Form: 8-K

Current report filing

February 18, 2003

 

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)

 

Registrant’s telephone number, including area code: (650) 944-6000


 

ITEM 5.    OTHER EVENTS.

 

Completed Disposition of Intuit’s 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 Board’s 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

    

  

 

4


 

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

 

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