Here is the full report in fixed font:
FORT LAUDERDALE, Fla., April 20 /PRNewswire/ -- Citrix Systems, Inc.
(NASDAQ:CTXS) today reported record results for its first quarter ended March
31, 1998.
Net revenues for the first quarter of 1998 were $49.3 million, up 129%
from $21.5 million in the comparable period of the prior year. Net income,
excluding one-time charges described below, was $16.0 million for the first
quarter, or $0.36 per share, compared with a net income of $7.5 million or
$0.18 per share for 1997's first quarter. During the quarter, Citrix
consummated the previously announced technology acquisition from Insignia
Solutions and licensing agreement with EPiCON and recognized one-time pre-tax
charges of approximately $23.8 million resulting from the write-off of
in-process research and development. Net income for the first quarter of
1998, including the one-time charges resulting from said acquisition and
licensing was $798,000 or $0.02 per share.
In February 1998, Citrix effected a three-for-two stock split. All share
and per share information has been restated to reflect the effect of the
split. In addition, all earnings per share amounts represent diluted earnings
per share as defined within Statement of Financial Accounting Standards No.
128.
Commenting on the company's performance, Roger W. Roberts, Citrix's chief
executive officer, said, "Our quarterly results reflected customer demand for
our WinFrame thin-client/server software product and further demonstrated
market support for ICA as an emerging standard for delivering Windows(R)
applications to enterprise desktops and a variety of thin-client devices.
Furthermore, we are looking forward to the market introduction of our
MetaFrame(TM) product, (formerly known as the pICAsso project). The MetaFrame
product will include new features to support and manage large-scale
thin-client/server deployments while providing interoperability with our
existing WinFrame(R) product line. This will provide our customers with the
flexibility to leverage their existing WinFrame investment while capitalizing
on the many benefits of thin-client/server computing." While Citrix currently
expects to begin commercial shipment of its MetaFrame product in the next
ninety days, the actual date of shipment will be dependent upon, among other
matters, the shipment date of the Microsoft(R) Windows(R) Terminal Server
product (formerly known as "Hydra"). Any significant delay in commercial
shipment of the Microsoft(R) Windows(R) Terminal Server product or the
Citrix's MetaFrame product could have a material adverse effect on Citrix's
results of operations.
Commenting on the marketplace, Citrix chairman Edward Iacobucci stated,
"The thin-client/server market continues to rapidly evolve around the core
business requirement to better manage application delivery systems. We have
continued to focus on this issue by establishing broad alliances with channel
members, OEMs and device manufacturers that form the basis for cooperation in
the emerging thin-client/server industry. Our efforts have become visible
through implementation of our "ICA Everywhere" strategy resulting in recent
agreements to license our ICA technology by IBM Corporation, Sharp
Electronics, Hewlett Packard Medical Products Group and Symbol Technologies.
The licensing of ICA technology remains a cornerstone of our strategy to
accelerate the growth of the thin-client/server market by ensuring that both
businesses and consumers have an ever expanding array of client devices and
appliances from which to access information."
In addition, Citrix announced that on April 17, 1998 it had entered into
an amendment to its May 1997 agreement with Microsoft(R) Corporation. Under
the terms of the amendment, assuming certain milestones are reached by Citrix
with respect to Microsoft(R)'s release to manufacturing of the Windows(R)
Terminal Server product, Citrix's right to receive royalties on future sales
of the Windows(R) Terminal Server product releases 4.0 and 5.0 under the 1997
agreement would be amended to require payment of the full amount in quarterly
payments. Further among other matters, Microsoft(R) would commit to make
commercially reasonable efforts to include Windows(R) Terminal Server product
functionality in its base Windows(R) NT Server product. In the event that the
milestones were not achieved, the existing royalties in the 1997 agreement of
up to $100.0 million on sales of the Windows(R) Terminal Server product would
continue to apply. In the event the milestones are achieved, Citrix intends
to recognize the royalty payments ratably over the remaining term of the May
1997 agreement.
