Intuit Reports Fiscal 1999 and Fourth Quarter Results - 4th qtr 1999 - Company Financial Information

Edge: Work-Group Computing Report, Sept 6, 1999

Intuit Inc. (NASDAQ:INTU) has announced the financial results for its fiscal year and fourth quarter ended July 31, 1999.

Bill Harris, President and CEO, remarked, "Intuit had a successful fiscal 1999, capped by a strong fourth quarter performance. We saw our Internet efforts take off over the past year at the same time we saw continued strength in our traditional desktop software businesses. In addition, we have once again improved operating profitability while building competitive advantages as we move from the desktop to the server."

Fiscal 1999 Results

For its fiscal year ended July 31, 1999, Intuit reported revenue of $847.6 million, an increase of 43% from revenue of $592.7 million reported for the prior fiscal year. Revenue from acquired companies including Lacerte, the professional tax software company that Intuit acquired in June 1998, was included in these results but not in the fiscal 1998 results. Excluding this revenue, Intuit posted a 28% increase compared to the prior fiscal year.

On a GAAP basis, the Company reported annual net income of $376.5 million, or $5.91 per share on a diluted basis, which included pre-tax gains and losses on marketable securities totaling $579.2 million, or $5.45 per share after tax. The results for the prior fiscal year showed a loss of $12.2 million, or $0.24 per share. (See Table A)

On a pro forma basis, the Company reported a 90% increase in net income for the year. Pro forma net income was $88.9 million, or $1.39 per share on a diluted basis. Net income associated with professional tax software sales by Lacerte, which was acquired in June 1998, was included in fiscal 1999 results but not in the fiscal 1998 results. Pro forma net income for the prior fiscal year was $46.7 million, or $0.90 per share. (See Table B)

The GAAP financial results are prepared in accordance with generally accepted accounting principles and are shown in Table A. Pro forma financial information shown in Table B excludes gain on disposal of business, non-recurring marketing charges, acquisition-related charges, and gains related to the sale of marketable securities.

Fourth Quarter Results

Intuit's financial results reflect the highly seasonal nature of its businesses, particularly its tax return preparation products. Historically, revenue and profitability are highest in Intuit's January and April quarters which reflect the intensity and the short season for its tax product sales. The Company experiences significantly lower revenue in the July and October quarters, while operating expenses to develop new products and services continue at relatively consistent levels during these periods. As a result, Intuit has losses or small profits in these quarters. In addition, Intuit's quarterly revenue pattern is inconsistent from year to year based in part on the variable timing of product launches. For example, versions of QuickBooks launched in the second quarter of the current fiscal year and in the fourth quarter of the previous year, benefiting those quarters.

For the fourth fiscal quarter ended July 31, 1999, Intuit reported revenue of $149.9 million, an increase of 28% compared to the same quarter a year ago. Strong market demand for QuickBooks, continued growth in Internet-based revenue, as well as sales from the launches of new versions of Quicken and QuickBooks in Europe were largely responsible for this growth.

On a GAAP basis, the Company reported net income for the quarter of $263.3 million, or $4.04 per share on a diluted basis, which included pre tax gains and losses on marketable securities totaling $510.5 million, or $4.69 per share after tax. The results for the same fiscal quarter last year reflected a net loss of $39.0 million, or $0.70 per share. (See Table A)

On a pro forma basis, the Company reported a net loss for the quarter of $16.3 million, or $0.26 per share. Pro forma net income for the same fiscal quarter last year was $1.6 million, or $0.03 per share. Fourth quarter fiscal 1999 profitability when compared to the fourth quarter of fiscal 1998 was negatively impacted by one-time expenses related to the transition of the Company's German operations to a licensing business. In addition, the Company experienced incremental marketing expenses to support the early Quicken 2000 launch. (See Table B)

The GAAP financial results are prepared in accordance with generally accepted accounting principles and are shown in Table A. Pro forma financial information shown in Table B excludes gain on disposal of business, non-recurring marketing charges, acquisition-related charges, and gains and losses related to marketable securities.

Business Highlights

"Intuit is leading and defining electronic finance, connecting individuals and small businesses to Web-based resources and then, building interconnections between these resources to provide unique, integrated financial solutions," commented Scott D. Cook, Chairman of the Executive Committee. "We are also driving an increase in revenue per customer, much of it repeat in nature, as we expand our e-finance solutions."