Citrix Reports an 8.5% Increase in Software License Revenue; Earnings Per Share Growth of 25% Over Comparable Period Last Year, 21% on an Adjusted Basis
FORT LAUDERDALE, Fla. - April 23, 2003 - Citrix Systems, Inc. (Nasdaq:CTXS), the global leader in access infrastructure solutions, today reported results for the first quarter ended March 31, 2003.
FINANCIAL RESULTS
Revenues for the three months ended March 31, 2003 were $143.5 million compared to $142.3 million in the same period of the prior year. Net income was $30.3 million for the first quarter of 2003, or $0.18 per share, as compared to $26.7 million or $0.14 per share in the comparable period of the prior year. Net income, adjusted to exclude the effect of amortization of intangible assets primarily related to business combinations, was $32.2 million for the first quarter of 2003, or $0.19 per share, as compared to $29.3 million, or $0.16 per share in the comparable period of the prior year.
"We had a solid quarter and I'm quite pleased with our performance," said Mark Templeton, president and chief executive officer for Citrix. "Our software license and technical services revenue was up about 8 percent over the same period last year. There was strength in medium-sized projects - both in first-time implementations and system expansions. We also saw growth in Subscription Advantage renewals, helping boost our deferred revenue.
"Overall we believe these results show that we are executing well, selling to both new and existing customers. Additionally, our results illustrate that our customers see great value in our access infrastructure solution, helping lower the costs of computing and increase the productive power of the on-demand enterprise."
FINANCIAL HIGHLIGHTS
· Quarterly year-over-year software license revenue grew 8.5%; technical services revenue grew 6.2%.
· Deferred revenue related to products and services grew by $6.7 million during the quarter to $110.7 million, primarily attributable to increased renewals in the Citrix® Subscription Advantage(tm) Program.
· Operating margin was 26.4% for the quarter; adjusted operating margin was 28.5%, excluding the effect of amortization of intangible assets primarily relating to business combinations. Operating margin for the comparable period last year was 21.7%; adjusted operating margin for the comparable period last year was 24.1%.
· First quarter 2003 operating expenses were down 5.4% versus first quarter 2002.
· Cash flow from operations was approximately $59 million for the quarter.
· Cash and investments totaled $722.6 million at the end of the quarter.
· During the quarter, the company repurchased 4.2 million shares at an average price per share of $12.23, net of premiums received.
CUSTOMER HIGHLIGHTS
Citrix closed several key deals in the first quarter including Adventist Health, Banco Pastor in Spain, Cargill, IKEA, Target Corporation, and others.
Adventist Health, one of the largest healthcare delivery networks on the west coast, with 20 hospitals located in California, Hawaii, Oregon and Washington, will be using Citrix access infrastructure software to deploy Cerner Corporation's Millennium Suite of healthcare applications. The software will be an integral part of delivering patient information at the point of care, whether it is in a hospital room or visiting a patient at home.
Cargill, Inc., an international company that merchandises, processes and distributes agricultural and other products and services throughout the world, recently expanded its use of Citrix MetaFrame XP(tm) Presentation Server to deploy Microsoft® and J.D. Edwards applications to its employees in North and Central America. Through simplified access to information, Cargill is able to improve internal efficiency and ultimately the delivery of customer solutions in supply chain management, food applications, and health and nutrition.
Target Corporation operates large-store general merchandise formats, including discount stores, moderate-priced promotional and traditional department stores, as well as a direct mail and on-line business. With more than 40,000 seats of Citrix MetaFrame XP Presentation Server, Target is able to connect employees and stores across the country to business applications, such as Lawson Financials and Siebel, as well as retail management and call center applications.
Citrix also announced in March that its flagship product, Citrix MetaFrame XP Presentation Server, has amassed 5.6 million new users since its launch in February 2001. In total, there are now nearly 50 million Citrix users at more than 120,000 organizations worldwide.
In addition, during the quarter, Citrix was awarded a U.S. General Services Administration (GSA) schedule 70 contract, which gives federal agencies a direct purchasing vehicle for acquiring Citrix access infrastructure solutions while utilizing architecture and integration services from the entire array of Citrix government integrators. Citrix software is currently used by hundreds of U.S. federal agencies including the U.S. Navy, Army and Air Force, the Department of Transportation and the Department of Veteran's Affairs.
