-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Csr6ip2YRrKAbsiInjaFif3r0+pXGacB7mzOaDCDGQBsaw2v+iyMsjeubiMXxxZh Hq4ikKLbBdcfl0W+EqO95A== 0001157523-06-000384.txt : 20060118 0001157523-06-000384.hdr.sgml : 20060118 20060118162115 ACCESSION NUMBER: 0001157523-06-000384 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060118 ITEM INFORMATION: Results of Operations and Financial Condition FILED AS OF DATE: 20060118 DATE AS OF CHANGE: 20060118 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CITRIX SYSTEMS INC CENTRAL INDEX KEY: 0000877890 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 752275152 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-27084 FILM NUMBER: 06535829 BUSINESS ADDRESS: STREET 1: 851 WEST CYPRESS CREEK ROAD CITY: FORT LAUDERDALE STATE: FL ZIP: 33309 BUSINESS PHONE: 9542673000 MAIL ADDRESS: STREET 1: 851 WEST CYPRESS CREEK ROAD CITY: FL LAUDERDALE STATE: FL ZIP: 33309 8-K 1 a5059229.txt CITRIX SYSTEMS, INC., 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ------------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of report (Date of earliest event reported) January 18, 2006 ----------------------------- Citrix Systems, Inc. - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Charter) Delaware - -------------------------------------------------------------------------------- (State or Other Jurisdiction of Incorporation) 0-27084 75-2275152 - -------------------------------------------------------------------------------- (Commission File Number) (IRS Employer Identification No.) 851 West Cypress Creek Road, Ft. Lauderdale, Florida 33309 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (954) 267-3000 - -------------------------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) Not Applicable - -------------------------------------------------------------------------------- (Former Name or Former Address, If Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) INFORMATION TO BE INCLUDED IN THE REPORT Section 2--Financial Information Item 2.02. Results of Operations and Financial Condition. The following information, including the Exhibit attached hereto, is intended to be furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such filing. On January 18, 2006, the Company issued a press release regarding its financial results for the quarter ended December 31, 2005. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. -2- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CITRIX SYSTEMS, INC. January 18, 2006 By: /s/ David J. Henshall --------------------------------------------- David J. Henshall Vice President and Chief Financial Officer -3- EXHIBIT INDEX Exhibit No. Description - ----------- ----------- 99.1 Press release dated January 18, 2006 of Citrix Systems, Inc. -4- EX-99.1 2 a5059229ex99_1.txt EXHIBIT 99.1 Exhibit 99.1 Citrix Reports Fourth Quarter and Fiscal Year 2005 Results; Quarterly Revenue Growth of 26% and Full Year Growth of 23%; Quarterly GAAP EPS Growth of 9% and Full Year Growth of 24% FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--Jan. 18, 2006-- Quarterly Non-GAAP EPS Growth of 24% and Full Year Growth of 26% Citrix Systems, Inc. (Nasdaq:CTXS), the global leader in access infrastructure solutions, today reported financial results for the fourth quarter and fiscal year ended Dec. 31, 2005. Financial Results GAAP Results In the fourth quarter of fiscal 2005, Citrix achieved record revenue of $269 million, compared to $214 million in the fourth quarter of fiscal 2004, representing 26 percent revenue growth. Annual revenues for 2005 were $909 million, compared to $741 million in the previous year, a 23 percent increase. Net income for the fourth quarter of fiscal 2005 was $59 million, or $0.32 per diluted share, compared to $52 million, or $0.30 per diluted share, for the fourth quarter of fiscal 2004. Annual net income for 2005 was $166 million, or $0.93 per diluted share, compared to $132 million, or $0.75 per diluted share in fiscal 2004. Non-GAAP Results Non-GAAP net income was $67 million for the fourth quarter of fiscal 2005, or $0.36 per diluted share, compared to $52 million, or $0.29 per diluted share, in the comparable period last year. Non-GAAP net income excludes the effects of amortization of intangible assets primarily related to business combinations, deferred stock-based compensation, the write-off of in-process research and development and the related tax effects of these items. Annual non-GAAP net income for 2005 was $209 million, or $1.17 per diluted share, compared to $162 