Citrix Systems, Inc. (NASDAQ:CTXS) today reported financial results for
the fourth quarter and fiscal year ended December 31, 2013.
FINANCIAL RESULTS
For the fourth quarter of fiscal year 2013, Citrix achieved revenue of
$802 million, compared to $740 million in the fourth quarter of fiscal
year 2012, representing 8 percent revenue growth. For fiscal year 2013,
Citrix reported annual revenues of $2.92 billion, compared to $2.59
billion for fiscal year 2012, a 13 percent increase.
GAAP Results
Net income for the fourth quarter of fiscal year 2013 was $139 million,
or $0.74 per diluted share, compared to $114 million, or $0.60 per
diluted share, for the fourth quarter of fiscal year 2012. Annual net
income for fiscal year 2013 was $340 million, or $1.80 per diluted
share, compared to $353 million, or $1.86 per diluted share for fiscal
year 2012.
Non-GAAP Results
Non-GAAP net income for the fourth quarter of fiscal year 2013 was $195
million, or $1.04 per diluted share, compared to $169 million, or $0.90
per diluted share for the fourth quarter of fiscal year 2012. Non-GAAP
net income excludes the effects of amortization of acquired intangible
assets, stock-based compensation expenses and the tax effects related to
these items.
Annual non-GAAP net income for fiscal year 2013 was $568 million, or
$3.02 per diluted share, compared to $543 million, or $2.87 per diluted
share for fiscal year 2012. Non-GAAP net income excludes the effects of
amortization of acquired intangible assets, stock-based compensation
expenses and the tax effects related to these items.
“We continued to see strong growth in our networking business for both
the quarter and for the full year,” said David Henshall, acting chief
executive officer and chief financial officer. “In the mobility space,
XenMobile, while still early stage, also showed strong momentum. We are
well positioned to help our customers embrace enterprise mobility by
providing infrastructure and cloud services to build and manage secure,
mobile workspaces.”
In addition, Citrix announced today that the company’s chief executive
officer, Mark B. Templeton, will be returning from his previously
announced leave of absence to resume his role as CEO. Mr. Templeton
intends to retire within the next year, subject to the naming of his
successor. The board of directors has formed a committee of independent
directors to lead a search process to identify the next CEO.
David J. Henshall, who has been serving as acting CEO, has been promoted
to chief operating officer and will retain a portion of the executive
responsibilities that he assumed during Mr. Templeton’s absence. Mr.
Henshall will continue in his roles as executive vice president and
chief financial officer, with responsibility for the company’s finance
and accounting organizations.
“I would like to express my deep appreciation to the board of directors
for allowing me time to support my family,” stated Mark Templeton. “I
remain fully committed to Citrix until my successor is named and the CEO
transition is complete.”
Citrix Chairman Thomas F. Bogan said, “Speaking on behalf of the entire
board, we are excited to welcome Mark back as CEO. I also would like to
acknowledge the important role that David Henshall has played in leading
Citrix during Mark’s absence. We look forward to Mark and David’s
continuing leadership and contributions to our company.”
Q4 Financial Summary
In reviewing the results for the fourth quarter of fiscal year 2013,
compared to the fourth quarter of fiscal year 2012:
-
Product and license revenue increased a half of a percent;
-
Software as a service revenue increased 13 percent;
-
Revenue from license updates and maintenance increased 11 percent;
-
Professional services revenue, which is comprised of consulting,
product training and certification, increased 28 percent;
-
Net revenue increased in the EMEA region by 14 percent, increased in
the Americas region by 8 percent and decreased in the Pacific region
by 12 percent;
-
Deferred revenue totaled $1.4 billion as of December 31, 2013,
compared to $1.2 billion as of December 31, 2012, an increase of 18
percent; and
-
Cash flow from operations was $230 million for the fourth quarter of
fiscal year 2013, compared with $227 million for the fourth quarter of
fiscal year 2012.
