Attached files

file filename
8-K - FORM 8-K - TIBCO SOFTWARE INCd456941d8k.htm

Exhibit 99.1

 

 

    LOGO  
Media Relations Contact:     Investor Relations Contact:  
Leslie Moore     Matthew Langdon  
TIBCO Software Inc.     TIBCO Software Inc.  
(650) 846-5025     (650) 846-5747  
lmoore@tibco.com     mlangdon@tibco.com  

TIBCO SOFTWARE REPORTS FOURTH QUARTER AND

FISCAL YEAR 2012 FINANCIAL RESULTS

Full Year Revenue Exceeds $1 Billion for the First Time;

Non-GAAP EPS of $1.15

PALO ALTO, Calif., December 20, 2012 – TIBCO Software Inc. (NASDAQ: TIBX) today announced results for its fourth quarter and fiscal year, which ended on November 30, 2012.

Total revenue for the fourth quarter of fiscal 2012 was $296.5 million and net income was $48.8 million, or $0.29 per diluted share. This compares to total revenue of $289.5 million and net income of $51.9 million, or $0.30 per diluted share, as reported for the fourth quarter of fiscal 2011.

On a non-GAAP basis, net income for the fourth quarter of fiscal 2012 was $70.7 million or $0.42 per diluted share, compared with $72.2 million or $0.42 per diluted share for the fourth quarter of fiscal 2011. Non-GAAP operating income for the fourth quarter of fiscal 2012 was $98.2 million, resulting in a non-GAAP operating margin of 33%. This compares to non-GAAP operating income of $99.8 million, or a 34% non-GAAP operating margin in the fourth quarter of fiscal 2011. Non-GAAP results exclude amortization of acquired intangible assets, stock-based compensation expense, acquisition related and other expenses and restructuring activities and assumes a non-GAAP effective tax rate of 26% for fiscal 2012 and 28% for fiscal 2011.

“Despite weakness in our Americas infrastructure business in Q4, TIBCO delivered another record year of revenue and profitability in 2012,” said Vivek Ranadivé, TIBCO’s chairman and chief executive officer. “As we enter 2013, we are confident about our market position and see many avenues of growth for our business. The world continues to accelerate its shift towards operating in real-time, requiring companies to find more and better ways to integrate their businesses and understand the information and events that drive performance. This trend continues to create demand for our event-driven platform. Our focus in the new year is on investing for innovation and growth, delivering extreme value to our customers, and executing with consistency.”

Fourth Quarter Fiscal 2012 Highlights

 

   

Total revenue of $296.5 million;

 

   

License revenue of $136.3 million;

 

   

Non-GAAP operating margin of 33%;

 

   

Non-GAAP EPS of $0.42;

 

   

Cash flow from operations of $72.0 million;

 

   

Strong mix of business across major industries including Financial Services, Energy, Telecommunications, Life Sciences, Manufacturing, and Retail; and

 

   

TIBCO closed 195 deals over $100k and had 25 deals over $1 million.

Full Year Fiscal 2012 Highlights

 

   

Record total revenue of $1,024.6 million;

 

   

License revenue of $410.3 million;


   

Non-GAAP operating margin of 27%;

 

   

Record non-GAAP EPS of $1.15, vs. $1.01 for fiscal 2011;

 

   

Cash flow from operations of $237.4 million; and

 

   

Repurchased 7.6 million shares.

Conference Call Details

TIBCO has scheduled a conference call for 4:30 pm ET / 1:30 pm PT today to discuss its fourth 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 PT on January 20, 2013 at www.tibco.com or via dial-in at 800-585-8367 or 404-537-3406. The pass code for both the call and the replay is 77950749.

About TIBCO

TIBCO Software Inc. (NASDAQ: TIBX) is a provider of infrastructure software for companies to use on-premise or as part of cloud computing environments. Whether it’s optimizing claims, processing trades, cross-selling products based on real-time customer behavior, or averting a crisis before it happens, TIBCO provides companies the two-second advantage® – the ability to capture the right information at the right time and act on it preemptively for a competitive advantage. More than 4,000 customers worldwide rely on TIBCO to manage information, decisions, processes and applications in real time. Learn more at www.tibco.com.

