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TIBCO Software Reports First Quarter Results

TIBCO Software Reports First Quarter Results 
Total Revenue of $238 Million; Non-GAAP EPS of $0.18 
PALO ALTO, CA -- (Marketwire) -- 03/21/13 --  TIBCO Software Inc.
(NASDAQ: TIBX) today announced results for its first fiscal quarter,
which ended on March 3, 2013.  
Total revenue for the first quarter of fiscal 2013 was $237.8 million
and net income was $9.5 million, or $0.06 per diluted share. This
compares to total revenue of $225.7 million and net income of $20.6
million, or $0.12 per diluted share, as reported for the first
quarter of fiscal 2012.  
On a non-GAAP basis, net income for the first quarter of fiscal 2013
was $31.1 million or $0.18 per diluted share, compared with $34.6
million or $0.20 per diluted share for the first quarter of fiscal
2012. Non-GAAP operating income for the first quarter of fiscal 2013
was $44.0 million, resulting in a non-GAAP operating margin of 19%.
This compares to non-GAAP operating income of $47.6 million, or a 21%
non-GAAP operating margin in the first quarter of fiscal 2012.
Non-GAAP results exclude amortization of acquired intangible assets,
stock-based compensation expense, acquisition related and other
expenses, restructuring activities and non-cash interest expense
related to convertible debt and assumes non-GAAP effective tax rates
of 19% and 27% for the first quarter of fiscal 2013 and 2012,
respectively.  
"We remain very focused on continuing the changes we initiated last
year to improve our execution," said Vivek Ranadive, TIBCO's chairman
and chief executive officer. "I believe we are making the right moves
to steady our performance and deliver our next leg of growth. Our
competitive differentiation remains strong, and we are well
positioned to benefit from the current trends driving enterprise IT
spending, such as 'big data,' especially with our event-driven
platform approach to integrating and analyzing data in real-time." 
First Quarter Fiscal 2013 Highlights  


 
--  Total revenue of $237.8 million;
--  License revenue of $78.3 million;
--  Non-GAAP operating margin of 19%;
--  Non-GAAP EPS of $0.18;
--  Cash flow from operations of $63.2 million;
--  Broad mix of business across major industries including Financial
    Services, Communications, Life Sciences, Retail, Energy,
    Manufacturing, Government, an
d Transportation & Logistics;
--  TIBCO closed 104 deals over $100k and had 12 deals over $1 million.

  
Conference Call Details 
TIBCO has scheduled a conference call for 4:30 pm ET / 1:30 pm PT
today to discuss its first quarter results. The conference call will
be hosted by InterCall and may be accessed over the internet at
www.tibco.com or via dial-in at 877-293-9114 or 706-758-2055. Please
join the conference call at least 10 minutes early to register. A
replay of the conference call will be available until midnight PT on
April 21, 2013 at www.tibco.com or via dial-in at 800-585-8367 or
404-537-3406. The pass code for both the call and the replay is
19449674.  
About TIBCO 
TIBCO Software Inc. (NASDAQ: TIBX) is a provider of infrastructure
software for companies to use on-premise or as part of cloud
computing environments. Whether it's optimizing claims, processing
trades, cross-selling products based on real-time customer behavior,
or averting a crisis before it happens, TIBCO provides companies the
two-second advantage(R) -- the ability to capture the right
information at the right time and act on it preemptively for a
competitive advantage. More than 4,000 customers worldwide rely on
TIBCO to manage information, decisions, processes and applications in
real time. Learn more at www.tibco.com.  
TIBCO, two-second advantage and TIBCO Software are trademarks or
registered trademarks of TIBCO Software Inc. in the United States
and/or other countries. All other product and company names and marks
mentioned in this document are the property of their respective
owners and are mentioned for identification purposes only. 
About Non-GAAP Financial Information 
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 section entitled "About Non-GAAP
Financial Measures" and the accompanying table entitled
"Reconciliation of GAAP to Non-GAAP Measures."  
Legal Notice Regarding Forward-Looking Statements  
This release contains forward-looking statements within the meaning
of the "safe harbor" provisions of the federal securities laws. The
final financial results for first quarter of fiscal year 2013 may
differ materially from the preliminary results presented in this
release due to factors that include, but are not limited to, risks
associated with the final review of the results and preparation of
financial statements. In addition, forward-looking statements such as
statements regarding TIBCO's ability to improve its execution,
TIBCO's ability to steady its performance and deliver growth, and
TIBCO's ability to benefit from current IT trends, are subject to
risks and uncertainties that could cause actual results to differ
materially from such forward-looking statements. These risks include
but are not limited to: risks arising from adverse changes and
uncertainty in domestic and global economies, TIBCO's ability to
implement successfully the changes designed to improve performance
and drive growth, the impact of competition from alternative business
models and new product introductions, TIBCO's ability to offer
differentiated products that capitalize on current technology trends,
and the impact of competition from companies that are larger or have
greater resources than TIBCO. Additional information regarding
potential risks is provided in TIBCO's filings with the SEC,
including its most recent Annual Report on Form 10-K for the year
ended November 30, 2012. TIBCO assumes no obligation to update the
forward-looking statements included in this release. 


