78
|
|
|
|
$
|
2.58
|
|
Basic net income per share from discontinued operations
|
|
|
|
0.10
|
|
|
|
|
0.12
|
|
|
|
|
0.11
|
|
|
|
|
0.09
|
|
Basic net income (loss) per share
|
|
|
$
|
(0.05
|
)
|
|
|
$
|
0.01
|
|
|
|
$
|
2.89
|
|
|
|
$
|
2.67
|
|
Shares used in basic per share calculations
|
|
|
|
298
|
|
|
|
|
294
|
|
|
|
|
297
|
|
|
|
|
296
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income (loss) per share from continuing operations
|
|
|
$
|
(0.15
|
)
|
|
|
$
|
(0.11
|
)
|
|
|
$
|
2.72
|
|
|
|
$
|
2.51
|
|
Diluted net income per share from discontinued operations
|
|
|
|
0.10
|
|
|
|
|
0.12
|
|
|
|
|
0.11
|
|
|
|
|
0.09
|
|
Diluted net income (loss) per share
|
|
|
$
|
(0.05
|
)
|
|
|
$
|
0.01
|
|
|
|
$
|
2.83
|
|
|
|
$
|
2.60
|
|
Shares used in diluted per share calculations
|
|
|
|
298
|
|
|
|
|
294
|
|
|
|
|
303
|
|
|
|
|
305
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common share
|
|
|
$
|
0.17
|
|
|
|
$
|
0.15
|
|
|
|
$
|
0.68
|
|
|
|
$
|
0.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying Notes.
|
|
|
|
|
|
|
INTUIT INC.
|
|
|
NOTES TO TABLE A
|
|
|
|
[A]
|
|
The following table summarizes the total share-based compensation
expense that we recorded for the periods shown.
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Twelve Months Ended
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
July 31, 2013
|
|
July 31, 2012
|
|
|
July 31, 2013
|
|
July 31, 2012
|
|
|
Cost of revenue
|
|
$
|
2
|
|
$
|
2
|
|
|
$
|
6
|
|
$
|
4
|
|
|
Selling and marketing
|
|
|
17
|
|
|
16
|
|
|
|
64
|
|
|
56
|
|
|
Research and development
|
|
|
16
|
|
|
14
|
|
|
|
55
|
|
|
49
|
|
|
General and administrative
|
|
|
16
|
|
|
14
|
|
|
|
59
|
|
|
50
|
|
|
Total share-based compensation expense from continuing operations
|
|
|
51
|
|
|
46
|
|
|
|
184
|
|
|
159
|
|
|
Discontinued operations
|
|
|
2
|
|
|
3
|
|
|
|
11
|
|
|
10
|
|
|
Total share-based compensation expense
|
|
$
|
53
|
|
$
|
49
|
|
|
$
|
195
|
|
$
|
169
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
[B]
|
|
We compute our annual provision for income taxes by applying the
annual effective tax rate to income from recurring operations and
adding the effects of any discrete income tax items specific to
the period. Our effective tax rate for the twelve months ended
July 31, 2013 was approximately 32%. Excluding a discrete tax
benefit related to the retroactive reinstatement of the federal
research and experimentation credit, our effective tax rate for
that period was approximately 33% and did not differ significantly
from the statutory rate of 35%. Our effective tax rate for the
twelve months ended July 31, 2012 was approximately 33% and did
not differ significantly from the statutory rate of 35%.
|
|
|
|
[C]
|
|
Intuit Financial Services. On July 1, 2013 we signed a definitive
agreement to sell our Intuit Financial Services business and on
August 1, 2013 we completed the sale for approximately $1.025
billion in cash. The IFS business comprised substantially all of
our former Financial Services reporting segment. We classified our
IFS business as discontinued operations in the fourth quarter of
fiscal 2013 and have therefore segregated its operating results
and net assets from continuing operations in our statements of
operations and on our balance sheets for all periods presented.
