EX-99.01 2 f10984exv99w01.htm EXHIBIT 99.01 exv99w01
 

Exhibit 99.01
         
Contacts:
  Investors   Media
 
  Bob Lawson   Holly Anderson
 
  Intuit Inc.   Intuit Inc.
 
  (650) 944-6165   (650) 944-3992
 
  Robert_Lawson@intuit.com   Holly_Anderson@intuit.com
Intuit’s Fiscal ’05 Revenue Grows 13 Percent, Tops $2 Billion
Fourth-Quarter Revenue Increases 17 Percent
MOUNTAIN VIEW, Calif. – Aug. 24, 2005 – Intuit Inc. (Nasdaq: INTU) today announced strong revenue and profit growth for its fiscal year ended July 31, 2005.
          “We’re very pleased with our results for the year,” said Steve Bennett, Intuit’s president and chief executive officer. “Each of our business segments performed very well. Our two largest segments – QuickBooks-Related and Consumer Tax – had outstanding results, with strong revenue growth and a significant increase in new users.”
Fiscal 2005 Financial Highlights
•   Revenue of $2.04 billion increased 13 percent from fiscal 2004. Growth was driven by solid performance in Intuit’s two largest business segments, QuickBooks-Related and Consumer Tax.
 
•   Intuit had operating income of $524.1 million in accordance with GAAP, or Generally Accepted Accounting Principles, up 25 percent from fiscal 2004. Intuit had non-GAAP operating income of $550.9 million, up 22 percent from fiscal 2004.
 
•   Intuit had net income of $381.6 million in accordance with GAAP, up 20 percent from fiscal 2004. This represents diluted earnings per share, or EPS, of $2.03, up 28 percent over fiscal 2004.
 
•   Intuit’s non-GAAP net income of $375.5 million increased 18 percent from fiscal 2004. Non-GAAP diluted EPS of $1.99 grew 25 percent over the year-ago period.

 

 

Fiscal 2005 Business Segment Revenue Growth
•   QuickBooks-Related revenue grew 15 percent over fiscal 2004 to $753.0 million.
•   Intuit-Branded Small Business revenue increased 11 percent over fiscal 2004 to $230.7 million. This segment includes outsourced payroll and Intuit’s three vertical businesses.
•   Consumer Tax revenue grew 16 percent over the prior-year period to $570.7 million.
•   Professional Tax revenue increased 5 percent over fiscal 2004 to $265.0 million.
•   Revenue from Other Businesses, which includes Quicken and Canada, was up 9 percent year-over-year to $218.3 million.
Fourth-Quarter 2005 Highlights
•   Revenue of $301.8 million increased 17 percent from the year-ago quarter. Growth was primarily driven by strong performance in Intuit’s QuickBooks-Related segment.
•   On a GAAP basis, Intuit had an operating loss of $34.2 million. On a non-GAAP basis, Intuit had an operating loss of $27.6 million.
•   On a GAAP basis, Intuit had a net loss of $20.0 million, narrower than a loss of $42.1 million in the year-ago quarter. This represents a loss of $0.11 per share versus a loss of $0.22 per share in the fourth quarter of fiscal 2004.
•   Intuit had a non-GAAP net loss of $14.7 million, narrower than a non-GAAP net loss of $16.2 million in the year-ago quarter. Intuit typically posts a seasonal loss in its fourth quarter when it has little revenue from its tax businesses but expenses remain relatively constant. The fourth-quarter non-GAAP loss per share was $0.08 versus a loss of $0.09 in the fourth quarter of fiscal 2004.
Forward-Looking Guidance for Fiscal 2006
     Intuit provided for the first time its financial guidance for fiscal 2006, which will end on July 31, 2006. The company expects:
•   Revenue of $2.18 billion to $2.24 billion, or year-over-year growth of approximately 7 percent to 10 percent. Revenue guidance for each quarter of fiscal 2006 is provided on the accompanying fact sheet.
•   GAAP operating income of $501 million to $523 million, versus $524.1 million in fiscal 2005. Beginning in fiscal 2006 GAAP operating income will include the expenses associated with employee stock options. On a non-GAAP basis, operating income is expected to be $595 million to $617 million, or growth of approximately 8 percent to 12 percent over fiscal 2005.

 

 

•   GAAP diluted EPS of $1.86 to $1.96, down 3 percent to 8 percent year-over-year due to the expensing of employee stock options and a higher GAAP tax rate. On a non-GAAP basis, diluted EPS is expected to be $2.19 to $2.29, up approximately 10 percent to 15 percent from fiscal 2005. GAAP and non-GAAP EPS guidance for each quarter of fiscal 2006 is provided on the accompanying fact sheet.
Forward-Looking Guidance for First-Quarter 2006
     Intuit’s expected results for the first quarter of fiscal 2006, which will end Oct. 31, 2005, are:
•   Revenue of $270 million to $285 million, or year-over-year growth of 7 percent to 13 percent.
•   A GAAP operating loss of $111 million to $121 million and a non-GAAP operating loss of $85 million to $95 million. Intuit typically posts a seasonal loss in its first quarter when it has little revenue from its tax businesses but expenses remain relatively constant.
•   A GAAP net loss of $0.38 to $0.43 per share and a non-GAAP net loss of $0.30 to $0.35 per share.
Conference Call Scripts, Webcast and Conference Call Information
          A live audio webcast of Intuit’s fourth-quarter and fiscal 2005 conference call is available at http://www.intuit.com/about_intuit/investors/webcast_events.html. The call begins today at 1:30 p.m. PDT. The replay of the audio webcast will remain on Intuit’s Web site for one week after the conference call. Intuit has posted to its Web site this press release, including the attached tables and non-GAAP to GAAP reconciliations. It will post the conference call script to the Web site shortly after the conference call concludes.
          The conference call number is (866) 261-7147 in the United States and (703) 639-1227 from international locations. No reservation or access code is needed. A replay of the call will be available for one week by calling (888) 266-2081 in the United States and (703) 925-2533 from international locations. The access code is 749152.
Intuit, the Intuit logo, Quicken and QuickBooks, among others, are registered trademarks and/or registered service marks of Intuit Inc. in the United States and other countries.
-30-

 

 