In conclusion, Roberts noted, "As we look ahead, we shall focus our
efforts with the intention of providing our customers innovative solutions to
their enterprise computing needs. Our financial condition remains solid with
$221.8 million in cash and short-term investments and stockholders' equity of
$203.6 million at the end of the first quarter of 1998."
Founded in 1989, Citrix Systems, Inc. is a leader in system software for
thin-client/server computing. The WinFrame product line and ICA
thin-client/server technology are marketed through a worldwide business
alliance of value-added resellers, system integrators, OEM licensees and
industry associates. Citrix is based in Fort Lauderdale, Fla. and is traded
on the Nasdaq National Market under the symbol CTXS.
Forward-looking statements in this release are made pursuant to the safe
harbor provisions of Section 21E of the Securities Exchange Act of 1934.
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 which involve risks and uncertainties, including, without
limitation, risks associated with the company's reliance upon its strategic
relationships with Microsoft and other strategic partners, dependence upon
broad-based acceptance of the company's ICA protocol, management of growth,
the possibility of undetected software errors, and dependence on proprietary
technology, 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.
In addition, revenues and earnings in the software industry are subject to
fluctuation and the growth rates recently experienced by the company do not
necessarily represent future operating results. The company's future
operating results may fluctuate as a result of a number of factors, including
the success of the company's WinFrame and future MetaFrame(TM) product line
and the acceptance of the company's ICA protocol; the size, timing and
recognition of revenue from significant orders and royalty payments from
Microsoft and others; increased competition; the proportion of revenues
derived from distributors, OEMs and other channels; changes in the company's
pricing policies or those of its competitors; costs of developing, acquiring,
or integrating new technologies or enhancements to existing products; and
other factors. Investors should not use any one period's results as a
benchmark for future growth. For a more detailed description of the risk
factors associated with the company, please refer to the company's 1997 Form
10-K on file with the Securities and Exchange Commission, and its First
Quarter 1998 Form 10-Q to be filed shortly with the Commission. Citrix
assumes no obligation to update any forward-looking information contained in
this press release or with respect to the announcements described herein.
The Citrix(R) logo, WinFrame(R) and ICA(R) are registered trademarks of
Citrix Systems, Inc. MultiWin(TM) and MetaFrame(TM) are trademarks of Citrix
Systems, Inc. for which there are pending applications for registration in the
U.S. Patent and Trademark Office. All other trademarks and registered
trademarks are property of their respective owners.
CITRIX SYSTEMS, INC.
Condensed Consolidated Statements of Operations
(In thousands, except per share data - unaudited)
Three Months Ended
March 31, March 31,
1998 1997
Net revenues $49,302 $21,521
Cost of goods sold 4,849 2,194
Gross margin 44,453 19,327
Operating expenses:
Research and development 3,398 1,513
Sales, marketing and support 14,901 6,198
General and administrative 3,766 1,483
In-process research and development 23,800 --
Total operating expenses 45,865 9,194
Income (loss) from operations (1,412) 10,133
Other income, net 2,659 1,575
Income before income taxes 1,247 11,708
Income taxes 449 4,215
Net income $798 $7,493
Net income per share $0.02 $0.18
Weighted average shares outstanding 44,808 42,614
Condensed Consolidated Balance Sheets
(In thousands - unaudited)
March 31, December 31,
1998 1997
Cash and short-term investments $221,784 $229,192
Accounts receivable, net 20,655 12,631
Inventories 2,275 2,273
Other current assets 21,619 14,266
Total current assets 266,333 258,362
Property and equipment, net 10,450 6,678
Other assets 16,848 17,628
Total assets $293,631 $282,668
Current liabilities $43,408 $35,445
Other liabilities 46,650 50,375
Stockholders' equity 203,573 196,848
Total liabilities and stockholders' equity $293,631 $282,668
SOURCE Citrix Systems, Inc.
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