Revenue for IFS was approximately $325 million for fiscal 2013 and
approximately $326 million for fiscal 2012. Net assets held for
sale at July 31, 2013 and July 31, 2012 consisted primarily of
goodwill. Because operating cash flows from the IFS business were
not material for any period presented, we have not segregated them
from continuing operations on our statements of cash flows.
|
|
|
|
|
|
Intuit Health. In July 2013 management having the authority to do
so formally approved a plan to sell our Intuit Health business and
on August 19, 2013 we completed the sale for cash consideration
that was not significant. Intuit Health was part of our Other
Businesses reporting segment. We classified our Intuit Health
business as discontinued operations in the fourth quarter of
fiscal 2013 and have segregated its operating results in our
statements of operations for all periods presented. Revenue for
Intuit Health was approximately $16 million for fiscal 2013 and
approximately $18 million for fiscal 2012. Net assets held for
sale at July 31, 2013 and July 31, 2012 consisted primarily of
operating assets and liabilities that were not material, so we
have not segregated them on our balance sheets. Because operating
cash flows from the Intuit Health business were also not material
for any period presented, we have not segregated them from
continuing operations on our statements of cash flows.
|
|
|
|
|
|
Intuit Websites. In July 2012 management having the authority to
do so formally approved a plan to sell our Intuit Websites
business and on September 17, 2012 we completed the sale for
approximately $60 million in cash. The Intuit Websites business
was a component of our Financial Management Solutions reporting
segment. We recorded a gain on disposal of approximately $32
million, net of income taxes, in the first quarter of fiscal 2012.
We classified our Intuit Websites business as discontinued
operations in the fourth quarter of fiscal 2012 and have
segregated its operating results in our statements of operations
for all periods presented. Revenue from Intuit Websites was
approximately $19 million for fiscal 2013 and approximately $76
million for fiscal 2012. Net assets held for sale at July 31, 2012
consisted primarily of operating assets and liabilities that were
not material, so we have not segregated them on our balance
sheets. Because operating cash flows from the Intuit Websites
business were also not material for any period presented, we have
not segregated them from continuing operations on our statements
of cash flows.
|
|
|
|
|
TABLE B
|
INTUIT INC.
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
|
TO MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASURES
|
(In millions, except per share amounts)
|
(Unaudited)
|
|
|
|
|
Three Months Ended
|
|
|
Twelve Months Ended
|
|
|
|
|
|
|
|
|
|
|
July 31, 2013
|
|
|
July 31, 2012
|
|
|
July 31, 2013
|
|
|
July 31, 2012
|
GAAP operating income (loss)
|
|
|
$
|
(60
|
)
|
|
|
$
|
(47
|
)
|
|
|
$
|
1,233
|
|
|
|
$
|
1,168
|
|
Amortization of acquired technology
|
|
|
|
4
|
|
|
|
|
4
|
|
|
|
|
18
|
|
|
|
|
10
|
|
Amortization of other acquired intangible assets
|
|
|
|
14
|
|
|
|
|
6
|
|
|
|
|
35
|
|
|
|
|
23
|
|
