| [August 22, 2006] |
 |
Intuit's Fiscal 2006 Revenue Grows 15 Percent; Fourth-Quarter Revenue Increases 14 Percent
MOUNTAIN VIEW, Calif. --(Business Wire)-- Aug. 22, 2006 -- Intuit Inc. (Nasdaq:INTU) today announced strong results for its fourth quarter and fiscal year ended July 31, 2006.
"Intuit just completed another very successful year of double-digit growth in revenue and earnings per share," said Steve Bennett, Intuit's president and chief executive officer. "Our two big businesses, QuickBooks and Consumer Tax, had outstanding results and our other business segments performed well. I'm very pleased with our position as we enter fiscal 2007."
Fiscal 2006 Financial Highlights
-- Revenue of $2.3 billion increased 15 percent from fiscal 2005. Growth was driven by strong performance in Intuit's two largest segments, QuickBooks-Related and Consumer Tax.
-- Intuit had operating income of $559.5 million in accordance with GAAP, or Generally Accepted Accounting Principles, up 7 percent from fiscal 2005. Fiscal 2006 was the first year in which Intuit recorded an expense for employee stock options under SFAS 123(R). Total employee stock-based compensation expense was approximately $71.4 million for the full year. Intuit had non-GAAP operating income of $654.1 million, up 18 percent from fiscal 2005.
-- Intuit had net income of $417.0 million in accordance with GAAP, up 9 percent from fiscal 2005. This represents diluted earnings per share, or EPS, of $1.16, up 15 percent over fiscal 2005. Fiscal 2006 was the first year in which Intuit recorded an expense for employee stock options under SFAS 123(R).
-- Intuit's non-GAAP net income of $437.3 million increased 15 percent from fiscal 2005. Growth in non-GAAP net income was less than growth in non-GAAP operating income due to a higher tax rate in fiscal 2006. Non-GAAP diluted EPS of $1.21 grew 20 percent over fiscal 2005.
Fiscal 2006 Business Segment Revenue Growth
-- QuickBooks-Related revenue grew 14 percent over fiscal 2005 to $861.7 million.
-- Consumer Tax revenue grew 25 percent over fiscal 2005 to $710.5 million.
-- Intuit-Branded Small Business revenue of $251.5 million was up 9 percent year-over-year.
-- Professional Tax revenue increased 3 percent over fiscal 2005 to $272.9 million.
-- Revenue from Other Businesses, which includes Quicken and Canada, was up 13 percent for the year to $245.7 million.
Fourth-Quarter 2006 Highlights
-- Revenue of $342.9 million increased 14 percent from the year-ago quarter.
-- Intuit had an operating loss of $56.9 million in accordance with GAAP. Intuit typically posts a seasonal loss in its fourth quarter when it has little revenue from its tax businesses but expenses remain relatively constant. On a non-GAAP basis, Intuit had an operating loss of $36.3 million.
-- Intuit had a net loss of $18.9 million in accordance with GAAP, compared to a net loss of $20.0 million in the year-ago quarter. This represents a loss of $0.06 per share versus a loss of $0.06 per share in the fourth quarter of fiscal 2005.
-- Intuit had a non-GAAP net loss of $10.5 million, compared to a net loss of $14.0 million in the year-ago quarter. This represents a non-GAAP loss per share of $0.03 versus a loss of $0.04 in the fourth quarter of fiscal 2005.
Forward-Looking Guidance for Fiscal 2007
Intuit provided its financial guidance for fiscal 2007, which will end on July 31, 2007. The company expects:
-- Revenue of $2.53 billion to $2.58 billion, or year-over-year growth of approximately 8 percent to 10 percent. Revenue guidance for each quarter of fiscal 2007 is provided on the accompanying fact sheet.
-- GAAP operating income of $620 million to $646 million, versus $560 million in fiscal 2006, or growth of 11 percent to 15 percent. On a non-GAAP basis operating income is expected to be $720 million to $746 million, or growth of approximately 10 percent to 14 percent over fiscal 2006.
-- GAAP diluted EPS of $1.18 to $1.22, or growth of 2 percent to 5 percent. In accordance with GAAP, fiscal 2006 EPS includes $0.11 from discontinued operations. On a non-GAAP basis, diluted EPS is expected to be $1.36 to $1.40, up approximately 12 percent to 16 percent from fiscal 2006. GAAP and non-GAAP EPS guidance for each quarter of fiscal 2007 is provided on the accompanying fact sheet.
Forward-Looking Guidance and New Business Segments
Intuit has changed its business segments to reflect a new management structure and to better align reporting with the company's strategy. Definitions of the new segments and expected fiscal 2007 revenue by segment are as follows:
-- QuickBooks includes QuickBooks software and support and financial supplies. For fiscal 2007, Intuit expects revenue of $577 million to $599 million, or growth of approximately 8 percent to 12 percent over fiscal 2006.
-- Payroll & Payments is a new segment that includes Intuit's Do It Yourself Payroll, Outsourced and Assisted Payroll and Innovative Merchant Solutions businesses. For fiscal 2007, Intuit expects revenue of $517 million to $536 million, or growth of approximately 12 percent to 16 percent.
-- Consumer Tax has not changed. For fiscal 2007, Intuit expects revenue of $782 million to $817 million, or growth of approximately 10 percent to 15 percent.
-- Professional Tax has not changed. For fiscal 2007, Intuit expects revenue of $273 million to $287 million, or growth of approximately 0 percent to 5 percent.
-- Other Businesses includes Quicken and Canada, as well as Intuit Distribution Management Solutions and Intuit Real Estate Solutions. For fiscal 2007, Intuit expects revenue of $362 million to $380 million, or growth of approximately 0 percent to 5 percent.
Forward-Looking Guidance for First-Quarter 2007
Intuit's expected results for the first quarter of fiscal 2007, which will end Oct. 31, 2006 are:
-- Revenue of $335 million to $350 million, which is annual growth of 10 percent to 15 percent.
-- GAAP operating loss of $99 million to $114 million and non-GAAP operating loss of $75 million to $90 million. Intuit typically posts a seasonal loss in its first quarter when it has little revenue from its tax businesses but expenses remain relatively constant.
-- GAAP net loss of $0.16 to $0.18 per share and non-GAAP net loss of $0.12 to $0.14 per share.
Webcast and Conference Call Information
A live audio webcast of Intuit's fourth-quarter and fiscal 2006 conference call is available at www.intuit.com/about_intuit/investors/webcast_events.html. The call begins today at 1:30 p.m. PDT. The replay of the audio webcast will remain on Intuit's Web site for one week after the conference call. Intuit has posted to its Web site this press release, including the attached tables and non-GAAP to GAAP reconciliations. Intuit will post the conference call script to the Web site shortly after the conference call concludes.
The conference call number is 866-837-9789 in the United States or 703-639-1425 from international locations. No reservation or access code is needed. A replay of the call will be available for one week by calling 888-266-2081, or 703-925-2533 from international locations. The access code is 945569.
Intuit, the Intuit logo, Quicken, QuickBooks and TurboTax, among others, are registered trademarks and/or registered service marks of Intuit Inc. in the United States and other countries.
About Non-GAAP Financial Measures
This press release and the accompanying tables and sheet titled "Intuit Facts" include 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 of the accompanying tables titled "About Non-GAAP Financial Measures" as well as the related Table B, Table E1 and Table E2 which follow it. A copy of the press release filed by Intuit on Aug. 22, 2006 can be found on the investor relations page of Intuit's Web site at www.intuit.com.
Cautions About Forward-Looking Statements
This press release contains forward-looking statements, including forecasts of Intuit's expected financial results; its prospects for the business in fiscal 2007 and beyond; all of the statements under the headings "Forward-Looking Guidance for Fiscal 2007," "Forward-Looking Guidance and New Business Segments" and "Forward-Looking Guidance for First-Quarter 2007;" and all information under the heading "Guidance" on the attached fact sheet.
Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause our actual results to differ materially from the expectations expressed in the forward-looking statements. These factors include, without limitation, the following: product introductions and price competition from our competitors, including Microsoft, can have unpredictable negative effects on our revenue, profitability and market position; governmental encroachment in our tax businesses or other governmental activities regulating the filing of tax returns could negatively affect our operating results and market position; we may not be able to successfully introduce new products and services to meet our growth and profitability objectives, and current and future products and services may not adequately address customer needs and may not achieve broad market acceptance, which could harm our operating results and financial condition; any failure to maintain reliable and responsive service levels for our offerings could cause us to lose customers and negatively impact our revenues and profitability; any significant product quality problems or delays in our products could harm our revenue, earnings and reputation, our participation in the Free File Alliance may result in lost revenue due to potential customers filing free federal tax returns and electing not to pay for state filing or other services and cannibalization of our traditional paid franchise; any failure to properly use and protect personal customer information could harm our revenue, earnings and reputation; our revenue and earnings are highly seasonal and the timing of our revenue between quarters is difficult to predict, which may cause significant quarterly fluctuations in our financial results; predicting tax-related revenues is challenging due to the heavy concentration of activity in a short time period; we have implemented, and are continuing to upgrade, new information systems and any problems with these new systems could interfere with our ability to ship and deliver products and gather information to effectively manage our business; our financial position may not make repurchasing shares advisable or we may issue additional shares in an acquisition causing our number of outstanding shares to grow; and litigation involving intellectual property, antitrust, shareholder and other matters may increase our costs. More details about these and other risks that may impact our business are included in our Form 10-K for fiscal 2005 and in our other SEC filings.
You can locate these reports through our Web site at http://www.intuit.com/about_intuit/investors. Forward-looking statements are based on information as of Aug. 22, 2006, and we do not undertake any duty to update any forward-looking statement or other information in this presentation.
Table A
INTUIT INC.
GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Twelve Months Ended
----------------------- -----------------------
July 31, July 31, July 31, July 31,
2006 2005 2006 2005
----------- ----------- ----------- -----------
Net revenue:
Product $ 191,902 $ 176,762 $1,351,636 $1,242,693
Service 126,274 102,130 910,506 724,049
Other 24,749 22,927 80,161 70,961
----------- ----------- ----------- -----------
Total net revenue 342,925 301,819 2,342,303 2,037,703
----------- ----------- ----------- -----------
Costs and expenses:
Cost of revenue:
Cost of product
revenue 28,351 25,928 176,188 164,551
Cost of service
revenue 60,606 46,633 229,435 183,969
Cost of other
revenue 2,490 6,297 20,566 24,133
Amortization of
purchased
intangible assets 1,901 2,542 9,902 10,251
Selling and
marketing 132,069 123,369 664,056 583,408
Research and
development 104,284 75,536 398,983 305,241
General and
administrative 67,391 51,698 270,292 225,507
Acquisition-related
charges 2,747 3,969 13,337 16,545
----------- ----------- ----------- -----------
Total costs and
expenses 399,839 335,972 1,782,759 1,513,605
----------- ----------- ----------- -----------
Operating income
(loss) from
continuing operations (56,914) (34,153) 559,544 524,098
Interest and other
income 22,098 14,072 43,038 26,636
Gains on marketable
equity securities and
other investments,
net 256 4,883 7,629 5,225
----------- ----------- ----------- -----------
Income (loss) from
continuing operations
before income taxes (34,560) (15,198) 610,211 555,959
Income tax provision
(benefit) (A) (15,774) 7,467 232,090 181,074
Minority interest 68 (98) 691 (98)
----------- ----------- ----------- -----------
Net income (loss)
from continuing
operations (18,854) (22,567) 377,430 374,983
Net income from
discontinued
operations (B) - 2,571 39,533 6,644
----------- ----------- ----------- -----------
Net income (loss) $ (18,854) $ (19,996) $ 416,963 $ 381,627
=========== =========== =========== ===========
Basic net income
(loss) per share from
continuing
operations $ (0.06) $ (0.07) $ 1.09 $ 1.01
Basic net income per
share from
discontinued
operations - 0.01 0.11 0.02
----------- ----------- ----------- -----------
Basic net income
(loss) per share (C) $ (0.06) $ (0.06) $ 1.20 $ 1.03
=========== =========== =========== ===========
Shares used in basic
per share amounts 342,505 360,532 347,854 369,202
=========== =========== =========== ===========
Diluted net income
(loss) per share from
continuing
operations $ (0.06) $ (0.07) $ 1.05 $ 0.99
Diluted net income per
share from
discontinued
operations - 0.01 0.11 0.02
----------- ----------- ----------- -----------
Diluted net income
(loss) per share (C) $ (0.06) $ (0.06) $ 1.16 $ 1.01
=========== =========== =========== ===========
Shares used in diluted
per share amounts 342,505 360,532 360,471 376,796
=========== =========== =========== ===========
Share-based
compensation expense
for stock options,
Employee Stock
Purchase Plan,
restricted stock and
restricted stock
units in continuing
operations (D):
Cost of product
revenue $ 197 $ - $ 941 $ -
Cost of service
revenue 459 - 2,048 -
Selling and
marketing 4,815 - 21,944 -
Research and
development 4,406 - 19,309 -
General and
administrative 6,120 1,119 27,119 5,489
----------- ----------- ----------- -----------
Total $ 15,997 $ 1,119 $ 71,361 $ 5,489
=========== =========== =========== ===========
See accompanying Notes.
INTUIT INC.
NOTES TO TABLE A
(A) Our effective tax rate for the twelve months ended July 31, 2006
was approximately 38% and differed from the federal statutory rate
primarily due to state income taxes and the tax on the gain on the
sale of certain assets of Intuit Construction Business Solutions,
which were partially offset by the benefit we received from tax
exempt interest income, federal and state research and
experimental credits and the domestic production activities
deduction.
Our effective tax rate for the twelve months ended July 31, 2005
was approximately 33% and differed from the federal statutory rate
primarily due to the net effect of the reversal of approximately
$25.7 million in reserves related to potential income tax
exposures that were resolved, the federal research and
experimental credit and the benefit received from tax-exempt
interest income, partially offset by state income taxes.
(B) In May 2005 our Board of Directors formally approved a plan to
sell our Intuit Information Technology Solutions (ITS) business
and in December 2005 we sold ITS for approximately $200 million in
cash. In accordance with the provisions of Statement of Financial
Accounting Standards (SFAS) No. 144, "Accounting for the
Impairment or Disposal of Long-lived Assets," we determined that
ITS became a long-lived asset held for sale and a discontinued
operation in the fourth quarter of fiscal 2005. Consequently, we
have segregated the net assets, operating results and cash flows
of ITS from continuing operations on our balance sheet at July 31,
2005 and on our statements of operations and statements of cash
flows for all periods prior to the sale. Revenue for ITS was $20.2
million and income before income taxes was $9.1 million for the
twelve months ended July 31, 2006. We recorded a $34.3 million net
of tax gain on the disposal of ITS in the twelve months ended July
31, 2006. Revenue for ITS was $57.0 million and income before
income taxes was $20.6 million for the twelve months ended July
31, 2005.
In December 2004 we sold our Intuit Public Sector Solutions (IPSS)
business for approximately $11 million. In accordance with SFAS
144, we determined that IPSS became a long-lived asset held for
sale and a discontinued operation in the first quarter of fiscal
2005. Consequently, we have segregated the operating results and
cash flows of IPSS from continuing operations on our statements of
operations and statements of cash flows for all periods prior to
the sale. Revenue for IPSS was $3.8 million and loss before income
taxes was $0.8 million for the twelve months ended July 31, 2005.
