UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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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) April 25, 2007
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Citrix Systems, Inc.
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(Exact Name of Registrant as Specified in Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
0-27084 75-2275152
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(Commission File Number) (IRS Employer Identification No.)
851 West Cypress Creek Road, Ft. Lauderdale, Florida 33309
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(Address of Principal Executive Offices) (Zip Code)
(954) 267-3000
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(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:
|_| 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 April 25, 2007, the Company issued a press release regarding its
revenues and other financial information for the quarter ended March 31, 2007. A
copy of the press release is attached hereto as Exhibit 99.1 and is incorporated
herein by reference.
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.
April 25, 2007
By: /s/ David J. Henshall
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David J. Henshall
Senior Vice President and
Chief Financial Officer
EXHIBIT INDEX
Exhibit No. Description
99.1 Press release dated April 25, 2007 of Citrix Systems, Inc.
Exhibit 99.1
Citrix Reports First Quarter Revenues of $308 Million
Year-over-year Quarterly Revenue Growth of 18%
FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--April 25, 2007--Citrix
Systems, Inc. (Nasdaq:CTXS), the global leader in application delivery
infrastructure, today reported quarterly revenues and other financial
information for the first quarter of fiscal 2007 ended March 31, 2007.
Operational Highlights
In the first quarter of fiscal 2007, Citrix achieved revenue of
$308 million, compared to $260 million in the first quarter of fiscal
2006, representing 18 percent revenue growth.
In the first quarter of fiscal 2007, total cost of revenues and
operating expenses - which include cost of product license and
services revenues, research and development, sales, marketing and
support, general and administrative, amortization of intangible assets
and acquisition related charges was approximately $250 million. This
amount includes amortization expense of approximately $10 million, a
$1 million write-off of in-process research and development related to
the closing of the Ardence acquisition and approximately $6 million in
accounting, legal, and tax fees related to the voluntary stock option
review. Other income was approximately $12 million. Due to the ongoing
voluntary stock option review, costs and expenses reported today do
not include any stock-based compensation expense.
"I'm very pleased with our first quarter performance," said Mark
Templeton, president and chief executive officer for Citrix. "We
generated great momentum in our product lines, and are off to a solid
start to 2007.
"We saw good pipeline growth for Presentation Server Platinum
Edition due to the positioning, pricing and packaging moves we made,
as well as the positive influence EdgeSight has on upgrades. I am also
pleased with the growth in our application networking product line."
Stock Option Review Update
In the quarter ended December 31, 2006, the Audit Committee of the
company's Board of Directors began a voluntary review of the company's
historical stock option granting practices and the related accounting
for the years 1996 through 2006. This voluntary review was initiated
in light of news about the option practices of numerous companies
across several industries and not in response to any governmental
investigation, whistleblower complaint, stockholder lawsuit or
inquiries from media organizations. The Audit Committee engaged
independent outside legal counsel to conduct the review.
The Audit Committee has nearly completed its review and has
reached a determination that incorrect measurement dates were used to
account for certain historical stock option grants during the years
under review. Citrix expects that the difference in these measurement
dates will result in material non-cash stock-based compensation
expenses and the restatement of previously issued financial
statements. Today Citrix is not providing full GAAP or non-GAAP
financial statements for the first quarter of fiscal 2007 due to the
ongoing stock option review.
Because this review is ongoing, the Audit Committee has not
reached any final conclusions. However, it has found nothing to date
that would cause it to conclude that there was intentional wrongdoing
by a current executive of the company.
Citrix intends to file its Annual Report on Form 10-K for the year
ended December 31, 2006 containing the required restatements of its
financial statements as soon as practicable after the voluntary review
is completed. The company will release full first quarter financial
statements on a press release at that time.
Q1 Financial Highlights
In reviewing the first quarter of 2007, compared to the first
quarter of 2006:
-- Product license revenue increased 7 percent;
-- Revenue from license updates grew 20 percent;
-- Online services contributed $47 million of revenue, up 49
percent;
-- Technical services revenue, which is comprised of consulting,
education and technical support, grew 28 percent;
-- Deferred revenue totaled $376 million, compared to $292
million at March 31, 2006; and
-- There was no stock repurchase activity during the quarter due
to the ongoing stock option review. Citrix has over $330
million remaining under the current repurchase authorization.
Financial Outlook for Second Fiscal Quarter 2007
Citrix management expects to achieve the following results during
the second fiscal quarter 2007 ending June 30, 2007. As a result of
the voluntary stock option review, Citrix is not providing earnings
per share guidance at this time.
