David J. Henshall Appointed President and Chief
Executive Officer
Mark M. Coyle to Serve as Interim Chief
Financial Officer
Board Forms Operations and Capital Committee
with Focus on Margin Expansion and Capital Allocation
Robert Calderoni, Executive Chairman, to Lead
Operations and Capital Committee
Reaffirms Guidance for the Second Quarter
Citrix Systems, Inc. today announced that its board of directors
has appointed David J. Henshall, chief financial officer and chief
operating officer of Citrix, as president, chief executive officer
(CEO) and a member of the board, effective immediately. Mr.
Henshall’s appointment follows the mutual separation decision
between the Citrix board and Kirill Tatarinov, president, CEO and
director of Citrix.
The Citrix board has identified the leadership team to drive the
company’s long-term strategy and growth, led by David Henshall. In
addition to product excellence and growth, Citrix is committed to
operational efficiency and value creation. This includes a series
of strategic initiatives intended to drive operating margin
expansion, increase capital return and facilitate further
investment in accelerating Citrix’s transformation to a cloud-based
subscription business and in high-growth areas, such as data
security and analytics services. Citrix will provide additional
details on these initiatives on the upcoming second quarter
earnings call.
“David is a proven leader who knows our company inside and out,
and the board has the utmost confidence in him,” said Robert
Calderoni, executive chairman of the Citrix board. “Moving forward,
the board believes that accelerating our cloud transformation will
position the company for even greater success in the years ahead,
driving greater value for our shareholders. We now have the right
team in place to execute on that vision.”
David Henshall said, “We have a talented team at Citrix, and I
am honored to lead Citrix through this new chapter. We have created
an impressive platform of best-in-class products and services that
customers and partners rely on every day to embrace the future of
work. I can assure you that we will continue to deliver and
innovate for our customers and partners as we move forward as a
more powerful Citrix. Citrix will also leverage Bob’s extensive
experience successfully leading software companies through a
transition to the cloud and establishing subscription-based
businesses.
“Q2 demonstrated that the momentum of our cloud transformation
is accelerating, resulting in a year-over-year double-digit
increase in deferred revenue. Broad-based demand from customers for
Citrix Cloud and other subscription solutions was strong,
demonstrating the value of the innovation we are delivering to
customers and partners.”
Mr. Calderoni concluded, “On behalf of the entire Citrix board,
I want to thank Kirill for his leadership. The progress we made
under his leadership has positioned Citrix well for the next phase
of its corporate transformation.”
In connection with Mr. Henshall’s appointment, Mark M. Coyle,
Senior Vice President, Finance, has been appointed interim CFO,
effective immediately. The Company has retained a leading executive
search firm to assist in a comprehensive search process to identify
a permanent CFO with both internal and external candidates being
considered.
The Board has also formed an Operations and Capital Committee
that will work with Citrix’s management team and advise the Citrix
Board on a comprehensive review of opportunities to drive margin
expansion and return capital to shareholders. The Committee will be
led by Citrix Executive Chairman, Robert Calderoni, joined by
Citrix President and CEO, David Henshall, and Citrix Directors,
Jesse Cohn and Peter J. Sacripanti.
Reaffirms Guidance for the Second Quarter
Citrix also reaffirmed guidance for the second quarter of fiscal
year 2017 ended June 30, 2017. Revenue for the quarter is expected
to be in line with the company’s current guidance of $685 million
to $695 million with strong demand from customers for
subscription-based solutions.
Net income for the second quarter of fiscal year 2017 per
diluted share is expected to be in line with the company’s current
guidance of $0.70 to $0.74 per diluted share. Non-GAAP net income
for the second quarter of fiscal year 2017 per diluted share is
expected to be in line with the company’s current guidance of $0.97
to $1.00 per diluted share. Non-GAAP net income for the second
quarter of fiscal year 2017 excludes the effects of stock-based
compensation expense, amortization of acquired intangible assets,
amortization of debt discount, restructuring charges, and the tax
effects related to these items.
The above statements are based on management's initial review of
operations for the quarter ended June 30, 2017, remain subject to
change based on management's ongoing review of the second quarter
results and actual results may differ materially.
Second Quarter 2017 Earnings Call
Citrix will host a conference call Wednesday, August 2, 2017 at
4:45 p.m. ET to discuss its 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 can be viewed for approximately 30 days on the Investor
Relations section of the Citrix corporate website at http://www.citrix.com/investors.
About Citrix
Citrix (NASDAQ:CTXS) aims to power a world where people,
organizations and things are securely connected and accessible to
make the extraordinary possible. We help customers reimagine the
future of work by providing the most comprehensive secure digital
workspace that unifies the apps, data and services people need to
be productive, and simplifies IT’s ability to adopt and manage
complex cloud environments. With 2016 annual revenue of $3.42
billion, Citrix solutions are in use by more than 400,000
organizations including 99 percent of the Fortune 100 and 98
percent of the Fortune 500.