About Non-GAAP Financial Measures
This press release includes non-GAAP financial measures. These measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with generally accepted accounting principles (“GAAP”). These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same names and may differ from non-GAAP financial measures with the same or similar names that are used by other companies. Intuit’s management believes that these non-GAAP financial measures provide meaningful supplemental information regarding Intuit’s operating results because they exclude amounts that are not necessarily related to Intuit’s core operating results. In addition, the forward-looking guidance for non-GAAP income, loss, earnings per share and loss per share in fiscal 2006 excludes estimated expenses for stock-based compensation and associated taxes that Intuit will begin recording under SFAS 123(R) in the first quarter of fiscal 2006. These estimated stock-based compensation expenses and associated taxes are excluded from non-GAAP financial measures in order to facilitate the comparison of guidance for future periods with results for past periods, which did not include such stock-based compensation expenses. Intuit’s management refers to these non-GAAP financial measures in assessing the performance of Intuit’s ongoing operations and for planning and forecasting in future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to Intuit’s historical operating results. In addition, Intuit has historically reported similar non-GAAP financial measures and believes that the inclusion of comparative numbers provides consistency in its financial reporting. Intuit computes non-GAAP financial measures using the same consistent method from quarter to quarter and year to year.
Non-GAAP operating income excludes amortization of purchased assets and acquisition-related charges. Non-GAAP net income and diluted earnings per share exclude gains and losses on marketable securities and other investments and the tax effects of these items as well as net income or loss from discontinued operations. In addition, the forward-looking guidance for non-GAAP income, loss, earnings per share and loss per share in fiscal 2006 excludes estimated expenses for stock-based compensation and associated taxes that Intuit will begin recording under SFAS 123(R) in the first quarter of fiscal 2006. The accompanying tables and sheet entitled “Intuit Facts” provide more details on Intuit’s historical performance and financial projections, the GAAP financial measures that are most directly comparable to Intuit’s non-GAAP financial measures, and the reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures.
Cautions About Forward-Looking Statements
This press release contains forward-looking statements, including forecasts of our expected financial results. All of the statements under the headings “Forward-Looking Guidance for Fiscal 2006,”and “Forward-Looking Guidance for First-Quarter 2006”are forward-looking statements. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors include, without limitation, the following: product introductions and price competition from our competitors, including competition from Microsoft, which has announced its intention to target small business customers with accounting software and associated services, can have unpredictable negative effects on our revenue, profitability and market position; governmental encroachment in our tax businesses or other governmental activities regulating the filing of tax returns could negatively affect our operating results and market position; our participation in the Free File Alliance may result in lost revenue due to potential customers filing free federal returns and electing not to pay for state filing or other services and cannibalization of our traditional paid franchise; our revenue and earnings are highly seasonal and the timing of our revenue between quarters is difficult to predict which may cause significant quarterly fluctuations in our financial results; predicting tax-related revenues is challenging due to the heavy concentration of activity in a short time period; revenue growth for some of our products is slowing and we must successfully introduce new products and services to meet our growth and profitability objectives; our new product offerings may not succeed or they may negatively impact our profitability if customers elect to purchase lower-priced simplified offerings instead of our higher priced offerings; we have implemented, and are continuing to upgrade, new information systems and any problems with these new systems could interfere with our ability to ship and deliver products and gather information to effectively manage our business; our financial position may not make repurchasing shares advisable or we may issue additional shares in an acquisition causing our number of outstanding shares to grow; litigation involving intellectual property, antitrust, shareholder and other matters may increase our costs; and our failure to maintain reliable and responsive service levels for our offerings could cause us to lose customers and negatively impact our revenues and profitability. More details about these and other risks that may impact our business are included in our Form 10-K for fiscal 2004 and in our subsequent reports on Form 10-Q and other SEC filings. You can locate these reports through our website at http://www.intuit.com/about_intuit/investors. Forward-looking statements are based on information as of August 24, 2005, and we do not undertake any duty to update any forward-looking statement or other information in this press release except as otherwise required by law.

 

 

Table A1
INTUIT INC.
GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
                                 
    Three Months Ended   Twelve Months Ended
    July 31,   July 31,   July 31,   July 31,
    2005   2004   2005   2004
Net revenue:
                                
Product
   $ 176,762     $ 164,060     $ 1,242,693     $ 1,179,101  
Service
     102,130       73,662       724,049       555,496  
Other
     22,927       20,313       70,961       67,627  
 
                                
Total net revenue
     301,819       258,035       2,037,703       1,802,224  
 
                                
Costs and expenses:
                                
Cost of revenue:
                                
Cost of product revenue
     25,928       26,534       164,551       170,769  
Cost of service revenue
     46,633       39,818       183,969       158,083  
Cost of other revenue
     6,297       6,634       24,133       24,179  
Amortization of purchased assets
     2,542       2,542       10,251       10,186  
Selling and marketing
     123,369       110,544       583,408       541,387  
Research and development
     75,536       64,012       305,241       276,049  
General and administrative
     51,698       46,524       225,507       178,653  
Acquisition-related charges
     3,969       4,995       16,545       23,435  
 
                                
Total costs and expenses
     335,972       301,603       1,513,605       1,382,741  
 
                                
Income (loss) from continuing operations
     (34,153 )     (43,568 )     524,098       419,483  
Interest and other income
     14,170       11,446       26,734       30,400  
Gains on marketable securities and other investments, net
     4,883       1,385       5,225       1,729  
 
                                
Income (loss) from continuing operations before income taxes
     (15,100 )     (30,737 )     556,057       451,612  
Income tax provision (benefit) [A]
     7,467       (3,469 )     181,074       128,290  
 
                                
Net income (loss) from continuing operations
     (22,567 )     (27,268 )     374,983       323,322  
Net income (loss) from discontinued operations, net of income taxes [B]
     2,571       (14,836 )     6,644       (6,292 )
 
                                
Net income (loss)
   $ (19,996 )   $ (42,104 )   $ 381,627     $ 317,030  
 
                                
 
                                
Basic net income (loss) per share from continuing operations
   $ (0.12 )   $ (0.14 )   $ 2.03     $ 1.65  
Basic net income (loss) per share from discontinued operations
     0.01       (0.08 )     0.04       (0.03 )
 
                                
Basic net income (loss) per share
   $ (0.11 )   $ (0.22 )   $ 2.07     $ 1.62  
 
                                
Shares used in basic per share amounts
     180,266       190,893       184,601       195,455  
 
                                
 
                                
Diluted net income (loss) per share from continuing operations
   $ (0.12 )   $ (0.14 )   $ 1.99     $ 1.61  
Diluted net income (loss) per share from discontinued operations
     0.01       (0.08 )     0.04       (0.03 )
 
                                
Diluted net income (loss) per share
   $ (0.11 )   $ (0.22 )   $ 2.03     $ 1.58  
 
                                
Shares used in diluted per share amounts
     180,266       190,893       188,398       200,081  
 
                                
See accompanying Notes.

 

 

INTUIT INC.
NOTES TO TABLE A1
 
[A]   We recorded an income tax provision of $7.5 million on a loss from continuing operations of $15.1 million for the three months ended July 31, 2005. The income tax provision recorded in this quarter included the accrual of additional state taxes for the twelve months ended July 31, 2005, partially offset by an increase in the carrying value of deferred state tax assets resulting from the increase in the effective state tax rate. The net effect of these items was to increase our effective tax rate from 30.4% for the nine months ended April 30, 2005 to 32.6% for the twelve months ended July 31, 2005.
 
    Our GAAP effective tax rate of 32.6% for the twelve months ended July 31, 2005 differed from the federal statutory tax rate of 35% primarily due to the net effect of the benefit received from federal research and experimental credits, tax exempt interest income, reversals of reserves related to potential income tax exposures that were resolved, and various state tax credits offset by state taxes.
 
    Our GAAP effective tax rate of 11.3% for the three months ended July 31, 2004 differed from the federal statutory rate of 35% primarily due to the net effect of non-deductible impairment of goodwill in the quarter and the benefit received from federal research and experimental credits, tax exempt interest income, reversals of reserves related to potential income tax exposures that were resolved, and various state tax credits offset by state taxes.
 
    Our GAAP effective tax rate of 28.4% for the twelve months ended July 31, 2004 differed from the federal statutory rate of 35% primarily due to the net effect of the benefit received from federal research and experimental credits, tax exempt interest income, reversals of reserves related to potential income tax exposures that were resolved, and various state tax credits offset by state taxes.
 
[B]   In December 2004 we sold our Intuit Public Sector Solutions (IPSS) business to a California software company for approximately $11 million. In accordance with SFAS 144, “Accounting for the Impairment or Disposal of Long-lived Assets,” we determined that IPSS became a long-lived asset held for sale and a discontinued operation in the first quarter of fiscal 2005. Consequently, we have segregated the net assets, operating results and cash flows of IPSS from continuing operations on our balance sheets, statements of operations and statements of cash flows for all periods prior to the sale. Also in accordance with SFAS 144, we discontinued the amortization of IPSS purchased intangible assets in the first quarter of fiscal 2005.
 
    Revenue and loss before income taxes for IPSS were $3.6 million and $18.7 million for the three months ended July 31, 2004. Revenue for IPSS was $3.8 million and $12.8 million for the twelve months ended July 31, 2005 and 2004. Loss before income taxes for IPSS was $0.8 million and $20.6 million for the same periods. The net loss from discontinued operations for the twelve months ended July 31, 2005 included a $0.5 million loss on disposal of IPSS and an income tax provision of $4.3 million for the estimated tax payable in connection with the tax gain on the sale of IPSS. The net loss from discontinued operations for the twelve months ended July 31, 2004 included an $18.7 million impairment of goodwill.
 