We also recorded a $4.8 million net of tax loss on the disposal of
IPSS in the twelve months ended July 31, 2005.
(C) Our Board of Directors authorized a two-for-one stock split which
was effected in the form of a 100% stock dividend on July 6, 2006
to stockholders of record on June 21, 2006. All share and per
share figures in these tables retroactively reflect this stock
split.
(D) Prior to August 1, 2005, we accounted for our share-based employee
compensation plans under the measurement and recognition
provisions of Accounting Principles Board (APB) Opinion No. 25,
"Accounting for Stock Issued to Employees." In accordance with APB
25, we recorded no share-based compensation expense for stock
options or purchases of common stock under our Employee Stock
Purchase Plan in fiscal periods prior to that date. Effective
August 1, 2005, we adopted the fair value recognition provisions
of SFAS 123(R), "Share-Based Payment," using the modified
prospective transition method. Accordingly, we began recording
compensation expense for stock options and purchases under our
Employee Stock Purchase Plan on that date. Because we elected to
use the modified prospective transition method, GAAP results for
prior periods have not been restated. Share-based compensation
expenses also include expenses for restricted stock and restricted
stock units, which we recorded under GAAP accounting rules for all
periods presented.
INTUIT INC.
ABOUT NON-GAAP FINANCIAL MEASURES
The accompanying press release dated August 22, 2006 contains non-GAAP
financial measures. Tables B and E1 reconcile the non-GAAP financial
measures in that press release to the most directly comparable
financial measures prepared in accordance with Generally Accepted
Accounting Principles (GAAP). In addition, Tables E1 and E2 reconcile
the non-GAAP financial measures found in the accompanying document
entitled "Intuit Facts" to the most directly comparable financial
measures prepared in accordance with GAAP. These non-GAAP financial
measures include non-GAAP operating income (loss) and related
operating margin as a percentage of revenue, non-GAAP net income
(loss) and non-GAAP net income (loss) per share.
Non-GAAP financial measures should not be considered as a substitute
for, or superior to, measures of financial performance prepared in
accordance with GAAP. These non-GAAP financial measures do not reflect
a comprehensive system of accounting, differ from GAAP measures with
the same names and may differ from non-GAAP financial measures with
the same or similar names that are used by other companies.
We believe that these non-GAAP financial measures provide meaningful
supplemental information regarding Intuit's operating results
primarily because they exclude amounts that we do not consider part of
ongoing operating results when assessing the performance of the
organization, our operating segments or our senior management. Segment
managers are not held accountable for share-based compensation
expenses, acquisition-related costs, or the other excluded items that
may impact their business units' operating income (loss) and,
accordingly, we exclude these amounts from our measures of segment
performance. We also exclude these amounts from our budget and
planning process. We believe that our non-GAAP financial measures also
facilitate the comparison of results for current periods and guidance
for future periods with results for past periods. We exclude the
following items from our non-GAAP financial measures:
-- Share-based compensation expenses. Our non-GAAP financial
measures exclude share-based compensation expenses, which
consist of expenses for stock options and purchases of common
stock under our Employee Stock Purchase Plan, which we began
recording under SFAS 123(R) in the first quarter of fiscal
2006, and expenses for restricted stock and restricted stock
units, which we recorded under GAAP accounting rules for all
periods presented. Segment managers are not held accountable
for share-based compensation expenses impacting their business
units' operating income (loss) and, accordingly, we exclude
share-based compensation expenses from our measures of segment
performance. While share-based compensation is a significant
expense affecting our results of operations, management
excludes share-based compensation from our budget and planning
process. We exclude share-based compensation expenses from our
non-GAAP financial measures for these reasons and the other
reasons stated above. We compute weighted average dilutive
shares using the method required by SFAS 123(R) for both GAAP
and non-GAAP diluted net income per share.
-- Amortization of purchased intangible assets and
acquisition-related charges. In accordance with GAAP,
amortization of purchased intangible assets in cost of revenue
includes amortization of software and other technology assets
related to acquisitions and acquisition-related charges in
operating expenses includes amortization of other purchased
intangible assets such as customer lists and covenants not to
compete. Acquisition activities are managed on a
corporate-wide basis and segment managers are not held
accountable for the acquisition-related costs impacting their
business units' operating income (loss). We exclude these
amounts from our measures of segment performance and from our
budget and planning process. We exclude these items from our
non-GAAP financial measures for these reasons, the other
reasons stated above and because we believe that excluding
these items facilitates comparisons to the results of other
companies in our industry, which have their own unique
acquisition histories.
-- Gains and losses on disposals of businesses. We exclude these
amounts from our non-GAAP financial measures for the reasons
stated above and because they are unrelated to our ongoing
business operating results.
-- Gains and losses on marketable equity securities and other
investments. We exclude these amounts from our non-GAAP
financial measures for the reasons stated above and because
they are unrelated to our ongoing business operating results.
-- Income taxes. Our historical non-GAAP effective tax rates
differ from our GAAP effective tax rates for those periods
because non-GAAP income tax expense or benefit excludes
certain GAAP discrete tax items, including the reversal of
reserves related to potential income tax exposures that have
been resolved. We exclude the impact of these discrete tax
items from our non-GAAP income tax provision or benefit for
the reasons stated above and because management believes that
they are not indicative of our ongoing business operations.
-- Operating results and gains and losses on the sale of
discontinued operations. From time to time, we sell or
otherwise dispose of selected operations as we adjust our
portfolio of businesses to meet our strategic goals. In
accordance with GAAP, we segregate the operating results of
discontinued operations as well as gains and losses on the
sale of these discontinued operations from continuing
operations on our GAAP statements of operations but continue
to include them in GAAP net income or loss and net income or
loss per share. We exclude these amounts from our non-GAAP
financial measures for the reasons stated above and because
they are unrelated to our ongoing business operations.
The following describes each non-GAAP financial measure, the items
excluded from the most directly comparable GAAP measure in arriving at
each non-GAAP financial measure, and the reasons management uses each
measure and excludes the specified amounts in arriving at each
non-GAAP financial measure.
(A) Operating income (loss) and related operating margin as a
percentage of revenue. We exclude share based compensation
expenses, amortization of purchased intangible assets and
acquisition-related charges from our GAAP operating income
from continuing operations and related operating margin in
arriving at our non-GAAP operating income (loss) and related
operating margin primarily because we do not consider them
part of ongoing operating results when assessing the
performance of the organization, our operating segments and
senior management or when undertaking our budget and planning
process. We believe that the exclusion of these expenses from
our non-GAAP financial measures also facilitates the
comparison of results for fiscal 2006 and guidance for future
periods with results for prior periods. In addition, we
exclude amortization of purchased intangible assets and
acquisition-related charges from non-GAAP operating income
(loss) and operating margin because we believe that excluding
these items facilitates comparisons to the results of other
companies in our industry, which have their own unique
acquisition histories.
(B) Net income (loss) and net income (loss) per share (or earnings
per share). We exclude share based compensation expenses,
amortization of purchased intangible assets,
acquisition-related charges, gains on marketable equity
securities and other investments, net, gains and losses on
disposals of businesses, certain discrete tax items and
amounts related to discontinued operations from our GAAP net
income (loss) and net income (loss) per share in arriving at
our non-GAAP net income (loss) and net income (loss) per
share. We exclude all of these items from our non-GAAP net
income (loss) and net income (loss) per share primarily
because we do not consider them part of ongoing operating
results when assessing the performance of the organization,
our operating segments and senior management or when
undertaking our budget and planning process. We believe that
the exclusion of these items from our non-GAAP financial
measures also facilitates the comparison of results for fiscal
2006 and guidance for future periods with results for prior
periods.
