SOURCE: TIBCO Software Inc.

TIBCO Software Inc.

June 23, 2011 16:05 ET

TIBCO Software Grows License Revenue by 32% and Total Revenue by 25% Over Q2 2010

Non-GAAP EPS Increases to $0.21

PALO ALTO, CA--(Marketwire - Jun 23, 2011) - TIBCO Software Inc. (NASDAQ: TIBX) today announced results for its second fiscal quarter, which ended on May 29, 2011.

Total revenue for the second quarter of fiscal 2011 was $216.4 million and net income was $21.0 million, or $0.12 per diluted share. This compares to total revenue of $173.3 million and net income of $12.8 million, or $0.08 per diluted share, as reported for the second quarter of fiscal 2010.

On a non-GAAP basis, net income for the second quarter of fiscal 2011 was $36.3 million or $0.21 per diluted share, compared with $26.2 million or $0.15 per diluted share for the second quarter of fiscal 2010. Non-GAAP operating income for the second quarter of fiscal 2011 was $50.8 million, an increase of 31% over non-GAAP operating income of $38.8 million in the second quarter of fiscal 2010. Non-GAAP results exclude amortization of acquired intangible assets, stock-based compensation expense, acquisition related and other expenses and restructuring activities and assume a non-GAAP effective tax rate of 26% and 31% for the second quarter of fiscal years 2011 and 2010, respectively.

"We experienced another quarter of accelerating demand in Q2, with total revenue growing 25%, license revenue growing 32%, and non-GAAP EPS growing 40% over the same period a year ago," said Vivek Ranadivé, TIBCO's chairman and CEO. "The threats and opportunities of the 21st century require a software platform like ours that is engineered from the ground up to operate in real-time, handle events and not just transactions, and deliver superior context to decision makers. Working with TIBCO, customers are addressing many of today's greatest needs, such as preventing service outages before they happen, avoiding security breaches before data is lost, and optimizing the revenue opportunity at every point of sale."

Second Quarter Fiscal 2011 Highlights

--  Record Q2 total revenue was $216.4 million;
--  Record Q2 license revenue was $82.0 million;
--  Non-GAAP operating margin was 23%;
--  Repurchased 1.6 million shares;
--  Strong mix of business across major industries including Financial
    Services, Telecommunications, Energy, Government, Transportation &
    Logistics, Retail, Life Sciences, Manufacturing, and Insurance;
--  TIBCO closed 119 deals over $100k and had 21 deals over $1 million; and
--  TIBCO expanded its business with leading companies and agencies in the
    second quarter such as Anadarko Petroleum, Defense Intelligence Agency,
    DB Netz AG, Eni, Essilor, First National Bank (South Africa), The
    Forzani Group Ltd., Procter & Gamble, Renaissance Capital, Scotia
    Capital, and Vodafone UK.

Conference Call Details

TIBCO has scheduled a conference call for 4:30 pm ET / 1:30 pm PT today to discuss its second quarter results. The conference call will be hosted by InterCall and may be accessed over the internet at www.tibco.com or via dial-in at 877-293-9114 or 706-758-2055. Please join the conference call at least 10 minutes early to register. A replay of the conference call will be available until midnight PT on July 23, 2011 at www.tibco.com or via dial-in at 800-642-1687 or 706-645-9291. The pass code for both the call and the replay is 72367850.

About TIBCO

TIBCO Software Inc. (NASDAQ: TIBX) is a provider of infrastructure software for companies to use on-premise or as part of cloud computing environments. Whether it's optimizing claims, processing trades, cross-selling products based on real-time customer behavior, or averting a crisis before it happens, TIBCO provides companies the two-second advantage™ -- the ability to capture the right information at the right time and act on it preemptively for a competitive advantage. More than 4,000 customers worldwide rely on TIBCO to manage information, decisions, processes and applications in real time. Learn more at www.tibco.com.

TIBCO, The Power of Now, two-second advantage, and TIBCO Software are trademarks or registered trademarks of TIBCO Software Inc. in the United States and/or other countries. All other product and company names and marks mentioned in this document are the property of their respective owners and are mentioned for identification purposes only.

About Non-GAAP Financial Information

This press release includes non-GAAP financial measures. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles (GAAP), please see the section entitled "About Non-GAAP Financial Measures" and the accompanying table entitled "Reconciliation of GAAP to Non-GAAP Measures."

