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TIBCO Software Inc. (TIBX) today announced results for its
third fiscal quarter, which ended on Sunday, September 2, 2012.
Total revenue for the third quarter of fiscal 2012 was $255.0 million
and net income was $26.1 million, or $0.15 per diluted share. This
compares to total revenue of $229.0 million and net income of $23.5
million, or $0.14 per diluted share, as reported for the third
quarter of fiscal 2011.
On a non-GAAP basis, net income for the third quarter of fiscal 2012
was $45.9 million or $0.27 per diluted share, compared with $39.4
million or $0.23 per diluted share for the third quarter of fiscal
2011. Non-GAAP operating income for the third quarter of fiscal 2012
was $68.8 million, an increase of 19% over non-GAAP operating income
of $57.6 million in the third quarter of fiscal 2011. 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 assume a non-GAAP effective tax rate
of 27% and 30% for the third quarter of fiscal years 2012 and 2011,
respectively.
"We continue to steadily build our business, with total revenue and
license revenue up by 18% and 14% respectively over the prior year
period, after adjusting for currency movements," said Vivek Ranadive,
TIBCO’s chairman and CEO. "By marrying mobile, social, cloud and
on-premise data streams, our infrastructure software platform
provides the backbone for data-in-motion, the ability to make sense
of data-at-rest, and the powerful context needed in the 21st century.
TIBCO is in a strategic position to benefit as IT shifts to
event-driven architectures and business looks for its two-second
advantage -- or the ability to anticipate change and opportunity
before and as it happens."
Third Quarter Fiscal 2012 Highlights
-- Record Q3 total revenue was $255.0 million, up 11% over last year on a
reported basis and up 18% on a constant currency basis;
-- Record Q3 license revenue was $99.1 million, up 9% over last year on a
reported basis and up 14% on a constant currency basis;
-- Q3 non-GAAP operating margin was 27%;
-- Q3 non-GAAP EPS was $0.27, up 19% over last year;
-- Repurchased 1.2 million shares;
-- Q3 total deferred revenue was $280.1 million, up 21% over last year
and up 10% over Q2 of 2012;
-- Diversified mix of business, with eight different industries
comprising 5% or more of business, including Financial Services,
Communications, Life Sciences, Energy, Manufacturing, Government,
Transportation & Logistics, and Retail.
-- TIBCO closed 134 deals over $100k and had 16 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 third 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
October 20, 2012 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
28093687.
About TIBCO
TIBCO Software Inc. (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(TM) -- 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 third 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 TIBCO’s ability to continue to build its
business, TIBCO’s ability to benefit from a shift to event-driven
architectures with its infrastructure software platform, and TIBCO’s
belief that this shift will remain a priority that creates
opportunities for TIBCO in up markets and down, 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, 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, 2011 and
Quarterly Report on Form 10-Q for the quarter ended June 3, 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)
September 2, November 30,
2012 2011
------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 675,274 $ 308,148
Short-term investments 196 225
Accounts receivable, net 206,985 196,419
Prepaid expenses and other current assets 72,704 61,864
------------- -------------
Total current assets 955,159 566,656
Property and equipment, net 94,862 89,871
Goodwill 530,779 451,821
Acquired intangible assets, net 131,904 97,258
Long-term deferred income tax assets 115,393 78,656
Other assets 71,586 48,676
------------- -------------
Total assets $ 1,899,683 $ 1,332,938
============= =============
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $ 25,940 $ 25,802
Accrued liabilities 127,462 129,168
Accrued restructuring costs 1,139 6,792
Deferred revenue 257,302 210,234
Current portion of long-term debt 36,323 2,397
------------- -------------
Total current liabilities 448,166 374,393
Accrued restructuring costs, less current
portion 666 1,050
Long-term deferred revenue 22,826 14,876
Long-term deferred income tax liabilities 58,224 4,540
Long-term income tax liabilities 26,513 20,772
Other long-term liabilities 2,883 2,445
Long-term debt, less current portion - 65,711
Convertible debt 520,715 -
------------- -------------
Total long-term liabilities 631,827 109,394
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Total liabilities 1,079,993 483,787
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Total equity 819,690 849,151
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Total liabilities and equity $ 1,899,683 $ 1,332,938
============= =============
TIBCO Software Inc.