 
                                                                            
                                                                            
                             TIBCO Software Inc.                            
                    Condensed Consolidated Balance Sheets                   
                                 (unaudited)                                
                               (in thousands)                               
                                                                            
                                                                            
                                                                            
                                                     March 3,   November 30,
                                                       2013         2012    
                                                   ------------ ------------
                                                                            
                      ASSETS                                                
                                                                            
Current assets:                                                             
  Cash and cash equivalents                        $    772,424 $    727,309
  Short-term investments                                 34,238       34,411
  Accounts receivable, net                              167,783      234,100
  Prepaid expenses and other current assets              73,262       61,174
                                                   ------------ ------------
    Total current assets                              1,047,707    1,056,994
                                                                            
Property and equipment, net                              97,074       98,474
Goodwill                                                521,995      532,290
Acquired intangible assets, net                         114,108      123,261
Long-term deferred income tax assets                     69,208       64,549
Other assets                                             66,288       71,340
                                                   ------------ ------------
    Total assets                                   $  1,916,380 $  1,946,908
                                                   ============ ============
                                                                            
              LIABILITIES AND EQUITY                                        
                                                                            
Current liabilities:                                                        
  Accounts payable                                 $     24,356 $     22,809
  Accrued liabilities                                   105,374      133,596
  Accrued restructuring costs                               665          893
  Deferred revenue                                      249,264      263,476
  Current portion of long-term debt                      35,091       35,711
                                                   ------------ ------------
    Total current liabilities                           414,750      456,485
                                                                            
Accrued restructuring costs, less current portion           465          643
Long-term deferred revenue                               27,582       25,543
Long-term deferred income tax liabilities                 1,683        3,208
Long-term income tax liabilities                         28,201       26,263
Other long-term liabilities                               3,957        4,015
Convertible debt                                        528,285      524,466
                                                   ------------ ------------
    Total long-term liabilities                         590,173      584,138
                                                   ------------ ------------
    Total liabilities                                 1,004,923    1,040,623
                                                   ------------ ------------
                                                                            
Total equity                                            911,457      906,285
                                                   ------------ ------------
    Total liabilities and equity                   $  1,916,380 $  1,946,908
                                                   ============ ============
                                                                            
                                                                            
                                                                            
                                                                            
                            TIBCO Software Inc.                             
              Condensed Consolidated Statements of Operations               
                                (unaudited)                                 
                (in thousands, except net income per share)                 
                                                                            