million, or $0.93 per diluted share, in 2004. Non-GAAP net income excludes the effects of amortization of intangible assets primarily related to business combinations, deferred stock-based compensation, the write-off of in process research and development, the write-off of deferred debt issuance costs, the related tax effects of these items and the tax provision related to the repatriation of foreign earnings under the American Jobs Creation Act (AJCA). "We finished a strong 2005 with a record fourth quarter," said Mark Templeton, president and chief executive officer for Citrix. "Solid performance across our products and regions drove record revenue for the company, excellent license growth and strong operating margin." Q4 Financial Highlights -- Revenue grew in the America's region by 30 percent; the EMEA region by 16 percent, and the Pacific region by 9 percent, compared to the fourth quarter of 2004. -- Product license revenue increased 23 percent, compared to the fourth quarter of 2005. -- Online services contributed $29 million of revenue, up 71 percent year over year on a GAAP basis and 60 percent when considering purchase accounting adjustments compared to the fourth quarter of 2004. -- Revenue from license updates grew 18 percent, compared to the fourth quarter of 2004. -- Technical services revenue, which is comprised of consulting, education and technical support, grew 33 percent, compared to the fourth quarter of 2004. -- Deferred revenue totaled $286 million, compared to $225 million at Dec. 31, 2004. -- Operating margin was 25 percent for the quarter; non-GAAP operating margin was 29 percent for the quarter excluding the effects of amortization of intangible assets primarily related to business combinations, deferred stock-based compensation, and the related tax effects of these items. -- Cash flow from operations was $79 million, compared to $80 million in the fourth quarter of 2004. This brings total twelve month cash flow from operations to $293 million. Annual Financial Highlights -- Total annual revenue grew 23 percent compared to fiscal 2004. -- Annual diluted earnings per share for fiscal 2005 increased 24 percent compared to fiscal 2004. Annual non-GAAP diluted earnings per share for fiscal 2005 increased 26 percent compared to fiscal 2004. Annual non-GAAP diluted earnings per share excludes the effects of amortization of intangible assets primarily related to business combinations, deferred stock-based compensation, the write-off of in process research and development, the write-off of deferred debt issuance costs, the related tax effects of these items, and the tax provision related to the repatriation of foreign earnings under the AJCA. -- Operating margin was 23 percent for fiscal 2005; non-GAAP operating margin was 27 percent, excluding the items noted above. -- Cash flow from operations was $293 million for fiscal 2005. -- During fiscal 2005, the company repurchased 7.4 million shares at an average net price per share of $23.51 equating to approximately $174 million in total expenditures. Financial Outlook for First Quarter 2006 Citrix management offers the following guidance for the first fiscal quarter 2006 ending March 31, 2006: -- Net revenue is expected to be in the range of $240 million to $249 million for the first quarter of fiscal 2006. -- GAAP diluted earnings per share is expected to be in the range of $0.18 to $0.20, and non-GAAP diluted earnings per share is expected to be in the range of $0.27 to $0.28, excluding $0.04 related to the effects of amortization of intangible assets primarily related to business combinations, and $0.04 to $0.05 related to the effects of stock-based compensation expenses. The above statements are based on current expectations including estimates. These statements are forward looking, and actual results may differ materially. Financial Outlook for Fiscal Year 2006 Citrix management offers the following guidance for the fiscal year 2006. The company expects net revenue to be in the range of $1.030 billion to $1.060 billion. The company expects GAAP diluted earnings per share to be in the range of $0.88 to $0.97, and non-GAAP diluted earnings per share to be in the range of $1.23 to $1.28. Non-GAAP diluted earnings per share excludes $0.15 related to the effects of amortization of intangible assets primarily related to business combinations and $0.16 to $0.20 related to the impact stock-based compensation expenses. The above statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. Product and Alliance Highlights During the fourth quarter, Citrix: -- Launched its first 64-bit solution for application virtualization: Citrix Presentation Server(TM) 4.0 for Microsoft(R) Windows Server(TM) 2003 x64 Edition. -- Introduced Citrix(R) NetScaler(R) Application Switch Standard Edition (SE), a new edition of its popular application delivery product line targeted specifically for the needs of small-to-medium enterprises. -- Acquired Sunnyvale, CA.