[July 27, 2016] |
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CA Technologies Reports First Quarter Fiscal Year 2017 Results
CA Technologies (NASDAQ:CA) today reported financial results for its
first quarter fiscal 2017, which ended June 30, 2016.
Mike Gregoire, CA Technologies Chief Executive Officer, said:
"Following solid performance in fiscal year 2016, I am pleased to report
that we are off to a strong start in fiscal year 2017.
"In the first quarter, revenue grew year-over-year, total new sales were
strong and we delivered a solid operating margin. These results improve
our confidence in our ability to cross over into modest growth for the
full year.
"Though we recognize that we still have work ahead to reach our
potential, we are progressing well on our journey to position CA for
sustainable, long-term growth. Looking ahead, we will continue to be
customer-focused and agile as we evolve CA to meet the challenges of an
incredibly dynamic technology market. This is reflected in the
organizational changes we are announcing today."
ORGANIZATIONAL UPDATE
CA Technologies has agreed with Richard Beckert, Chief Financial
Officer, that it is the appropriate time to transition the role, and he
retired as CFO from CA Technologies effective July 26. Beckert joined CA
in 2006 during a pivotal time in the Company's history, and he played an
important role in our ongoing transformation.
Kieran J. McGrath, Corporate Controller, has been named interim Chief
Financial Officer, reporting to CEO Mike Gregoire. McGrath, who has been
with CA since 2014 as corporate controller, was previously the Finance
lead of IBM's $25B Global Software Business and brings a wealth of
financial, operational and transformational management experience.
McGrath will lead CA's Finance organization while the Company undertakes
the process of identifying a new CFO.
Gregoire commented, "I would like to thank Rich for his many
contributions to CA and the positive impact he has had on our business.
On behalf of CA we wish Rich much continued success in the future.
Separately, I look forward to working closely with Kieran in the months
ahead and have the utmost confidence in his ability to help lead this
important evolution."
CA Technologies also announced that Adam Elster, formerly EVP of Sales,
has been named President, Global Field Operations, and that Ayman Sayed,
formerly EVP and Chief Product Officer, has been named President, Chief
Product Officer.
Gregoire continued, "In these new roles, Adam and Ayman will be
responsible for collaborating to ensure that our development and
go-to-market efforts are completely aligned to customer and market
demand, and that we are positioned to achieve our goal of consistently
delivering better, more impactful products to our customers."
FINANCIAL OVERVIEW
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(dollars in millions, except share data)
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First Quarter FY17 vs. FY16
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FY17
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FY16
|
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% Change
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% Change CC*
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Revenue
|
|
$999
|
|
$977
|
|
2%
|
|
3%
|
GAAP Income from Continuing Operations
|
|
$198
|
|
$207
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(4)%
|
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(9)%
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Non-GAAP Income from Continuing Operations*
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$269
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|
$283
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(5)%
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(6)%
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GAAP Diluted EPS from Continuing Operations
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$0.47
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$0.47
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0%
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(4)%
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Non-GAAP Diluted EPS from Continuing Operations*
|
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$0.64
|
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$0.64
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0%
|
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(2)%
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Cash Flow from Continuing Operations
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$161
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|
$188
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(14)%
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|
(10)%
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* Non-GAAP income, Non-GAAP earnings per share and CC or Constant
Currency are non-GAAP financial measures, as noted in the discussion
of non-GAAP results below. A reconciliation of non-GAAP financial
measures to their comparable GAAP financial measures is included in
the tables following this news release.
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REVENUE AND BOOKINGS
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(dollars in millions)
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First Quarter FY17 vs. FY16
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FY17
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% of Total
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FY16
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% of Total
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% Change
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% Change CC*
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North America Revenue
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$669
|
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67%
|
|
$652
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|
67%
|
|
3%
|
|
3%
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International Revenue
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$330
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33%
|
|
$325
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|
33%
|
|
2%
|
|
2%
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Total Revenue
|
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$999
|
|
|
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$977
|
|
|
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2%
|
|
3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America Bookings
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$992
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73%
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$451
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68%
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120%
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120%
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International Bookings
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$361
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27%
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|
$211
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32%
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71%
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76%
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Total Bookings
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$1,353
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|
|
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$662
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104%
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106%
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|
|
|
|
|
|
|
|
|
|
|
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Current Revenue Backlog
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$3,031
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|
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$3,042
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|
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0%
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0%
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Total Revenue Backlog
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$7,151
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|
|
|
$6,278
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|
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14%
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15%
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*CC or Constant Currency is a non-GAAP financial measure, as noted
in the discussion of non-GAAP results below. A reconciliation of
non-GAAP financial measures to their comparable GAAP financial
measures is included in the tables following this news release.
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-
Total revenue increased as a result of an increase in software fees
and other revenue, partially offset by a decrease in subscription and
maintenance revenue. The fiscal 2016 acquisitions of Rally Software
Development Corp. (Rally) and Xceedium, Inc. (Xceedium) contributed
approximately 4 points of revenue growth for the quarter.
-
Total bookings grew primarily due to the replacement and extension of
a large system integrator transaction that was scheduled to expire in
fiscal 2018, as well as an increase in mainframe solutions renewals
that were not associated with this transaction. The large system
integrator transaction provides an incremental contract value in
excess of $475 million, extends the term of the replaced agreement for
an additional five years and was a strong contributor to renewals and
new product sales in the quarter.
-
The Company executed a total of 14 license agreements with incremental
contract values in excess of $10 million each, for an aggregate
contract value of $910 million including the aforementioned large
system integrator transaction. During the first quarter of fiscal
2016, the Company executed a total of 6 license agreements with
incremental contract values in excess of $10 million each, for an
aggregate contract value of $214 million.
-
The weighted average duration of subscription and maintenance bookings
for the quarter was 4.93 years, compared with 3.45 years for the same
period in fiscal 2016.
EXPENSES AND MARGIN AND EARNINGS PER SHARE
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(dollars in millions)
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First Quarter FY17 vs. FY16
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FY17
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FY16
|
|
% Change
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% Change CC**
|
GAAP
|
|
|
Operating Expenses Before Interest and Income Taxes
|
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$707
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$673
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5%
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8%
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Operating Income Before Interest and Income Taxes
|
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$292
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$304
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(4)%
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(8)%
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Diluted EPS from Continuing Operations
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$0.47
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$0.47
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0%
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(4)%
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Operating Margin
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29%
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31%
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|
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Effective Tax Rate
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28.5%
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29.8%
|
|
|
|
|
|
|
|
|
|
|
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Non-GAAP*
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Operating Expenses Before Interest and Income Taxes
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$607
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|
$572
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6%
|
|
8%
|
Operating Income Before Interest and Income Taxes
|
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$392
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$405
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(3)%
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(5)%
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Diluted EPS from Continuing Operations
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$0.64
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$0.64
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0%
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(2)%
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Operating Margin
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39%
|
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41%
|
|
|
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Effective Tax Rate
|
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28.6%
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28.5%
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|
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*A reconciliation of non-GAAP financial measures to their comparable
GAAP financial measures is included in the tables following this
news release. Year-over-year non-GAAP results exclude purchased
software and other intangibles amortization, share-based
compensation, amortization of internal software costs, Board
approved workforce rebalancing initiatives and certain other gains
and losses. The results also include gains and losses on hedges that
mature within the quarter, but exclude gains and losses on hedges
that do not mature within the quarter.
