Science & Technology
Science and Technology
Science and Technology
Tue, December 23, 2008
Mon, December 22, 2008
TIBCO Software Inc.: TIBCO Software Delivers Record Profits in Q4
PALO ALTO, CA--(Marketwire - December 22, 2008) - TIBCO Software Inc. (
Total revenue for the fourth quarter of fiscal 2008 was $185.5 million and net income was $32.3 million, or $0.18 per diluted share. This compares to total revenue of $186.1 million and net income of $27.6 million, or $0.14 per diluted share, as reported for the fourth quarter of fiscal 2007.
On a non-GAAP basis, net income for the fourth quarter of fiscal 2008 was $39.9 million or $0.23 per diluted share, compared with $34.2 million or $0.18 per diluted share for the fourth quarter of fiscal 2007. Non-GAAP operating income for the fourth quarter of fiscal 2008 was $54.0 million, resulting in non-GAAP operating margins of 29%. This compares to non-GAAP operating income of $50.2 million, or 27% non-GAAP operating margins in the fourth quarter of fiscal 2007. Non-GAAP results exclude stock-based compensation expense, amortization of acquired intangible assets, restructuring charges and gains on sales of certain equity investments, and assume a non-GAAP effective tax rate of 30% for fiscal 2008 and 35% for fiscal 2007.
"In spite of a difficult environment, we delivered record operating profits and earnings per share this quarter," said Vivek Ranadivé, TIBCO's chairman and chief executive officer. "As we turn to 2009, I expect a continuing shift away from database oriented solutions to event-based solutions built on 'in-memory' data management systems, as businesses look to more proactively service and acquire customers. TIBCO, with its event-driven infrastructure platform, is well positioned to benefit from this trend."
Fourth Quarter Fiscal 2008 Highlights
-- Total revenue was $185.5 million; -- License revenue was $90.4 million; -- Repurchased 6.9 million shares; -- Strong mix of business across major industries including Financial Services, Telecommunications, Energy, Life Sciences and Government; -- TIBCO closed 135 deals over $100k and had 20 deals over $1 million; -- TIBCO expanded its business with leading companies in Q4 such as BNP Paribas, CIBC World Markets, CareFirst BlueCross BlueShield, Grupo Santander, Harvard Pilgrim Healthcare, Merck, Microsoft, Northrop Grumman, Scripps Networks, Swisscom, UNUM and Vodafone Group.
Full Year Fiscal 2008 Highlights
-- Record total revenue of $644.5 million, an increase of 12% over fiscal 2007; -- Record cash flow from operations of $152.5 million, an increase of 49% over fiscal 2007; -- Record non-GAAP EPS of $0.47, vs. $0.38 for fiscal 2007; and -- Repurchased over 21 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 Thomson Financial and may be accessed over the Internet at [ www.tibco.com ] or via dial-in at (877) 856-1956 or (719) 325-4756. Please join the conference call at least 10 minutes early to register. A replay of the conference call will be available until midnight on January 22, 2009 at [ www.tibco.com ] or via dial-in at (888) 203-1112 or (719) 457-0820. The pass code for both the call and the replay is 4604945.
About TIBCO
TIBCO's 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, TIBCO's 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 ].
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 (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 2008 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 the anticipated shift to event-based solutions built on 'in-memory' data management systems and away from old database technologies and TIBCO's ability to benefit from that shift 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 adapt to new technologies and evolving industry trends; and competitive factors, including but not limited to competition from alternative business models, industry consolidation and new product introductions. 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, 2007 and Quarterly Report on Form 10-Q for the quarter ended August 30, 2008. 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, ----------------------- 2008 2007 ----------- ----------- ASSETS Current assets: Cash and cash equivalents $ 254,400 $ 170,237 Short-term investments 13,073 95,534 Accounts receivable, net 133,191 161,730 Prepaid expenses and other current assets 46,495 53,540 ----------- ----------- Total current assets 447,159 481,041 Property and equipment, net 103,531 111,390 Goodwill 343,942 412,256 Acquired intangible assets, net 80,437 110,930 Long-term deferred income tax assets 73,634 35,307 Other assets 39,865 47,535 ----------- ----------- Total assets $ 1,088,568 $ 1,198,459 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 15,030 $ 12,076 Accrued liabilities 91,397 95,526 Accrued excess facilities costs 6,572 5,421 Deferred revenue 140,221 127,200 Current portion of long-term debt 2,033 1,924 ----------- ----------- Total current liabilities 255,253 242,147 Accrued excess facilities costs, less current portion 5,594 10,811 Long-term deferred revenue 12,007 14,319 Long-term deferred income tax liabilities 14,912 25,821 Long-term income tax liabilities 12,439 - Long-term debt, less current portion 42,525 44,558 Other long-term liabilities 3,837 5,006 ----------- ----------- Total long-term liabilities 91,314 100,515 ----------- ----------- Total liabilities 346,567 342,662 ----------- ----------- Minority interest 358 401 Total stockholders' equity 741,643 855,396 ----------- ----------- Total liabilities and stockholders' equity $ 1,088,568 $ 1,198,459 =========== ===========
