Intuit Announces Second-Quarter Revenue of $763M In Line With Expectations
MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--
Intuit Inc. (Nasdaq:INTU) today announced its second-quarter 2007 revenue increased 3 percent year-over-year to $763 million, in line with expectations. For the first six months of the fiscal year, the company reported revenue growth of 8 percent.
Growth in the quarter was driven by strong sales in Consumer Tax, which were up 18 percent over the year-ago period, and Payroll and Payments segment, which was up 15 percent year-over-year. This growth was offset partly by revenue shifts in QuickBooks and Pro Tax, which moved about $45 million in revenue from the second quarter to the first and third quarters, compared to last year.
"We are pleased with the early results of TurboTax and the continued strength in our Payroll and Payments segment," said Steve Bennett, Intuit's president and chief executive officer. "We are also excited by the recent acquisition of Digital Insight, which will provide a third platform for growth as we go forward."
Second-Quarter 2007 Financial Highlights
Intuit posted GAAP (Generally Accepted Accounting Principles) diluted net income of $145 million in the quarter versus diluted net income of $183 million in the second quarter of 2006. This represents diluted net income of $0.40 per share versus diluted net income of $0.50 per share in the year-ago quarter. Second quarter 2006 results included $28 million, or 7 cents per share, from discontinued operations. Intuit posted non-GAAP diluted net income of $161 million, or $0.45 per share versus $174 million, or $0.48 per share in the second quarter of 2006.
Second-Quarter 2007 Business Segment Results
-- QuickBooks second quarter revenue was $164 million. The
earlier launch of QuickBooks 2007 versus QuickBooks 2006
shifted about $20 million of revenue from the second quarter
to the first quarter. Year-to-date QuickBooks revenue was up 5
percent.
-- Payroll and Payments revenue of $138 million was up 15 percent
compared to the second quarter of 2006.
-- Consumer Tax revenue was $226 million, up 18 percent
year-over-year.
-- Professional Tax revenue was $131 million, down 13 percent as
a result of changes in product offerings, which deferred
approximately $25 million to the third quarter.
-- Other Businesses revenue of $105 million was up 1 percent.
Forward-looking Guidance
Forward-looking guidance has been adjusted to reflect the acquisition of Digital Insight, the disposition of certain fully outsourced payroll assets, and a lower effective tax rate. For fiscal 2007 Intuit now expects:
-- Revenue of $2.625 billion to $2.675 billion, representing
annual growth of 12 to 14 percent.
-- GAAP operating income of $585 million to $611 million, and
non-GAAP operating income of $725 million to $751 million.
-- GAAP diluted earnings per share, or EPS, of $1.10 to $1.14,
and non-GAAP diluted EPS of $1.33 to $1.37.
Intuit also adjusted its previously given third quarter, fourth quarter and full year fiscal 2007 guidance for revenue and earnings per share, details of which are available on Intuit's Web site at www.intuit.com/about_intuit/investors/earnings/2007.
Webcast and Conference Call Information
A live audio webcast of Intuit's second-quarter 2007 conference call is available at 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 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 web.intuit.com/about_intuit/press_releases/2007/.
The conference call number is 866-206-6509 in the United States or 703-639-1108 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 is 1035185.