    In May 2005 our Board of Directors formally approved a plan to sell our Intuit Information Technology Solutions (ITS) business. In accordance with the provisions of SFAS 144, we determined that ITS became a long-lived asset held for sale in the fourth quarter of fiscal 2005. SFAS 144 provides that a long-lived asset classified as held for sale should be measured at the lower of its carrying amount or fair value less cost to sell. Since the carrying value of ITS at July 31, 2005 was less than the fair value less cost to sell, no adjustment to the carrying value of this long-lived asset was necessary during the fourth quarter of fiscal 2005.
 
    Also in accordance with the provisions of SFAS 144, we determined that ITS became a discontinued operation in the fourth quarter of fiscal 2005. Consequently, we have segregated the net assets, operating results and cash flows of ITS from continuing operations on our balance sheets, statements of operations and statements of cash flows for all periods presented. We discontinued the amortization of ITS intangible assets in the fourth quarter of fiscal 2005. Revenue for ITS was $14.7 million and $14.3 million for the three months ended July 31, 2005 and 2004. Income before income taxes for ITS was $5.6 million and $6.2 million for the same periods. Revenue for ITS was $57.0 million and $52.6 million for the twelve months ended July 31, 2005 and 2004. Income before income taxes for ITS was $20.6 million and $21.9 million for the same periods.

 

 

Table A2
INTUIT INC.
NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS DATA
(In thousands, except per share amounts)
(Unaudited)
                                 
    Three Months Ended   Twelve Months Ended
    July 31,   July 31,   July 31,   July 31,
    2005   2004   2005   2004
Net revenue:
                                
Product
   $ 176,762     $ 164,060     $ 1,242,693     $ 1,179,101  
Service
     102,130       73,662       724,049       555,496  
Other
     22,927       20,313       70,961       67,627  
 
                                
Total net revenue
     301,819       258,035       2,037,703       1,802,224  
 
                                
Costs and expenses:
                                
Cost of revenue:
                                
Cost of product revenue
     25,928       26,534       164,551       170,769  
Cost of service revenue
     46,633       39,818       183,969       158,083  
Cost of other revenue
     6,297       6,634       24,133       24,179  
Selling and marketing
     123,369       110,544       583,408       541,387  
Research and development
     75,536       64,012       305,241       276,049  
General and administrative
     51,698       46,524       225,507       178,653  
 
                                
Total costs and expenses
     329,461       294,066       1,486,809       1,349,120  
 
                                
Income (loss) from operations
     (27,642 )     (36,031 )     550,894       453,104  
Interest and other income
     14,170       11,446       26,734       30,400  
 
                                
Income (loss) before income taxes
     (13,472 )     (24,585 )     577,628       483,504  
Income tax provision (benefit)
     1,196       (8,359 )     202,170       164,391  
 
                                
Net income (loss)
   $ (14,668 )   $ (16,226 )   $ 375,458     $ 319,113  
 
                                
 
                                
Basic net income (loss) per share
   $ (0.08 )   $ (0.09 )   $ 2.03     $ 1.63  
 
                                
Shares used in basic per share amounts
     180,266       190,893       184,601       195,455  
 
                                
 
                                
Diluted net income (loss) per share
   $ (0.08 )   $ (0.09 )   $ 1.99     $ 1.59  
 
                                
Shares used in diluted per share amounts
     180,266       190,893       188,398       200,081  
 
                                
Total costs and expenses and each of the line items below it except interest and other income in Table A2 are non-GAAP financial measures. These measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with generally accepted accounting principles (“GAAP”). These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same captions and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies. Intuit’s management believes that these non-GAAP financial measures provide meaningful supplemental information regarding Intuit’s operating results because they exclude amounts that are not related to Intuit’s core operating results. Intuit’s management refers to these non-GAAP financial measures in assessing the performance of Intuit’s ongoing operations and for planning and forecasting in future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to Intuit’s historical operating results. In addition, Intuit has historically reported similar non-GAAP financial measures and believes that the inclusion of comparative numbers provides consistency in its financial reporting. Intuit computes non-GAAP financial measures using the same consistent method from quarter to quarter and year to year. Tables B1 and B2 provide reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures.
The accompanying document entitled “Intuit Facts” also includes non-GAAP financial measures. These non-GAAP financial measures exclude estimated expenses for stock-based compensation and the associated taxes that Intuit will begin recording under SFAS 123(R) in the first quarter of fiscal 2006. These estimated stock-based compensation expenses and the associated taxes are excluded from non-GAAP financial measures in order to facilitate the comparison of guidance for future periods with results for past periods, which did not include such stock-based compensation expenses. Tables E1 and E2 provide reconciliations of the non-GAAP financial measures in the “Intuit Facts” document to the most directly comparable GAAP financial measures.

 

 

Table B1
INTUIT INC.
RECONCILIATION OF NON-GAAP STATEMENT OF OPERATIONS DATA
TO GAAP CONSOLIDATED STATEMENTS OF OPERATIONS [A]-[E]
(In thousands, except per share amounts)
(Unaudited)
                                                                 
    Three Months Ended   Three Months Ended
    July 31, 2005   July 31, 2004
    Non-                           Non-            
    GAAP   Adjmts   [A]   GAAP   GAAP   Adjmts   [A]   GAAP
Net revenue:
                                                                
Product
   $ 176,762     $ —             $ 176,762     $ 164,060     $ —             $ 164,060  
Service
     102,130       —               102,130       73,662       —               73,662  
Other
     22,927       —               22,927       20,313       —               20,313  
 
                                                                
Total net revenue
     301,819       —               301,819       258,035       —               258,035  
 
                                                                
Costs and expenses:
                                                                
Cost of revenue:
                                                                
Cost of product revenue
     25,928       —               25,928       26,534       —               26,534  
Cost of service revenue
     46,633       —               46,633       39,818       —               39,818  
Cost of other revenue
     6,297       —               6,297       6,634       —               6,634  
Amortization of purchased assets
     —       2,542       [B]       2,542       —       2,542       [B]       2,542  
Selling and marketing
     123,369       —               123,369       110,544       —               110,544  
Research and development
     75,536       —               75,536       64,012       —               64,012  
General and administrative
     51,698       —               51,698       46,524       —               46,524  
Acquisition-related charges
     —       3,969       [B]       3,969       —       4,995       [B]       4,995  
 
                                                                
Total costs and expenses
     329,461       6,511               335,972       294,066       7,537               301,603  
 
                                                                
Loss from continuing operations
     (27,642 )     (6,511 )             (34,153 )     (36,031 )     (7,537 )             (43,568 )
Interest and other income
     14,170       —               14,170       11,446       —               11,446  
Gains on marketable securities and other investments, net
     —       4,883       [C]       4,883       —       1,385       [C]       1,385  
 
                                                                
Loss from continuing operations before income taxes
     (13,472 )     (1,628 )             (15,100 )     (24,585 )     (6,152 )             (30,737 )
Income tax provision (benefit)
     1,196       6,271       [D]       7,467       (8,359 )     4,890       [D]       (3,469 )
 
                                                                
Net loss from continuing operations
     (14,668 )     (7,899 )             (22,567 )     (16,226 )     (11,042 )             (27,268 )
Net income (loss) from discontinued operations, net of income taxes
     —       2,571       [E]       2,571       —       (14,836 )     [E]       (14,836 )
 
                                                                
Net loss
   $ (14,668 )   $ (5,328 )           $ (19,996 )   $ (16,226 )   $ (25,878 )           $ (42,104 )
 
                                                                
 
                                                                
Basic net loss per share from continuing operations
   $ (0.08 )                   $ (0.12 )   $ (0.09 )                   $ (0.14 )
Basic net income (loss) per share from discontinued operations
     —                       0.01       —                       (0.08 )
 
                                                                
Basic net loss per share
   $ (0.08 )                   $ (0.11 )   $ (0.09 )                   $ (0.22 )
 
                                                                
Shares used in basic per share amounts
     180,266                       180,266       190,893                       190,893  
 
                                                                
 
                                                                
Diluted net loss per share from continuing operations
   $ (0.08 )                   $ (0.12 )   $ (0.09 )                   $ (0.14 )
Diluted net income (loss) per share from discontinued operations
     —                       0.01       —                       (0.08 )
 
