Citrix Systems, Inc. (NASDAQ:CTXS) today announced preliminary
results for the first quarter of fiscal year 2015 ended March 31,
2015.
Revenue for the quarter is expected to be in the range of $755
million to $760 million, below the company’s guidance of $780
million to $790 million. Net income for the first quarter of fiscal
year 2015 per diluted share is expected to be in the range of $0.15
to $0.17 compared to guidance of $0.20 to $0.22 per diluted share.
Non-GAAP net income for the first quarter of fiscal year 2015 per
diluted share is expected to be in the range of $0.63 to $0.65,
compared to guidance of $0.70 to $0.72 per diluted share. Non-GAAP
net income per diluted share excludes the effects of amortization
of acquired intangible assets, stock-based compensation expenses,
charges related to amortization of debt discount and restructuring
programs as well as a benefit from a previously disclosed patent
lawsuit, and the tax effects related to these items.
“We are disappointed with our Q1 results, but fully committed to
the financial, operational and strategic initiatives announced last
quarter,” said Mark Templeton, president and CEO for Citrix. “We
underestimated the impact caused by our restructuring,
organizational evolution, and changes to our field and channel
strategies, which were the result of important decisions made to
get the business ready for our next phase of growth. Additionally,
the increase in foreign exchange volatility impacted results and
customer-buying behavior to a larger extent than anticipated in the
quarter.
“We are continuing to optimize our business model and our focus
on improving margins remains unchanged.”
These preliminary, unaudited results are based on management’s
initial review of operations for the quarter ended March 31, 2015,
and remains subject to change based on management’s ongoing review
of the first quarter results.
Conference Call Information
Citrix will report final results for the first quarter of fiscal
year 2015 in its regularly scheduled earnings release and
conference call on Wednesday, April 22, 2015 after market close. A
news release will be issued at approximately 4:05 p.m. ET and the
conference call will begin at 4:45 p.m. ET to discuss financial
results, quarterly highlights and business outlook. The call will
include a slide presentation and participants are encouraged to
view the presentation via webcast at
http://www.citrix.com/investors.
The conference call may also be accessed by dialing:
(888) 799-0519 or (706) 634-0155
Using passcode: CITRIX
A replay of the webcast will be available on the Investor
Relations section of the Citrix corporate website at
http://www.citrix.com/investors for approximately 30 days.
About Citrix
Citrix (NASDAQ:CTXS) is leading the transition to
software-defining the workplace, uniting virtualization, mobility
management, networking and SaaS solutions to enable new ways for
businesses and people to work better. Citrix solutions power
business mobility through secure, mobile workspaces that provide
people with instant access to apps, desktops, data and
communications on any device, over any network and cloud. With
annual revenue in 2014 of $3.14 billion, Citrix solutions are in
use at more than 330,000 organizations and by over 100 million
users globally. Learn more at www.citrix.com.
For Citrix Investors
This release contains forward-looking statements which are made
pursuant to the safe harbor provisions of Section 27A of the
Securities Act of 1933 and 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 by Citrix's president and chief executive
officer, statements regarding expected revenue and net income per
diluted share for the first quarter 2015, and statements regarding
management's plans, objectives and strategies, 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, the
identification of adjustments to the preliminary results presented
in this release upon completion of the financial close process for
the quarter; the impact of the global economy and uncertainty in
the IT spending environment; the success and growth of the
company's product lines, including competition, demand and pricing
dynamics and other transitions in the markets for Citrix’s
virtualization products and collaboration services; the company’s
ability to develop and commercialize new products and services,
including its enterprise mobility products, while growing its
established virtualization, networking and collaboration products
and services; disruptions to execution due to its restructuring
programs, changes and transitions in key personnel and succession
risks; the introduction of new products by competitors or the entry
of new competitors into the markets for Citrix's products and
services; changes in our revenue mix towards products and services
with lower gross margins; seasonal fluctuations in the company's
business; failure to execute Citrix's sales and marketing plans;
failure to successfully partner with key distributors, resellers,
system integrators, service providers and strategic partners and
the company's reliance on and the success of those partners for the
marketing and distribution of the company's products; the company's
ability to maintain and expand its business in small sized and
large enterprise accounts; the size, timing and recognition of
revenue from significant orders; the success of investments in its
product groups, foreign operations and vertical and geographic
markets; the ability of Citrix to make suitable acquisitions on
favorable terms in the future; risks associated with Citrix's
acquisitions, including failure to further develop and successfully
market the technology and products of acquired companies, failure
to achieve or maintain anticipated revenues and operating
performance contributions from acquisitions, which could dilute
earnings, the retention of key employees from acquired companies,
difficulties and delays integrating personnel, operations,
technologies and products, disruption to our ongoing business and
diversion of management's attention from our ongoing business; the
recruitment and retention of qualified employees; risks in
effectively controlling operating expenses, including failure to
achieve anticipated cost savings from the restructuring programs
and other cost reduction initiatives; ability to effectively manage
our capital structure and the impact of related changes on our
operating results and financial condition; the effect of new
accounting pronouncements on revenue and expense recognition; the
risks associated with securing data and maintaining security of our
networks and customer data stored by our services; failure to
comply with federal, state and international regulations;
litigation and disputes, including challenges to our intellectual
property rights or allegations of infringement of the intellectual
property rights of others; the inability to further innovate our
technology or enter into new businesses due to the intellectual
property rights of others; changes in the company's pricing and
licensing models, promotional programs and product mix, all of
which may impact Citrix's revenue recognition; charges in the event
of a write-off or impairment of acquired assets, underperforming
businesses, investments or licenses; international market
readiness, execution and other risks associated with the markets
for Citrix's products and services; unanticipated changes in tax
rates, non-renewal of tax credits or exposure to additional tax
liabilities; risks of political and social turmoil; 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® is a trademark or registered trademark of Citrix
Systems, Inc. and/or one or more of its subsidiaries, and may be
registered in the U.S. Patent and Trademark Office and in other
countries. All other trademarks and registered trademarks are the
property of their respective owners.
