Citrix Systems, Inc. (NASDAQ:CTXS) today announced revised profitability
guidance for the second quarter of fiscal year 2014 and the full fiscal
year 2014 following its previously announced offering of $1.4 billion
principal amount of convertible senior notes due 2019, inclusive of the
over-allotment option, and ongoing accelerated share repurchase.
“We were very pleased with the results of the convertible offering and
the ongoing accelerated share repurchase,” said David Henshall, chief
operating officer and chief financial officer for Citrix.
"Over the past few years, we have consistently re-purchased shares to
drive shareholder value. With the current market financing environment,
the timing was right to go even further with a significant accelerated
share repurchase program, funded by this convertible note offering.”
Financial Outlook for Second Quarter 2014
For the second quarter of fiscal year 2014 ending June 30, 2014, GAAP
diluted earnings per share is targeted to be in the range of $0.18 to
$0.20. Non-GAAP diluted earnings per share is targeted to be in the
range of $0.59 to $0.61, excluding $0.20 related to the effects of
amortization of acquired intangible assets, $0.30 related to the effects
of stock-based compensation expenses, $0.03 related to the effects of
amortization of debt discount, $0.03 related to the effects of
restructuring charges, and $(0.13) to $(0.17) for the tax effects
related to these items.
Financial Outlook for Fiscal Year 2014
For the fiscal year ending December 31, 2014, GAAP diluted earnings per
share is targeted to be in the range of $1.60 to $1.65. Non-GAAP diluted
earnings per share is targeted to be in the range of $3.07 to $3.12,
excluding $0.81 related to the effects of amortization of acquired
intangible assets, $1.10 related to the effects of stock-based
compensation expenses, $0.12 related to the effects of amortization of
debt discount, $0.09 related to the effects of restructuring charges,
and $(0.60) to $(0.70) 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.
On April 23, 2014, Citrix announced a proposed private offering of $1.4
billion principal amount of convertible senior notes due 2019, inclusive
of the over-allotment option, and on April 25, 2014, announced the
pricing of the offering. After deducting fees, expenses and the net cost
of the associated convertible note hedge transactions, Citrix used the
remainder of the net proceeds from the offering and a portion of its
existing cash and investments to enter into transactions for the
repurchase of $1.5 billion of its common stock as authorized under its
share repurchase program.
About Citrix
Citrix (NASDAQ:CTXS) is a leader in mobile workspaces, providing
virtualization, mobility management, networking and cloud services to
enable new ways to work better. Citrix solutions power business mobility
through secure, personal workspaces that provide people with instant
access to apps, desktops, data and communications on any device, over
any network and cloud. This year Citrix is celebrating 25 years of
innovation, making IT simpler and people more productive. 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 users 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 chief financial officer and
chief operating officer, statements contained in the Financial Outlook
for Second Quarter 2014 and Financial Outlook for Fiscal Year 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 products and
collaboration 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; changes in deferred
growth and composition associated with product license revenue growth;
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; ability to
effectively manage our capital structure and the impact of related
changes on our operating results and financial condition; 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 trademarks or registered trademarks 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 property of their respective
owners.
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 and debt discount, stock-based compensation
expenses, charges associated with the Company’s restructuring program
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.
-
Under GAAP, certain convertible debt instruments that may be settled
in cash on conversion are required to be accounted for as separate
liability (debt) and equity (conversion option) components in a manner
that reflects the issuer’s non-convertible debt borrowing rate. The
difference between the imputed interest expense and the coupon
interest expense, net of the interest amount capitalized, is excluded
from management’s assessment of the company’s operating performance
because management believes that the exclusion of these charges will
better help investors and financial analysts understand the Company's
operating results and underlying operational trends.
-
The charges incurred in conjunction with the Company's restructuring
program, which relate to reductions in headcount are not anticipated
to be ongoing costs and, thus, are outside of the normal operations of
the Company's business. The Company, therefore, believes that the
exclusion of these charges will better help investors and financial
analysts understand the Company's operating results and underlying
operational trends as compared to prior periods.
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 and debt discount,
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.
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CITRIX SYSTEMS, INC.
Non-GAAP Financial Measures Reconciliation
Forward Looking Guidance
(In thousands, except per share and operating margin data -
unaudited)
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The following tables show the non-GAAP financial measures used in
this press release reconciled to the most directly comparable GAAP
financial measures.
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For the Three Months Ended
June 30,
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For the Twelve Months Ended
December 31,
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2014
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2014
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GAAP earnings per share – diluted
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$0.18 to $0.20
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$1.60 to $1.65
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Add: adjustments to exclude the effects of amortization of
intangible assets
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0.20
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0.81
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Add: adjustments to exclude the effects of expenses related to
stock-based compensation
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0.30
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1.10
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Add: adjustments to exclude the effects of amortization of debt
discount
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0.03
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0.12
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Add: adjustments to exclude the effects of restructuring charges
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0.03
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0.09
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Less: tax effects related to above items
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(0.13) to (0.17)
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(0.60) to (0.70)
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Non-GAAP earnings per share – diluted
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$0.59 to $0.61
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$3.07 to $3.12
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