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**CC or Constant Currency is a non-GAAP financial measure, as noted
in the discussion of non-GAAP results below. A reconciliation of
non-GAAP financial measures to their comparable GAAP financial
measures is included in the tables following this news release.
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-
GAAP and Non-GAAP first quarter operating expenses increased primarily
due to operational costs associated with the acquisitions of Rally and
Xceedium.
-
GAAP and Non-GAAP EPS in the first quarter of fiscal 2017 were
consistent with the year-ago period due to an increase in expenses,
primarily due to operational costs associated with the acquisitions of
Rally and Xceedium, offset by an increase in revenue and a decrease in
weighted average common shares outstanding.
SELECTED HIGHLIGHTS FROM THE QUARTER
Leadership and recognition during the quarter include:
-
For the second consecutive year, CA Technologies was positioned by
Gartner, Inc. as a leader in the Magic Quadrant for IT Project and
Portfolio Management Software Applications, Worldwide.(1)
-
IT Central Station, a leading product review site for enterprise
technology, named CA
Unified Infrastructure Management as the number one solution for
cloud monitoring.(2)
-
CA Technologies was named an API
Management market leader for 2016-2017 by Ovum in its API
Management Decision Matrix, and received the highest overall score for
the technology evaluation dimension.(3)
Customer traction for CA Technologies innovation during the quarter
include:
-
CA
Privileged Access Management (CA PAM) closed its single largest
deal ever and was selected over competitors to become the standard for
this American multinational corporation's 1000+ global customers.
-
CA PAM also displaced an incumbent at a large American multi-national
telecommunications company that chose the product for the strength of
its password management.
-
CA
Project and Portfolio Management (PPM) closed several six-figure
transactions during the quarter, three of which were brand new
customers to the platform.
SEGMENT INFORMATION
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(dollars in millions)
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First Quarter FY17 vs. FY16
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Revenue
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|
|
% Change
|
|
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% Change CC*
|
|
|
Operating Margin
|
|
FY17
|
|
|
FY16
|
|
|
|
|
|
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FY17
|
|
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FY16
|
Mainframe Solutions
|
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$551
|
|
|
$560
|
|
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(2)%
|
|
|
(1)%
|
|
|
62%
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|
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62%
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Enterprise Solutions
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$371
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|
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$338
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|
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10%
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|
|
10%
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|
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13%
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|
|
14%
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Services
|
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$77
|
|
|
$79
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|
(3)%
|
|
|
(2)%
|
|
|
3%
|
|
|
10%
|
*CC or Constant Currency is a non-GAAP financial measure, as noted
in the discussion of non-GAAP results below. A reconciliation of
non-GAAP financial measures to their comparable GAAP financial
measures is included in the tables following this news release.
|
|
-
Mainframe Solutions revenue declined primarily due to insufficient
revenue from prior period new sales to offset the decline in revenue
contribution from renewals.
-
Enterprise Solutions revenue increased primarily driven by the
additional revenue associated with the Rally and Xceedium
acquisitions, which contributed approximately 9 points of revenue
growth for the quarter.
-
Services revenue decreased primarily due to a decline in professional
services engagements from prior periods. Operating margin decreased as
a result of the decrease in revenue and additional personnel-related
costs associated with the Rally acquisition.
CASH FLOW FROM OPERATIONS
-
Cash flow from operations for the first quarter of fiscal 2017 was
$161 million, versus $188 million in the year-ago period. Cash flow
from operations decreased compared with the year-ago period primarily
due to the increase in income tax payments, partially offset by the
decrease in vendor disbursements and payroll.
CAPITAL STRUCTURE
-
Cash and cash equivalents at June 30, 2016 were $2.776 billion.
-
With $1.95 billion in total debt outstanding and $138 million in
notional pooling, the Company's net cash, cash equivalents and
investments position was $688 million.
-
In the first quarter of fiscal 2017, the Company repurchased 1.6
million shares of common stock for $50 million.
-
As of June 30, 2016, the Company is currently authorized to purchase
$700 million of its common stock under its current stock repurchase
program.
-
The Company distributed $107 million in dividends to shareholders.
-
The Company's outstanding share count at June 30, 2016 was 414 million.
OUTLOOK FOR FISCAL YEAR 2017
The Company updated its fiscal 2017 outlook for GAAP diluted earnings
per share from continuing operations and full-year GAAP operating
margin. This guidance update reflects the increase in share-based
compensation expense as a result of the increase in the Company's share
price. The following outlook contains "forward-looking statements" (as
defined below) and assumes no material acquisitions.
The Company expects the following:
-
Total revenue to increase in a range of flat to plus 1 percent in
constant currency, unchanged from previous guidance. At June 30, 2016
exchange rates, this translates to reported revenue of $4.03 billion
to $4.07 billion.
-
GAAP diluted earnings per share from continuing operations to increase
in a range of 2 percent to 5 percent in constant currency. Previous
guidance was to increase in a range of 3 percent to 6 percent in
constant currency. At June 30, 2016 exchange rates, this translates to
reported GAAP diluted earnings per share from continuing operations of
$1.88 to $1.93.
-
Non-GAAP diluted earnings per share from continuing operations to
increase in a range of 1 percent to 3 percent in constant currency,
unchanged from previous guidance. At June 30, 2016 exchange rates,
this translates to reported non-GAAP diluted earnings per share from
continuing operations of $2.49 to $2.54.
-
Cash flow from continuing operations to increase in the range of 1
percent to 5 percent in constant currency, unchanged from previous
guidance. At June 30, 2016 exchange rates, this translates to reported
cash flow from continuing operations of $1.05 billion to $1.09 billion.
The Company expects a full-year GAAP operating margin of 29 percent and
non-GAAP operating margin of 38 percent. This translates to 1-point
decrease from previous guidance for GAAP operating margin of 30 percent
and unchanged from previous guidance for non-GAAP operating margin.
The Company also expects a full-year GAAP and non-GAAP effective tax
rate of between 28 percent and 29 percent, unchanged from previous
guidance.
The Company anticipates approximately 411 million shares outstanding at
fiscal 2017 year-end and weighted average diluted shares outstanding of
approximately 414 million for the fiscal year.