Professional fees for business combinations
|
|
|
|
—
|
|
|
|
|
4
|
|
|
|
|
—
|
|
|
|
|
7
|
|
Share-based compensation expense
|
|
|
|
51
|
|
|
|
|
46
|
|
|
|
|
184
|
|
|
|
|
159
|
|
Non-GAAP operating income
|
|
|
$
|
9
|
|
|
|
$
|
13
|
|
|
|
$
|
1,470
|
|
|
|
$
|
1,367
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss)
|
|
|
$
|
(16
|
)
|
|
|
$
|
4
|
|
|
|
$
|
858
|
|
|
|
$
|
792
|
|
Amortization of acquired technology
|
|
|
|
4
|
|
|
|
|
4
|
|
|
|
|
18
|
|
|
|
|
10
|
|
Amortization of other acquired intangible assets
|
|
|
|
14
|
|
|
|
|
6
|
|
|
|
|
35
|
|
|
|
|
23
|
|
Professional fees for business combinations
|
|
|
|
—
|
|
|
|
|
4
|
|
|
|
|
—
|
|
|
|
|
7
|
|
Share-based compensation expense
|
|
|
|
51
|
|
|
|
|
46
|
|
|
|
|
184
|
|
|
|
|
159
|
|
Net gains on debt securities and other investments
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
1
|
|
|
|
|
(12
|
)
|
Income tax effect of non-GAAP adjustments
|
|
|
|
(22
|
)
|
|
|
|
(24
|
)
|
|
|
|
(91
|
)
|
|
|
|
(70
|
)
|
Discontinued operations
|
|
|
|
(30
|
)
|
|
|
|
(36
|
)
|
|
|
|
(35
|
)
|
|
|
|
(28
|
)
|
Non-GAAP net income
|
|
|
$
|
1
|
|
|
|
$
|
4
|
|
|
|
$
|
970
|
|
|
|
$
|
881
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted net income (loss) per share
|
|
|
$
|
(0.05
|
)
|
|
|
$
|
0.01
|
|
|
|
$
|
2.83
|
|
|
|
$
|
2.60
|
|
Amortization of acquired technology
|
|
|
|
0.01
|
|
|
|
|
0.01
|
|
|
|
|
0.06
|
|
|
|
|
0.03
|
|
Amortization of other acquired intangible assets
|
|
|
|
0.04
|
|
|
|
|
0.02
|
|
|
|
|
0.11
|
|
|
|
|
0.08
|
|
Professional fees for business combinations
|
|
|
|
—
|
|
|
|
|
0.01
|
|
|
|
|
—
|
|
|
|
|
0.02
|
|
Share-based compensation expense
|
|
|
|
0.17
|
|
|
|
|
0.15
|
|
|
|
|
0.61
|
|
|
|
|
0.52
|
|
Net gains on debt securities and other investments
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(0.04
|
)
|
Income tax effect of non-GAAP adjustments
|
|
|
|
(0.07
|
)
|
|
|
|
(0.07
|
)
|
|
|
|
(0.30
|
)
|
|
|
|
(0.23
|
)
|
Discontinued operations
|
|
|
|
(0.10
|
)
|
|
|
|
(0.12
|
)
|
|
|
|
(0.11
|
)
|
|
|
|
(0.09
|
)
|
Non-GAAP diluted net income per share
|
|
|
$
|
—
|
|
|
|
$
|
0.01
|
|
|
|
$
|
3.20
|
|
|
|
$
|
2.89
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in diluted per share calculation
|
|
|
|
304
|
|
|
|
|
302
|
|
|
|
|
303
|
|
|
|
|
305
|
|
|
See “About Non-GAAP Financial Measures” immediately following Table E
for information on these measures, the items excluded from the most
directly comparable GAAP measures in arriving at non-GAAP financial
measures, and the reasons management uses each measure and excludes the
specified amounts in arriving at each non-GAAP financial measure.
|
TABLE C
|
INTUIT INC.
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(In millions)
|
(Unaudited)
|
|
|
|
|
July 31, 2013
|
|
|
July 31, 2012
|
ASSETS
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
1,009
|
|
|
$
|
393
|
Investments
|
|
|
|
652
|
|
|
|
351
|
Accounts receivable, net
|
|
|
|
130
|
|
|
|
142
|
Income taxes receivable
|
|
|
|
62
|
|
|
|
53
|
Deferred income taxes
|
|
|
|
166
|
|
|
|
183
|
Prepaid expenses and other current assets
|
|
|
|
98
|
|
|
|
65
|
Current assets of discontinued operations
|
|
|
|
44
|
|
|
|
46
|
Current assets before funds held for customers
