-----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, RrE+CTEGLIM4E5cVsa7YK66B5ClwYVMrhSf/Q9HU8oiQqXKeqnSsCfWuL8o89saB rKYFX4yfa5tph2UrpX7rjw== 0001157523-06-007025.txt : 20060719 0001157523-06-007025.hdr.sgml : 20060719 20060719161630 ACCESSION NUMBER: 0001157523-06-007025 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060719 ITEM INFORMATION: Results of Operations and Financial Condition FILED AS OF DATE: 20060719 DATE AS OF CHANGE: 20060719 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: 06969593 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 a5191491.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) July 19, 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 July 19, 2006, the Company issued a press release regarding its financial results for the quarter ended June 30, 2006. 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. July 19, 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 July 19, 2006 of Citrix Systems, Inc. -4- EX-99.1 2 a5191491ex99_1.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Citrix Reports Second Quarter Earnings Results; Year-over-year Quarterly Revenue Growth of 30%; GAAP Diluted Earnings Per Share of $0.24 Versus $0.16 Over Comparable Period Last Year FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--July 19, 2006-- Non-GAAP Diluted Earnings Per Share of $0.33 Versus $0.27 Over Comparable Period Last Year Citrix Systems, Inc. (Nasdaq:CTXS), the global leader in access infrastructure solutions, today reported financial results for the second quarter of fiscal 2006 ended June 30, 2006. Financial Results In the second quarter of fiscal 2006, Citrix achieved revenue of $275 million, compared to $211 million in the second quarter of fiscal 2005, representing 30 percent revenue growth. GAAP Results Net income for the second quarter of fiscal 2006 was $46 million, or $0.24 per diluted share, compared to $28 million, or $0.16 per diluted share, for the second quarter of fiscal 2005. Non-GAAP Results Non-GAAP net income, in the second quarter of 2006 increased 34 percent to $64 million, or $0.33 per diluted share, compared to $48 million, or $0.27 per diluted share, in the comparable period last year. Non-GAAP net income excludes the effects of the amortization of intangible assets primarily related to business combinations, stock-based compensation expenses and the tax effects related to those items. In addition, adjusted results for the second quarter of 2005 exclude a net tax provision recorded in anticipation of repatriating certain foreign earnings pursuant to the American Jobs Creation Act of 2004 (AJCA). "I'm pleased with our second quarter results," said Mark Templeton, president and chief executive officer for Citrix. "We saw across-the-board strength in our product portfolio and in our geographic segments. We are well positioned for the second half of 2006 as we continue to drive our access infrastructure strategy." Q2 Financial Highlights In reviewing the second quarter results of 2006, compared to the second quarter of 2005: -- Revenue grew in the America's region by 36 percent, the EMEA region by 20 percent and the Pacific region by 24 percent; -- Product license revenue increased 28 percent; -- Online services contributed $35 million of revenue, up 47 percent; -- Revenue from license updates grew 24 percent; and -- Technical services revenue, which is comprised of consulting, education and technical support, grew 52 percent. Other financial highlights included: -- Deferred revenue totaled $311 million, compared to $243 million on June 30, 2005; -- Operating margin was 19 percent for the quarter; non-GAAP operating margin was 27 percent for the quarter, excluding the effects of the amortization of intangible assets primarily related to business combinations, stock-based compensation expenses and the tax effects related to those items; and -- Cash flow from operations was $60 million, compared to $65 million in the second quarter of 2005. This brings total twelve month trailing cash flow from operations to approximately $310 million. Financial Outlook for Third Fiscal Quarter 2006 Citrix management offers the following guidance for the third fiscal quarter 2006 ending September 30, 2006: -- Net revenue is expected to be in the range of $275 million to $280 million, compared to $227 million in the third quarter of 2005. -- GAAP diluted earnings per share is expected to be in the range of $0.24 to $0.26, compared to $0.23 