-based Teros, Inc., a privately-held provider of application security solutions. The deal allows Citrix to further extend the technological leadership of the company's NetScaler application delivery product line. -- Introduced Citrix Hospitality Voice Services, its new packaged IP telephony services specially designed for the hospitality industry. -- Announced it has been positioned by Gartner in the "visionary" quadrant in the "Magic Quadrant for SSL/VPN, North America, 3Q05" report; and has moved into the #1 market share position for SSL/VPN according to Infonetics Research. -- Announced it has been positioned in the Leaders Quadrant of the most recent Gartner Application Delivery Products Magic Quadrant Report. -- Introduced Citrix(R) GoToAssist(TM) 7, the next generation of the industry-leading remote technical-support and professional-services solution. Conference Call Information Citrix will host a conference call today at 4:45 p.m. ET to discuss its financial results, quarterly highlights and business outlook. The call will include a slide presentation, and participants are encouraged to listen to and view the presentation via webcast at http://www.citrix.com/investors. The conference call may also be accessed by dialing: (888) 799-0519 or (706) 634-0155, using passcode: CITRIX. A replay of the webcast can be viewed by visiting the Investor Relations section of the Citrix corporate Web site at http://www.citrix.com/investors for approximately thirty days. In addition, an audio replay of the conference call will be available through Jan. 20, 2006, by dialing (800) 642-1687 or (706) 645-9291 (passcode required: 3745280). About Citrix Citrix Systems, Inc. (Nasdaq:CTXS) is the global leader and most trusted name in on-demand access. More than 160,000 organizations around the world use the Citrix Access Platform to provide the best possible access experience to any application for any user. Citrix customers include 100% of the Fortune 100 companies and 98% of the Fortune Global 500, as well as hundreds of thousands of small businesses and individuals. Citrix has approximately 6,200 channel and alliance partners in more than 100 countries. Citrix annual revenues in 2004 were $741 million. Learn more at http://www.citrix.com. 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 by management, the statements contained in the Financial Outlook for First Quarter 2006, Financial Outlook for Fiscal Year 2006, and in the reconciliation of non-GAAP financial measures to comparable U.S. GAAP measures concerning management's forecast of revenues and earnings per share, statements regarding existing and new products and services, and management's plans, objectives and strategies, constitute forward-looking statements. Such forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated by the forward-looking statements, including, without limitation, the success of the company's product lines; the company's product concentration and its ability to develop and commercialize new products and services; the success of investments in its product groups, foreign operations and vertical and geographic markets; the company's ability to successfully integrate the operations and employees of acquired companies, and the possible failure to achieve or maintain anticipated revenues and profits from acquisitions; the company's ability to maintain and expand its core business in large enterprise accounts; the company's ability to attract and retain small sized customers; the size, timing and recognition of revenue from significant orders; the effect of new accounting pronouncements on revenue and expense recognition, including the effects of FAS 123(R) on certain of the company's GAAP financial measures due to the variability of the factors used to estimate the value of stock-based compensation; the company's reliance on and the success of the company's independent distributors and resellers for the marketing and distribution of the company's products and the success of the company's marketing and licensing programs; increased competition; changes in the company's pricing policies or those