SOURCE: TIBCO Software Inc.

TIBCO Software Inc.

March 20, 2014 16:05 ET

TIBCO Software Reports First Quarter Results

Record Q1 Total Revenue of $253 Million; Record Q1 License Revenue of $83 Million; Non-GAAP EPS of $0.19

PALO ALTO, CA--(Marketwired - Mar 20, 2014) -  TIBCO Software Inc. (NASDAQ: TIBX) today announced results for its fiscal first quarter, which ended on March 2, 2014.

Total revenue for the first quarter of fiscal 2014 was $252.9 million and net income was $12.2 million, or $0.07 per diluted share. This compares to total revenue of $237.8 million and net income of $9.5 million, or $0.06 per diluted share, as reported for the first quarter of fiscal 2013.

On a non-GAAP basis, net income for the first quarter of fiscal 2014 was $31.6 million or $0.19 per diluted share, compared with $31.1 million or $0.18 per diluted share for the first quarter of fiscal 2013. Non-GAAP operating income for the first quarter of fiscal 2014 was $47.2 million, resulting in a non-GAAP operating margin of 18.7%. This compares to non-GAAP operating income of $44.0 million, or a 18.5% non-GAAP operating margin in the first quarter of fiscal 2013. Non-GAAP results exclude amortization of acquired intangible assets, stock-based compensation expense, acquisition related and other expenses, restructuring activities and non-cash interest expense related to convertible debt and assumes non-GAAP effective tax rates of 26% and 19% for the first quarters of fiscal 2014 and 2013, respectively.

"We've started our year with a step in the right direction, showing a record level of total revenue for a Q1," said Vivek Ranadivé, TIBCO's chairman and chief executive officer. "The world's leading companies are increasingly focused on not just big but fast data, and how to gain a real-time competitive edge from their information. Our unique combination of technologies allows us to create a true business advantage for our customers, or what we call the Two-Second Advantage."

First Quarter Fiscal 2014 Highlights

  • Total revenue of $252.9 million;
  • License revenue of $83.0 million;
  • Non-GAAP operating margin of 18.7%;
  • Non-GAAP EPS of $0.19;
  • Cash flow from operations of $51.8 million;
  • Broad mix of business across major industries including Financial Services, Telecommunications, Energy, Transportation & Logistics, Manufacturing, Government, Retail, and Insurance;
  • TIBCO closed 126 deals over $100k and had 18 deals over $1 million.

Conference Call Details

TIBCO has scheduled a conference call for 4:30 pm ET / 1:30 pm PT today to discuss its first 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 706-679-0841. Please join the conference call at least 10 minutes early to register. A replay of the conference call will be available until midnight ET on April 20, 2014 at www.tibco.com or via dial-in at 800-585-8367 or 404-537-3406. The pass code for both the call and the replay is 7022353.

About TIBCO

TIBCO Software Inc. (NASDAQ: TIBX) is a global leader in infrastructure and business intelligence software. Whether it's optimizing inventory, cross-selling products, or averting crisis before it happens, TIBCO uniquely delivers the Two-Second Advantage® -- the ability to capture the right information at the right time and act on it preemptively for a competitive advantage. With a broad mix of innovative products and services, TIBCO is the strategic technology partner trusted by businesses around the world. Learn more about TIBCO at www.tibco.com.

TIBCO, Two-Second Advantage, and TIBCO Software are trademarks or registered trademarks of TIBCO Software Inc. or its subsidiaries in the United States and/or other countries. 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 first quarter of fiscal year 2014 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 TIBCO's ability to provide products that create a business advantage for its customers, 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: risks arising from adverse changes and uncertainty in domestic and global economies, TIBCO's ability to achieve improved performance and accelerate growth from its investments for growth and innovation, the impact of competition from alternative business models and new product introductions, TIBCO's ability to offer compelling, differentiated products, 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, 2013. TIBCO assumes no obligation to update the forward-looking statements included in this release.

