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8-K - 8-K - TIBCO SOFTWARE INCd645198d8k.htm

Exhibit 99.1

 

LOGO

 

Media Contact:       Investor Contact:
Leslie Moore       Giuseppe Incitti
(650) 846-5025       (650) 846-5637
lmoore@tibco.com       gincitti@tibco.com

TIBCO SOFTWARE REPORTS FOURTH QUARTER AND FISCAL YEAR 2013 RESULTS

Record Full Year Revenue of $1.1 Billion; Non-GAAP EPS of $1.06

Record Fourth Quarter Revenue of $315 Million; Non-GAAP EPS of $0.42

PALO ALTO, Calif., December 19, 2013 - TIBCO Software Inc. (NASDAQ: TIBX) today announced results for its fourth quarter and fiscal year, which ended on November 30, 2013.

Total revenue for the fourth quarter of fiscal 2013 was $315.5 million and net income was $44.5 million, or $0.27 per diluted share. This compares to total revenue of $296.5 million and net income of $48.8 million, or $0.29 per diluted share, as reported for the fourth quarter of fiscal 2012.

On a non-GAAP basis, net income for the fourth quarter of fiscal 2013 was $70.8 million or $0.42 per diluted share, compared with $70.7 million or $0.42 per diluted share for the fourth quarter of fiscal 2012. Non-GAAP operating income for the fourth quarter of fiscal 2013 was $95.3 million, resulting in a non-GAAP operating margin of 30.2%. This compares to non-GAAP operating income of $98.2 million, or a 33.1% non-GAAP operating margin in the fourth quarter of fiscal 2012. Non-GAAP results exclude amortization of acquired intangible assets, stock-based compensation expense, acquisition related and other expenses, restructuring activities and non-cash interest expense related to convertible debt and assumes non-GAAP effective tax rates of 23% and 24% for the fourth quarters of fiscal 2013 and 2012, respectively.

“We saw strong, accelerating growth in the Americas and a return to growth in Asia this quarter, while closing a record 31 deals over $1 million in license revenue worldwide,” said Vivek Ranadivé, TIBCO Chairman and CEO. “We are building momentum as we enter 2014, and I am very optimistic about our prospects in the year ahead.”

Fourth Quarter Fiscal 2013 Highlights

 

    Record total revenue of $315.5 million;

 

    Record license revenue of $139.7 million;

 

    Non-GAAP operating margin of 30.2%;

 

    Non-GAAP EPS of $0.42;

 

    Cash flow from operations of $59.6 million;

 

    Broad mix of business across major industries including Financial Services, Telecommunications, Energy, Transportation & Logistics, Retail, Life Sciences, and Manufacturing; and

 

    TIBCO closed 193 deals over $100k and had 31 deals over $1 million in license revenue.

Full Year Fiscal 2013 Highlights

 

    Record total revenue of $1,070.0 million;

 

    License revenue of $405.5 million;

 

    Non-GAAP operating margin of 23.3%;

 

    Non-GAAP EPS of $1.06;

 

    Cash flow from operations of $206.0 million; and

 

    Repurchased 6 million shares.


Conference Call Details

TIBCO has scheduled a conference call for 4:30 pm ET / 1:30 pm PT today to discuss fourth quarter and full year 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 706-679-0841. Please join the conference call 10 minutes early to register. A replay of the conference call will be available until midnight ET on January 19, 2014 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 19900317.

About TIBCO

TIBCO Software Inc. (NASDAQ: TIBX) is a global leader in infrastructure and business intelligence software. Whether it’s optimizing inventory, cross-selling products, or averting crisis before it happens, TIBCO uniquely delivers the Two-Second Advantage® – the ability to capture the right information at the right time and act on it preemptively for a competitive advantage. With a broad mix of innovative products and services, TIBCO is the strategic technology partner trusted by businesses around the world. Learn more about TIBCO 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 2013 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 TIBCO’s ability to improve its sales execution, and TIBCO’s ability to build and maintain momentum, 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 implement successfully the changes designed to improve performance and drive growth, 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, and the impact of competition from companies that are larger or have greater resources than TIBCO. 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, 2012 and Quarterly Report on Form 10-Q for the quarter ended September 1, 2013. 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,
2013
     November 30,
2012
 
ASSETS      

Current assets:

     