Webcast
This news release and the accompanying tables should be read in
conjunction with additional content that is available on the Company's
website, including a supplemental financial package, as well as a
conference call and webcast that the Company will host at 5:00 p.m. ET
today to discuss its unaudited first quarter results. The webcast will
be archived on the website. Individuals can access the webcast, as well
as the press release and supplemental financial information at http://ca.com/invest
or can listen to the call at 1-877-561-2748. The international
participant number is 1-720-545-0044.
(1)
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Gartner, Inc., "Magic Quadrant for IT Project and Portfolio
Management Software Applications, Worldwide," Daniel B. Stang,
Robert A. Handler, Teresa Jones, May 24, 2016
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The Gartner Report(s) described herein, (the "Gartner
Report(s)") represent(s) research opinion or viewpoints published,
as part of a syndicated subscription service, by Gartner, Inc.
("Gartner"), and are not representations of fact. Each Gartner
Report speaks as of its original publication date (and not as of
the date of this Quarterly Report) and the opinions expressed in
the Gartner Report(s) are subject to change without notice.
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Gartner does not endorse any vendor, product or service
depicted in its research publications, and does not advise
technology users to select only those vendors with the highest
ratings or other designation. Gartner research publications
consist of the opinions of Gartner's research organization and
should not be construed as statements of fact. Gartner disclaims
all warranties, expressed or implied, with respect to this
research, including any warranties of merchantability or fitness
for a particular purpose.
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(2)
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https://www.itcentralstation.com/products/ca-unified-infrastructure-management
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(3)
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Ovum Decision Matrix: Selecting an API Management Solution,
2016-2017
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About CA Technologies
CA Technologies (NASDAQ:CA) creates software that fuels transformation
for companies and enables them to seize the opportunities of the
Application Economy. Software is at the heart of every business in every
industry. From planning, to development, to management and security, CA
is working with companies worldwide to change the way we live, transact,
and communicate - across mobile, private and public cloud, distributed
and mainframe environments. Learn more at www.ca.com.
Follow CA Technologies
Non-GAAP Financial Measures
This news release, the accompanying tables and the additional content
that is available on the Company's website, including a supplemental
financial package, include certain financial measures that exclude the
impact of certain items and therefore have not been calculated in
accordance with U.S. generally accepted accounting principles (GAAP).
Non-GAAP metrics for operating expenses, operating income, operating
margin, income from continuing operations and diluted earnings per share
exclude the following items: share-based compensation expense; non-cash
amortization of purchased software, internally developed software and
other intangible assets; charges relating to rebalancing initiatives
that are large enough to require approval from the Company's Board of
Directors and certain other gains and losses, which include the gains
and losses since inception of hedges that mature within the quarter, but
exclude gains and losses of hedges that do not mature within the
quarter. The effective tax rate on GAAP and non-GAAP income from
operations is the Company's provision for income taxes expressed as a
percentage of pre-tax GAAP and non-GAAP income from continuing
operations, respectively. These tax rates are determined based on an
estimated effective full year tax rate, with the effective tax rate for
GAAP generally including the impact of discrete items in the period in
which such items arise and the effective tax rate for non-GAAP generally
allocating the impact of discrete items pro rata to the fiscal year's
remaining reporting periods. The non-GAAP effective tax rate is equal to
the full year GAAP effective tax rate, therefore no adjustment is
required on an annual basis. Adjusted cash flow from operations excludes
payments associated with the fiscal 2014 Board-approved rebalancing
initiative as described above and restructuring and other payments. Free
cash flow excludes purchases of property and equipment. The Company
presents constant currency information to provide a framework for
assessing how the Company's underlying businesses performed excluding
the effect of foreign currency rate fluctuations. To present this
information, current and comparative prior period results for entities
reporting in currencies other than U.S. dollars are converted into U.S.
dollars at the exchange rate in effect on the last day of the Company's
prior fiscal year (i.e., March 31, 2016, March 31, 2015 and March 31,
2014, respectively). Constant currency excludes the impacts from the
Company's hedging program. The constant currency calculation for
annualized subscription and maintenance bookings is calculated by
dividing the subscription and maintenance bookings in constant currency
by the weighted average subscription and maintenance duration in years.
These non-GAAP financial measures may be different from non-GAAP
financial measures used by other companies. Non-GAAP financial measures
should not be considered as a substitute for, or superior to, measures
of financial performance prepared in accordance with GAAP. By excluding
these items, non-GAAP financial measures facilitate management's
internal comparisons to the Company's historical operating results and
cash flows, to competitors' operating results and cash flows, and to
estimates made by securities analysts. Management uses these non-GAAP
financial measures internally to evaluate its performance and they are
key variables in determining management incentive compensation. The
Company believes these non-GAAP financial measures are useful to
investors in allowing for greater transparency of supplemental
information used by management in its financial and operational
decision-making. In addition, the Company has historically reported
similar non-GAAP financial measures to its investors and believes that
the inclusion of comparative numbers provides consistency in its
financial reporting. Investors are encouraged to review the
reconciliation of the non-GAAP financial measures used in this news
release to their most directly comparable GAAP financial measures, which
are attached to this news release.
Cautionary Statement Regarding Forward-Looking Statements
The declaration and payment of future dividends is subject to the
determination of the Company's Board of Directors, in its sole
discretion, after considering various factors, including the Company's
financial condition, historical and forecasted operating results, and
available cash flow, as well as any applicable laws and contractual
covenants and any other relevant factors. The Company's practice
regarding payment of dividends may be modified at any time and from time
to time.
Repurchases under the Company's stock repurchase program may be made
from time to time, subject to market conditions and other factors, in
the open market, through solicited or unsolicited privately negotiated
transactions or otherwise. The program does not obligate the Company to
acquire any particular amount of common stock, and it may be modified or
suspended at any time at the Company's discretion.
