Intuit Reaffirms First Quarter and Fiscal 2011 Guidance
MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)-- Intuit Inc. (Nasdaq:INTU) today reaffirmed its financial guidance for first quarter and the full fiscal year 2011, first provided on Aug. 19. The company's fiscal year runs from Aug. 1 - July 31.
The announcement coincides with the company's annual Investor Day, to be held today at Intuit's Mountain View, Calif., headquarters. Chief Executive Officer Brad Smith will be joined by business segment leaders to discuss Intuit's business strategy and financial performance. The event will include business segment updates from small business, tax, and financial services leaders and will conclude with a financial update from Chief Financial Officer Neil Williams. In addition, attendees will see demonstrations of a number of Intuit products and services.
Intuit's guidance for fiscal 2011 is as follows:
Forward-Looking Guidance for Fiscal 2011
($ millions except earnings per share)
Q1 11 FY 11
Revenue change Year-Over-Year 9-11% 8-11%
GAAP Operating Income (Loss) ($110)-($100) $980-$1,015
Non-GAAP Operating Income (Loss) ($60)-($50) $1,215-1,250
Non-GAAP Operating Margin NA 32.0-32.5%
GAAP Diluted EPS ($0.25)-($0.23) $1.88-$1.95
Non-GAAP Diluted EPS ($0.13)-($0.11) $2.36-$2.43
Fiscal 2011 Business Segment Revenue Growth Guidance Segment Year-Over-Year Revenue Growth Small Business Group 8-12% Consumer Tax 10-13% Accounting Professionals 4-7% Financial Services 4-7% Other Businesses 11-16%
Webcast Information
The event will be broadcast live on Intuit's website at http://www.intuit.com/about_intuit/investors/webcast.jhtml beginning at 8:30 a.m. Pacific time. A replay of the webcast will be available on Intuit's website two hours after the meeting ends.
About Intuit Inc.
Intuit Inc. is a leading provider of business and financial management solutions for small and mid-sized businesses; financial institutions, including banks and credit unions; consumers and accounting professionals. Its flagship products and services, including QuickBooks(R), Quicken(R) and TurboTax(R), simplify small business management and payroll processing, personal finance, and tax preparation and filing. ProSeries(R) and Lacerte(R) are Intuit's leading tax preparation offerings for professional accountants. Intuit Financial Services helps banks and credit unions grow by providing on-demand solutions and services that make it easier for consumers and businesses to manage their money.
Founded in 1983, Intuit had annual revenue of $3.5 billion in its fiscal year 2010. The company has approximately 7,700 employees with major offices in the United States, Canada, the United Kingdom, India and other locations. More information can be found at www.intuit.com.
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 includes 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 (GAAP), please see the accompanying text titled "About Non-GAAP Financial Measures" as well as the related Table 1 which follows it.
Cautions About Forward-Looking Statements
This press release contains forward-looking statements, including forecasts of Intuit's expected financial results for fiscal 2011 and all of the statements under the headings "Forward-Looking Guidance for Fiscal 2011" and "Fiscal 2011 Business Segment Revenue Growth 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; we may not be able to successfully innovate and introduce new offerings and business models 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; business interruption or failure of our information technology and communication systems may impair the availability of our products and services, which may damage our reputation and harm our future financial results; as we upgrade and consolidate our customer facing applications and supporting information technology infrastructure, any problems with these implementations could interfere with our ability to deliver our offerings; any failure to properly use and protect personal customer information and data could harm our revenue, earnings and reputation; if we are unable to develop, manage and maintain critical third party business relationships, our business may be adversely affected; increased government regulation of our businesses may harm our operating results; if we fail to process transactions effectively or fail to adequately protect against potential fraudulent activities, our revenue and earnings may be harmed; any significant offering quality problems or delays in our offerings 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; the continuing global economic downturn may continue to impact consumer and small business spending and financial institutions, which could negatively affect our revenue and profitability; 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; 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; our inability to adequately protect our intellectual property rights may weaken our competitive position and reduce our revenue and earnings; our acquisition and divestiture activities may disrupt our ongoing business, may involve increased expenses and may present risks not contemplated at the time of the transactions; our use of significant amounts of debt to finance acquisitions or other activities could harm our financial condition and results of operation; 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 2010 and in our other SEC filings. You can locate these reports through our website at http://investors.intuit.com. Forward-looking statements are based on information as of September 22, 2010, and we do not undertake any duty to update any forward-looking statement or other information in these materials.
INTUIT INC.
ABOUT NON-GAAP FINANCIAL MEASURES
The accompanying press release dated September 22, 2010 contains non-GAAP financial measures. Table 1 reconciles 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 acquired technology
-- Amortization of other acquired intangible assets
-- Charges for historical use of technology licensing rights
-- Professional fees for business combinations
We also exclude the following items from non-GAAP net income (loss) and diluted net income (loss) per share:
-- 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 expense, amortization, 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 acquired technology and amortization of other acquired intangible assets. When we acquire an entity, we are required by GAAP to record the fair values of the intangible assets of the entity and amortize them over their useful lives. Amortization of acquired technology in cost of revenue includes amortization of software and other technology assets of acquired entities. Amortization of other acquired intangible assets in operating expenses includes amortization of assets such as customer lists, covenants not to compete and trade names.
Charges 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.
Professional fees for business combinations. We exclude from our non-GAAP financial measures the professional fees we incur to complete business combinations. These include investment banking, legal and accounting fees.
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 1 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 1
INTUIT INC.
RECONCILIATION OF FORWARD-LOOKING GUIDANCE FOR NON-GAAP FINANCIAL MEASURES
TO PROJECTED GAAP REVENUE, OPERATING INCOME (LOSS), AND EPS
(In millions, 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, 2010
Revenue $ 515 $ 525 $ - $ 515 $ 525
Operating loss $ (110 ) $ (100 ) $ 50 [a] $ (60 ) $ (50 )
Net loss per share $ (0.25 ) $ (0.23 ) $ 0.12 [b] $ (0.13 ) $ (0.11 )
Twelve Months
Ending
July 31, 2011
Revenue $ 3,740 $ 3,840 $ - $ 3,740 $ 3,840
Operating income $ 980 $ 1,015 $ 235 [c] $ 1,215 $ 1,250
Diluted earnings $ 1.88 $ 1.95 $ 0.48 [d] $ 2.36 $ 2.43
per share
See "About Non-GAAP Financial Measures" immediately preceding Table 1 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 $34 million; amortization of acquired technology of approximately
$5 million; and amortization of other acquired intangible assets of
approximately $11 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 $174 million; amortization of acquired technology of approximately
$18 million; and amortization of other acquired intangible assets of
approximately $43 million.
[d] Reflects the estimated adjustments in item [c], income taxes related to
these adjustments, and adjustments for certain discrete GAAP tax items.
Source: Intuit Inc.
Released September 22, 2010