Intuit, the Intuit logo, Quicken, QuickBooks and TurboTax, 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 which follow it. A copy of the press release filed by Intuit on February 22, 2007 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 expected financial results; its prospects for the business in fiscal 2007 and beyond; expectations of future growth, including growth of the Digital Insight business; and all of the statements under the heading "Forward-Looking 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 regulating the filing of tax returns could negatively effect our operating results and market position; 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 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; 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 2006 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 February 22, 2007, 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 Six Months Ended
----------------------- -----------------------
January 31, January 31, January 31, January 31,
2007 2006 2007 2006
----------- ----------- ----------- -----------
Net revenue:
Product $ 549,539 $ 557,079 $ 761,959 $ 739,533
Service and other 213,768 185,625 363,419 307,242
----------- ----------- ----------- -----------
Total net revenue 763,307 742,704 1,125,378 1,046,775
----------- ----------- ----------- -----------
Costs and expenses:
Cost of revenue:
Cost of product
revenue 68,253 71,739 105,596 104,170
Cost of service and
other revenue 70,293 63,393 138,665 122,641
Amortization of
purchased
intangible assets 2,583 2,763 4,891 5,712
Selling and marketing 221,440 196,903 376,538 344,333
Research and
development 115,474 100,084 235,688 197,364
General and
administrative 68,606 65,297 145,994 128,892
Acquisition-related
charges 2,334 3,553 5,176 7,312
----------- ----------- ----------- -----------
Total costs and
expenses 548,983 503,732 1,012,548 910,424
----------- ----------- ----------- -----------
Operating income from
continuing operations 214,324 238,972 112,830 136,351
Interest and other
income 11,046 5,566 21,336 11,870
Gains on marketable
equity securities and
other investments,
net - 3,027 1,221 7,294
----------- ----------- ----------- -----------
Income from continuing
operations before
income taxes 225,370 247,565 135,387 155,515
Income tax provision
(A) 79,673 92,074 48,405 57,635
Minority interest 335 244 550 244
----------- ----------- ----------- -----------
Net income from
continuing operations 145,362 155,247 86,432 97,636
Net income from
discontinued
operations (B) - 27,726 - 39,533
----------- ----------- ----------- -----------
Net income $ 145,362 $ 182,973 $ 86,432 $ 137,169
=========== =========== =========== ===========
Basic net income per
share from continuing
operations $ 0.42 $ 0.44 $ 0.25 $ 0.28
Basic net income per
share from
discontinued
operations - 0.08 - 0.11
----------- ----------- ----------- -----------
Basic net income per
share (C) $ 0.42 $ 0.52 $ 0.25 $ 0.39
=========== =========== =========== ===========
Shares used in basic
per share amounts (C) 347,185 350,292 346,700 352,552
=========== =========== =========== ===========
Diluted net income per
share from continuing
operations $ 0.40 $ 0.43 $ 0.24 $ 0.27
Diluted net income per
share from
discontinued
operations - 0.07 - 0.11
----------- ----------- ----------- -----------
Diluted net income per
share (C) $ 0.40 $ 0.50 $ 0.24 $ 0.38
=========== =========== =========== ===========
Shares used in diluted
per share amounts (C) 360,573 363,582 360,654 365,200
=========== =========== =========== ===========
Total share-based
compensation expense
in continuing
operations:
Cost of product
revenue $ 262 $ 245 $ 480 $ 533
Cost of service and
other revenue 644 496 1,261 1,133
Selling and marketing 5,759 5,250 11,497 11,557
Research and
development 5,560 4,684 10,862 10,294
General and
administrative 7,087 7,074 14,071 14,656
----------- ----------- ----------- -----------
Total $ 19,312 $ 17,749 $ 38,171 $ 38,173
=========== =========== =========== ===========
See accompanying Notes.
INTUIT INC.
NOTES TO TABLE A
(A) Our effective tax rate for the three months ended January 31,
2007 was approximately 35% and did not differ significantly from
the federal statutory rate. Our effective tax rate for the six
months ended January 31, 2007 was approximately 36% and differed
from the federal statutory rate primarily due to state income
taxes, which were partially offset by the benefit we received
from federal and state research and experimental credits and tax
exempt interest income. In addition, we benefited from the
retroactive extension of the federal research and experimental
credit. Our effective tax rates for the three and six months
ended January 31, 2006 were approximately 37% and differed from
the federal statutory rate primarily due to state income taxes,
which were partially offset by the benefit we received from
federal and state research and experimental credits and tax
exempt interest income.
(B) In December 2005 we sold our Intuit Information Technology
Solutions (ITS) business for approximately $200 million in cash.
In accordance with the provisions of Statement of Financial
Accounting Standards No. 144, "Accounting for the Impairment or
Disposal of Long-lived Assets," we accounted for the sale of ITS
as discontinued operations. Consequently, we have segregated the
operating results and cash flows of ITS from continuing
operations in our financial statements for all periods prior to
the sale. Revenue for ITS was $5.8 million and $20.2 million for
the three and six months ended January 31, 2006. Net income from
ITS operations was $1.9 million and $5.2 million for the same
periods. We recorded a net gain on the disposal of ITS of $34.3
million in the six months ended January 31, 2006.
(C) Our Board of Directors authorized a two-for-one stock split which
was effected in the form of a 100% stock dividend on July 6,
2006. All share and per share figures in these tables
retroactively reflect this stock split.
INTUIT INC.