Certain statements in this communication (such as statements containing
the words "believes," "plans," "anticipates," "expects," "estimates,"
"targets" and similar expressions relating to the future) constitute
"forward-looking statements" that are based upon the beliefs of, and
assumptions made by, the Company's management, as well as information
currently available to management. These forward-looking statements
reflect the Company's current views with respect to future events and
are subject to certain risks, uncertainties, and assumptions. A number
of important factors could cause actual results or events to differ
materially from those indicated by such forward-looking statements,
including: the ability to achieve success in the Company's strategy by,
among other things, enabling the Company's sales force to accelerate
growth of new product sales (at levels sufficient to offset any decline
in revenue in the Company's Mainframe Solutions segment), improving the
Company's brand, technology and innovation awareness in the marketplace,
ensuring the Company's offerings for cloud computing, application
development and IT operations (DevOps), Software-as-a-Service (SaaS),
and mobile device management, as well as other new offerings, address
the needs of a rapidly changing market, while not adversely affecting
the demand for the Company's traditional products or its profitability
to an extent greater than anticipated, and effectively managing the
strategic shift in the Company's business model to develop more easily
installed software, provide additional SaaS offerings and refocus the
Company's professional services and education engagements on those
engagements that are connected to new product sales, without affecting
the Company's performance to an extent greater than anticipated; the
failure to innovate or adapt to technological changes and introduce new
software products and services in a timely manner; competition in
product and service offerings and pricing; the ability of the Company's
products to remain compatible with ever-changing operating environments,
platforms or third party products; global economic factors or political
events beyond the Company's control and other business and legal risks
associated with non-U.S. operations; the failure to expand partner
programs and sales of our solutions by our partners; the ability to
retain and attract qualified professionals; general economic conditions
and credit constraints, or unfavorable economic conditions in a
particular region, industry or business sector; the ability to
successfully integrate acquired companies and products into the
Company's existing business; risks associated with sales to government
customers; breaches of the Company's data center, network, as well as
the Company's software products, and the IT environments of the
Company's vendors and customers; the ability to adequately manage,
evolve and protect the Company's information systems, infrastructure and
processes; the failure to renew large license transactions on a
satisfactory basis; fluctuations in foreign exchange rates; discovery of
errors or omissions in the Company's software products or documentation
and potential product liability claims; the failure to protect the
Company's intellectual property rights and source code; access to
software licensed from third parties; risks associated with the use of
software from open source code sources; third-party claims of
intellectual property infringement or royalty payments; fluctuations in
the number, terms and duration of the Company's license agreements, as
well as the timing of orders from customers and channel partners; events
or circumstances that would require the Company to record an impairment
charge relating to the Company's goodwill or capitalized software and
other intangible assets balances; potential tax liabilities; changes in
market conditions or the Company's credit ratings; changes in generally
accepted accounting principles; the failure to effectively execute the
Company's workforce reductions, workforce rebalancing and facilities
consolidations; successful and secure outsourcing of various functions
to third parties; and other factors described more fully in the
Company's filings with the Securities and Exchange Commission. Should
one or more of these risks or uncertainties occur, or should the
Company's assumptions prove incorrect, actual results may vary
materially from those described herein as believed, planned,
anticipated, expected, estimated, targeted or similarly expressed in a
forward-looking manner. The Company assumes no obligation to update the
information in this communication, except as otherwise required by law.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof.
Copyright © 2016 CA, Inc. All Rights Reserved. All other trademarks,
trade names, service marks, and logos referenced herein belong to their
respective companies.
Table 1
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CA Technologies
|
Consolidated Statements of Operations
|
(unaudited)
|
(in millions, except per share amounts)
|
|
|
|
Three Months Ended
|
|
|
June 30,
|
Revenue:
|
|
2016
|
2015
|
Subscription and maintenance
|
|
$
|
826
|
|
$
|
836
|
|
Professional services
|
|
|
77
|
|
|
79
|
|
Software fees and other
|
|
|
96
|
|
|
62
|
|
Total revenue
|
|
$
|
999
|
|
$
|
977
|
|
Expenses:
|
|
|
|
|
Costs of licensing and maintenance
|
|
$
|
68
|
|
$
|
66
|
|
Cost of professional services
|
|
|
75
|
|
|
71
|
|
Amortization of capitalized software costs
|
|
|
66
|
|
|
60
|
|
Selling and marketing
|
|
|
242
|
|
|
226
|
|
General and administrative
|
|
|
88
|
|
|
90
|
|
Product development and enhancements
|
|
|
148
|
|
|
136
|
|
Depreciation and amortization of other intangible assets
|
|
|
20
|
|
|
27
|
|
Other expenses (gains), net
|
|
|
-
|
|
|
(3
|
)
|
Total expenses before interest and income taxes
|
|
$
|
707
|
|
$
|
673
|
|
Income from continuing operations before interest and income taxes
|
|
$
|
292
|
|
$
|
304
|
|
Interest expense, net
|
|
|
15
|
|
|
9
|
|
Income from continuing operations before income taxes
|
|
$
|
277
|
|
$
|
295
|
|
Income tax expense
|
|
|
79
|
|
|
88
|
|
Income from continuing operations
|
|
$
|
198
|
|
$
|
207
|
|
Income from discontinued operations, net of income taxes
|
|
$
|
-
|
|
$
|
5
|
|
Net income
|
|
$
|
198
|
|
$
|
212
|
|
|
|
|
|
|
Basic income per common share:
|
|
|
|
|
Income from continuing operations
|
|
$
|
0.47
|
|
$
|
0.47
|
|
Income from discontinued operations
|
|
|
-
|
|
|
0.01
|
|
Net income
|
|
$
|
0.47
|
|
$
|
0.48
|
|
Basic weighted average shares used in computation
|
|
|
414
|
|
|
436
|
|
|
|
|
|
|
Diluted income per common share:
|
|
|
|
|
Income from continuing operations
|
|
$
|
0.47
|
|
$
|
0.47
|
|
Income from discontinued operations
|
|
|
-
|
|
|
0.01
|
|
Net income
|
|
$
|
0.47
|
|
$
|
0.48
|
|
Diluted weighted average shares used in computation
|
|
|
415
|
|
|
438
|
|
|
Table 2
|
CA Technologies
|
Condensed Consolidated Balance Sheets
