Press Releases

Intuit Signs Agreement To Acquire Eclipse, Inc.
Raises Fiscal 2003 Guidance
MOUNTAIN VIEW, Calif. - June 27, 2002 - Intuit Inc. (NASDAQ: INTU) today announced it has signed a definitive agreement to acquire Eclipse, Inc., a leading provider of business management software solutions for wholesale durable goods distributors. When completed, the acquisition will provide an additional platform for Intuit to drive sustained revenue and profit growth. Accordingly, Intuit has raised the upper ends of its fiscal year 2003 guidance ranges for revenue, pro forma operating income and pro forma earnings per share.

Executing on Intuit's "Right for My Business" Strategy
"The acquisition of Eclipse is another example of Intuit executing its 'Right for My Business' small business strategy and entering a new segment," said Steve Bennett, Intuit's president and chief executive officer. "This acquisition fits all three elements of our strategy -- serving larger and more complex businesses, providing solutions beyond accounting and providing industry-specific solutions. Wholesale distribution is an intensely competitive business with very tight margins. Eclipse's solutions enable distributors to maximize productivity, revenue and profitability by managing every critical aspect of their business - from order processing and inventory control to accounting, purchasing and customer service."

Penetrating a Large, Untapped Opportunity
The acquisition of Eclipse will enable Intuit to become a key provider in the wholesale distribution software segment, which has annual sales of approximately $300 million today and significant opportunity for growth in the future. "A new Intuit-Eclipse brand has incredible opportunity," Bennett said. "The vast majority of distributors still rely on inflexible, legacy systems and are great candidates for technology solutions that make their businesses more competitive and profitable. By combining Intuit's strong brand and resources with Eclipse's highly talented management team and superior products, we believe we can further penetrate this large untapped opportunity and accelerate Eclipse's growth."

Bennett said Intuit will also explore opportunities to provide the more than 200,000 QuickBooks customers involved in wholesale distribution with more robust solutions.

Expanded Small Business Portfolio Driving Faster Growth
"Our 'Right for My Business' strategy is working," said Bennett. "We believe Eclipse and the other companies we've acquired - all of which have great products and strong track records - will drive stronger revenue growth for Intuit." Bennett noted that revenue from its November 2001 acquisition of OMware, a provider of business management solutions for construction companies, has grown significantly since the acquisition closed. Even stronger growth is expected in fiscal 2003.

Eclipse marks the fifth acquisition Intuit has made or announced in fiscal 2002 to execute its "Right for My Business" strategy. In addition to OMware, Intuit has acquired American Fundware, which provides business management software solutions to public sector organizations, and has announced plans to acquire Management Reports, Inc., which provides business management software solutions for commercial and residential property managers. In early June, Intuit also acquired CBS Payroll, which provides a full-service outsourced payroll solution.

A Leader in Distribution Software
Founded in 1991, privately held Eclipse is a leading provider of business management software solutions for wholesale distributors in a number of market segments, including plumbing-heating-cooling-piping, electrical, building materials, industrial, janitorial and floor coverings. The company's flagship product, the Eclipse Distribution Management System, is a fully integrated, real-time ERP (enterprise resource planning) system that enables distributors to automate their business processes, penetrate new segments and better serve their customers.

"Eclipse and Intuit both have strong track records of customer-driven innovation," said Michael London, an Eclipse founder and the company's president and chief executive officer. "Both companies have grown and succeeded because we understand our customers and the challenges they face - and then deliver innovative, world-class solutions that help them run their businesses better. Everyone on the Eclipse management team is excited about the opportunity we have going forward with Intuit."

Eclipse supports more than 450 customers and 25,000 active users throughout the U.S. The vast majority of Eclipse customers have 250 or fewer employees. The company is headquartered in Shelton, Conn., with offices in Boulder, Colo. and West Yarmouth, Mass.

Intuit currently plans to operate Eclipse as a separate business unit led by London and will offer Eclipse's current products and services using both the Intuit and Eclipse brands. London will become a vice president at Intuit reporting to Bennett, and virtually all of Eclipse's 220 employees will be asked to stay with the business, including the company's other five founders. Eclipse will continue to be based in Shelton.