For Citrix Investors
This release contains forward-looking statements that 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 Executive Chairman and President
and Chief Executive Officer, statements contained in the Reaffirms
Guidance for the Second Quarter section and under the Non-GAAP
Financial Measures Reconciliation section, including statements
regarding revenue and net income per diluted share guidance for the
second quarter 2017, and statements regarding management's
strategic initiatives, 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 upon completion of the financial
close process for the quarter; risks associated with transitions in
key personnel and succession risk, including transitions in the
Company’s Chief Executive Officer, President and Chief Financial
Officer; the impact of the global economy, volatility in global
stock markets, foreign exchange rate volatility and uncertainty in
the IT spending environment; the success and growth of the
company's product lines, including competition, demand and pricing
dynamics and our ability to transition to new business models,
including a subscription model, and markets for Citrix's
virtualization and networking products and secure data services;
the introduction of new products by competitors or the entry of new
competitors into the markets for Citrix's products and services;
the concentration of customers in Citrix’s networking business; the
company's ability to develop, maintain a high level of quality and
commercialize new products and services while growing its
established virtualization and networking products and services;
changes in our revenue mix towards products and services with lower
gross margins; seasonal fluctuations in the company's business;
disruptions to execution due to actions that may be taken as a
result of Citrix’s operational reviews; 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 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 large enterprise accounts and reliance on large service provider
customers; 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 and
divestitures, 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, and
failure to realize expected benefits or synergies from
divestitures; risks associated with the failure to achieve the
expected strategic, operational and competitive benefits of the
separation of the GoTo business, and the effect of the separation
on Citrix its shareholders, customers, partners and employees; tax
risks related to the separation of the GoTo business; the
recruitment and retention of qualified employees; risks in
effectively controlling operating expenses; 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; the ability to maintain and protect our
collection of brands; changes in Citrix’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; risks related to servicing our
debt; unanticipated changes in tax rates, non-renewal of tax
credits or exposure to additional tax liabilities; risks of
political uncertainty and social turmoil; and other risks detailed
in Citrix’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
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 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, the related
tax effect of those items. The income tax effect on non-GAAP items
is calculated based upon the tax laws and statutory income tax
rates applicable in the tax jurisdiction(s) of the underlying
non-GAAP adjustment. The Company also excludes the effect of
anti-dilutive convertible note hedges in the number of shares used
in non-GAAP diluted earnings per share. 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 of intangible assets and 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 of intangible assets 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 Company has engaged in various
restructuring activities over the past several years that have
resulted in costs associated with reductions in headcount,
consolidation of leased facilities and related costs. Each
restructuring activity has been a discrete event based on a unique
set of business objectives or circumstances, and each has differed
from the others in terms of its operational implementation,
business impact and scope. The Company does not engage in
restructuring activities in the ordinary course of business. While
the Company’s operations previously benefited from the employees
and facilities covered by the various restructuring charges, these
employees and facilities have benefited different parts of the
Company’s business in different ways, and the amount of these
charges has varied significantly from period to period. 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.
- The Company has convertible note hedges
in place to offset potential dilution from the embedded conversion
feature in its convertible notes. For GAAP diluted earnings per
share purposes, the Company cannot reflect the anti-dilutive impact
of the convertible note hedges. The Company believes that
reflecting the anti-dilutive impact of the convertible note hedges
in non-GAAP diluted earnings per share provides investors with
useful information in evaluating the financial performance of the
Company on a per share basis.
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.
CITRIX SYSTEMS, INC.
Reconciliation of Non-GAAP Diluted Earnings
per Share Estimate
(In thousands, except per share, gross margin
and operating margin data - unaudited)
The following tables show the non-GAAP
financial measures used in this press release reconciled to the
most directly comparable GAAP financial measures.
Three Months Ended June 30, 2017 Number of
shares used in diluted earnings per share calculations: GAAP
weighted average shares outstanding 156,037 Less: effect of
convertible note hedges (2,644) Non-GAAP weighted average shares
outstanding 153,393
Three Months Ended June
30, 2017 GAAP earnings per share – diluted $0.70 to
$0.74 Add: stock-based compensation 0.26 Add: amortization of
intangible assets 0.10 Add: amortization of debt discount 0.05 Add:
restructuring charges 0.01 Less: tax effects related to above items
(0.15) to (0.16) Non-GAAP earnings per share – diluted $0.97 to
$1.00
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170710006299/en/
Citrix Systems, Inc.InvestorsEduardo Fleites,
954-229-5758eduardo.fleites@citrix.comorPressEric Armstrong,
954-267-2977eric.armstrong@citrix.com
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