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TIBCO Software Reports First Quarter Results

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PALO ALTO, CA -- (Marketwire) -- 03/21/13 -- TIBCO Software Inc. (NASDAQ: TIBX) today announced results for its first fiscal quarter, which ended on March 3, 2013.

Total revenue for the first quarter of fiscal 2013 was $237.8 million and net income was $9.5 million, or $0.06 per diluted share. This compares to total revenue of $225.7 million and net income of $20.6 million, or $0.12 per diluted share, as reported for the first quarter of fiscal 2012.

On a non-GAAP basis, net income for the first quarter of fiscal 2013 was $31.1 million or $0.18 per diluted share, compared with $34.6 million or $0.20 per diluted share for the first quarter of fiscal 2012. Non-GAAP operating income for the first quarter of fiscal 2013 was $44.0 million, resulting in a non-GAAP operating margin of 19%. This compares to non-GAAP operating income of $47.6 million, or a 21% non-GAAP operating margin in the first quarter of fiscal 2012. 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 19% and 27% for the first quarter of fiscal 2013 and 2012, respectively.

"We remain very focused on continuing the changes we initiated last year to improve our execution," said Vivek Ranadivé, TIBCO's chairman and chief executive officer. "I believe we are making the right moves to steady our performance and deliver our next leg of growth. Our competitive differentiation remains strong, and we are well positioned to benefit from the current trends driving enterprise IT spending, such as 'big data,' especially with our event-driven platform approach to integrating and analyzing data in real-time."

First Quarter Fiscal 2013 Highlights

•Total revenue of $237.8 million; •License revenue of $78.3 million; •Non-GAAP operating margin of 19%; •Non-GAAP EPS of $0.18; •Cash flow from operations of $63.2 million; •Broad mix of business across major industries including Financial Services, Communications, Life Sciences, Retail, Energy, Manufacturing, Government, and Transportation & Logistics; •TIBCO closed 104 deals over $100k and had 12 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 706-758-2055. 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 April 21, 2013 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 19449674.