of its competitors; management of operations and operating expenses; charges in the event of the impairment of assets acquired through business combinations and licenses; the management of anticipated future growth and the recruitment and retention of qualified employees; competition and other risks associated with the market for our Web-based access, training and customer assistance products and appliance products; as well as risks of downturns in economic conditions generally; political and social turmoil; and the uncertainty in the IT spending environment; 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. Use of Non-GAAP Financial Measures In our earnings release, conference call, slide presentation or webcast, we may use or discuss non-GAAP financial measures as defined by SEC Regulation G. The GAAP financial measure most directly comparable to each non-GAAP financial measure used or discussed and a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure are included in this press release after the condensed consolidated financial statements and can be found on the Investor Relations page of the Citrix corporate Web site at http://www.citrix.com/investors. CITRIX SYSTEMS, INC. Condensed Consolidated Statements of Income (In thousands, except per share data - unaudited) Three Months Ended Twelve Months Ended December 31, December 31, 2005 2004 2005 2004 --------------------------------------- Revenues: Product licenses $130,131 $106,229 $409,435 $369,826 License updates 88,961 75,263 331,102 271,547 Online services 28,725 16,762 99,097 44,101 Technical services 20,839 15,713 69,088 55,683 --------------------------------------- Total net revenues 268,656 213,967 908,722 741,157 Cost of revenues: Cost of product license revenue 5,931 802 14,404 3,824 Cost of service revenue 10,273 4,937 26,794 16,472 Amortization of core and product technology 5,278 (3,884) 16,766 6,127 --------------------------------------- Total cost of revenue 21,482 1,855 57,964 26,423 --------------------------------------- Gross margin 247,174 212,112 850,758 714,734 Operating expenses: Research and development 28,515 23,314 107,037 86,357 Sales, marketing and support 108,988 100,022 391,509 337,566 General and administrative 35,719 27,786 124,838 106,516 Amortization of intangible assets 4,084 1,711 11,622 6,204 Amortization of deferred stock-based compensation 2,875 - 4,261 - In-process research and development - 400 7,000 19,100 --------------------------------------- Total operating expenses 180,181 153,233 646,267 555,743 Income from operations 66,993 58,879 204,491 158,991 Write-off of deferred debt issuance costs - - - (7,219) Other income, net 5,376 4,279 21,017 12,661 --------------------------------------- Income before income taxes 72,369 63,158 225,508 164,433 Income taxes 13,428 10,860 59,168 32,887 --------------------------------------- Net income $58,941 $52,298 $166,340 $131,546 ======================================= Earnings per share - diluted $0.32 $0.30 $0.93 $0.75 ======================================= Weighted average shares outstanding - Diluted 182,769 176,576 178,036 174,734 ======================================= Non GAAP net income $66,704 $51,942 $208,763 $162,466 ======================================= Non GAAP earnings per share - diluted $0.36 $0.29 $1.17 $0.93 ======================================= Note: See accompanying reconciliation of non-GAAP financial measures to comparable US GAAP measures (unaudited). Condensed Consolidated Balance Sheets (In thousands - unaudited) December 31, December 31, 2005 2004 ------------------------- ASSETS: Cash and cash equivalents $484,035 $73,485 Short-term investments 18,900 159,656 Accounts receivable, net 142,015 108,399 Other current assets 81,507 85,040 ------------------------- Total current assets 726,457 426,580 Restricted cash equivalents and investments 63,728 149,051 Long-term investments 51,286 183,974 Property and equipment, net 73,727 69,281 Goodwill and other intangible assets, net 729,327 448,624 Other long-term assets 37,131 8,574 ------------------------- Total assets $1,681,656 $1,286,084 ========================= LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable and accrued expenses $159,853 $131,287 Current portion of deferred revenues 266,223 210,872 ------------------------- Total current liabilities 426,076 342,159 Long-term debt 31,000 - Long-term portion of deferred revenues 19,803 14,271 Other liabilities 1,297 4,749 Stockholders' equity 1,203,480 924,905 ------------------------- Total liabilities