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except net income per share)
Three Months Ended Nine Months Ended
-------------------------- --------------------------
September 2, August 28, September 2, August 28,
2012 2011 2012 2011
------------ ------------ ------------ ------------
Revenue:
License $ 99,103 $ 90,853 $ 273,999 $ 242,912
Service and
maintenance 155,918 138,120 454,087 387,823
------------ ------------ ------------ ------------
Total revenue 255,021 228,973 728,086 630,735
------------ ------------ ------------ ------------
Cost of revenue:
License 11,368 6,929 29,809 25,566
Service and
maintenance 60,881 56,425 177,417 152,462
------------ ------------ ------------ ------------
Total cost of
revenue 72,249 63,354 207,226 178,028
------------ ------------ ------------ ------------
Gross profit 182,772 165,619 520,860 452,707
------------ ------------ ------------ ------------
Operating expenses:
Research and
development 39,354 36,041 115,280 104,902
Sales and
marketing 76,803 72,182 231,444 203,614
General and
administrative 17,906 15,170 52,908 43,660
Amortization of
acquired
intangible assets 4,640 4,632 14,841 14,553
Acquisition
related and other 845 863 2,170 1,686
Restructuring
adjustment 72 143 (447) 110
------------ ------------ ------------ ------------
Total operating
expenses 139,620 129,031 416,196 368,525
------------ ------------ ------------ ------------
Income from
operations 43,152 36,588 104,664 84,182
Interest income 366 246 842 1,176
Interest expense (8,713) (940) (14,573) (2,937)
Other income
(expense), net (1,306) (503) 242 (1,929)
------------ ------------ ------------ ------------
Income before
provision for
income taxes and
noncontrolling
interest
33,499 35,391 91,175 80,492
Provision for income
taxes 7,400 11,800 17,900 19,796
------------ ------------ ------------ ------------
Net income 26,099 23,591 73,275 60,696
Less: Net income
attributable to
noncontrolling
interest 13 62 56 168
------------ ------------ ------------ ------------
Net income
attributable to
TIBCO Software Inc. $ 26,086 $ 23,529 $ 73,219 $ 60,528
============ ============ ============ ============
Net income per share
attributable to
TIBCO Software
Inc.:
Basic $ 0.16 $ 0.15 $ 0.46 $ 0.37
============ ============ ============ ============
Diluted $ 0.15 $ 0.14 $ 0.43 $ 0.35
============ ============ ============ ============
Shares used to
compute net income
per share
attributable to
TIBCO Software
Inc.:
Basic 159,308 161,876 160,402 161,430
============ ============ ============ ============
Diluted 169,165 172,957 169,836 173,703
============ ============ ============ ============
TIBCO Software Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
Nine Months Ended
--------------------------
September 2, August 28,
2012 2011
------------ ------------
Cash flows from operating activities:
Net income $ 73,275 $ 60,696
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation of property and equipment 10,992 9,801
Amortization of acquired intangible assets 26,719 26,788
Amortization of debt discount and
transaction costs 6,820 579
Stock-based compensation 45,130 36,186
Deferred income tax (20,183) 3,406
Tax benefits related to stock benefit plans 14,455 11,773
Excess tax benefits from stock-based
compensation (20,612) (31,506)
Other non-cash adjustments, net 905 85
Changes in assets and liabilities:
Accounts receivable (12,079) 15,887
Prepaid expenses and other assets (8,975) (8,962)
Accounts payable 159 (492)
Accrued liabilities and restructuring costs (5,576) (8,380)
Deferred revenue 54,285 28,273
------------ ------------
Net cash provided by operating activities 165,315 144,134
------------ ------------
Cash flows from investing activities:
Acquisitions, net of cash acquired (132,209) (22,579)
Purchases of property and equipment (16,366) (7,458)
Restricted cash pledged as security (1,169) (3,978)
Other investing activities, net 376 1,365
------------ ------------
Net cash used in investing activities (149,368) (32,650)
------------ ------------
Cash flows from financing activities:
Proceeds from issuance of convertible debt,
net 584,450 -
Proceeds from revolving credit facility, net 116,648 -
Principal payments on debt (151,785) (1,690)
Proceeds from issuance of common stock 25,390 42,402
Repurchases of the Company’s common stock (220,265) (145,216)
Withholding taxes related to restricted stock
net share settlement (17,383) (17,472)
Excess tax benefits from stock-based
compensation 20,612 31,506
------------ ------------
Net cash provided by (used in) financing
activities 357,667 (90,470)
------------ ------------
Effect of foreign exchange rate changes on cash
and cash equivalents (6,488) 7,212
------------ ------------
Net change in cash and cash equivalents 367,126 28,226
Cash and cash equivalents at beginning of period 308,148 243,989
------------ ------------
Cash and cash equivalents at end of period $ 675,274 $ 272,215
============ ============
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 operating
income, 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
----------------------------------------------
September 2, August 28,
2012 2011
---------------------- ----------------------
Net income Net income
attributable attributable
to TIBCO to TIBCO
Operating Software Operating Software
Income Inc. Income Inc.
