Mattie, 1998 earnings re-adjustment news for CTXS is finally out.
Basically what is happening to them and the rest of SW
companies is that by the new SEC ruling they
are required to amortize any R&D-related charges
over a period of few years, instead of one lump-sum charge.
Clint
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Monday February 22, 7:33 pm Eastern Time
Company Press Release
SOURCE: Citrix Systems Inc.
Citrix Systems, Inc. has Completed the Previously
Announced Re-Evaluation Of Write-Offs for In-Process Research and
Development
FORT LAUDERDALE, Fla., Feb. 22 /PRNewswire/ -- Citrix Systems, Inc. (Nasdaq: CTXS - news) has completed the previously
announced re-evaluation of write-offs for in-process research and development. Pursuant to this re-evaluation, the company has
revised the quarterly and annual results with respect to the year ended December 31, 1998.
During 1998, the company acquired and licensed certain technology assets with an aggregate value of approximately $74 million.
Based upon a subsequent re-evaluation of these transactions as a result of recent guidance published by the SEC, the company
decreased its write-offs for in-process research and development net of the amortization of intangibles by approximately $39.2
million for the fiscal year ended December 31, 1998. The company's net income for the same period increased by approximately
$24.8 million. The amortization of intangibles for subsequent years can be ascertained by reviewing the attached amortization
schedule.
Net revenues and earnings per share for the fiscal period ending December 31, 1998, excluding these one-time charges and
amortization of intangibles were $248.6 million and $1.74 per share, respectively.
Earnings per share for the fiscal period ending December 31, 1998 including the revised one-time charges and amortization of
intangibles were $1.34 per share. Quarterly condensed income statements are attached.
Commenting on the subject, James J. Felcyn, Jr., Citrix's Chief Financial Officer, stated, ''The in-process charges were revised to
address issues included in an SEC guidance letter dated September 9, 1998 to the chairman of the AICPA's SEC Regulations
Committee, which was issued subsequent to the date of the company's transactions. Furthermore, the effect of such revision does
not change the financial condition of the company.''
Founded in 1989, Citrix Systems, Inc. is a leader in system software for thin-client/server computing. The WinFrame® and
MetaFrame(TM) product lines 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, year 2000 compliance efforts of the company and third parties on which the company is dependent, 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 MetaFrame(TM) product lines 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. In addition, with respect to the statements made regarding
the adjustment of amounts previously charged to in-process research and development, the amount and rate of amortization of such
amounts included in this release are subject to a number of risks and uncertainties, including, without limitation, the effects of any
changes in accounting standards or guidance adopted by the Securities and Exchange Commission or the accounting profession.
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 Annual Report or Form 10-K for the year ended December 31,
1997 and the Quarterly Report or Form 10-Q for the quarter ended September 30,1998 on file with the Securities and Exchange
Commission, and its Form 10-K for the year ending December 31, 1998 to be filed 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.
CITRIX SYSTEMS, INC.
Condensed Consolidated Statements of Operations
(In thousands, except per share data - unaudited)
Three Months Ended
March 31, 1998
Restated As Reported
Net revenues $49,302 $49,302
Cost of goods sold 4,849 4,849
Gross margin 44,453 44,453
Operating expenses: (A)
Research and development 3,278 3,398
Sales, marketing and support 14,888 14,901
General and administrative 3,705 3,766
Amortization of Intangibles 774 --
In-process research and development 5,284 23,800
Total operating expenses 27,929 45,865
Income from operations 16,524 (1,412)
Other income, net 2,659 2,659
Income before income taxes 19,183 1,247
Income taxes 6,906 449
Net income $12,277 $798
Net income per share $0.27 $0.02
Weighted average shares outstanding 44,808 44,808
(A) Certain operating expenses as reported have been reclassified for
consistent presentation.
CITRIX SYSTEMS, INC.
Condensed Consolidated Statements of Operations
(In thousands, except per share data - unaudited)
Three Months Ended
June 30, 1998
Restated As Reported
Net revenues $56,204 $56,204
Cost of goods sold 4,681 4,681
Gross margin 51,523 51,523
Operating expenses: (A)
Research and development 4,211 4,387
Sales, marketing and support 18,583 18,598
General and administrative 4,101 4,183
Amortization of Intangibles 1,446 --
In-process research and development 10,700 33,797
Total operating expenses 39,041 60,965
Income from operations 12,482 (9,442)
Other income, net 2,550 2,550
Income before income taxes 15,032 (6,892)
Income taxes 5,412 (2,481)
Net income $9,620 $(4,411)
Net income per share $0.21 $(0.11)
Weighted average shares outstanding 45,418 41,870
(A) Certain operating expenses as reported have been reclassified for
consistent presentation.
CITRIX SYSTEMS, INC.
