UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended May 30, 2004
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number: 000-26579
TIBCO SOFTWARE INC.
(Exact name of registrant as specified in its charter)
| Delaware | 77-0449727 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
3303 Hillview Avenue
Palo Alto, California 94304-1213
(Address of principal executive offices) (zip code)
Registrant’s telephone number, including area code: (650) 846-1000
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨
The number of shares outstanding of the registrant’s Common Stock, $0.001 par value, as of June 25, 2004 was 209,882,607.
| Item |
Page No. | |||
| PART I – FINANCIAL INFORMATION | ||||
| Item 1 |
||||
| Condensed Consolidated Balance Sheets as of May 31, 2004 and November 30, 2003 (Unaudited) |
3 | |||
| 4 | ||||
| 5 | ||||
| Notes to Condensed Consolidated Financial Statements (Unaudited) |
6 | |||
| Item 2 |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
17 | ||
| Item 3 |
36 | |||
| Item 4 |
36 | |||
| PART II – OTHER INFORMATION | ||||
| Item 4 |
38 | |||
| Item 6 |
38 | |||
| 39 | ||||
2
PART I — FINANCIAL INFORMATION
Condensed Consolidated Balance Sheets
(in thousands)
| May 31, 2004 |
November 30, 2003 |
|||||||
| (Unaudited) | ||||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 101,254 | $ | 83,278 | ||||
| Short-term investments |
278,165 | 521,391 | ||||||
| Accounts receivable, net of allowances; $4,208 and $4,715, respectively |
70,528 | 53,659 | ||||||
| Due from related parties |
2,598 | 4,454 | ||||||
| Cash restricted for acquisition |
150,000 | — | ||||||
| Other current assets |
16,863 | 15,549 | ||||||
| Total current assets |
619,408 | 678,331 | ||||||
| Property and equipment, net of accumulated depreciation; $50,755 and $44,590, respectively |
115,567 | 119,124 | ||||||
| Other assets |
35,725 | 34,923 | ||||||
| Goodwill |
98,691 | 103,006 | ||||||
| Acquired intangibles, net of accumulated amortization; $25,110 and $21,745, respectively |
4,510 | 7,875 | ||||||
| $ | 873,901 | $ | 943,259 | |||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 3,968 | $ | 3,692 | ||||
| Amounts due related parties |
1 | 1,641 | ||||||
| Accrued liabilities |
47,280 | 36,219 | ||||||
| Accrued excess facilities costs |
38,509 | 42,522 | ||||||
| Deferred revenue |
49,458 | 42,914 | ||||||
| Current portion of long term debt |
1,666 | 1,624 | ||||||
| Total current liabilities |
140,882 | 128,612 | ||||||
| Long term debt |
51,009 | 51,853 | ||||||
| Commitments and contingencies (Note 6) |
||||||||
| Stockholders’ equity: |
||||||||
| Common stock |
199 | 213 | ||||||
| Additional paid-in capital |
822,554 | 921,038 | ||||||
| Unearned stock-based compensation |
(174 | ) | (254 | ) | ||||
| Accumulated other comprehensive income (loss) |
(267 | ) | 225 | |||||
| Accumulated deficit |
(140,302 | ) | (158,428 | ) | ||||
| Total stockholders’ equity |
682,010 | 762,794 | ||||||
| $ | 873,901 | $ | 943,259 | |||||
See accompanying notes to condensed consolidated financial statements.
3
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
| Three Months Ended May 31, |
Six Months Ended May 31, |
|||||||||||||||
| 2004 |
2003 |
2004 |
2003 |
|||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| License revenue: |
||||||||||||||||
| Non-related parties |
$ | 41,261 | $ | 27,977 | $ | 77,720 | $ | 52,762 | ||||||||
| Related parties |
4,057 | 2,823 | 8,368 | 13,013 | ||||||||||||
| Total license revenue |
45,318 | 30,800 | 86,088 | 65,775 | ||||||||||||
| Service and maintenance revenue: |
||||||||||||||||
| Non-related parties |
31,644 | 26,303 | 60,986 | 51,211 | ||||||||||||
| Related parties |
3,317 | 3,826 | 6,836 | 7,049 | ||||||||||||
| Reimbursable expenses |
970 | 539 | 1,740 | 1,086 | ||||||||||||
| Total service and maintenance revenue |
35,931 | 30,668 | 69,562 | 59,346 | ||||||||||||
| Total revenue |
81,249 | 61,468 | 155,650 | 125,121 | ||||||||||||
| Cost of revenue: |
||||||||||||||||
| Stock based compensation |
9 | 65 | 23 | 119 | ||||||||||||
| Other cost of revenue non-related parties |
18,410 | 14,489 | 34,809 | 28,913 | ||||||||||||
| Other cost of revenue related parties |
— | 199 | — | 602 | ||||||||||||
| Gross profit |
62,830 | 46,715 | 120,818 | 95,487 | ||||||||||||
| Operating expenses: |
||||||||||||||||
| Research and development: |
||||||||||||||||
| Stock-based compensation |
7 | 148 | 32 | 375 | ||||||||||||
| Other research and development |
13,832 | 17,119 | 26,926 | 34,395 | ||||||||||||
| Sales and marketing: |
||||||||||||||||
| Stock-based compensation |
20 | 100 | 56 | 137 | ||||||||||||
| Other sales and marketing |
26,871 | 29,099 | 53,471 | 55,948 | ||||||||||||
| General and administrative: |
||||||||||||||||
| Stock-based compensation |
9 | 18 | 12 | 57 | ||||||||||||
| Other general and administrative |
5,727 | 5,728 | 10,530 | 10,753 | ||||||||||||
| Restructuring charges |
— | — | — | 1,100 | ||||||||||||
| Amortization of acquired intangibles |
483 | 499 | 982 | 998 | ||||||||||||
| Total operating expenses |
46,949 | 52,711 | 92,009 | 103,763 | ||||||||||||
| Income (loss) from operations |
15,881 | (5,996 | ) | 28,809 | (8,276 | ) | ||||||||||
| Interest and other income (expense), net |
849 | 4,992 | 3,161 | 10,095 | ||||||||||||
| Interest expense |
(691 | ) | — | (1,388 | ) | — | ||||||||||
| Income (loss) before income taxes |
16,039 | (1,004 | ) | 30,582 | 1,819 | |||||||||||
| Provision for (benefit from) income taxes |
6,441 | (444 | ) | 12,456 | 718 | |||||||||||
| Net income (loss) |
$ | 9,598 | $ | (560 | ) | $ | 18,126 | $ | 1,101 | |||||||
| Net income (loss) per share: |
||||||||||||||||
| Basic |
$ | 0.05 | $ | (0.00 | ) | $ | 0.09 | $ | 0.01 | |||||||
| Weighted average common shares outstanding |
198,816 | 211,213 | 204,002 | 210,718 | ||||||||||||
| Net income (loss) per share: |
||||||||||||||||
| Diluted |
$ | 0.05 | $ | (0.00 | ) | $ | 0.08 | $ | 0.01 | |||||||
| Weighted average common shares outstanding |
212,658 | 211,213 | 217,555 | 218,646 | ||||||||||||
See accompanying notes to condensed consolidated financial statements.
4
Condensed Consolidated Statements of Cash Flows
(in thousands)
| Six Months Ended |
||||||||
| May 31, 2004 |
May 31, 2003 |
|||||||
| (Unaudited) | ||||||||
| Cash flows from operating activities: |
||||||||
| Net income |
$ | 18,126 | $ | 1,101 | ||||
| Adjustments to reconcile net loss to net cash provided by operating activities: |
||||||||