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8-K - FORM 8-K - TIBCO SOFTWARE INC | d8k.htm |
Exhibit 99.1
Media Relations Contact: | Investor Relations Contact: | |
Holly Burkhart | Matthew Langdon | |
TIBCO Software Inc. | TIBCO Software Inc. | |
(650) 846-5624 | (650) 846-5747 | |
hburkhar@tibco.com | mlangdon@tibco.com |
TIBCO SOFTWARE GROWS LICENSE REVENUE BY 21% AND
TOTAL REVENUE BY 17% OVER Q1 2009
Non-GAAP EPS Increases to $0.12
PALO ALTO, Calif., March 25, 2010 TIBCO Software Inc. (Nasdaq: TIBX) today announced results for its first quarter, which ended on February 28, 2010.
Total revenue for the first quarter of fiscal 2010 was $155.0 million and net income was $10.4 million, or $0.06 per diluted share. This compares to total revenue of $132.9 million and net income of $5.6 million, or $0.03 per diluted share, as reported for the first quarter of fiscal 2009.
On a non-GAAP basis, net income for the first quarter of fiscal 2010 was $20.0 million or $0.12 per diluted share, compared with $15.2 million or $0.09 per diluted share for the first quarter of fiscal 2009. Non-GAAP operating income for the first quarter of fiscal 2010 was $30.4 million, an increase of 39% over non-GAAP operating income of $21.9 million in Q1 2009. This implies an expansion of non-GAAP operating margins of over 300 basis points, from 16.5% in Q1 2009 to 19.6% in Q1 2010. Non-GAAP results exclude stock-based compensation expense, amortization of acquired intangible assets, and acquisition related and other expenses and assume a non-GAAP effective tax rate of 32% for the first quarter of fiscal 2010 and 2009.
Q1 was a good start to the year, as we delivered strong growth in both revenue and profits, said Vivek Ranadivé, TIBCOs chairman and chief executive officer. Each of our major regions grew total revenue by double-digit percentages, and seven separate verticals contributed five percent or more of our business. As the market leader in event-driven software, we are uniquely positioned to benefit from the shift away from systems built to handle transactions to those built for capitalizing on events. We remain focused on continuing to lead in this area, pressing our innovation advantage, and delivering differentiated value to our customers and shareholders alike.
First Quarter Fiscal 2010 Highlights
| Total revenue increased 17% year over year to $155.0 million; |
| License revenue increased 21% year over year to $54.2 million; |
| Non-GAAP operating margin was 20%; |
| Cash flow from operations was $40.5 million; |
| Repurchased 3.1 million shares; |
| Diverse mix of business across major industries including Financial Services, Telecommunications, Energy, Government, Life Sciences, Insurance, and Manufacturing; |
| TIBCO closed 97 deals over $100k and had 10 deals over $1 million; and |
| TIBCO expanded its business with leading companies and agencies in the first quarter such as CGI Group, COLT, Colonial Life & Accident Insurance Company, EADS Astrium, Hong Kong Jockey Club, Ladbrokes, NXP Semiconductors, Rent-A-Center, sanofi-aventis, and State Street Corporation. |
Conference Call Details
TIBCO has scheduled a conference call for 4:30 pm ET / 1:30 pm PT today to discuss its first quarter results. The conference call will be hosted by InterCall and may be accessed over the Internet at www.tibco.com or via dial-in at (877) 293-9114 or (706) 758-2055. Please join the conference call at least 10 minutes early to register. A replay of the conference call will be available until midnight on April 25, 2010 at www.tibco.com or via dial-in at (800) 642-1687 or (706) 645-9291. The pass code for both the call and the replay is 53656894.
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About TIBCO
TIBCOs technology digitized Wall Street in the 80s with event-driven Information Bus software, which helped make real-time business a strategic differentiator in the 90s. Today, TIBCOs infrastructure software gives customers the ability to constantly innovate by connecting applications and data in a service-oriented architecture, streamlining activities through business process management, and giving people the information and intelligence tools they need to make faster and smarter decisions, what we call The Power of Now®. TIBCO serves more than 3,000 customers around the world with offices in more than 20 countries and an ecosystem of over 200 partners. Learn more at www.tibco.com.