-- Net revenue is expected to be in the range of $317 million to
$324 million, compared to $275 million in the second quarter
of 2006.
-- Total cost of revenues and operating expenses in the second
quarter are expected to be in a range of approximately $254
million to $258 million. Included in the second quarter
outlook are amortization expenses in the range of $10 million
to $11 million and $3 million for accounting, legal, and tax
fees related to the ongoing stock option review. This estimate
of second quarter spending does not take into account any
stock-based compensation expense or other charges likely to
result from the voluntary stock option review.
The above statements are based on current expectations. These
statements are forward-looking, and actual results may differ
materially.
Financial Outlook for Fiscal Year 2007
Citrix management expects to achieve the following results for the
fiscal year 2007:
-- For fiscal year 2007, the company expects net revenue to be in
the range of $1.31 billion to $1.33 billion, compared to $1.13
billion in fiscal year 2006. The company expects total cost of
revenues and operating expenses to be in the range of $1.03
billion to $1.04 billion. Included in the fiscal year 2007
outlook is amortization expenses in the range of $41 million
to $42 million, a $1 million write-off of in-process research
and development related to the closing of the Ardence
acquisition and $9 million for accounting, legal, and tax fees
related to the ongoing stock option review. This estimate of
fiscal year 2007 spending does not take into account any
stock-based compensation expense or other charges likely to
result from the voluntary stock option review.
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 first quarter of fiscal 2007, Citrix:
-- Introduced a new version of its flagship product - Citrix
Presentation Server(TM) 4.5 redefining state-of-the-art
application delivery for Windows;
-- Introduced a new Citrix Access Gateway(TM) appliance that
supports more than 10,000 users, which is more than double
what other market leading products offer;
-- Introduced a new version of Citrix(R) GoToMyPC(R) 6.0, the
market-leading remote access service, with a new sound
capability allowing users to listen to music, voice-mail and
system sounds on their PC from anywhere;
-- Completed the acquisition of Ardence Inc. bringing on-demand
provisioning to its application delivery infrastructure;
-- Introduced version 7.1 of Ardence(R) RTX(R), a market-leading
real-time software solution, with significant enhancements
including support for IPv6 and greater performance and
reliability;
-- Acquired Aurema Pty Ltd., which improved application delivery
for Windows-based applications by boosting workload management
capabilities;
-- Opened a new Silicon Valley headquarters in Santa Clara,
California;
-- Won the 2007 SC Magazine Reader Trust Award for IPSec/SSL VPN
Solution;
-- Placed in the SSL VPN Leader Quadrant by Gartner, Inc., and
soared to No. 2 in worldwide SSL VPN market share according to
Infonetics Research Inc.;
-- Won a "Top 10 Product of the Year Award" from Small Business
Technology for Citrix(R) GoToWebinar(TM), and an "Excellence
in Technology Award" from Small Business Computing; and
-- Honored with INTERNET TELEPHONY(R) Magazine's 2006 Product of
the Year Award for Citrix Application Gateway(TM).
Conference Call Information
Citrix will host a conference call today at 4:45 p.m. ET to
discuss its financial results, quarterly highlights and business
outlook. The call will include a slide presentation, and participants
are encouraged to listen to and view the presentation via webcast at
http://www.citrix.com/investors.
The conference call may also be accessed by dialing: (888)
799-0519 or (706) 634-0155, using passcode: CITRIX. A replay of the
webcast can be viewed by visiting the Investor Relations section of
the Citrix corporate Web site at http://www.citrix.com/investors for
approximately 30 days. In addition, an audio replay of the conference
call will be available through April 27, 2007, by dialing (800)
642-1687 or (706) 645-9291 (passcode required: 5640355).
About Citrix
Citrix Systems, Inc. (Nasdaq:CTXS) is the global leader and the
most trusted name in application delivery infrastructure. More than
180,000 organizations worldwide rely on Citrix to deliver any
application to users anywhere with the best performance, highest
security and lowest cost. 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 prosumers. Citrix has
approximately 6,200 channel and alliance partners in more than 100
countries. Annual revenue in 2006 was $1.1 billion.