|
(in millions)
|
|
|
|
June 30,
|
|
March 31,
|
|
|
2016
|
|
2016
|
|
|
(unaudited)
|
|
|
Cash and cash equivalents
|
|
$
|
2,776
|
|
|
$
|
2,812
|
|
Trade accounts receivable, net
|
|
|
430
|
|
|
|
625
|
|
Other current assets
|
|
|
144
|
|
|
|
124
|
|
Total current assets
|
|
$
|
3,350
|
|
|
$
|
3,561
|
|
|
|
|
|
|
Property and equipment, net
|
|
$
|
229
|
|
|
$
|
242
|
|
Goodwill
|
|
|
6,084
|
|
|
|
6,086
|
|
Capitalized software and other intangible assets, net
|
|
|
725
|
|
|
|
795
|
|
Deferred income taxes
|
|
|
405
|
|
|
|
407
|
|
Other noncurrent assets, net
|
|
|
114
|
|
|
|
113
|
|
Total assets
|
|
$
|
10,907
|
|
|
$
|
11,204
|
|
|
|
|
|
|
Current portion of long-term debt
|
|
$
|
4
|
|
|
$
|
6
|
|
Deferred revenue (billed or collected)
|
|
|
2,027
|
|
|
|
2,197
|
|
Other current liabilities
|
|
|
607
|
|
|
|
691
|
|
Total current liabilities
|
|
$
|
2,638
|
|
|
$
|
2,894
|
|
|
|
|
|
|
Long-term debt, net of current portion
|
|
$
|
1,946
|
|
|
$
|
1,947
|
|
Deferred income taxes
|
|
|
2
|
|
|
|
3
|
|
Deferred revenue (billed or collected)
|
|
|
654
|
|
|
|
737
|
|
Other noncurrent liabilities
|
|
|
240
|
|
|
|
245
|
|
Total liabilities
|
|
$
|
5,480
|
|
|
$
|
5,826
|
|
|
|
|
|
|
Common stock
|
|
$
|
59
|
|
|
$
|
59
|
|
Additional paid-in capital
|
|
|
3,628
|
|
|
|
3,664
|
|
Retained earnings
|
|
|
6,666
|
|
|
|
6,575
|
|
Accumulated other comprehensive loss
|
|
|
(445
|
)
|
|
|
(416
|
)
|
Treasury stock
|
|
|
(4,481
|
)
|
|
|
(4,504
|
)
|
Total stockholders' equity
|
|
$
|
5,427
|
|
|
$
|
5,378
|
|
Total liabilities and stockholders' equity
|
|
$
|
10,907
|
|
|
$
|
11,204
|
|
|
Table 3
|
CA Technologies
|
Condensed Consolidated Statements of Cash Flows
|
(unaudited)
|
(in millions)
|
|
|
|
Three Months Ended
|
|
|
June 30,
|
|
|
2016
|
|
2015
|
Operating activities from continuing operations:
|
|
|
|
|
Net income
|
|
$
|
198
|
|
|
$
|
212
|
|
Income from discontinued operations
|
|
|
-
|
|
|
|
(5
|
)
|
Income from continuing operations
|
|
$
|
198
|
|
|
$
|
207
|
|
Adjustments to reconcile income from continuing operations to net
cash provided by operating activities:
|
|
|
|
|
Depreciation and amortization
|
|
|
86
|
|
|
|
87
|
|
Deferred income taxes
|
|
|
3
|
|
|
|
(10
|
)
|
Provision for bad debts
|
|
|
1
|
|
|
|
1
|
|
Share-based compensation expense
|
|
|
29
|
|
|
|
22
|
|
Other non-cash items
|
|
|
1
|
|
|
|
-
|
|
Foreign currency transaction (gains) losses
|
|
|
(2
|
)
|
|
|
3
|
|
Changes in other operating assets and liabilities, net of effect of
acquisitions:
|
|
|
|
|
Decrease in trade accounts receivable
|
|
|
193
|
|
|
|
228
|
|
Decrease in deferred revenue
|
|
|
(245
|
)
|
|
|
(239
|
)
|
(Decrease) increase in taxes payable, net
|
|
|
(41
|
)
|
|
|
27
|
|
Increase (decrease) in accounts payable, accrued expenses and other
|
|
|
8
|
|
|
|
(33
|
)
|
Decrease in accrued salaries, wages and commissions
|
|
|
(65
|
)
|
|
|
(83
|
)
|
Changes in other operating assets and liabilities
|
|
|
(5
|
)
|
|
|
(22
|
)
|
Net cash provided by operating activities - continuing operations
|
|
$
|
161
|
|
|
$
|
188
|
|
Investing activities from continuing operations:
|
|
|
|
|
Acquisitions of businesses, net of cash acquired, and purchased
software
|
|
$
|
(1
|
)
|
|
$
|
(37
|
)
|
Purchases of property and equipment
|
|
|
(8
|
)
|
|
|
(13
|
)
|
Net cash used in investing activities - continuing operations
|
|
$
|
(9
|
)
|
|
$
|
(50
|
)
|
Financing activities from continuing operations:
|
|
|
|
|
Dividends paid
|
|
$
|
(107
|
)
|
|
$
|
(110
|
)
|
Purchases of common stock
|
|
|
(50
|
)
|
|
|
(50
|
)
|
Notional pooling borrowings (repayments), net
|
|
|
4
|
|
|
|
(16
|
)
|
Debt repayments
|
|
|
(4
|
)
|
|
|
(5
|
)
|
Exercise of common stock options
|
|
|
13
|
|
|
|
4
|
|
Other financing activities
|
|
|
-
|
|
|
|
(23
|
)
|
Net cash used in financing activities - continuing operations
|
|
$
|
(144
|
)
|
|
$
|
(200
|
)
|
Effect of exchange rate changes on cash
|
|
$
|
(44
|
)
|
|
$
|
69
|
|
Net change in cash and cash equivalents - continuing operations
|
|
$
|
(36
|
)
|
|
$
|
7
|
|
Cash provided by operating activities - discontinued operations
|
|
$
|
-
|
|
|
$
|
5
|
|
Net effect of discontinued operations on cash and cash equivalents
|
|
$
|
-
|
|
|
$
|
5
|
|
(Decrease) increase in cash and cash equivalents
|
|
$
|
(36
|
)
|
|
$
|
12
|
|
Cash and cash equivalents at beginning of period
|
|
$
|
2,812
|
|
|
$
|
2,804
|
|
Cash and cash equivalents at end of period
|
|
$
|
2,776
|
|
|
$
|
2,816
|
|
|
Table 4
|
CA Technologies
|
Operating Segments
|
(unaudited)
|
(dollars in millions)
|
|
|
|
Three Months Ended June 30, 2016
|
|
|
Mainframe
|
|
Enterprise
|
|
|
|
|
|
|
Solutions (1)
|
|
Solutions (1)
|
|
Services (1)
|
|
Total
|
|
|
|
|
|
|
|
|
|
Revenue (2)
|
|
$
|
551
|
|
|
$
|
371
|
|
|
$
|
77
|
|
|
$
|
|
999
|
|
Expenses (3)
|
|
|
208
|
|
|
|
324
|
|
|
|
75
|
|
|
|
|
607
|
|
Segment profit
|
|
$
|
343
|
|
|
$
|
47
|
|
|
$
|
2
|
|
|
$
|
|
392
|
|
Segment operating margin
|
|
|
62
|
%
|
|
|
13
|
%
|
|
|
3
|
%
|
|
|
|
39
|
%
|
|
|
|
|
|
|
|
|
|
Segment profit
|
|
|
|
|
|
|
|
$
|
|
392
|
|
Less:
|
|
|
|
|
|
|
|
|
Purchased software amortization
|
|
|
|
|
|
|
|
|
|
43
|
|
Other intangibles amortization
|
|
|
|
|
|
|
|
|
|
5
|
|
Internally developed software products amortization
|
|
|
|
|
|
|
|
|
|
23
|
|
Share-based compensation expense
|
|
|
|
|
|
|
|
|
|
29
|
|
Other expenses, net (4)
|
|
|
|
|
|
|
|
|
|
-
|
|
Interest expense, net
|
|
|
|
|
|
|
|
|
|
15
|
|
Income from continuing operations before income taxes
|
|
|
|
|
|
|
|
$
|
|
277
|
|
|
|
|
|
Three Months Ended June 30, 2015
|
|
|
Mainframe
|
|
Enterprise
|
|
|
|
|
|
|
Solutions (1)
|
|
Solutions (1)
|
|
Services (1)
|
|
Total
|
|
|
|
|
|
|
|
|
|
Revenue (2)
|
|
$
|
560
|
|
|
$
|
338
|
|
|
$
|
79
|
|
|
$
|
|
977
|
|
Expenses (3)
|
|
|
211
|
|
|
|
290
|
|
|
|
71
|
|
|
|
|
572
|
|
Segment profit
|
|
$
|
349
|
|
|
$
|
48
|
|
|
$
|
8
|
|
|
$
|
|
405
|
|
Segment operating margin
|
|
|
62
|
%
|
|
|
14
|
%
|
|
|
10
|
%
|
|
|
|
41
|
%
|
|
|
|
|
|
|
|
|
|
Segment profit
|
|
|
|
|
|
|
|
$
|
|
405
|
|
Less:
|
|
|
|
|
|
|
|
|
Purchased software amortization
|
|
|
|
|
|
|
|
|
|
28
|
|
Other intangibles amortization
|
|
|
|
|
|
|
|
|
|
11
|
|
Internally developed software products amortization
|
|
|
|
|
|
|
|
|
|
32
|
|
Share-based compensation expense
|
|
|
|
|
|
|
|
|
|
22
|
|
Other expenses, net (4)
|
|
|
|
|
|
|
|
|
|
8
|
|
Interest expense, net
|
|
|
|
|
|
|
|
|
|
9
|
|
Income from continuing operations before income taxes
|
|
|
|
|
|
|
|
$
|
|
295
|
|
(1)
|
|
The Company's Mainframe Solutions and Enterprise Solutions segments
comprise its software business organized by the nature of the
Company's software offerings and the platform on which the products
operate. The Services segment comprises product implementation,
consulting, customer education and customer training, including
those directly related to the Mainframe Solutions and Enterprise
Solutions software that the Company sells to its customers.