Cash and cash equivalents

   $ 662,109      $ 727,309   

Short-term investments

     83,842        34,411   

Accounts receivable, net

     231,194        234,100   

Prepaid expenses and other current assets

     74,725        61,174   
  

 

 

    

 

 

 

Total current assets

     1,051,870        1,056,994   

Property and equipment, net

     101,050        98,474   

Goodwill

     582,091        532,290   

Acquired intangible assets, net

     119,418        123,261   

Long-term deferred income tax assets

     78,853        64,549   

Other assets

     72,831        71,340   
  

 

 

    

 

 

 

Total assets

   $ 2,006,113      $ 1,946,908   
  

 

 

    

 

 

 
LIABILITIES AND EQUITY      

Current liabilities:

     

Accounts payable

   $ 37,701      $ 22,809   

Accrued liabilities

     125,112        133,596   

Accrued restructuring costs

     5,819        893   

Deferred revenue

     258,315        263,476   

Current portion of long-term debt

     —           35,711   
  

 

 

    

 

 

 

Total current liabilities

     426,947        456,485   

Accrued restructuring costs, less current portion

     87        643   

Long-term deferred revenue

     24,036        25,543   

Long-term deferred income tax liabilities

     1,334        3,208   

Long-term income tax liabilities

     55,733        26,263   

Other long-term liabilities

     4,701        4,015   

Convertible debt

     540,022        524,466   
  

 

 

    

 

 

 

Total long-term liabilities

     625,913        584,138   
  

 

 

    

 

 

 

Total liabilities

     1,052,860        1,040,623   
  

 

 

    

 

 

 

Total equity

     953,253        906,285   
  

 

 

    

 

 

 

Total liabilities and equity

   $ 2,006,113      $ 1,946,908   
  

 

 

    

 

 

 


TIBCO Software Inc.

Condensed Consolidated Statements of Operations

(unaudited)

(in thousands, except net income per share)

 

     Three Months Ended     Twelve Months Ended  
     November 30,
2013
    November 30,
2012
    November 30,
2013
    November 30,
2012
 

Revenue:

        

License

   $ 139,733     $ 136,307     $ 405,471     $ 410,306   

Service and maintenance

     175,722       160,220       664,479       614,307   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

     315,455       296,527       1,069,950       1,024,613   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenue:

        

License

     12,548       11,554       47,324       41,363   

Service and maintenance

     69,316       64,035       260,121       241,452   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of revenue

     81,864       75,589       307,445       282,815   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     233,591       220,938       762,505       741,798   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

        

Research and development

     43,331       39,255       170,922       154,535   

Sales and marketing

     98,907       85,557       348,302       317,001   

General and administrative

     15,404       17,960       65,950       70,868   

Amortization of acquired intangible assets

     4,827       4,813       18,852       19,654   

Acquisition related and other

     (16 )     502       1,509       2,672   

Restructuring adjustment

     3,682       (201 )     12,553       (648
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     166,135       147,886       618,088       564,082   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     67,456       73,052       144,417       177,716   

Interest income

     266       267       938       1,109   

Interest expense

     (8,474 )     (8,823 )     (34,330 )     (23,396

Other income (expense), net

     841       (357 )     (417 )     (115
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before provision for income taxes and noncontrolling interest

     60,089       64,139       110,608       155,314   

Provision for income taxes

     15,500       15,300       26,400       33,200   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     44,589       48,839       84,208       122,114   

Less: Net income attributable to noncontrolling interest

     40       51       188       107   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to TIBCO Software Inc.

   $ 44,549     $ 48,788     $ 84,020     $ 122,007   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income per share attributable to TIBCO Software Inc.:

        

Basic

   $ 0.28     $ 0.30     $ 0.52     $ 0.76   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.27     $ 0.29     $ 0.50     $ 0.72   
  

 

 

   

 

 

   

 

 

   

 

 

 

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

        

Basic

     160,814       160,115       160,963       160,330   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     167,758       169,284       167,848       169,698   
  

 

 

   

 

 

   

 

 

   

 

 

 


TIBCO Software Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)

(in thousands)

 

     Twelve Months Ended  
     November 30,
2013
    November 30,
2012
 

Cash flows from operating activities:

    

Net income

   $ 84,208     $ 122,114  

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

    

