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TIBCO Software Reports First Quarter Results(Marketwire Via Acquire Media NewsEdge) PALO ALTO, CA -- (Marketwired) -- 03/20/14 -- TIBCO Software Inc. (NASDAQ: TIBX) today announced results for its fiscal first quarter, which ended on March 2, 2014. Total revenue for the first quarter of fiscal 2014 was $252.9 million and net income was $12.2 million, or $0.07 per diluted share. This compares to total revenue of $237.8 million and net income of $9.5 million, or $0.06 per diluted share, as reported for the first quarter of fiscal 2013. On a non-GAAP basis, net income for the first quarter of fiscal 2014 was $31.6 million or $0.19 per diluted share, compared with $31.1 million or $0.18 per diluted share for the first quarter of fiscal 2013. Non-GAAP operating income for the first quarter of fiscal 2014 was $47.2 million, resulting in a non-GAAP operating margin of 18.7%. This compares to non-GAAP operating income of $44.0 million, or a 18.5% non-GAAP operating margin in the first quarter of fiscal 2013. Non-GAAP results exclude amortization of acquired intangible assets, stock-based compensation expense, acquisition related and other expenses, restructuring activities and non-cash interest expense related to convertible debt and assumes non-GAAP effective tax rates of 26% and 19% for the first quarters of fiscal 2014 and 2013, respectively. "We've started our year with a step in the right direction, showing a record level of total revenue for a Q1," said Vivek Ranadivé, TIBCO's chairman and chief executive officer. "The world's leading companies are increasingly focused on not just big but fast data, and how to gain a real-time competitive edge from their information. Our unique combination of technologies allows us to create a true business advantage for our customers, or what we call the Two-Second Advantage." First Quarter Fiscal 2014 Highlights Total revenue of $252.9 million; License revenue of $83.0 million; Non-GAAP operating margin of 18.7%; Non-GAAP EPS of $0.19; Cash flow from operations of $51.8 million; Broad mix of business across major industries including Financial Services, Telecommunications, Energy, Transportation & Logistics, Manufacturing, Government, Retail, and Insurance; TIBCO closed 126 deals over $100k and had 18 deals over $1 million. Conference Call Details TIBCO has scheduled a conference call for 4:30 pm ET / 1:30 pm PT today to discuss its first 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 706-679-0841. Please join the conference call at least 10 minutes early to register. A replay of the conference call will be available until midnight ET on April 20, 2014 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 7022353. About TIBCO TIBCO Software Inc. (NASDAQ: TIBX) is a global leader in infrastructure and business intelligence software. Whether it's optimizing inventory, cross-selling products, or averting crisis before it happens, TIBCO uniquely delivers the Two-Second Advantage® -- the ability to capture the right information at the right time and act on it preemptively for a competitive advantage. With a broad mix of innovative products and services, TIBCO is the strategic technology partner trusted by businesses around the world. Learn more about TIBCO at www.tibco.com. TIBCO, Two-Second Advantage, and TIBCO Software are trademarks or registered trademarks of TIBCO Software Inc. or its subsidiaries in the United States and/or other countries. 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 first quarter of fiscal year 2014 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 TIBCO's ability to provide products that create a business advantage for its customers, 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 achieve improved performance and accelerate growth from its investments for growth and innovation, the impact of competition from alternative business models and new product introductions, TIBCO's ability to offer compelling, differentiated products, and the impact of competition from companies that are larger or have greater resources than TIBCO. 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, 2013. TIBCO assumes no obligation to update the forward-looking statements included in this release. TIBCO Software Inc. Condensed Consolidated Balance Sheets (unaudited) (in thousands) March 2, November 30, 2014 2013 -------------- -------------- ASSETS Current assets: Cash and cash equivalents $ 524,962 $ 662,109 Short-term investments 235,131 83,842 Accounts receivable, net 205,521 231,194 Prepaid expenses and other current assets 93,176 74,725 -------------- -------------- Total current assets 1,058,790 1,051,870 Property and equipment, net 102,867 101,050 Goodwill 588,191 582,091 Acquired intangible assets, net 110,028 119,418 Long-term deferred income tax assets 61,201 78,853 Other assets 71,247 72,831 -------------- -------------- Total assets $ 1,992,324 $ 2,006,113 ============== ============== LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 36,327 $ 37,701 Accrued liabilities 104,271 125,112 Accrued restructuring costs 1,797 5,819 Deferred revenue 271,902 258,315 -------------- -------------- Total current liabilities 414,297 426,947 Long-term deferred revenue 20,908 24,036 Long-term deferred income tax liabilities 1,118 1,334 Long-term income tax liabilities 54,460 55,733 Other long-term liabilities 6,519 4,788 Convertible debt 544,054 540,022 -------------- -------------- Total long-term liabilities 627,059 625,913 -------------- -------------- Total liabilities 1,041,356 1,052,860 -------------- -------------- Total equity 950,968 953,253 -------------- -------------- Total liabilities and equity $ 1,992,324 $ 