February 18, 2003 - 8-K: Current report filing

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

February 18, 2003

(Date of report)

February 6, 2003

(Date of earliest event reported)

INTUIT INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware

(State or other Jurisdiction

of Incorporation)

000-21180

(Commission File Number)

77-0034661

(I.R.S. Employer

Identification No.)

2535 Garcia Avenue

Mountain View, CA 94043

(Address of Principal Executive Offices) (Zip Code)

Registrants telephone number, including area code: (650) 944-6000

ITEM 5. OTHER EVENTS.

Completed Disposition of Intuits Japanese Subsidiary

On December 23, 2002, Intuit Inc. announced that it had signed a definitive agreement to sell its wholly owned Japanese subsidiary, Intuit KK, to Advantage Partners, Inc., a private equity investment firm located in Japan. The transaction closed on February 6, 2003. Advantage Partners paid 9.6 billion yen (approximately $79 million) for the business.

Announcement of Fiscal 2003 Second Quarter Results

On February 13, 2003, Intuit Inc. announced the results for its second quarter of fiscal 2003, which ended January 31, 2003. Revenue of $558.1 million increased 17 percent from the second quarter of fiscal 2002. Intuit reported net income of $124.8 million, up 7 percent from net income of $119.9 million in the earlier period. This represents $0.60 per share, up 9 percent from $0.55 per share in the second quarter of 2002. Stronger revenue growth and lower acquisition-related charges in fiscal 2003 due to the adoption of the Financial Accounting Standard Boards SFAS 142 contributed to the year-over-year difference.

INTUIT INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except per share data)

(unaudited)

	Three Months Ended January 31,				Six Months Ended January 31,
	2002		2003		2002			2003
Net revenue:
Products	$	413,096	$	465,130	$	524,169		$	607,033
Services		45,029		75,348		76,950			130,952
Other		17,783		17,598		33,107			32,963

Total net revenue		475,908		558,076		634,226			770,948
Costs and expenses:
Cost of revenue:
Products, services and other		106,250		115,783		166,255			185,697
Amortization of purchased software		7,171		3,518		8,877			6,495
Customer service and technical support		50,289		55,591		85,985			95,221
Selling and marketing		74,720		97,796		131,012			172,617
Research and development		51,402		66,080		98,822			130,207
General and administrative		28,761		38,405		54,987			78,021
Charge for purchased research and development				1,070					8,859
Acquisition-related charges		62,008		9,154		102,999			18,609
Loss on impairment of long-lived asset						27,000

Total costs and expenses		380,601		387,397		675,937			695,726

Income (loss) from continuing operations		95,307		170,679		(41,711	)		75,222
Interest and other income		7,635		7,770		17,463			16,556
Gains (losses) on marketable securities and other investments, net		1,632		2,827		(10,622	)		3,080

Income (loss) from continuing operations before income taxes		104,574		181,276		(34,870	)		94,858
Income tax (benefit) provision (i)		4,678		55,905		(31,460	)		29,936

Income from continuing operations		99,896		125,371		(3,410	)		64,922
Discontinued operations, net of income taxes (ii) and (iii):
Net income from Quicken Loans discontinued operations		16,740				26,469
Gain on disposal of Quicken Loans discontinued operations									5,556
Net income from Intuit KK discontinued operations		3,232		3,059		4,382			3,267

Net income from discontinued operations		19,972		3,059		30,851			8,823

Net income	$	119,868	$	128,430	$	27,441		$	73,745

Basic net income (loss) per share from continuing operations	$	0.47	$	0.61	$	(0.02	)	$	0.32
Basic net income per share from discontinued operations		0.09		0.01		0.15			0.04

Basic net income per share	$	0.56	$	0.62	$	0.13		$	0.36

Shares used in basic per share amounts		212,520		205,682		211,780			206,823

Diluted net income (loss) per share from continuing operations	$	0.46	$	0.59	$	(0.01	)	$	0.31
Diluted net income per share from discontinued operations		0.09		0.01		0.14			0.04

Diluted net income per share	$	0.55	$	0.60	$	0.13		$	0.35

Shares used in diluted per share amounts		219,355		212,455		217,914			213,445

(i)

There is a difference in the effective tax rate for each of these periods, primarily due to the net effect of non-deductible merger and divestiture related charges offset by the benefit received from tax-exempt interest income and various tax credits.

(ii)

On July 31, 2002, we sold our Quicken Loans mortgage business to Rock Acquisition Corporation. We accounted for the sale as discontinued operations and, accordingly, the operating results of Quicken Loans have been segregated from continuing operations on our statement of operations for the three and six months ended January 31, 2002. Income taxes netted against net income from discontinued operations amounted to $9.4 million and $14.9 million for those periods. In the first quarter of fiscal 2003, we sold our residual minority equity interest in Rock and recorded a gain of $5.6 million. We also received payment in full on a $23.3 million promissory note from Rock. We did not record a tax benefit related to the transaction because we cannot be assured that we will realize the tax benefit.

(iii)

On December 23, 2002, we signed a definitive agreement to sell our wholly owned Japanese subsidiary, Intuit KK, to a private equity investment firm located in Japan. Intuit KK became a long-lived asset held for sale and a discontinued operation during the second quarter of fiscal 2003 and, accordingly, its operating results have been segregated from continuing operations on our statement of operations for all periods presented. Income tax benefits included in net income from discontinued operations amounted to $0.4 million and $0.5 million for the second quarter and first six months of fiscal 2002. Income tax expense netted against net income from discontinued operations amounted to $2.2 million and $2.4 million for the same periods of fiscal 2003.

INTUIT INC.

CONDENSED CONSOLIDATED BALANCE SHEET

(In thousands)

(unaudited)

	July 31, 2002		January 31, 2003
ASSETS
Current assets:
Cash and cash equivalents	$	414,748	$	379,915
Short-term investments		815,342		718,437
Marketable securities		16,791		18,548
Customer deposits		300,409		259,958
Accounts receivable, net		51,999		245,687
Deferred income taxes		67,799		61,270
Income taxes receivable		2,187
Prepaid expenses and other current assets		49,581		39,520
Amounts due from discontinued operations entities		241,616		4,728

Total current assets		1,960,472		1,728,063
Property and equipment, net		179,122		195,990
Goodwill, net		428,948		583,907
Purchased intangibles, net		125,474		124,289
Long-term deferred income taxes		176,553		172,835
Loans to executive officers and other employees		21,270		19,968
Other assets		31,854		11,512
Net long-term assets of discontinued operations		4,312		4,066

Total assets	$	2,928,005	$	2,840,630

LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities:
Accounts payable	$	71,069	$	107,189
Accrued compensation and related liabilities		87,426		91,598
Payroll service obligations		300,381		259,958
Deferred revenue		147,120		170,500
Income taxes payable				17,169
Short-term note payable		2,277		2,717
Other current liabilities		81,795		176,855
Net current liabilities of discontinued operations		7,688		4,220

Total current liabilities		697,756		830,206
Long-term obligations		14,610		12,766
Stockholders equity		2,215,639		1,997,658

Total liabilities and stockholders equity	$	2,928,005	$	2,840,630

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.

		INTUIT INC.

Date:	February 18, 2003	By:	/s/ ROBERT B. HENSKE
			Robert B. Henske Senior Vice President and Chief Financial Officer