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TIBCO, The Power of Now and TIBCO Software are trademarks or registered trademarks of TIBCO Software Inc. in the United States and/or other countries. All other product and company names and marks mentioned in this document are the property of their respective owners and are mentioned for identification purposes only.
About Non-GAAP Financial Information
This press release includes 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 in the United States of America (GAAP), please see the section entitled About Non-GAAP Financial Measures and the accompanying table entitled Reconciliation of GAAP to Non-GAAP Measures.
Legal Notice Regarding Forward-Looking Statements
This release contains forward-looking statements within the meaning of the safe harbor provisions of the federal securities laws. The final financial results for first quarter of fiscal year 2010 may differ materially from the preliminary results presented in this release due to factors that include, but are not limited to, risks associated with the final review of the results and preparation of financial statements. In addition, forward-looking statements such as statements regarding our ability to benefit from the shift away from systems built to handle transactions towards those built for capitalizing on events, our ability to maintain our leadership position in this area and maintain our innovation advantage, and our ability to deliver differentiated value to our customers and shareholders are subject to risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. These risks include but are not limited to: our ability to compete effectively against alternative product offerings and business models, and our ability to execute successfully on our product plans. Additional information regarding potential risks is provided in TIBCOs filings with the SEC, including its most recent Annual Report on Form 10-K for the year ended November 30, 2009. TIBCO assumes no obligation to update the forward-looking statements included in this release.
TIBCO Software Inc.
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands)
February 28, 2010 |
November 30, 2009 (1) | |||||
ASSETS | ||||||
Current assets: |
||||||
Cash and cash equivalents |
$ | 278,467 | $ | 292,529 | ||
Short-term investments |
215 | 307 | ||||
Accounts receivable, net |
111,325 | 154,744 | ||||
Prepaid expenses and other current assets |
49,045 | 52,657 | ||||
Total current assets |
439,052 | 500,237 | ||||
Property and equipment, net |
92,024 | 94,631 | ||||
Goodwill |
385,122 | 374,285 | ||||
Acquired intangible assets, net |
91,210 | 83,060 | ||||
Long-term deferred income tax assets |
72,841 | 70,057 | ||||
Other assets |
44,565 | 44,069 | ||||
Total assets |
$ | 1,124,814 | $ | 1,166,339 | ||
LIABILITIES AND EQUITY | ||||||
Current liabilities: |
||||||
Accounts payable |
$ | 13,531 | $ | 18,350 | ||
Accrued liabilities |
62,906 | 96,595 | ||||
Accrued excess facilities costs |
5,054 | 5,848 | ||||
Deferred revenue |
173,026 | 159,241 | ||||
Current portion of long-term debt |
2,177 | 2,148 | ||||
Total current liabilities |
256,694 | 282,182 | ||||
Accrued excess facilities costs, less current portion |
57 | 1,083 | ||||
Long-term deferred revenue |
14,204 | 15,353 | ||||
Long-term deferred income tax liabilities |
9,650 | 9,257 | ||||
Long-term income tax liabilities |
16,446 | 17,045 | ||||
Long-term debt, less current portion |
39,821 | 40,377 | ||||
Other long-term liabilities |
3,257 | 3,561 | ||||
Total long-term liabilities |
83,435 | 86,676 | ||||
Total liabilities |
340,129 | 368,858 | ||||
Total equity |
784,685 | 797,481 | ||||
Total liabilities and equity |
$ | 1,124,814 | $ | 1,166,339 | ||
(1) | On December 1, 2009, TIBCO adopted a new accounting standard related to the presentation of noncontrolling interest. Prior period results have been adjusted to conform with this new accounting standard. |
TIBCO Software Inc.