During the fourth quarter of fiscal year 2013:
-
GAAP gross margin was 83 percent and non-GAAP gross margin was 86
percent, excluding the effects of amortization of acquired product
related intangible assets and stock-based compensation expense;
-
GAAP operating margin was 20 percent and non-GAAP operating margin was
30 percent, excluding the effects of amortization of acquired
intangible assets and stock-based compensation expense; and
-
The company repurchased 4.4 million shares at an average price of
$57.84.
Annual Financial Summary
In reviewing the results for fiscal year 2013 compared to fiscal year
2012:
-
Product and license revenue increased 7 percent;
-
Software as a service revenue increased 14 percent;
-
Revenue from license updates and maintenance increased 16 percent;
-
Professional services revenue, which is comprised of consulting,
product training and certification, increased 17 percent;
-
Net revenue increased in the Americas region by 14 percent, increased
in the EMEA region by 14 percent and increased in the Pacific region
by 3 percent; and
-
Cash flow from operations was $928 million for fiscal year 2013
compared with $819 million for fiscal year 2012.
During the year ended December 31, 2013:
-
GAAP gross margin was 83 percent and non-GAAP gross margin was 86
percent, excluding the effects of amortization of acquired product
related intangible assets and stock-based compensation expense;
-
GAAP operating margin was 13 percent and non-GAAP operating margin was
24 percent, excluding the effects of amortization of acquired
intangible assets and stock-based compensation expense; and
-
The company repurchased 7.0 million shares at an average price of
$62.40.
Financial Outlook for Fiscal Year 2014
Citrix management expects to achieve the following results for fiscal
year ending December 31, 2014:
-
Net revenue is targeted to grow by approximately 8 percent to 10
percent.
-
GAAP gross margin is targeted to be in the range of 81 percent to 82
percent. Non-GAAP gross margin is targeted to be in the range of 84
percent to 85 percent, excluding 3 percent related to the effects of
amortization of acquired product related intangible assets and
stock-based compensation expense.
-
GAAP diluted earnings per share is targeted to be in the range of
$1.58 to $1.69. Non-GAAP diluted earnings per share is targeted to be
in the range of $2.85 to $2.95, excluding $0.75 related to the effects
of amortization of acquired intangible assets, $1.05 related to the
effects of stock-based compensation expenses, and $(0.43) to $(0.64)
for the tax effects related to these items.
-
GAAP tax rate is targeted to be in the range of 19 percent to 20
percent. Non-GAAP tax rate, which excludes the effects of amortization
of acquired intangible assets and stock-based compensation expenses,
is targeted to be in the range of 24 percent to 25 percent.
The above statements are based on current targets. These statements are
forward-looking, and actual results may differ materially.
Financial Outlook for First Quarter 2014
Citrix management expects to achieve the following results for the first
quarter of fiscal year 2014 ending March 31, 2014:
-
Net revenue is targeted to grow by approximately 8 percent to 10
percent.
-
GAAP gross margin is targeted to be in the range of 81 percent to 82
percent. Non-GAAP gross margin is targeted to be in the range of 84
percent to 85 percent, excluding 3 percent related to the effects of
amortization of acquired product related intangible assets and
stock-based compensation expense.
-
GAAP diluted earnings per share is targeted to be in the range of
$0.24 to $0.26. Non-GAAP diluted earnings per share is targeted to be
in the range of $0.57 to $0.60, excluding $0.19 related to the effects
of amortization of acquired intangible assets, $0.26 related to the
effects of stock-based compensation expenses, and $(0.09) to $(0.14)
for the tax effects related to these items.
The above statements are based on current targets. These statements are
forward-looking, and actual results may differ materially.
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
for approximately 30 days.
About Citrix
Citrix (NASDAQ:CTXS) is a leader in virtualization, networking and cloud
infrastructure to enable new ways for people to work better. Citrix
solutions help IT and service providers to build, manage and secure,
virtual and mobile workspaces that seamlessly deliver apps, desktops,
data and services to anyone, on any device, over any network or cloud.
This year Citrix is celebrating 25 years of innovation, making IT
simpler and people more productive with mobile workstyles. With annual
revenue in 2013 of $2.9 billion, Citrix solutions are in use at more
than 330,000 organizations and by over 100 million people globally.