                                                                            
                                                           Year Ended       
                               Three Months Ended         November 30,      
                             ----------------------  ---------------------- 
                              March 3,    March 4,    March 3,              
                                2013        2012        2013        2011    
                             ----------  ----------  ----------  ---------- 
Revenue:                                                                    
  License                    $   78,263  $   82,315  $  410,306  $  377,618 
  Service and maintenance       159,527     143,387     614,307     542,628 
                             ----------  ----------  ----------  ---------- 
    Total revenue               237,790     225,702   1,024,613     920,246 
                             ----------  ----------  ----------  ---------- 
                                                                            
Cost of revenue:                                                            
  License                        11,261       9,040      41,363      35,309 
  Service and maintenance        62,376      57,050     241,452     212,066 
                             ----------  ----------  ----------  ---------- 
    Total cost of revenue        73,637      66,090     282,815     247,375 
                             ----------  ----------  ----------  ---------- 
Gross profit                    164,153     159,612     741,798     672,871 
                             ----------  ----------  ----------  ---------- 
                                                                            
Operating expenses:                                                         
  Research and development       41,625      37,321     154,535     143,173 
  Sales and marketing            80,089      75,718     317,001     285,366 
  General and administrative     18,925      17,595      70,868      59,990 
  Amortization of acquired                                                  
   intangible assets              4,321       4,548      19,654      19,149 
  Acquisition related and                                                   
   other                            327         396       2,672       1,840 
  Restructuring adjustment            7        (119)       (648)      8,926 
                             ----------  ----------  ----------  ---------- 
    Total operating expenses    145,294     135,459     564,082     518,444 
                             ----------  ----------  ----------  ---------- 
                                                                            
Income from operations           18,859      24,153     177,716     154,427 
                                                                            
  Interest income                   198         255       1,109       1,374 
  Interest expense               (8,782)     (1,465)    (23,396)     (4,020)
  Other income (expense),                                                   
   net                             (842)        976        (115)     (1,846)
                             ----------  ----------  ----------  ---------- 
Income before provision for                                                 
 income taxes and                                                           
 noncontrolling interest          9,433      23,919     155,314     149,935 
                                                                            
Provision for (benefit from)                                                
 income taxes                      (100)      3,300      33,200      37,300 
                             ----------  ----------  ----------  ---------- 
Net income                        9,533      20,619     122,114     112,635 
                                                                            
Less: Net income                                                            
 attributable to                                                            
 noncontrolling interest             28         (22)        107         229 
                             ----------  ----------  ----------  ---------- 
Net income attributable to                                                  
 TIBCO Software Inc.         $    9,505  $   20,641  $  122,007  $  112,406 
                             ==========  ==========  ==========  ========== 
                                                                            
Net income per share                                                        
 attributable to TIBCO                                                      
 Software Inc.:                                                             
  Basic                      $     0.06  $     0.13  $     0.76  $     0.70 
                             ==========  ==========  ==========  ========== 
  Diluted                    $     0.06  $     0.12  $     0.72  $     0.65 
                             ==========  ==========  ==========  ========== 
                                                                            
Shares used to compute net                                                  
 income per share                                                           
 attributable to TIBCO                                                      
 Software Inc.:                                                             
  Basic                         161,521     161,460     160,330     161,469 
                             ==========  ==========  ==========  ========== 
  Diluted                       169,130     170,866     169,698     173,272 
                             ==========  ==========  ==========  ========== 
                                                                            
                                                                            
                                                                            
                                                                            
                            TIBCO Software Inc.                             
              Condensed Consolidated Statements of Cash Flows               
                                (unaudited)                                 
                               (in thousands)                               
                                                                            
                                                        Three Months Ended  
                                                       -------------------- 
                                                        March 3,   March 4, 
                                                          2013       2012   
                                                       ---------  --------- 
                                                                            