--------- ------------ --------- ------------
GAAP $ 43,152 $ 26,086 $ 36,588 $ 23,529
Amortization of
intangible assets - cost
of revenue 4,714 4,714 2,492 2,492
Amortization of
intangible assets -
operating expense 4,640 4,640 4,632 4,632
Stock-based compensation
- cost of revenue 1,313 1,313 1,717 1,717
Stock-based compensation
- R&D expense 3,885 3,885 2,933 2,933
Stock-based compensation
- S&M expense 5,380 5,380 4,566 4,566
Stock-based compensation
- G&A expense 4,832 4,832 3,702 3,702
Acquisition related and
other 845 845 863 863
Non-cash interest expense
related to convertible
debt - 3,717 - -
Restructuring adjustment 72 72 143 143
Income tax adjustment for
non-GAAP - (9,582) - (5,132)
--------- ------------ --------- ------------
Non-GAAP $ 68,833 $ 45,902 $ 57,636 $ 39,445
========= ============ ========= ============
Diluted net income per
share attributable to
TIBCO Software Inc.:
GAAP $ 0.15 $ 0.14
============ ============
Non-GAAP $ 0.27 $ 0.23
============ ============
Shares used to compute
diluted net income per
share attributable to
TIBCO Software Inc.: 169,165 172,957
============ ============
TIBCO Software Inc.
Reconciliation of GAAP to Non-GAAP Measures
(unaudited)
(in thousands, except net income per share)
Nine Months Ended
-----------------------------------------------
September 2, August 28,
2012 2011
----------------------- ----------------------
Net income Net income
attributable attributable
to TIBCO to TIBCO
Operating Software Operating Software
Income Inc. Income Inc.
--------- ------------ --------- ------------
GAAP $ 104,664 $ 73,219 $ 84,182 $ 60,528
Amortization of
intangible assets - cost
of revenue 11,878 11,878 12,235 12,235
Amortization of
intangible assets -
operating expense 14,841 14,841 14,553 14,553
Stock-based compensation
- cost of revenue 3,711 3,711 3,548 3,548
Stock-based compensation
- R&D expense 11,244 11,244 8,585 8,585
Stock-based compensation
- S&M expense 15,367 15,367 12,856 12,856
Stock-based compensation
- G&A expense 14,808 14,808 11,197 11,197
Acquisition related and
other 2,170 2,170 1,686 1,686
Non-cash interest expense
related to convertible
debt - 5,281 - -
Restructuring adjustment (447) (447) 110 110
Income tax adjustment for
non-GAAP - (28,008) - (22,215)
--------- ------------ --------- ------------
Non-GAAP $ 178,236 $ 124,064 $ 148,952 $ 103,083
========= ============ ========= ============
Diluted net income per
share attributable to
TIBCO Software Inc.:
GAAP $ 0.43 $ 0.35
============ ============
Non-GAAP $ 0.73 $ 0.59
============ ============
Shares used to compute
diluted net income per
share attributable to
TIBCO Software Inc.: 169,836 173,703
============ ============
Media Relations Contact:
Leslie Moore
TIBCO Software Inc.
(650) 846-5025
Email Contact
Investor Relations Contact:
Matthew Langdon
TIBCO Software Inc.
(650) 846-5747
Email Contact
SOURCE: TIBCO Software Inc.
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