ABOUT NON-GAAP FINANCIAL MEASURES
The accompanying press release dated February 22, 2007 contains non-
GAAP financial measures. Tables B and 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) and related
operating margin as a percentage of revenue, 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 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 assessing the performance of the
organization, our operating segments or our senior management.
Segment managers are not held accountable for share-based
compensation expenses, acquisition-related costs, or the other
excluded items that may impact their business units' operating income
(loss) and, accordingly, we exclude these amounts from our measures
of segment performance. We also exclude these amounts from our budget
and planning process. We believe that our non-GAAP financial measures
also facilitate the comparison of results for current periods and
guidance for future periods with results for past periods. We exclude
the following items from our non-GAAP financial measures:
-- Share-based compensation expenses. Our non-GAAP financial
measures exclude share-based compensation expenses, which
consist of expenses for stock options, restricted stock,
restricted stock units and purchases of common stock under our
Employee Stock Purchase Plan. Segment managers are not held
accountable for share-based compensation expenses impacting
their business units' operating income (loss) and, accordingly,
we exclude share-based compensation expenses from our measures
of segment performance. While share-based compensation is a
significant expense affecting our results of operations,
management excludes share-based compensation from our budget and
planning process. We exclude share-based compensation expenses
from our non-GAAP financial measures for these reasons and the
other reasons stated above. We compute weighted average dilutive
shares using the method required by SFAS 123R for both GAAP and
non-GAAP diluted net income per share.
-- Amortization of purchased intangible assets and acquisition-
related charges. In accordance with GAAP, amortization of
purchased intangible assets in cost of revenue includes
amortization of software and other technology assets related to
acquisitions and acquisition-related charges in operating
expenses includes amortization of other purchased intangible
assets such as customer lists and covenants not to compete.
Acquisition activities are managed on a corporate-wide basis and
segment managers are not held accountable for the acquisition-
related costs impacting their business units' operating income
(loss). We exclude these amounts from our measures of segment
performance and from our budget and planning process. We exclude
these items from our non-GAAP financial measures for these
reasons, the other reasons stated above and because we believe
that excluding these items facilitates comparisons to the
results of other companies in our industry, which have their own
unique acquisition histories.
-- Gains and losses on disposals of businesses. We exclude these
amounts from our non-GAAP financial measures for the reasons
stated above and because they are unrelated to our ongoing
business operating results.
-- Gains and losses on marketable equity securities and other
investments. We exclude these amounts from our non-GAAP
financial measures for the reasons stated above and because they
are unrelated to our ongoing business operating results.
-- Income tax effects of excluded items. Our non-GAAP financial
measures exclude 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. We
exclude the impact of these tax items for the reasons stated
above and because management believes that they are not
indicative of our ongoing business operations.
-- 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 for the reasons stated
above and because they are unrelated to our ongoing business
operations.
The following describes each non-GAAP financial measure, the items
excluded from the most directly comparable GAAP measure in arriving
at each non-GAAP financial measure, and the reasons management uses
each measure and excludes the specified amounts in arriving at each
non-GAAP financial measure.
(A) Operating income (loss) and related operating margin as a
percentage of revenue. We exclude share-based compensation
expenses, amortization of purchased intangible assets and
acquisition-related charges from our GAAP operating income
(loss) from continuing operations and related operating margin
in arriving at our non-GAAP operating income (loss) and related
operating margin primarily because we do not consider them part
of ongoing operating results when assessing the performance of
the organization, our operating segments and senior management
or when undertaking our budget and planning process. We believe
that the exclusion of these expenses from our non-GAAP financial
measures also facilitates the comparison of results for fiscal
2006 and guidance for future periods with results for prior
periods. In addition, we exclude amortization of purchased
intangible assets and acquisition-related charges from non-GAAP
operating income (loss) and operating margin because we believe
that excluding these items facilitates comparisons to the
results of other companies in our industry, which have their own
unique acquisition histories.
(B) Net income (loss) and net income (loss) per share (or earnings
per share). We exclude share-based compensation expenses,
amortization of purchased intangible assets, acquisition-related
charges, net gains on marketable equity securities and other
investments, gains and losses on disposals of businesses,
certain tax items as described above, and amounts related to
discontinued operations from our GAAP net income (loss) and net
income (loss) per share in arriving at our non-GAAP net income
(loss) and net income (loss) per share. We exclude all of these
items from our non-GAAP net income (loss) and net income (loss)
per share primarily because we do not consider them part of
ongoing operating results when assessing the performance of the
organization, our operating segments and senior management or
when undertaking our budget and planning process. We believe
that the exclusion of these items from our non-GAAP financial
measures also facilitates the comparison of results for fiscal
2006 and guidance for future periods with results for prior
periods.
