Intuit Reports Solid 2009 Fiscal Year Results; Forecasts Strong Earnings Growth for 2010
Highlights:
-- Fiscal year 2009 non-GAAP operating income grew 9 percent; non-GAAP EPS
grew 14 percent
-- Expects revenue growth of 4 to 8 percent in fiscal 2010
-- Expects GAAP operating income growth of 15 to 21 percent in fiscal 2010
MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)-- Intuit Inc. (Nasdaq:INTU) today announced fiscal year 2009 revenue of $3.183 billion, a 4 percent increase from last year. For the fiscal year, GAAP (Generally Accepted Accounting Principles) operating income grew 5 percent to $682 million, while non-GAAP operating income grew 9 percent to $931 million.
Intuit also provided full-year guidance for the 2010 fiscal year, projecting GAAP operating income growth of 15 to 21 percent, non-GAAP operating income growth of 6 to 10 percent, GAAP earnings per share growth of 10 to 16 percent and non-GAAP earnings per share growth of 4 to 8 percent.
"We delivered solid revenue and operating income growth in 2009 by staying focused on helping our customers save and make money in this tough economy, while maintaining our own operating discipline," said Brad Smith, Intuit's president and chief executive officer. "Connected services that solve important customer problems, led by our SaaS (Software as a Service) offerings, grew 14 percent this past year. These predictable revenue streams continue to be the fastest-growing portion of our business, and a key element of our future."
"As a result, we are entering our new fiscal year with larger customer bases and stronger positions in all of our core businesses. This gives us confidence that we'll have another good year in fiscal 2010," Smith said.
Fiscal 2009 Financial Highlights
-- Revenue of $3.183 billion, up 4 percent from fiscal 2008.
-- GAAP operating income from continuing operations of $682 million, up 5
percent from fiscal 2008. GAAP diluted earnings per share of $1.35, down
4 percent from fiscal 2008. The decrease is driven by a 10-cent per
share gain for the sale of certain payroll assets to ADP and an 8-cent
per share gain from discontinued operations from the sale of IDMS. Both
events were included in fiscal 2008 results and did not recur in fiscal
2009.
-- Non-GAAP operating income of $931 million, up 9 percent from fiscal
2008. Non-GAAP diluted earnings per share of $1.82, up 14 percent from
fiscal 2008.
-- In fiscal 2009 Intuit had a non-GAAP effective tax rate of approximately
33 percent due to tax benefits from a favorable settlement of prior year
issues and retroactive reinstatement of the R&D tax credit. These
benefits added 8 cents to the company's 2009 EPS. Without these benefits
non-GAAP EPS would have grown 9 percent, in line with non-GAAP operating
income.
Fiscal 2009 Business Segment Results
Intuit has changed its business reporting structure and segment names to better reflect the relationships between the segments and provide additional insight into business unit performance.
The Small Business Group now includes three reporting segments: Financial Management Solutions, Employee Management Solutions and Payments Solutions. Financial Management Solutions was formerly known as the QuickBooks segment. Employee Management Solutions and Payments Solutions were formerly combined in the Payroll and Payments segment. The company will provide guidance at the Small Business Group level.
-- Financial Management Solutionsrevenue was $579 million, down 2 percent
from the prior year.
-- Employee Management Solutionsrevenue was $365 million, up 8 percent from
the prior year.
-- Payments Solutionsrevenue was $291 million, up 15 percent from the prior
year.
-- Consumer Tax revenue was $996 million, up 7 percent from the prior year.
-- Accounting Professionalsrevenue was $352 million, up 8 percent from the
prior year.
-- Financial Institutionsrevenue was $311 million, up 4 percent from the
prior year.
-- Other Businessesrevenue was $289 million, down 14 percent from the prior
year.
Fourth-Quarter 2009 Highlights
-- Revenue of $476 million, flat from the year-ago quarter.
-- GAAP operating loss from continuing operations of $116 million, compared
to a loss of $94 million in the year-ago quarter. GAAP diluted loss per
share was $0.22, compared to a loss of $0.19 in the year ago quarter.
-- Non-GAAP operating loss of $49 million, compared to a loss of $41
million in the year ago quarter. The non-GAAP diluted loss per share was
$0.10, compared to a loss of $0.08 in the year ago quarter.
