Science & Technology
Science and Technology
Science and Technology
Mon, September 28, 2009
Fri, September 25, 2009
Thu, September 24, 2009 TIBCO Software Inc.: TIBCO Software Reports Q3 GAAP EPS of $0.09, Non-GAAP EPS of $0.13
PALO ALTO, CA--(Marketwire - September 24, 2009) - TIBCO Software Inc. (
Total revenue for the third quarter of fiscal 2009 was $150.3 million and GAAP net income was $14.9 million, or $0.09 per diluted share. This compares to total revenue of $162.3 million and GAAP net income of $11.1 million, or $0.06 per diluted share, as reported for the third quarter of fiscal 2008.
On a non-GAAP basis, net income for the third quarter of fiscal 2009 was $22.1 million or $0.13 per diluted share, compared with $19.6 million or $0.11 per diluted share for the third quarter of fiscal 2008. Non-GAAP operating income for the third quarter of fiscal 2009 was $32.5 million, resulting in a non-GAAP operating margin of 22%. This compares to non-GAAP operating income of $28.7 million, or a 18% non-GAAP operating margin in the third quarter of fiscal 2008. Non-GAAP results exclude stock-based compensation expense, amortization of acquired intangible assets, and assume a non-GAAP effective tax rate of 32% and 33% for the third quarters of fiscal 2009 and 2008, respectively.
"During Q3, we exceeded guidance targets for revenue and profitability, we repurchased $50 million of stock, and we acquired DataSynapse, a leader in the grid and cloud computing space," said Vivek Ranadivé, TIBCO's chairman and CEO. "Year to date, we have demonstrated strong operating leverage in our model by delivering an incremental $0.08 in non-GAAP EPS over the first three quarters of 2008. Looking forward, we are well-positioned to benefit from the accelerating shift away from database-centric architectures designed to handle transactions and towards bus-based architectures designed to handle events."
Third Quarter Fiscal 2009 Highlights
-- Total revenue was $150.3 million; -- License revenue was $57.3 million; -- Continued strong mix of business across industries including Financial Services, Telecommunications, Energy, Government, Manufacturing, Transportation & Logistics, and Insurance; -- TIBCO closed 85 deals over $100k and had 17 deals over $1 million; -- TIBCO expanded its business with leading companies in Q3 such as Activision Blizzard, Auchan, Bank of Nova Scotia, Bed Bath & Beyond, Jefferies & Company, Inc., Las Vegas Sands, Microsoft, National Semiconductor, and OXY.
Conference Call Details
TIBCO has scheduled a conference call for 4:30 pm ET / 1:30 pm PT today to discuss its third quarter results. The conference call will be hosted by Thomson Reuters and may be accessed over the Internet at [ www.tibco.com ] or via dial-in at (888) 329-8903 or (719) 457-2702. Please join the conference call at least 10 minutes early to register. A replay of the conference call will be available until midnight on October 24, 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 6409040.