|
|
|
|
2,161
|
|
|
|
1,233
|
Funds held for customers
|
|
|
|
235
|
|
|
|
290
|
Total current assets
|
|
|
|
2,396
|
|
|
|
1,523
|
|
|
|
|
|
|
|
Long-term investments
|
|
|
|
83
|
|
|
|
75
|
Property and equipment, net
|
|
|
|
555
|
|
|
|
543
|
Goodwill
|
|
|
|
1,246
|
|
|
|
1,286
|
Acquired intangible assets, net
|
|
|
|
149
|
|
|
|
207
|
Other assets
|
|
|
|
102
|
|
|
|
94
|
Long-term assets of discontinued operations
|
|
|
|
955
|
|
|
|
956
|
Total assets
|
|
|
$
|
5,486
|
|
|
$
|
4,684
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
137
|
|
|
$
|
139
|
Accrued compensation and related liabilities
|
|
|
|
218
|
|
|
|
214
|
Deferred revenue
|
|
|
|
495
|
|
|
|
439
|
Income taxes payable
|
|
|
|
2
|
|
|
|
—
|
Other current liabilities
|
|
|
|
154
|
|
|
|
144
|
Current liabilities of discontinued operations
|
|
|
|
39
|
|
|
|
39
|
Current liabilities before customer fund deposits
|
|
|
|
1,045
|
|
|
|
975
|
Customer fund deposits
|
|
|
|
235
|
|
|
|
290
|
Total current liabilities
|
|
|
|
1,280
|
|
|
|
1,265
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
499
|
|
|
|
499
|
Other long-term obligations
|
|
|
|
167
|
|
|
|
166
|
Long-term obligations of discontinued operations
|
|
|
|
9
|
|
|
|
10
|
Total liabilities
|
|
|
|
1,955
|
|
|
|
1,940
|
|
|
|
|
|
|
|
Stockholders’ equity
|
|
|
|
3,531
|
|
|
|
2,744
|
Total liabilities and stockholders’ equity
|
|
|
$
|
5,486
|
|
|
$
|
4,684
|
|
|
|
|
|
|
|
|
|
|
TABLE D
|
INTUIT INC.
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Twelve Months Ended
|
|
|
|
|
|
|
|
|
|
|
July 31, 2013
|
|
|
July 31, 2012
|
|
|
July 31, 2013
|
|
|
July 31, 2012
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
(16
|
)
|
|
|
$
|
4
|
|
|
|
$
|
858
|
|
|
|
$
|
792
|
|
Adjustments to reconcile net income (loss) to net cash (used in)
generated by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
42
|
|
|
|
|
41
|
|
|
|
|
166
|
|
|
|
|
171
|
|
Amortization of acquired intangible assets
|
|
|
|
21
|
|
|
|
|
16
|
|
|
|
|
66
|
|
|
|
|
71
|
|
Goodwill and intangible asset impairment charge
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
46
|
|
|
|
|
—
|
|
Share-based compensation expense
|
|
|
|
53
|
|
|
|
|
49
|
|
|
|
|
195
|
|
|
|
|
169
|
|
Pre-tax gain on sale of discontinued operations (1)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(53
|
)
|
|
|
|
—
|
|
Deferred income taxes
|
|
|
|
(39
|
)
|
|
|
|
(63
|
)
|
|
|
|
13
|
|
|
|
|
(62
|
)
|
Tax benefit from share-based compensation plans
|
|
|
|
4
|
|
|
|
|
8
|
|
|
|
|
69
|
|
|
|
|
71
|
|
Excess tax benefit from share-based compensation plans
|
|
|
|
(4
|
)
|
|
|
|
(8
|
)
|
|
|
|
(69
|
)
|
|
|
|
(70
|
)
|
Other
|
|
|
|
7
|
|
|
|
|
7
|
|
|
|
|
19
|
|
|
|
|
11
|
|
Total adjustments
|
|
|
|
84
|
|
|
|
|
50
|
|
|
|
|
452
|
|
|
|
|
361
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
141
|
|
|
|
|
114
|
|
|
|
|
12
|
|
|
|
|
(10
|
)
|
Prepaid expenses, income taxes receivable and other assets
|
|
|
|
(91
|
)
|
|
|
|
(53
|
)
|
|
|
|
(42
|
)
|
|
|
|
31
|
|
Accounts payable
|
|
|
|
(72
|
)
|
|
|
|
(61
|
)
|
|
|
|
4
|
|
|
|
|
19
|
|
Accrued compensation and related liabilities
|
|
|
|
28
|
|
|
|
|
22
|
|
|
|
|
8
|
|
|
|
|
17
|
|
Deferred revenue