 
 
TIBCO Software Inc.
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands)
     
    March 2,
2014
  November 30,
2013
             
ASSETS            
             
Current assets:            
  Cash and cash equivalents   $ 524,962   $ 662,109
  Short-term investments     235,131     83,842
  Accounts receivable, net     205,521     231,194
  Prepaid expenses and other current assets     93,176     74,725
    Total current assets     1,058,790     1,051,870
             
Property and equipment, net     102,867     101,050
Goodwill     588,191     582,091
Acquired intangible assets, net     110,028     119,418
Long-term deferred income tax assets     61,201     78,853
Other assets     71,247     72,831
    Total assets   $ 1,992,324   $ 2,006,113
             
LIABILITIES AND EQUITY            
             
Current liabilities:            
  Accounts payable   $ 36,327   $ 37,701
  Accrued liabilities     104,271     125,112
  Accrued restructuring costs     1,797     5,819
  Deferred revenue     271,902     258,315
    Total current liabilities     414,297     426,947
             
Long-term deferred revenue     20,908     24,036
Long-term deferred income tax liabilities     1,118     1,334
Long-term income tax liabilities     54,460     55,733
Other long-term liabilities     6,519     4,788
Convertible debt     544,054     540,022
    Total long-term liabilities     627,059     625,913
    Total liabilities     1,041,356     1,052,860
             
Total equity     950,968     953,253
    Total liabilities and equity   $ 1,992,324   $ 2,006,113
             
             
             
TIBCO Software Inc.  
Condensed Consolidated Statements of Operations  
(unaudited)  
(in thousands, except net income per share)  
             
             
    Three Months Ended  
    March 2,
2014
    March 3,
2013
 
Revenue:                
  License   $ 83,033     $ 78,263  
  Service and maintenance     169,846       159,527  
    Total revenue     252,879       237,790  
                 
Cost of revenue:                
  License     11,950       11,261  
  Service and maintenance     65,582       62,376  
    Total cost of revenue     77,532       73,637  
Gross profit     175,347       164,153  
                 
Operating expenses:                
  Research and development     43,616       41,625  
  Sales and marketing     85,791       80,089  
  General and administrative     16,485       18,925  
  Amortization of acquired intangible assets     5,043       4,321  
  Acquisition related and other     35       327  
  Restructuring adjustment     (759 )     7  
    Total operating expenses     150,211       145,294  
Income from operations     25,136       18,859  
                 
  Interest income     279       198  
  Interest expense     (8,520 )     (8,782 )
  Other income (expense), net     (323 )     (842 )
Income before provision for income taxes                
  16,572       9,433  
Provision for income taxes     4,400       (100 )
Net income     12,172       9,533  
                 
Less: Net income attributable to noncontrolling interest     22       28  
Net income attributable to TIBCO Software Inc.   $ 12,150     $ 9,505  
Net income per share attributable to TIBCO Software Inc.:                
Basic   $ 0.07     $ 0.06  
Diluted   $ 0.07     $ 0.06  
Shares used to compute net income per share attributable to TIBCO Software Inc.:                
Basic     162,299       161,521  
Diluted     167,369       169,130  
                 
                 
                 
TIBCO Software Inc.  
Condensed Consolidated Statements of Cash Flows  
(unaudited)  
(in thousands)  
             
    Three Months Ended  
    March 2,
2014
    March 3,
2013
 
                 
Cash flows from operating activities:                
  Net income   $ 12,172     $ 9,533  
  Adjustments to reconcile net income to net cash provided by operating activities:                
    Depreciation of property and equipment     4,688       3,863  
    Amortization of acquired intangible assets     10,031       8,418  
    Amortization of debt discount and transaction costs     4,907       4,713  
    Stock-based compensation     12,763       16,392  
    Deferred income tax     424       (9,188 )
    Tax benefits related to stock benefit plans     1,162       4,486  
    Excess tax benefits from stock-based compensation     (1,057 )     (3,257 )
    Other non-cash adjustments, net     191       139  
  Changes in assets and liabilities:                
    Accounts receivable     26,292       63,733  
    Prepaid expenses and other assets     (3,943 )     (2,426 )
    Accounts payable     (1,833 )     1,953  
    Accrued and tax liabilities including restructuring costs     (24,591 )     (23,383 )
    Deferred revenue     10,556       (11,752 )
      Net cash provided by operating activities     51,762       63,224  
                 