in the third quarter of 2005. Non-GAAP diluted earnings per share is expected to be in the range of $0.33 to $0.34, excluding $0.03 related to the effects of amortization of intangible assets primarily related to business combinations and $0.05 to $0.06 related to the effects of stock-based compensation expenses. This compares to $0.29 in the same quarter of the previous year, adjusted to exclude the effects of the amortization of intangible assets primarily related to business combinations, stock-based compensation expenses, the write off of in-process research and development and the tax effects related to those items. The above statements are based on current expectations. 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 ending December 31, 2006: -- The company expects net revenue to be in the range of $1.105 billion to $1.120 billion, compared to $909 million in fiscal year 2005. -- The company expects GAAP diluted earnings per share to be in the range of $1.00 to $1.05, compared to $0.93 in fiscal year 2005. Non-GAAP diluted earnings per share to be in the range of $1.36 to $1.39, excluding $0.14 related to the effects of the amortization of intangible assets primarily related to business combinations and $0.20 to $0.22 related to the effects of stock-based compensation expenses. This compares to $1.17 for fiscal year 2005, when adjusted to exclude the effects of the amortization of intangible assets primarily related to business combinations, stock-based compensation expenses, the write-off of in process research and development, the related tax effects of these items and the tax provision related to the repatriation of foreign earnings under the AJCA. The above statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. Company, Product and Alliance Highlights During the second quarter of 2006, Citrix announced: -- Citrix(R) GoToWebinar(TM), the company's next-generation collaboration offering, giving marketing professionals a simple and affordable solution available for conducting online events, such as large sales presentations and marketing events over the Web. -- Citrix(R) NetScaler(R) 12000, the new system designed for large-scale Web applications handling millions of simultaneous users conducting hundreds of thousands of transactions per second. -- Citrix(R) GoToMyPC(R) won PC World's 2006 World Class Award for best remote-access software for the fourth consecutive year citing its "unbeatable speed, security and hassle-free approach." -- Citrix Password Manager(TM) won the prestigious SC Magazine Awards 2006 Europe in the Reader Trust category "Best Password Management." -- The acquisition of privately held Reflectent Software, Inc., provider of one of the industry's most widely deployed solutions to monitor the performance of client-server, Web and desktop applications from an end-user perspective. -- The appointment of Asiff Hirji, Chief Operating Officer for TD Ameritrade, to its Board of Directors. 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 website at http://www.citrix.com/investors for approximately 30 days. In addition, an audio replay of the conference call will be available through July 21, 2006, by dialing (800) 642-1687 or (706) 645-9291 (passcode required: 2350219). About Citrix Citrix Systems, Inc. (Nasdaq:CTXS) is the global leader and most trusted name in on-demand access. More than 180,000 organizations around the world rely on Citrix 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 2005 were $909 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 Third Fiscal 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, and statements regarding 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 SFAS No. 123R 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(R), NetScaler(R), GoToMyPC(R), Citrix Password Manager(TM) and GoToWebinar(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. 