Learn more at www.citrix.com.
For Citrix Investors
This release contains forward-looking statements which are made pursuant
to the safe harbor provisions of Section 27A of the Securities Act of
1933 and 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 Citrix's Acting Chief Executive
Officer and Chief Financial Officer, statements contained in the
Financial Outlook for Fiscal Year 2014 and First Quarter 2014 sections,
and under the Non-GAAP Financial Measures Reconciliation section, and
statements regarding 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 impact of
the global economy and uncertainty in the IT spending environment; the
success and growth of the company's product lines, including transitions
in the markets for Citrix’s desktop virtualization and collaboration
products and services; the company's ability to develop and
commercialize new products and services, including its enterprise
mobility and cloud platform products, while growing its established
virtualization, networking and collaboration products and services;
disruptions due to changes and transitions in key personnel and
succession risks, including but not limited to risks related to the
timing and outcome of our CEO search; the introduction of new products
by competitors or the entry of new competitors into the markets for
Citrix's products and services; changes in our revenue mix towards
products and services with lower gross margins; seasonal fluctuations in
the company's business; failure to execute Citrix's sales and marketing
plans; failure to successfully partner with key distributors, resellers,
system integrators, service providers and strategic partners and the
company's reliance on and the success of those partners for the
marketing and distribution of the company's products; the company's
ability to maintain and expand its business in small sized and large
enterprise accounts; the size, timing and recognition of revenue from
significant orders; the success of investments in its product groups,
foreign operations and vertical and geographic markets; the ability of
Citrix to make suitable acquisitions on favorable terms in the future;
risks associated with Citrix's acquisitions, including failure to
further develop and successfully market the technology and products of
acquired companies, failure to achieve or maintain anticipated revenues
and operating performance contributions from acquisitions, which could
dilute earnings, the retention of key employees from acquired companies,
difficulties and delays integrating personnel, operations, technologies
and products, disruption to our ongoing business and diversion of
management's attention from our ongoing business; the recruitment and
retention of qualified employees; risks in effectively controlling
operating expenses, including failure to manage untargeted expenses; the
effect of new accounting pronouncements on revenue and expense
recognition; the risks associated with securing data and maintaining
security of our networks and customer data stored by our services;
failure to comply with federal, state and international regulations;
litigation and disputes, including challenges to our intellectual
property rights or allegations of infringement of the intellectual
property rights of others; the inability to further innovate our
technology or enter into new businesses due to the intellectual property
rights of others; changes in the company's pricing and licensing models,
promotional programs and product mix, all of which may impact Citrix's
revenue recognition; charges in the event of the impairment of acquired
assets, investments or licenses; international market readiness,
execution and other risks associated with the markets for Citrix's
products and services; unanticipated changes in tax rates, non-renewal
of tax credits or exposure to additional tax liabilities; risks of
political and social turmoil; 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® is a trademark or registered trademark of Citrix Systems, Inc.
and/or one or more of its subsidiaries, and may be registered in the
U.S. Patent and Trademark Office and in other countries. All other
trademarks and registered trademarks are the property of their
respective owners.
CITRIX SYSTEMS, INC.