In addition, we exclude amortization of purchased intangible
assets and acquisition-related charges from our non-GAAP net
income (loss) and net income (loss) per share because we believe
that excluding these items facilitates comparisons to the
results of other companies in our industry, which have their own
unique acquisition histories. We exclude gains on marketable
equity securities and other investments, net from our non-GAAP
net income (loss) and net income (loss) per share because they
are unrelated to our ongoing business operating results. Our
non-GAAP financial measures exclude 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. We exclude the impact of these tax items because
management believes that they are not indicative of our ongoing
business operations. The effective tax rates used to calculate
non-GAAP net income (loss) and net income (loss) per share were
as follows: 35% for the first and second quarters of fiscal
2006; 37% for the first quarter of fiscal 2007; 36% for the
second quarter of fiscal 2007; 35% for the first six months of
fiscal 2007; and 35% for fiscal 2007 guidance. Finally, we
exclude amounts related to discontinued operations from our non-
GAAP net income (loss) and net income (loss) per share because
they are unrelated to our ongoing business operations.
We refer 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 our internal comparisons to Intuit's historical operating
results. We have historically reported similar non-GAAP financial
measures and believe that the inclusion of comparative numbers
provides consistency in our financial reporting. We compute 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 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.
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 Six Months Ended
----------------------- -----------------------
January 31, January 31, January 31, January 31,
2007 2006 2007 2006
----------- ----------- ----------- -----------
GAAP operating income
from continuing
operations $ 214,324 $ 238,972 $ 112,830 $ 136,351
Amortization of
purchased intangible
assets 2,583 2,763 4,891 5,712
Acquisition-related
charges 2,334 3,553 5,176 7,312
Share-based
compensation expense 19,312 17,749 38,171 38,173
----------- ----------- ----------- -----------
Non-GAAP operating
income $ 238,553 $ 263,037 $ 161,068 $ 187,548
=========== =========== =========== ===========
GAAP net income $ 145,362 $ 182,973 $ 86,432 $ 137,169
Amortization of
purchased intangible
assets 2,583 2,763 4,891 5,712
Acquisition-related
charges 2,334 3,553 5,176 7,312
Share-based
compensation expense 19,312 17,749 38,171 38,173
Gains on marketable
equity securities - (3,027) (1,221) (7,294)
Income tax effect of
non-GAAP adjustments (8,663) (7,784) (17,095) (15,787)
Exclusion of discrete
tax items (368) 5,932 1,658 3,711
Discontinued
operations - (27,726) - (39,533)
----------- ----------- ----------- -----------
Non-GAAP net income $ 160,560 $ 174,433 $ 118,012 $ 129,463
=========== =========== =========== ===========
GAAP diluted net
income per share $ 0.40 $ 0.50 $ 0.24 $ 0.38
Amortization of
purchased intangible
assets 0.01 0.01 0.01 0.02
Acquisition-related
charges 0.01 0.01 0.01 0.02
Share-based
compensation expense 0.05 0.05 0.11 0.10
Gains on marketable
equity securities - (0.01) - (0.02)
Income tax effect of
non-GAAP adjustments (0.02) (0.03) (0.04) (0.05)
Exclusion of discrete
tax items - 0.02 - 0.01
Discontinued
operations - (0.07) - (0.11)
----------- ----------- ----------- -----------
Non-GAAP diluted net
income per share $ 0.45 $ 0.48 $ 0.33 $ 0.35
=========== =========== =========== ===========
Shares used in
diluted per share
amounts 360,573 363,582 360,654 365,200
=========== =========== =========== ===========
See "About Non-GAAP Financial Measures" immediately preceding this
Table B 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. All share and per share figures in this Table B
retroactively reflect our July 2006 two-for-one common stock split.