Depreciation of property and equipment

     16,340       14,931  

Amortization of acquired intangible assets

     36,782       35,553  

Amortization of debt discount and transaction costs

     19,093       11,465  

Stock-based compensation

     53,635       61,146  

Deferred income tax

     (16,397 )     (20,351 )

Tax benefits related to stock benefit plans

     14,343       24,561  

Excess tax benefits from stock-based compensation

     (18,539 )     (30,311 )

Other non-cash adjustments, net

     1,442       1,486  

Changes in assets and liabilities:

    

Accounts receivable

     2,870       (37,171 )

Prepaid expenses and other assets

     (13,860 )     (1,880 )

Accounts payable

     14,221       (3,036 )

Accrued and tax liabilities including restructuring costs

     20,307       (1,542 )

Deferred revenue

     (8,424 )     60,395  
  

 

 

   

 

 

 

Net cash provided by operating activities

     206,021       237,360  
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Purchases of short-term investments

     (70,786 )     (41,409 )

Maturities and sales of short-term investments

     22,657       7,229  

Acquisitions, net of cash acquired

     (74,898 )     (132,209 )

Purchases of property and equipment

     (19,269 )     (23,723 )

Restricted cash pledged as security

     (1,165 )     (1,169 )

Other investing activities, net

     (212 )     326  
  

 

 

   

 

 

 

Net cash used in investing activities

     (143,673 )     (190,955 )
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Proceeds from issuance of convertible debt, net

     —          584,450  

Proceeds from revolving credit facility, net

     —          116,648  

Principal payments on debt

     (35,711 )     (152,397 )

Proceeds from issuance of common stock

     30,702       33,417  

Repurchases of the Company’s common stock

     (130,741 )     (220,265 )

Withholding taxes related to restricted stock net share settlement

     (13,279 )     (18,212 )

Excess tax benefits from stock-based compensation

     18,539        30,311   
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     (130,490 )     373,952  
  

 

 

   

 

 

 

Effect of foreign exchange rate changes on cash and cash equivalents

     2,942       (1,196 )
  

 

 

   

 

 

 

Net change in cash and cash equivalents

     (65,200 )     419,161  

Cash and cash equivalents at beginning of period

     727,309       308,148  
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 662,109     $ 727,309  
  

 

 

   

 

 

 


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     Twelve Months Ended  
     November 30,
2013
    November 30,
2012
    November 30,
2013
    November 30,
2012
 
     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

   $ 67,456     $ 44,549     $ 73,052     $ 48,788     $ 144,417      $ 84,020     $ 177,716     $ 122,007   

Amortization of intangible assets - cost of revenue

     4,990       4,990       4,021       4,021       17,930        17,930       15,899       15,899   

Amortization of intangible assets - operating expense

     4,827       4,827       4,813       4,813       18,852        18,852       19,654       19,654   

Stock-based compensation - cost of revenue

     3,800       3,800       1,431       1,431       9,186        9,186       5,142       5,142   

Stock-based compensation - R&D expense

     4,129       4,129       3,887       3,887       15,888        15,888       15,131       15,131   

Stock-based compensation - S&M expense

     4,697       4,697       5,844       5,844       17,479        17,479       21,211       21,211   

Stock-based compensation - G&A expense

     1,764       1,764       4,854       4,854       11,082        11,082       19,662       19,662   

Acquisition related and other

     (16 )     (16 )     502       502       1,509        1,509       2,672       2,672   

Non-cash interest expense related to convertible debt

     —          3,960       —          3,751       —           15,557       —          9,032   

Restructuring adjustment

     3,682       3,682       (201 )     (201 )     12,553        12,553       (648 )     (648

Income tax adjustment for non-GAAP

     —          (5,550 )     —          (7,030 )     —           (26,226 )     —          (35,037
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Non-GAAP

   $ 95,329     $ 70,832     $ 98,203     $ 70,660     $ 248,896      $ 177,830     $ 276,439     $ 194,725   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

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

                 

GAAP

     $ 0.27       $ 0.29        $ 0.50       $ 0.72   
    

 

 

     

 

 

      

 

 

     

 

 

 

Non-GAAP

     $ 0.42       $ 0.42        $ 1.06       $ 1.15   
    

 

 

     

 

 

      

 

 

     

 

 

 

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

       167,758         169,284          167,848         169,698