|
Condensed Consolidated Statements of Income
|
(In thousands, except per share data - unaudited)
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Product and licenses
|
|
$
|
269,889
|
|
$
|
268,674
|
|
$
|
891,630
|
|
$
|
830,645
|
|
Software as a service
|
|
|
153,269
|
|
|
135,421
|
|
|
582,872
|
|
|
511,323
|
|
License updates and maintenance
|
|
|
337,036
|
|
|
302,981
|
|
|
1,305,053
|
|
|
1,125,094
|
|
Professional services
|
|
|
42,226
|
|
|
32,920
|
|
|
138,879
|
|
|
119,061
|
|
Total net revenues
|
|
|
802,420
|
|
|
739,996
|
|
|
2,918,434
|
|
|
2,586,123
|
|
|
|
|
|
|
|
|
|
|
|
Cost of net revenues:
|
|
|
|
|
|
|
|
|
|
Cost of product and licenses revenues
|
|
|
30,467
|
|
|
33,086
|
|
|
114,932
|
|
|
96,962
|
|
Cost of services and maintenance revenues
|
|
|
81,749
|
|
|
60,822
|
|
|
289,990
|
|
|
227,150
|
|
Amortization of product related intangible assets
|
|
|
24,492
|
|
|
23,460
|
|
|
97,873
|
|
|
80,025
|
|
Total cost of net revenues
|
|
|
136,708
|
|
|
117,368
|
|
|
502,795
|
|
|
404,137
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
|
665,712
|
|
|
622,628
|
|
|
2,415,639
|
|
|
2,181,986
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
126,498
|
|
|
122,208
|
|
|
516,338
|
|
|
450,571
|
|
Sales, marketing and services
|
|
|
301,486
|
|
|
287,097
|
|
|
1,216,680
|
|
|
1,060,829
|
|
General and administrative
|
|
|
66,528
|
|
|
58,852
|
|
|
260,236
|
|
|
245,259
|
|
Amortization of other intangible assets
|
|
|
10,346
|
|
|
9,050
|
|
|
41,668
|
|
|
34,549
|
|
Total operating expenses
|
|
|
504,858
|
|
|
477,207
|
|
|
2,034,922
|
|
|
1,791,208
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
160,854
|
|
|
145,421
|
|
|
380,717
|
|
|
390,778
|
|
|
|
|
|
|
|
|
|
|
|
Other income, net
|
|
|
1,164
|
|
|
3,815
|
|
|
7,173
|
|
|
19,451
|
|
Income before income taxes
|
|
|
162,018
|
|
|
149,236
|
|
|
387,890
|
|
|
410,229
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
23,374
|
|
|
35,207
|
|
|
48,367
|
|
|
57,682
|
|
Net income
|
|
$
|
138,644
|
|
$
|
114,029
|
|
$
|
339,523
|
|
$
|
352,547
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share - diluted
|
|
$
|
0.74
|
|
$
|
0.60
|
|
$
|
1.80
|
|
$
|
1.86
|
|
Weighted average shares outstanding - diluted
|
|
|
186,500
|
|
|
188,662
|
|
|
188,245
|
|
|
189,129
|
|
|
CITRIX SYSTEMS, INC.
|
Condensed Consolidated Balance Sheets
|
(In thousands - unaudited)
|
|
|
|
|
|
December 31, 2013
|
|
December 31, 2012
|
ASSETS:
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
280,740
|
|
|
$
|
643,609
|
|
Short-term investments
|
|
|
453,976
|
|
|
|
285,022
|
|
Accounts receivable, net
|
|
|
654,821
|
|
|
|
630,956
|
|
Inventories, net
|
|
|
14,107
|
|
|
|
10,723
|
|
Prepaid expenses and other current assets
|
|
|
110,981
|
|
|
|
106,579
|
|
Current portion of deferred tax assets, net
|
|
|
48,470
|
|
|
|
36,846
|
|
Total current assets
|
|
|
1,563,095
|
|
|
|
1,713,735
|
|
|
|
|
|
|
Long-term investments
|
|
|
855,700
|
|
|
|
595,313
|
|
Property and equipment, net
|
|
|
338,996
|
|
|
|
303,294
|
|
Goodwill
|
|
|
1,768,949
|
|
|
|
1,518,219
|
|
Other intangible assets, net
|
|
|
509,595
|
|
|
|
556,205
|
|
Long-term portion of deferred tax assets, net
|
|
|
115,418
|
|
|
|
43,097
|
|
Other assets
|
|
|
60,496
|
|
|
|
66,539
|
|
Total assets
|
|
$
|
5,212,249
|
|
|
$
|
4,796,402
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY:
|
|
|
|
|
Accounts payable
|
|
|
78,452
|
|
|
|
71,116
|
|
Accrued expenses and other current liabilities
|
|
|
257,606
|
|
|
|
257,135
|
|
Income taxes payable
|
|
|
29,322
|
|
|
