ISLANDIA, N.Y., Jan 24, 2012 /PRNewswire/
-- CA Technologies (NASDAQ:CA) today announced
that its Board of Directors has approved a capital allocation
program that targets the return of up to $2.5 billion to CA Technologies shareholders
through the fiscal year ending March
31, 2014.
The Company's capital allocation program plans to return
approximately 80 percent of expected cumulative free cash flow to
shareholders through fiscal 2014. This includes a planned
increase in the annual dividend from $0.20 to $1.00 per
common share and the authorization to repurchase up to $1.5 billion in CA Technologies common stock,
including approximately $230 million
remaining under the Company's current share repurchase
authorization. Approximately $500
million of the planned repurchase is expected to be an
accelerated share repurchase pursuant to an agreement executed
in the Company's fiscal fourth quarter ending March 31, 2012.
"Today's announcement is an extension of the strategic and
operational priorities we outlined last summer to build long-term
value for shareholders," said CA Technologies Chief Executive
Officer Bill McCracken. "Our third
quarter performance and positive operating momentum reinforce our
belief that we have the right strategic plan in place. Our clear
priorities are to continue to improve operating performance, return
capital to shareholders and maintain a strong and efficient balance
sheet.
"We are committed to delivering enhanced shareholder value
through a significant return of cash directly to shareholders
balanced with continued investment in our future to further improve
our strategic market position and deliver superior mainframe,
enterprise and cloud solutions and services to our customers,"
continued McCracken. "The dividend increase and share repurchase
authorization underscore the Board and management's confidence in
the Company's long-term business outlook and ability to generate
significant free cash flow on a consistent basis."
Additional Details on the Capital Allocation Program
On January 23, 2012 the Company
declared a quarterly dividend of $0.25 per common share payable on March 13, 2012 to shareholders of record at the
close of business on February 14,
2012. At its new annualized rate of $1.00 per share, CA Technologies dividend will
represent a yield of approximately 4.5 percent, based on CA
Technologies closing price of $22.44
on January 23, 2012.
The timing and amount of share repurchases will be determined by
the Company's management based on its evaluation of market
conditions, trading price, legal requirements and other factors.
The share repurchase program is expected to be funded by the
Company's available cash on hand.
CA Technologies has anticipated in its strategic plans
acquisition activity in the range of $300 to
$500 million per year on average through fiscal 2014,
focused on accelerating key technical capabilities. The Company
expects to invest approximately $600
million on average per year in research and development over
that same time frame.
Multi-Year Financial Targets
CA Technologies continues to expect over the three-year time
horizon ending March 31, 2015 an
acceleration to mid-single digit constant currency organic revenue
growth, non-GAAP operating margin expansion of 100 basis points
annually, low double digit non-GAAP diluted earnings per share
compound annual growth rate in constant currency, high single digit
cash flow from operations compound annual growth rate in constant
currency, and a non-GAAP tax rate of between 28 percent and 30
percent. Please also see the information under the heading Non-GAAP
Financial Measures below.*
The Company intends to provide quarterly updates regarding
shares repurchased under its capital allocation program.
Additionally, today CA Technologies announced results of the
Company's fiscal 2012 third quarter ended December 31, 2011. Details about CA Technologies
third quarter results, capital allocation program and commitment to
sustainable, long-term total shareholder returns can be found in
the Investor Relations section of the Company's website
at www.ca.com.
CA Technologies expects to provide annual guidance for fiscal
year 2013 during its fourth earnings call in early May 2012.
* For the non-GAAP projections in this paragraph, the Company is
unable to provide a reconciliation to the GAAP equivalents because
the information is not available without unreasonable
effort.
Cautionary Statement Regarding Forward-Looking Statements
The declaration and payment of future dividends is subject to
the determination of the CA Technologies Board of Directors, in its
sole discretion, after considering various factors, including CA
Technologies' financial condition, historical and forecast
operating results, and available cash flow, as well as any
applicable laws and contractual covenants and any other relevant
factors. CA Technologies' practice regarding payment of
dividends may be modified at any time and from time to time.