Legal Notice Regarding Forward-Looking Statements

This release contains forward-looking statements within the meaning of the "safe harbor" provisions of the federal securities laws. The final financial results for second quarter of fiscal year 2011 may differ materially from the preliminary results presented in this release due to factors that include, but are not limited to, risks associated with the final review of the results and preparation of financial statements. In addition, forward-looking statements such as statements regarding the threats and opportunities of the 21st century requiring a software platform like TIBCO's, and the ability of TIBCO's platform to operate in real-time, handle events, deliver superior context to decision makers and address many of today's greatest needs are subject to risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. These risks include but are not limited to: TIBCO's ability to develop products that address changing market demands, the impact of competition from alternative business models and new product introductions, and the impact of competition from companies that are larger or have greater resources than TIBCO. Additional information regarding potential risks is provided in TIBCO's filings with the SEC, including its most recent Annual Report on Form 10-K for the year ended November 30, 2010 and Quarterly Report on Form 10-Q for the quarter ended February 27, 2011. TIBCO assumes no obligation to update the forward-looking statements included in this release.

                            TIBCO Software Inc.
                  Condensed Consolidated Balance Sheets
                                (unaudited)
                              (in thousands)


                                                  May 29,     November 30,
                                                    2011          2010
                                                ------------- -------------
                            ASSETS

Current assets:
  Cash and cash equivalents                     $     278,487 $     243,989
  Short-term investments                                  247         1,504
  Accounts receivable, net                            171,191       185,740
  Prepaid expenses and other current assets            63,273        57,889
                                                ------------- -------------
    Total current assets                              513,198       489,122

Property and equipment, net                            86,976        88,523
Goodwill                                              441,567       409,545
Acquired intangible assets, net                        94,359       104,818
Long-term deferred income tax assets                   76,758        66,671
Other assets                                           46,533        46,320
                                                ------------- -------------
    Total assets                                $   1,259,391 $   1,204,999
                                                ============= =============

                   LIABILITIES AND EQUITY

Current liabilities:
  Accounts payable                              $      23,098 $      23,815
  Accrued liabilities                                  94,206       108,576
  Deferred revenue                                    213,501       182,895
  Current portion of long-term debt                     2,332         2,269
  Accrued restructuring costs                             996         2,714
                                                ------------- -------------
    Total current liabilities                         334,133       320,269

Long-term deferred revenue                             13,351        15,212
Long-term deferred income tax liabilities               6,138         4,257
Long-term income tax liabilities                       16,338        14,044
Long-term debt, less current portion                   36,926        38,108
Accrued restructuring costs, less current
 portion                                                  298           513
Other long-term liabilities                             2,679         2,865
                                                ------------- -------------
    Total long-term liabilities                        75,730        74,999
                                                ------------- -------------
    Total liabilities                                 409,863       395,268
                                                ------------- -------------

Total equity                                          849,528       809,731
                                                ------------- -------------
    Total liabilities and equity                $   1,259,391 $   1,204,999
                                                ============= =============





                            TIBCO Software Inc.
              Condensed Consolidated Statements of Operations
                                (unaudited)
                (in thousands, except net income per share)


                              Three Months Ended       Six Months Ended
                            ----------------------  ----------------------
                              May 29,     May 30,     May 29,     May 30,
                               2011        2010        2011        2010
                            ----------  ----------  ----------  ----------
Revenue:
  License                   $   81,974  $   62,096  $  152,059  $  116,270
  Service and maintenance      134,447     111,174     249,703     212,044
                            ----------  ----------  ----------  ----------
        Total revenue          216,421     173,270     401,762     328,314
                            ----------  ----------  ----------  ----------

Cost of revenue:
  License                        9,710       8,199      18,637      15,595
  Service and maintenance       52,017      39,128      96,037      74,332
                            ----------  ----------  ----------  ----------
        Total cost of
         revenue                61,727      47,327     114,674      89,927
                            ----------  ----------  ----------  ----------
Gross profit                   154,694     125,943     287,088     238,387
                            ----------  ----------  ----------  ----------

Operating expenses:
  Research and development      36,175      30,127      68,861      58,201
  Sales and marketing           68,909      56,846     131,432     109,549
  General and administrative    15,573      11,907      28,490      23,253
  Amortization of acquired
   intangible assets             5,030       3,976       9,921       7,684
  Acquisition related and
   other                           278         589         823       1,634
  Restructuring                      -       6,271         (33)      6,271
                            ----------  ----------  ----------  ----------
        Total operating
         expenses              125,965     109,716     239,494     206,592
                            ----------  ----------  ----------  ----------
Income from operations          28,729      16,227      47,594      31,795