Cash flows from operating activities:                                       
  Net income                                           $   9,533  $  20,619 
  Adjustments to reconcile net income to net cash                           
   provided by operating activities:                                        
    Depreciation of property and equipment                 3,863      3,476 
    Amortization of acquired intangible assets             8,418      7,813 
    Amortization of debt discount and transaction                           
     costs                                                 4,713        228 
    Stock-based compensation                              16,392     15,324 
    Deferred income tax                                   (9,188)    (4,700)
    Tax benefits related to stock benefit plans            4,486      6,703 
    Excess tax benefits from stock-based compensation     (3,257)    (5,856)
    Other non-cash adjustments, net                          139       (229)
  Changes in assets and liabilities:                                        
    Accounts receivable                                   63,733      8,266 
    Prepaid expenses and other assets                     (2,426)     6,016 
    Accounts payable                                       1,953     (1,165)
    Accrued liabilities and restructuring costs          (23,383)   (36,305)
    Deferred revenue                                     (11,752)    20,935 
                                                       ---------  --------- 
      Net cash provided by operating activities           63,224     41,125 
                                                       ---------  --------- 
                                                                            
Cash flows from investing activities:                                       
  Acquisition purchase price adjustment                    2,280          - 
  Purchases of property and equipment                     (2,586)    (6,703)
  Restricted cash pledged as security                       (322)      (968)
  Other investing activities, net                             51        399 
                                                       ---------  --------- 
      Net cash used in investing activities                 (577)    (7,272)
                                                       ---------  --------- 
                                                                            
Cash flows from financing activities:                                       
  Proceeds from revolving credit facility, net                 -     68,060 
  Principal payments on debt                                (620)      (587)
  Proceeds from issuance of common stock                   6,086     11,862 
  Repurchases of the Company's common stock              (21,871)   (67,525)
  Withholding taxes related to restricted stock net                         
   share settlement                                       (4,890)    (4,403)
  Excess tax benefits from stock-based compensation        3,257      5,856 
                                                       ---------  --------- 
      Net cash provided by (used in) financing                              
       activities                                        (18,038)    13,263 
                                                       ---------  --------- 
                                                                            
Effect of foreign exchange rate changes on cash and                         
 cash equivalents                                            506       (893)
                                                       ---------  --------- 
                                                                            
Net change in cash and cash equivalents                   45,115     46,223 
                                                                            
Cash and cash equivalents at beginning of period         727,309    308,148 
                                                                            
                                                       ---------  --------- 
Cash and cash equivalents at end of period             $ 772,424  $ 354,371 
                                                       =========  ========= 