and stockholders' equity $1,681,656 $1,286,084 ========================= CITRIX SYSTEMS, INC. Condensed Consolidated Statement of Cash Flows (In thousands - unaudited) Twelve Months Ended December 31, 2005 ---------------- OPERATING ACTIVITIES Net income $166,340 Adjustments to reconcile net income to net cash provided by operating activities: Amortization and depreciation 50,358 Amortization of deferred stock-based compensation 4,261 In-process research and development 7,000 Provision for accounts receivable allowances 6,100 Deferred income tax benefit (14,348) Tax benefit related to the exercise of non-statutory stock options and disqualifying Dispositions of incentive stock options 38,336 Other non-cash items 541 ---------------- Total adjustments to reconcile net income to net cash provided by operating activities 92,248 Changes in operating assets and liabilities, net of effects of acquisitions: Accounts receivable (28,424) Prepaid expenses and other current assets 775 Other assets 234 Deferred tax assets, net 2,111 Accounts payable and accrued expenses 7,978 Deferred revenues 54,864 Other liabilities (2,983) ---------------- Total changes in operating assets and liabilities, net of effects of acquisitions 34,555 ---------------- Net cash provided by operating activities 293,143 INVESTING ACTIVITIES Net proceeds from sales, maturities and purchases of available-for-sale investments 354,987 Cash paid for acquisitions, net of cash acquired (168,347) Purchases of property and equipment (26,377) ---------------- Net cash provided by investing activities 160,263 FINANCING ACTIVITIES Proceeds from issuance of common stock 101,592 Net proceeds from term loan and revolving credit facility 29,902 Cash paid under stock repurchase programs (174,350) ---------------- Net cash used in financing activities (42,856) ---------------- Change in cash and cash equivalents 410,550 Cash and cash equivalents at beginning of period 73,485 ---------------- Cash and cash equivalents at end of period $484,035 ================ Reconciliation of Non-GAAP Financial Measures to Comparable U.S. GAAP Measures (Unaudited) We utilize certain non-GAAP financial measures to evaluate our performance. We consider these measures important indicators of our success. Citrix provides these non-GAAP measures of the company's performance to investors to enable them to, among other things, better compare Citrix's most recent results of operations against financial models prepared by the company's investors and securities analysts, and to provide additional information concerning the impact of business acquisitions on Citrix's results of operations. In addition, we believe that it is useful to investors to review information concerning Citrix's results of operations on both a GAAP basis and a non-GAAP basis that excludes stock-based compensation expense under FAS 123(R) amongst others as it relates to 2006 forward-looking guidance. These measures should not be considered an alternative to measurements required by accounting principles generally accepted in the United States ("GAAP") such as net income and earnings per share and should not be considered measures of our liquidity. In addition, our non-GAAP financial measures may not be comparable to similar measures reported by other companies. The following tables reconcile non-GAAP financial measures used in this release to the most comparable GAAP measure for the respective periods (in thousands, except for per share information and percentages): CITRIX SYSTEMS, INC. RECONCILIATION OF CONDENSED CONSOLIDATED STATEMENTS OF INCOME TO THE NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data - unaudited) Three Months Ended December 31, 2005 ------------------------------- GAAP Adjustments Non-GAAP ------------------------------- Revenues: Product licenses $130,131 - $130,131 License updates 88,961 - 88,961 Online services 28,725 - 28,725 Technical services 20,839 - 20,839 ------------------------------- Total net revenues 268,656 - 268,656 Cost of revenues: Cost of product license revenues 5,931 - 5,931 Cost of services revenues 10,273 - 10,273 Amortization of core and product technology 5,278 (5,278) A - ------------------------------- Total cost of revenues 21,482 (5,278) 16,204 Gross margin 247,174 5,278 252,452 Operating expenses: Research and development 28,515 - 28,515 Sales, marketing and support 108,988 - 108,988 General and administrative 35,719 - 35,719 Amortization of other intangible assets 4,084 (4,084) A - Amortization of deferred stock-based - Compensation 