Citrix Systems Reports Results for First Quarter 2001

Apr 18, 2001, 01:00 ET from Citrix Systems, Inc.

     - Net revenues total $132.8 million
      - Adjusted earnings per share of $0.17
 
     FORT LAUDERDALE, Fla., April 18 /PR Newswire/ -- Citrix Systems, Inc.
 (Nasdaq: CTXS) today reported results for the first quarter ended March 31,
 2001.
 
     FINANCIAL RESULTS
     Net revenues for the first quarter ending March 31, 2001, were
 $132.8 million, up 7.7% sequentially from $123.4 million in the fourth
 quarter, and up 4.2% from $127.5 million in the comparable period of the prior
 year.  Net income was $28.9 million for the first quarter of 2001, or $0.15
 per share, as compared with net income of $19.4 million, or $0.10 per share,
 in the fourth quarter, and compared to $38.5 million, or $0.19 per share, in
 the comparable period of the prior year.  Net income, adjusted to exclude the
 amortization of intangible assets relating to business combinations, was
 $33.9 million for the first quarter, or $0.17 per share, as compared to
 $31.7 million, or $0.16 per share, in the fourth quarter (which also excluded
 the effect of a technology write-down), and $43.9 million, or $0.21 per share,
 in the comparable period of the prior year.
     "We are extremely pleased with the positive results reported for this
 quarter, especially, given the ongoing volatility in the marketplace," said
 Mark Templeton, Citrix president. "In addition to meeting our financial
 objectives, we made significant progress in Q1 with our strategic goals in
 launching our MetaFrame XP family of products, announcing our intention to
 acquire leading portal software provider Sequoia, and bolstering the
 management team with the hiring of a new Chief Technology Officer and a new
 Vice President for the Europe/Middle East/Africa region."
 
     FINANCIAL HIGHLIGHTS
     -- The company experienced sequential quarterly revenue growth of 7.7% and
        comparable quarterly year-over-year revenue growth of 4.2%.
     -- Electronic delivery of licenses this quarter amounted to 19% of product
        sales compared to 24% in the previous quarter.
     -- Operating margins, excluding the amortization of intangible assets
        relating to business combinations and technology write-down, increased
        during the quarter to 31.6%.
     -- Cash flow from operations was $56.9 million for the quarter.
     -- The company's cash and investments totaled $877.6 million at the end of
        the quarter.
     -- The company repurchased approximately 1.6 million shares of its common
        stock during the quarter.
 
     CUSTOMER WINS
     The company entered into customer agreements across a broad range of
 industry segments as a testament to the value provided to its diverse customer
 base.  Significant customer deals and implementations during the quarter
 include Shell, Voicestream Wireless, Hilton Hotel Corporation, The Cleveland
 Clinic, Dana Corporation, Mercury Insurance Services, Bravida Norge ASA,
 Statoil, and Maersk.
 
     PRODUCT ANNOUNCEMENTS & AWARDS
     During the quarter, Citrix introduced the next generation of MetaFrame(TM)
 for Windows(R) operating systems with the launch of MetaFrame XP(TM) -- the
 company's most powerful application serving and management platform to date.
 During the quarter, Citrix received notable recognition for its products,
 including the following:
     -- Citrix(R) NFuse(TM), which enables existing, interactive applications
        to be quickly published without rewrites via a Web portal to users on
        any standard browser, won a Crossroads 2001 A-List award from Open
        Systems Advisors in January.
    -- Citrix NFuse software was also awarded the Editor's Choice designation
       by Network Computing Magazine in a February 19, 2001 comparative review
       of Web browser-based thin-client software.
    -- Citrix won the Midsize Enterprise Innovation Award for Excellence in
       Technology for its new Citrix MetaFrame XP for Windows family of
       application server software and for Citrix NFuse 1.5 application portal
       software.  Citrix was selected for the award from a field of 60
       technology vendors by 300 senior-level IT executives who attended the
       Midsize Enterprise Summit, which featured sessions led by Gartner Group
       analysts.
 
     PENDING ACQUISITION OF SEQUOIA SOFTWARE
     -- On March 21, 2001, Citrix and Sequoia Software Corporation announced
        that the two companies signed a definitive agreement for Citrix to
        acquire Sequoia.  By adding Sequoia's portal products and technology to
        Citrix's existing application serving software, Citrix will be better
        positioned to deliver a more complete application services platform --
        one that provides users with secure access to any information source,
        business process or application, whether it's a Web, Windows or UNIX(R)
        application.  The transaction is expected to close in the second
        quarter.
 