|
49,346
|
|
Current portion of deferred revenues
|
|
|
1,106,474
|
|
|
|
965,276
|
|
Total current liabilities
|
|
|
1,471,854
|
|
|
|
1,342,873
|
|
|
|
|
|
|
Long-term portion of deferred revenues
|
|
|
305,266
|
|
|
|
232,719
|
|
Other liabilities
|
|
|
115,322
|
|
|
|
99,033
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
Common stock
|
|
|
291
|
|
|
|
287
|
|
Additional paid-in capital
|
|
|
3,974,297
|
|
|
|
3,691,111
|
|
Retained earnings
|
|
|
2,903,541
|
|
|
|
2,564,018
|
|
Accumulated other comprehensive income (loss)
|
|
|
4,951
|
|
|
|
(7,705
|
)
|
Less – common stock in treasury, at cost
|
|
|
(3,563,273
|
)
|
|
|
(3,125,934
|
)
|
Total stockholders' equity
|
|
|
3,319,807
|
|
|
|
3,121,777
|
|
Total liabilities and stockholders’ equity
|
|
$
|
5,212,249
|
|
|
$
|
4,796,402
|
|
|
CITRIX SYSTEMS, INC.
|
Condensed Consolidated Statement of Cash Flows
|
(In thousands - unaudited)
|
|
|
|
Three Months Ended
December 31, 2013
|
|
Year Ended
December 31, 2013
|
OPERATING ACTIVITIES
|
|
|
|
|
Net Income
|
|
$
|
138,644
|
|
|
$
|
339,523
|
|
Adjustments to reconcile net income to net cash
|
|
|
|
|
provided by operating activities:
|
|
|
|
|
Amortization and depreciation
|
|
|
68,858
|
|
|
|
267,500
|
|
Stock-based compensation expense
|
|
|
46,635
|
|
|
|
183,941
|
|
Provision for accounts receivable allowances
|
|
|
781
|
|
|
|
5,519
|
|
Deferred income tax benefit
|
|
|
(1,310
|
)
|
|
|
(51,848
|
)
|
Other non-cash items
|
|
|
1,237
|
|
|
|
1,363
|
|
Total adjustments to reconcile net income to net cash
|
|
|
116,201
|
|
|
|
406,475
|
|
provided by operating activities
|
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities,
|
|
|
|
|
net of the effects of acquisitions:
|
|
|
|
|
Accounts receivable
|
|
|
(204,990
|
)
|
|
|
(22,951
|
)
|
Inventory
|
|
|
(2,503
|
)
|
|
|
(5,591
|
)
|
Prepaid expenses and other current assets
|
|
|
20,801
|
|
|
|
(862
|
)
|
Other assets
|
|
|
235
|
|
|
|
5,076
|
|
Deferred revenues
|
|
|
141,564
|
|
|
|
201,455
|
|
Accounts payable
|
|
|
8,041
|
|
|
|
3,092
|
|
Income taxes, net
|
|
|
(1,542
|
)
|
|
|
(35,316
|
)
|
Accrued expenses
|
|
|
11,732
|
|
|
|
22,515
|
|
Other liabilities
|
|
|
1,511
|
|
|
|
14,927
|
|
Total changes in operating assets and liabilities,
|
|
|
(25,151
|
)
|
|
|
182,345
|
|
net of the effects of acquisitions
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
229,694
|
|
|
|
928,343
|
|
|
|
|
|
|
INVESTING ACTIVITIES
|
|
|
|
|
Proceeds (purchases) of available-for-sale investments, net
|
|
|
97,850
|
|
|
|
(433,470
|
)
|
Purchases of property and equipment
|
|
|
(36,279
|
)
|
|
|
(162,889
|
)
|
Cash paid for acquisitions, net of cash acquired
|
|
|
(5,538
|
)
|
|
|
(334,881
|
)
|
Proceeds from sales of cost method investments
|
|
|
9,256
|
|
|
|
12,067
|
|
Purchases of cost method investments
|
|
|
(1,729
|
)
|
|
|
(6,824
|
)
|
Cash paid for licensing and core technology
|
|
|
(4,951
|
)
|
|
|
(12,153
|
)
|
Net cash provided by (used in) investing activities
|
|
|
58,609
|
|
|
|
(938,150
|
)
|
|
|
|
|
|
FINANCING ACTIVITIES
|
|
|
|
|
Proceeds from issuance of common stock
|
|
|
5,085
|
|
|
|
73,655
|
|
under stock-based compensation plans
|
|
|
|
|
Payments on debt from acquisitions
|
|
|
(2,061
|
)
|
|
|
(2,061
|
)
|
Excess tax benefit from stock-based compensation
|
|
|
(3,733
|
)
|
|
|
12,552
|
|
Stock repurchases, net
|
|
|
(249,992
|
)
|
|
|
(406,326
|
)
|
Cash paid for tax withholding on vested stock awards
|
|
|
(3,305
|
)
|
|
|
(31,013
|
)
|
Other
|
|
|
-
|
|
|
|
912
|
|
Net cash used in financing activities
|
|