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except net income per share)
Three Months Ended | ||||||||
February 28, 2010 |
March 1, 2009 (1) |
|||||||
Revenue: |
||||||||
License |
$ | 54,174 | $ | 44,849 | ||||
Service and maintenance |
100,870 | 88,047 | ||||||
Total revenue |
155,044 | 132,896 | ||||||
Cost of revenue: |
||||||||
License |
7,396 | 6,810 | ||||||
Service and maintenance |
35,204 | 31,245 | ||||||
Total cost of revenue |
42,600 | 38,055 | ||||||
Gross profit |
112,444 | 94,841 | ||||||
Operating expenses: |
||||||||
Research and development |
28,074 | 25,134 | ||||||
Sales and marketing |
52,703 | 46,126 | ||||||
General and administrative |
11,346 | 10,628 | ||||||
Amortization of acquired intangible assets |
3,708 | 3,716 | ||||||
Acquisition related and other (2) |
1,045 | | ||||||
Total operating expenses |
96,876 | 85,604 | ||||||
Income from operations |
15,568 | 9,237 | ||||||
Interest income |
204 | 1,077 | ||||||
Interest expense |
(985 | ) | (746 | ) | ||||
Other income (expense), net |
(229 | ) | 159 | |||||
Income before provision for income taxes and noncontrolling interest |
14,558 | 9,727 | ||||||
Provision for income taxes |
4,118 | 4,122 | ||||||
Net income |
10,440 | 5,605 | ||||||
Less: Net income (loss) attributable to noncontrolling interest |
15 | (21 | ) | |||||
Net income attributable to TIBCO Software Inc. |
$ | 10,425 | $ | 5,626 | ||||
Net income per share attributable to TIBCO Software Inc.: |
||||||||
Basic |
$ | 0.06 | $ | 0.03 | ||||
Diluted |
$ | 0.06 | $ | 0.03 | ||||
Shares used to compute net income per share attributable to TIBCO Software Inc.: |
||||||||
Basic |
162,593 | 171,284 | ||||||
Diluted |
169,745 | 172,092 | ||||||
(1) | On December 1, 2009, TIBCO adopted a new accounting standard related to the presentation of noncontrolling interest. Prior period results have been adjusted to conform with this new accounting standard. |
(2) | Prior to the adoption of new amended guidance for business combinations effective December 1, 2009, the majority of acquisition related and other expenses were capitalized. |
TIBCO Software Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
Three Months Ended | ||||||||
February 28, 2010 |
March 1, 2009 (1) |
|||||||
Cash flows from operating activities: |
||||||||
Net income |
$ | 10,440 | $ | 5,605 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation of property and equipment |
3,445 | 3,820 | ||||||
Amortization of acquired intangible assets |
7,322 | 7,279 | ||||||
Stock-based compensation |
6,436 | 5,361 | ||||||
Deferred income tax |
(5,115 | ) | (2,397 | ) | ||||
Tax benefits related to stock benefit plans |
4,879 | 2,711 | ||||||
Excess tax benefits from stock-based compensation |
(3,850 | ) | (2,318 | ) | ||||
Other non-cash adjustments, net |
10 | 493 | ||||||
Changes in assets and liabilities: |
||||||||
Accounts receivable |
43,658 | 24,710 | ||||||
Prepaid expenses and other assets |
2,104 | 2,928 | ||||||
Accounts payable |
(4,549 | ) | (598 | ) | ||||
Accrued liabilities and excess facilities costs |
(35,272 | ) | (23,931 | ) | ||||
Deferred revenue |
10,994 | 5,650 | ||||||
Net cash provided by operating activities |
40,502 | 29,313 | ||||||
Cash flows from investing activities: |
||||||||
Maturities and sales of short-term investments |
152 | 5,174 | ||||||
Acquisitions, net of cash acquired |
(29,227 | ) | (163 | ) | ||||
Proceeds from private equity investments |
32 | | ||||||
Purchases of property and equipment |
(1,058 | ) | (1,318 | ) | ||||
Restricted cash pledged as security |
22 | (2,315 | ) | |||||
Net cash provided by (used in) investing activities |
(30,079 | ) | 1,378 | |||||
Cash flows from financing activities: |
||||||||
Proceeds from issuance of common stock |
3,868 | 2,127 | ||||||
Repurchases of the Companys common stock |
(29,564 | ) | | |||||
Excess tax benefits from stock-based compensation |
3,850 | 2,318 | ||||||
Principal payments on long-term debt |
(527 | ) | (498 | ) | ||||
Net cash provided by (used in) financing activities |
(22,373 | ) | 3,947 | |||||