     OTHER HIGHLIGHTS
     -- From a partnership perspective, the company announced that it signed a
        mySAP.com global Technology Partner Agreement with SAP AG.  The
        agreement encompasses coordination of worldwide marketing and technical
        support activities, as well as technical integration and joint
        development work to optimize the performance of SAP's cross-industry
        solution, mySAP Workplace, deployed on Citrix technology.
     -- In the wireless arena, Citrix is to provide application serving
        software for the Nokia 9210 Communicator, offering customers higher
        performance access to business applications running on Citrix MetaFrame
        servers over wireless connections.
     -- Additionally, Citrix and Ericsson Mobile Communications announced a
        licensing agreement to incorporate Citrix ICA technology in Ericsson's
        mobile information devices, offering high-performance mobile Internet
        and multimedia communication -- with access to applications running on
        Citrix MetaFrame servers over wireless connections.
     -- Citrix also announced it is strengthening support for wireless
        information access with a new Citrix ICA client for Symbian, providing
        high-performance access to mission-critical applications and
        information on next-generation Symbian-based Wireless Information
        Devices.
 
     ABOUT CITRIX
     Founded in 1989, Citrix Systems, Inc. is a global leader in application
 server software and services that offer "Digital Independence(TM)" -- the
 ability to run any application on any device over any connection, wireless to
 Web.  Its products, including MetaFrame application server software, NFuse
 application portal software and Independent Computing Architecture (ICA(R)), a
 core application-server technology, have been widely adopted by the corporate
 mainstream to achieve key business goals.  The firm, which markets its
 solutions through value-added resellers, system integrators and OEM licensees,
 is headquartered in Fort Lauderdale, Florida.  Citrix is traded on The Nasdaq
 Stock Market(SM) under the symbol CTXS and is part of the Standard & Poor's
 500 Index.
 
     For Citrix Investors
     This release contains forward-looking statements which are made pursuant
 to the safe harbor provisions 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 regarding current or future financial
 performance, management's plans and objectives for future operations, product
 plans and performance, management's assessment of market factors, as well as
 statements regarding the strategy and plans of the company and its strategic
 partners, 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, risks associated
 with the following: the success of the company's MetaFrame product line and
 the acceptance of the company's ICA protocol; the company's ability to develop
 and commercialize new products and services; the company's success in
 expanding into new geographic markets; the company's ability to expand its
 core business in large enterprise accounts; the company's ability to succeed
 in the transition to a paper/electronic licensing model; the size, timing and
 recognition of revenue from significant orders; increased competition,
 including potential competition from Microsoft and other companies; the
 results of the company's iBusiness and other new licensing programs; the rate
 of growth of the ASP market, and the company's ability to continue to develop
 and market products to meet the requirements of this market; the proportion of
 revenues derived from distributors, OEMs and other channels; changes in the
 company's pricing policies or those of its competitors, including Microsoft;
 the costs of developing, acquiring, or integrating new technologies or
 enhancements ADD to existing products; the company's ability to successfully
 integrate and manage merged or acquired companies, including Sequoia Software
 Corporation; the company's ability to develop new products, extend existing
 products, and maintain or develop such company's customer and employee
 relationships as a result of such merger or acquisition; the company's
 reliance upon its strategic relationships with Microsoft and other strategic
 partners; management of growth; the possibility of undetected software errors;
 dependence on proprietary technology; risks that the company's portal strategy
 will not succeed in the manner anticipated; as well as risks of downturns in
 economic conditions generally, and in the software industry specifically, and
 other risks detailed in the company's filings with the Securities and Exchange
 Commission.  Citrix assumes no obligation to update any forward-looking
 information contained in this press release or with respect to the
 announcements described herein.
 
     Citrix(R), ICA(R), MetaFrame(TM), MetaFrame XP(TM), NFuse(TM) and Digital
 Independence(TM) are registered trademarks or trademarks of Citrix Systems,
 Inc. in the U.S. and other countries.  All other trademarks and registered
 trademarks are property of their respective owners.
 