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 the third quarter of fiscal year 2009 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 towards bus-based architectures 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: the current uncertainty in global economic conditions and its effect on the demand for enterprise software and services; 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 our filings with the SEC, including our most recent Annual Report on Form 10-K for the year ended November 30, 2008 and Quarterly Report on Form 10-Q for the quarter ended May 31, 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) August 30, November 30, 2009 2008 ----------- ----------- ASSETS Current assets: Cash and cash equivalents $ 285,103 $ 254,400 Short-term investments 1,771 13,073 Accounts receivable, net 100,099 133,191 Prepaid expenses and other current assets 46,758 49,994 ----------- ----------- Total current assets 433,731 450,658 Property and equipment, net 97,168 103,531 Goodwill 371,312 343,942 Acquired intangible assets, net 89,440 80,437 Long-term deferred income tax assets 79,293 70,135 Other assets 41,518 39,865 ----------- ----------- Total assets $ 1,112,462 $ 1,088,568 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 12,924 $ 15,030 Accrued liabilities 81,703 90,980 Accrued excess facilities costs 5,804 6,572 Deferred revenue 141,836 140,221 Current portion of long-term debt 2,118 2,033 ----------- ----------- Total current liabilities 244,385 254,836 Accrued excess facilities costs, less current portion 2,461 5,594 Long-term deferred revenue 14,964 12,007 Long-term deferred income tax liabilities 13,208 15,329 Long-term income tax liabilities 14,412 12,439 Long-term debt, less current portion 40,925 42,525 Other long-term liabilities 4,046 3,837 ----------- ----------- Total long-term liabilities 90,016 91,731 ----------- ----------- Total liabilities 334,401 346,567 ----------- ----------- Minority interest 610 358 Total stockholders' equity 777,451 741,643 ----------- ----------- Total liabilities and stockholders' equity $ 1,112,462 $ 1,088,568 =========== =========== TIBCO Software Inc. Condensed Consolidated Statements of Operations (unaudited) (in thousands, except net income per share) Three Months Ended Nine Months Ended ------------------------ ------------------------ August 30, August 31, August 30, August 31, 2009 2008 2009 2008 ----------- ----------- ----------- ----------- Revenue: License $ 57,257 $ 67,542 $ 152,563 $ 182,991 Service and maintenance 92,995 94,795 273,255 275,956 ----------- ----------- ----------- ----------- Total revenue 150,252 162,337 425,818 458,947 ----------- ----------- ----------- ----------- Cost of revenue: License 6,050 7,193 20,353 21,957 Service and maintenance 32,253 38,083 95,902 111,941 ----------- ----------- ----------- ----------- Total cost of revenue 38,303 45,276 116,255 133,898 ----------- ----------- ----------- ----------- Gross profit 111,949 117,061 309,563 325,049 ----------- ----------- ----------- ----------- Operating expenses: Research and development 26,449 28,496 77,843 80,706 Sales and marketing 50,657 55,683 144,228 166,525 General and administrative 11,227 13,468 33,172 40,257 Amortization of acquired intangible assets 3,107 4,156 10,559 12,531 ----------- ----------- ----------- ----------- Total operating expenses 91,440 101,803 265,802 300,019 ----------- ----------- ----------- ----------- Income from operations 20,509 15,258 43,761 25,030 Interest income 219 1,925 2,053 7,427 Interest expense (673) (810) (2,212) (2,528) Other income (expense), net 471 (319) 1,672 (287) ----------- ----------- ----------- ----------- Income before provision for income taxes and minority interest 20,526 16,054 45,274 29,642 Provision for income taxes 5,629 4,917 14,579 9,391 Minority interest, net of tax 31 24 126 131 ----------- ----------- ----------- ----------- Net income $ 14,866 $ 11,113 $ 30,569 $ 20,120 =========== =========== =========== =========== Net income per share: Basic $ 0.09 $ 0.06 $ 0.18 $ 0.11 =========== =========== =========== =========== Diluted $ 0.09 $ 0.06 $ 0.18 $ 0.11 =========== =========== =========== =========== Shares used to compute net income per share: Basic 168,036 179,094 170,318 182,496 =========== =========== =========== =========== Diluted 172,194 183,154 172,473 186,402 =========== =========== =========== =========== TIBCO Software Inc. Condensed Consolidated Statements of Cash Flows (unaudited) (in thousands) Nine Months Ended --------------------- August 30, August 31, 2009 2008 --------- --------- Cash flows from operating