SOURCE: TIBCO Software Inc.

TIBCO Software Inc.

December 21, 2010 16:06 ET

TIBCO Software Grows Total Revenue by 23% Over Q4 2009

Full Year Non-GAAP EPS of $0.76 Increases by 38% Over 2009

PALO ALTO, CA--(Marketwire - December 21, 2010) - TIBCO Software Inc. (NASDAQ: TIBX) today announced results for its fourth quarter and fiscal year, which ended on November 30, 2010.

Total revenue for the fourth quarter of fiscal 2010 was $241.2 million and net income was $37.5 million, or $0.22 per diluted share. This compares to total revenue of $195.6 million and net income of $31.7 million, or $0.18 per diluted share, as reported for the fourth quarter of fiscal 2009.

On a non-GAAP basis, net income for the fourth quarter of fiscal 2010 was $53.8 million or $0.31 per diluted share, compared with $39.2 million or $0.23 per diluted share for the fourth quarter of fiscal 2009. Non-GAAP operating income for the fourth quarter of fiscal 2010 was $76.2 million, resulting in a non-GAAP operating margin of 32%. This compares to non-GAAP operating income of $58.3 million, or a 30% non-GAAP operating margin in the fourth quarter of fiscal 2009. Non-GAAP results exclude stock-based compensation expense, amortization of acquired intangible assets, acquisition related and other expenses and restructuring activities and assume a non-GAAP effective tax rate of 30% for fiscal 2010 and 32% for fiscal 2009.

"TIBCO turned in an excellent year in 2010 -- demonstrating our innovation leadership, broadening our business model, and delivering substantially higher growth and profit to our shareholders," said Vivek Ranadivé, TIBCO's chairman and chief executive officer. "As we turn to 2011, we are in an excellent position to benefit from three key trends in enterprise IT: mobility, cloud computing and real-time information. These trends are generating massive amounts of data and increasing IT complexity, which plays to our core strengths of simplifying systems deployment and integration and distilling insight from disparate pools of information."

Fourth Quarter Fiscal 2010 Highlights

--  Record quarterly total revenue of $241.2 million;
--  License revenue was $114.7 million;
--  Non-GAAP operating margin was 32%;
--  Repurchased 5.8 million shares;
--  Strong mix of business across major industries including Financial
    Services, Telecommunications, Energy, Government, Manufacturing,
    Transportation & Logistics, and Life Sciences;
--  TIBCO closed 164 deals over $100k and had 25 deals over $1 million; and
--  TIBCO expanded its business with leading companies and agencies in the
    fourth quarter such as ConEdison Solutions, The Cooper Companies,
    DekaBank, Ingram Book Group, MGM Resorts International Operations,
    Macy's, Metcash Trading Limited, Orient Overseas Container Line, and
    Shinhan Bank.

Full Year Fiscal 2010 Highlights

--  Total revenue of $754.0 million;
--  Non-GAAP operating margin was 25%;
--  Record non-GAAP EPS of $0.76, vs. $0.55 for fiscal 2009;
--  Cash flow from operations of $148.8 million; and
--  Repurchased 15.1 million shares.

Conference Call Details

TIBCO has scheduled a conference call for 4:30 pm ET / 1:30 pm PT today to discuss its fourth 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 January 21, 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 29493957.

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, the 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 fourth quarter of fiscal year 2010 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 ability of TIBCO to benefit from three key trends in enterprise IT: mobility, cloud computing and real-time information 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: our ability to adapt to new technologies and evolving industry trends; and competitive factors, including but not limited to competition from alternative business models, industry consolidation and new product introductions. 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, 2009 and Quarterly Report on Form 10-Q for the quarter ended August 29, 2010. TIBCO assumes no obligation to update the forward-looking statements included in this release.

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

                                                        November 30,
                                                  -------------------------
                                                      2010       2009 (1)
                                                  ------------ ------------
                    ASSETS

Current assets:
  Cash and cash equivalents                       $    245,302 $    292,529
  Short-term investments                                   191          307
  Accounts receivable, net                             185,740      154,744
  Prepaid expenses and other current assets             57,889       52,657
                                                  ------------ ------------
    Total current assets                               489,122      500,237

Property and equipment, net                             88,523       94,631
Goodwill                                               409,545      374,285
Acquired intangible assets, net                        104,818       83,060
Long-term deferred income tax assets                    66,671       70,057
Other assets                                            46,320       44,069
                                                  ------------ ------------
    Total assets                                  $  1,204,999 $  1,166,339
                                                  ============ ============

             LIABILITIES AND EQUITY

Current liabilities:
  Accounts payable                                $     23,815 $     18,350
  Accrued liabilities                                  108,576       96,595
  Deferred revenue                                     182,895      159,241
  Current portion of long-term debt                      2,269        2,148
  Accrued restructuring costs                            2,714        5,848
                                                  ------------ ------------
    Total current liabilities                          320,269      282,182

Long-term deferred revenue                              15,212       15,353
Long-term deferred income tax liabilities                4,257        9,257
Long-term income tax liabilities                        14,044       17,045
Long-term debt, less current portion                    38,108       40,377
Accrued restructuring costs, less current portion          513        1,083
Other long-term liabilities                              2,865        3,561
                                                  ------------ ------------
    Total long-term liabilities                         74,999       86,676
                                                  ------------ ------------
    Total liabilities                                  395,268      368,858
                                                  ------------ ------------

Total equity                                           809,731      797,481
                                                  ------------ ------------
    Total liabilities and equity                  $  1,204,999 $  1,166,339
                                                  ============ ============


(1) On December 1, 2009, TIBCO adopted a new accounting standard related to
    the presentation of noncontrolling interest. Prior period results have
    been adjusted to conform with this new accounting standard.