|
(254,006
|
)
|
|
|
(352,281
|
)
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
(30
|
)
|
|
|
(781
|
)
|
Change in cash and cash equivalents
|
|
|
34,267
|
|
|
|
(362,869
|
)
|
Cash and cash equivalents at beginning of period
|
|
|
246,473
|
|
|
|
643,609
|
|
Cash and cash equivalents at end of period
|
|
$
|
280,740
|
|
|
$
|
280,740
|
|
|
The Condensed Consolidated Statement of Cash Flows for the year
ended December 31, 2013 reflect an adjustment of approximately $17
million made to the captions “Excess tax benefit from stock based
compensation” and “Income taxes, net” for the three months ended
March 31, 2013. Accordingly, the adjusted net cash provided by
operating activities and net cash used in financing activities for
the three months ended March 31, 2013 is approximately $267
million and $29 million, respectively.
|
Reconciliation of Non-GAAP Financial Measures to Comparable U.S. GAAP
Measures
(Unaudited)
Pursuant to the requirements of Regulation G, the Company has provided a
reconciliation of each non-GAAP financial measure used in this earnings
release and related conference call, slide presentation or webcast to
the most directly comparable GAAP financial measure. These measures
differ from GAAP in that they exclude amortization primarily related to
acquired intangible assets, stock-based compensation expenses and the
related tax effect of those items. The Company's basis for these
adjustments is described below.
Management uses these non-GAAP measures for internal reporting and
forecasting purposes, when publicly providing its business outlook, to
evaluate the Company's performance and to evaluate and compensate the
Company's executives. The Company has provided these non-GAAP financial
measures in addition to GAAP financial results because it believes that
these non-GAAP financial measures provide useful information to certain
investors and financial analysts for comparison across accounting
periods not influenced by certain non-cash items that are not used by
management when evaluating the Company's historical and prospective
financial performance. In addition, the Company has historically
provided this or similar information and understands that some investors
and financial analysts find this information helpful in analyzing the
Company's operating margins, operating expenses and net income and
comparing the Company's financial performance to that of its peer
companies and competitors.
Management typically excludes the amounts described above when
evaluating the Company's operating performance and believes that the
resulting non-GAAP measures are useful to investors and financial
analysts in assessing the Company's operating performance due to the
following factors:
• The Company does not acquire businesses on a predictable cycle. The
Company, therefore, believes that the presentation of non-GAAP measures
that adjust for the impact of amortization and certain stock-based
compensation expenses and the related tax effects that are primarily
related to acquisitions, provide investors and financial analysts with a
consistent basis for comparison across accounting periods and,
therefore, are useful to investors and financial analysts in helping
them to better understand the Company's operating results and underlying
operational trends.
• Amortization costs and the related tax effects are fixed at the time
of an acquisition, are then amortized over a period of several years
after the acquisition and generally cannot be changed or influenced by
management after the acquisition.