|
|
|
|
73
|
|
|
|
|
74
|
|
|
|
|
62
|
|
|
|
|
38
|
|
Income taxes payable
|
|
|
|
(272
|
)
|
|
|
|
(257
|
)
|
|
|
|
2
|
|
|
|
|
—
|
|
Other liabilities
|
|
|
|
(69
|
)
|
|
|
|
(75
|
)
|
|
|
|
10
|
|
|
|
|
(2
|
)
|
Total changes in operating assets and liabilities
|
|
|
|
(262
|
)
|
|
|
|
(236
|
)
|
|
|
|
56
|
|
|
|
|
93
|
|
Net cash (used in) generated by operating activities
|
|
|
|
(194
|
)
|
|
|
|
(182
|
)
|
|
|
|
1,366
|
|
|
|
|
1,246
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of available-for-sale debt securities
|
|
|
|
(194
|
)
|
|
|
|
(177
|
)
|
|
|
|
(869
|
)
|
|
|
|
(669
|
)
|
Sales of available-for-sale debt securities
|
|
|
|
54
|
|
|
|
|
458
|
|
|
|
|
333
|
|
|
|
|
840
|
|
Maturities of available-for-sale debt securities
|
|
|
|
63
|
|
|
|
|
40
|
|
|
|
|
228
|
|
|
|
|
178
|
|
Net change in money market funds and other cash equivalents held to
satisfy customer fund obligations
|
|
|
|
(51
|
)
|
|
|
|
35
|
|
|
|
|
55
|
|
|
|
|
124
|
|
Net change in customer fund deposits
|
|
|
|
51
|
|
|
|
|
(35
|
)
|
|
|
|
(55
|
)
|
|
|
|
(124
|
)
|
Purchases of property and equipment
|
|
|
|
(48
|
)
|
|
|
|
(61
|
)
|
|
|
|
(195
|
)
|
|
|
|
(186
|
)
|
Acquisitions of businesses, net of cash acquired
|
|
|
|
(8
|
)
|
|
|
|
(392
|
)
|
|
|
|
(17
|
)
|
|
|
|
(392
|
)
|
Acquisitions of intangible assets
|
|
|
|
(12
|
)
|
|
|
|
(10
|
)
|
|
|
|
(14
|
)
|
|
|
|
(10
|
)
|
Proceeds from divestiture of businesses
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
60
|
|
|
|
|
—
|
|
Other
|
|
|
|
7
|
|
|
|
|
(1
|
)
|
|
|
|
(11
|
)
|
|
|
|
14
|
|
Net cash used in investing activities
|
|
|
|
(138
|
)
|
|
|
|
(143
|
)
|
|
|
|
(485
|
)
|
|
|
|
(225
|
)
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayment of debt
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(500
|
)
|
Net proceeds from issuance of treasury stock under employee stock
plans
|
|
|
|
(20
|
)
|
|
|
|
4
|
|
|
|
|
165
|
|
|
|
|
164
|
|
Purchases of treasury stock
|
|
|
|
—
|
|
|
|
|
(107
|
)
|
|
|
|
(292
|
)
|
|
|
|
(900
|
)
|
Cash dividends paid to stockholders
|
|
|
|
(51
|
)
|
|
|
|
(44
|
)
|
|
|
|
(203
|
)
|
|
|
|
(178
|
)
|
Excess tax benefit from share-based compensation plans
|
|
|
|
4
|
|
|
|
|
8
|
|
|
|
|
69
|
|
|
|
|
70
|
|
Other
|
|
|
|
(1
|
)
|
|
|
|
—
|
|
|
|
|
(1
|
)
|
|
|
|
—
|
|
Net cash used in financing activities
|
|
|
|
(68
|
)
|
|
|
|
(139
|
)
|
|
|
|
(262
|
)
|
|
|
|
(1,344
|
)
|
Effect of exchange rates on cash and cash equivalents
|
|
|
|
(3
|
)
|
|
|
|
(2
|
)
|
|
|
|
(3
|
)
|
|
|
|
(6
|
)
|
Net increase (decrease) in cash and cash equivalents
|
|
|
|
(403
|
)
|
|
|
|
(466
|
)
|
|
|
|
616
|
|
|
|
|
(329
|
)
|
Cash and cash equivalents at beginning of period
|
|
|
|
1,412
|
|
|
|
|
859
|
|
|
|
|
393
|
|
|
|
|
722
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
1,009
|
|
|
|
$
|
393
|
|
|
|
$
|
1,009
|
|
|
|
$
|
393
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
Because the cash flows of our discontinued operations were not
material for any period presented, we have not segregated the cash
flows of those businesses on these statements of cash flows. We have
presented the effect of the gains on disposals of discontinued
operations on these statements of cash flow.