                                                                
Diluted net loss per share
   $ (0.08 )                   $ (0.11 )   $ (0.09 )                   $ (0.22 )
 
                                                                
Shares used in diluted per share amounts
     180,266                       180,266       190,893                       190,893  
 
                                                                

 

 

Table B2
INTUIT INC.
RECONCILIATION OF NON-GAAP STATEMENT OF OPERATIONS DATA
TO GAAP CONSOLIDATED STATEMENTS OF OPERATIONS [A]-[E]
(In thousands, except per share amounts)
(Unaudited)
                                                                 
    Twelve Months Ended   Twelve Months Ended
    July 31, 2005   July 31, 2004
    Non-                           Non-            
    GAAP   Adjmts   [A]   GAAP   GAAP   Adjmts   [A]   GAAP
Net revenue:
                                                                
Product
   $ 1,242,693     $ —             $ 1,242,693     $ 1,179,101     $ —             $ 1,179,101  
Service
     724,049       —               724,049       555,496       —               555,496  
Other
     70,961       —               70,961       67,627       —               67,627  
 
                                                                
Total net revenue
     2,037,703       —               2,037,703       1,802,224       —               1,802,224  
 
                                                                
Costs and expenses:
                                                                
Cost of revenue:
                                                                
Cost of product revenue
     164,551       —               164,551       170,769       —               170,769  
Cost of service revenue
     183,969       —               183,969       158,083       —               158,083  
Cost of other revenue
     24,133       —               24,133       24,179       —               24,179  
Amortization of purchased assets
     —       10,251       [B]       10,251       —       10,186       [B]       10,186  
Selling and marketing
     583,408       —               583,408       541,387       —               541,387  
Research and development
     305,241       —               305,241       276,049       —               276,049  
General and administrative
     225,507       —               225,507       178,653       —               178,653  
Acquisition-related charges
     —       16,545       [B]       16,545       —       23,435       [B]       23,435  
 
                                                                
Total costs and expenses
     1,486,809       26,796               1,513,605       1,349,120       33,621               1,382,741  
 
                                                                
Income from continuing operations
     550,894       (26,796 )             524,098       453,104       (33,621 )             419,483  
Interest and other income
     26,734       —               26,734       30,400       —               30,400  
Gains on marketable securities and other investments, net
     —       5,225       [C]       5,225       —       1,729       [C]       1,729  
 
                                                                
Income from continuing operations before income taxes
     577,628       (21,571 )             556,057       483,504       (31,892 )             451,612  
Income tax provision (benefit)
     202,170       (21,096 )     [D]       181,074       164,391       (36,101 )     [D]       128,290  
 
                                                                
Net income from continuing operations
     375,458       (475 )             374,983       319,113       4,209               323,322  
Net loss from discontinued operations, net of income taxes
     —       6,644       [E]       6,644       —       (6,292 )     [E]       (6,292 )
 
                                                                
Net income
   $ 375,458     $ 6,169             $ 381,627     $ 319,113     $ (2,083 )           $ 317,030  
 
                                                                
 
                                                                
Basic net income per share from continuing operations
   $ 2.03                     $ 2.03     $ 1.63                     $ 1.65  
Basic net income (loss) per share from discontinued operations
     —                       0.04       —                       (0.03 )
 
                                                                
Basic net income per share
   $ 2.03                     $ 2.07     $ 1.63                     $ 1.62  
 
                                                                
Shares used in basic per share amounts
     184,601                       184,601       195,455                       195,455  
 
                                                                
 
                                                                
Diluted net income per share from continuing operations
   $ 1.99                     $ 1.99     $ 1.59                     $ 1.61  
Diluted net income (loss) per share from discontinued operations
     —                       0.04       —                       (0.03 )
 
                                                                
Diluted net income per share
   $ 1.99                     $ 2.03     $ 1.59                     $ 1.58  
 
                                                                
Shares used in diluted per share amounts
     188,398                       188,398       200,081                       200,081  
 
                                                                

 

 

INTUIT INC.
NOTES TO TABLES B1 and B2
 
[A]   Tables B1 and B2 reconcile the differences between the non-GAAP financial measures presented in Table A2 and the GAAP condensed consolidated statements of operations presented in Table A1 for the three and twelve month periods ended July 31, 2005 and 2004. We exclude certain GAAP items from our non-GAAP results of operations because they are not related to our core business operating results. Eliminating expense or loss line items improves non-GAAP results compared with GAAP results. Eliminating income or gain line items decreases non-GAAP results compared with GAAP results. See Notes B through E below for more information regarding the reasons for which we have excluded specific GAAP items from the non-GAAP financial measures in Table A2.
 
[B]   We amortize the value of intangible assets that we receive in connection with acquisitions over their estimated useful lives. Amortization of purchased assets in GAAP cost of revenue includes amortization of software and other technology assets related to acquisitions. Acquisition-related charges in GAAP operating expenses include amortization of other purchased intangible assets and deferred stock compensation related to acquisitions. We exclude amortization of purchased assets and acquisition-related charges from our non-GAAP operating income or loss because we believe that excluding these items facilitates comparisons to our historical core operating results and to the results of other companies in our industry, which have their own unique acquisition histories.
 
[C]   We exclude GAAP gains and losses on marketable securities and other investments from our non-GAAP net income or loss because they are unrelated to our core business operating results.
 
[D]   Our non-GAAP effective tax rates of 35% for the twelve months ended July 31, 2005 and 34% for the twelve months ended July 31, 2004 differ from our GAAP effective tax rates for those periods because non-GAAP income tax expense excludes certain GAAP discrete tax items, including the reversal of reserves related to potential income tax exposures that have been resolved. We exclude the impact of these discrete tax items from our non-GAAP provision for income taxes because they are not indicative of our ongoing business operations.
 
[E]   From time to time, we sell or otherwise dispose of selected operations as we adjust our portfolio of businesses to meet our strategic goals. In accordance with GAAP, we segregate the operating results of these discontinued businesses from continuing operations on our GAAP statements of operations but continue to include them in GAAP net income or loss and net income or loss per share. We exclude the operating results and gains and losses on the sale of these discontinued operations from our non-GAAP net income or loss and net income or loss per share, however, because they are unrelated to our ongoing business operations.

 

 

Table C
INTUIT INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
                 
    July 31,   July 31,
    2005   2004
ASSETS
                
Current assets:
                
Cash and cash equivalents
   $ 83,842     $ 25,992  
Investments
     910,416       991,971  
Accounts receivable, net
     86,125       81,615  
Deferred income taxes
     54,854       31,094  
Prepaid expenses, taxes and other current assets
     99,275       62,792  
Current assets of discontinued operations
     21,989       12,279  
 
                
Current assets before funds held for payroll customers
     1,256,501       1,205,743  
Funds held for payroll customers
     357,838       323,041  
 
                
Total current assets
     1,614,339       1,528,784  
 
                
Property and equipment, net
     208,548       232,194  
Goodwill, net
     509,499       508,855  
Purchased intangible assets, net
     69,678       93,904  
Long-term deferred income taxes
     118,475       161,502  
Loans to executive officers and other employees
     9,245       15,809  
Other assets
     30,078       17,510  
Long-term assets of discontinued operations
     156,589       172,183  
 
                
Total assets
   $ 2,716,451     $ 2,730,741  
 
                
 
                
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
Current liabilities:
                
Accounts payable
   $ 65,812     $ 68,303  
Accrued compensation and related liabilities
     144,823       132,004  
Deferred revenue
     279,382       207,196  
Income taxes payable
     30,423       56,828  
Other current liabilities
     103,131       82,944  
Current liabilities of discontinued operations
     21,995       21,612  
 
                
Current liabilities before payroll customer fund deposits
     645,566       568,887  
Payroll customer fund deposits
     357,838       323,041  
 
                
Total current liabilities
     1,003,404       891,928  
 
                
Long-term obligations
     17,308       16,106  
Long-term obligations of discontinued operations
     240       288  
Stockholders’ equity
     1,695,499       1,822,419  
 