Cash flows from investing activities:                
  Purchases of short-term investments     (165,998 )     -  
  Maturities and sales of short-term investments     16,373       51  
  Acquisitions, net of cash acquired     -       2,280  
  Purchases of property and equipment     (6,365 )     (2,586 )
  Restricted cash pledged as security     629       (322 )
      Net cash used in investing activities     (155,361 )     (577 )
                 
Cash flows from financing activities:                
  Principal payments on debt     -       (620 )
  Proceeds from issuance of common stock     2,991       6,086  
  Repurchases of the Company's common stock     (35,799 )     (21,871 )
  Withholding taxes related to restricted stock net share settlement     (4,276 )     (4,890 )
  Excess tax benefits from stock-based compensation     1,057       3,257  
      Net cash used in financing activities     (36,027 )     (18,038 )
  Effect of foreign exchange rate changes on cash and cash equivalents     2,479       506  
                 
Net change in cash and cash equivalents     (137,147 )     45,115  
                 
Cash and cash equivalents at beginning of period     662,109       727,309  
                 
Cash and cash equivalents at end of period   $ 524,962     $ 772,424  
                 

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, non-cash interest expense related to convertible debt, 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 incurs 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 incurs 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.

Non-Cash Interest Expense Related to Convertible Debt

TIBCO is required to recognize non-cash interest expense related to its 2.25% convertible senior notes issued in April 2012 as an imputed interest expense. Management excludes this incremental non-cash interest expense for purposes of calculating non-GAAP net income and non-GAAP net income per share. Under the relevant accounting guidance, TIBCO is required to separate the conversion option as an equity component from the debt and account for the debt in a manner that reflects TIBCO's non-convertible debt borrowing rate. This results in the debt component of the convertible notes being treated as though it was issued at a discount, with the debt discount being accreted as additional non-cash interest expense over the term of the notes using the effective interest method. TIBCO believes that excluding this expense from its non-GAAP measures is useful to investors because this incremental interest expense does not represent a cash outflow for the company and is not meaningful in evaluating current versus past business results. Finally, TIBCO believes that non-GAAP measures of profitability that exclude non-cash interest accretion expense are widely used by analysts and investors.

   
   
TIBCO Software Inc.  
Reconciliation of GAAP to Non-GAAP Measures  
(unaudited)  
(in thousands, except net income per share)  
   
    Three Months Ended  
    March 2, 2014     March 3, 2013  
    Operating Income     Net income attributable to TIBCO Software Inc.     Operating Income   Net income attributable to TIBCO Software Inc.  
                               
                               
                               
GAAP   $ 25,136     $ 12,150     $ 18,859   $ 9,505  
                               
  Amortization of intangible assets - cost of revenue     4,988       4,988       4,097     4,097  
  Amortization of intangible assets - operating expense     5,043       5,043       4,321     4,321  
  Stock-based compensation - cost of revenue     1,930       1,930       1,603     1,603  
  Stock-based compensation - R&D expense     4,280       4,280       3,996     3,996  
  Stock-based compensation - S&M expense     4,402       4,402       5,239     5,239  
  Stock-based compensation - G&A expense     2,151       2,151       5,554     5,554  
  Acquisition related and other     35       35       327     327  
  Non-cash interest expense related to convertible debt     -       4,032       -     3,819  
  Restructuring adjustment     (759 )     (759 )     7     7  
  Income tax adjustment for non-GAAP     -       (6,695 )     -     (7,395 )
                               
Non-GAAP   $ 47,206     $ 31,557     $ 44,003   $ 31,073  
                               
Diluted net income per share attributable toTIBCO Software Inc.:                              
                               
  GAAP           $ 0.07           $ 0.06  
  Non-GAAP           $ 0.19           $ 0.18  
Shares used to compute diluted net income per share attributable to TIBCO Software Inc.:             167,369             169,130  

Contact Information

  • Media Contact:
    Leslie Moore
    TIBCO Software Inc.
    (650) 846-5025
    Email Contact

    Investor Contact:
    Giuseppe Incitti
    TIBCO Software Inc.
    (650) 846-5637
    Email Contact