###

TIBCO, two-second advantage, 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 (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 fourth quarter of fiscal year 2012 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 future avenues of growth for TIBCO’s business, growing demand for TIBCO’s event-driven platform, TIBCO’s ability to invest in innovation and growth, TIBCO’s ability to deliver extreme value to customers, and TIBCO’s ability to execute with consistency, 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: risks arising from adverse changes and uncertainty in domestic and global economies, TIBCO’s ability to develop products that address changing market demands, the impact of competition from alternative business models and new product introductions, TIBCO’s ability to offer differentiated products that capitalize on current technology trends, the impact of competition from companies that are larger or have greater resources than TIBCO, and TIBCO’s ability to execute on its strategy. Additional information regarding potential risks is provided in TIBCO’s filings with the SEC, including its most recent Annual Report on Form 10-K for the year ended November 30, 2011 and Quarterly Report on Form 10-Q for the quarter ended September 2, 2012. TIBCO assumes no obligation to update the forward-looking statements included in this release.


TIBCO Software Inc.

Condensed Consolidated Balance Sheets

(unaudited)

(in thousands)

 

     November 30,  
     2012      2011  
ASSETS      

Current assets:

     

Cash and cash equivalents

   $ 727,309       $ 308,148   

Short-term investments

     34,411         225   

Accounts receivable, net

     234,100         196,419   

Prepaid expenses and other current assets

     61,174         61,864   
  

 

 

    

 

 

 

Total current assets

     1,056,994         566,656   

Property and equipment, net

     98,474         89,871   

Goodwill

     532,290         451,821   

Acquired intangible assets, net

     123,261         97,258   

Long-term deferred income tax assets

     64,549         78,656   

Other assets

     71,340         48,676   
  

 

 

    

 

 

 

Total assets

   $ 1,946,908       $ 1,332,938   
  

 

 

    

 

 

 
LIABILITIES AND EQUITY      

Current liabilities:

     

Accounts payable

   $ 22,809       $ 25,802   

Accrued liabilities

     133,596         129,168   

Accrued restructuring costs

     893         6,792   

Deferred revenue

     263,476         210,234   

Current portion of long-term debt

     35,711         2,397   
  

 

 

    

 

 

 

Total current liabilities

     456,485         374,393   

Accrued restructuring costs, less current portion

     643         1,050   

Long-term deferred revenue

     25,543         14,876   

Long-term deferred income tax liabilities

     3,208         4,540   

Long-term income tax liabilities

     26,263         20,772   

Other long-term liabilities

     4,015         2,445   

Long-term debt, less current portion

     —           65,711   

Convertible debt

     524,466         —     
  

 

 

    

 

 

 

Total long-term liabilities

     584,138         109,394   
  

 

 

    

 

 

 

Total liabilities

     1,040,623         483,787   
  

 

 

    

 

 

 

Total equity

     906,285         849,151   
  

 

 

    

 

 

 

Total liabilities and equity

   $ 1,946,908       $ 1,332,938   
  

 

 

    

 

 

 


TIBCO Software Inc.

Condensed Consolidated Statements of Operations

(unaudited)

(in thousands, except net income per share)

 

     Three Months Ended
November 30,
    Year Ended November 30,  
     2012     2011     2012     2011  

Revenue:

        

License

   $ 136,307      $ 134,706      $ 410,306      $ 377,618   

Service and maintenance

     160,220        154,805        614,307        542,628   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

     296,527        289,511        1,024,613        920,246   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenue:

        

License

     11,554        9,743        41,363        35,309   

Service and maintenance

     64,035        59,604        241,452        212,066   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of revenue

     75,589        69,347        282,815        247,375   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     220,938        220,164        741,798        672,871   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

        

Research and development

     39,255        38,271        154,535        143,173   

Sales and marketing

     85,557        81,752        317,001        285,366   

General and administrative

     17,960        16,330        70,868        59,990   

Amortization of acquired intangible assets

     4,813        4,596        19,654        19,149   

Acquisition related and other

     502        154        2,672        1,840   

Restructuring adjustment

     (201     8,816        (648     8,926   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     147,886        149,919        564,082        518,444   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     73,052        70,245        177,716        154,427   

Interest income

     267        198        1,109        1,374   

Interest expense

     (8,823     (1,083     (23,396     (4,020

Other income (expense), net

     (357     83        (115     (1,846
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before provision for income taxes and noncontrolling interest

     64,139        69,443        155,314        149,935   

Provision for income taxes

     15,300        17,504        33,200        37,300   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     48,839        51,939        122,114        112,635   

Less: Net income attributable to noncontrolling interest

     51        61        107        229   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to TIBCO Software Inc.