                
Total liabilities and stockholders’ equity
   $ 2,716,451     $ 2,730,741  
 
                

 

 

Table D
INTUIT INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
                                 
    Three Months Ended     Twelve Months Ended  
    July 31,     July 31,     July 31,     July 31,  
    2005     2004     2005     2004  
Cash flows from operating activities:
                                
Net income (loss)
   $ (19,996 )   $ (42,104 )   $ 381,627     $ 317,030  
Net (income) loss from discontinued operations
     (2,571 )     14,836       (6,644 )     6,292  
 
                        
Net income (loss) from continuing operations
     (22,567 )     (27,268 )     374,983       323,322  
Adjustments to reconcile net income (loss) from continuing operations to net cash provided by (used in) operating activities:
                                
Depreciation
     22,723       20,165       99,970       77,261  
Acquisition-related charges
     3,969       4,995       16,545       23,435  
Amortization of purchased assets
     2,542       2,542       10,251       10,186  
Amortization of other purchased intangible assets
     2,137       1,601       8,123       5,982  
Amortization of deferred compensation not related to acquisitions
     1,119       1,558       5,489       6,232  
Charge for vacant facilities
     —       729       —       729  
(Gain) loss on disposal of property and equipment
     188       359       (492 )     2,750  
Amortization of premiums and discounts on available-for-sale debt securities
     2,318       3,291       10,633       12,449  
Net realized (gain) loss on sales of available-for-sale debt securities
     927       (6 )     2,546       (391 )
Net gain from marketable securities and other investments
     (4,883 )     (1,385 )     (5,225 )     (1,729 )
Deferred income taxes
     60,756       66,702       18,460       66,702  
Tax benefit from employee stock options
     12,169       1,098       26,372       27,061  
(Gain) loss on foreign exchange transactions
     475       450       67       (2,651 )
 
                        
Subtotal
     81,873       74,831       567,722       551,338  
 
                        
Changes in operating assets and liabilities:
                                
Accounts receivable
     44,872       47,038       (4,708 )     (2,037 )
Prepaid expenses and other current assets
     (43,450 )     (7,581 )     (40,409 )     (23,517 )
Accounts payable
     (28,716 )     (7,429 )     (3,060 )     12,287  
Accrued compensation and related liabilities
     26,332       20,712       12,568       15,112  
Deferred revenue
     83,314       68,763       72,069       39,806  
Income taxes payable
     (215,640 )     (174,334 )     (31,301 )     (62,577 )
Other liabilities
     (49,934 )     (61,549 )     17,123       22,101  
 
                        
Total changes in operating assets and liabilities
     (183,222 )     (114,380 )     22,282       1,175  
 
                        
Net cash provided by (used in) operating activities of continuing operations
     (101,349 )     (39,549 )     590,004       552,513  
Net cash provided by (used in) operating activities of discontinued operations
     (9,410 )     10,167       7,700       26,350  
 
                        
Net cash provided by (used in) operating activities
     (110,759 )     (29,382 )     597,704       578,863  
 
                        
 
                                
Cash flows from investing activities:
                                
Purchases of available-for-sale debt securities
     (908,817 )     (529,814 )     (2,937,586 )     (3,554,863 )
Liquidation and maturity of available-for-sale debt securities
     1,134,645       693,586       3,007,528       3,490,533  
Net change in funds held for payroll customers’ money market funds and other cash equivalents
     3,394       (19 )     (34,797 )     77,166  
Purchases of property and equipment
     (13,218 )     (32,072 )     (69,535 )     (117,623 )
Proceeds from sale of property
     —       —       3,151       —  
Proceeds from sale of long-term investments
     4,667       —       4,667       —  
Change in other assets
     (1,001 )     939       (5,446 )     936  
Net change in payroll customer funds deposits
     (3,394 )     19       34,797       17,034  
Acquisitions of businesses and intangible assets, net of cash acquired
     (181 )     (3,573 )     (4,337 )     (121,359 )
 
                        
Net cash provided by (used in) investing activities of continuing operations
     216,095       129,066       (1,558 )     (208,176 )
Acquisition of intangible assets of discontinued operation
     —       760       —       (2,190 )
Net proceeds from sale of discontinued operations
     —       —       9,619       —  
                 
Net cash provided by (used in) investing activities
     216,095       129,826       8,061       (210,366 )
                 
 
                                
Cash flows from financing activities:
                                
Change in long-term obligations
     (1,116 )     (7,827 )     (4,009 )     (18,971 )
Net proceeds from issuance of common stock under stock plans
     68,392       14,250       165,797       119,140  
Purchase of treasury stock
     (209,220 )     (98,683 )     (709,887 )     (610,184 )
 
                        
Net cash used in financing activities
     (141,944 )     (92,260 )     (548,099 )     (510,015 )
 
                        
 
                                
Effect of exchange rates on cash and cash equivalents
     (309 )     115       184       172  
 
                        
Net increase (decrease) in cash and cash equivalents
     (36,917 )     8,299       57,850       (141,346 )
Cash and cash equivalents at beginning of period
     120,759       17,693       25,992       167,338  
 
                        
Cash and cash equivalents at end of period
   $ 83,842     $ 25,992     $ 83,842     $ 25,992  
 
                        

 

Table E1
INTUIT INC.
RECONCILIATION OF GUIDANCE FOR NON-GAAP FINANCIAL MEASURES
TO PROJECTED GAAP REVENUE, OPERATING INCOME, AND EPS
(All Figures Except GAAP EPS Exclude Intuit Information Technology Solutions)
(In thousands, except per share amounts)
(Unaudited)
                                                 
    Three Months Ending October 31, 2005
    Non-GAAP                   GAAP
    Range of Estimate                   Range of Estimate
    From   To   Adjustments           From   To
Revenue
   $ 270,000     $ 285,000     $ —             $ 270,000     $ 285,000  
Operating loss
     (95,000 )     (85,000 )     (26,100 ) [a]             (121,100 )     (111,100 )
Diluted loss per share
   $ (0.35 )   $ (0.30 )   $ (0.08 ) [b]           $ (0.43 )   $ (0.38 )
Shares
     178,000       179,000       —               178,000       179,000  
                                                 
    Three Months Ending January 31, 2006
    Non-GAAP                   GAAP
    Range of Estimate                   Range of Estimate
    From   To   Adjustments           From   To
Revenue
   $ 670,000     $ 710,000     $ —             $ 670,000     $ 710,000  
Diluted earnings per share
   $ 0.75     $ 0.85     $ (0.09 ) [c]           $ 0.66     $ 0.76  
                                                 
    Three Months Ending April 30, 2006
    Non-GAAP                   GAAP
    Range of Estimate                   Range of Estimate
    From   To   Adjustments           From   To
Revenue
   $ 890,000     $ 950,000     $ —             $ 890,000     $ 950,000  
Diluted earnings per share
   $ 1.75     $ 2.00     $ (0.08 ) [d]           $ 1.67     $ 1.92  
                                                 
    Three Months Ending July 31, 2006
    Non-GAAP                   GAAP
    Range of Estimate                   Range of Estimate
    From   To   Adjustments           From   To
Revenue
   $ 300,000     $ 330,000     $ —             $ 300,000     $ 330,000  
Diluted loss per share
   $ (0.15 )   $ (0.10 )   $ (0.08 ) [e]           $ (0.23 )   $ (0.18 )
                                                 
    Twelve Months Ending July 31, 2006
    Non-GAAP                   GAAP
    Range of Estimate                   Range of Estimate
    From   To   Adjustments           From   To
Revenue
   $ 2,180,000     $ 2,240,000     $ —             $ 2,180,000     $ 2,240,000  
Operating income
     595,000       617,000       (93,800 ) [f]             501,200       523,200  
Diluted earnings per share
   $ 2.19     $ 2.29     $ (0.33 ) [g]           $ 1.86     $ 1.96  
Shares
     179,000       181,000       —               179,000       181,000  
 
[a]   Reflects estimated adjustments for amortization of purchased assets of approximately $2.4 million, acquisition-related charges of approximately $4.5 million and stock-based compensation expense of approximately $19.2 million.
 