Intuit Raises Fiscal 2003 Guidance to Reflect the Eclipse Acquisition
Intuit is raising the upper ends of its financial guidance ranges for fiscal 2003 to reflect the acquisition of Eclipse. New guidance is:

  • Revenue of $1.650 billion to $1.750 billion, or growth of 22-29 percent over fiscal 2002. (Intuit's previous guidance, provided on June 20, was for fiscal 2003 revenue of $1.650 billion to $1.725 billion, or growth of 22-27 percent.)
  • Pro forma operating income of $385 million to $410 million, or growth of 40-49 percent over fiscal 2002. (Intuit's previous guidance was for fiscal 2003 pro forma operating income of $385 million to $405 million, or growth of 40-47 percent.)
  • Pro forma earnings per share of $1.25 to $1.32, or growth of 32-39 percent over fiscal 2002. (Intuit's previous guidance is for earnings per share of $1.25-$1.31, or growth of 32-38 percent.)

See the notes at the end of the press release for an explanation of pro forma financial information.

Terms of Agreement
Under the terms of the agreement, Intuit will acquire substantially all of Eclipse's assets for approximately $85 million in cash. Intuit expects Eclipse to contribute between $40 million and $50 million in revenue in fiscal year 2003 and expects it to be slightly accretive to pro forma earnings per share in fiscal 2003. The acquisition is expected to close near the end of the fourth quarter of Intuit's fiscal 2002 (May 1, 2002 - July 31, 2002) or in early fiscal 2003, so the company does not expect the acquisition to have a material impact on fiscal 2002 results.

About Intuit Inc.
Intuit Inc. (NASDAQ: INTU) is the leading provider of financial software and Web-based services for consumers, small businesses and accounting professionals. Its flagship products and services, including Quicken®, QuickBooks®, Quicken TurboTax® and Quicken Loans® simplify personal finance, small business management and payroll processing, tax preparation and filing and home loans.

Founded in 1983, Intuit has annual revenue of more than $1.3 billion and reaches 25 million customers with nearly 6,000 employees in 13 states and four countries. More information can be found at www.Intuit.com.
 
About Eclipse, Inc.
Eclipse, Inc., is the leading provider of enterprise software for end-to-end, supply-chain management. The company's flagship product, Eclipse Distribution Management System (DMS), is a fully-integrated, real-time ERP system designed for wholesale distributors. Eclipse DMS, and its extended suite of Companion Products, provides the power and flexibility for companies of all sizes to automate their business processes, penetrate new markets and improve their ability to serve existing customers. Integrated business applications include Business Intelligence, CRM, E-Commerce, Financials, Inventory & Purchasing, Mobile Business, Sales & Pricing and Warehouse Logistics. Collectively, these components work together to optimize the flow of information throughout the supply chain. Benefits include improved business efficiency, increased inventory turns, reduced transaction costs and enhanced customer service. For more information call 203-926-2641, send email to info@eclipseinc.com, or visit www.eclipseinc.com.
 

Information About Pro Forma Financial Information; Intuit's Policy on Providing Guidance; Cautions about Forward Looking Statements
Pro forma financial information is not prepared in accordance with generally accepted accounting principles. Pro forma operating income excludes acquisition-related charges, such as amortization of goodwill and intangibles and impairment charges, and amortization of purchased software and purchased research and development. Pro forma earnings per share exclude gains and losses on marketable securities, gains and losses on divestitures and the tax effects of these transactions. Because there are no industry standards for presenting pro forma results, the method Intuit uses may differ from the methods used by other companies.

Intuit's policy is to not confirm, update or otherwise comment on its financial projections except in compliance with Regulation FD. The projections in the guidance provided above are forward-looking statements and are subject to a number of risks and uncertainties as described below.

This press release contains forward-looking statements about events that have not yet occurred. For example, statements about future financial performance and statements in the future tense are forward-looking statements. Actual results may differ materially from the company's expectations because of risks and uncertainties about the future. Intuit will not necessarily update information in this press release if any forward-looking statement later turns out to be inaccurate.

