Citrix reports third quarter earnings

Citrix Systems, Inc the global leader in access infrastructure solutions, today reported results for the third quarter ended 30 September 2003.

Revenues for the three months ended 30 September 2003 were $144.3 million compared to $118.9 million in the same period of the prior year.

Net income was $31.0 million for the third quarter of 2003, or $0.18 per share, as compared to $16.8 million, or $0.10 per share, in the comparable period of the prior year. Net income, adjusted to exclude the effect of amortisation of intangible assets primarily related to business combinations, was $32.8 million for the third quarter of 2003, or $0.19 per share, as compared to $17.4 million, or $0.10 per share, in the comparable period of the prior year.

"We had a solid quarter, and I`m quite pleased with our performance," said Mark Templeton, president and chief executive officer for Citrix. "We saw strong demand from large enterprises, which contributed to the strength in our top-line and an increase in deferred revenue.

"Overall, I believe our results demonstrate that we are executing well in selling to large enterprises, and that our customers see great value in access infrastructure for the on-demand enterprise."

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* Total revenue grew about 21% over the comparable period last year.

* Deferred revenue balance grew by $16.4 million, about 13%, during the quarter to approximately $144.6 million.

* Operating margin was 26.8% for the quarter; adjusted operating margin was 28.8%, excluding the effect of amortisation of intangible assets primarily relating to business combinations.

* Cash flow from operations was approximately $72.6 million for the quarter.

* Cash and investments totalled approximately $810.7 million at the end of the quarter.

* During the quarter, the company repurchased about 1.9 million shares at an average net price per share of $19.79.

In September, Citrix launched a $14 million global advertising campaign designed to raise the company`s overall visibility and build the Citrix brand as the leading provider of access infrastructure for the on-demand enterprise. The campaign marks the first global branding initiative in Citrix history and builds on the company`s introduction of a complete suite of access infrastructure software. Leveraging the strong loyalty Citrix has secured from its installed base of more than 120 000 customers globally, the company enlisted the help of customer CIOs to participate in the campaign and explain how Citrix software helps grow their businesses. Among the customer participants in the integrated campaign, which comprises print, online, billboard and radio advertising, are Delta Air Lines, AutoNation and smart, a brand of DaimlerChrysler.

Citrix closed several large deals during the quarter in the financial services, insurance, telecommunications, medical, government and technology sectors.

In the financial services sector, Citrix signed a deal with Bankdata, one of the leading suppliers of banking information technology in Denmark. Bankdata will implement CitrixR MetaFrame Presentation Server for Windows, Enterprise Edition, to centralise information technology management and deploy applications more quickly to around 4 000 users at more than 100 locations.

* In September, Citrix shipped MetaFrame Password Manager, the most efficient single sign-on and password security solution for accessing password-protected applications. MetaFrame Password Manager is a key part of the Citrix MetaFrame Access Suite, which gives users a single point of access to enterprise applications and information on demand anywhere, anytime, using any device, over any connection. Citrix also announced broad support for the new product from customers including Rockford Health System and Pressley Ridge, and partners including RSA, SAFLINK Corporation and Secure Computing.

* In other product news, Citrix announced international versions of MetaFrame Secure Access Manager for French, German and Spanish customers. MetaFrame Secure Access Manager is the most cost-effective way to get secure, remote, single-point access over the Web to any enterprise information resource, including client/server, legacy and Web applications, Internet and intranet sites, streaming media, documents, network file services, and XML-based Web services.

* At Citrix iForumT 2003 held from 13 to 15 October, Citrix announced that:

o It was named by Microsoft as its first ever Global Independent Software Vendor Partner of the Year for delivering the best customer solutions as a Microsoft Global Gold Certified Partner for Software Products;

o It has signed a systems integration agreement with IBM, which will allow IBM sales personnel to offer the Citrix MetaFrame Access Suite of products to IBM eServerR xSeries customers; and,

o Customers now have the option to purchase the entire Citrix MetaFrame Access Suite as a bundle package for one price.

Citrix management offers the following guidance for the quarter and year ending 31 December 2003:

* Revenue is expected to be in the range of $147 million to $157 million for the quarter ending 31 December 2003 for the fourth quarter 2003; for the full year 2003, revenue is expected to be in the range of $577 million to $587 million.

* Earnings per share is expected to be in the range of $0.17 to $0.19 for the quarter ending 31 December 2003; for the full year 2003, earnings per share is expected to be in the range of $0.70 to $0.72.

* Adjusted earnings per share, which excludes the effect of amortisation of intangible assets primarily related to business combinations, is expected to be in the range of $0.18 to $0.20 for the quarter ending 31 December 2003; for the full year 2003, adjusted earnings per share is expected to be in the range of $0.74 to $0.76.

The above statements are based on current expectations. These statements are forward-looking, and actual results may differ materially.