[b]   Reflects the adjustments in item [a], the income tax benefit related to these adjustments and estimated net income from discontinued operations of $3.2 million.
 
[c]   Reflects estimated adjustments for amortization of purchased assets of approximately $2.1 million, acquisition-related charges of approximately $4.3 million, stock-based compensation expense of approximately $17.7 million and the income tax benefit related to these adjustments.

 

 

[d]   Reflects estimated adjustments for amortization of purchased assets of approximately $1.6 million, acquisition-related charges of approximately $4.0 million, stock-based compensation expense of approximately $16.6 million and the income tax benefit related to these adjustments.
 
[e]   Reflects estimated adjustments for amortization of purchased assets of approximately $1.5 million, acquisition-related charges of approximately $3.6 million, stock-based compensation expense of approximately $16.3 million and the income tax benefit related to these adjustments.
 
[f]   Reflects estimated adjustments for amortization of purchased assets of approximately $7.6 million, acquisition-related charges of approximately $16.4 million and stock-based compensation expense of approximately $69.8 million.
 
[g]   Reflects the adjustments in item [f], the income tax benefit related to these adjustments and estimated net income from discontinued operations of $3.2 million.
Tables E1 and E2 reconcile the differences between the non-GAAP financial measures presented in the accompanying document entitled “Intuit Facts” and the most directly comparable GAAP financial measures. These non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same captions and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies. Intuit’s management believes that these non-GAAP financial measures provide meaningful supplemental information regarding Intuit’s operating results because they exclude amounts that are not related to Intuit’s core operating results. In addition, these non-GAAP financial measures exclude estimated expenses for stock-based compensation and the associated taxes that Intuit will begin recording under SFAS 123(R) in the first quarter of fiscal 2006. These estimated stock-based compensation expenses and the associated taxes are excluded from non-GAAP financial measures in order to facilitate the comparison of guidance for future periods with results for past periods, which did not include such stock-based compensation expenses. Intuit’s management refers to these non-GAAP financial measures in assessing the performance of Intuit’s ongoing operations and for planning and forecasting in future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to Intuit’s historical operating results. In addition, Intuit has historically reported similar non-GAAP financial measures and believes that the inclusion of comparative numbers provides consistency in its financial reporting. Intuit computes non-GAAP financial measures using the same consistent method from quarter to quarter and year to year.
The reconciliations of the forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures in this Table E1 include all information reasonably available to Intuit at the date of this press release. This table includes adjustments that management can reasonably predict. Intuit’s non-GAAP financial measures exclude amortization of purchased assets, acquisition-related charges, gains and losses on marketable securities and discontinued operations. Events that could cause the reconciliation to change include acquisitions and divestitures of businesses, goodwill and other asset impairments and sales of marketable securities.

 

 

TABLE E2
INTUIT INC.
RECONCILIATION OF SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES
TO MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASURES
(In thousands, except per share amounts)
(Unaudited)
                                 
    Non-                
    GAAP   Adjustments         GAAP
Three months ended October 31, 2003
                                
Operating loss
   $ (84,977 )   $ (8,311 ) [a]     $ (93,288 )
Diluted loss per share
   $ (0.26 )   $ (0.01 ) [b]     $ (0.27 )
 
                                
Three months ended January 31, 2004
                                
Operating income
   $ 223,346     $ (9,083 ) [c]     $ 214,263  
Diluted earnings per share
   $ 0.75     $ (0.02 ) [d]     $ 0.73  
 
                                
Three months ended April 30, 2004
                                
Operating income
   $ 350,766     $ (8,690 ) [e]     $ 342,076  
Diluted earnings per share
   $ 1.18     $ 0.15   [f]     $ 1.33  
 
                                
Three months ended July 31, 2004
                                
Operating loss
   $ (36,031 )   $ (7,537 ) [g]     $ (43,568 )
Diluted loss per share
   $ (0.09 )   $ (0.13 ) [h]     $ (0.22 )
 
                                
Twelve months ended July 31, 2004
                                
Operating income
   $ 453,104     $ (33,621 ) [i]     $ 419,483  
Diluted earnings per share
   $ 1.59     $ (0.01 ) [j]     $ 1.58  
 
                                
Three months ended October 31, 2004
                                
Operating loss
   $ (75,169 )   $ (6,982 ) [k]     $ (82,151 )
Diluted loss per share
   $ (0.25 )   $ 0.01   [l]     $ (0.24 )
 
                                
Three months ended January 31, 2005
                                
Operating income
   $ 224,983     $ (6,795 ) [m]     $ 218,188  
Diluted earnings per share
   $ 0.79     $ (0.02 ) [n]     $ 0.77  
 
                                
Three months ended April 30, 2005
                                
Operating income
   $ 428,722     $ (6,508 ) [o]     $ 422,214  
Diluted earnings per share
   $ 1.53     $ 0.08   [p]     $ 1.61  
 
                                
Three months ended July 31, 2005
                                
Operating loss
   $ (27,642 )   $ (6,511 ) [q]     $ (34,153 )
Diluted loss per share
   $ (0.08 )   $ (0.03 ) [r]     $ (0.11 )
 
                                
Twelve months ended July 31, 2005
                                
Operating income
   $ 550,894     $ (26,796 ) [s]     $ 524,098  
Diluted earnings per share
   $ 1.99     $ 0.04   [t]     $ 2.03  
 
[a]   Reflects adjustments for amortization of purchased software of $2.5 million and amortization of purchased intangible assets of $5.8 million.
 
[b]   Reflects the adjustments in item [a], an adjustment for net gains on marketable securities of $0.1 million and income taxes related to these adjustments as well as net income from discontinued operations of $2.5 million.

 

 

[c]   Reflects adjustments for amortization of purchased software of $2.6 million and amortization of purchased intangible assets of $6.5 million.
 
[d]   Reflects the adjustments in item [c], an adjustment for net gains on marketable securities of $0.1 million and income taxes related to these adjustments as well as net income from discontinued operations of $2.9 million.
 
[e]   Reflects adjustments for amortization of purchased software of $2.5 million and amortization of purchased intangible assets of $6.2 million.
 
[f]   Reflects the adjustments in item [e], an adjustment for net gains on marketable securities of $0.1 million and income taxes related to these adjustments. Also reflects an adjustment to exclude the GAAP release of certain tax reserves as well as net income from discontinued operations of $3.2 million.
 
[g]   Reflects adjustments for amortization of purchased software of $2.5 million and amortization of purchased intangible assets of $5.0 million.
 
[h]   Reflects the adjustments in item [g], an adjustment for net gains on marketable securities of $1.4 million and income taxes related to these adjustments as well as net loss from discontinued operations of $14.8 million.
 
[i]   Reflects adjustments for amortization of purchased software of $10.2 million and amortization of purchased intangible assets of $23.4 million.
 
[j]   Reflects the adjustments in item [i], an adjustment for net gains on marketable securities of $1.7 million and income taxes related to these adjustments as well as net loss from discontinued operations of $6.3 million.
 
[k]   Reflects adjustments for amortization of purchased software of $2.6 million and amortization of purchased intangible assets of $4.4 million.
 
[l]   Reflects the adjustments in item [k], an adjustment for net gains on marketable securities of $0.2 million and income taxes related to these adjustments. Also reflects an adjustment to exclude certain GAAP tax benefits as well as net loss from discontinued operations of $0.6 million.
 
[m]   Reflects adjustments for amortization of purchased software of $2.6 million and amortization of purchased intangible assets of $4.2 million.
 
[n]   Reflects the adjustments in item [m], an adjustment for net gains on marketable securities of $0.1 million and income taxes related to these adjustments as well as net income from discontinued operations of $2.3 million.
 
[o]   Reflects adjustments for amortization of purchased software of $2.5 million and amortization of purchased intangible assets of $4.0 million.
 
[p]   Reflects the adjustments in item [o], an adjustment for net gains on marketable securities of $0.1 million and income taxes related to these adjustments as well as net income from discontinued operations of $2.4 million.
 