Intuit typically posts a seasonal loss in its fourth quarter when there is little revenue from its tax businesses but expenses remain relatively constant. The 2009 GAAP and non-GAAP loss includes a $10 million charge for severance and facilities closures and a $9 million charge related to the July acquisition of PayCycle.
Forward-looking Guidance
Intuit provided its financial guidance for fiscal 2010, which will end on July 31, 2010. The company expects:
-- Revenueof $3.30 billion to $3.43 billion, or growth of 4 to 8 percent.
-- GAAP operating income of $785 million to $825 million, or growth of 15
to 21 percent.
-- Non-GAAP operating income of $985 million to $1.025 billion, or growth
of 6 to 10 percent.
-- GAAP diluted EPS of $1.49 to $1.56 or growth of 10 to 16 percent.
-- Non-GAAP diluted EPS of $1.89 to $1.96, or growth of 4 to 8 percent.
Fiscal 2010 Business Segment Guidance
Intuit's expected results for its business segments for fiscal 2010 are:
-- Small Business Grouprevenue of $1.280 billion to $1.330 billion, or
growth of 4 to 8 percent.
-- Consumer Tax revenueof $1.045 billion to $1.085 billion, or growth of 5
to 9 percent.
-- Accounting Professionalsrevenueof $363 million to $375 million, or
growth of 3 to 7 percent.
-- Financial Institutionsrevenueof $330 million to $341 million, or growth
of 6 to 10 percent.
-- Other Businessesrevenueof $305 million to $318 million, or growth of 6
to 10 percent.
First-Quarter Fiscal 2010 Guidance
Intuit expects the following results for the first quarter of 2010, which will end on Oct. 31, 2009:
-- Revenue of $479 million to $493 million, or growth of zero to 2 percent.
-- GAAP operating loss of $126 million to $107 million and non-GAAP
operating loss of $79 million to $60 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.
-- GAAP net loss per share of $0.28 to $0.24 and a non-GAAP net loss per
share of $0.19 to $0.15.
Webcast and Conference Call Information
A live audio webcast of Intuit's fourth-quarter 2009 conference call is available at http://investors.intuit.com/events.cfm. The call begins today at 1:30 p.m. Pacific time. The replay of the audio webcast will remain on Intuit's Web site for one week after the conference call. Intuit has also posted this press release, including the attached tables and non-GAAP to GAAP reconciliations, on its Web site and will post the conference call script shortly after the conference call concludes. These documents may be found at http://investors.intuit.com/results.cfm.
The conference call number is 866-238-1645 in the United States or 703-639-1163 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, or 703-925-2533 from international locations. The access code for this call is 1382220.
Intuit, the Intuit logo and QuickBooks, among others, are registered trademarks and/or registered service marks of Intuit Inc. in the United States and other countries.
About Non-GAAP Financial Measures
This press release and the accompanying tables include non-GAAP financial measures. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles, please see the section of the accompanying tables titled "About Non-GAAP Financial Measures" as well as the related Table B and Table E. A copy of the press release issued by Intuit on Aug. 20, 2009 can be found on the investor relations page of Intuit's Web site.
Cautions About Forward-Looking Statements
This press release contains forward-looking statements, including forecasts of Intuit's future expected financial results; its prospects for the business in fiscal 2010; and all of the statements under the headings "Forward-looking Guidance," "Fiscal 2010 Business Segment Guidance", and "First-Quarter Fiscal 2010 Guidance."
Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause our actual results to differ materially from the expectations expressed in the forward-looking statements. These factors include, without limitation, the following: product introductions and price competition from our competitors can have unpredictable negative effects on our revenue, profitability and market position; governmental encroachment in our tax businesses or other governmental activities or public policy affecting the preparation and filing of tax returns could negatively affect our operating results and market position; if economic and market conditions in the U.S. and worldwide continue to decline, our customers may delay or reduce technology purchases which may harm our business, results of operations and financial condition; we may not be able to successfully introduce new products and services to meet our growth and profitability objectives, and current and future products and services may not adequately address customer needs and may not achieve broad market acceptance, which could harm our operating results and financial condition; any failure to maintain reliable and responsive service levels for our offerings could cause us to lose customers and negatively impact our revenues and profitability; any significant product quality problems or delays in our products could harm our revenue, earnings and reputation; our participation in the Free File Alliance may result in lost revenue opportunities and cannibalization of our traditional paid franchise; any failure to properly use and protect personal customer information could harm our revenue, earnings and reputation; our acquisition activities may be disruptive to Intuit and may not result in expected benefits; our use of significant amounts of debt to finance acquisitions or other activities could harm our financial condition and results of operations; 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; we have implemented, and are continuing to upgrade, new information systems and any problems with these new systems could interfere with our ability to deliver products and services 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; and litigation involving intellectual property, antitrust, shareholder and other matters may increase our costs. More details about these and other risks that may impact our business are included in our Form 10-K for fiscal 2008 and in our 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 Aug. 20, 2009, and we do not undertake any duty to update any forward-looking statement or other information in these remarks.
Table A
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,
2009 2008 2009 2008
Net revenue:
Product $ 192,842 $ 219,575 $ 1,384,056 $ 1,496,655
Service and other 282,932 258,579 1,798,481 1,574,319
Total net revenue 475,774 478,154 3,182,537 3,070,974
Costs and expenses:
Cost of revenue:
Cost of product 34,302 28,883 157,197 154,147
revenue
Cost of service and 115,463 108,497 458,505 414,100
other revenue
Amortization of
purchased intangible 15,530 15,823 61,146 56,011
assets
Selling and marketing 186,005 180,188 927,174 859,647
Research and 153,900 156,730 566,232 605,818
development
General and 76,581 72,029 288,101 294,966
administrative
Acquisition-related 9,522 10,169 42,122 35,518
charges
Total costs and 591,303 572,319 2,500,477 2,420,207
expenses [A]
Operating income
(loss) from continuing (115,529 ) (94,165 ) 682,060 650,767
operations
Interest expense (15,125 ) (11,901 ) (51,184 ) (52,290 )
Interest and other 11,172 14,043 21,471 46,520
income
Gains on marketable
equity securities and - 227 1,084 1,417
other investments, net
Gain on sale of
outsourced payroll - - - 51,571
assets [B]
Income (loss) from
continuing operations (119,482 ) (91,796 ) 653,431 697,985
before income taxes
Income tax provision (49,179 ) (30,260 ) 205,222 245,579
(benefit) [C]
Minority interest 372 324 1,168 1,656
expense, net of tax
Net income (loss) from (70,675 ) (61,860 ) 447,041 450,750
continuing operations
Net income from
discontinued - - - 26,012
operations [D]
Net income (loss) $ (70,675 ) $ (61,860 ) $ 447,041 $ 476,762
Basic net income
(loss) per share from $ (0.22 ) $ (0.19 ) $ 1.39 $ 1.37
continuing operations
Basic net income per
share from - - - 0.08
discontinued
operations
Basic net income $ (0.22 ) $ (0.19 ) $ 1.39 $ 1.45
(loss) per share
Shares used in basic 323,418 321,641 322,280 328,545
per share calculations
Diluted net income
(loss) per share from $ (0.22 ) $ (0.19 ) $ 1.35 $ 1.33
continuing operations
Diluted net income per
share from - - - 0.08
discontinued
operations
Diluted net income $ (0.22 ) $ (0.19 ) $ 1.35 $ 1.41
(loss) per share
Shares used in diluted 323,418 321,641 330,190 339,268
per share calculations
See accompanying Notes.
INTUIT INC.
NOTES TO TABLE A
[A] The following table summarizes the total share-based compensation expense
that we recorded for the periods shown.
Three Months Ended Twelve Months Ended
July 31, July 31, July 31, July 31,
2009 2008 2009 2008
Cost of product $ 419 $ 171 $ 1,414 $ 1,018
revenue
Cost of service and 2,192 1,317 7,183 6,211
other revenue
Selling and marketing 14,100 9,838 47,990 37,948
Research and 11,799 7,464 39,244 31,841
development
General and 10,667 8,165 36,947 36,219
administrative
Total share-based $ 39,177 $ 26,955 $ 132,778 $ 113,237
compensation
[B] In March 2007 we sold certain assets related to our Complete Payroll and
Premier Payroll Service businesses to Automatic Data Processing, Inc. (ADP) for
a price of up to approximately $135 million in cash. The final purchase price
was contingent upon the number of customers that transitioned to ADP pursuant to
the purchase agreement over a period of approximately one year from the date of
sale. In the twelve months ended July 31, 2008 we recorded a pre-tax gain of
$51.6 million on our statement of operations for customers who transitioned to
ADP during that period. We received a total price of $93.6 million and recorded
a total pre-tax gain of $83.2 million from the inception of this transaction
through its completion in the third quarter of fiscal 2008.