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 Ended Six Months Ended June 30, June 30, 2006 2005 2006 2005 --------------------------------------- Revenues: Product licenses $117,799 $91,980 $231,984 $182,042 License updates 99,750 80,455 193,621 157,630 Online services 35,128 23,844 66,766 44,209 Technical services 22,791 14,950 43,095 29,238 --------------------------------------- Total net revenues 275,468 211,229 535,466 413,119 Cost of revenues: Cost of product license revenues 8,116 2,277 14,747 3,645 Cost of services revenues 11,421 5,395 21,811 9,910 Amortization of core and product technology 4,585 3,693 9,586 7,011 --------------------------------------- Total cost of revenues 24,122 11,365 46,144 20,566 Gross margin 251,346 199,864 489,322 392,553 Operating expenses: Research and development 38,222 26,402 71,882 51,467 Sales, marketing and support 117,002 92,035 225,939 186,429 General and administrative 40,796 30,150 79,414 57,561 Amortization of other intangible assets 4,150 2,214 8,182 4,391 --------------------------------------- Total operating expenses 200,170 150,801 385,417 299,848 --------------------------------------- Income from operations 51,176 49,063 103,905 92,705 Other income, net 10,340 4,983 16,796 10,071 --------------------------------------- Income before income taxes 61,516 54,046 120,701 102,776 Income taxes 15,066 26,160 29,572 36,330 --------------------------------------- Net income $46,450 $27,886 $91,129 $66,446 ======================================= Earnings per common share - diluted $0.24 $0.16 $0.48 $0.38 ======================================= Weighted average shares outstanding - diluted 191,500 175,146 188,762 175,541 ======================================= Adjusted net income $63,831 $47,753 $124,918 $89,819 ======================================= Adjusted earnings per share - diluted $0.33 $0.27 $0.66 $0.51 ======================================= Note: See accompanying reconciliation of non-GAAP financial measures to comparable U.S. GAAP measures (unaudited). CITRIX SYSTEMS, INC. Condensed Consolidated Balance Sheets (In thousands - unaudited) June 30, 2006 December 31, 2005 ---------------------------------- ASSETS: Cash and cash equivalents $344,589 $484,035 Short-term investments 276,244 18,900 Accounts receivable, net 136,175 142,015 Other current assets 105,723 81,507 ---------------------------------- Total current assets 862,731 726,457 Restricted cash equivalents and investments 63,779 63,728 Long-term investments 214,892 51,286 Property and equipment, net 81,314 73,727 Goodwill and other intangible assets, net 727,059 729,327 Other long-term assets 42,158 37,131 ---------------------------------- Total assets $1,991,933 $1,681,656 ================================== LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable and accrued expenses $160,363 $159,853 Current portion of deferred revenues 290,097 266,223 ---------------------------------- Total current liabilities 450,460 426,076 Long-term debt -- 31,000 Long-term portion of deferred revenues 20,628 19,803 Other liabilities 1,379 1,297 Stockholders' equity 1,519,466 1,203,480 ---------------------------------- Total liabilities and stockholders' equity $1,991,933 $1,681,656 ================================== CITRIX SYSTEMS, INC. Condensed Consolidated Statement of Cash Flows (In thousands - unaudited) Six Months Ended June 30, 2006 -------------------- OPERATING ACTIVITIES Net Income $91,129 Adjustments to reconcile net income to net cash provided by operating activities: Amortization and depreciation 30,425 Stock-based compensation expense 25,631 Provision for accounts receivable allowances 3,174 Other non-cash items 1,019 -------------------- Total adjustments to reconcile net income to net cash provided by operating activities 60,249 Changes in operating assets and liabilities, net of the effects of acquisition: Accounts receivable 3,578 Prepaid expenses and other current assets (21,340) Other assets (938) Deferred tax asset (2,432) Accounts payable and accrued expenses 788 Deferred revenues 24,374 Other liabilities 57 -------------------- Total changes in operating assets and liabilities, net of the effects of acquisition 4,087 -------------------- Net cash provided by operating activities 155,465 INVESTING ACTIVITIES Purchases of available-for-sale investments, net of proceeds (421,902) Cash paid for acquisition, net of cash acquired (13,448) Purchases of property and equipment (21,417) -------------------- Net cash used in investing activities (456,767) FINANCING ACTIVITIES Proceeds from issuance of common stock 196,526 Payments on term loan (31,000) Excess tax benefit from stock-based compensation 34,634 Cash paid under stock repurchase programs, net of premiums received (38,304) -------------------- Net cash provided in financing activities 161,856 -------------------- Change in cash and cash equivalents (139,446) Cash and cash equivalents at beginning of period 484,035 -------------------- Cash and cash equivalents at end of period $344,589 ==================== Reconciliation of Non-GAAP Financial Measures to Comparable U.S. GAAP Measures (Unaudited) We utilize certain non-GAAP financial measures to evaluate our performance and for internal planning and forecasting purposes. We consider these measures important indicators of our success. In addition, 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. 