In addition, we exclude amortization of purchased intangible
assets and acquisition-related charges from our non-GAAP net
income (loss) and net income (loss) per share because we
believe that excluding these items facilitates comparisons to
the results of other companies in our industry, which have
their own unique acquisition histories. We exclude gains on
marketable equity securities and other investments, net from
our non-GAAP net income (loss) and net income (loss) per share
because they are unrelated to our ongoing business operating
results. Our historical non-GAAP effective tax rates differ
from our GAAP effective tax rates for those periods because
our non-GAAP income tax expense or benefit excludes certain
GAAP discrete tax items, including the reversal of reserves
related to potential income tax exposures that have been
resolved. We exclude the impact of these discrete tax items
from our non-GAAP income tax provision or benefit because
management believes that they are not indicative of our
ongoing business operations. The effective tax rates used to
calculate non-GAAP net income and net income per share were as
follows: 34% for the first, second and third quarters of
fiscal 2005; 35% for full fiscal 2005 and the first and second
quarters of fiscal 2006; 38% for the third quarter of fiscal
2006; 37% for the fourth quarter of fiscal 2006 and full
fiscal 2006; and 37% for fiscal 2007 guidance. Finally, we
exclude amounts related to discontinued operations from our
non-GAAP net income and net income per share because they are
unrelated to our ongoing business operations.
We refer to these non-GAAP financial measures in assessing the
performance of Intuit's ongoing operations and for planning and
forecasting in future periods. These non-GAAP financial measures also
facilitate our internal comparisons to Intuit's historical operating
results. We have historically reported similar non-GAAP financial
measures and believe that the inclusion of comparative numbers
provides consistency in our financial reporting. We compute non-GAAP
financial measures using the same consistent method from quarter to
quarter and year to year.
The reconciliations of the forward-looking non-GAAP financial measures
to the most directly comparable GAAP financial measures in Table E1
include all information reasonably available to Intuit at the date of
this press release. These tables include adjustments that we can
reasonably predict. Events that could cause the reconciliation to
change include acquisitions and divestitures of businesses, goodwill
and other asset impairments and sales of marketable equity securities
and other investments.
Table B
INTUIT INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
TO MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASURES
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Twelve Months Ended
------------------- -------------------
July 31, July 31, July 31, July 31,
2006 2005 2006 2005
--------- --------- --------- ---------
GAAP operating income (loss)
from continuing operations $(56,914) $(34,153) $559,544 $524,098
Amortization of purchased
intangible assets 1,901 2,542 9,902 10,251
Acquisition-related charges 2,747 3,969 13,337 16,545
Share-based compensation
expense 15,997 1,119 71,361 5,489
--------- --------- --------- ---------
Non-GAAP operating income
(loss) $(36,269) $(26,523) $654,144 $556,383
========= ========= ========= =========
GAAP net income (loss) $(18,854) $(19,996) $416,963 $381,627
Amortization of purchased
intangible assets 1,901 2,542 9,902 10,251
Acquisition-related charges 2,747 3,969 13,337 16,545
Share-based compensation
expense 15,997 1,119 71,361 5,489
Pretax gain on disposal of
certain assets of ICBS (2,364) - (2,364) -
Gains on marketable equity
securities (256) (4,883) (7,629) (5,225)
Income tax effect of non-GAAP
adjustments (7,544) (934) (32,179) (9,200)
Income taxes related to
disposal of certain assets of
our ICBS business 10,106 - 10,106 -
Exclusion of discrete tax
items (12,218) 6,770 (2,689) (13,817)
Discontinued operations - (2,571) (39,533) (6,644)
--------- --------- --------- ---------
Non-GAAP net income (loss) $(10,485) $(13,984) $437,275 $379,026
========= ========= ========= =========
GAAP diluted net income (loss)
per share $ (0.06) $ (0.06) $ 1.16 $ 1.01
Amortization of purchased
intangible assets 0.01 0.01 0.03 0.03
Acquisition-related charges 0.01 0.01 0.04 0.04
Share-based compensation
expense 0.05 - 0.20 0.01
Pretax gain on disposal of
certain assets of ICBS (0.01) - (0.01) -
Gains on marketable equity
securities - (0.01) (0.02) (0.01)
Income tax effect of non-GAAP
adjustments (0.02) - (0.10) (0.02)
Income taxes related to
disposal of certain assets of
our ICBS business 0.03 - 0.03 -
Exclusion of discrete tax
items (0.04) 0.02 (0.01) (0.03)
Discontinued operations - (0.01) (0.11) (0.02)
--------- --------- --------- ---------
Non-GAAP diluted net income
(loss) per share $ (0.03) $ (0.04) $ 1.21 $ 1.01
========= ========= ========= =========
Shares used in diluted per
share amounts 342,505 360,532 360,471 376,796
========= ========= ========= =========
See "About Non-GAAP Financial Measures" immediately preceding this
Table B for information on these measures, the items excluded from the
most directly comparable GAAP measures in arriving at non-GAAP
financial measures, and the reasons management uses each measure and
excludes the specified amounts in arriving at each non-GAAP financial
measure. All share and per share figures in this Table B retroactively
reflect our July 2006 two-for-one common stock split.
Table C
INTUIT INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
July 31, July 31,
2006 2005
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 179,601 $ 83,842
Investments 1,017,599 910,416
Accounts receivable, net 97,797 86,125
Income taxes receivable 64,178 38,665
Deferred income taxes 47,199 54,854
Prepaid expenses and other current assets 53,357 60,610
Current assets of discontinued operations - 21,989
----------- -----------
Current assets before funds held for
payroll customers 1,459,731 1,256,501
Funds held for payroll customers 357,299 357,838
----------- -----------
Total current assets 1,817,030 1,614,339
Property and equipment, net 194,434 208,548
Goodwill, net 504,991 509,499
Purchased intangible assets, net 59,521 69,678
Long-term deferred income taxes 144,697 118,475
Loans to executive officers and other
employees 8,865 9,245
Other assets 40,489 30,078
Long-term assets of discontinued operations - 156,589
----------- -----------
Total assets $2,770,027 $2,716,451
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 70,808 $ 65,812
Accrued compensation and related liabilities 171,903 144,823
Deferred revenue 293,113 279,382
Income taxes payable 33,560 30,423
Other current liabilities 89,291 103,131
Current liabilities of discontinued
operations - 21,995
----------- -----------
Current liabilities before payroll
customer fund deposits 658,675 645,566
Payroll customer fund deposits 357,299 357,838
----------- -----------
Total current liabilities 1,015,974 1,003,404
Long-term obligations 15,399 17,308
Long-term obligations of discontinued
operations - 240
Minority interest 568 -
Stockholders' equity 1,738,086 1,695,499
----------- -----------
Total liabilities and stockholders' equity $2,770,027 $2,716,451
=========== ===========
Table D
INTUIT INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended Twelve Months Ended
----------------------- -------------------------
July 31, July 31, July 31, July 31,
(In thousands) 2006 2005 2006 2005
----------- ----------- ------------ ------------
Cash flows from
operating
activities:
Net income (loss) $ (18,854) $ (19,996) $ 416,963 $ 381,627
Net income from
discontinued
operations - (2,571) (39,533) (6,644)