[C] Our effective tax benefit rate for the three months ended July 31, 2009 was
approximately 41%. The income tax benefit for that period included the impact of
finalizing the annual effective tax rate for fiscal 2009 in connection with the
preparation of the annual tax provision for that period. Excluding this impact,
our effective tax benefit rate for the three months ended July 31, 2009 was
approximately 36% and did not differ significantly from the federal statutory
rate of 35%. Our effective benefit tax rate for the three months ended July 31,
2008 was approximately 33%. Excluding one-time charges primarily related to an
adjustment of a deferred tax asset, our effective tax rate for that period was
approximately 35% and did not differ significantly from the federal statutory
rate of 35%.
Our effective tax benefit rate for the twelve months ended July 31, 2009 was
approximately 31%. Excluding discrete tax benefits primarily related to a
favorable agreement we entered into with a tax authority and the retroactive
reinstatement of the federal research and experimentation credit, our effective
tax rate for that period was approximately 35% and did not differ significantly
from the federal statutory rate of 35%. Our effective tax rate for the twelve
months ended July 31, 2008 was approximately 35% and did not differ
significantly from the federal statutory rate of 35%.
[D] In August 2007 we sold our Intuit Distribution Management Solutions (IDMS)
business for approximately $100 million in cash and recorded a net gain on
disposal of $27.5 million. IDMS was part of our Other Businesses segment. We
determined that IDMS became a discontinued operation in the fourth quarter of
fiscal 2007. We have therefore segregated the operating results of IDMS from
continuing operations in our statements of operations for all periods prior to
the sale. Revenue and net loss from IDMS discontinued operations for the twelve
months ended July 31, 2008 were not significant. Because IDMS operating cash
flows were not material for any period presented, we have not segregated them
from continuing operations on our statements of cash flows. We have segregated
the cash impact of the gain on disposal of IDMS on our statement of cash flows
for the twelve months ended July 31, 2008.
Table B
INTUIT INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
TO MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASURES
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Twelve Months Ended
July 31, July 31, July 31, July 31,
2009 2008 2009 2008
GAAP operating income
(loss) from continuing $ (115,529 ) $ (94,165 ) $ 682,060 $ 650,767
operations
Amortization of purchased 15,530 15,823 61,146 56,011
intangible assets
Acquisition-related 9,522 10,169 42,122 35,518
charges
Charge for historical use
of technology licensing 2,000 - 12,600 -
rights
Share-based compensation 39,177 26,955 132,778 113,237
expense
Non-GAAP operating income $ (49,300 ) $ (41,218 ) $ 930,706 $ 855,533
(loss)
GAAP net income (loss) $ (70,675 ) $ (61,860 ) $ 447,041 $ 476,762
Amortization of purchased 15,530 15,823 61,146 56,011
intangible assets
Acquisition-related 9,522 10,169 42,122 35,518
charges
Charge for historical use
of technology licensing 2,000 - 12,600 -
rights
Share-based compensation 39,177 26,955 132,778 113,237
expense
Net gains on marketable
equity securities and - (227 ) (1,084 ) (1,417 )
other investments
Pre-tax gain on sale of - - - (51,571 )
outsourced payroll assets
Income tax effect of (26,377 ) (15,618 ) (90,017 ) (55,181 )
non-GAAP adjustments
Exclusion of discrete tax (458 ) (575 ) (2,089 ) (5,155 )
items
Discontinued operations - - - (26,012 )
Non-GAAP net income (loss) $ (31,281 ) $ (25,333 ) $ 602,497 $ 542,192
GAAP diluted net income $ (0.22 ) $ (0.19 ) $ 1.35 $ 1.41
(loss) per share
Amortization of purchased 0.05 0.05 0.18 0.17
intangible assets
Acquisition-related 0.03 0.03 0.13 0.10
charges
Charge for historical use
of technology licensing - - 0.04 -
rights
Share-based compensation 0.12 0.08 0.40 0.33
expense
Net gains on marketable
equity securities and - - - -
other investments
Pre-tax gain on sale of - - - (0.15 )
outsourced payroll assets
Income tax effect of (0.08 ) (0.05 ) (0.27 ) (0.16 )
non-GAAP adjustments
Exclusion of discrete tax - - (0.01 ) (0.02 )
items
Discontinued operations - - - (0.08 )
Non-GAAP diluted net $ (0.10 ) $ (0.08 ) $ 1.82 $ 1.60
income (loss) per share
Shares used in diluted per 323,418 321,641 330,190 339,268
share calculations
See "About Non-GAAP Financial Measures" immediately following Table E for information on these measures, the items excluded from the most directly comparable GAAP measures in arriving at non-GAAP financial measures, and the reasons management uses each measure and excludes the specified amounts in arriving at each non-GAAP financial measure.