• Although stock-based compensation is an important aspect of the
compensation of the Company's employees and executives, stock-based
compensation expense is generally fixed at the time of grant, then
amortized over a period of several years after the grant of the
stock-based instrument, and generally cannot be changed or influenced by
management after the grant.
These non-GAAP financial measures are not prepared in accordance with
accounting principles generally accepted in the United States ("GAAP")
and may differ from the non-GAAP information used by other companies.
There are significant limitations associated with the use of non-GAAP
financial measures. The additional non-GAAP financial information
presented here should be considered in conjunction with, and not as a
substitute for or superior to, the financial information presented in
accordance with GAAP (such as net income and earnings per share) and
should not be considered measures of the Company's liquidity.
Furthermore, the Company in the future may exclude amortization
primarily related to newly acquired intangible assets, additional
charges related to its restructuring program and the related tax effects
from financial measures that it releases, and the Company expects to
continue to incur stock-based compensation expenses.
CITRIX SYSTEMS, INC.
Non-GAAP Financial Measures Reconciliation
(In thousands, except per share and operating margin data - unaudited)
The following tables show the non-GAAP financial measures used in this
press release reconciled to the most directly comparable GAAP financial
measures.
|
|
|
Three Months Ended
|
|
|
|
December 31, 2013
|
|
|
|
|
|
|
|
GAAP gross margin
|
|
|
83.0%
|
Add: stock-based compensation
|
|
|
0.1
|
Add: amortization of product related intangible assets
|
|
|
3.0
|
Non-GAAP gross margin
|
|
|
86.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
December 31, 2013
|
|
|
|
|
|
|
|
GAAP operating margin
|
|
|
20.0%
|
Add: stock-based compensation
|
|
|
5.9
|
Add: amortization of product related intangible assets
|
|
|
3.0
|
Add: amortization of other intangible assets
|
|
|
1.3
|
Non-GAAP operating margin
|
|
|
30.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Three Months Ended
|
|
|
|
December 31, 2013
|
|
|
December 31, 2012
|
|
|
|
|
|
|
|
GAAP net income
|
|
$
|
138,644
|
|
$
|
114,029
|
Add: stock-based compensation
|
|
|
46,635
|
|
|
41,018
|
Add: amortization of product related intangible assets
|
|
|
24,492
|
|
|
23,460
|
Add: amortization of other intangible assets
|
|
|
10,346
|
|
|
9,050
|
Less: tax effects related to above items
|
|
|
(25,422)
|
|
|
(18,211)
|
Non-GAAP net income
|
|
$
|
194,695
|
|
$
|
169,346
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Three Months Ended
|
|
|
|
December 31, 2013
|
|
|
December 31, 2012
|
|
|
|
|
|
|
|
GAAP earnings per share – diluted
|
|
$
|
0.74
|
|
$
|
0.60
|
Add: stock-based compensation
|
|
|
0.25
|
|
|
0.22
|
Add: amortization of product related intangible assets
|
|
|
0.13
|
|
|
0.13
|
Add: amortization of other intangible assets
|
|
|
0.06
|
|
|
0.05
|
Less: tax effects related to above items
|
|
|
(0.14)
|
|
|
(0.10)
|
Non-GAAP earnings per share – diluted
|
|
$
|
1.04
|
|
$
|
0.90
|
|
|
|
|
Twelve Months Ended
|
|
|
|
December 31, 2013
|
|
|
|
|
GAAP gross margin
|
|
|
82.8%
|
Add: stock-based compensation
|