2,875 (2,875) B - In-process research and development - - - ------------------------------- Total operating expenses 180,181 (6,959) 173,222 ------------------------------- Income from operations 66,993 12,237 79,230 Other income, net 5,376 - 5,376 ------------------------------- Income before income taxes 72,369 12,237 84,606 Income taxes 13,428 4,474 D 17,902 ------------------------------- Net Income $58,941 $7,763 $66,704 =============================== Earnings per common share - diluted $0.32 $0.04 $0.36 =============================== Weighted average shares outstanding - diluted 182,769 182,769 =============================== Three Months Ended December 31, 2004 ------------------------------- GAAP Adjustments Non-GAAP ------------------------------- Revenues: Product licenses $106,229 - $106,229 License updates 75,263 - 75,263 Online services 16,762 - 16,762 Technical services 15,713 - 15,713 ------------------------------- Total net revenues 213,967 - 213,967 Cost of revenues: Cost of product license revenues 802 - 802 Cost of services revenues 4,937 - 4,937 Amortization of core and product technology (3,884) 3,884 A - ------------------------------- Total cost of revenues 1,855 3,884 5,739 Gross margin 212,112 (3,884) 208,228 Operating expenses: Research and development 23,314 - 23,314 Sales, marketing and support 100,022 - 100,022 General and administrative 27,786 - 27,786 Amortization of other intangible assets 1,711 (1,711) A - Amortization of deferred stock-based Compensation - - - In-process research and development 400 (400) C - ------------------------------- Total operating expenses 153,233 (2,111) 151,122 ------------------------------- Income from operations 58,879 (1,773) 57,106 Other income, net 4,279 - 4,279 ------------------------------- Income before income taxes 63,158 (1,773) 61,385 Income taxes 10,860 (1,417) E 9,443 ------------------------------- Net Income $52,298 (356) $51,942 =============================== Earnings per common share - diluted $0.30 ($0.01) $0.29 =============================== Weighted average shares outstanding - diluted 176,576 176,576 =============================== A - To exclude the effects of the amortization of core and product technology and other intangible assets primarily related to business combinations. B - To exclude the effect of amortization of deferred stock-based compensation. C - To exclude the effect of the write off of in-process research and development related to business combinations. D - To exclude the tax effects of amortization of core and product technology and other intangible assets and the amortization of deferred stock-based compensation. E - To exclude the tax effects of amortization of core and product technology and other intangible assets and the write off of in-process research and development related to business combinations. CITRIX SYSTEMS, INC. RECONCILIATION OF CONDENSED CONSOLIDATED STATEMENTS OF INCOME TO THE NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data - unaudited) Twelve Months Ended December 31, 2005 ------------------------------- GAAP Adjustments Non-GAAP ------------------------------- Revenues: Product licenses $409,435 - $409,435 License updates 331,102 - 331,102 Online services 99,097 - 99,097 Technical services 69,088 - 69,088 ------------------------------- Total net revenues 908,722 - 908,722 Cost of revenues: Cost of product license revenues 14,404 - 14,404 Cost of services revenues 26,794 - 26,794 Amortization of core and product technology 16,766 (16,766) A - ------------------------------- Total cost of revenues 57,964 (16,766) 41,198 Gross margin 850,758 16,766 867,524 Operating expenses: Research and development 107,037 - 107,037 Sales, marketing and support 391,509 - 391,509 General and administrative 124,838 - 124,838 Amortization of other intangible assets 11,622 (11,622) A - Amortization of deferred stock-based Compensation 4,261 (4,261) B - In-process research and development 7,000 (7,000) C - ------------------------------- Total operating expenses 646,267 (22,883) 623,384 ------------------------------- Income from operations 204,491 39,649 244,140 Write-off of deferred debt issuance costs - - - Other income, net 21,017 - 21,017 ------------------------------- Income before income taxes 225,508 39,649 265,157 Income taxes 59,168 (2,774) E 56,394 ------------------------------- Net Income $166,340 $42,423 $208,763 =============================== Earnings per common share - diluted $0.93 $0.24 $1.17 =============================== Weighted average