  Interest income                  448         224         930         428
  Interest expense                (951)       (980)     (1,997)     (1,965)
  Other income (expense),
   net                          (1,137)        142      (1,427)        (87)
                            ----------  ----------  ----------  ----------
Income before provision for
 income taxes and
 noncontrolling interest        27,089      15,613      45,100      30,171
Provision for income taxes       5,999       2,682       7,995       6,800
                            ----------  ----------  ----------  ----------
Net income                      21,090      12,931      37,105      23,371
Less: Net income
 attributable to
 noncontrolling interest            44         117         106         132
                            ----------  ----------  ----------  ----------
Net income attributable to
 TIBCO Software Inc.        $   21,046  $   12,814  $   36,999  $   23,239
                            ==========  ==========  ==========  ==========
Net income per share
 attributable to TIBCO
 Software Inc.:
  Basic                     $     0.13  $     0.08  $     0.23  $     0.14
                            ==========  ==========  ==========  ==========
  Diluted                   $     0.12  $     0.08  $     0.21  $     0.14
                            ==========  ==========  ==========  ==========
Shares used to compute net
 income per share
 attributable to
 TIBCO Software Inc.:
  Basic                        161,911     160,992     161,207     161,793
                            ==========  ==========  ==========  ==========
  Diluted                      174,666     169,975     174,076     169,861
                            ==========  ==========  ==========  ==========





                            TIBCO Software Inc.
              Condensed Consolidated Statements of Cash Flows
                                (unaudited)
                              (in thousands)

                                                     Six Months Ended
                                                --------------------------
                                                May 29, 2011  May 30, 2010
                                                ------------  ------------
Cash flows from operating activities:
  Net income                                    $     37,105  $     23,371
  Adjustments to reconcile net income to net
   cash provided by operating activities:
     Depreciation of property and equipment            6,310         6,606
     Amortization of acquired intangible assets       19,664        15,218
     Stock-based compensation                         23,268        14,224
     Deferred income tax                              (9,342)       (5,263)
     Tax benefits related to stock benefit
      plans                                           10,739        13,683
     Excess tax benefits from stock-based
      compensation                                   (26,737)       (8,889)
     Other non-cash adjustments, net                    (146)           50
  Changes in assets and liabilities:
     Accounts receivable                              17,516        40,579
     Prepaid expenses and other assets                 3,623         4,482
     Accounts payable                                 (1,222)       (5,388)
     Accrued liabilities and restructuring
      costs                                          (21,504)      (29,769)
     Deferred revenue                                 24,064        12,601
                                                ------------  ------------
       Net cash provided by operating
        activities                                    83,338        81,505
                                                ------------  ------------

Cash flows from investing activities:
  Purchases of short-term investments                    (76)            -
  Maturities and sales of short-term
   investments                                         1,424           157
  Acquisitions, net of cash acquired                 (22,579)      (42,626)
  Proceeds from private equity investments                 -            32
  Purchases of property and equipment                 (3,837)       (2,458)
  Restricted cash pledged as security                 (1,852)       (1,880)
                                                ------------  ------------
       Net cash used in investing activities         (26,920)      (46,775)
                                                ------------  ------------

Cash flows from financing activities:
  Proceeds from issuance of common stock              33,324        20,638
  Repurchases of the Company's common stock          (72,329)      (67,482)
  Witholding taxes related to restricted stock
   net share settlement                              (15,024)       (4,216)
  Excess tax benefits from stock-based
   compensation                                       26,737         8,889
  Principal payments on long-term debt                (1,119)       (2,404)
                                                ------------  ------------
       Net cash used in financing activities         (28,411)      (44,575)
                                                ------------  ------------

Effect of foreign exchange rate changes on
 cash and cash equivalents                             6,491        (5,626)
                                                ------------  ------------

Net change in cash and cash equivalents               34,498       (15,471)

Cash and cash equivalents at beginning of
 period                                              243,989       292,529

                                                ------------  ------------
Cash and cash equivalents at end of period      $    278,487  $    277,058
                                                ============  ============