Table C
INTUIT INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
July 31, July 31,
2009 2008
ASSETS
Current assets:
Cash and cash equivalents $ 678,902 $ 413,340
Investments 668,118 414,493
Accounts receivable, net 146,869 127,230
Income taxes receivable 66,435 60,564
Deferred income taxes 92,177 101,730
Prepaid expenses and other current assets 43,333 45,457
Current assets before funds held for customers 1,695,834 1,162,814
Funds held for customers 272,028 610,748
Total current assets 1,967,862 1,773,562
Long-term investments 97,095 288,310
Property and equipment, net 528,949 507,499
Goodwill 1,826,172 1,698,087
Purchased intangible assets, net 292,964 273,087
Long-term deferred income taxes 36,516 52,491
Other assets 76,771 73,548
Total assets $ 4,826,329 $ 4,666,584
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 104,963 $ 115,198
Accrued compensation and related liabilities 175,010 229,819
Deferred revenue 378,148 359,936
Income taxes payable 358 16,211
Other current liabilities 153,322 135,326
Current liabilities before customer fund deposits 811,801 856,490
Customer fund deposits 272,028 610,748
Total current liabilities 1,083,829 1,467,238
Long-term debt 998,184 997,996
Other long-term obligations 186,966 121,489
Total liabilities 2,268,979 2,586,723
Minority interest 1,551 6,907
Stockholders' equity 2,555,799 2,072,954
Total liabilities and stockholders' equity $ 4,826,329 $ 4,666,584
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,
2009 2008 2009 2008
Cash flows from
operating activities:
Net income (loss) $ (70,675 ) $ (61,860 ) $ 447,041 $ 476,762
Net loss from
discontinued - - - 755
operations
Net income (loss)
from continuing (70,675 ) (61,860 ) 447,041 477,517
operations
Adjustments to
reconcile net income
(loss) to net cash
provided by (used in)
operating activities:
Depreciation 43,828 31,030 149,117 116,572
Amortization of 41,723 28,265 125,556 99,891
intangible assets
Share-based 39,177 26,956 132,778 113,284
compensation
Pre-tax gain on sale
of outsourced payroll - - - (51,571 )
assets
Pre-tax gain on sale - - - (45,667 )
of IDMS
Deferred income taxes (22,664 ) 41,408 22,280 60,550
Tax benefit from
share-based 9,856 10,135 18,468 38,226
compensation plans
Excess tax benefit
from share-based (2,125 ) (2,979 ) (9,487 ) (20,764 )
compensation plans
Other 3,392 5,084 13,467 12,195
Subtotal 42,512 78,039 899,220 800,233
Changes in operating
assets and
liabilities:
Accounts receivable 128,782 97,825 (17,693 ) 11,427
Prepaid expenses,
taxes and other (52,333 ) (54,923 ) (12,111 ) (14,360 )
assets
Accounts payable (46,754 ) (28,212 ) (6,855 ) (17,504 )
Accrued compensation
and related 20,172 50,082 (55,329 ) 28,508
liabilities
Deferred revenue 78,177 80,418 26,433 47,472
Income taxes payable (155,014 ) (198,190 ) (17,682 ) (15,147 )
Other liabilities (81,069 ) (64,342 ) (3,619 ) (10,439 )
Total changes in
operating assets and (108,039 ) (117,342 ) (86,856 ) 29,957
liabilities
Net cash provided by
(used in) operating (65,527 ) (39,303 ) 812,364 830,190
activities
Cash flows from
investing activities:
Purchases of