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

                                 Three Months Ended        Year Ended
                                    November 30,          November 30,
                                --------------------  --------------------
                                  2010     2009 (1)     2010     2009 (1)
                                ---------  ---------  ---------  ---------
Revenue:
  License                       $ 114,695  $  94,674  $ 301,532  $ 247,237
  Service and maintenance         126,522    100,896    452,475    374,151
                                ---------  ---------  ---------  ---------
    Total revenue                 241,217    195,570    754,007    621,388
                                ---------  ---------  ---------  ---------

Cost of revenue:
 License                           10,738      7,899     35,325     28,252
 Service and maintenance           47,079     34,898    162,468    130,800
                                ---------  ---------  ---------  ---------
    Total cost of revenue          57,817     42,797    197,793    159,052
                                ---------  ---------  ---------  ---------
Gross profit                      183,400    152,773    556,214    462,336
                                ---------  ---------  ---------  ---------

Operating expenses:
  Research and development         35,680     30,848    124,654    108,691
  Sales and marketing              71,736     59,984    240,357    204,212
  General and administrative       13,617     13,494     49,260     46,666
  Amortization of acquired
   intangible assets                4,624      3,606     16,414     14,165
  Acquisition related and
   other (2)                          881          -      3,421          -
  Restructuring                       121          -      6,953          -
                                ---------  ---------  ---------  ---------
    Total operating expenses      126,659    107,932    441,059    373,734
                                ---------  ---------  ---------  ---------
Income from operations             56,741     44,841    115,155     88,602

  Interest income                     523        212      1,349      2,265
  Interest expense                 (1,020)      (756)    (4,123)    (2,968)
  Other income (expense), net        (543)        46     (1,509)     1,718
                                ---------  ---------  ---------  ---------
Income before provision for
 income taxes and
 noncontrolling interest           55,701     44,343    110,872     89,617
Provision for income taxes         18,065     12,518     32,401     27,097
                                ---------  ---------  ---------  ---------
Net income                         37,636     31,825     78,471     62,520
Less: Net income attributable
 to noncontrolling interest           142         92        383        218
                                ---------  ---------  ---------  ---------
Net income attributable to
 TIBCO Software Inc.            $  37,494  $  31,733  $  78,088  $  62,302
                                =========  =========  =========  =========
Net income per share
 attributable to TIBCO
 Software Inc.:
  Basic                         $    0.23  $    0.19  $    0.49  $    0.37
                                =========  =========  =========  =========
  Diluted                       $    0.22  $    0.18  $    0.46  $    0.36
                                =========  =========  =========  =========
Shares used to compute net
 income per share attributable
 to TIBCO Software Inc.:
  Basic                           160,013    164,925    160,959    168,970
                                =========  =========  =========  =========
  Diluted                         172,899    171,886    170,953    172,328
                                =========  =========  =========  =========


(1) On December 1, 2009, TIBCO adopted a new accounting standard related to
    the presentation of noncontrolling interest. Prior period results have
    been adjusted to conform with this new accounting standard.

(2) Prior to the adoption of new amended guidance for business combinations
    effective December 1, 2009, the majority of acquisition related and
    other expenses were capitalized.




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

                                                  Year Ended November 30,
                                                  ------------------------
                                                      2010       2009 (1)
                                                  -----------  -----------

Cash flows from operating activities:
  Net income                                      $    78,471  $    62,520
  Adjustments to reconcile net income to net cash
   provided by operating activities:
     Depreciation of property and equipment            13,414       15,107
     Amortization of acquired intangible assets        32,494       27,628
     Stock-based compensation                          32,248       23,546
     Deferred income tax                               (8,478)     (12,630)
     Tax benefits related to stock benefit plans       30,626       21,573
     Excess tax benefits from stock-based
      compensation                                    (21,510)     (17,016)
     Other non-cash adjustments, net                      225        1,207
  Changes in assets and liabilities:
     Accounts receivable                              (25,909)     (20,896)
     Prepaid expenses and other assets                 14,518        7,465
     Accounts payable                                   3,829        2,300
     Accrued liabilities and excess facilities
      costs                                           (12,553)      (7,735)
     Deferred revenue                                  11,382       12,328
                                                  -----------  -----------
       Net cash provided by operating activities      148,757      115,397
                                                  -----------  -----------