Reconciliation of Non-GAAP Financial
Measures to Comparable U.S. GAAP Measures
(Unaudited)
Pursuant to the requirements of Regulation G, the Company has
provided a reconciliation of each non-GAAP financial measure used
in this earnings release to the most directly comparable GAAP
financial measure. These measures differ from GAAP in that they
exclude amortization primarily related to acquired intangible
assets and debt discount, stock-based compensation expenses,
charges associated with the Company’s restructuring programs,
significant litigation charges or benefits and the related tax
effect of those items. The Company's basis for these adjustments is
described below.
Management uses these non-GAAP measures for internal reporting
and forecasting purposes, when publicly providing its business
outlook, to evaluate the Company's performance and to evaluate and
compensate the Company's executives. The Company has provided these
non-GAAP financial measures in addition to GAAP financial results
because it believes that these non-GAAP financial measures provide
useful information to certain investors and financial analysts for
comparison across accounting periods not influenced by certain
non-cash items that are not used by management when evaluating the
Company's historical and prospective financial performance. In
addition, the Company has historically provided this or similar
information and understands that some investors and financial
analysts find this information helpful in analyzing the Company's
operating margins, operating expenses and net income and comparing
the Company's financial performance to that of its peer companies
and competitors.
Management typically excludes the amounts described above when
evaluating the Company's operating performance and believes that
the resulting non-GAAP measures are useful to investors and
financial analysts in assessing the Company's operating performance
due to the following factors:
• The Company does not acquire businesses on
a predictable cycle. The Company, therefore, believes that the
presentation of non-GAAP measures that adjust for the impact of
amortization and certain stock-based compensation expenses and the
related tax effects that are primarily related to acquisitions,
provide investors and financial analysts with a consistent basis
for comparison across accounting periods and, therefore, are useful
to investors and financial analysts in helping them to better
understand the Company's operating results and underlying
operational trends.
• Amortization costs and the related tax
effects are fixed at the time of an acquisition, are then amortized
over a period of several years after the acquisition and generally
cannot be changed or influenced by management after the
acquisition.
• Although stock-based compensation is an
important aspect of the compensation of the Company's employees and
executives, stock-based compensation expense is generally fixed at
the time of grant, then amortized over a period of several years
after the grant of the stock-based instrument, and generally cannot
be changed or influenced by management after the grant.
• Under GAAP, certain convertible debt
instruments that may be settled in cash on conversion are required
to be accounted for as separate liability (debt) and equity
(conversion option) components in a manner that reflects the
issuer’s non-convertible debt borrowing rate. The difference
between the imputed interest expense and the coupon interest
expense, net of the interest amount capitalized, is excluded from
management’s assessment of the company’s operating performance
because management believes that the exclusion of these charges
will better help investors and financial analysts understand the
Company's operating results and underlying operational trends.
• The charges incurred in conjunction with
the Company's restructuring programs, which relate to reductions in
headcount and the consolidation of leased facilities, are not
anticipated to be ongoing costs; and, thus, are outside of the
normal operations of the Company's business. The Company,
therefore, believes that the exclusion of these charges will better
help investors and financial analysts understand the Company's
operating results and underlying operational trends as compared to
prior periods.
• Charges or benefits related to significant
litigation are not anticipated to be ongoing costs; and, thus, are
outside of the normal operations of the Company's business. These
charges or benefits are recorded in the period when it is probable
a liability had been incurred and the amount of loss can be
reasonably estimated even though the subject matter of the
underlying dispute may relate to multiple or different periods. As
such, the Company believes that these expenses do not accurately
reflect the underlying performance of continuing operations for the
period in which they are incurred.
These non-GAAP financial measures are not prepared in accordance
with accounting principles generally accepted in the United States
("GAAP") and may differ from the non-GAAP information used by other
companies. There are significant limitations associated with the
use of non-GAAP financial measures. The additional non-GAAP
financial information presented here should be considered in
conjunction with, and not as a substitute for or superior to, the
financial information presented in accordance with GAAP (such as
net income and earnings per share) and should not be considered
measures of the Company's liquidity. Furthermore, the Company in
the future may exclude amortization primarily related to newly
acquired intangible assets and debt discount, additional charges
related to its restructuring programs, significant litigation
charges or benefits and the related tax effects from financial
measures that it releases, and the Company expects to continue to
incur stock-based compensation expenses.
CITRIX SYSTEMS, INC.
Non-GAAP Financial Measures
Reconciliation
(unaudited)
The following table shows the non-GAAP financial measures used
in this press release reconciled to the most directly comparable
GAAP financial measures.
Reconciliation of Expected Non-GAAP
Diluted Earnings per Share
For the Three
MonthsEnded
March 31,
2015 GAAP earnings per share – diluted $0.15 to $0.17 Add:
adjustments to exclude the effects of amortization of intangible
assets 0.17 Add: adjustments to exclude the effects of expenses
related to stock-based compensation 0.21 Add: adjustments to
exclude the effects of amortization of debt discount 0.05 Add:
adjustments to exclude the effects of restructuring charges 0.21
Less: benefit related to a previously disclosed patent lawsuit
(0.01) Less: tax effects related to above items (0.13) to (0.17)
Non-GAAP earnings per share – diluted $0.63 to $0.65
Citrix Systems, Inc.For media inquiries, contact:Eric Armstrong,
954-267-2977eric.armstrong@citrix.comorFor investor inquiries,
contact:Eduardo Fleites, 954-229-5758eduardo.fleites@citrix.com
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