Risks and uncertainties affecting the proposed acquisition of Eclipse include the following:

  • The closing of the transaction is subject to standard closing conditions, including but not limited to various regulatory approvals.
  • The anticipated benefits of Eclipse's products and services to Intuit (including but not limited to the expected financial impact for fiscal 2003) will depend on a number of variables that could impact Intuit's ability acquire and retain customers, including the rate at which potential customers are willing to replace proprietary legacy systems; and the company's ability to attract a broader spectrum of customers through new or existing products and distribution channels.
  • Current economic and market conditions, including ongoing consolidation in target customer markets, and reduced levels of spending on information technology, could have a negative impact on customer purchasing decisions.
  • Integration of acquired businesses subjects Intuit to risks and uncertainties associated with retaining and compensating the personnel of acquired companies.
  • Integrating Eclipse and Intuit will create challenges for Intuit's operational, financial and management information systems.
  • The acquisition, if completed, could have a negative impact on Intuit's operating results if the integration poses greater than anticipated challenges and risks.

Risks and uncertainties affecting the company's fiscal 2003 financial guidance provided in this press release include the following:

  • If for any reason the acquisition of Eclipse is not completed, the updated guidance levels provided in this press release may not be realized. Furthermore, even if the acquisition is completed in a timely manner, there are a number of risks and uncertainties that may affect Intuit's ability to achieve the guidance levels, including those described below.
  • The company's revenue and earnings are highly seasonal, which causes significant quarterly fluctuations in its revenue and net income.
  • Acquisition-related charges can substantially reduce the company's net income, and cause significant fluctuations in net income. The company plans to adopt new Financial Accounting Standards Board guidelines relating to accounting for goodwill in fiscal 2003. Under the new guidelines, the company's acquisition-related charges may be less predictable in any given reporting period, as the company could incur less frequent, but larger, impairment charges related to goodwill.
  • It is too early to ensure that the company's "Right for My Business" strategy will generate substantial and sustained revenue growth in the small business accounting and business management segments.
  • The company faces competitive pressures in all of its businesses, and particularly in its consumer tax preparation software and services business. This can have a negative impact on the company's revenue, profitability and market position. In particular, if federal and/or state government agencies are ultimately successful in their efforts to provide tax preparation and filing services to consumers, it could have a significant negative impact on the company's financial results in future years.
  • The company does not expect that the revenue and profit growth rates experienced by its payroll businesses during the past two years will be sustainable long-term, either on a year-over-year basis or on a sequential quarter basis.
  • The company relies heavily on third-party vendors in connection with its primary retail desktop software product launches and replenishing product in the retail channel after the primary launch. If a vendor fails to perform, it could have severe negative consequences for the company's software businesses.
  • Integrating acquired businesses creates challenges for the company's operational, financial and management information systems, as well as for its product development processes. If the company is unable to adequately address these and other issues presented by growth through acquisitions, the company may not fully realize the intended benefits (including financial benefits) of its acquisitions.
  • If the company fails to maintain reliable and responsive service levels for its electronic tax offerings, it could lose revenue and customers.
  • The company faces risks relating to customer privacy and security and increasing government regulation, which could hinder the growth of its businesses.
  • Despite the company's efforts to adequately staff and equip its customer service and technical support operations, it cannot always respond promptly to customer requests for assistance.
  • Actual product returns may exceed the company's product return reserves, particularly for the company's tax preparation software.
  • A continuation of the recent general decline in economic conditions could lead to significantly reduced demand for the company's products and services.
  • The company's business operations depend on the efficient and uninterrupted operation of a large number of computer and communications hardware and software systems, which are vulnerable to damage or interruption from electrical power interruptions, telecommunication failures, earthquakes, fires, floods, terrorist activities and their aftermath, and other similar events. Any significant interruptions in the company's ability to conduct its business operations would reduce its revenue and operating income.

Additional information about factors that could affect future results and events is included in Intuit's fiscal 2001 Form10-K and subsequent reports filed with the Securities and Exchange Commission, and at www.intuit.com/company/investors/considerations.html

Intuit, the Intuit logo, Quicken, QuickBooks, Quicken Loans, QuickBooks Pro, QuickBase, TurboTax, ProSeries and Lacerte, among others, are registered trademarks and/or registered service marks of Intuit Inc. in the United States and other countries. Quicken.com and Intuit Master Builder, among others, are trademarks and/or service marks of Intuit Inc., or one of its subsidiaries, in the United States and other countries. Other parties' trademarks or service marks are the property of their respective owners and should be treated as such.