For Citrix Investors
This release contains forward-looking statements which are made
pursuant to the safe harbor provisions of Section 27A of the
Securities Act of 1933 and 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, statements concerning the company's ongoing stock option
review, the statements contained in the Financial Outlook for Second
Quarter 2007, Financial Outlook for Fiscal Year 2007 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 risks
summarized in the immediately succeeding paragraph and the following:
the success and growth 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;
Citrix's and Microsoft's ability to develop and market a
multi-function Citrix branch office appliance; 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. 123(R) on certain of
the company's GAAP financial measures due to the variability of the
factors used to estimate the value of stock-based compensation; the
company's reliance on and the success of the company's independent
distributors and resellers for the marketing and distribution of the
company's products and the success of the company's marketing and
licensing programs; intellectual property litigation; 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 ("SEC"). Citrix assumes no
obligation to update any forward-looking information contained in this
press release or with respect to the announcements described herein.
There can be no assurance that the outcome of the review by the
company's Audit Committee of the company's historical stock option
granting practices and the related accounting will not result in
adjustments to the financial information for the first quarter ended
March 31, 2007 released today. In addition, the review and its
possible conclusions has and may continue to require additional
expenses to be recorded, adversely affect the company's ability to
file required reports with the SEC on a timely basis and adversely
impact the company's ability to meet the requirements of the Nasdaq
Global Select Market for continued listing of its shares; and may
adversely impact management's conclusions on the effectiveness of its
internal control over financial reporting and disclosure controls and
procedures, result in claims and proceedings relating to such matters,
including shareholder litigation and actions by the SEC and/or other
governmental agencies, and negative tax, costs related to the
remediation of certain tax-related liabilities or other implications
for the company resulting from any accounting adjustments or other
factors.
Citrix(R), NetScaler(R), GoToMyPC(R), Ardence(R), RTX(R), Citrix
Desktop Server(TM), Citrix Presentation Server(TM), Citrix Application
Gateway(TM), Citrix Access Gateway(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.
SELECTED FINANCIAL METRICS
Selected Consolidated Net Revenue Line Items
(In thousands -- unaudited)
Three Months Three Months
Ended Ended
March 31, March 31,
2007 2006
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Revenues:
Product licenses $122,067 $114,185
License updates 112,808 93,871
Online services 47,211 31,638
Technical services 26,002 20,304
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Total net revenues $308,088 $259,998
Selected Consolidated Cost of Revenues Line Items
(In thousands -- unaudited)
Three Months Three Months
Ended Ended
March 31, March 31,
2007 2006
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Cost of revenues(1):
Cost of product license revenues $8,295 $6,631
Cost of services revenues 14,482 10,030
Amortization of product related
intangible assets 6,228 5,001
Selected Consolidated Operating Expense Line Items
(In thousands -- unaudited)
Three Months Three Months
Ended Ended
March 31, March 31,
2007 2006
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Operating expenses(1):
Research and development $41,530 $30,003
Sales, marketing and support 122,107 104,162
General and administrative 52,030 35,861
Amortization of other intangible
assets 4,147 4,032
In-process research and development 1,200 -
Selected Consolidated Income Statement Line Item
(In thousands -- unaudited)
Three Months Three Months
Ended Ended
March 31, March 31,
2007 2006
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Other income, net $11,517 $6,456
Selected Consolidated Balance Sheet Line Items
(In thousands -- unaudited)
March 31, December 31,
2007 2006
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Total cash (including restricted cash) &
investments $909,140 $807,196
Accounts receivable, net $168,047 $204,974
Total deferred revenue $376,202 $356,288
1 -- Due to the ongoing voluntary stock option review, cost of
revenues and operating expenses presented above and under the caption
Operational Highlights do not include any stock-based compensation
expense and may be considered non-GAAP financial measures as defined
by the Securities and Exchange Commission's Regulation G. The GAAP
financial measure most directly comparable to each potential non-GAAP
financial measure used above and under the caption Operational
Highlights and a reconciliation of the differences between each such
potential non-GAAP financial measure and the comparable GAAP financial
measure cannot be provided by Citrix at this time because the ongoing
voluntary stock option review, among other things, makes such
information with respect to stock-based compensation expense
unavailable. Until the completion of the voluntary stock option
review, Citrix intends to use cost of revenues and operating expenses
as presented above for internal reporting and forecasting purposes and
to evaluate the company's performance. Citrix has provided cost of
revenues and operating expenses as presented above because it believes
that these financial measures provide useful information to certain
investors and financial analysts during the pendency of the Audit
Committee's voluntary stock option review. Citrix will release GAAP
cost of revenues and operating expenses for the first quarter ended
March 31, 2007 upon completion of the stock option review.
CONTACT: Citrix Systems, Inc., Fort Lauderdale
Eric Armstrong, 954-267-2977
eric.armstrong@citrix.com
or
For investor inquiries:
Citrix Systems, Inc.
Eduardo Fleites, 954-229-5758
eduardo.fleites@citrix.com