----------- ----------- ------------ ------------
Net income
(loss) from
continuing
operations (18,854) (22,567) 377,430 374,983
Adjustments to
reconcile net
income (loss)
from continuing
operations to net
cash provided by
(used in)
operating
activities:
Depreciation 25,359 22,723 94,237 99,970
Acquisition-
related charges 2,747 3,969 13,337 16,545
Amortization of
purchased
intangible
assets 1,901 2,542 9,902 10,251
Amortization of
other purchased
intangible
assets 2,447 2,137 9,263 8,123
Share-based
compensation -
restricted
stock 1,335 1,119 5,335 5,489
Share-based
compensation -
all other 14,662 - 66,026 -
Loss (gain) on
disposal of
property and
equipment 394 188 329 (492)
Amortization of
premiums and
discounts on
available-for-
sale debt
securities 820 2,318 3,606 10,633
Net realized
(gain) loss on
sales of
available-for-
sale debt
securities 1 927 494 2,546
Net gains on
marketable
equity
securities and
other
investments (256) (4,883) (7,629) (5,225)
Minority
interest, net
of tax 68 (98) 691 (98)
Deferred income
taxes 16,335 60,756 (18,943) 18,460
Tax benefit from
share-based
compensation
plans 11,847 12,169 57,956 26,372
Excess tax
benefit from
share-based
compensation
plans (4,032) - (26,981) -
Loss (gain) on
foreign
exchange
transactions 6 475 (126) 67
Other (2,364) - (2,364) -
----------- ----------- ------------ ------------
Subtotal 52,416 81,775 582,563 567,624
----------- ----------- ------------ ------------
Changes in
operating
assets and
liabilities:
Accounts
receivable 47,205 44,872 (10,981) (4,708)
Prepaid
expenses,
taxes and
other current
assets (38,084) (43,450) (2,912) (40,409)
Accounts
payable (22,200) (28,716) 4,256 (3,060)
Accrued
compensation
and related
liabilities 32,435 26,332 26,438 12,568
Deferred
revenue 78,325 83,314 18,656 72,069
Income taxes
payable (207,326) (215,640) (6,276) (31,301)
Other
liabilities (78,929) (49,934) (16,284) 17,123
----------- ----------- ------------ ------------
Total
changes in
operating
assets and
liabilities (188,574) (183,222) 12,897 22,282
----------- ----------- ------------ ------------
Net cash
provided by
(used in)
operating
activities of
continuing
operations (136,158) (101,447) 595,460 589,906
Net cash provided
by (used in)
operating
activities of
discontinued
operations - (9,410) 14,090 7,700
----------- ----------- ------------ ------------
Net cash
provided by
(used in)
operating
activities (136,158) (110,857) 609,550 597,606
----------- ----------- ------------ ------------
Cash flows from
investing
activities:
Purchases of
available-for-
sale debt
securities (365,201) (908,817) (1,636,765) (2,937,586)
Liquidation and
maturity of
available-for-
sale debt
securities 376,238 1,134,645 1,525,656 3,007,528
Proceeds from sale
of marketable
equity securities
and other
investments 256 4,667 10,256 4,667
Net change in
funds held for
payroll
customers' money
market funds and
other cash
equivalents 51,491 3,394 539 (34,797)
Purchases of
property and
equipment (22,623) (13,218) (82,074) (69,535)
Proceeds from sale
of property - - 3,026 3,151
Change in other
assets (5,310) (1,001) (11,034) (5,446)
Net change in
payroll customer
funds deposits (51,491) (3,394) (539) 34,797
Acquisitions of
businesses and
intangible
assets, net of
cash acquired (5,373) (181) (42,231) (4,337)
Proceeds from
divestiture of
business 23,169 - 23,169 -
----------- ----------- ------------ ------------
Net cash
provided by
(used in)
investing
activities of
continuing
operations 1,156 216,095 (209,997) (1,558)
Net proceeds from
sales of
discontinued
operations - - 171,833 9,619
----------- ----------- ------------ ------------
Net cash
provided by
(used in)
investing
activities 1,156 216,095 (38,164) 8,061
----------- ----------- ------------ ------------
Cash flows from
financing
activities:
Change in long-
term obligations 421 (1,018) (923) (3,911)
Net proceeds from
issuance of
common stock
under stock plans 61,760 68,392 279,306 165,797
Purchase of
treasury stock (4,201) (209,220) (784,186) (709,887)
Excess tax benefit
from share-based
compensation
plans 4,032 - 26,981 -
----------- ----------- ------------ ------------
Net cash
provided by
(used in)
financing
activities 62,012 (141,846) (478,822) (548,001)
----------- ----------- ------------ ------------
Effect of exchange
rates on cash and
cash equivalents (378) (309) 3,195 184
----------- ----------- ------------ ------------
Net increase
(decrease) in cash
and cash
equivalents (73,368) (36,917) 95,759 57,850
Cash and cash
equivalents at
beginning of period 252,969 120,759 83,842 25,992
----------- ----------- ------------ ------------
Cash and cash
equivalents at end
of period $ 179,601 $ 83,842 $ 179,601 $ 83,842
=========== =========== ============ ============
Table E1
INTUIT INC.
RECONCILIATION OF FORWARD-LOOKING GUIDANCE FOR NON-GAAP FINANCIAL
MEASURES TO PROJECTED GAAP REVENUE, OPERATING INCOME (LOSS), AND EPS
(In thousands, except per share amounts)
(Unaudited)
Forward-Looking Guidance
------------------------------------------------------------
GAAP Non-GAAP
Range of Estimate Range of Estimate
----------------------- Adjust- -----------------------
From To ments From To
----------------------- --------- -----------------------
Three
Months
Ending[FEED_C
RLF]October
31, 2006
Revenue $ 335,000 $ 350,000 $ - $ 335,000 $ 350,000
Operating
loss $ (114,000) $ (99,000) $ 24,000 (a) $ (90,000) $ (75,000)
Diluted
loss per
share $ (0.18) $ (0.16) $ 0.04 (b) $ (0.14) $ (0.12)
Shares 346,000 348,000 346,000 348,000
Three
Months
Ending
January[FEED
_CRLF]31, 2007
Revenue $ 743,000 $ 760,000 $ - $ 743,000 $ 760,000
Diluted
earnings
per
share $ 0.34 $ 0.37 $ 0.05 (c) $ 0.39 $ 0.42
Three
Months
Ending
April 30,
2007
Revenue $1,075,000 $1,105,000 $ - $1,075,000 $1,105,000
Diluted
earnings
per
share $ 1.04 $ 1.08 $ 0.04 (d) $ 1.08 $ 1.12
Three
Months
Ending
July 31,
2007
Revenue $ 355,000 $ 370,000 $ - $ 355,000 $ 370,000
Diluted
loss per
share $ (0.09) $ (0.07) $ 0.05 (e) $ (0.04) $ (0.02)
Twelve
Months
Ending
July 31,
2007
Revenue $2,525,000 $2,575,000 $ - $2,525,000 $2,575,000
Operating
income $ 620,000 $ 646,000 $100,000 (f) $ 720,000 $ 746,000
Operating
margin 24% 25% 4%(f) 28% 29%
Diluted
earnings
per
share $ 1.18 $ 1.22 $ 0.18 (g) $ 1.36 $ 1.40
Shares 354,000 356,000 354,000 356,000
See "About Non-GAAP Financial Measures" immediately preceding Table B
for more information on these measures, the items excluded from the
most directly comparable GAAP measures in arriving at non-GAAP
financial measures, and the reasons management uses each measure and
excludes the specified amounts in arriving at each non-GAAP financial
measure.
(a) Reflects estimated adjustments for share-based compensation
expense of approximately $19 million; amortization of purchased
intangible assets of approximately $2 million; and
acquisition-related charges of approximately $3 million.
(b) Reflects the estimated adjustments in item (a) and income taxes
related to these adjustments.
(c) Reflects estimated adjustments for share-based compensation
expense of approximately $22 million; amortization of purchased
intangible assets of approximately $2 million; acquisition-related
charges of approximately $2 million; and income taxes related to
these adjustments.
(d) Reflects adjustments for share-based compensation expense of
approximately $21 million; amortization of purchased intangible
assets of approximately $2 million; acquisition-related charges of
approximately $2 million; and income taxes related to these
adjustments.
(e) Reflects adjustments for share-based compensation expense of
approximately $22 million; amortization of purchased intangible
assets of approximately $2 million; acquisition-related charges of
approximately $1 million; and income taxes related to these
adjustments.