 
About Non-GAAP Financial Measures 
TIBCO provides non-GAAP measures for operating income, net income and
net income per share data as supplemental information regarding
TIBCO's business performance. TIBCO believes that these non-GAAP
financial measures are useful to investors because they exclude
non-operating charges. TIBCO's management excludes these
non-operating charges when it internally evaluates the performance of
TIBCO's business and makes operating decisions, including internal
budgeting, performance measurement and the calculation of bonuses and
discretionary compensation, because these measures provide a
consistent method of comparison to historical periods. Moreover,
management believes these non-GAAP measures reflect the essential
revenue generation activities of TIBCO. Accordingly, management
excludes stock-based compensation related to employee stock options,
amortization of acquired intangible assets, costs related to formal
restructuring activities, acquisition-related and other expenses,
non-cash interest expense related to convertible debt, gains and
losses on equity investments, and the income tax effects of the
foregoing, as well as adjustments for the impact of changes in the
valuation allowance recorded against TIBCO's deferred tax assets when
making operational decisions. 
TIBCO believes that providing the non-GAAP measures that management
uses to its investors is useful to investors for a number of reasons.
The non-GAAP measures provide a consistent basis for investors to
understand TIBCO's financial performance on a trended basis across
historical periods. In addition, it allows investors to evaluate
TIBCO's performance using the same methodology and information as
that used by TIBCO's management. 
Non-GAAP measures are subject to material limitations as these
measures are not in accordance with, or a substitute for, GAAP and
thus TIBCO's definition may be different from similar non-GAAP
measures used by other companies and/or analysts. However, TIBCO's
management compensates for these limitations by providing the
relevant disclosure of the items excluded in the calculation of
non-GAAP operating income, non-GAAP net income and non-GAAP net
income per share. In addition, some item
s such as restructuring
charges that are excluded from non-GAAP net income and non-GAAP
earnings per share can have a material impact on cash flows and stock
compensation charges can have a significant impact on earnings.
Management compensates for these limitations by evaluating the
non-GAAP measure together with the most directly comparable GAAP
measure. TIBCO has historically provided non-GAAP measures to the
investment community as a supplement to its GAAP results, to enable
investors to evaluate TIBCO's business performance in the way that
management does. 
The non-GAAP adjustments, and the basis for excluding them, are
outlined below: 
Amortization of Intangible Assets 
TIBCO has incurred amortization of intangible assets, included in its
GAAP financial statements, related to various acquisitions TIBCO has
made. Management excludes these items, for the purposes of
calculating non-GAAP operating income, non-GAAP net income and
non-GAAP net income per share. TIBCO believes that eliminating this
expense from its non-GAAP measures is useful to investors, because
the amortization of intangible assets can be inconsistent in amount
and frequency and is significantly impacted by the timing and
magnitude of TIBCO's acquisition transactions, which also vary
substantially in frequency from period to period. 
Stock-based Compensation 
TIBCO incurs stock-based compensation expense. TIBCO excludes this
item for the purposes of calculating non-GAAP operating income,
non-GAAP net income and non-GAAP net income per share because it is a
non-cash expense that TIBCO believes is not reflective of its
business performance. The nature of the stock-based compensation
expense also makes it very difficult to estimate prospectively, since
the expense will vary with changes in the stock price and market
conditions at the time of new grants, varying valuation
methodologies, subjective assumptions and different award types,
making the comparison of current results with forward-looking
guidance potentially difficult for investors to interpret. The tax
effects of stock-based compensation expenses may also vary
significantly from period to period, without any change in underlying
operational performance, thereby obscuring the underlying
profitability of operations relative to prior periods. Finally, TIBCO
believes that non-GAAP measures of profitability that exclude
stock-based compensation are widely used by analysts and investors in
the software industry. 
Acquisition-related and Other Expenses  
TIBCO incurs acquisition-related and other expenses which consist of
costs incurred after the issuance of a definitive term sheet for a
particular transaction (whether or not such transaction is ultimately
completed, remains in process or is not completed) and include legal,
banker, accounting and other advisory fees of third parties and
severance costs for employees of the acquired company that are
terminated within 90 days of the acquisition date. Management
excludes these items, for the purposes of calculating non-GAAP
operating income, non-GAAP net income and non-GAAP net income per
share. TIBCO believes that eliminating these expenses from its
non-GAAP measures is useful to investors, because it generally would
not have otherwise incurred such expenses in the periods presented as
part of its continuing operations. The acquisition-related and other
expenses are not recurring with respect to past transactions, can be
inconsistent in amount and frequency from period to period and are
significantly impacted by the timing and magnitude of TIBCO's
acquisitions. While these expenses are not recurring with respect to
past transactions, TIBCO generally will incur these expenses in
connection with any future acquisitions.  
Restructuring Activities  
TIBCO incurs restructuring expenses, included in its GAAP
presentation of operating expense, primarily due to workforce related
charges such as payments for severance and benefits and estimated
costs of exiting and terminating facility lease commitments related
to a formal restructuring plan. TIBCO excludes these items, for the
purposes of calculating non-GAAP operating income, non-GAAP net
income and non-GAAP net income per share, when it evaluates the
continuing business performance of TIBCO. TIBCO believes that these
items are not consistently recurring and do not necessarily reflect
expected future operating expense, nor does TIBCO believe that they
provide a meaningful evaluation of current versus past business
results or the expense levels required to support TIBCO's operating
plan.  
Non-Cash Interest Expense Related to Convertible Debt 
TIBCO is required to recognize non-cash interest expense related to
its 2.25% convertible senior notes issued in April 2012 as an imputed
interest expense. Management excludes this incremental non-cash
interest expense for purposes of calculating non-GAAP net income and
non-GAAP net income per share. Under the relevant accounting
guidance, TIBCO is required to separate the conversion option as an
equity component from the debt and account for the debt in a manner
that reflects TIBCO's non-convertible debt borrowing rate. This
results in the debt component of the convertible notes being treated
as though it was issued at a discount, with the debt discount being
accreted as additional non-cash interest expense over the term of the
notes using the effective interest method. TIBCO believes that
excluding this expense from its non-GAAP measures is useful to
investors because this incremental interest expense does not
represent a cash outflow for the company and is not meaningful in
evaluating current versus past business results. Finally, TIBCO
believes that non-GAAP measures of profitability that exclude
non-cash interest accretion expense are widely used by analysts and
investors. 