ALLIANCE HIGHLIGHTS
· In February, the company announced the integration of MetaFrame XP with PeopleSoft® AppConnect 8. The certification affords IT administrators the ability to manage PeopleSoft browser-based applications and the end-user desktop environment with a rapid, server-based rollout across the enterprise.
· Also in February, Citrix and Verizon Wireless partnered to provide enhanced mobility solutions to the government, education, financial services, healthcare, manufacturing and telecommunications industries. The joint solution provides superior anywhere application access over the Verizon Wireless Express Network SM through MetaFrame XP Presentation Server.
· In March, Citrix, a Microsoft Global Gold Partner, was one of only seven independent software vendors (ISVs) to be named a Platinum Sponsor of the Microsoft Windows Server 2003 launch (April 2003). Citrix and Microsoft have worked closely together for over a decade, bringing increasing levels of value to joint customers by solving their complex IT issues and enhancing the performance of their infrastructures. Citrix will play a highly visible role at the Windows Server 2003 launch in San Francisco and in 45 cities and 22 countries around the world.
· The company also added two new systems integrators to its partner family in the first quarter. Schlumberger, a global technology services company, signed an agreement to be a Citrix Global 2000-Authorized Solutions Integrator for Citrix software. Northrop Grumman Information Technology Services, one of the largest IT services providers in the government sector, also signed a systems integrator agreement. Northrop Grumman Information Technology Services is focused in the federal defense and intelligence areas.
CITRIX METAFRAME ACCESS SUITE
At Citrix Product Strategy Day in March, the company announced that it was expanding into the multi-billion-dollar access infrastructure market with the launch of the Citrix MetaFrameÒ Access Suite. The strategy is designed to drive Citrix growth by leveraging the company's market-leading position in access infrastructure to expand into adjacent access-related markets. To this end, Citrix is extending its flagship MetaFrame brand into a suite of products that address end-to-end enterprise access requirements.
As part of the new product strategy, Citrix is effectively integrating multiple technologies that have traditionally been served by disparate vendors with little synergy and integration. The Citrix MetaFrame Access Suite provides customers with a complete and integrated access infrastructure solution that brings greater simplicity, cost-effectiveness and agility to IT organizations. The MetaFrame Access Suite includes:
· Citrix MetaFrame XP Presentation Server, Feature Release 3
· Citrix MetaFrame Presentation Server 1.2 for UNIX
· Citrix MetaFrame Secure Access Manager
· Citrix MetaFrame Conferencing Manager
· Citrix MetaFrame Password Manager
Availability of these products is planned over the next two quarters.
BUSINESS OUTLOOK
The company believes that continuing uncertainty in IT spending levels persists, making it particularly difficult to forecast product demand and other related matters. Accordingly, Citrix management offers the following guidance for the quarter ending June 30, 2003:
· Revenue is expected to be in the range of $135 million to $145 million.
· Earnings per share is expected to be in the range of $0.13 to $0.16.
· Adjusted earnings per share is expected to be in the range of $0.14 to $0.17, excluding the effect of amortization of intangible assets primarily related to business combinations.
The above statements are based on current expectations. These statements are forward-looking, and actual results may differ materially.
CONFERENCE CALL INFORMATION
To see webcast of the Citrix financial results conference call please visit the Investor Relations section of the Citrix corporate website at <http://www.citrix.com/investors>. The webcast will be available through May 7, 2003. In addition, an audio replay of the conference call will be available through April 30, 2003, by dialing (800) 642-1687 or (706) 645-9291 (passcode required: 9660664).
FULL FINANCIAL DETAILS
The attached document provides an overview of financial figures relating to this release.
ABOUT CITRIX
Citrix Systems, Inc. (Nasdaq:CTXS) is the global leader in access infrastructure solutions for businesses, government agencies, and educational institutions. The most trusted name in enterprise access, the Citrix MetaFrame Access Suite enables people to easily and securely access the on-demand enterprise, from anywhere, anytime, using any device over any connection. Nearly 50 million people in more than 120,000 organizations around the world use Citrix every day. Citrix customers include 100% of the Fortune 100 companies, 95% of the Fortune 500 and 95% of the Financial Times European 100. 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.