|
|
|
|
|
|
TABLE E
|
INTUIT INC.
|
RECONCILIATION OF FORWARD-LOOKING GUIDANCE FOR NON-GAAP FINANCIAL
MEASURES
|
TO PROJECTED GAAP REVENUE, OPERATING INCOME (LOSS), AND EPS
|
(In millions, except per share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
Forward-Looking Guidance
|
|
|
|
GAAP
|
|
|
|
|
|
|
|
|
Non-GAAP
|
|
|
|
Range of Estimate
|
|
|
|
|
|
|
|
|
Range of Estimate
|
|
|
|
From
|
|
|
To
|
|
|
Adjmts
|
|
|
|
|
|
From
|
|
|
To
|
Three Months Ending October 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
$
|
595
|
|
|
|
$
|
605
|
|
|
|
$
|
—
|
|
|
|
|
|
$
|
595
|
|
|
|
$
|
605
|
|
Operating loss
|
|
|
$
|
(93
|
)
|
|
|
$
|
(88
|
)
|
|
|
$
|
58
|
|
|
[a]
|
|
|
$
|
(35
|
)
|
|
|
$
|
(30
|
)
|
Diluted loss per share
|
|
|
$
|
(0.11
|
)
|
|
|
$
|
(0.10
|
)
|
|
|
$
|
—
|
|
|
[b]
|
|
|
$
|
(0.11
|
)
|
|
|
$
|
(0.10
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ending July 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
$
|
4,440
|
|
|
|
$
|
4,525
|
|
|
|
$
|
—
|
|
|
|
|
|
$
|
4,440
|
|
|
|
$
|
4,525
|
|
Operating income
|
|
|
$
|
1,347
|
|
|
|
$
|
1,377
|
|
|
|
$
|
233
|
|
|
[c]
|
|
|
$
|
1,580
|
|
|
|
$
|
1,610
|
|
Diluted earnings per share
|
|
|
$
|
3.11
|
|
|
|
$
|
3.19
|
|
|
|
$
|
0.41
|
|
|
[d]
|
|
|
$
|
3.52
|
|
|
|
$
|
3.60
|
|
|
See “About Non-GAAP Financial Measures” immediately following this
Table E for information on these measures, the items excluded from
the most directly comparable GAAP measures in arriving at non-GAAP
financial measures, and the reasons management uses each measure
and excludes the specified amounts in arriving at each non-GAAP
financial measure.
|
[a]
|
|
|
Reflects estimated adjustments for share-based compensation expense
of approximately $48 million; amortization of acquired technology of
approximately $5 million; and amortization of other acquired
intangible assets of approximately $5 million.
|
|
|
|
|
[b]
|
|
|
Reflects the estimated adjustments in item [a], income taxes related
to these adjustments, and the estimated net gain on the disposal of
Intuit Financial Services.
|
|
|
|
|
[c]
|
|
|
Reflects estimated adjustments for share-based compensation expense
of approximately $198 million; amortization of acquired technology
of approximately $18 million; and amortization of other acquired
intangible assets of approximately $17 million.
|
|
|
|
|
[d]
|
|
|
Reflects the estimated adjustments in item [c], income taxes related
to these adjustments, and the estimated net gain on the disposal of
Intuit Financial Services.
|
|
|
|
|
INTUIT INC.
ABOUT NON-GAAP FINANCIAL MEASURES
The accompanying press release dated August 20, 2013 contains non-GAAP
financial measures. Table B and Table E reconcile the non-GAAP financial
measures in that press release to the most directly comparable financial
measures prepared in accordance with Generally Accepted Accounting
Principles (GAAP). These non-GAAP financial measures include non-GAAP
operating income (loss), non-GAAP net income (loss) and non-GAAP net
income (loss) per share.