Effect of foreign exchange rate changes on cash and cash equivalents |
(2,112 | ) | (3,315 | ) | ||||
Net change in cash and cash equivalents |
(14,062 | ) | 31,323 | |||||
Cash and cash equivalents at beginning of period |
292,529 | 254,400 | ||||||
Cash and cash equivalents at end of period |
$ | 278,467 | $ | 285,723 | ||||
(1) | On December 1, 2009, TIBCO adopted a new accounting standard related to the presentation of noncontrolling interest. Prior period results have been adjusted to conform with this new accounting standard. |
About Non-GAAP Financial Measures
TIBCO provides non-GAAP measures for operating income, net income and net income per share data as supplemental information regarding TIBCOs business performance. TIBCO believes that these non-GAAP financial measures are useful to investors because they exclude non-operating charges. TIBCOs management excludes these non-operating charges when it internally evaluates the performance of TIBCOs business and makes operating decisions, including internal budgeting, performance measurement and the calculation of bonuses and discretionary compensation, because these measures provide a consistent method of comparison to historical periods. Moreover, management believes these non-GAAP measures reflect the essential revenue generation activities of TIBCO. Accordingly, management excludes stock-based compensation related to employee stock options, amortization of acquired intangible assets, charges for acquired in-process research and development, costs related to formal restructuring activities, acquisition related and other expenses, gains and losses on equity investments, and the income tax effects of the foregoing, as well as adjustments for the impact of changes in the valuation allowance recorded against TIBCOs deferred tax assets when making operational decisions.
TIBCO believes that providing the non-GAAP measures that management uses to its investors is useful to investors for a number of reasons. The non-GAAP measures provide a consistent basis for investors to understand TIBCOs financial performance on a trended basis across historical periods. In addition, it allows investors to evaluate TIBCOs performance using the same methodology and information as that used by TIBCOs management.
Non-GAAP measures are subject to material limitations as these measures are not in accordance with, or a substitute for, GAAP and thus TIBCOs definition may be different from similar non-GAAP measures used by other companies and/or analysts. However, TIBCOs management compensates for these limitations by providing the relevant disclosure of the items excluded in the calculation of non-GAAP operating income, non-GAAP net income and non-GAAP net income per share. In addition, some items such as restructuring charges that are excluded from non-GAAP net income and non-GAAP earnings per share can have a material impact on cash flows and stock compensation charges can have a significant impact on earnings. Management compensates for these limitations by evaluating the non-GAAP measure together with the most directly comparable GAAP measure. TIBCO has historically provided non-GAAP measures to the investment community as a supplement to its GAAP results, to enable investors to evaluate TIBCOs business performance in the way that management does.
The non-GAAP adjustments, and the basis for excluding them, are outlined below:
Amortization of Intangible Assets
TIBCO has incurred amortization of intangible assets, included in its GAAP financial statements, related to various acquisitions TIBCO has made. Management excludes these items, for the purposes of calculating non-GAAP operating income, non-GAAP net income and non-GAAP net income per share. TIBCO believes that eliminating this expense from its non-GAAP measures is useful to investors, because the amortization of intangible assets can be inconsistent in amount and frequency and is significantly impacted by the timing and magnitude of TIBCOs acquisition transactions, which also vary substantially in frequency from period to period.