available-for-sale (412,301 ) (195,344 ) (550,464 ) (934,335 )
debt securities
Sales of
available-for-sale 134,098 176,562 426,231 1,045,321
debt securities
Maturities of
available-for-sale 30,410 35,800 57,530 236,895
debt securities
Net change in funds
held for customers'
money market funds 98,448 (252,747 ) 365,607 (290,462 )
and other cash
equivalents
Purchases of property (34,081 ) (88,873 ) (182,452 ) (306,127 )
and equipment
Net change in
customer fund (98,448 ) 252,747 (365,607 ) 290,462
deposits
Acquisitions of
businesses and (174,526 ) (1,686 ) (187,357 ) (264,525 )
intangible assets,
net of cash acquired
Cash received from
acquirer of - 4 - 34,883
outsourced payroll
assets
Proceeds from
divestiture of - - - 97,147
businesses
Other (1,406 ) 6,022 4,071 4,691
Net cash used in
investing activities (457,806 ) (67,515 ) (432,441 ) (86,050 )
of continuing
operations
Net cash used in
investing activities - - - (755 )
of discontinued
operations
Net cash used in (457,806 ) (67,515 ) (432,441 ) (86,805 )
investing activities
Cash flows from
financing activities:
Net proceeds from
issuance of common 72,635 48,993 198,447 202,783
stock under employee
stock plans
Tax payments related
to restricted stock (84 ) (1,278 ) (14,826 ) (5,838 )
issuance
Purchase of treasury (99,998 ) - (300,249 ) (799,998 )
stock
Excess tax benefit
from share-based 2,125 2,979 9,487 20,764
compensation plans
Other (638 ) (1,148 ) (3,173 ) (4,220 )
Net cash provided by
(used in) financing (25,960 ) 49,546 (110,314 ) (586,509 )
activities
Effect of exchange
rates on cash and 6,167 (892 ) (4,047 ) 1,263
cash equivalents
Net increase
(decrease) in cash (543,126 ) (58,164 ) 265,562 158,139
and cash equivalents
Cash and cash
equivalents at 1,222,028 471,504 413,340 255,201
beginning of period
Cash and cash
equivalents at end of $ 678,902 $ 413,340 $ 678,902 $ 413,340
period
Table E
INTUIT INC.
RECONCILIATION OF FORWARD-LOOKING GUIDANCE FOR NON-GAAP FINANCIAL MEASURES
TO PROJECTED GAAP REVENUE, OPERATING INCOME (LOSS), AND EPS
(In thousands, except per share amounts)
(Unaudited)
Forward-Looking Guidance
GAAP Non-GAAP
Range of Estimate Range of Estimate
From To Adjustments From To
Three
Months
Ending
October
31, 2009
Revenue $ 479,000 $ 493,000 $ - $ 479,000 $ 493,000
Operating $ (126,000 ) $ (107,000 ) $ 47,000 [a] $ (79,000 ) $ (60,000 )
loss
Diluted
loss per $ (0.28 ) $ (0.24 ) $ 0.09 [b] $ (0.19 ) $ (0.15 )
share
Shares 321,000 323,000 - 321,000 323,000
Twelve
Months
Ending
July 31,
2010
Revenue $ 3,300,000 $ 3,430,000 $ - $ 3,300,000 $ 3,430,000
Operating $ 785,000 $ 825,000 $ 200,000 [c] $ 985,000 $ 1,025,000
income
Diluted
earnings $ 1.49 $ 1.56 $ 0.40 [d] $ 1.89 $ 1.96
per share
Shares 319,000 323,000 - 319,000 323,000
See "About Non-GAAP Financial Measures" immediately following this Table E for
information on these measures, the items excluded from the most directly comparable
GAAP measures in arriving at non-GAAP financial measures, and the reasons management
uses each measure and excludes the specified amounts in arriving at each non-GAAP
financial measure.