activities: Net income $ 30,569 $ 20,120 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation of property and equipment 11,175 11,957 Amortization of acquired intangible assets 20,567 24,319 Stock-based compensation 17,155 15,618 Deferred income tax (7,662) (20,484) Tax benefits related to stock benefit plans 11,995 13,050 Excess tax benefits from stock-based compensation (7,960) (10,812) Minority interest, net of tax 126 131 Other non-cash adjustments, net 1,125 583 Changes in assets and liabilities: Accounts receivable 33,470 49,504 Prepaid expenses and other assets 3,553 12,277 Accounts payable (2,976) 2,071 Accrued liabilities and excess facilities costs (21,076) (2,659) Deferred revenue (4,774) (855) --------- --------- Net cash provided by operating activities 85,287 114,820 --------- --------- Cash flows from investing activities: Purchases of short-term investments - (37,047) Maturities and sales of short-term investments 10,966 121,896 Acquisitions, net of cash acquired (26,811) - Purchases of private equity investments - (29) Proceeds from private equity investments 117 347 Purchases of property and equipment (4,108) (6,464) Restricted cash pledged as security (2,559) 53 --------- --------- Net cash provided by (used in) investing activities (22,395) 78,756 --------- --------- Cash flows from financing activities: Proceeds from issuance of common stock 15,219 10,295 Repurchases of the Company's common stock (64,639) (110,687) Excess tax benefits from stock-based compensation 7,960 10,812 Principal payments on long-term debt (1,515) (1,434) --------- --------- Net cash used in financing activities (42,975) (91,014) --------- --------- Effect of foreign exchange rate changes on cash and cash equivalents 10,786 (2,645) --------- --------- Net change in cash and cash equivalents 30,703 99,917 Cash and cash equivalents at beginning of period 254,400 170,237 --------- --------- Cash and cash equivalents at end of period $ 285,103 $ 270,154 ========= =========
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. 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.
TIBCO Software Inc. Reconciliation of GAAP to Non-GAAP Measures (unaudited) (in thousands, except net income per share) Three Months Ended --------------------------------------- August 30, 2009 August 31, 2008 ------------------- ------------------- Operating Net Operating Net Income Income Income Income --------- --------- --------- --------- GAAP $ 20,509 $ 14,866 $ 15,258 $ 11,113 Amortization of intangible assets - cost of revenue 2,873 2,873 3,989 3,989 Amortization of intangible assets - operating expense 3,107 3,107 4,156 4,156 Stock-based compensation - cost of revenue 658 658 645 645 Stock-based compensation - R&D expense 1,486 1,486 1,181 1,181 Stock-based compensation - S&M expense 1,906 1,906 1,682 1,682 Stock-based compensation - G&A expense 1,925 1,925 1,749 1,749 Realized gain on sales of private equity investment - - - (125) Income tax adjustment for non-GAAP (1) - (4,765) - (4,762) --------- -------- --------- -------- Non-GAAP $ 32,464 $ 22,056 $ 28,660 $ 19,628 ========= ======== ========= ======== Diluted net income per share: GAAP $ 0.09 $ 0.06 ======== ======== Non-GAAP $ 0.13 $ 0.11 ======== ======== Shares used to compute diluted net income per share 172,194 183,154 ======== ======== Nine Months Ended --------------------------------------- August 30, 2009 August 31, 2008 ------------------- ------------------- Operating Net Operating Net Income Income Income Income --------- --------- --------- --------- GAAP $ 43,761 $ 30,569 $ 25,030 $ 20,120 Amortization of intangible assets - cost of revenue 10,008 10,008 11,788 11,788 Amortization of intangible assets - operating expense 10,559 10,559 12,531 12,531 Stock-based compensation - cost of revenue 1,900 1,900 1,972 1,972 Stock-based compensation - R&D expense 4,140 4,140 3,456 3,456 Stock-based compensation - S&M expense 5,318 5,318 5,089 5,089 Stock-based compensation - G&A expense 5,797 5,797 5,101 5,101 Realized gain on sales of private equity investment - - - (125) Income tax adjustment for non-GAAP (1) - (11,980) - (13,529) --------- -------- --------- -------- Non-GAAP $ 81,483 $ 56,311 $ 64,967 $ 46,403 ========= ======== ========= ======== Diluted net income per share: GAAP $ 0.18 $ 0.11 ======== ======== Non-GAAP $ 0.33 $ 0.25 ======== ======== Shares used to compute diluted net income per share 172,473 186,402 ======== ======== (1) The estimated non-GAAP effective tax rate was 32% and 33% for fiscal 2009 and 2008, respectively, and has been used to adjust the provision for income taxes for non-GAAP purposes.