|
|
|
|
(2)
|
|
The Company regularly enters into a single arrangement with a
customer that includes mainframe solutions, enterprise solutions and
services. The amount of contract revenue assigned to operating
segments is generally based on the manner in which the proposal is
made to the customer. The software product revenue is assigned to
the Mainframe Solutions and Enterprise Solutions segments based on
either: (1) a list price allocation method (which allocates a
discount in the total contract price to the individual products in
proportion to the list price of the product); (2) allocations
included within internal contract approval documents; or (3) the
value for individual software products as stated in the customer
contract. The price for the implementation, consulting, education
and training services is separately stated in the contract and these
amounts of contract revenue are assigned to the Services segment.
The contract value assigned to each operating segment is then
recognized in a manner consistent with the revenue recognition
policies the Company applies to the customer contract for purposes
of preparing the Consolidated Financial Statements.
|
|
|
|
(3)
|
|
Segment expenses include costs that are controllable by segment
managers (i.e., direct costs) and, in the case of the Mainframe
Solutions and Enterprise Solutions segments, an allocation of shared
and indirect costs (i.e., allocated costs). Segment-specific direct
costs include a portion of selling and marketing costs, licensing
and maintenance costs, product development costs and general and
administrative costs. Allocated segment costs primarily include
indirect and non-segment specific direct selling and marketing costs
and general and administrative costs that are not directly
attributable to a specific segment. The basis for allocating shared
and indirect costs between the Mainframe Solutions and Enterprise
Solutions segments is dependent on the nature of the cost being
allocated and is either in proportion to segment revenues or in
proportion to the related direct cost category. Expenses for the
Services segment consist of cost of professional services and other
direct costs included within selling and marketing and general and
administrative expenses. There are no allocated or indirect costs
for the Services segment.
|
|
|
|
(4)
|
|
Other expenses, net consists of costs associated with certain
foreign exchange derivative hedging gains and losses, and other
miscellaneous costs.
|
|
Table 5
|
CA Technologies
|
Constant Currency Summary
|
(unaudited)
|
(dollars in millions)
|
|
|
|
Three Months Ended June 30,
|
|
|
|
|
|
|
|
|
% Increase
|
|
|
|
|
|
|
% Increase
|
|
(Decrease)
|
|
|
|
|
|
|
(Decrease)
|
|
in Constant
|
|
|
2016
|
|
2015
|
|
in $ US
|
|
Currency (1)
|
|
|
|
|
|
|
|
|
|
Bookings
|
|
$
|
|
1,353
|
|
|
$
|
|
662
|
|
|
104
|
%
|
|
106
|
%
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
North America
|
|
$
|
|
669
|
|
|
$
|
|
652
|
|
|
3
|
%
|
|
3
|
%
|
International
|
|
|
|
330
|
|
|
|
|
325
|
|
|
2
|
%
|
|
2
|
%
|
Total revenue
|
|
$
|
|
999
|
|
|
$
|
|
977
|
|
|
2
|
%
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
Subscription and maintenance
|
|
$
|
|
826
|
|
|
$
|
|
836
|
|
|
(1
|
)%
|
|
(1
|
)%
|
Professional services
|
|
|
|
77
|
|
|
|
|
79
|
|
|
(3
|
)%
|
|
(2
|
)%
|
Software fees and other
|
|
|
|
96
|
|
|
|
|
62
|
|
|
55
|
%
|
|
55
|
%
|
Total revenue
|
|
$
|
|
999
|
|
|
$
|
|
977
|
|
|
2
|
%
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
Segment Revenue:
|
|
|
|
|
|
|
|
|
Mainframe solutions
|
|
$
|
|
551
|
|
|
$
|
|
560
|
|
|
(2
|
)%
|
|
(1
|
)%
|
Enterprise solutions
|
|
$
|
|
371
|
|
|
|
|
338
|
|
|
10
|
%
|
|
10
|
%
|
Services
|
|
|
|
77
|
|
|
|
|
79
|
|
|
(3
|
)%
|
|
(2
|
)%
|
|
|
|
|
|
|
|
|
|
Total expenses before interest and income taxes:
|
|
|
|
|
|
|
|
|
Total non-GAAP (2)
|
|
$
|
|
607
|
|
|
$
|
|
572
|
|
|
6
|
%
|
|
8
|
%
|
Total GAAP
|
|
|
|
707
|
|
|
|
|
673
|
|
|
5
|
%
|
|
8
|
%
|
(1)
|
|
Constant currency information is presented to provide a framework
for assessing how the Company's underlying businesses performed
excluding the effect of foreign currency rate fluctuations. To
present this information, current and comparative prior period
results for entities reporting in currencies other than U.S. dollars
are converted into U.S. dollars at the exchange rate in effect on
March 31, 2016, which was the last day of the prior fiscal year.