2,006,113 ============== ============== TIBCO Software Inc. Condensed Consolidated Statements of Operations (unaudited) (in thousands, except net income per share) Three Months Ended ---------------------------- March 2, March 3, 2014 2013 ------------- ------------- Revenue: License $ 83,033 $ 78,263 Service and maintenance 169,846 159,527 ------------- ------------- Total revenue 252,879 237,790 ------------- ------------- Cost of revenue: License 11,950 11,261 Service and maintenance 65,582 62,376 ------------- ------------- Total cost of revenue 77,532 73,637 ------------- ------------- Gross profit 175,347 164,153 ------------- ------------- Operating expenses: Research and development 43,616 41,625 Sales and marketing 85,791 80,089 General and administrative 16,485 18,925 Amortization of acquired intangible assets 5,043 4,321 Acquisition related and other 35 327 Restructuring adjustment (759) 7 ------------- ------------- Total operating expenses 150,211 145,294 ------------- ------------- Income from operations 25,136 18,859 Interest income 279 198 Interest expense (8,520) (8,782) Other income (expense), net (323) (842) ------------- ------------- Income before provision for income taxes 16,572 9,433 Provision for income taxes 4,400 (100) ------------- ------------- Net income 12,172 9,533 Less: Net income attributable to noncontrolling interest 22 28 ------------- ------------- Net income attributable to TIBCO Software Inc. $ 12,150 $ 9,505 ============= ============= Net income per share attributable to TIBCO Software Inc.: Basic $ 0.07 $ 0.06 ============= ============= Diluted $ 0.07 $ 0.06 ============= ============= Shares used to compute net income per share attributable to TIBCO Software Inc.: Basic 162,299 161,521 ============= ============= Diluted 167,369 169,130 ============= ============= TIBCO Software Inc. Condensed Consolidated Statements of Cash Flows (unaudited) (in thousands) Three Months Ended ---------------------------- March 2, March 3, 2014 2013 ------------- ------------- Cash flows from operating activities: Net income $ 12,172 $ 9,533 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation of property and equipment 4,688 3,863 Amortization of acquired intangible assets 10,031 8,418 Amortization of debt discount and transaction costs 4,907 4,713 Stock-based compensation 12,763 16,392 Deferred income tax 424 (9,188) Tax benefits related to stock benefit plans 1,162 4,486 Excess tax benefits from stock-based compensation (1,057) (3,257) Other non-cash adjustments, net 191 139 Changes in assets and liabilities: Accounts receivable 26,292 63,733 Prepaid expenses and other assets (3,943) (2,426) Accounts payable (1,833) 1,953 Accrued and tax liabilities including restructuring costs (24,591) (23,383) Deferred revenue 10,556 (11,752) ------------- ------------- Net cash provided by operating activities 51,762 63,224 ------------- ------------- Cash flows from investing activities: Purchases of short-term investments (165,998) - Maturities and sales of short-term investments 16,373 51 Acquisitions, net of cash acquired - 2,280 Purchases of property and equipment (6,365) (2,586) Restricted cash pledged as security 629 (322) ------------- ------------- Net cash used in investing activities (155,361) (577) ------------- ------------- Cash flows from financing activities: Principal payments on debt - (620) Proceeds from issuance of common stock 2,991 6,086 Repurchases of the Company's common stock (35,799) (21,871) Withholding taxes related to restricted stock net share settlement (4,276) (4,890) Excess tax benefits from stock-based compensation 1,057 3,257 ------------- ------------- Net cash used in financing activities (36,027) (18,038) ------------- ------------- Effect of foreign exchange rate changes on cash and cash equivalents 2,479 506 ------------- ------------- Net change in cash and cash equivalents (137,147) 45,115 Cash and cash equivalents at beginning of period 662,109 727,309 ------------- ------------- Cash and cash equivalents at end of period $ 524,962 $ 772,424 ============= ============= 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 ------------------------------------------------ March 2, 2014 March 3, 2013 ----------------------- ----------------------- Net income Net income attributable attributable to TIBCO to TIBCO Operating Software Operating Software Income Inc. Income Inc. --------- ------------ ---------- ------------ GAAP $ 25,136 $ 12,150 $ 18,859 $ 9,505 Amortization of intangible assets - cost of revenue 4,988 4,988 4,097 4,097 Amortization of intangible assets - operating expense 5,043 5,043 4,321 4,321 Stock-based compensation - cost of revenue 1,930 1,930 1,603 1,603 Stock-based compensation - R&D expense 4,280 4,280 3,996 3,996 Stock-based compensation - S&M expense 4,402 4,402 5,239 5,239 Stock-based compensation - G&A expense 2,151 2,151 5,554 5,554 Acquisition related and other 35 35 327 327 Non-cash interest expense related to convertible debt - 4,032 - 3,819 Restructuring adjustment (759) (759) 7 7 Income tax adjustment for non-GAAP - (6,695) - (7,395) --------- ------------ ---------- ------------ Non-GAAP $ 47,206 $ 31,557 $ 44,003 $ 31,073 ========= ============ ========== ============ Diluted net income per share attributable toTIBCO Software Inc.: GAAP $ 0.07 $ 0.06 ============ ============ Non-GAAP $ 0.19 $ 0.18 ============ ============ Shares used to compute diluted net income per share attributable to TIBCO Software Inc.: 167,369 169,130 ============ ============ Media Contact: Leslie Moore TIBCO Software Inc. (650) 846-5025 Email Contact Investor Contact: Giuseppe Incitti TIBCO Software Inc. (650) 846-5637 Email Contact Source: TIBCO Software Inc. |