TIBCO Software Inc. Condensed Consolidated Statements of Operations (unaudited) (in thousands, except net income per share) Three Months Ended Year Ended -------------------- -------------------- November November November November 30, 30, 30, 30, 2008 2007 2008 2007 --------- --------- --------- --------- Revenue: License revenue $ 90,424 $ 99,609 $ 273,415 $ 259,313 Service and maintenance revenue: Service and maintenance 92,716 84,211 361,880 310,444 Reimbursable expenses 2,384 2,281 9,176 7,629 --------- --------- --------- --------- Total service and maintenance revenue 95,100 86,492 371,056 318,073 --------- --------- --------- --------- Total revenue 185,524 186,101 644,471 577,386 --------- --------- --------- --------- Cost of revenue: License 8,319 8,591 30,276 24,024 Service and maintenance 35,681 37,522 147,622 134,877 --------- --------- --------- --------- Total cost of revenue 44,000 46,113 177,898 158,901 --------- --------- --------- --------- Gross profit 141,524 139,988 466,573 418,485 --------- --------- --------- --------- Operating expenses: Research and development 25,888 26,069 106,594 92,924 Sales and marketing 58,116 59,260 224,641 197,397 General and administrative 12,789 13,009 53,046 51,538 Restructuring adjustment - - - (1,095) Amortization of acquired intangible assets 4,026 4,164 16,557 13,164 Acquired in-process research and development - - - 1,600 --------- --------- --------- --------- Total operating expenses 100,819 102,502 400,838 355,528 --------- --------- --------- --------- Income from operations 40,705 37,486 65,735 62,957 Interest income 1,688 3,499 9,115 18,447 Interest expense (710) (1,170) (3,238) (2,824) Other income (expense), net (495) 56 (782) (1,181) --------- --------- --------- --------- Income before provision for income taxes and minority interest 41,188 39,871 70,830 77,399 Provision for income taxes 8,923 12,186 18,314 25,401 Minority interest, net of tax (26) 40 105 110 --------- --------- --------- --------- Net income $ 32,291 $ 27,645 $ 52,411 $ 51,888 ========= ========= ========= ========= Net income per share: Basic $ 0.18 $ 0.15 $ 0.29 $ 0.26 ========= ========= ========= ========= Diluted $ 0.18 $ 0.14 $ 0.29 $ 0.25 ========= ========= ========= ========= Shares used to compute net income per share: Basic 174,612 188,748 180,525 198,885 ========= ========= ========= ========= Diluted 175,758 192,940 183,742 205,316 ========= ========= ========= =========
TIBCO Software Inc. Condensed Consolidated Statements of Cash Flows (unaudited) (in thousands) Year Ended -------------------- November November 30, 30, 2008 2007 --------- --------- Cash flows from operating activities: Net income $ 52,411 $ 51,888 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation of property and equipment 15,814 16,167 Amortization of acquired intangible assets 32,302 23,490 Stock-based compensation 20,972 17,563 Acquired in-process research and development - 1,600 Deferred income tax (26,667) (6,077) Tax benefits related to stock benefit plans 27,025 19,456 Excess tax benefits from stock-based compensation (24,713) (17,980) Minority interest, net of tax 105 110 Other non-cash adjustments, net 991 (1,506) Changes in assets and liabilities: Accounts receivable 20,683 (5,459) Prepaid expenses and other assets 9,060 (4,778) Accounts payable 3,531 (885) Accrued liabilities and excess facilities costs 13,001 (8,613) Deferred revenue 7,977 17,304 --------- --------- Net cash provided by operating activities 152,492 102,280 --------- --------- Cash flows from investing activities: Purchases of short-term investments (37,047) (140,928) Maturities and sales of short-term investments 124,032 450,311 Acquisitions, net of cash acquired (20,098) (182,912) Purchases of private equity investments (38) (63) Proceeds from private equity investments 347 803 Purchases of property and equipment (8,937) (12,599) Restricted cash pledged as security 652 368 --------- --------- Net cash provided by investing activities 58,911 114,980 --------- --------- Cash flows from financing activities: Proceeds from issuance of common stock 10,630 25,043 Repurchases of the Company's common stock (148,989) (226,932) Excess tax benefits from stock-based compensation 24,713 17,980 Principal payments on long-term debt (1,924) (6,277) Proceeds from minority investors - 189 --------- --------- Net cash used for financing activities (115,570) (189,997) --------- --------- Effect of foreign exchange rate changes on cash and cash equivalents (11,670) 4,062 --------- --------- Net change in cash and cash equivalents 84,163 31,325 Cash and cash equivalents at beginning of period 170,237 138,912 --------- --------- Cash and cash equivalents at end of period $ 254,400 $ 170,237 ========= =========
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, charges for acquired in-process research and development, costs related to formal restructuring activities, 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:
Stock-based Compensation
TIBCO incurs stock-based compensation expense under SFAS 123(R). 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 (including prior periods following the adoption of SFAS 123(R)). The exclusion of stock-based compensation from the non-GAAP measures also allows a consistent comparison of TIBCO's relative historical financial performance, since the method for accounting for stock-based compensation changed at the beginning of fiscal 2006 when TIBCO adopted SFAS 123(R). 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.