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 June 30, 2006 -------------------------------- GAAP Adjustments Non-GAAP -------------------------------- Revenues: Product licenses $117,799 - $117,799 License updates 99,750 - 99,750 Online services 35,128 - 35,128 Technical services 22,791 - 22,791 -------------------------------- Total net revenues 275,468 - 275,468 -------------------------------- Cost of revenues: Cost of product license revenues 8,116 - 8,116 Cost of services revenues 11,421 (387) B 11,034 Amortization of core and product technology 4,585 (4,585) A - -------------------------------- Total cost of revenues 24,122 (4,972) 19,150 Gross margin 251,346 4,972 256,318 Operating expenses: Research and development 38,222 (4,723) B 33,499 Sales, marketing and support 117,002 (5,871) B 111,131 General and administrative 40,796 (3,101) B 37,695 Amortization of other intangible assets 4,150 (4,150) C - -------------------------------- Total operating expenses 200,170 (17,845) 182,325 -------------------------------- Income from operations 51,176 22,817 73,993 Other income, net 10,340 - 10,340 -------------------------------- Income before income taxes 61,516 22,817 84,333 Income taxes 15,066 5,436 D 20,502 -------------------------------- Net Income $46,450 $17,381 $63,831 ================================ Earnings per common share - diluted $0.24 $0.09 $0.33 ================================ Weighted average shares outstanding - diluted 191,500 191,500 ================================ Three Months Ended June 30, 2005 -------------------------------- GAAP Adjustments Non-GAAP -------------------------------- Revenues: Product licenses $91,980 - $91,980 License updates 80,455 - 80,455 Online services 23,844 - 23,844 Technical services 14,950 - 14,950 -------------------------------- Total net revenues 211,229 - 211,229 -------------------------------- Cost of revenues: Cost of product license revenues 2,277 - 2,277 Cost of services revenues 5,395 - 5,395 Amortization of core and product technology 3,693 (3,693) A - -------------------------------- Total cost of revenues 11,365 (3,693) 7,672 Gross margin 199,864 3,693 203,557 Operating expenses: Research and development 26,402 - 26,402 Sales, marketing and support 92,035 - 92,035 General and administrative 30,150 (94) B 30,056 Amortization of other intangible assets 2,214 (2,214) C - -------------------------------- Total operating expenses 150,801 (2,308) 148,493 -------------------------------- Income from operations 49,063 6,001 55,064 Other income, net 4,983 - 4,983 -------------------------------- Income before income taxes 54,046 6,001 60,047 Income taxes 26,160 (13,866) E 12,294 -------------------------------- Net Income $27,886 $19,867 $47,753 ================================ Earnings per common share - diluted $0.16 $0.11 $0.27 ================================ Weighted average shares outstanding - diluted 175,146 175,146 ================================ A - To exclude the effects of the amortization of core and product technology. B - To exclude the effects of stock-based compensation expenses. C - To exclude the effects of the amortization of other intangible assets primarily related to business combinations. D - To exclude the tax effects of the amortization of core and product technology, stock-based compensation and the amortization of other intangible assets primarily related to business combinations. E - To exclude the tax effects of the amortization of core and product technology, stock-based compensation expenses, the amortization of other intangible assets primarily related to business combinations and the tax provision recorded related to the AJCA. 