 
                              CITRIX SYSTEMS, INC.
                  Condensed Consolidated Statements of Income
               (In thousands, except per share data - unaudited)
 
                                                   Three Months  Three Months
                                                       Ended          Ended
                                                     March 31,      March 31,
                                                       2001           2000
     Net revenues                                    $132,812       $127,515
     Cost of goods sold                                 7,312          5,129
     Gross margin                                     125,500        122,386
 
     Operating expenses:
       Research and development                        16,173         12,112
       Sales, marketing and support                    49,412         41,189
       General and administrative                      18,015         12,655
       Amortization of intangibles                      6,304          6,819
     Total operating expenses                          89,904         72,775
 
     Income from operations                            35,596         49,611
     Other income, net                                  4,591          5,453
     Income before income taxes                        40,187         55,064
 
     Income taxes                                      11,252         16,519
     Net income                                       $28,935        $38,545
 
     Earnings per share - diluted                       $0.15          $0.19
     Weighted average shares outstanding              195,669        208,309
 
 
     Adjusted net income*                             $33,939        $43,937
     Adjusted earnings per share* - diluted             $0.17          $0.21
 
     * Adjustments to net income and earnings per share have been adjusted to
       exclude the effects of the amortization of intangible assets of $6,304
       and $6,819 for the three months ended March 31, 2001 and 2000,
       respectively.  These intangible assets primarily include goodwill and
       core technology.
 
 
                     Condensed Consolidated Balance Sheets
                           (In thousands - unaudited)
 
                                                     March 31,    December 31,
                                                       2001           2000
 
     Cash and short-term investments                 $412,104       $466,637
     Accounts receivable, net                          43,057         37,299
     Inventories                                        4,593          4,622
     Other current assets                              79,588         78,174
       Total current assets                           539,342        586,732
 
     Property and equipment, net                       73,327         55,559
     Long-term investments                            465,496        382,524
     Intangible assets, net                            46,034         52,339
     Other assets                                      35,693         35,419
     Total assets                                  $1,159,892     $1,112,573
 
     Current liabilities                             $167,849       $159,387
     Long-term liabilities                            342,992        344,579
     Put warrants                                       6,064         15,732
     Stockholders' equity                             642,987        592,875
     Total liabilities and stockholders' equity    $1,159,892     $1,112,573
 
 

SOURCE Citrix Systems, Inc.
     - Net revenues total $132.8 million
      - Adjusted earnings per share of $0.17
 
     FORT LAUDERDALE, Fla., April 18 /PR Newswire/ -- Citrix Systems, Inc.
 (Nasdaq: CTXS) today reported results for the first quarter ended March 31,
 2001.
 
     FINANCIAL RESULTS
     Net revenues for the first quarter ending March 31, 2001, were
 $132.8 million, up 7.7% sequentially from $123.4 million in the fourth
 quarter, and up 4.2% from $127.5 million in the comparable period of the prior
 year.  Net income was $28.9 million for the first quarter of 2001, or $0.15
 per share, as compared with net income of $19.4 million, or $0.10 per share,
 in the fourth quarter, and compared to $38.5 million, or $0.19 per share, in
 the comparable period of the prior year.  Net income, adjusted to exclude the
 amortization of intangible assets relating to business combinations, was
 $33.9 million for the first quarter, or $0.17 per share, as compared to
 $31.7 million, or $0.16 per share, in the fourth quarter (which also excluded
 the effect of a technology write-down), and $43.9 million, or $0.21 per share,
 in the comparable period of the prior year.
     "We are extremely pleased with the positive results reported for this
 quarter, especially, given the ongoing volatility in the marketplace," said
 Mark Templeton, Citrix president. "In addition to meeting our financial
 objectives, we made significant progress in Q1 with our strategic goals in
 launching our MetaFrame XP family of products, announcing our intention to
 acquire leading portal software provider Sequoia, and bolstering the
 management team with the hiring of a new Chief Technology Officer and a new
 Vice President for the Europe/Middle East/Africa region."
 
     FINANCIAL HIGHLIGHTS
     -- The company experienced sequential quarterly revenue growth of 7.7% and
        comparable quarterly year-over-year revenue growth of 4.2%.
     -- Electronic delivery of licenses this quarter amounted to 19% of product
        sales compared to 24% in the previous quarter.
     -- Operating margins, excluding the amortization of intangible assets
        relating to business combinations and technology write-down, increased
        during the quarter to 31.6%.
     -- Cash flow from operations was $56.9 million for the quarter.
     -- The company's cash and investments totaled $877.6 million at the end of
        the quarter.
     -- The company repurchased approximately 1.6 million shares of its common
        stock during the quarter.
 