(f) Reflects estimated adjustments for share-based compensation
expense of approximately $84 million; amortization of purchased
intangible assets of approximately $8 million; and
acquisition-related charges of approximately $8 million.
(g) Reflects the estimated adjustments in item (f) and income taxes
related to these adjustments.
TABLE E2
INTUIT INC.
RECONCILIATION OF HISTORICAL NON-GAAP FINANCIAL MEASURES
TO MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASURES
(In thousands, except per share amounts)
(Unaudited)
Non-
GAAP Adjustments GAAP
---------- ----------- ----------
Three months ended October 31,
2004
Operating loss $ (82,151) $ 8,607 (a) $ (73,544)
Diluted loss per share $ (0.12) $ - (b) $ (0.12)
Three months ended January 31,
2005
Operating income $ 218,188 $ 8,421 (c) $ 226,609
Operating margin 33.7% 1.3%(c) 35.0%
Diluted earnings per share $ 0.39 $ 0.01 (d) $ 0.40
Three months ended April 30,
2005
Operating income $ 422,214 $ 7,627 (e) $ 429,841
Operating margin 50.6% 0.9%(e) 51.5%
Diluted earnings per share $ 0.80 $ (0.03)(f) $ 0.77
Three months ended July 31,
2005
Operating loss $ (34,153) $ 7,630 (g) $ (26,523)
Diluted loss per share $ (0.06) $ 0.02 (h) $ (0.04)
Twelve months ended July 31,
2005
Operating income $ 524,098 $ 32,285 (i) $ 556,383
Operating margin 25.7% 1.6%(i) 27.3%
Diluted earnings per share $ 1.01 $ - (j) $ 1.01
Three months ended October 31,
2005
Operating loss $(102,621) $ 27,132 (k) $ (75,489)
Diluted loss per share $ (0.13) $ - (l) $ (0.13)
Three months ended January 31,
2006
Operating income $ 238,972 $ 24,065 (m) $ 263,037
Operating margin 32.2% 3.2%(m) 35.4%
Diluted earnings per share $ 0.50 $ (0.02)(n) $ 0.48
Three months ended April 30,
2006
Operating income $ 480,107 $ 22,758 (o) $ 502,865
Operating margin 50.4% 2.4%(o) 52.8%
Diluted earnings per share $ 0.84 $ 0.05 (p) $ 0.89
Three months ended July 31,
2006
Operating loss $ (56,914) $ 20,645 (q) $ (36,269)
Diluted loss per share $ (0.06) $ 0.03 (r) $ (0.03)
Twelve months ended July 31,
2006
Operating income $ 559,544 $ 94,600 (s) $ 654,144
Operating margin 23.9% 4.0%(s) 27.9%
Diluted earnings per share $ 1.16 $ 0.05 (t) $ 1.21
See "About Non-GAAP Financial Measures" immediately preceding Table B
for more information on these measures, the items excluded from the
most directly comparable GAAP measures in arriving at non-GAAP
financial measures, and the reasons management uses each measure and
excludes the specified amounts in arriving at each non-GAAP financial
measure. All per share figures in this Table E2 retroactively reflect
our July 2006 two-for-one common stock split.
(a) Reflects adjustments for share-based compensation expense for
restricted stock and restricted stock units of $1.6 million;
amortization of purchased intangible assets of $2.6 million; and
acquisition-related charges of $4.4 million.
(b) Reflects the adjustments in item (a); an adjustment for gains on
marketable equity securities and other investments, net of $0.2
million; and income taxes related to these adjustments. Also
reflects adjustments for certain GAAP tax benefits and for net
loss from discontinued operations of $0.6 million.
(c) Reflects adjustments for share-based compensation expense for
restricted stock and restricted stock units of $1.6 million;
amortization of purchased intangible assets of $2.6 million; and
acquisition-related charges of $4.2 million.
(d) Reflects the adjustments in item (c); an adjustment for gains on
marketable equity securities and other investments, net of $0.1
million; and income taxes related to these adjustments. Also
reflects adjustments for certain GAAP tax benefits and for net
income from discontinued operations of $2.3 million.
(e) Reflects adjustments for share-based compensation expense for
restricted stock and restricted stock units of $1.1 million;
amortization of purchased intangible assets of $2.5 million; and
acquisition-related charges of $4.0 million.
(f) Reflects the adjustments in item (e); an adjustment for gains on
marketable equity securities and other investments, net of $0.1
million; and income taxes related to these adjustments. Also
reflects adjustments for certain GAAP tax benefits and for net
income from discontinued operations of $2.4 million.
(g) Reflects adjustments for share-based compensation expense for
restricted stock and restricted stock units of $1.1 million;
amortization of purchased intangible assets of $2.5 million; and
acquisition-related charges of $4.0 million.
(h) Reflects the adjustments in item (g); an adjustment for gains on
marketable equity securities and other investments, net of $4.9
million; and income taxes related to these adjustments. Also
reflects adjustments for certain GAAP tax benefits and for net
income from discontinued operations of $2.6 million.
(i) Reflects adjustments for share-based compensation expense for
restricted stock and restricted stock units of $5.5 million;
amortization of purchased intangible assets of $10.3 million; and
acquisition-related charges of $16.5 million.
(j) Reflects the adjustments in item (i); an adjustment for gains on
marketable equity securities and other investments, net of $5.2
million; and income taxes related to these adjustments. Also
reflects adjustments for certain GAAP tax benefits and for net
income from discontinued operations of $6.6 million.
(k) Reflects adjustments for share-based compensation expense for
stock options, restricted stock, restricted stock units and
purchases under our Employee Stock Purchase Plan of $20.4 million;
amortization of purchased intangible assets of $2.9 million; and
acquisition-related charges of $3.8 million.
(l) Reflects the adjustments in item (k); an adjustment for gains on
marketable equity securities and other investments, net of $4.3
million; and income taxes related to these adjustments. Also
reflects adjustments for certain GAAP tax benefits and for net
income from discontinued operations of $11.8 million.
(m) Reflects adjustments for share-based compensation expense for
stock options, restricted stock, restricted stock units and
purchases under our Employee Stock Purchase Plan of $17.7 million;
amortization of purchased intangible assets of $2.8 million; and
acquisition-related charges of $3.6 million.
(n) Reflects the adjustments in item (m); an adjustment for gains on
marketable equity securities and other investments, net of $3.0
million; and income taxes related to these adjustments. Also
reflects adjustments for certain GAAP tax benefits and for net
income from discontinued operations of $27.7 million.
(o) Reflects adjustments for share-based compensation expense for
stock options, restricted stock, restricted stock units and
purchases under our Employee Stock Purchase Plan of $17.2 million;
amortization of purchased intangible assets of $2.3 million; and
acquisition-related charges of $3.3 million.
(p) Reflects the adjustments in item (o); an adjustment for gains on
marketable equity securities and other investments, net of $0.1
million; and income taxes related to these adjustments. Also
reflects adjustments for certain GAAP tax benefits.
(q) Reflects adjustments for share-based compensation expense for
stock options, restricted stock, restricted stock units and
purchases under our Employee Stock Purchase Plan of $16.0 million;
amortization of purchased intangible assets of $1.9 million; and
acquisition-related charges of $2.7 million.
(r) Reflects the adjustments in item (q); an adjustment for gains on
marketable equity securities and other investments, net of $0.3
million; and income taxes related to these adjustments. Also
reflects adjustments for certain discrete GAAP tax items,
including the tax on the gain on the sale of certain assets of
Intuit Construction Business Solutions.
(s) Reflects adjustments for share-based compensation expense for
stock options, restricted stock, restricted stock units and
purchases under our Employee Stock Purchase Plan of $71.4 million;
amortization of purchased intangible assets of $9.9 million; and
acquisition-related charges of $13.3 million.