   $ 48,788      $ 51,878      $ 122,007      $ 112,406   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income per share attributable to TIBCO Software Inc.:

        

Basic

   $ 0.30      $ 0.32      $ 0.76      $ 0.70   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.29      $ 0.30      $ 0.72      $ 0.65   
  

 

 

   

 

 

   

 

 

   

 

 

 

Shares used to compute net income per share attributable to TIBCO Software Inc.:

        

Basic

     160,115        161,586        160,330        161,469   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     169,284        171,978        169,698        173,272   
  

 

 

   

 

 

   

 

 

   

 

 

 


TIBCO Software Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)

(in thousands)

 

     Year Ended
November 30,
 
     2012     2011  

Cash flows from operating activities:

    

Net income

   $ 122,114      $ 112,635   

Adjustments to reconcile net income to net cash provided by operating activities:

    

Depreciation of property and equipment

     14,931        13,145   

Amortization of acquired intangible assets

     35,553        34,661   

Amortization of debt discount and transaction costs

     11,465        772   

Stock-based compensation

     61,146        48,867   

Deferred income tax

     (20,351     1,266   

Tax benefits related to stock benefit plans

     24,561        8,552   

Excess tax benefits from stock-based compensation

     (30,311     (41,950

Other non-cash adjustments, net

     1,486        476   

Changes in assets and liabilities:

    

Accounts receivable

     (37,171     (3,312

Prepaid expenses and other assets

     (1,880     4,859   

Accounts payable

     (3,036     501   

Accrued liabilities and restructuring costs

     (1,542     7,015   

Deferred revenue

     60,395        20,563   
  

 

 

   

 

 

 

Net cash provided by operating activities

     237,360        208,050   
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Purchases of short-term investments

     (41,409     (76

Maturities and sales of short-term investments

     7,229        1,451   

Acquisitions, net of cash acquired

     (132,209     (63,610

Purchases of property and equipment

     (23,723     (13,971

Restricted cash pledged as security

     (1,169     (3,234

Other investing activities, net

     326        —     
  

 

 

   

 

 

 

Net cash used in investing activities

     (190,955     (79,440
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Proceeds from issuance of convertible debt, net

     584,450        —     

Proceeds from revolving credit facility, net

     116,648        30,000   

Principal payments on debt

     (152,397     (2,269

Proceeds from issuance of common stock

     33,417        80,610   

Repurchases of the Company’s common stock

     (220,265     (194,059

Withholding taxes related to restricted stock net share settlement

     (18,212     (17,922

Excess tax benefits from stock-based compensation

     30,311        41,950   
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     373,952        (61,690
  

 

 

   

 

 

 

Effect of foreign exchange rate changes on cash and cash equivalents

     (1,196     (2,761
  

 

 

   

 

 

 

Net change in cash and cash equivalents

     419,161        64,159   

Cash and cash equivalents at beginning of period

     308,148        243,989   
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 727,309      $ 308,148   
  

 

 

   

 

 

 


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 TIBCO’s business performance. TIBCO believes that these non-GAAP financial measures are useful to investors because they exclude non-operating charges. TIBCO’s management excludes these non-operating charges when it internally evaluates the performance of TIBCO’s 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, costs related to formal restructuring activities, acquisition-related and other expenses, non-cash interest expense related to convertible debt, 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 TIBCO’s 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 TIBCO’s financial performance on a trended basis across historical periods. In addition, it allows investors to evaluate TIBCO’s performance using the same methodology and information as that used by TIBCO’s management.

Non-GAAP measures are subject to material limitations as these measures are not in accordance with, or a substitute for, GAAP and thus TIBCO’s definition may be different from similar non-GAAP measures used by other companies and/or analysts. However, TIBCO’s 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 TIBCO’s 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 TIBCO’s 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 incurs 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 TIBCO’s acquisitions. While these expenses are not recurring with respect to past transactions, TIBCO generally will incur these expenses in connection with any future acquisitions.