Non-GAAP financial measures should not be considered as a substitute
for, or superior to, measures of financial performance prepared in
accordance with GAAP. These non-GAAP financial measures do not reflect a
comprehensive system of accounting, differ from GAAP measures with the
same names and may differ from non-GAAP financial measures with the same
or similar names that are used by other companies.
We compute non-GAAP financial measures using the same consistent method
from quarter to quarter and year to year. We may consider whether other
significant items that arise in the future should be excluded from our
non-GAAP financial measures.
We exclude the following items from all of our non-GAAP financial
measures:
-
Share-based compensation expense
-
Amortization of acquired technology
-
Amortization of other acquired intangible assets
-
Goodwill and intangible asset impairment charges
-
Professional fees for business combinations
We also exclude the following items from non-GAAP net income (loss) and
diluted net income (loss) per share:
-
Gains and losses on debt securities and other investments
-
Income tax effects of excluded items and related discrete tax items
-
Discontinued operations
We believe that these non-GAAP financial measures provide meaningful
supplemental information regarding Intuit’s operating results primarily
because they exclude amounts that we do not consider part of ongoing
operating results when planning and forecasting and when assessing the
performance of the organization, our individual operating segments or
our senior management. Segment managers are not held accountable for
share-based compensation expense, amortization, or the other excluded
items and, accordingly, we exclude these amounts from our measures of
segment performance. We believe that our non-GAAP financial measures
also facilitate the comparison by management and investors of results
for current periods and guidance for future periods with results for
past periods.
The following are descriptions of the items we exclude from our non-GAAP
financial measures.
Share-based compensation expenses. These consist of non-cash
expenses for stock options, restricted stock units and our Employee
Stock Purchase Plan. When considering the impact of equity awards, we
place greater emphasis on overall shareholder dilution rather than the
accounting charges associated with those awards.
Amortization of acquired technology and amortization of other
acquired intangible assets. When we acquire an entity, we are
required by GAAP to record the fair values of the intangible assets of
the entity and amortize them over their useful lives. Amortization of
acquired technology in cost of revenue includes amortization of software
and other technology assets of acquired entities. Amortization of other
acquired intangible assets in operating expenses includes amortization
of assets such as customer lists, covenants not to compete and trade
names.
Goodwill and intangible asset impairment charges. We exclude from
our non-GAAP financial measures non-cash charges to adjust the carrying
values of goodwill and other acquired intangible assets to their
estimated fair values.
Professional fees for business combinations. We exclude from our
non-GAAP financial measures the professional fees we incur to complete
business combinations. These include investment banking, legal and
accounting fees.
Gains and losses on debt securities and other investments. We
exclude from our non-GAAP financial measures gains and losses that we
record when we sell or impair available-for-sale debt securities and
other investments.
Income tax effects of excluded items and certain discrete tax items.
We exclude from our non-GAAP financial measures the income tax effects
of the items described above, as well as income tax effects related to
business combinations. In addition, the effects of one-time income tax
adjustments recorded in a specific quarter for GAAP purposes are
reflected on a forecasted basis in our non-GAAP financial measures. This
is consistent with how we plan, forecast and evaluate our operating
results.
Operating results and gains and losses on the sale of discontinued
operations. From time to time, we sell or otherwise dispose of
selected operations as we adjust our portfolio of businesses to meet our
strategic goals. In accordance with GAAP, we segregate the operating
results of discontinued operations as well as gains and losses on the
sale of these discontinued operations from continuing operations on our
GAAP statements of operations but continue to include them in GAAP net
income or loss and net income or loss per share. We exclude these
amounts from our non-GAAP financial measures.
The reconciliations of the forward-looking non-GAAP financial measures
to the most directly comparable GAAP financial measures in Table E
include all information reasonably available to Intuit at the date of
this press release. These tables include adjustments that we can
reasonably predict. Events that could cause the reconciliation to change
include acquisitions and divestitures of businesses, goodwill and other
asset impairments, and sales of available-for-sale debt securities and
other investments.
Copyright Business Wire 2013