About Non-GAAP Financial Measures

TIBCO provides non-GAAP measures for operating income, net income and net income per share data as supplemental information regarding TIBCO's business performance. TIBCO believes that these non-GAAP financial measures are useful to investors because they exclude non-operating charges. TIBCO's management excludes these non-operating charges when it internally evaluates the performance of TIBCO's business and makes operating decisions, including internal budgeting, performance measurement and the calculation of bonuses and discretionary compensation, because these measures provide a consistent method of comparison to historical periods. Moreover, management believes these non-GAAP measures reflect the essential revenue generation activities of TIBCO. Accordingly, management excludes stock-based compensation related to employee stock options, amortization of acquired intangible assets, costs related to formal restructuring activities, acquisition-related and other expenses, gains and losses on equity investments, and the income tax effects of the foregoing, as well as adjustments for the impact of changes in the valuation allowance recorded against TIBCO's deferred tax assets when making operational decisions.

TIBCO believes that providing the non-GAAP measures that management uses to its investors is useful to investors for a number of reasons. The non-GAAP measures provide a consistent basis for investors to understand TIBCO's financial performance on a trended basis across historical periods. In addition, it allows investors to evaluate TIBCO's performance using the same methodology and information as that used by TIBCO's management.

Non-GAAP measures are subject to material limitations as these measures are not in accordance with, or a substitute for, GAAP and thus TIBCO's definition may be different from similar non-GAAP measures used by other companies and/or analysts. However, TIBCO's management compensates for these limitations by providing the relevant disclosure of the items excluded in the calculation of non-GAAP operating income, non-GAAP net income and non-GAAP net income per share. In addition, some items such as restructuring charges that are excluded from non-GAAP net income and non-GAAP earnings per share can have a material impact on cash flows and stock compensation charges can have a significant impact on earnings. Management compensates for these limitations by evaluating the non-GAAP measure together with the most directly comparable GAAP measure. TIBCO has historically provided non-GAAP measures to the investment community as a supplement to its GAAP results, to enable investors to evaluate TIBCO's business performance in the way that management does.

The non-GAAP adjustments, and the basis for excluding them, are outlined below:

Amortization of Intangible Assets

TIBCO has incurred amortization of intangible assets, included in its GAAP financial statements, related to various acquisitions TIBCO has made. Management excludes these items, for the purposes of calculating non-GAAP operating income, non-GAAP net income and non-GAAP net income per share. TIBCO believes that eliminating this expense from its non-GAAP measures is useful to investors, because the amortization of intangible assets can be inconsistent in amount and frequency and is significantly impacted by the timing and magnitude of TIBCO's acquisition transactions, which also vary substantially in frequency from period to period.

Stock-based Compensation

TIBCO incurs stock-based compensation expense. TIBCO excludes this item for the purposes of calculating non-GAAP operating income, non-GAAP net income and non-GAAP net income per share because it is a non-cash expense that TIBCO believes is not reflective of its business performance. The nature of the stock-based compensation expense also makes it very difficult to estimate prospectively, since the expense will vary with changes in the stock price and market conditions at the time of new grants, varying valuation methodologies, subjective assumptions and different award types, making the comparison of current results with forward-looking guidance potentially difficult for investors to interpret. The tax effects of stock-based compensation expenses may also vary significantly from period to period, without any change in underlying operational performance, thereby obscuring the underlying profitability of operations relative to prior periods. Finally, TIBCO believes that non-GAAP measures of profitability that exclude stock-based compensation are widely used by analysts and investors in the software industry.

Acquisition-related and Other Expenses

TIBCO has incurred acquisition-related and other expenses which consist of costs incurred after the issuance of a definitive term sheet for a particular transaction (whether or not such transaction is ultimately completed, remains in process or is not completed) and include legal, banker, accounting and other advisory fees of third parties and severance costs for employees of the acquired company that are terminated within 90 days of the acquisition date. Management excludes these items, for the purposes of calculating non-GAAP operating income, non-GAAP net income and non-GAAP net income per share. TIBCO believes that eliminating these expenses from its non-GAAP measures is useful to investors, because it generally would not have otherwise incurred such expenses in the periods presented as part of its continuing operations. The acquisition-related and other expenses are not recurring with respect to past transactions, can be inconsistent in amount and frequency from period to period and are significantly impacted by the timing and magnitude of TIBCO's acquisitions. While these expenses are not recurring with respect to past transactions, TIBCO generally will incur these expenses in connection with any future acquisitions.