Repurchases under the Company's stock repurchase program are
expected to be made with cash on hand and 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, which is authorized through
fiscal year 2014, 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) 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, increasing sales in new and emerging enterprises and
markets, enabling the sales force to sell new products, improving
the Company's brand in the marketplace and ensuring the Company's
set of cloud computing, Software-as-a-Service and 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; global economic factors or political
events beyond the Company's control; general economic conditions
and credit constraints, or unfavorable economic conditions in a
particular region, industry or business sector; failure to expand
partner programs; the ability to adequately manage and evolve
financial reporting and managerial systems and processes;
acquisition opportunities that may or may not arise; the ability to
integrate acquired companies and products into existing businesses;
competition in product and service offerings and pricing; the
ability to retain and attract qualified key personnel; the ability
to adapt to rapid technological and market changes; the ability of
the Company's products to remain compatible with ever-changing
operating environments; access to software licensed from third
parties; use of software from open source code sources; discovery
of errors in the Company's software and potential product liability
claims; any significant amounts of debt and possible future credit
rating changes; the failure to protect the Company's intellectual
property rights and source code; fluctuations in the number, terms
and duration of our license agreements as well as the timing of
orders from customers and channel partners; reliance upon large
transactions with customers; risks associated with sales to
government customers; breaches of the Company's software products
and the Company's and customers' data centers and IT environments;
third-party claims of intellectual property infringement or royalty
payments; fluctuations in foreign currencies; failure to
effectively execute the Company's workforce reductions; successful
outsourcing of various functions to third parties; potential tax
liabilities; 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
our assumptions prove incorrect, actual results may vary materially
from those described herein as believed, planned, anticipated,
expected, estimated or targeted. 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.
Non-GAAP Financial Measures
This news release includes 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 operations and
diluted earnings per share exclude the following items: non-cash
amortization of purchased software and other intangibles,
share-based compensation, pre-fiscal year 2010 restructuring
and certain other gains and losses, which includes recoveries and
certain costs associated with derivative litigation matters and
includes 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. Prior to fiscal year 2011,
non-GAAP income also excludes the interest on convertible bonds.
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 operations,
respectively. Such 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 such items arise and the effective tax rate for non-GAAP
income generally allocating the impact of discrete items pro rata
to the fiscal year's remaining reporting periods. Free cash flow
excludes purchases of property, equipment and capitalized software
development costs. We present constant currency information to
provide a framework for assessing how our 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 US dollars are converted into US dollars at
the exchange rate in effect on March 31,
2011, which was the last day of our prior fiscal year.
Constant currency excludes the impacts from the Company's hedging
program. 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. For projections of Non-GAAP performance metrics,
the Company is unable to provide a reconciliation to the GAAP
equivalents because the information is not available without
unreasonable effort. For the current period, investors are
encouraged to review the reconciliation of the non-GAAP financial
measures used in the earnings news release to their most directly
comparable GAAP financial measures, which are attached to that news
release.
(Logo:
http://photos.prnewswire.com/prnh/20100516/NY05617LOGO )
About CA Technologies
CA Technologies (NASDAQ: CA) is an IT management software and
solutions company with expertise across all IT environments — from
mainframe and distributed, to virtual and cloud. CA Technologies
manages and secures IT environments and enables customers to
deliver more flexible IT services. CA Technologies innovative
products and services provide the insight and control essential for
IT organizations to power business agility. The majority of the
Global Fortune 500 relies on CA Technologies to manage evolving IT
ecosystems. For additional information, visit CA Technologies at
www.ca.com.
Follow CA Technologies
- Twitter
- Social Media Page
- Press Releases
- Podcasts
Copyright © 2012 CA, Inc. All Rights Reserved. One CA Plaza,
Islandia, N.Y. 11749. All other trademarks, trade names,
service marks, and logos referenced herein belong to their
respective companies.
Contacts:
|
Bill
Hughes
|
Kelsey
Doherty
|
|
CA
Technologies
|
Investor
Relations
|
|
(212)
415-6828
|
(212)
415-6844
|
|
william.hughes@ca.com
|
kelsey.doherty@ca.com
|
SOURCE CA Technologies