About TIBCO

TIBCO Software Inc. (NASDAQ: 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® -- 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 first quarter of fiscal year 2013 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 improve its execution, TIBCO's ability to steady its performance and deliver growth, and TIBCO's ability to benefit from current IT trends, 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 implement successfully the changes designed to improve performance and drive growth, 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, 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) March 3, November 30, 2013 2012 ------------ ------------ ASSETSCurrent assets: Cash and cash equivalents $ 772,424 $ 727,309 Short-term investments 34,238 34,411 Accounts receivable, net 167,783 234,100 Prepaid expenses and other current assets 73,262 61,174 ------------ ------------ Total current assets 1,047,707 1,056,994Property and equipment, net 97,074 98,474Goodwill 521,995 532,290Acquired intangible assets, net 114,108 123,261Long-term deferred income tax assets 69,208 64,549Other assets 66,288 71,340 ------------ ------------ Total assets $ 1,916,380 $ 1,946,908 ============ ============ LIABILITIES AND EQUITYCurrent liabilities: Accounts payable $ 24,356 $ 22,809 Accrued liabilities 105,374 133,596 Accrued restructuring costs 665 893 Deferred revenue 249,264 263,476 Current portion of long-term debt 35,091 35,711 ------------ ------------ Total current liabilities 414,750 456,485Accrued restructuring costs, less current portion 465 643Long-term deferred revenue 27,582 25,543Long-term deferred income tax liabilities 1,683 3,208Long-term income tax liabilities 28,201 26,263Other long-term liabilities 3,957 4,015Convertible debt 528,285 524,466 ------------ ------------ Total long-term liabilities 590,173 584,138 ------------ ------------ Total liabilities 1,004,923 1,040,623 ------------ ------------Total equity 911,457 906,285 ------------ ------------ Total liabilities and equity $ 1,916,380 $ 1,946,908 ============ ============ TIBCO Software Inc. Condensed Consolidated Statements of Operations (unaudited) (in thousands, except net income per share) Year Ended Three Months Ended November 30, ---------------------- ---------------------- March 3, March 4, March 3, 2013 2012 2013 2011 ---------- ---------- ---------- ----------Revenue: License $ 78,263 $ 82,315 $ 410,306 $ 377,618 Service and maintenance 159,527 143,387 614,307 542,628 ---------- ---------- ---------- ---------- Total revenue 237,790 225,702 1,024,613 920,246 ---------- ---------- ---------- ----------Cost of revenue: License 11,261 9,040 41,363 35,309 Service and maintenance 62,376 57,050 241,452 212,066 ---------- ---------- ---------- ---------- Total cost of revenue 73,637 66,090 282,815 247,375 ---------- ---------- ---------- ----------Gross profit 164,153 159,612 741,798 672,871 ---------- ---------- ---------- ----------Operating expenses: Research and development 41,625 37,321 154,535 143,173 Sales and marketing 80,089 75,718 317,001 285,366 General and administrative 18,925 17,595 70,868 59,990 Amortization of acquired intangible assets 4,321 4,548 19,654 19,149 Acquisition related and other 327 396 2,672 1,840 Restructuring adjustment 7 (119) (648) 8,926 ---------- ---------- ---------- ---------- Total operating expenses 145,294 135,459 564,082 518,444 ---------- ---------- ---------- ----------Income from operations 18,859 24,153 177,716 154,427 Interest income 198 255 1,109 1,374 Interest expense (8,782) (1,465) (23,396) (4,020) Other income (expense), net (842) 976 (115) (1,846) ---------- ---------- ---------- ----------Income before provision for income taxes and noncontrolling interest 9,433 23,919 155,314 149,935Provision for (benefit from) income taxes (100) 3,300 33,200 37,300 ---------- ---------- ---------- ----------Net income 9,533 20,619 122,114 112,635Less: Net income attributable to noncontrolling interest 28 (22) 107 229 ---------- ---------- ---------- ----------Net income attributable to TIBCO Software Inc. $ 9,505 $ 20,641 $ 122,007 $ 112,406 ========== ========== ========== ==========Net income per share attributable to TIBCO Software Inc.: Basic $ 0.06 $ 0.13 $ 0.76 $ 0.70 ========== ========== ========== ========== Diluted $ 0.06 $ 0.12 $ 0.72 $ 0.65 ========== ========== ========== ==========Shares used to compute net income per share attributable to TIBCO Software Inc.: Basic 161,521 161,460 160,330 161,469 ========== ========== ========== ========== Diluted 169,130 170,866 169,698 173,272 ========== ========== ========== ========== TIBCO Software Inc. Condensed Consolidated Statements of Cash Flows (unaudited) (in thousands) Three Months Ended -------------------- March 3, March 4, 2013 2012 --------- ---------Cash flows from operating activities: Net income $ 9,533 $ 20,619 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation of property and equipment 3,863 3,476 Amortization of acquired intangible assets 8,418 7,813 Amortization of debt discount and transaction costs 4,713 228 Stock-based compensation 16,392 15,324 Deferred income tax (9,188) (4,700) Tax benefits related to stock benefit plans 4,486 6,703 Excess tax benefits from stock-based compensation (3,257) (5,856) Other non-cash adjustments, net 139 (229) Changes in assets and liabilities: Accounts receivable 63,733 8,266 Prepaid expenses and other assets (2,426) 6,016 Accounts payable 1,953 (1,165) Accrued liabilities and restructuring costs (23,383) (36,305) Deferred revenue (11,752) 20,935 --------- --------- Net cash provided by operating activities 63,224 41,125 --------- ---------Cash flows from investing activities: Acquisition purchase price adjustment 2,280 - Purchases of property and equipment (2,586) (6,703) Restricted cash pledged as security (322) (968) Other investing activities, net 51 399 --------- --------- Net cash used in investing activities (577) (7,272) --------- ---------Cash flows from financing activities: Proceeds from revolving credit facility, net - 68,060 Principal payments on debt (620) (587) Proceeds from issuance of common stock 6,086 11,862 Repurchases of the Company's common stock (21,871) (67,525) Withholding taxes related to restricted stock net share settlement (4,890) (4,403) Excess tax benefits from stock-based compensation 3,257 5,856 --------- --------- Net cash provided by (used in) financing activities (18,038) 13,263 --------- ---------Effect of foreign exchange rate changes on cash and cash equivalents 506 (893) --------- ---------Net change in cash and cash equivalents 45,115 46,223Cash and cash equivalents at beginning of period 727,309 308,148 --------- ---------Cash and cash equivalents at end of period $ 772,424 $ 354,371 ========= =========




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 3, March 4, 2013 2012 ------------------------- -------------------------- Net income Net income attributable attributable to TIBCO to TIBCO Operating Software Operating Software Income Inc. Income Inc. ------------ ------------ ------------ ------------GAAP $ 18,859 $ 9,505 $ 24,153 $ 20,641 Amortization of intangible assets - cost of revenue 4,097 4,097 3,265 3,265 Amortization of intangible assets - operating expense 4,321 4,321 4,548 4,548 Stock-based compensation - cost of revenue 1,603 1,603 1,282 1,282 Stock-based compensation - R&D expense 3,996 3,996 4,005 4,005 Stock-based compensation - S&M expense 5,239 5,239 5,293 5,293 Stock-based compensation - G&A expense 5,554 5,554 4,745 4,745 Acquisition related and other 327 327 396 396 Non-cash interest expense related to convertible debt - 3,819 - - Restructuring adjustment 7 7 (119) (119) Income tax adjustment for non-GAAP - (7,395) - (9,480) ------------ ------------ ------------ ------------Non-GAAP $ 44,003 $ 31,073 $ 47,568 $ 34,576 ============ ============ ============ ============Diluted net income per share attributable to TIBCO Software Inc.: GAAP $ 0.06 $ 0.12 ============ ============ Non-GAAP $ 0.18 $ 0.20 ============ ============Shares used to compute diluted net income per share attributable to TIBCO Software Inc.: 169,130 170,866 ============ ============





Media Relations Contact:
Leslie Moore
TIBCO Software Inc.
(650) 846-5025
Email Contact

Investor Relations Contact:
Giuseppe Incitti
TIBCO Software Inc.
(650) 846-5637
Email Contact



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