 
                                                                            
                                                                            
                            TIBCO Software Inc.                             
                Reconciliation of GAAP to Non-GAAP Measures                 
                                (unaudited)                                 
                (in thousands, except net income per share)                 
                                                                            
                                        Three Months Ended                  
                      ----------------------------------------------------- 
                               March 3,                   March 4,          
                                 2013                       2012            
                      -------------------------  -------------------------- 
                                    Net income                  Net income  
                                   attributable                attributable 
                                     to TIBCO                    to TIBCO   
                        Operating    Software      Operating     Software   
                         Income        Inc.         Income         Inc.     
                      ------------ ------------  ------------  ------------ 
                                                                            
                                                                            
GAAP                  $     18,859 $      9,505  $     24,153  $     20,641 
                                                                            
  Amortization of                                                           
   intangible assets                                                        
   - cost of revenue         4,097        4,097         3,265         3,265 
  Amortization of                                                           
   intangible assets                                                        
   - operating                                                              
   expense                   4,321        4,321         4,548         4,548 
  Stock-based                                                               
   compensation -                                                           
   cost of revenue           1,603        1,603         1,282         1,282 
  Stock-based                                                               
   compensation - R&D                                                       
   expense                   3,996        3,996         4,005         4,005 
  Stock-based                                                               
   compensation - S&M                                                       
   expense                   5,239        5,239         5,293         5,293 
  Stock-based                                                               
   compensation - G&A                                                       
   expense                   5,554        5,554         4,745         4,745 
  Acquisition related                                                       
   and other                   327          327           396           396 
  Non-cash interest                                                         
   expense related to                                                       
   convertible debt              -        3,819             -             - 
  Restructuring                                                             
   adjustment                    7            7          (119)         (119)
  Income tax                                                                
   adjustment for                                                           
   non-GAAP                      -       (7,395)            -        (9,480)
                                                                            
                      ------------ ------------  ------------  ------------ 
Non-GAAP              $     44,003 $     31,073  $     47,568  $     34,576 
                      ============ ============  ============  ============ 
                                                                            
Diluted net income                                                          
 per share                                                                  
 attributable to                                                            
 TIBCO Software Inc.:                                                       
                                                                            
    GAAP                           $       0.06                $       0.12 
                                   ============                ============ 
                                                                            
    Non-GAAP                       $       0.18                $       0.20 
                                   ============                ============ 
Shares used to                                                              
 compute diluted net                                                        
 income per share                                                           
 attributable to                                                            
 TIBCO Software Inc.:                   169,130                     170,866 
                                   ============                ============ 

  
Media Relations Contact:
Leslie Moore
TIBCO Software Inc.
(650) 846-5025
lmoore@tibco.com 
Investor Relations Contact:
Giuseppe Incitti
TIBCO Software Inc.
(650) 846-5637
gincitti@tibco.com