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Citrix Reports First Quarter Earnings

  • 22 April, 2004 11:28

<p>First Quarter Revenues of US$161.3 Million; GAAP Earnings per Share of US$0.05 Include Debenture Redemption and Expertcity Acquisition Costs; Adjusted Earnings per Share of US$0.19</p>
<p>FORT LAUDERDALE, Fla. – 22 April 2004 – Citrix Systems, Inc., the global leader in access infrastructure solutions, today reported results for the first quarter ended March 31, 2004.</p>
<p>FINANCIAL RESULTS</p>
<p>Revenues for the three months ended March 31, 2004 were US$161.3 million, compared to US$143.5 million in the same period of the prior year, a 12.4% increase. Net income was US$9.3 million for the first quarter of 2004, or US$0.05 per diluted share on a GAAP basis, compared to US$30.3 million, or US$0.18 per diluted share on a GAAP basis, in the comparable period of the prior year. As expected, GAAP net income and GAAP earnings per share were down in the first quarter of 2004 as compared to the comparable period of the prior year due to a charge for in-process research and development of US$18.7 million in connection with the acquisition of Expertcity and a charge of approximately US$7.2 million for the write-off of deferred debt issuance costs associated with the redemption of the company’s convertible subordinated debentures. Net income, adjusted to exclude the effects of these charges and the amortisation of intangible assets primarily related to business combinations, was US$32.8 million for the first quarter of 2004, or US$0.19 per diluted share, compared to US$32.2 million, or US$0.19 per diluted share, in the comparable period of the prior year.</p>
<p>“We’re reporting solid results for the first quarter, and I am quite pleased,” said Mark Templeton, president and chief executive officer for Citrix. “Our results for the first quarter demonstrate we are building on the progress and momentum we established last year. Our focus is paying off – access is a growing strategic priority for organisations, and Citrix access infrastructure is a compelling solution. The integration of Expertcity as the Citrix Online Division is on track, giving us new access products, broader customer reach and additional subscription revenue. “We will continue to focus on defining, building and leading the access infrastructure market.”</p>
<p>FINANCIAL HIGHLIGHTS</p>
<p>· Net revenues for the first quarter increased approximately 12.4% over the comparable period last year.</p>
<p>· Deferred revenue increased by US$18.6 million, or approximately 11%, during the quarter to a total of US$183.7 million.</p>
<p>· Operating margin was 10.4% for the quarter; adjusted operating margin was 24.3% for the quarter, excluding the effects of write-offs for in-process research and development and amortisation of intangible assets primarily related to business combinations.</p>
<p>· Cash flow from operations was approximately US$78 million for the quarter.</p>
<p>· Cash and investments totaled approximately US$536 million at the end of the quarter.</p>
<p>· During the quarter, the company repurchased approximately 0.7 million shares at an average net price per share of US$20.96.</p>
<p>· In March, the company redeemed its zero coupon convertible subordinated debentures due in March 2019 for a total of approximately US$355.7 million for all outstanding debentures, resulting in a write-off of deferred debt issuance costs of approximately US$7.2 million.</p>
<p>· In February, the company closed on its acquisition of Expertcity, paying approximately US$231 million in cash and stock to Expertcity shareholders.</p>
<p>CUSTOMER HIGHLIGHTS</p>
<p>Citrix closed several large deals during the quarter, including Group Deutsche Post World Net, IZB SOFT, Sadia S/A, Sonepar Germany and Ysleta Independent School District.</p>
<p>Group Deutsche Post World Net is one of the largest and most productive logistics providers in the world. The company's regional subsidiary in Darmstadt, Germany, has licensed over 7,000 seats of Citrix® MetaFrame® Presentation Server to provide fast company-wide access to business-critical data.</p>
<p>IZB SOFT, a leading German IT company with 900 employees in Munich and Nuremberg, assisted 81 Bavarian savings banks and other institutions in the selection and implementation of a common development platform. IZB SOFT was contracted to re-centralise the IT systems for all 81 banks. By licensing 38,725 seats of Citrix MetaFrame Presentation Server, IZB SOFT has reduced overall operational costs.</p>