Table C
INTUIT INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
January 31, July 31,
2007 2006
------------ -----------
ASSETS
Current assets:
Cash and cash equivalents $ 286,328 $ 179,601
Investments 849,228 1,017,599
Accounts receivable, net 310,506 97,797
Income taxes receivable 9,318 64,178
Deferred income taxes 56,016 47,199
Prepaid expenses and other current assets 100,824 53,357
------------ -----------
Current assets before funds held for
payroll customers 1,612,220 1,459,731
Funds held for payroll customers 411,774 357,299
------------ -----------
Total current assets 2,023,994 1,817,030
Property and equipment, net 205,377 194,434
Goodwill, net 555,023 504,991
Purchased intangible assets, net 57,350 59,521
Long-term deferred income taxes 135,358 144,697
Loans to executive officers and other
employees 8,865 8,865
Other assets 48,032 40,489
------------ -----------
Total assets $ 3,033,999 $2,770,027
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 120,300 $ 70,808
Accrued compensation and related liabilities 138,145 171,903
Deferred revenue 295,463 293,113
Income taxes payable 35,984 33,560
Other current liabilities 189,328 89,291
------------ -----------
Current liabilities before payroll customer
fund deposits 779,220 658,675
Payroll customer fund deposits 411,774 357,299
------------ -----------
Total current liabilities 1,190,994 1,015,974
Long-term obligations 18,378 15,399
Minority interest 978 568
Stockholders' equity 1,823,649 1,738,086
------------ -----------
Total liabilities and stockholders' equity $ 3,033,999 $2,770,027
============ ===========
Table D
INTUIT INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended Six Months Ended
----------------------- -----------------------
January 31, January 31, January 31, January 31,
2007 2006 2007 2006
----------- ----------- ----------- -----------
Cash flows from
operating activities:
Net income $ 145,362 $ 182,973 $ 86,432 $ 137,169
Net income from
discontinued
operations - (27,726) - (39,533)
----------- ----------- ----------- -----------
Net income from
continuing
operations 145,362 155,247 86,432 97,636
Adjustments to
reconcile net income
from continuing
operations to net
cash provided by
operating
activities:
Depreciation 21,061 22,616 43,336 45,761
Acquisition-related
charges 2,334 3,553 5,176 7,312
Amortization of
purchased
intangible assets 2,583 2,763 4,891 5,712
Amortization of
other purchased
intangible assets 2,734 2,259 5,305 4,290
Share-based
compensation 19,312 17,749 38,171 38,173
Amortization of
premiums and
discounts on
available-for-sale
debt securities 1,071 972 1,961 2,066
Net realized loss
(gain) on sales of
available-for-sale
debt securities (9) 98 (1) 478
Net gains on
marketable equity
securities and
other investments - (3,027) (1,221) (7,294)
Minority interest,
net of tax 335 244 550 244
Deferred income
taxes (6,552) (4,128) (9,399) (1,608)
Tax benefit from
share-based
compensation plans 12,634 26,554 29,430 29,076
Excess tax benefit
from share-based
compensation plans (7,967) (12,446) (16,720) (13,385)
Other 68 (40) 194 (21)
----------- ----------- ----------- -----------
Subtotal 192,966 212,414 188,105 208,440
----------- ----------- ----------- -----------
Changes in operating
assets and
liabilities:
Accounts receivable (215,488) (245,772) (212,884) (232,851)
Prepaid expenses,
taxes and other
current assets 66,985 70,864 8,727 32,370
Accounts payable 22,619 28,937 48,970 59,602
Accrued
compensation and
related
liabilities 47,436 43,917 (33,726) (20,482)
Deferred revenue 19,052 (17,825) 2,273 (23,062)
Income taxes
payable 18,415 8,343 2,702 (8,428)
Other liabilities 91,152 66,473 102,264 57,002
----------- ----------- ----------- -----------
Total changes in
operating assets
and liabilities 50,171 (45,063) (81,674) (135,849)
----------- ----------- ----------- -----------
Net cash provided by
operating
activities of
continuing
operations 243,137 167,351 106,431 72,591
Net cash provided by
operating activities
of discontinued
operations - 3,109 - 14,090
----------- ----------- ----------- -----------
Net cash provided by
operating
activities 243,137 170,460 106,431 86,681
----------- ----------- ----------- -----------
Cash flows from
investing activities:
Purchases of
available-for-sale
debt securities (479,703) (392,673) (880,578) (681,792)
Liquidation of
available-for-sale
debt securities 495,550 271,213 985,747 826,282
