FINANCIAL RESULTS
Net revenues for the third quarter ending September 30, 2000, were $113.5 million, up 7%
from $105.8 million in the comparable period of the prior year. Net income, excluding the
amortization of intangible assets and write-off of in-process research and development
relating to business combinations, was $27.5 million for the third quarter, or $0.14 per
share, as compared to $34.2 million, or $0.18 per share, for the third quarter of 1999. Net
income including amortization of intangible assets and write-off of in- process research and
development relating to business combinations was $21.6 million for the third quarter of
2000, or $0.11 per share, as compared with net income of $29.3 million, or $0.15 per
share, for the third quarter of 1999.
Net revenues for the first nine months of fiscal 2000 were $347.1 million, compared to
$285.2 million in the same period last year. Net income for the first nine months of fiscal
2000, excluding the amortization of intangible assets and write-off of in-process research
and development relating to business combinations, was $92.2 million, or $0.46 per share,
as compared to $92.5 million, or $0.49 per share, for the same period last year. Net
income for the first nine months of fiscal 2000, including the amortization of intangible assets
and write-off of in-process research and development relating to business combinations,
was $75.1 million, or $0.37 per share, as compared to $82.9 million, or $0.44 per share,
for the same period last year.
``We are pleased with these results, which we believe confirm the overall health of our
business,'' said Mark Templeton, Citrix president. ``Based upon our recent product
launches and exciting strategic vision outlined at Citrix iForum 2000, we believe that we are
well positioned to successfully execute on our strategic plan.''
HIGHLIGHTS
-- The company experienced sequential revenue growth of 7%. Additionally,
members of our enterprise sales force were re-assigned back into the
geographic regions to pursue a partner selling strategy. We believe
this will be a more effective sales approach by supporting both
customer and channel strategies.
-- Electronic delivery of licenses grew this quarter to 20% of product
sales compared to 16% in the previous quarter. Separately, total
worldwide channel inventory was reduced during the quarter in response
to the new product distribution mix.
-- Expenses, excluding amortization of intangibles, decreased in the third
quarter by 4% when compared to the previous quarter. This resulted in
an improvement to operating margins, which increased to 29.8% compared
to 22.4% in the second quarter.
-- Days sales outstanding (DSO's) decreased to 42 days from 49 days in the
previous quarter.
-- The company repurchased approximately 1.7 million shares of its common
stock during the quarter.
CUSTOMER WINS
The company signed customer agreements across a broad range of industry segments with
companies including Cisco Systems, Commerzbank, EDS, GE Capital, Lucent, Nokia,
Qwest, Target Corporation and Xerox Corporation. ``Large corporations continue to
benefit from Citrix's innovative software solutions, allowing IT managers to maximize the
efficiencies of their computing platforms and solve the problems of infrastructure complexity
that every corporation faces in the technology revolution,'' said David Jones, senior vice
president of worldwide sales.
CITRIX iFORUM(TM) 2000 CUSTOMER CONFERENCE HIGHLIGHTS
The company held its annual iForum conference in Orlando, Florida during the first week of
October with over 3,200 attendees, an increase of 40% from the previous year. The event
presented a unique opportunity to hear first- hand about real-world successes in using Citrix
technology, technology advances, and future trends in providing access to applications in
complex technology environments.
Conference highlights included keynotes by Citrix president Mark Templeton discussing the
role of the Web in application serving, the emerging importance of enterprise application
portals, and how the Citrix strategy complements Microsoft's recently launched .NET
strategy.
Microsoft product management was represented and expanded on the benefits of using
Windows 2000 and explained how Citrix® MetaFrame(TM) software adds value on top of
the Windows® 2000 platform, a point Citrix further demonstrated by previewing some of
the capabilities of its upcoming ``Extended Platform'' release of MetaFrame.
PRODUCT ANNOUNCEMENTS
A major highlight of the quarter was the announcement of new products to speed delivery of
applications over the Web, forming an end-to-end system for secure, Web-based access to
corporate applications.
Citrix launched Feature Release 1 for MetaFrame for Windows -- software designed to
improve performance, enhance usability and increase security. Citrix also delivered a new
version of its NFuse(TM) application portal software, which gives IT departments a
scalable, secure and simple means of integrating applications into Web portals for users.
Concurrent with the Feature Release and NFuse announcements, the company introduced
Citrix Extranet(TM) as a server-based computing solution that enables secure access to
applications over public networks such as the Internet.
