TIBCO Software Reports Q2 GAAP EPS of $0.06, Non-GAAP EPS of $0.11
Q2 Non-GAAP Operating Profit Increases 56% Over Prior Year
- Press Release
- Source: TIBCO Software
- On 4:16 pm EDT, Thursday June 25, 2009
PALO ALTO, CA--(Marketwire - 06/25/09) - TIBCO Software Inc. (NASDAQ:TIBX - News) today announced results for its second fiscal quarter, which ended on May 31, 2009.
Total revenue for the second quarter of fiscal 2009 was $142.7 million, as compared to $150.0 million for the second quarter of fiscal 2008. On a constant currency basis, total revenue for fiscal Q2 grew year over year by approximately 1%. GAAP net income for Q2 was $10.1 million or $0.06 per diluted share, as compared to $3.5 million or $0.02 per diluted share reported for the second quarter of fiscal 2008. Using constant currency, earnings growth for Q2 was not significantly impacted by currency movements.
On a non-GAAP basis, net income for the second quarter of fiscal 2009 was $19.0 million or $0.11 per diluted share, compared with $12.4 million or $0.07 per diluted share for the second quarter of fiscal 2008. Non-GAAP operating income for the second quarter of fiscal 2009 was $27.1 million, resulting in a non-GAAP operating margin of 19%. This compares to non-GAAP operating income of $17.5 million, or a 12% non-GAAP operating margin in the second 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 second quarters of fiscal 2009 and 2008, respectively.
"We are managing our business tightly during the downturn and focused on delivering strong returns, as shown by a 40% annual growth in non-GAAP EPS through the first half of the year," said Vivek Ranadiv�, TIBCO's chairman and chief executive officer. "At the same time, we continue to innovate by investing in our core product lines and moving aggressively into emerging sectors such as cloud computing, as highlighted by our release this quarter of TIBCO Silver, the industry's first cloud application delivery platform for the enterprise."
Second Quarter Fiscal 2009 Highlights
�
-- Total revenue was $142.7 million;
-- License revenue was $50.5 million;
-- Cash flow from operations for the quarter was $42.3 million;
-- Continued strong mix of business across industries including Financial
Services, Telecommunications, Government, Life Sciences, and Energy;
-- TIBCO closed 88 deals over $100k and had 11 deals over $1 million;
-- TIBCO expanded its business with leading companies in Q2 such as
CenturyTel, Chevron Corporation, Cricket Communications, IP Australia, QVC,
Tesco Stores, and World Vision International.
Conference Call Details
TIBCO has scheduled a conference call for 4:30 pm ET / 1:30 pm PT today to discuss its second 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 (877) 723-9517 or (719) 325-4791. Please join the conference call at least 10 minutes early to register. A replay of the conference call will be available until midnight on July 25, 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 2404640.
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, TIBCO Silver, 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 second 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 manage our business tightly during the downturn 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 March 1, 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)
May 31, November, 30
2009 2008
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 327,491 $ 254,400
Short-term investments 2,108 13,073
Accounts receivable, net 97,964 133,191
Prepaid expenses and other current assets 44,644 49,994
----------- -----------
Total current assets 472,207 450,658
Property and equipment, net 99,584 103,531
Goodwill 356,700 343,942
Acquired intangible assets, net 68,597 80,437
Long-term deferred income tax assets 70,117 70,135
Other assets 41,652 39,865
----------- -----------
Total assets $ 1,108,857 $ 1,088,568
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 16,527 $ 15,030
Accrued liabilities 75,942 90,980
Accrued excess facilities costs 5,542 6,572
Deferred revenue 145,628 140,221
Current portion of long-term debt 2,090 2,033
----------- -----------
Total current liabilities 245,729 254,836
Accrued excess facilities costs, less current
portion 3,383 5,594
Long-term deferred revenue 8,982 12,007
Long-term deferred income tax liabilities 14,600 15,329
Long-term income tax liabilities 13,421 12,439
Long-term debt, less current portion 41,466 42,525
Other long-term liabilities 4,075 3,837
----------- -----------
Total long-term liabilities 85,927 91,731
----------- -----------
Total liabilities 331,656 346,567
----------- -----------
Minority interest 560 358
Total stockholders' equity 776,641 741,643
----------- -----------
Total liabilities and stockholders' equity $ 1,108,857 $ 1,088,568
=========== ===========
TIBCO Software Inc.