<p>Sadia S/A is Brazil's market leader in the production and sale of frozen and refrigerated chicken, turkey and pork products. The company has 40 sites around Brazil and looked to Citrix access infrastructure when it designed its access strategy. Using Citrix MetaFrame Presentation Server, nearly 4,000 Sadia employees will have secure anytime, anywhere access to SAP and over 200 other business-critical applications.</p>
<p>Sonepar Germany, a leading provider of electrical products and services, has implemented 1,500 seats of Citrix MetaFrame Presentation Server, with an additional 1,200 scheduled for deployment. With Citrix access infrastructure, Sonepar Germany provides its employees with instant, centralised and secure remote access to applications such as SAP, Microsoft® Office and SQL.</p>
<p>Located in El Paso, Texas, the Ysleta Independent School District (Ysleta ISD) is a Big 8 Texas School District recognised for its progressive approach to teaching and its focus on technology. The Ysleta Independent School District was the first urban school district in the state of Texas to be rated a “Recognised School District” and continues to receive national recognition for being a leader in educational innovation and achievement. To ensure that access to the application that tracks student performance is easily, securely and remotely available, Ysleta ISD has deployed 2,000 licenses of Citrix MetaFrame Presentation Server.</p>
<p>CITRIX ONLINE DIVISION</p>
<p>On February 27, 2004, Citrix completed the acquisition of Expertcity, Inc., the market leader in Web-based desktop access services. Citrix acquired Expertcity for approximately US$231 million, comprised of approximately US$113 million in cash and 5.6 million shares of the company’s stock valued at approximately US$118 million. Additional purchase price consideration of up to 0.6 million shares of the company’s stock will be issued to Expertcity stockholders if certain financial milestones are achieved by the Expertcity business in 2004. Expertcity now operates as the Citrix Online Division. Financial results for the three months ended March 31, 2004, include the financial results of the Citrix Online Division after the closing date of the acquisition.</p>
<p>As a result of the acquisition, Citrix’s access infrastructure product portfolio now includes GoToMyPC® and GoToAssist™. GoToMyPC is a popular software service for secure, browser-based and managed access to desktop PCs from anywhere. GoToAssist provides secure and reliable Web-based technical support and customer collaboration.</p>
<p>PRODUCT HIGHLIGHTS</p>
<p>During the quarter, Citrix Online announced Citrix GoToMeeting™ a next-generation Web-based collaboration service that provides the easiest, most secure and most cost-effective means for conducting meetings and demonstrations online. Citrix GoToMeeting makes instant real-time meetings with desktop-based applications simple, secure and easy. Two versions will be available for customer trial in the second quarter: Citrix GoToMeeting for individual professionals and small business, and Citrix GoToMeeting Corporate for the enterprise.</p>
<p>In March, Citrix announced the general availability of Citrix MetaFrame Secure Access Manager 2.2, a key component of the Citrix MetaFrame Access Suite. The latest version supports increased mobility and flexibility by enabling access to Microsoft Outlook synchronisation and offering workers additional choices in user interfaces based on their requirements. MetaFrame Secure Access Manager is the most cost-effective access infrastructure solution, providing fast deployment and secure, single-point access to aggregated information over the Web based on roles and access policies – without compromising ease of access.</p>
<p>In other product news, during the first quarter Citrix announced enhanced security and identity management capabilities within Citrix MetaFrame Password Manager, the most efficient single sign-on solution for accessing all password-protected applications, whether running in a Citrix or non-Citrix environment. These enhanced capabilities include out- of- the- box support for a broad range of authentication devices – smart cards, tokens, biometrics, and proximity devices – from 14 vendors including RSA Security, PassGo, Secure Computing, SAFLINK Corporation, NetMaker and Ensure.</p>
<p>Citrix accessPARTNER Network</p>
<p>At January’s Citrix Solutions Summit™, the company’s annual global partner conference, Citrix unveiled the Citrix accessPARTNER network, the new name for the company’s global network of partners. The new partner network unifies a strong ecosystem of solution advisors, educators and alliance partners to meet specific customer needs in developing and executing an access strategy.</p>