Restructuring Activities

TIBCO incurs restructuring expenses, included in its GAAP presentation of operating expense, primarily due to workforce related charges such as payments for severance and benefits and estimated costs of exiting and terminating facility lease commitments related to a formal restructuring plan. TIBCO excludes these items, for the purposes of calculating non-GAAP operating income, non-GAAP net income and non-GAAP net income per share, when it evaluates the continuing business performance of TIBCO. TIBCO believes that these items are not consistently recurring and do not necessarily reflect expected future operating expense, nor does TIBCO believe that they provide a meaningful evaluation of current versus past business results or the expense levels required to support TIBCO’s operating plan.

Non-Cash Interest Expense Related to Convertible Debt

TIBCO is required to recognize non-cash interest expense related to its 2.25% convertible senior notes issued in April 2012 as an imputed interest expense. Management excludes this incremental non-cash interest expense for purposes of calculating non-GAAP net income and non-GAAP net income per share. Under the relevant accounting guidance, TIBCO is required to separate the conversion option as an equity component from the debt and account for the debt in a manner that reflects TIBCO’s non-convertible debt borrowing rate. This results in the debt component of the convertible notes being treated as though it was issued at a discount, with the debt discount being accreted as additional non-cash interest expense over the term of the notes using the effective interest method. TIBCO believes that excluding this expense from its non-GAAP measures is useful to investors because this incremental interest expense does not represent a cash outflow for the company and is not meaningful in evaluating current versus past business results. Finally, TIBCO believes that non-GAAP measures of profitability that exclude non-cash interest accretion expense are widely used by analysts and investors.


TIBCO Software Inc.

Reconciliation of GAAP to Non-GAAP Measures

(unaudited)

(in thousands, except net income per share)

 

     Three Months Ended November 30,     Year Ended November 30,  
     2012     2011     2012     2011  
     Operating
Income
    Net
income
attributable
to TIBCO
Software
Inc.
    Operating
Income
     Net
income
attributable
to TIBCO
Software
Inc.
    Operating
Income
    Net
income
attributable
to TIBCO
Software
Inc.
    Operating
Income
     Net
income
attributable
to TIBCO
Software
Inc.
 

GAAP

   $ 73,052      $ 48,788      $ 70,245       $ 51,878      $ 177,716      $ 122,007      $ 154,427       $ 112,406   

Amortization of intangible assets - cost of revenue

     4,021        4,021        3,277         3,277        15,899        15,899        15,512         15,512   

Amortization of intangible assets - operating expense

     4,813        4,813        4,596         4,596        19,654        19,654        19,149         19,149   

Stock-based compensation - cost of revenue

     1,431        1,431        1,167         1,167        5,142        5,142        4,715         4,715   

Stock-based compensation - R&D expense

     3,887        3,887        2,856         2,856        15,131        15,131        11,441         11,441   

Stock-based compensation - S&M expense

     5,844        5,844        4,350         4,350        21,211        21,211        17,206         17,206   

Stock-based compensation - G&A expense

     4,854        4,854        4,308         4,308        19,662        19,662        15,505         15,505   

Acquisition related and other

     502        502        154         154        2,672        2,672        1,840         1,840   

Non-cash interest expense related to convertible debt

     —          3,751        —           —          —          9,032        —           —     

Restructuring adjustment

     (201     (201     8,816         8,816        (648     (648     8,926         8,926   

Income tax adjustment for non-GAAP

     —          (7,030     —           (9,217     —          (35,037     —           (31,431
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Non-GAAP

   $ 98,203      $ 70,660      $ 99,769       $ 72,185      $ 276,439      $ 194,725      $ 248,721       $ 175,269   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Diluted net income per share attributable to TIBCO Software Inc.:

                  

GAAP

     $ 0.29         $ 0.30        $ 0.72         $ 0.65   
    

 

 

      

 

 

     

 

 

      

 

 

 

Non-GAAP

     $ 0.42         $ 0.42        $ 1.15         $ 1.01   
    

 

 

      

 

 

     

 

 

      

 

 

 

Shares used to compute diluted net income per share attributable to TIBCO Software Inc.:

   

    169,284           171,978          169,698           173,272