     CUSTOMER WINS
     The company entered into customer agreements across a broad range of
 industry segments as a testament to the value provided to its diverse customer
 base.  Significant customer deals and implementations during the quarter
 include Shell, Voicestream Wireless, Hilton Hotel Corporation, The Cleveland
 Clinic, Dana Corporation, Mercury Insurance Services, Bravida Norge ASA,
 Statoil, and Maersk.
 
     PRODUCT ANNOUNCEMENTS & AWARDS
     During the quarter, Citrix introduced the next generation of MetaFrame(TM)
 for Windows(R) operating systems with the launch of MetaFrame XP(TM) -- the
 company's most powerful application serving and management platform to date.
 During the quarter, Citrix received notable recognition for its products,
 including the following:
     -- Citrix(R) NFuse(TM), which enables existing, interactive applications
        to be quickly published without rewrites via a Web portal to users on
        any standard browser, won a Crossroads 2001 A-List award from Open
        Systems Advisors in January.
    -- Citrix NFuse software was also awarded the Editor's Choice designation
       by Network Computing Magazine in a February 19, 2001 comparative review
       of Web browser-based thin-client software.
    -- Citrix won the Midsize Enterprise Innovation Award for Excellence in
       Technology for its new Citrix MetaFrame XP for Windows family of
       application server software and for Citrix NFuse 1.5 application portal
       software.  Citrix was selected for the award from a field of 60
       technology vendors by 300 senior-level IT executives who attended the
       Midsize Enterprise Summit, which featured sessions led by Gartner Group
       analysts.
 
     PENDING ACQUISITION OF SEQUOIA SOFTWARE
     -- On March 21, 2001, Citrix and Sequoia Software Corporation announced
        that the two companies signed a definitive agreement for Citrix to
        acquire Sequoia.  By adding Sequoia's portal products and technology to
        Citrix's existing application serving software, Citrix will be better
        positioned to deliver a more complete application services platform --
        one that provides users with secure access to any information source,
        business process or application, whether it's a Web, Windows or UNIX(R)
        application.  The transaction is expected to close in the second
        quarter.
 
     OTHER HIGHLIGHTS
     -- From a partnership perspective, the company announced that it signed a
        mySAP.com global Technology Partner Agreement with SAP AG.  The
        agreement encompasses coordination of worldwide marketing and technical
        support activities, as well as technical integration and joint
        development work to optimize the performance of SAP's cross-industry
        solution, mySAP Workplace, deployed on Citrix technology.
     -- In the wireless arena, Citrix is to provide application serving
        software for the Nokia 9210 Communicator, offering customers higher
        performance access to business applications running on Citrix MetaFrame
        servers over wireless connections.
     -- Additionally, Citrix and Ericsson Mobile Communications announced a
        licensing agreement to incorporate Citrix ICA technology in Ericsson's
        mobile information devices, offering high-performance mobile Internet
        and multimedia communication -- with access to applications running on
        Citrix MetaFrame servers over wireless connections.
     -- Citrix also announced it is strengthening support for wireless
        information access with a new Citrix ICA client for Symbian, providing
        high-performance access to mission-critical applications and
        information on next-generation Symbian-based Wireless Information
        Devices.
 
     ABOUT CITRIX
     Founded in 1989, Citrix Systems, Inc. is a global leader in application
 server software and services that offer "Digital Independence(TM)" -- the
 ability to run any application on any device over any connection, wireless to
 Web.  Its products, including MetaFrame application server software, NFuse
 application portal software and Independent Computing Architecture (ICA(R)), a
 core application-server technology, have been widely adopted by the corporate
 mainstream to achieve key business goals.  The firm, which markets its
 solutions through value-added resellers, system integrators and OEM licensees,
 is headquartered in Fort Lauderdale, Florida.  Citrix is traded on The Nasdaq
 Stock Market(SM) under the symbol CTXS and is part of the Standard & Poor's
 500 Index.
 