[q]   Reflects adjustments for amortization of purchased software of $2.5 million and amortization of purchased intangible assets of $4.0 million.
 
[r]   Reflects the adjustments in item [q], an adjustment for net gains on marketable securities of $4.9 million and income taxes related to these adjustments as well as net income from discontinued operations of $2.6 million.
 
[s]   Reflects adjustments for amortization of purchased software of $10.3 million and amortization of purchased intangible assets of $16.5 million.
 
[t]   Reflects the adjustments in item [s], an adjustment for net gains on marketable securities of $5.2 million and income taxes related to these adjustments as well as net income from discontinued operations of $6.6 million.

 

 

Intuit Facts   Intuit Inc.
     
Q4/FY05 & FY04   Investor Relations (650) 944-5401
     
    NASDAQ: INTU
Financial Summary
($ millions)
                                                                                     
      Q1 FY04   Q2 FY04   Q3 FY04   Q4 FY04   FY04     Q1 FY05   Q2 FY05   Q3 FY05   Q4 FY05   FY05
             
Revenue:
                                                                                    
Small & Medium Business
                                                                                    
QuickBooks Related
     $ 129.9     $ 201.4     $ 169.9     $ 152.7     $ 653.9       $ 145.6     $ 222.3     $ 196.6     $ 188.4     $ 753.0  
% change YOY
       19 %     16 %     27 %     13 %     18 %       12 %     10 %     16 %     23 %     15 %
Intuit-Branded Small Business
     $ 47.0     $ 55.6     $ 51.7     $ 52.6     $ 206.9       $ 53.5     $ 60.7     $ 56.4     $ 60.2     $ 230.7  
% change YOY
       18 %     9 %     9 %     10 %     11 %       14 %     9 %     9 %     14 %     11 %
 
                                                                                    
Tax
                                                                                    
Consumer Tax
     $ 5.2     $ 130.0     $ 344.7     $ 10.1     $ 490.0       $ 5.0     $ 141.1     $ 419.0     $ 5.6     $ 570.7  
% change YOY
       -15 %     36 %     10 %     19 %     16 %       -3 %     9 %     22 %     -45 %     16 %
Professional Tax
     $ 6.9     $ 156.8     $ 82.5     $ 5.7     $ 251.9       $ 7.4     $ 150.6     $ 99.8     $ 7.2     $ 265.0  
% change YOY
       7 %     4 %     3 %     -9 %     3 %       7 %     -4 %     21 %     27 %     5 %
 
                                                                                    
Other Businesses
     $ 38.2     $ 76.8     $ 47.6     $ 36.9     $ 199.5       $ 41.2     $ 73.5     $ 63.1     $ 40.5     $ 218.3  
% change YOY
       -9 %     4 %     6 %     16 %     4 %       8 %     -4 %     32 %     10 %     9 %
             
 
                                                                                    
Total Revenue
     $ 227.2     $ 620.6     $ 696.4     $ 258.0     $ 1,802.2       $ 252.8     $ 648.2     $ 834.9     $ 301.9     $ 2,037.7  
% change YOY
       11 %     14 %     12 %     12 %     13 %       11 %     4 %     20 %     17 %     13 %
 
                                                                                    
GAAP Operating Income (Loss)
     ($ 93.3 )   $ 214.3     $ 342.1     ($ 43.6 )   $ 419.5       ($ 82.2 )   $ 218.2     $ 422.2     ($ 34.2 )   $ 524.1  
Non-GAAP Operating Income (Loss) [A]
     ($ 85.0 )   $ 223.3     $ 350.8     ($ 36.0 )   $ 453.1       ($ 75.2 )   $ 225.0     $ 428.7     ($ 27.6 )   $ 550.9  
Non-GAAP Operating Margin % [A]
     NA     36 %     50 %   NA     25 %     NA     35 %     51 %   NA     27 %
 
                                                                                    
Interest and Other Income [B]
     $ 7.4     $ 6.8     $ 4.7     $ 11.4     $ 30.4       $ 3.9     $ 3.0     $ 5.7     $ 14.2     $ 26.7  
 
                                                                                    
GAAP EPS [C]
     ($ 0.27 )   $ 0.73     $ 1.33     ($ 0.22 )   $ 1.58       ($ 0.24 )   $ 0.77     $ 1.61     ($ 0.11 )   $ 2.03  
Non-GAAP EPS [A]
     ($ 0.26 )   $ 0.75     $ 1.18     ($ 0.09 )   $ 1.59       ($ 0.25 )   $ 0.79     $ 1.53     ($ 0.08 )   $ 1.99  
 
                                                                                    
Basic Share Count
       198.7       197.7       194.5       190.9       195.5         188.3       186.3       183.4       180.3       184.6  
 
                                                                                    
Fully Diluted Share Count
       NA       203.4       198.7       NA       200.1         NA       190.1       186.9       NA       188.4  
 
                                                                                    
GAAP Tax Rate [C]
       34 %     34 %     25 %     11 %     28 %       42 %     34 %     30 %     NA       33 %
Non-GAAP Tax Rate [A]
       34 %     34 %     34 %     34 %     34 %       34 %     34 %     34 %     NA       35 %
Corporate Metrics
                                   
    Q4/04   FYE/04     Q4/05   FYE/05
Capital Expenditure
   $ 32.1M     $ 117.6M       $ 13.2M     $ 69.5M  
 
                                  
Depreciation
   $ 20.2M     $ 77.3M       $ 22.7M     $ 100.0M  
 
                                  
Common Stock Outst.
     190.1M       190.1M         179.3M       179.3M  
 
                                  
Full Time Employees
     6,513       6,513         6,915       6,915  
Portfolio and Segment Composition
                         Small & Medium Business
QuickBooks Related
QuickBooks Software
QuickBooks Standard Payroll
QuickBooks Enhanced Payroll
QuickBooks Enhanced Payroll Plus
Financial Supplies
Innovative Merchant Solutions
QuickBooks Support Programs
Point of Sale
Intuit-Branded Small Business
Complete Payroll
QuickBooks Assisted Payroll
Premier Payroll
Intuit Real Estate Solutions (MRI)
Intuit Distribution Management Solutions (Eclipse)
Intuit Construction Business Solutions
                         Tax
Consumer Tax
TurboTax
Professional Tax
ProSeries
Lacerte
                         Other
Other Businesses
Quicken
Canada/UK
 
Note:   All amounts except GAAP EPS exclude information related to Intuit Public Sector Solutions, which we divested in December 2004, and Intuit Information Technology Solutions, which we expect to divest in the first quarter of fiscal 2006.
 
[A]   These are non-GAAP financial measures. See tables B1, B2, E1 and E2 of the accompanying press release for reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures.
 
[B]   Interest and other income includes $7.5 million in variable royalty income from the purchaser of our former Quicken Loans business in each of Q4 FY04 and Q4 FY05.
 
[C]   The GAAP tax rate and GAAP EPS for Q3 FY04 and fiscal 2004 and for Q3 FY05 and fiscal 2005 include the reversal of reserves related to potential income tax exposures that have been resolved.
 
    The non-GAAP tax rate and non-GAAP EPS do not reflect the benefit of those reserve reversals.
Page 1

 

 

Intuit Facts   Intuit Inc.
     