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) Six Months Ended June 30, 2006 -------------------------------- GAAP Adjustments Non-GAAP -------------------------------- Revenues: Product licenses $231,984 - $231,984 License updates 193,621 - 193,621 Online services 66,766 - 66,766 Technical services 43,095 - 43,095 -------------------------------- Total net revenues 535,466 - 535,466 -------------------------------- Cost of revenues: Cost of product license revenues 14,747 - 14,747 Cost of services revenues 21,811 (747) B 21,064 Amortization of core and product technology 9,586 (9,586) A - -------------------------------- Total cost of revenues 46,144 (10,333) 35,811 Gross margin 489,322 10,333 499,655 Operating expenses: Research and development 71,882 (8,380) B 63,502 Sales, marketing and support 225,939 (10,646) B 215,293 General and administrative 79,414 (5,858) B 73,556 Amortization of other intangible assets 8,182 (8,182) C - -------------------------------- Total operating expenses 385,417 (33,066) 352,351 -------------------------------- Income from operations 103,905 43,399 147,304 Other income, net 16,796 - 16,796 -------------------------------- Income before income taxes 120,701 43,399 164,100 Income taxes 29,572 9,610 D 39,182 -------------------------------- Net Income $91,129 $33,789 $124,918 ================================ Earnings per common share - diluted $0.48 $0.18 $0.66 ================================ Weighted average shares outstanding - diluted 188,762 188,762 ================================ Six Months Ended June 30, 2005 -------------------------------- GAAP Adjustments Non-GAAP -------------------------------- Revenues: Product licenses $182,042 - $182,042 License updates 157,630 - 157,630 Online services 44,209 - 44,209 Technical services 29,238 - 29,238 -------------------------------- Total net revenues 413,119 - 413,119 -------------------------------- Cost of revenues: Cost of product license revenues 3,645 - 3,645 Cost of services revenues 9,910 - 9,910 Amortization of core and product technology 7,011 (7,011) A - -------------------------------- Total cost of revenues 20,566 (7,011) 13,555 Gross margin 392,553 7,011 399,564 Operating expenses: Research and development 51,467 - 51,467 Sales, marketing and support 186,429 - 186,429 General and administrative 57,561 (197) B 57,364 Amortization of other intangible assets 4,391 (4,391) C - -------------------------------- Total operating expenses 299,848 (4,588) 295,260 -------------------------------- Income from operations 92,705 11,599 104,304 Other income, net 10,071 - 10,071 -------------------------------- Income before income taxes 102,776 11,599 114,375 Income taxes 36,330 (11,774) E 24,556 -------------------------------- Net Income $66,446 $23,373 $89,819 ================================ Earnings per common share - diluted $0.38 $0.13 $0.51 ================================ Weighted average shares outstanding - diluted 175,541 175,541 ================================ A - To exclude the effects of the amortization of core and product technology. B - To exclude the effects of stock-based compensation expenses. C - To exclude the effects of the amortization of other intangible assets primarily related to business combinations. D - To exclude the tax effects of the amortization of core and product technology, stock-based compensation and the amortization of other intangible assets primarily related to business combinations. E - To exclude the tax effects of the amortization of core and product technology, stock-based compensation expenses, the amortization of other intangible assets primarily related to business combinations and the tax provision recorded related to the AJCA. Forward-looking Guidance for the Three Months Ended September 30, 2006 --------------------------------------------- Earnings Per Share Range - Diluted -------------------- U.S. GAAP measure $0.24 to $0.26 Adjustments to exclude the effects of amortization of intangible assets $0.03 -------------------- Adjustments to exclude the effects of expenses related to stock-based compensation $0.05 to $0.06 ==================== Non-GAAP figures $0.33 to $0.34 ==================== Forward-looking Guidance for Fiscal Year Ended December 31, 2006 ---------------------------------------- Earnings Per Share Range - Diluted ------------------- U.S. GAAP measure $1.00 to $1.05 Adjustments to exclude the effects of amortization of intangible assets $0.14 ------------------- Adjustments to exclude the effects of expenses related to stock-based compensation $0.20 to $0.22 =================== Non-GAAP figures $1.36 to $1.39 =================== CONTACT: Citrix Systems, Inc., Fort Lauderdale Media inquiries: Eric Armstrong, 954-267-2977 eric.armstrong@citrix.com or Investor inquiries: Jeff Lilly, 954-267-2886 jeff.lilly@citrix.com -----END PRIVACY-ENHANCED MESSAGE-----