<p>In addition to the new partner network, Citrix introduced Advisor Rewards, a program that provides a new way for Citrix channel partners to enhance their profitability from sales of the Citrix MetaFrame Access Suite. Combining the industry’s best incentive vehicles, Advisor Rewards provides monetary rewards for Citrix Solution Advisors (formerly resellers within the Citrix Solutions Network™) that register deals, submit sales forecasts earlier in the volume licensing sales process and provide value-based solution selling around the Citrix MetaFrame Access Suite. The rewards can reach as high as 10 percent incremental margin of the suggested licensing price of the products sold and are available to Citrix Solution Advisors. The new program gives Solution Advisors a fixed commission rate for driving demand – no matter where the customer fulfills the licenses – rewarding value-added selling efforts.</p>
<p>ALLIANCE HIGHLIGHTS</p>
<p>During the first quarter, Citrix strengthened existing relationships and forged new ones with key partners including IBM, Verizon Wireless, and Intel.</p>
<p>· At the CeBIT conference in Hannover, Germany, Citrix announced that it would work with Intel through the Mobilised Software Initiative (MSI) to enable enterprises and ISVs to deploy applications for mobile devices. Citrix and Intel are working with organisations in the finance, education, healthcare and government sectors to architect mobile solutions that leverage the benefits of the Citrix MetaFrame Access Suite.</p>
<p>· Citrix announced that it joined IBM’s new Orchestration and Provisioning Automation Library (OPAL) initiative, which is designed to capture IT best practices and turn them into “workflows” for automating manually driven IT tasks. As an OPAL participant, Citrix worked with IBM Tivoli to develop a workflow for automatically provisioning Citrix MetaFrame Presentation Server environments using IBM Tivoli orchestration and provisioning products.</p>
<p>· Citrix, Verizon Wireless and Zumasys announced the completed rollout of Citrix access infrastructure over Verizon Wireless’ BroadbandAccess high-speed wireless service. The three companies worked together to deliver this solution to Continental Laboratory Products, which is using it to give its direct sales force on-demand wireless access to corporate information and Web content from the field.</p>
<p>· The Citrix Online Division announced an alliance with Sharp to make remote access to desktop PCs easier and more cost-effective. Under the agreement, Citrix GoToMyPC, the market-leading remote desktop access service, will now come with every Sharp Actius MM20 notebook computer.</p>
<p>BUSINESS OUTLOOK</p>
<p>Citrix management offers the following guidance for the quarter ending June 30, 2004:</p>
<p>· Revenue is expected to be in the range of US$170 million to US$180 million for the quarter ending June 30, 2004.</p>
<p>· GAAP earnings per share is expected to be in the range of US$0.14 to US$0.16 for the quarter ending June 30, 2004.</p>
<p>· Adjusted earnings per share, which excludes the amortisation of intangible assets primarily related to business combinations, is expected to be in the range of US$0.16 to US$0.18 for the quarter ending June 30, 2004.</p>
<p>The above statements are based on current expectations. These statements are forward-looking, and actual results may differ materially.</p>
<p>About Citrix
Citrix Systems, Inc. (Nasdaq:CTXS) is the global leader in access infrastructure solutions and the most trusted name in secure access for enterprises and individuals. Nearly 50 million people in more than 120,000 organisations around the world use Citrix every day. Our software gives people secure and well-managed access to business information wherever it lives—on demand. Citrix customers include 100% of the Fortune 100 companies, 99% of the Fortune 500, and 92% of the Fortune Global 500. Based in Fort Lauderdale, Florida, Citrix has offices in 22 countries, and more than 7,000 channel and alliance partners in more than 100 countries. For more information visit http://www.citrix.com.</p>
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<p>Citrix®, MetaFrame®, Citrix Solutions Summit™ and Citrix Solutions Network™ are registered trademarks or trademarks of Citrix Systems, Inc. in the U.S. and other countries. GoToMyPC®, GoToAssist™ and GoToMeeting™ are registered trademarks or trademarks of Citrix Online LLC in the U.S. and other countries. Microsoft® is a registered trademark of Microsoft Corporation in the U.S. and/or other countries. All product and company names herein may be trademarks of their respective owners.</p>

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