Amortization of Acquired 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.
Acquired In-Process Research and Development
TIBCO recorded charges for acquired in-process research and development ("IPR&D"), included in its GAAP presentation of operating expense, in connection with its acquisitions. These amounts were expensed on the acquisition dates as the acquired technology had not yet reached technological feasibility and had no future alternative uses. There can be no assurance that acquisition of businesses, products or technologies in the future will not result in substantial charges for acquired IPR&D. Accordingly, acquired IPR&D are non-recurring and generally unpredictable. TIBCO believes that eliminating this expense, for the purposes of calculating non-GAAP operating income, non-GAAP net income and non-GAAP net income per share, is useful to investors.
Formal Restructuring Activities
TIBCO has incurred 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.
Equity Investment Activities
TIBCO records gains or losses on its equity investments based on its pro-rata share of gains or the net losses of the investment. These gains or net losses are included in TIBCO's GAAP presentation of operating income, net income and net income per share. TIBCO's business is not to invest in third parties, and such investments do not constitute a material portion of TIBCO's assets. The timing and magnitude of gains and losses are unpredictable, as they are inherently based on the performance of the third party subject to a particular investment. 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 do not necessarily reflect expected future operating expense or income, 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.
TIBCO Software Inc. Reconciliation of GAAP to Non-GAAP Measures (unaudited) (in thousands, except net income per share) Three Months Ended ------------------------------------------- November 30, 2008 November 30, 2007 --------------------- --------------------- Operating Net Operating Net Income Income Income Income ---------- --------- ---------- --------- GAAP $ 40,705 $ 32,291 $ 37,486 $ 27,645 Amortization of intangible assets - cost of revenue 3,957 3,957 3,829 3,829 Amortization of intangible assets - operating expense 4,026 4,026 4,164 4,164 Stock-based compensation - cost of revenue 640 640 647 647 Stock-based compensation - R&D expense 1,128 1,128 897 897 Stock-based compensation - S&M expense 1,874 1,874 1,593 1,593 Stock-based compensation - G&A expense 1,712 1,712 1,601 1,601 Acquired in-process research and development - - - - Restructuring adjustment - - - - Realized gain on sales of private equity investment - - - - Income tax adjustment for non-GAAP (1) - (5,690) - (6,225) ---------- --------- ---------- --------- Non-GAAP $ 54,042 $ 39,938 $ 50,217 $ 34,151 ========== ========= ========== ========= Diluted net income per share: GAAP $ 0.18 $ 0.14 ========= ========= Non-GAAP $ 0.23 $ 0.18 ========= ========= Shares used to compute diluted net income per share 175,758 192,940 ========= ========= Year Ended ------------------------------------------- November 30, 2008 November 30, 2007 --------------------- -------------------- Operating Net Operating Net Income Income Income Income ---------- --------- --------- --------- GAAP $ 65,735 $ 52,411 $ 62,957 $ 51,888 Amortization of intangible assets - cost of revenue 15,745 15,745 10,326 10,326 Amortization of intangible assets - operating expense 16,557 16,557 13,164 13,164 Stock-based compensation - cost of revenue 2,612 2,612 2,465 2,465 Stock-based compensation - R&D expense 4,584 4,584 3,712 3,712 Stock-based compensation - S&M expense 6,963 6,963 5,695 5,695 Stock-based compensation - G&A expense 6,813 6,813 5,691 5,691 Acquired in-process research and development - - 1,600 1,600 Restructuring adjustment - - (1,095) (1,095) Realized gain on sales of private equity investment - (125) - (64) Income tax adjustment for non-GAAP (1) - (19,434) - (16,212) ---------- --------- --------- --------- Non-GAAP $ 119,009 $ 86,126 $ 104,515 $ 77,170 ========== ========= ========= ========= Diluted net income per share: GAAP $ 0.29 $ 0.25 ========= ========= Non-GAAP $ 0.47 $ 0.38 ========= ========= Shares used to compute diluted net income per share 183,742 205,316 ========= ========= (1) The estimated non-GAAP effective tax rate was approximately at 30% and 35% for fiscal 2008 and 2007, respectively, and has been used to adjust the provision for income taxes for non-GAAP purposes.