Maturity of
available-for-sale
debt securities 26,784 31,665 61,614 52,440
Proceeds from the
sale of marketable
equity securities - 4,235 858 4,235
Net change in funds
held for payroll
customers' money
market funds and
other cash
equivalents 24,438 (78,576) (54,475) (66,170)
Purchases of property
and equipment (23,683) (22,855) (52,906) (47,912)
Proceeds from sale of
property 22 334 22 334
Change in other
assets (2,026) (1,925) (6,704) (6,379)
Net change in payroll
customer fund
deposits (24,438) 78,576 54,475 66,170
Acquisitions of
businesses and
intangible assets,
net of cash acquired (1,991) (23,733) (61,993) (33,881)
----------- ----------- ----------- -----------
Net cash provided
by (used in)
investing
activities of
continuing
operations 14,953 (133,739) 46,060 113,327
Net cash provided
by investing
activities of
discontinued
operations 20,989 171,833 20,989 171,833
----------- ----------- ----------- -----------
Net cash provided
by investing
activities 35,942 38,094 67,049 285,160
----------- ----------- ----------- -----------
Cash flows from
financing activities:
Change in long-term
obligations (874) (260) (1,315) (894)
Net proceeds from
issuance of common
stock under stock
plans 41,299 126,083 124,197 147,551
Purchase of treasury
stock (205,373) (300,181) (205,373) (494,981)
Excess tax benefit
from share-based
compensation plans 7,967 12,446 16,720 13,385
----------- ----------- ----------- -----------
Net cash used in
financing
activities (156,981) (161,912) (65,771) (334,939)
----------- ----------- ----------- -----------
Effect of exchange
rates on cash and
cash equivalents (1,844) 1,090 (982) 1,962
----------- ----------- ----------- -----------
Net increase in cash
and cash equivalents 120,254 47,732 106,727 38,864
Cash and cash
equivalents at
beginning of period 166,074 74,974 179,601 83,842
----------- ----------- ----------- -----------
Cash and cash
equivalents at end of
period $ 286,328 $ 122,706 $ 286,328 $ 122,706
=========== =========== =========== ===========
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
----------------------- Adjust- -----------------------
From To ments From To
----------------------- --------- -----------------------
Three
Months
Ending
April 30,
2007
Revenue $1,102,000 $1,132,000 $ - $1,102,000 $1,132,000
Operating
income $ 527,000 $ 554,000 $ 45,000 (a) $ 572,000 $ 599,000
Operating
margin 48% 49% 4%(a) 52% 53%
Diluted
earnings
per
share $ 0.94 $ 0.98 $ 0.11 (b) $ 1.05 $ 1.09
Shares 354,000 356,000 354,000 356,000
Three
Months
Ending
July 31,
2007
Revenue $ 405,000 $ 418,000 $ - $ 405,000 $ 418,000
Diluted
loss per
share $ (0.12) $ (0.10) $ 0.05 (c) $ (0.07) $ (0.05)
Twelve
Months
Ending
July 31,
2007
Revenue $2,625,000 $2,675,000 $ - $2,625,000 $2,675,000
Operating
income $ 585,000 $ 611,000 $140,000 (d) $ 725,000 $ 751,000
Operating
margin 23% 23% 5%(d) 28% 28%
Diluted
earnings
per
share $ 1.10 $ 1.14 $ 0.23 (e) $ 1.33 $ 1.37
Shares 357,000 359,000 357,000 359,000
See "About Non-GAAP Financial Measures" immediately preceding Table B
for more 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 $14 million;
and acquisition-related charges of approximately $10
million.
(b) Reflects the estimated adjustments in item (a) and income
taxes related to these adjustments.
(c) Reflects adjustments for share-based compensation expense of
approximately $22 million; amortization of purchased
intangible assets of approximately $14 million;
acquisition-related charges of approximately $10 million;
an adjustment for an expected net gain on the sale of
certain assets related to our Complete Payroll and Premier
Payroll Service businesses of approximately $14 million;
and income taxes related to these adjustments.
(d) Reflects estimated adjustments for share-based compensation
expense of approximately $82 million; amortization of
purchased intangible assets of approximately $33 million;
and acquisition-related charges of approximately $25
million.
(e) Reflects the estimated adjustments in item (d); an
adjustment for net gains on marketable equity securities
and other investments of approximately $1 million; an
adjustment for an expected net gain on the sale of certain
assets related to our Complete Payroll and Premier Payroll
Service businesses of approximately $14 million; and income
taxes related to these adjustments.
Source: Intuit Inc.
Released February 22, 2007