Restructuring Activities

TIBCO has incurred restructuring expenses, included in its GAAP presentation of operating expense, primarily due to workforce related charges such as payments for severance and benefits and estimated costs of exiting and terminating facility lease commitments related to a formal restructuring plan. TIBCO excludes these items, for the purposes of calculating non-GAAP operating income, non-GAAP net income and non-GAAP net income per share, when it evaluates the continuing business performance of TIBCO. TIBCO believes that these items are not consistently recurring and do not necessarily reflect expected future operating expense, nor does TIBCO believe that they provide a meaningful evaluation of current versus past business results or the expense levels required to support TIBCO's operating plan.


                            TIBCO Software Inc.
                Reconciliation of GAAP to Non-GAAP Measures
                                (unaudited)
                (in thousands, except net income per share)

                                          Three Months Ended
                            -----------------------------------------------
                                 May 29, 2011            May 30, 2010
                            ----------------------- -----------------------
                                        Net income              Net income
                                       attributable            attributable
                                         to TIBCO                to TIBCO
                            Operating    Software   Operating    Software
                              Income       Inc.       Income       Inc.
                            ----------- ----------  ----------- ----------


GAAP                        $    28,729 $   21,046  $    16,227 $   12,814

 Amortization of intangible
  assets - cost of revenue        4,948      4,948        3,920      3,920
 Amortization of intangible
  assets - operating
  expense                         5,030      5,030        3,976      3,976
 Stock-based compensation -
  cost of revenue                   957        957          681        681
 Stock-based compensation -
  R&D expense                     3,003      3,003        2,020      2,020
 Stock-based compensation -
  S&M expense                     4,077      4,077        2,571      2,571
 Stock-based compensation -
  G&A expense                     3,750      3,750        2,516      2,516
 Acquisition related and
  other                             278        278          589        589
 Restructuring                        -          -        6,271      6,271
 Income tax adjustment for
  non-GAAP                            -     (6,775)           -     (9,147)
                            ----------- ----------  ----------- ----------
Non-GAAP                    $    50,772 $   36,314  $    38,771 $   26,211
                            =========== ==========  =========== ==========

Diluted net income per
 share attributable to
 TIBCO Software Inc.:
 GAAP                                   $     0.12              $     0.08
                                        ==========              ==========
 Non-GAAP                               $     0.21              $     0.15
                                        ==========              ==========
Shares used to compute
 diluted net income per
 share attributable to TIBCO
 Software Inc.:                            174,666                 169,975
                                        ==========              ==========



                                           Six Months Ended
                            ----------------------------------------------
                                 May 29, 2011            May 30, 2010
                            ----------------------  -----------------------
                                         Net income             Net income
                                        attributable           attributable
                                         to TIBCO                to TIBCO
                            Operating    Software    Operating   Software
                              Income       Inc.       Income       Inc.
                            ----------  ----------  ----------- ----------


GAAP                        $   47,594  $   36,999  $    31,795 $   23,239

 Amortization of intangible
  assets - cost of revenue       9,743       9,743        7,534      7,534
 Amortization of intangible
  assets - operating
  expense                        9,921       9,921        7,684      7,684
 Stock-based compensation -
  cost of revenue                1,831       1,831        1,323      1,323
 Stock-based compensation -
  R&D expense                    5,652       5,652        3,540      3,540
 Stock-based compensation -
  S&M expense                    8,290       8,290        4,826      4,826
 Stock-based compensation -
  G&A expense                    7,495       7,495        4,535      4,535
 Acquisition related and
  other                            823         823        1,634      1,634
 Restructuring                     (33)        (33)       6,271      6,271
 Income tax adjustment for
  non-GAAP                           -     (17,083)           -    (14,425)
                            ----------  ----------  ----------- ----------
Non-GAAP                    $   91,316  $   63,638  $    69,142 $   46,161
                            ==========  ==========  =========== ==========

Diluted net income per
 share attributable to
 TIBCO Software Inc.:
 GAAP                                   $     0.21              $     0.14
                                        ==========              ==========
 Non-GAAP                               $     0.37              $     0.27
                                        ==========              ==========
Shares used to compute
 diluted net income per
 share attributable to TIBCO
 Software Inc.:                            174,076                 169,861
                                        ==========              ==========

Contact Information

  • Media Relations Contact:
    Holly Gilthorpe
    TIBCO Software Inc.
    (650) 846-5624
    Email Contact

    Investor Relations Contact:
    Matthew Langdon
    TIBCO Software Inc.
    (650) 846-5747
    Email Contact