(t) Reflects the adjustments in item (s); an adjustment for gains on
marketable equity securities and other investments, net of $7.6
million; and income taxes related to these adjustments. Also
reflects adjustments for certain discrete GAAP tax items,
including the tax on the gain on the sale of certain assets of
Intuit Construction Business Solutions, and for net income from
discontinued operations of $39.5 million.
Intuit Facts Intuit Inc.
Q4/FY06 & FY05 Investor Relations (650) 944-6165
NASDAQ: INTU
Financial Summary
-----------------
($ millions), except per share data
Q1 FY05 Q2 FY05 Q3 FY05 Q4 FY05 FY05
------------------------------- ---------
Revenue:
Small Business
---------------
QuickBooks Related $145.6 $222.3 $196.6 $188.4 $753.0
% change YOY 12% 10% 16% 23% 15%
Intuit-Branded Small
Business $53.5 $60.7 $56.4 $60.2 $230.7
% change YOY 14% 9% 9% 14% 11%
Tax
----
Consumer Tax $5.0 $141.1 $419.0 $5.6 $570.7
% change YOY -3% 9% 22% -45% 16%
Professional Tax $7.4 $150.6 $99.8 $7.2 $265.0
% change YOY 7% -4% 21% 27% 5%
Other Businesses $41.2 $73.5 $63.1 $40.5 $218.3
-----------------
% change YOY 8% -4% 32% 10% 9%
------------------------------- ---------
Total Revenue $252.8 $648.2 $834.9 $301.8 $2,037.7
% change YOY 11% 4% 20% 17% 13%
GAAP Operating Income
(Loss) ($82.2) $218.2 $422.2 ($34.2) $524.1
Non-GAAP Operating Income
(Loss)(A) ($73.5) $226.6 $429.8 ($26.5) $556.4
Non-GAAP Operating Margin
%(A) NA 35% 51% NA 27%
Interest and Other
Income(B) $3.9 $3.0 $5.7 $14.1 $26.6
GAAP Share Based
Compensation Expense $1.6 $1.6 $1.1 $1.1 $5.5
GAAP EPS Share Based
Compensation Expense ($0.01)
GAAP Diluted EPS(C) ($0.12) $0.39 $0.80 ($0.06) $1.01
Non-GAAP Diluted EPS(A)(C) ($0.12) $0.40 $0.77 ($0.04) $1.01
Basic Share Count 376.7 372.7 366.8 360.5 369.2
Diluted Share Count 376.7 380.2 373.8 360.5 376.8
GAAP Tax Rate (C) 42% 34% 30% NA 33%
Capital Expenditures $69.5M
Depreciation $100.0M
--------------------------------------------------------------
--------
Q1 FY06 Q2 FY06 Q3 FY06 Q4 FY06 FY06
------------------------------- ---------
Revenue:
Small Business
---------------
QuickBooks Related $178.1 $259.0 $211.6 $213.1 $861.7
% change YOY 22% 16% 8% 13% 14%
Intuit-Branded Small
Business $58.2 $69.6 $63.2 $60.6 $251.5
% change YOY 9% 15% 12% 1% 9%
Tax
----
Consumer Tax $7.9 $190.3 $499.3 $13.0 $710.5
% change YOY 57% 35% 19% 134% 25%
Professional Tax $8.9 $150.5 $104.7 $8.7 $272.9
% change YOY 20% 0% 5% 22% 3%
Other Businesses $51.0 $73.3 $73.9 $47.5 $245.7
-----------------
% change YOY 24% 0% 17% 17% 13%
------------------------------- ---------
Total Revenue $304.1 $742.7 $952.6 $342.9 $2,342.3
% change YOY 20% 15% 14% 14% 15%
GAAP Operating Income
(Loss) ($102.6)$239.0 $480.1 ($56.9) $559.5
Non-GAAP Operating Income
(Loss)(A) ($75.5) $263.0 $502.9 ($36.3) $654.1
Non-GAAP Operating Margin
%(A) NA 35% 53% NA 28%
Interest and Other
Income(B) $6.3 $5.6 $9.1 $19.7 $40.7
GAAP Share Based
Compensation Expense $20.4 $17.7 $17.2 $16.0 $71.4
GAAP EPS Share Based
Compensation Expense ($0.04) ($0.03) ($0.03) ($0.03) ($0.12)
GAAP Diluted EPS(C) ($0.13) $0.50 $0.84 ($0.06) $1.16
Non-GAAP Diluted EPS(A) (C) ($0.13) $0.48 $0.89 ($0.03) $1.21
Basic Share Count 354.8 350.3 343.7 342.5 347.9
Diluted Share Count 354.8 363.6 355.9 342.5 360.5
GAAP Tax Rate (C) 37% 37% 39% 43% 38%
Capital Expenditures $82.1M
Depreciation $94.2M
---------------------------------------------------------------
-------
Note: All amounts except GAAP EPS exclude information related to
Intuit Information Technology Solutions, which we sold in the second
quarter of fiscal 2006.
(A) These are non-GAAP financial measures. See tables B, E1 and E2 of
the accompanying press release for reconciliations of these
non-GAAP financial measures to the most directly comparable GAAP
measures and the reasons management uses each measure.
(B) Interest and other income includes $7.5 million in variable
royalty income from the purchaser of our former Quicken Loans
business in Q4 FY05 and Q4 FY06.
(C) In accordance with GAAP, diluted EPS includes ITS results for all
periods presented. The GAAP tax rate and GAAP diluted EPS for
fiscal 2005 also include the reversal of reserves related to
potential income tax exposures that have been resolved. Non-GAAP
EPS does not reflect the benefit of those reserve reversals. The
effective tax rates used to calculate non-GAAP EPS were as
follows:
34% for Q1 FY05, Q2 FY05 and Q3 FY05; 35% for full fiscal 2005, Q1
FY06 and Q2 FY06; 38% for Q3 FY06; and 37% for Q4 FY06 and for
full FY06.
Historical Segments: QuickBooks Related - QuickBooks Software,
QuickBooks Payroll, Financial Supplies, Innovative Merchant Solutions;
Intuit-Branded Small Business - Outsourced Payroll,
Intuit Real Estate Solutions, Intuit Distribution Management
Solutions, Intuit Construction Business Solutions; Consumer Tax -
TurboTax; Professional Tax - ProSeries, Lacerte; Other Businesses -
Quicken, Canada/UK
Intuit Facts Intuit Inc.