shares outstanding - diluted 178,036 178,036 =============================== Twelve Months Ended December 31, 2004 ------------------------------- GAAP Adjustments Non-GAAP ------------------------------- Revenues: Product licenses $369,826 - $369,826 License updates 271,547 - 271,547 Online services 44,101 - 44,101 Technical services 55,683 - 55,683 ------------------------------- Total net revenues 741,157 - 741,157 Cost of revenues: Cost of product license revenues 3,824 - 3,824 Cost of services revenues 16,472 - 16,472 Amortization of core and product technology 6,127 (6,127) A - ------------------------------- Total cost of revenues 26,423 (6,127) 20,296 Gross margin 714,734 6,127 720,861 Operating expenses: Research and development 86,357 - 86,357 Sales, marketing and support 337,566 - 337,566 General and administrative 106,516 - 106,516 Amortization of other intangible assets 6,204 (6,204) A - Amortization of deferred stock-based Compensation - - - In-process research and development 19,100 (19,100) C - ------------------------------- Total operating expenses 555,743 (25,304) 530,439 ------------------------------- Income from operations 158,991 31,431 190,422 Write-off of deferred debt issuance costs (7,219) 7,219 D - Other income, net 12,661 - 12,661 ------------------------------- Income before income taxes 164,433 38,650 203,083 Income taxes 32,887 7,730 F 40,617 ------------------------------- Net Income $131,546 $30,920 $162,466 =============================== Earnings per common share - diluted $0.75 $0.18 $0.93 =============================== Weighted average shares outstanding - diluted 174,734 174,734 =============================== A - To exclude the effects of the amortization of core and product technology and other intangible assets primarily related to business combinations. B - To exclude the effect of amortization of deferred stock-based compensation. C - To exclude the effect of the write-off of in-process research and development related to business combinations. D - To exclude the effect of the write-off of deferred debt issuance costs due to the redemption of the Company's convertible subordinated debentures. E - To exclude the tax effect of amortization of core and product technology and other intangible assets, the amortization of deferred stock-based compensation, the write-off of in-process research and development related to business combinations and the tax provision related to the repatriation of foreign earnings under the AJCA. F - To exclude the tax effect of amortization of core and product technology and other intangible assets, the write-off of in-process research and development related to business combinations and the write-off of deferred debt issuance costs. Forward-looking Guidance for the Three Months Ended March 31, 2006 - ---------------------------------------------------------------------- Earnings Per Share Range - Diluted --------------------------- U.S. GAAP measure $0.18 to $0.20 Adjustments to exclude the effects of amortization of intangible assets $0.04 --------------------------- Adjustments to exclude the effects of expenses related to stock-based compensation $0.04 to $0.05 =========================== Non GAAP figures $0.27 to $0.28 =========================== Forward-looking Guidance for Fiscal Year Ended December 31, 2006 --------------------------------------------------------------------- Earnings Per Share Range - Diluted --------------------------- U.S. GAAP measure $0.88 to $0.97 Adjustments to exclude the effects of amortization of intangible assets $0.15 --------------------------- Adjustments to exclude the effects of expenses related to stock-based compensation $0.16 to $0.20 =========================== Non GAAP figures $1.23 to $1.28 =========================== Citrix(R), NetScaler(R), Citrix Presentation Server(TM) and GoToAssist(TM) are trademarks of Citrix Systems, Inc. and/or one or more of its subsidiaries, and may be registered in the U.S. Patent and Trademark Office and in other countries. Microsoft(R) and Windows Server(TM) are registered trademarks of Microsoft Corporation in the U.S. and/or other countries. All other trademarks and registered trademarks are property of their respective owners. CONTACT: Citrix Systems, Inc., Fort Lauderdale Media Inquiries: Eric Armstrong, 954-267-2977 eric.armstrong@citrix.com or A&R Partners Eric Jones, 212-905-6154 ejones@arpartners.com or Investor Inquiries: Citrix Systems, Inc. Jeff Lilly, 954-267-2886 jeff.lilly@citrix.com -----END PRIVACY-ENHANCED MESSAGE-----