Constant currency excludes the impacts from the Company's hedging
program.
|
|
|
|
(2)
|
|
Refer to Table 7 for a reconciliation of total expenses before
interest and income taxes to total non-GAAP operating expenses.
|
|
|
|
|
|
Certain non-material differences may arise versus actual from impact
of rounding.
|
|
Table 6
|
CA Technologies
|
Reconciliation of Select GAAP Measures to Non-GAAP Measures
|
(unaudited)
|
(dollars in millions)
|
|
|
|
Three Months Ended
|
|
|
June 30,
|
|
|
2016
|
|
2015
|
GAAP net income
|
|
$
|
|
198
|
|
|
$
|
|
212
|
|
GAAP income from discontinued operations, net of income taxes
|
|
|
|
-
|
|
|
|
|
(5
|
)
|
GAAP income from continuing operations
|
|
$
|
|
198
|
|
|
$
|
|
207
|
|
GAAP income tax expense
|
|
|
|
79
|
|
|
|
|
88
|
|
Interest expense, net
|
|
|
|
15
|
|
|
|
|
9
|
|
GAAP income from continuing operations before interest and income
taxes
|
|
$
|
|
292
|
|
|
$
|
|
304
|
|
GAAP operating margin (% of revenue) (1)
|
|
|
|
29
|
%
|
|
|
|
31
|
%
|
|
|
|
|
|
Non-GAAP adjustments to expenses:
|
|
|
|
|
Costs of licensing and maintenance (2)
|
|
$
|
|
2
|
|
|
$
|
|
2
|
|
Cost of professional services (2)
|
|
|
|
1
|
|
|
|
|
1
|
|
Amortization of capitalized software costs (3)
|
|
|
|
66
|
|
|
|
|
60
|
|
Selling and marketing (2)
|
|
|
|
10
|
|
|
|
|
8
|
|
General and administrative (2)
|
|
|
|
11
|
|
|
|
|
7
|
|
Product development and enhancements (2)
|
|
|
|
5
|
|
|
|
|
4
|
|
Depreciation and amortization of other intangible assets (4)
|
|
|
|
5
|
|
|
|
|
11
|
|
Other expenses, net (5)
|
|
|
|
-
|
|
|
|
|
8
|
|
Total Non-GAAP adjustment to operating expenses
|
|
$
|
|
100
|
|
|
$
|
|
101
|
|
Non-GAAP income from continuing operations before interest and
income taxes
|
|
$
|
|
392
|
|
|
$
|
|
405
|
|
Non-GAAP operating margin (% of revenue) (6)
|
|
|
|
39
|
%
|
|
|
|
41
|
%
|
|
|
|
|
|
Interest expense, net
|
|
|
|
15
|
|
|
|
|
9
|
|
GAAP income tax expense
|
|
|
|
79
|
|
|
|
|
88
|
|
Non-GAAP adjustment to income tax expense (7)
|
|
|
|
29
|
|
|
|
|
25
|
|
Non-GAAP income tax expense
|
|
$
|
|
108
|
|
|
$
|
|
113
|
|
Non-GAAP income from continuing operations
|
|
$
|
|
269
|
|
|
$
|
|
283
|
|
(1)
|
|
GAAP operating margin is calculated by dividing GAAP income from
continuing operations before interest and income taxes by total
revenue (refer to Table 1 for total revenue).
|
|
|
|
(2)
|
|
Non-GAAP adjustment consists of share-based compensation.
|
|
|
|
(3)
|
|
For the three month periods ending June 30, 2016 and 2015, non-GAAP
adjustment consists of $43 million and $28 million of purchased
software amortization and $23 million and $32 million of internally
developed software products amortization, respectively.
|
|
|
|
(4)
|
|
Non-GAAP adjustment consists of other intangibles amortization.
|
|
|
|
(5)
|
|
Non-GAAP adjustment consists gains and losses since inception of
hedges that mature within the quarter, but excludes gains and losses
of hedges that do not mature within the quarter.
|
|
|
|
(6)
|
|
Non-GAAP operating margin is calculated by dividing non-GAAP income
from continuing operations before interest and income taxes by total
revenue (refer to Table 1 for total revenue).
|
|
|
|
(7)
|
|
The full year non-GAAP income tax expense is different from GAAP
income tax expense because of the difference in non-GAAP income from
continuing operations before income taxes. On an interim basis, this
difference would also include a difference in the impact of discrete
and permanent items where for GAAP purposes the effect is recorded
in the period such items arise, but for non-GAAP such items are
recorded pro rata to the fiscal year's remaining reporting periods.
|
|
|
|
|
|
Refer to the discussion of non-GAAP financial measures included in
the accompanying press release for additional information.
|
|
|
|
|
|
Certain non-material differences may arise versus actual from impact
of rounding.
|
|
Table 7
|
CA Technologies
|
Reconciliation of GAAP to Non-GAAP
|
Operating Expenses and Diluted Earnings per Share
|
(unaudited)
|
(in millions, except per share amounts)
|
|
|
|
Three Months Ended
|
|
|
June 30,
|
Operating Expenses
|
|
2016
|
|
2015
|
|
|
|
|
|
Total expenses before interest and income taxes
|
|
$
|
707
|
|
|
$
|
673
|
|
|
|
|
|
|
Non-GAAP operating adjustments:
|
|
|
|
|
Purchased software amortization
|
|
|
43
|
|
|
|
28
|
|
Other intangibles amortization
|
|
|
5
|
|
|
|
11
|
|
Internally developed software products amortization
|
|
|
23
|
|
|
|
32
|
|
Share-based compensation
|
|
|
29
|
|
|
|
22
|
|
Other expenses, net (1)
|
|
|
-
|
|
|
|
8
|
|
Total non-GAAP operating adjustment
|
|
$
|
100
|
|
|
$
|
101
|
|
|
|
|
|
|
Total non-GAAP operating expenses
|
|
$
|
607
|
|
|
$
|
572
|
|
|
|
|
|
Three Months Ended
|
|
|
June 30,
|
Diluted EPS from Continuing Operations
|
|
2016
|
|
2015
|
|
|
|
|
|
GAAP diluted EPS from continuing operations
|
|
$
|
0.47
|
|
|
$
|
0.47
|
|
|
|
|
|
|
Non-GAAP adjustments:
|
|
|
|
|
Purchased software amortization
|
|
|
0.10
|
|
|
|
0.06
|
|
Other intangibles amortization
|
|
|
0.01
|
|
|
|
0.02
|
|
Internally developed software products amortization
|
|
|
0.06
|
|
|
|
0.07
|
|
Share-based compensation
|
|
|
0.07
|
|
|
|
0.05
|
|
Other expenses, net (1)
|
|
|
-
|
|
|
|
0.02
|
|
Tax effect of non-GAAP adjustments
|
|
|
(0.07
|
)
|
|
|
(0.06
|
)
|
Non-GAAP effective tax rate adjustments (2)
|
|
|
-
|
|
|
|
0.01
|
|
Total non-GAAP adjustment
|
|
$
|
0.17
|
|
|
$
|
0.17
|
|
|
|
|
|
|
Non-GAAP diluted EPS from continuing operations
|
|
$
|
0.64
|
|
|
$
|
0.64
|
|
(1)
|
|
Other expenses (gains), net consists of costs associated with
certain foreign exchange derivative hedging gains and losses, and
other miscellaneous costs.