    Investor Relations (650) 944-5401
NASDAQ: INTU
Business Metrics
                                                                                                     
Units in thousands, except where noted     FY03     Q1/FY04   Q2/FY04   Q3/FY04   Q4/FY04     FY04     Q1/FY05   Q2/FY05   Q3/FY05   Q4/FY05     FY05  
                                 
QuickBooks Related [D]
                                                                                                    
Simple Start, Basic and Pro
       998         163       262       312       205         942         152       318       325       223         1,018    
Premier units
       122         26       62       60       44         192         32       67       53       39         191    
Enterprise units
       4         1       1       1       2         5         2       3       3       2         10    
                                 
Total QuickBooks software units sold
       1,124         190       325       373       251         1,139         186       388       381       264         1,219    
 
                                                                                                    
Net increase in Quickbooks software subscriptions [E]
       7         1       3       4       2         10         5       54       45       33         137    
                                 
 
                                                                                                    
Total Quickbooks software units and increase in subscriptions [E]
       1,131         191       328       377       253         1,149         191       442       426       297         1,356    
 
                                                                                                    
Total Quickbooks software subscription customers [E]
       11         12       15       19       21         21         26       80       125       158         158    
 
                                                                                                    
Sell Thru Channel Mix [F]
                                                                                                    
% of dollars at retail
       54 %       59 %     49 %     48 %     53 %       51 %       62 %     47 %     49 %     50 %       51 %  
 
                                                                                                    
QuickBooks Retail Share [G]
                                                                                                    
Unit share FYTD
       82 %       78 %     82 %     83 %     83 %       83 %       83 %     86 %     88 %     88 %       88 %  
Dollar share FYTD
       89 %       85 %     89 %     90 %     91 %       91 %       89 %     90 %     92 %     92 %       92 %  
 
                                                                                                    
QuickBooks do-it-yourself payroll (customers)
       739         753       776       806       807         807         816       837       844       837         837    
 
                                                                                                    
Intuit-Branded Small Business (selected)
                                                                                                    
 
                                                                                                    
Outsourced Payroll Customers
                                                                                                    
Premier
       24         24       23       22       21         21         20       19       17       15         15    
Branded Outsourced (Assisted & Complete)
       43         45       48       50       51         51         51       53       54       54         54    
                                 
Total Outsourced Payroll Customers
       67         69       71       72       72         72         71       72       71       69         69    
 
                                                                                                    
Consumer Tax [D]
                                                                                                    
Federal TurboTax (millions)
                                                                                                    
Desktop units retail
       4.2       NM     2.4       2.3     NM       4.7       NM     2.6       2.7     NM       5.3    
Desktop units direct
       1.9       NM     1.2       0.5     NM       1.7       NM     1.1       0.6     NM       1.7    
Web units paid
       2.4       NM     0.4       2.4     NM       2.8       NM     0.6       2.7     NM       3.4    
Free File Alliance
       1.3       NM     0.1       0.6     NM       0.7       NM     0.4       1.8     NM       2.2    
                                 
Total TurboTax federal units
       9.8       NM     4.1       5.8     NM       9.9       NM     4.7       7.8     NM       12.6    
 
                                                                                                    
TurboTax Efile returns (millions)
       12.3       NM     1.3       11.6       0.2         13.1       NM     1.8       14.4       0.1         16.3    
 
                                                                                                    
Sell-Thru Channel Mix [F]
                                                                                                    
% of dollars at retail
       36 %     NM     51 %     30 %   NM       36 %     NM     55 %     26 %   NM       34 %  
 
                                                                                                    
Federal TurboTax retail share [H]
                                                                                                    
Unit share FYTD
       71 %     NM     71 %     72 %     72 %       72 %     NM     75 %     79 %     79 %       79 %  
Dollar share FYTD
       79 %     NM     81 %     82 %     82 %       82 %     NM     81 %     85 %     85 %       85 %  
 
                                                                                                    
Professional Tax
                                                                                                    
Professional Tax units
       96       NM     90       7     NM       97       NM     94       12     NM       106    
Efile returns (millions)
       8.7         0.2       0.6       12.7       0.4         13.9         0.7       0.7       15.6       0.6         17.6    
                                 
 
[D]   Sales to end users (sell-through) by Intuit and via retailers and distributors for which Intuit relies on reports from these merchants. These numbers include estimates, including estimates of sales by merchants who do not report sales to Intuit.
 
[E]   Includes QuickBooks Online Edition, QuickBooks Pro and QuickBooks Premier from Enhanced Payroll Plus subscription units.
 
[F]   Estimate based on subset of retailers reporting.
 
[G]   Sources: NPD Group Monthly Retail Software Report through June 2005 and NPD Group Weekly Retail Software reports for July 2005.
 
[H]   Sources: NPD Group Monthly Retail Software Report through April 2005.
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Intuit Facts   Intuit Inc.
     
FY06 Financial Outlook[I], [J]   Investor Relations (650) 944-5401
     
    NASDAQ: INTU
Guidance
($ millions)
                                   
      Guidance     Guidance   Guidance   Guidance   Guidance     Historical
      Q1 FY06     Q2 FY06   Q3 FY06   Q4 FY06   FY06     FY05
                   
Revenue:
                                  
Small & Medium Business
                                  
QuickBooks Related
                       $791-$828     $ 753.0  
% change YOY
                       5%-10%       15 %
Intuit-Branded Small Business
                       $242-$254     $ 230.7  
% change YOY
                       5%-10%       11 %
 
                                  
Tax
                                  
Consumer Tax
                       $628-$656     $ 570.7  
% change YOY
                       10%-15%       16 %
Professional Tax
                       $265-$278     $ 265.0  
% change YOY
                       0%-5%       5 %
 
                                  
Other Businesses
                       $229-$240     $ 218.3  
% change YOY
                       5%-10%       9 %
 
                                  
                   
Total Revenue
     $270-$285     $670-$710   $890-$950   $300-$330   $2,180-$2,240     $ 2,037.7  
% change YOY
     7%-13%     3%-10%   7%-14%   (1%)-9%   7%-10%       13 %
 
                                  
GAAP Operating Income (Loss)
     ($121)-($111)                 $501-$523     $ 524.1  
Non-GAAP Operating Income (Loss)[A]
     ($95)-($85)                 $595-$617     $ 550.9  
Non-GAAP Operating Margin %[A]
     NA                 27%-28%       27 %
 
                                  
GAAP EPS [C] [K]
     ($0.43)-($0.38)     $0.66-$0.76   $1.67-$1.92   ($0.23)-($0.18)   $1.86 - $1.96     $ 2.03  
Non-GAAP EPS [A]
     ($0.35)-($0.30)     $0.75-$0.85   $1.75-$2.00   ($0.15)-($0.10)   $2.19 - $2.29     $ 1.99  
 
                                  
Basic Share Count
     178-179                 174-176       184.6  
 
                                  
Fully Diluted Share Count
     NA                 179-181       188.4  
 
                                  
GAAP Tax Rate [C] [K]
     35%                 35%       33 %
Non-GAAP Tax Rate [A]
     35%                 35%       35 %
Portfolio and Segment Composition
                         Small & Medium Business
QuickBooks Related
QuickBooks Software
QuickBooks Standard Payroll
QuickBooks Enhanced Payroll
QuickBooks Enhanced Payroll Plus
Financial Supplies
Innovative Merchant Solutions
QuickBooks Support Programs
Point of Sale
Intuit-Branded Small Business
Complete Payroll
QuickBooks Assisted Payroll
Premier Payroll
Intuit Real Estate Solutions (MRI)
Intuit Distribution Management Solutions (Eclipse)
Intuit Construction Business Solutions
                         Tax
Consumer Tax
TurboTax
Professional Tax
ProSeries
Lacerte
                         Other
Other Businesses
Quicken
Canada/UK
 
[I]   All of the numbers provided in the table entitled “Guidance,” other than those in the Historical FY05 column, are forward-looking statements.
 
    Please see “Cautions About Forward-Looking Statements” in the pages accompanying this fact sheet for important information to assess when evaluating these statements. Actual future results may differ materially due to a number of risks and uncertainties.
 
[J]   Excludes results of Intuit Information Technology Solutions (ITS). The figures in the Historical FY05 column exclude $57.0 million in ITS revenue, $23.2 million in ITS non-GAAP operating income, $20.8 million in ITS GAAP operating income and $0.08 in ITS non-GAAP EPS.
 
[K]   In accordance with accounting rules, GAAP EPS includes ITS for all periods presented. The GAAP tax rate and GAAP EPS for fiscal 2005 also include the reversal of reserves related to potential income tax exposures that have been resolved. The non-GAAP tax rate and Non-GAAP EPS do not reflect the benefit of those reserve reversals.

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