Continuing to expand its flagship MetaFrame product beyond Windows platforms to other
operating systems, Citrix made several announcements related to its MetaFrame for
UNIX® family of products. Jointly participating at major IBM and Hewlett-Packard
industry events, Citrix announced versions of MetaFrame for both IBM's AIX operating
system and Hewlett-Packard's HP-UX operating systems. In addition, Citrix announced the
availability of a new and enhanced version of the MetaFrame for Solaris(TM) Operating
Environment software.
Following a successful preview of its ``Project Vertigo'' user interface server technology at
the Microsoft Developers Conference earlier in the summer, Citrix demonstrated the beta
version of Project Vertigo at iForum.
NEW ALLIANCES
Citrix aligned itself with several new companies and partners to focus on
expanding both its existing product lines and new partner opportunities.
-- In the portal software segment, Citrix announced licensing deals with
Brio, Epicentric, Plumtree, TopTier, and Viador to market and
demonstrate Citrix NFuse application portal software.
-- In the ASP market, Citrix announced a global alliance with British
Telecom's Ignite to enable independent software vendors to offer
customers network hosted and rented applications worldwide.
-- In the professional services space, Citrix announced a global systems
integration and professional services agreement with Compaq Computer
Corporation that enables Compaq to market and sell Citrix software
products and provide professional information technology services.
-- In the UNIX arena, Citrix announced a licensing agreement with SunGard
Trading and Risk Systems to embed Citrix MetaFrame for the Solaris
Operating Environment in their trading and risk management
applications, enabling customers to benefit from these applications
being made instantly available to virtually any device, over any
connection -- anywhere in the world.
OTHER HIGHLIGHTS
-- Citrix appointed Jeanne Moreno as its new chief information officer to
focus on improving the global implementation of infrastructure
solutions within Citrix. Her past experience from BMC Software and
Kimberly-Clark will play a major role in managing Citrix's data center
and telecommunications and supporting the company's future growth
objectives.
-- Citrix expanded its global market presence through the opening of a new
subsidiary in India, following the acquisition of India's PowerTel Boca
Ltd., an Internet solutions and services company. Citrix's presence
will allow a greater focus on the increasing number of Indian
businesses realizing the benefits of application server computing.
-- Citrix announced that it signed a distribution agreement with Beijing
Stone Investment Co. Ltd., a national distributor of electronic
products, e-commerce, and Internet applications and services in China.
This agreement offers Citrix the ability to expand its presence in the
growing China marketplace and will focus on delivering its server-based
computing solutions.
-- As the ASP market continues to develop, Citrix announced that it signed
its 100th member to the iBusiness ASP Program, surpassing the century
mark in a program that was launched 12 months ago during Citrix's
annual iForum conference. The addition of 19 ASP's increased total
membership to 105 and broadened its geographic reach.
CONFERENCE CALL INFORMATION
Citrix management will be hosting a conference call today at 5:00 pm EST to discuss the
results and highlights for the third quarter ended September 30, 2000. The call will include
slide presentations and participants are encouraged to listen in and view the slide
presentation via webcast at www.citrix.com/investors or www.vcall.com . The
teleconference may also be accessed in listen-only mode by dialing 703-871-3073. A
replay of the teleconference will be available by dialing 703-925-2435, using passcode
4639186 or by visiting the Investor Relations section of the Citrix corporate website at
www.citrix.com/investors .
ABOUT CITRIX
Founded in 1989, Citrix Systems, Inc. is a global leader in application server software and
services that offer ``Digital Independence(TM)'' - the ability to run any application on any
device over any connection, wireless to Web. Its products, including MetaFrame(TM)
application server software, NFuse(TM) application portal software and Independent
Computing Architecture (ICA®), a core application-server technology, have been widely
adopted by the corporate mainstream to achieve key business goals. The firm, which
markets its solutions through value-added resellers, system integrators and OEM licensees,
is headquartered in Fort Lauderdale, Florida. Citrix is traded on The Nasdaq Stock
Market(SM) under the symbol CTXS and is part of the Standard & Poor's 500 Index.