|
|
|
|
(2)
|
|
The non-GAAP effective tax rate is equal to the full year GAAP
effective tax rate, therefore no adjustment is required on an annual
basis. On an interim basis, the difference in non-GAAP income tax
expense and GAAP income tax expense relates to the difference in
non-GAAP income from continuing operations before income taxes, and
includes a difference in the impact of discrete and permanent items
where for GAAP purposes the effect is recorded in the period such
items arise but for non-GAAP purposes such items are recorded pro
rata to the fiscal year's remaining reporting periods.
|
|
|
|
|
|
Refer to the discussion of non-GAAP financial measures included in
the accompanying press release for additional information.
|
|
|
|
|
|
Certain non-material differences may arise versus actual from impact
of rounding.
|
|
Table 8
|
CA Technologies
|
Effective Tax Rate Reconciliation
|
GAAP and Non-GAAP
|
(unaudited)
|
(dollars in millions)
|
|
|
|
Three Months Ended
|
|
|
June 30, 2016
|
|
|
GAAP
|
|
Non-GAAP
|
|
|
|
|
|
Income from continuing operations before interest and income taxes (1)
|
|
$
|
292
|
|
|
$
|
392
|
|
Interest expense, net
|
|
|
15
|
|
|
|
15
|
|
Income from continuing operations before income taxes
|
|
$
|
277
|
|
|
$
|
377
|
|
|
|
|
|
|
Statutory tax rate
|
|
|
35
|
%
|
|
|
35
|
%
|
|
|
|
|
|
Tax at statutory rate
|
|
$
|
97
|
|
|
$
|
132
|
|
Adjustments for discrete and permanent items (2)
|
|
|
(18
|
)
|
|
|
(24
|
)
|
Total tax expense
|
|
$
|
79
|
|
|
$
|
108
|
|
|
|
|
|
|
Effective tax rate (3)
|
|
|
28.5
|
%
|
|
|
28.6
|
%
|
|
|
|
Three Months Ended
|
|
|
June 30, 2015
|
|
|
GAAP
|
|
Non-GAAP
|
|
|
|
|
|
Income from continuing operations before interest and income taxes (1)
|
|
$
|
304
|
|
|
$
|
405
|
|
Interest expense, net
|
|
|
9
|
|
|
|
9
|
|
Income from continuing operations before income taxes
|
|
$
|
295
|
|
|
$
|
396
|
|
|
|
|
|
|
Statutory tax rate
|
|
|
35
|
%
|
|
|
35
|
%
|
|
|
|
|
|
Tax at statutory rate
|
|
$
|
103
|
|
|
$
|
139
|
|
Adjustments for discrete and permanent items (2)
|
|
|
(15
|
)
|
|
|
(26
|
)
|
Total tax expense
|
|
$
|
88
|
|
|
$
|
113
|
|
|
|
|
|
|
Effective tax rate (3)
|
|
|
29.8
|
%
|
|
|
28.5
|
%
|
(1)
|
|
Refer to Table 6 for a reconciliation of income from continuing
operations before interest and income taxes on a GAAP basis to
income from continuing operations before interest and income taxes
on a non-GAAP basis.
|
|
|
|
(2)
|
|
The effective tax rate for GAAP generally includes the impact of
discrete and permanent items in the period such items arise, whereas
the effective tax rate for non-GAAP generally allocates the impact
of such items pro rata to the fiscal year's remaining reporting
periods.
|
|
|
|
(3)
|
|
The effective tax rate on GAAP and non-GAAP income from continuing
operations is the Company's provision for income taxes expressed as
a percentage of GAAP and non-GAAP income from continuing operations
before income taxes, respectively. The non-GAAP effective tax rate
is equal to the full year GAAP effective tax rate. On an interim
basis, the effective tax rates are determined based on an estimated
effective full year tax rate after the adjustments for the impacts
of certain discrete items (such as changes in tax rates,
reconciliations of tax returns to tax provisions and resolutions of
tax contingencies).
|
|
|
|
|
|
Refer to the discussion of non-GAAP financial measures included in
the accompanying press release for additional information.
|
|
|
|
|
|
Certain non-material differences may arise versus actual from impact
of rounding.
|
|
Table 9
|
CA Technologies
|
Reconciliation of Projected GAAP Metrics to Projected Non-GAAP
Metrics
|
(unaudited)
|
|
|
|
Fiscal Year Ending
|
Projected Diluted EPS from Continuing
Operations
|
|
March 31, 2017
|
|
|
|
|
|
|
|
|
Projected GAAP diluted EPS from continuing operations range
|
|
$
|
1.88
|
|
|
to
|
|
$
|
1.93
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
Purchased software amortization
|
|
|
0.37
|
|
|
|
|
|
0.37
|
|
Other intangibles amortization
|
|
|
0.03
|
|
|
|
|
|
0.03
|
|
Internally developed software products amortization
|
|
|
0.19
|
|
|
|
|
|
0.19
|
|
Share-based compensation
|
|
|
0.26
|
|
|
|
|
|
0.26
|
|
Tax effect of non-GAAP adjustments
|
|
|
(0.24
|
)
|
|
|
|
|
(0.24
|
)
|
Total non-GAAP adjustment
|
|
$
|
0.61
|
|
|
|
|
$
|
0.61
|
|
|
|
|
|
|
|
|
|
Projected non-GAAP diluted EPS from continuing operations range
|
|
$
|
2.49
|
|
|
to
|
|
$
|
2.54
|
|
|
|
|
|
|
|
Fiscal Year Ending
|
Projected Operating Margin
|
|
March 31, 2017
|
|
|
|
|
|
|
|
|
Projected GAAP operating margin
|
|
|
|
29
|
%
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating adjustments:
|
|
|
|
|
|
|
|
Purchased software amortization
|
|
|
|
4
|
%
|
|
|
Other intangibles amortization
|
|
|
|
0
|
%
|
|
|
Internally developed software products amortization
|
|
|
|
2
|
%
|
|
|
Share-based compensation
|
|
|
3
|
%
|
|
|
Total non-GAAP operating adjustment
|
|
|
9
|
%
|
|
|
|
|
|
|
|
|
|
|
Projected non-GAAP operating margin
|
|
|
38
|
%
|
|
|
|
|
Refer to the discussion of non-GAAP financial measures included in
the accompanying press release for additional information.
|
|
|
Certain non-material differences may arise versus actual from impact
of rounding.
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160727006526/en/
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|