|
|
0.1
|
Add: amortization of product related intangible assets
|
|
|
3.3
|
Non-GAAP gross margin
|
|
|
86.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended
|
|
|
|
December 31, 2013
|
|
|
|
|
GAAP operating margin
|
|
|
13.1%
|
Add: stock-based compensation
|
|
|
6.3
|
Add: amortization of product related intangible assets
|
|
|
3.3
|
Add: amortization of other intangible assets
|
|
|
1.4
|
Non-GAAP operating margin
|
|
|
24.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended
|
|
|
Twelve Months Ended
|
|
|
|
December 31, 2013
|
|
|
December 31, 2012
|
|
|
|
|
|
|
|
GAAP net income
|
|
$
|
339,523
|
|
$
|
352,547
|
Add: stock-based compensation
|
|
|
183,941
|
|
|
149,940
|
Add: amortization of product related intangible assets
|
|
|
97,873
|
|
|
80,025
|
Add: amortization of other intangible assets
|
|
|
41,668
|
|
|
34,549
|
Less: tax effects related to above items
|
|
|
(95,009)
|
|
|
(73,817)
|
Non-GAAP net income
|
|
$
|
567,996
|
|
$
|
543,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended
|
|
|
Twelve Months Ended
|
|
|
|
December 31, 2013
|
|
|
December 31, 2012
|
|
|
|
|
|
|
|
GAAP earnings per share – diluted
|
|
$
|
1.80
|
|
$
|
1.86
|
Add: stock-based compensation
|
|
|
0.98
|
|
|
0.79
|
Add: amortization of product related intangible assets
|
|
|
0.52
|
|
|
0.43
|
Add: amortization of other intangible assets
|
|
|
0.22
|
|
|
0.18
|
Less: tax effects related to above items
|
|
|
(0.50)
|
|
|
(0.39)
|
Non-GAAP earnings per share – diluted
|
|
$
|
3.02
|
|
$
|
2.87
|
|
CITRIX SYSTEMS, INC.
|
Forward Looking Guidance
|
|
|
|
|
|
|
|
|
For the
|
|
|
Three Months Ended
|
|
|
March 31, 2014
|
GAAP gross margin
|
|
80.5% to 81.5%
|
Add: stock-based compensation
|
|
0.1
|
Add: amortization of product related intangible assets
|
|
3.4
|
Non-GAAP gross margin
|
|
84.0% to 85.0%
|
|
|
|
|
|
For the
|
|
|
Three Months Ended
|
|
|
March 31, 2014
|
GAAP earnings per share - diluted
|
|
$0.24 to $0.26
|
Add: adjustments to exclude the effects
|
|
|
of amortization of intangible assets
|
|
0.19
|
|
|
|
Add: adjustments to exclude the effects of
|
|
|
expenses related to stock-based compensation
|
|
0.26
|
|
|
|
Less: tax effects related to above items
|
|
|
|
|
(0.09) to (0.14)
|
Non-GAAP earnings per share - diluted
|
|
$0.57 to $0.60
|
|
CITRIX SYSTEMS, INC.
|
Forward Looking Guidance
|
|
|
|
|
|
|
For the
|
|
|
Twelve Months Ended
|
|
|
December 31, 2014
|
GAAP gross margin
|
|
80.9% to 81.9%
|
Add: stock-based compensation
|
|
0.1
|
Add: amortization of product related intangible assets
|
|
3.0
|
Non-GAAP gross margin
|
|
84.0% to 85.0%
|
|
|
|
|
|
For the
|
|
|
Twelve Months Ended
|
|
|
December 31, 2014
|
GAAP earnings per share - diluted
|
|
$1.58 to $1.69
|
Add: adjustments to exclude the effects
|
|
|
of amortization of intangible assets
|
|
0.75
|
|
|
|
Add: adjustments to exclude the effects of
|
|
|
expenses related to stock-based compensation
|
|
1.05
|
|
|
|
Less: tax effects related to above items
|
|
|
|
|
(0.43) to (0.64)
|
Non-GAAP earnings per share - diluted
|
|
$2.85 to $2.95
|
|
|
|
|
|
|
|
|
For the
|
|
|
Twelve Months Ended
|
|
|
December 31, 2014
|
GAAP tax rate
|
|
19.0% to 20.0%
|
Add: tax effects of stock-based compensation and amortization
|
|
5.0
|
of intangible assets
|
|
|
Non-GAAP tax rate
|
|
24.0% - 25.0%
|
|
Copyright Business Wire 2014