Investor Relations (650) 944-6165
NASDAQ: INTU
Business Metrics
----------------
Units in thousands,
except where noted FY04 Q1/FY05 Q2/FY05 Q3/FY05 Q4/FY05 FY05
------ ------------------------------- ------
QuickBooks Related(D)
---------------------
Simple Start, Basic,
and Pro 942 152 351 353 241 1,097
Premier 192 32 80 63 46 221
Enterprise 5 2 3 3 2 10
QuickBooks Online
Edition 10 5 8 7 8 28
------ ------------------------------- ------
Total QuickBooks
software units sold 1,149 191 442 426 297 1,356
QuickBooks Desktop
subscriptions 0 0 46 84 109 109
QuickBooks Online
Edition subscriptions 21 26 34 41 49 49
------ ------------------------------- ------
Total QuickBooks
Software
subscriptions(E) 21 26 80 125 158 158
QuickBooks Retail
Share(F)
Unit share FYTD 83% 83% 86% 88% 88% 88%
Dollar share FYTD 91% 89% 90% 92% 91% 91%
Merchant Account
Services customers 106 114 120 123 127 127
QuickBooks Do-It-
Yourself Payroll
customers 807 816 837 844 837 837
Intuit-Branded Small
Business (selected)
--------------------
Outsourced Payroll
Customers
Premier 21 20 19 17 15 15
Branded Outsourced
(Assisted & Complete) 51 51 53 54 54 54
------ ------------------------------- ------
Total Outsourced Payroll
Customers 72 71 72 71 69 69
Consumer Tax
------------
Federal TurboTax
(millions)
Desktop units retail 4.7 NM 2.6 2.7 NM 5.3
Desktop units direct 1.7 NM 1.1 0.6 NM 1.7
Web units paid 2.8 NM 0.6 2.7 NM 3.4
Free File Alliance 0.7 NM 0.4 1.8 NM 2.2
------ ------------------------------- ------
Total TurboTax federal
units 9.9 NM 4.7 7.8 NM 12.6
Federal TurboTax retail
share(G)
Unit share FYTD 72% NM 80% 79% 79% 79%
Dollar share FYTD 82% NM 85% 85% 85% 85%
Professional Tax
----------------
Professional Tax units 97 NM 94 12 NM 106
------------------------------------------------------------------
----
Units in thousands, except
where noted Q1/FY06 Q2/FY06 Q3/FY06 Q4/FY06 FY06
------------------------------- ------
QuickBooks Related(D)
---------------------
Simple Start, Basic, and Pro 213 414 370 232 1,229
Premier 36 107 79 55 277
Enterprise 3 3 3 3 12
QuickBooks Online Edition 7 8 8 6 29
------------------------------- ------
Total QuickBooks software units
sold 259 532 460 295 1,546
QuickBooks Desktop
subscriptions 124 142 151 155 155
QuickBooks Online Edition
subscriptions 56 64 72 78 78
------------------------------- ------
Total QuickBooks Software
subscriptions(E) 180 206 223 233 233
QuickBooks Retail Share(F)
Unit share FYTD 85% 90% 90% 89% 89%
Dollar share FYTD 89% 92% 92% 92% 92%
Merchant Account Services
customers 139 148 159 167 167
QuickBooks Do-It-Yourself
Payroll customers 853 881 890 892 892
Intuit-Branded Small Business
(selected)
-----------------------------
Outsourced Payroll Customers
Premier 15 14 13 13 13
Branded Outsourced (Assisted
& Complete) 55 59 61 62 62
------------------------------- ------
Total Outsourced Payroll
Customers 70 73 74 75 75
Consumer Tax
------------
Federal TurboTax (millions)
Desktop units retail NM 2.5 3.0 NM 5.5
Desktop units direct NM 1.0 0.6 NM 1.6
Web units paid NM 0.9 4.3 0.1 5.3
Free File Alliance NM 0.2 1.2 NM 1.4
------------------------------- ------
Total TurboTax federal units NM 4.7 9.0 0.1 13.8
Federal TurboTax retail
share(G)
Unit share FYTD NM 80% 79% 79% 79%
Dollar share FYTD NM 86% 85% 85% 85%
Professional Tax
----------------
Professional Tax units NM 100 11 1 112
------------------------------------------------------------------
---
(D) Sales to end users (sell-through) by Intuit and via retailers and
distributors for which Intuit relies on reports from these
merchants. These numbers include estimates, including estimates of
sales by merchants who do not report sales to Intuit.
These numbers reflect total QuickBooks purchases for the period,
including subscription purchases.
(E) Includes QuickBooks Online Edition, QuickBooks Pro and QuickBooks
Premier from Enhanced Payroll Plus subscription units. This
represents the cumulative base of QuickBooks subscribers.
Subscription units sold in any particular period are a subset of
total QuickBooks software units sold in that period.
(F) Sources: NPD Group Monthly Retail Software Report through June
2006.
(G) Sources: NPD Group Monthly Retail Software Report through April
2006.
Intuit Facts
FY07 Financial Outlook
Guidance(H)
----------------------------------------
------------------------------
($ millions), except per share data
Q1 FY07 Q2 FY07 Q3 FY07 Q4 FY07
--------------- -----------------------------------------
Revenue:
Small[FEE
D_CRLF]Business
---------
QuickBooks
% change
YOY
Payroll &
Payments
% change
YOY
Tax
---
Consumer Tax
% change
YOY
Professional
Tax
% change
YOY
Other
Businesses
-----------
% change
YOY
--------------- -----------------------------------------
Total Revenue $335-$350 $743-$760 $1,075-$1,105 $355-$370
% change
YOY 10%-15% 0%-2% 13%-16% 4%-8%
GAAP
Operating
Income
(Loss) ($114)-($99)
Non-GAAP
Operating
Income
(Loss)(I) ($90)-($75)
Non-GAAP
Operating
Margin %(I) NA
Interest and
Other
Income(J)
GAAP Share
Based
Compensation
Expense
GAAP EPS
Share Based
Compensation
Expense
GAAP Diluted
EPS(K) ($0.18)-($0.16) $0.34-$0.37 $1.04-$1.08 ($0.09)-($0.07)
Non-GAAP
Diluted
EPS(I)(K) ($0.14)-($0.12) $0.39-$0.42 $1.08-$1.12 ($0.04)-($0.02)
Basic Share
Count 346-348
Diluted Share
Count NA
GAAP Tax
Rate (K) 37%
------------------------------------------------------------------
----
Historical
FY07 FY06
-------------- ---------------
Revenue:
Small Business
--------------
QuickBooks $577-$599 $534.6
% change YOY 8%-12% 6%
Payroll & Payments $517-$536 $462.0
% change YOY 12%-16% 24%
Tax
---
Consumer Tax $782-$817 $710.5
% change YOY 10%-15% 25%
Professional Tax $273-$287 $272.9
% change YOY 0%-5% 3%
Other Businesses $362-$380 $362.3
----------------
% change YOY 0%-5% 11%
-------------- ---------------
Total Revenue $2,525-$2,575 $2,342.3
% change YOY 8%-10% 15%
GAAP Operating Income (Loss) $620-$646 $559.5
Non-GAAP Operating Income
(Loss)(I) $720-$746 $654.1
Non-GAAP Operating Margin
%(I) 28%-29% 28%
Interest and Other Income(J) $40.7
GAAP Share Based Compensation
Expense $71.4
GAAP EPS Share Based
Compensation Expense ($0.12)
GAAP Diluted EPS(K) $1.18-$1.22 $1.16
Non-GAAP Diluted EPS(I)(K) $1.36-$1.40 $1.21
Basic Share Count 343-345 347.9
Diluted Share Count 354-356 360.5
GAAP Tax Rate (K) 37% 38%
-----------------------------------------------------------[FEED_C
RLF]Note: All amounts except GAAP EPS for FY06 exclude information related
to Intuit Information Technology Solutions, which we sold in the
second quarter of fiscal 2006.
(H) All of the numbers provided in the table entitled "Guidance," are
forward-looking statements. Please see "Cautions About Forward-
Looking Statements" in the accompanying press release for
important information to assess when evaluating these statements.
Actual future results may differ materially due to a number of
risks and uncertainties.
(I) These are non-GAAP financial measures. See tables B, E1 and E2 of
the accompanying press release for reconciliations of these
non-GAAP financial measures to the most directly comparable GAAP
measures and the reasons management uses each measure.
(J) Interest and other income includes $7.5 million in variable
royalty income from the purchaser of our former Quicken Loans
business in Q4 FY06.
(K) In accordance with GAAP, diluted EPS includes ITS results for all
periods presented. The effective tax rates used to calculate non-
GAAP EPS were as follows:
35% for Q1 FY06 and Q2 FY06; 38% for Q3 FY06; 37% for Q4 FY06 and
for full year FY06.
New Segments: QuickBooks - QuickBooks Software, Financial Supplies;
Payroll & Payments - DIY Payroll, Assisted/Outsourced Payroll,
Innovative Merchant Solutions
Consumer Tax - TurboTax; Professional Tax - ProSeries, Lacerte; Other
Businesses - IDMS, IRES, Quicken
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