FOR CITRIX INVESTORS
This release contains forward-looking statements which are made pursuant to the safe
harbor provisions of Section 21E of the Securities Exchange Act of 1934. The
forward-looking statements in this release do not constitute guarantees of future
performance. Investors are cautioned that statements in this press release which are not
strictly historical statements, including, without limitation, statements regarding current or
future financial performance, management's plans and objectives for future operations,
product plans and performance, management's assessment of market factors, as well as
statements regarding the strategy and plans of the company and its strategic partners,
constitute forward-looking statements. Such forward-looking statements are subject to a
number of risks and uncertainties that could cause actual results to differ materially from
those anticipated by the forward- looking statements, including, without limitation, risks
associated with the following: the success of the company's MetaFrame product line and the
acceptance of the company's ICA protocol; the company's ability to develop and
commercialize new products and services; the company's success in expanding into new
geographic markets; the company's ability to expand its core business in large enterprise
accounts; the company's ability to succeed in the transition to a paper/electronic licensing
model; the size, timing and recognition of revenue from significant orders; increased
competition, including potential competition from Microsoft and other companies; the results
of the company's iBusiness and other new licensing programs; the rate of growth of the ASP
market, and the company's ability to continue to develop and market products to meet the
requirements of this market; the proportion of revenues derived from distributors, OEMs
and other channels; changes in the company's pricing policies or those of its competitors,
including Microsoft; the costs of developing, acquiring, or integrating new technologies or
enhancements to existing products; the company's reliance upon its strategic relationships
with Microsoft and other strategic partners; management of growth; the possibility of
undetected software errors; dependence on proprietary technology; risks that the
company's portal strategy will not succeed in the manner anticipated; as well as risks of
downturns in economic conditions generally, and in the software industry specifically, and
risks associated with competition and competitive pricing pressures, and other risks detailed
in the company's filings with the Securities and Exchange Commission. Citrix assumes no
obligation to update any forward-looking information contained in this press release or with
respect to the announcements described herein.
Citrix®, ICA®, MetaFrame(TM), NFuse(TM), Citrix Extranet(TM), Citrix iForum(TM)
and Digital Independence(TM) are registered trademarks or trademarks of Citrix Systems,
Inc. in the U.S. and other countries. All other trademarks and registered trademarks are
property of their respective owners.
CITRIX SYSTEMS, INC.
Condensed Consolidated Statements of Income
(In thousands, except per share data - unaudited)
Three Months Nine Months
Ended Sept 30, Ended Sept 30,
2000 1999 2000 1999
Net revenues $113,491 $105,780 $347,092 $285,233
Cost of goods sold 8,854 3,303 22,387 10,925
Gross margin 104,637 102,477 324,705 274,308
Operating expenses:
Research and development 12,532 9,524 36,945 26,644
Sales, marketing and support 43,999 31,214 130,613 85,352
General and administrative 14,305 11,169 43,173 25,927
Amortization of intangibles 7,890 5,235 22,550 12,776
In-process research and
development - 2,300 - 2,300
Total operating expenses 78,726 59,442 233,281 152,999
Income from operations 25,911 43,035 91,424 121,309
Other income, net 4,970 2,818 15,912 8,221
Income before income taxes 30,881 45,853 107,336 129,530
Income taxes 9,264 16,507 32,201 46,631
Net income $21,617 $29,346 $75,135 $82,899
Earnings per share
-- diluted $0.11 $0.15 $0.37 $0.44
Weighted average shares
outstanding 192,879 193,137 201,536 189,836
Adjusted net income $27,528 $34,168 $92,219 $92,548
Adjusted earnings per
share -- diluted $0.14 $0.18 $0.46 $0.49
Note: The above presentation of adjusted net income and adjusted net
income per share has been adjusted to exclude the effects of in-process
research and development of $2,300 for the three months and nine months
ended September 30, 1999 and the amortization of intangible assets
acquired from purchases, business combinations, and licenses of $7,890 and
$5,235 for the three months ended September 30, 2000 and 1999,
respectively, and $22,550 and $12,776 for the nine months ended September
30, 2000 and 1999, respectively. These intangible assets primarily
include goodwill and core technology.
Condensed Consolidated Balance Sheets
(In thousands - unaudited)
Sept. 30, 2000 Dec. 31, 1999
Cash and short-term investments $608,884 $438,094
Accounts receivable, net 53,111 55,327
Inventories 5,107 7,731
Other current assets 105,550 69,092
Total current assets 772,652 570,244
Property and equipment, net 49,155 31,530
Long-term investments 193,744 325,755
Intangible assets, net 69,300 63,396
Other assets 34,734 46,932
Total assets $1,119,585 $1,037,857
Current liabilities $153,034 $136,995
Long-term liabilities 350,312 367,792
Stockholders' equity 616,239 533,070
Total liabilities and stockholders' equity $1,119,585 $1,037,857
SOURCE: Citrix Systems, Inc. |