Cash flows from investing activities:
  Maturities and sales of short-term investments          183       12,448
  Acquisitions, net of cash acquired                  (78,573)     (27,340)
  Proceeds from private equity investments                485          117
  Purchases of property and equipment                  (6,399)      (5,388)
  Restricted cash pledged as security                  (5,498)      (2,571)
                                                  -----------  -----------
       Net cash used in investing activities          (89,802)     (22,734)
                                                  -----------  -----------

Cash flows from financing activities:
  Proceeds from issuance of common stock               80,800       26,120
  Repurchases of the Company's common stock          (204,280)    (106,447)
  Excess tax benefits from stock-based
   compensation                                        21,510       17,016
  Principal payments on long-term debt                 (3,492)      (2,033)
  Payment of issuance costs on line of credit               -       (2,317)
                                                  -----------  -----------
       Net cash used in financing activities         (105,462)     (67,661)
                                                  -----------  -----------

Effect of foreign exchange rate changes on cash
 and cash equivalents                                    (720)      13,127
                                                  -----------  -----------

Net change in cash and cash equivalents               (47,227)      38,129

Cash and cash equivalents at beginning of period      292,529      254,400

                                                  -----------  -----------
Cash and cash equivalents at end of period        $   245,302  $   292,529
                                                  ===========  ===========


(1) On December 1, 2009, TIBCO adopted a new accounting standard related to
    the presentation of noncontrolling interest. Prior period results have
    been adjusted to conform with this new accounting standard.

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 November 30,
                            -----------------------------------------------
                                     2010                    2009
                            ----------------------- -----------------------
                                        Net income              Net income
                                       attributable            attributable
                                         to TIBCO                to TIBCO
                            Operating    Software   Operating    Software
                              Income       Inc.       Income       Inc.
                            ----------- ----------  ----------- ----------


GAAP                        $    56,741 $   37,494  $    44,841 $   31,733

  Amortization of intangible
   assets - cost of revenue       4,635      4,635        3,455      3,455
  Amortization of intangible
   assets - operating
   expense                        4,624      4,624        3,606      3,606
  Stock-based compensation -
   cost of revenue                  800        800          626        626
  Stock-based compensation -
   R&D expense                    2,239      2,239        1,457      1,457
  Stock-based compensation -
   S&M expense                    3,410      3,410        2,122      2,122
  Stock-based compensation -
   G&A expense                    2,706      2,706        2,186      2,186
  Acquisition related and
   other                            881        881            -          -
  Restructuring                     121        121            -          -
  Income tax adjustment for
   non-GAAP (1)                       -     (3,067)           -     (5,976)
                            ----------- ----------  ----------- ----------
Non-GAAP                    $    76,157 $   53,843  $    58,293 $   39,209
                            =========== ==========  =========== ==========

Diluted net income per
 share attributable to
 TIBCO Software Inc.:

  GAAP                                  $     0.22              $     0.18
                                        ==========              ==========
  Non-GAAP                              $     0.31              $     0.23
                                        ==========              ==========
Shares used to compute
 diluted net income per
 share attributable to TIBCO
 Software Inc.:                            172,899                 171,886
                                        ==========              ==========


                                        Year Ended November 30,
                            -----------------------------------------------
                                     2010                    2009
                            ----------------------- -----------------------
                                        Net income              Net income
                                       attributable            attributable
                                         to TIBCO                to TIBCO
                            Operating    Software   Operating    Software
                              Income       Inc.       Income       Inc.
                            ----------- ----------  ----------- ----------


GAAP                        $   115,155 $   78,088  $    88,602 $   62,302

  Amortization of intangible
   assets - cost of revenue      16,080     16,080       13,463     13,463
  Amortization of intangible
   assets - operating
   expense                       16,414     16,414       14,165     14,165
  Stock-based compensation -
   cost of revenue                2,909      2,909        2,526      2,526
  Stock-based compensation -
   R&D expense                    8,065      8,065        5,597      5,597
  Stock-based compensation -
   S&M expense                   11,390     11,390        7,440      7,440
  Stock-based compensation -
   G&A expense                    9,884      9,884        7,983      7,983
  Acquisition related and
   other                          3,421      3,421            -          -
  Restructuring                   6,953      6,953            -          -
  Income tax adjustment for
   non-GAAP (1)                       -    (23,395)           -    (17,956)
                            ----------- ----------  ----------- ----------
Non-GAAP                    $   190,271 $  129,809  $   139,776 $   95,520
                            =========== ==========  =========== ==========

Diluted net income per
 share attributable to
 TIBCO Software Inc.:

  GAAP                                  $     0.46              $     0.36
                                        ==========              ==========
  Non-GAAP                              $     0.76              $     0.55
                                        ==========              ==========
Shares used to compute
 diluted net income per
 share attributable to TIBCO
 Software Inc.:                            170,953                 172,328
                                        ==========              ==========


(1) The estimated non-GAAP effective tax rate was 30% and 32% for fiscal
    2010 and 2009, respectively, and has been used to adjust the provision
    for income taxes for non-GAAP purposes.

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