TIBCO Software Reports Fourth Quarter and Fiscal Year 2012 Financial Results

PALO ALTO, CA--(Marketwire - Dec 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