Condensed Consolidated Statements of Operations
(In thousands, except per share data - unaudited)
Three Months Ended
September 30, 1998
Restated As Reported
Net revenues $67,621 $67,621
Cost of goods sold 3,909 3,909
Gross margin 63,712 63,712
Operating expenses: (A)
Research and development 7,939 8,830
Sales, marketing and support 19,868 20,116
General and administrative 5,326 5,456
Amortization of Intangibles 4,168 --
In-process research and development 2,432 7,200
Total operating expenses 39,733 41,602
Income from operations 23,979 22,110
Other income, net 2,424 2,415
Income before income taxes 26,403 24,525
Income taxes 9,505 8,823
Net income $16,898 $15,702
Net income per share $0.37 $0.34
Weighted average shares outstanding 45,909 45,909
(A) Certain operating expenses as reported have been reclassified for
consistent presentation.
CITRIX SYSTEMS, INC.
Condensed Consolidated Statements of Operations
(In thousands, except per share data - unaudited)
Three Months Ended
December 31, 1998
Revised As Reported
Net revenues $75,510 $75,510
Cost of goods sold 3,243 3,243
Gross margin 72,267 72,267
Operating expenses: (A)
Research and development 7,431 7,983
Sales, marketing and support 21,517 21,752
General and administrative 6,997 7,113
Amortization of Intangibles 3,802 --
In-process research and development -- --
Total operating expenses 39,747 36,848
Income from operations 32,520 35,419
Other income, net 2,333 2,333
Income before income taxes 34,853 37,752
Income taxes 12,547 13,591
Net income $22,306 $24,161
Net income per share $0.48 $0.52
Weighted average shares outstanding 46,460 46,460
(A) Certain operating expenses as reported have been reclassified for
consistent presentation.
CITRIX SYSTEMS, INC.
Condensed Consolidated Statements of Operations
(In thousands, except per share data - unaudited)
Year Ended
December 31, 1998
Revised As Reported
Net revenues $248,636 $248,636
Cost of goods sold 16,682 16,682
Gross margin 231,954 231,954
Operating expenses: (A)
Research and development 22,858 24,597
Sales, marketing and support 74,855 75,366
General and administrative 20,131 20,520
Amortization of Intangibles 10,190 --
In-process research and development 18,416 64,797
Total operating expenses 146,450 185,280
Income from operations 85,504 46,674
Other income, net 9,968 9,968
Income before income taxes 95,472 56,642
Income taxes 34,370 20,391
Net income $61,102 $36,251
Net income per share $1.34 $0.79
Weighted average shares outstanding 45,648 45,648
(A) Certain operating expenses as reported have been reclassified for
consistent presentation.
CITRIX SYSTEMS, INC.
Condensed Consolidated Balance Sheet
(In thousands - unaudited)
Revised
December 31, 1998
Cash and short-term investments $184,481
Accounts receivable, net 32,798
Inventories 4,072
Other current assets 22,665
Total current assets 244,016
Property and equipment, net 14,183
Long-term investments 97,108
Intangible Assets (net) 46,799
Other assets 29,274
Total assets $431,380
Current liabilities 85,022
Other liabilities 48,905
Shareholders' equity 297,453
Total liabilities and shareholders' equity $431,380
CITRIX SYSTEMS, INC.
Schedule of Amortization of Intangibles
Fiscal Year 1999 $15.1 Million
Fiscal Year 2000 $14.7 Million
Fiscal Year 2001 $13.0 Million
Fiscal Year 2002 $4.0 Million
SOURCE: Citrix Systems Inc.
========================================================
Monday February 22, 8:05 pm Eastern Time
Citrix revises results after reviewing write-offs
FORT LAUDERDALE, Fla., Feb 22 (Reuters) - Software maker Citrix Systems Inc.
(Nasdaq:CTXS - news) on Monday said it revised its 1998 results after reevaluating write-offs for
in-process research and development in light of recent guidance released by the U.S. Securities
and Exchange Commission.
The company decreased its write-off for in-process research and development by about $39.2 million for the 1998 year, increasing
net income by $24.8 million for the year.
''The in-process charges were revised to address issues included in an SEC guidance letter dated Sept. 9,'' Citrix's Chief Financial
Officer, James Feleyn Jr., said in a statement.
Citrix shares rose 6-11/16 to 81-5/8 in Nasdaq Stock Market trade on Monday. The company's announcement came after the
market's close.
With the revision, the company's net income for the year increased to $61.1 million, or $1.34 a share, up from $36.3 million, or
$0.79 a share, reported earlier.
In the first quarter, the company's net income rose to a revised $12.3 million, or $0.27 a share, up from a reported $798,000, or
$0.02 a share.
The second quarter net income rose to a revised profit of $9.6 million, or $0.21 a share, up from a reported loss of $4.4 million, or
$0.11 a share.
The third quarter revised net income rose to $16.9 million, or $0.37 a share, compared with a reported $15.7 million, or $0.34 a
share.
In the fourth quarter, however, the revised net income fell to $22.3 million, or $0.48 a share, compared with a reported $24.2 million,
or $0.52 a share.
Last week, the company said it would review its write-offs in light of the SEC recommendations.
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