     For Citrix Investors
     This release contains forward-looking statements which are made pursuant
 to the safe harbor provisions 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 regarding current or future financial
 performance, management's plans and objectives for future operations, product
 plans and performance, management's assessment of market factors, as well as
 statements regarding the strategy and plans of the company and its strategic
 partners, 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, risks associated
 with the following: the success of the company's MetaFrame product line and
 the acceptance of the company's ICA protocol; the company's ability to develop
 and commercialize new products and services; the company's success in
 expanding into new geographic markets; the company's ability to expand its
 core business in large enterprise accounts; the company's ability to succeed
 in the transition to a paper/electronic licensing model; the size, timing and
 recognition of revenue from significant orders; increased competition,
 including potential competition from Microsoft and other companies; the
 results of the company's iBusiness and other new licensing programs; the rate
 of growth of the ASP market, and the company's ability to continue to develop
 and market products to meet the requirements of this market; the proportion of
 revenues derived from distributors, OEMs and other channels; changes in the
 company's pricing policies or those of its competitors, including Microsoft;
 the costs of developing, acquiring, or integrating new technologies or
 enhancements ADD to existing products; the company's ability to successfully
 integrate and manage merged or acquired companies, including Sequoia Software
 Corporation; the company's ability to develop new products, extend existing
 products, and maintain or develop such company's customer and employee
 relationships as a result of such merger or acquisition; the company's
 reliance upon its strategic relationships with Microsoft and other strategic
 partners; management of growth; the possibility of undetected software errors;
 dependence on proprietary technology; risks that the company's portal strategy
 will not succeed in the manner anticipated; as well as risks of downturns in
 economic conditions generally, and in the software industry specifically, and
 other risks detailed in the company's filings with the Securities and Exchange
 Commission.  Citrix assumes no obligation to update any forward-looking
 information contained in this press release or with respect to the
 announcements described herein.
 
     Citrix(R), ICA(R), MetaFrame(TM), MetaFrame XP(TM), NFuse(TM) and Digital
 Independence(TM) are registered trademarks or trademarks of Citrix Systems,
 Inc. in the U.S. and other countries.  All other trademarks and registered
 trademarks are property of their respective owners.
 
 
                              CITRIX SYSTEMS, INC.
                  Condensed Consolidated Statements of Income
               (In thousands, except per share data - unaudited)
 
                                                   Three Months  Three Months
                                                       Ended          Ended
                                                     March 31,      March 31,
                                                       2001           2000
     Net revenues                                    $132,812       $127,515
     Cost of goods sold                                 7,312          5,129
     Gross margin                                     125,500        122,386
 
     Operating expenses:
       Research and development                        16,173         12,112
       Sales, marketing and support                    49,412         41,189
       General and administrative                      18,015         12,655
       Amortization of intangibles                      6,304          6,819
     Total operating expenses                          89,904         72,775
 
     Income from operations                            35,596         49,611
     Other income, net                                  4,591          5,453
     Income before income taxes                        40,187         55,064
 
     Income taxes                                      11,252         16,519
     Net income                                       $28,935        $38,545
 
     Earnings per share - diluted                       $0.15          $0.19
     Weighted average shares outstanding              195,669        208,309
 
 
     Adjusted net income*                             $33,939        $43,937
     Adjusted earnings per share* - diluted             $0.17          $0.21
 
     * Adjustments to net income and earnings per share have been adjusted to
       exclude the effects of the amortization of intangible assets of $6,304
       and $6,819 for the three months ended March 31, 2001 and 2000,
       respectively.  These intangible assets primarily include goodwill and
       core technology.
 
 
                     Condensed Consolidated Balance Sheets
                           (In thousands - unaudited)
 
                                                     March 31,    December 31,
                                                       2001           2000
 
     Cash and short-term investments                 $412,104       $466,637
     Accounts receivable, net                          43,057         37,299
     Inventories                                        4,593          4,622
     Other current assets                              79,588         78,174
       Total current assets                           539,342        586,732
 
     Property and equipment, net                       73,327         55,559
     Long-term investments                            465,496        382,524
     Intangible assets, net                            46,034         52,339
     Other assets                                      35,693         35,419
     Total assets                                  $1,159,892     $1,112,573
 
     Current liabilities                             $167,849       $159,387
     Long-term liabilities                            342,992        344,579
     Put warrants                                       6,064         15,732
     Stockholders' equity                             642,987        592,875
     Total liabilities and stockholders' equity    $1,159,892     $1,112,573
 
 SOURCE   Citrix Systems, Inc.