Stock-based Compensation
TIBCO incurs stock-based compensation expense. TIBCO excludes this item for the purposes of calculating non-GAAP operating income, non-GAAP net income and non-GAAP net income per share because it is a non-cash expense that TIBCO believes is not reflective of its business performance. The nature of the stock-based compensation expense also makes it very difficult to estimate prospectively, since the expense will vary with changes in the stock price and market conditions at the time of new grants, varying valuation methodologies, subjective assumptions and different award types, making the comparison of current results with forward-looking guidance potentially difficult for investors to interpret. The tax effects of stock-based compensation expenses may also vary significantly from period to period, without any change in underlying operational performance, thereby obscuring the underlying profitability of operations relative to prior periods. Finally, TIBCO believes that non-GAAP measures of profitability that exclude stock-based compensation are widely used by analysts and investors in the software industry.
Acquisition Related and Other Expenses
TIBCO has incurred acquisition related and other expenses which consist of costs incurred after the issuance of a definitive term sheet for a particular transaction (whether or not such transaction is ultimately completed, remains in process or is not completed) and include legal, banker, accounting and other advisory fees of third parties and severance costs for employees of the acquired company that are terminated within 90 days of the acquisition date. Management excludes these items, for the purposes of calculating non-GAAP operating income, non-GAAP net income and non-GAAP net income per share. TIBCO believes that eliminating these expenses from its non-GAAP measures is useful to investors, because it generally would not have otherwise incurred such expenses in the periods presented as part of its continuing operations. The acquisition related and other expenses are not recurring with respect to past transactions, can be inconsistent in amount and frequency from period to period and are significantly impacted by the timing and magnitude of TIBCOs acquisitions. While these expenses are not recurring with respect to past transactions, TIBCO generally will incur these expenses in connection with any future acquisitions.
TIBCO Software Inc.
Reconciliation of GAAP to Non-GAAP Measures
(unaudited)
(in thousands, except net income per share)
Three Months Ended | ||||||||||||||
February 28, 2010 | March 1, 2009 | |||||||||||||
Operating Income |
Net income attributable to TIBCO Software Inc. |
Operating Income |
Net income attributable to TIBCO Software Inc. |
|||||||||||
GAAP |
$ | 15,568 | $ | 10,425 | $ | 9,237 | $ | 5,626 | ||||||
Amortization of intangible assets - cost of revenue |
3,614 | 3,614 | 3,563 | 3,563 | ||||||||||
Amortization of intangible assets - operating expense |
3,708 | 3,708 | 3,716 | 3,716 | ||||||||||
Stock-based compensation - cost of revenue |
642 | 642 | 610 | 610 | ||||||||||
Stock-based compensation - R&D expense |
1,520 | 1,520 | 1,123 | 1,123 | ||||||||||
Stock-based compensation - S&M expense |
2,255 | 2,255 | 1,706 | 1,706 | ||||||||||
Stock-based compensation - G&A expense |
2,019 | 2,019 | 1,923 | 1,923 | ||||||||||
Acquisition related and other |
1,045 | 1,045 | | | ||||||||||
Income tax adjustment for non-GAAP (1) |
| (5,278 | ) | | (3,036 | ) | ||||||||
Non-GAAP |
$ | 30,371 | $ | 19,950 | $ | 21,878 | $ | 15,231 | ||||||
Diluted net income per share attributable to TIBCO Software Inc.: |
||||||||||||||
GAAP |
$ | 0.06 | $ | 0.03 | ||||||||||
Non-GAAP |
$ | 0.12 | $ | 0.09 | ||||||||||
Shares used to compute diluted net income per share attributable to TIBCO Software Inc.: |
169,745 | 172,092 | ||||||||||||
(1) | The estimated non-GAAP effective tax rate was 32% for the first quarter of fiscal 2010 and 2009, and has been used to adjust the provision for income taxes for non-GAAP purposes. |