[a] Reflects estimated adjustments for share-based compensation expense of
approximately $21 million; amortization of purchased intangible assets of approximately
$16 million; and acquisition-related charges of approximately $10 million.
[b] Reflects the estimated adjustments in item [a], income taxes related to these
adjustments, and adjustments for certain discrete GAAP tax items.
[c] Reflects estimated adjustments for share-based compensation expense of
approximately $124 million; amortization of purchased intangible assets of
approximately $36 million; and acquisition-related charges of approximately $40
million.
[d] Reflects the estimated adjustments in item [c], income taxes related to these
adjustments, and adjustments for certain discrete GAAP tax items.
INTUIT INC.
ABOUT NON-GAAP FINANCIAL MEASURES
The accompanying press release dated August 20, 2009 contains non-GAAP financial measures. Table B and Table E reconcile the non-GAAP financial measures in that press release to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles (GAAP). These non-GAAP financial measures include non-GAAP operating income (loss), non-GAAP net income (loss) and non-GAAP net income (loss) per share.
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 names and may differ from non-GAAP financial measures with the same or similar names that are used by other companies.
We compute non-GAAP financial measures using the same consistent method from quarter to quarter and year to year. We may consider whether other significant items that arise in the future should be excluded from our non-GAAP financial measures.
We exclude the following items from all of our non-GAAP financial measures:
- Share-based compensation expense
- Amortization of purchased intangible assets
- Acquisition-related charges
- Charges for historical use of technology licensing rights
We also exclude the following items from non-GAAP net income (loss) and diluted net income (loss) per share:
- Gains and losses on disposals of businesses and assets
- Gains and losses on marketable equity securities and other investments
- Income tax effects of excluded items
- Discontinued operations
We believe that these non-GAAP financial measures provide meaningful supplemental information regarding Intuit's operating results primarily because they exclude amounts that we do not consider part of ongoing operating results when planning and forecasting and when assessing the performance of the organization, our individual operating segments or our senior management. Segment managers are not held accountable for share-based compensation expenses, acquisition-related charges, or the other excluded items and, accordingly, we exclude these amounts from our measures of segment performance. We believe that our non-GAAP financial measures also facilitate the comparison by management and investors of results for current periods and guidance for future periods with results for past periods.
The following are descriptions of the items we exclude from our non-GAAP financial measures.
Share-based compensation expenses. These consist of non-cash expenses for stock options, restricted stock units and purchases of common stock under our Employee Stock Purchase Plan. When considering the impact of equity awards, we place greater emphasis on overall shareholder dilution rather than the accounting charges associated with those awards.
Amortization of purchased intangible assets and acquisition-related charges. When we acquire an entity, we are required under GAAP to record the fair values of the intangible assets of the entity and amortize them over their useful lives. Amortization of purchased intangible assets in cost of revenue includes amortization of software and other technology assets of acquired entities. Acquisition-related charges in operating expenses include amortization of other purchased intangible assets such as customer lists, covenants not to compete and trade names.
Charge for historical use of technology licensing rights. We exclude from our non-GAAP financial measures the portion of technology licensing fees that relates to historical use of that technology.
Gains and losses on disposals of businesses and assets. We exclude from our non-GAAP financial measures gains and losses that we record from time to time when we sell or otherwise dispose of businesses and assets that are not considered discontinued operations under GAAP.
Gains and losses on marketable equity securities and other investments. We exclude from our non-GAAP financial measures gains and losses that we record when we sell or impair marketable equity securities and other investments.
Income tax effects of excluded items. We exclude from our non-GAAP financial measures the income tax effects of the adjustments described above that relate to the current period as well as adjustments for similar items that relate to prior periods. This is consistent with how we plan, forecast and evaluate our operating results.
Operating results and gains and losses on the sale of discontinued operations. 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 discontinued operations as well as gains and losses on the sale of these discontinued operations 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 these amounts from our non-GAAP financial measures.
The reconciliations of the forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures in Table E include all information reasonably available to Intuit at the date of this press release. These tables include adjustments that we can reasonably predict. Events that could cause the reconciliation to change include acquisitions and divestitures of businesses, goodwill and other asset impairments and sales of marketable equity securities and other investments.
Source: Intuit Inc.
Released August 20, 2009