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except net income per share)
Three Months Ended Six Months Ended
-------------------- --------------------
May 31, June 1, May 31, June 1,
2009 2008 2009 2008
--------- --------- --------- ---------
Revenue:
License $ 50,457 $ 57,696 $ 95,306 $ 115,449
Service and maintenance 92,213 92,336 180,260 181,161
--------- --------- --------- ---------
Total revenue 142,670 150,032 275,566 296,610
--------- --------- --------- ---------
Cost of revenue:
License 7,493 7,484 14,303 14,764
Service and maintenance 32,404 38,088 63,649 73,858
--------- --------- --------- ---------
Total cost of revenue 39,897 45,572 77,952 88,622
--------- --------- --------- ---------
Gross profit 102,773 104,460 197,614 207,988
--------- --------- --------- ---------
Operating expenses:
Research and development 26,260 26,756 51,394 52,210
Sales and marketing 47,445 56,454 93,571 110,842
General and administrative 11,317 12,991 21,945 26,789
Amortization of acquired
intangible assets 3,736 4,235 7,452 8,375
--------- --------- --------- ---------
Total operating expenses 88,758 100,436 174,362 198,216
--------- --------- --------- ---------
Income from operations 14,015 4,024 23,252 9,772
Interest income 757 2,244 1,834 5,502
Interest expense (793) (876) (1,539) (1,718)
Other income (expense), net 1,042 (206) 1,201 32
--------- --------- --------- ---------
Income before provision for
income taxes and
minority interest 15,021 5,186 24,748 13,588
Provision for income taxes 4,828 1,641 8,950 4,474
Minority interest, net of tax 116 52 95 107
--------- --------- --------- ---------
Net income $ 10,077 $ 3,493 $ 15,703 $ 9,007
========= ========= ========= =========
Net income per share:
Basic $ 0.06 $ 0.02 $ 0.09 $ 0.05
========= ========= ========= =========
Diluted $ 0.06 $ 0.02 $ 0.09 $ 0.05
========= ========= ========= =========
Shares used to compute net
income per share:
Basic 171,635 182,078 171,460 184,197
========= ========= ========= =========
Diluted 173,134 185,990 172,614 188,028
========= ========= ========= =========
TIBCO Software Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
Six Months Ended
--------------------
May 31, June 1,
2009 2008
--------- ---------
Cash flows from operating activities:
Net income $ 15,703 $ 9,007
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation of property and equipment 7,477 8,016
Amortization of acquired intangible assets 14,587 16,174
Stock-based compensation 11,180 10,361
Deferred income tax (4,216) (10,229)
Tax benefits related to stock benefit plans 5,615 4,679
Excess tax benefits from stock-based
compensation (3,558) (4,580)
Minority interest, net of tax 95 107
Other non-cash adjustments, net 942 139
Changes in assets and liabilities:
Accounts receivable 33,344 47,132
Prepaid expenses and other assets 9,367 6,819
Accounts payable 745 2,642
Accrued liabilities and excess facilities
costs (21,200) (9,738)
Deferred revenue 1,507 11,749
--------- ---------
Net cash provided by operating activities 71,588 92,278
--------- ---------
Cash flows from investing activities:
Purchases of short-term investments - (37,046)
Maturities and sales of short-term investments 10,586 99,384
Acquisitions, net of cash acquired (163) -
Purchases of private equity investments - (25)
Proceeds from private equity investments - 222
Purchases of property and equipment (3,255) (4,780)
Restricted cash pledged as security (3,241) (148)
--------- ---------
Net cash provided by investing activities 3,927 57,607
--------- ---------
Cash flows from financing activities:
Proceeds from issuance of common stock 2,094 5,885
Repurchases of the Company's common stock (14,791) (85,645)
Excess tax benefits from stock-based
compensation 3,558 4,580
Principal payments on long-term debt (1,002) (949)
--------- ---------
Net cash used in financing activities (10,141) (76,129)
--------- ---------
Effect of foreign exchange rate changes on cash
and cash equivalents 7,717 925
--------- ---------
Net change in cash and cash equivalents 73,091 74,681
Cash and cash equivalents at beginning of period 254,400 170,237
--------- ---------
Cash and cash equivalents at end of period $ 327,491 $ 244,918
========= =========
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
---------------------------------------
May 31, 2009 June 1, 2008
------------------- -------------------
Operating Net Operating Net
Income Income Income Income
--------- -------- --------- --------
GAAP $ 14,015 $ 10,077 $ 4,024 $ 3,493
Amortization of intangible assets
- cost of revenue 3,572 3,572 3,982 3,982
Amortization of intangible assets
- operating expense 3,736 3,736 4,235 4,235
Stock-based compensation - cost of
revenue 632 632 732 732
Stock-based compensation - R&D
expense 1,531 1,531 1,256 1,256
Stock-based compensation - S&M
expense 1,706 1,706 1,677 1,677
Stock-based compensation - G&A
expense 1,949 1,949 1,546 1,546
Income tax adjustment for non-GAAP
(1) - (4,179) - (4,502)
--------- -------- --------- --------
Non-GAAP $ 27,141 $ 19,024 $ 17,452 $ 12,419
========= ======== ========= ========
Diluted net income per share:
GAAP $ 0.06 $ 0.02
======== ========
Non-GAAP $ 0.11 $ 0.07
======== ========
Shares used to compute diluted net
income per share 173,134 185,990
======== ========
Six Months Ended
---------------------------------------
May 31, 2009 June 1, 2008
------------------- -------------------
Operating Net Operating Net
Income Income Income Income
--------- -------- --------- --------
GAAP $ 23,252 $ 15,703 $ 9,772 $ 9,007
Amortization of intangible assets
- cost of revenue 7,135 7,135 7,799 7,799
Amortization of intangible assets
- operating expense 7,452 7,452 8,375 8,375
Stock-based compensation - cost of
revenue 1,242 1,242 1,327 1,327
Stock-based compensation - R&D
expense 2,654 2,654 2,275 2,275
Stock-based compensation - S&M
expense 3,412 3,412 3,407 3,407
Stock-based compensation - G&A
expense 3,872 3,872 3,352 3,352
Income tax adjustment for non-GAAP
(1) - (7,215) - (8,767)
--------- -------- --------- --------
Non-GAAP $ 49,019 $ 34,255 $ 36,307 $ 26,775
========= ======== ========= ========
Diluted net income per share:
GAAP $ 0.09 $ 0.05
======== ========
Non-GAAP $ 0.20 $ 0.14
======== ========
Shares used to compute diluted net
income per share 172,614 188,028
======== ========
(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.
Contact:
Media Relations Contact:
Holly Burkhart
TIBCO Software Inc.
(650) 846-5624
hburkhart@tibco.com
Investor Relations Contact:
Matthew Langdon
TIBCO Software Inc.
(650) 846-5747
mlangdon@tibco.com
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