Press Releases

Intuit Reiterates Fiscal 2003 Financial Guidance; Outlines Plans To Sustain Strong Growth
Company Forecasts Revenue Growth of 25-33 Percent in Fiscal 2003 and Pro Forma Operating Income Growth of 42-50 Percent
MOUNTAIN VIEW, Calif. - September 17, 2002 - Intuit Inc. (NASDAQ: INTU), a leading provider of business and financial management solutions for consumers, businesses and accounting professionals, today reiterated its guidance for fiscal 2003 revenue and profit growth and outlined plans to drive sustainable growth in the years ahead. The information is being provided in a meeting with financial and industry analysts this afternoon at Intuit's headquarters.

"Intuit has become a profitable growth machine," said Steve Bennett, Intuit's president and chief executive officer. "We delivered strong results in fiscal 2002, and expect even stronger growth in fiscal 2003. We have chosen the businesses we're in very deliberately - businesses with steady demand and where we have a sustainable and durable advantage. Within those businesses, we're pursuing unmet or under-served customer needs, creating additional, large growth opportunities. We've added strategic and operational rigor to our core competence of customer-driven innovation to improve execution and better capitalize on these multiple opportunities."

Making Taxes less Taxing: Strategy for Driving Growth in Consumer Tax Unveiled
Intuit announced its strategy for driving sustainable growth in its consumer tax business, which represented 26 percent of the company's revenue in fiscal 2002. Thirty-four million prospects have been identified that are not currently using an Intuit tax product or service. Intuit is launching a "Right for Me" strategy to capitalize on this large opportunity and drive sustained growth. There are two elements to the strategy: introducing new offerings that are tailored to the needs of specific taxpayer segments and being where customers want to be by expanding distribution channels.

The company announced three new TurboTax offerings for the coming tax season - a Spanish version; a deluxe version for retirees and people planning for retirement; and a deluxe version for active investors. Intuit also plans to further expand its distribution by selling TurboTax in additional food and drug stores and other retail outlets. These are just the first steps the company is taking to execute its multi-year "Right for Me" strategy. More details about the strategy are available in a separate press release issued today and available at www.intuit.com/company/press_room/.

Intuit said that it will make minor modifications to its Intuit Tax Freedom program (ITFP) as part of its participation in the Internal Revenue Service's consortium to offer free tax preparation and e-filing to lower income taxpayers. Intuit has been donating free electronic tax preparation and e-filing to lower income taxpayers for the past four years through ITFP (formerly called Quicken Tax Freedom Project). More than 1 million tax returns were prepared and filed under this program in fiscal 2002. Beginning with the coming season, Intuit will donate the service to taxpayers or households with an annual adjusted gross income of $27,000 or less, up from $25,000 last year. Approximately 50 percent of taxpayers will qualify for ITFP, up from about 47 percent last year.

"Right for My Business" Strategy Successfully Driving Stronger Growth Intuit's "Right for My Business" small business strategy, which was launched in December 2001, drove stronger revenue and profit growth in fiscal 2002. Intuit expects even stronger results in fiscal 2003 from its three "Right for My Business" growth engines - QuickBooks, Small Business Services and Vertical Business Management Solutions (business management solutions tailored to meet the needs of specific vertical industries). The company said it will offer 26 QuickBooks products and Small Business Services offerings in fiscal 2003, up from 16 in fiscal 2002 and 8 in fiscal 2001. It also intends to acquire additional companies that provide Vertical Business Management Solutions to bring its total portfolio of companies to between five and ten. New acquisitions will create additional growth platforms for Intuit.

QuickBooks
New "Right for My Business" QuickBooks products produced $30 million in revenue in fiscal 2002, or 40 percent of year-over-year QuickBooks-related revenue growth. "We're very pleased with the early results from our new QuickBooks products and have solid momentum for fiscal 2003 where we'll see the full-year benefit of these offerings," said Bennett. Four new QuickBooks products were introduced in fiscal 2002: QuickBooks Premier (launched Dec. 2001); QuickBooks Premier Accountant edition (launched Dec. 2001); QuickBooks Point-of-Sale (launched May 2002); and QuickBooks Enterprise Solutions (launched June 2002).

Intuit intends to build on this foundation in fiscal 2003, with new versions of existing products and the introduction of new products. New offerings will include a QuickBooks "flavor" designed to meet the needs of small businesses in the construction industry. The new product will be priced at about $500 and will be the third QuickBooks flavor. The company believes there is opportunity for between 5-15 QuickBooks flavors over the next few years.

In addition, Intuit plans to launch a standalone version of the QuickBooks Employee Organizer in December 2003. This new product, priced at approximately $300, will integrate fully with QuickBooks and will make it easier for businesses to manage employee data and meet compliance requirements.

Intuit expects QuickBooks revenue to grow 20-30 percent in fiscal 2003 from approximately $195 million in fiscal 2002, as it continues to pursue the under-penetrated $4.8 billion opportunity for small business accounting and vertical solutions offerings.

Small Business Services
Small Business Services, a $13 billion opportunity that includes payroll and human resources services, technical support, online services and supplies, is another core "Right for My Business" growth engine. In fiscal 2002, Intuit's Small Business Services portfolio had revenue of $335 million, up 15 percent from the prior year. Excluding the supplies business, which had 4 percent growth, year-over-year revenue was up 25 percent. Intuit's goal is to create a $500 million-$1 billion Small Business Services business in the next five years, with a pro forma operating margin of 30 percent or higher.

Intuit has made two acquisitions in recent months to expand this growth engine - Blue Ocean Software, which offers information technology resources management software, and CBS Payroll, which enables Intuit to offer a full-service fully outsourced payroll solution.

With the acquisition of CBS Payroll, Intuit Payroll Services includes three offerings to meet the full range of needs:

  • Complete Payroll Services, a fully outsourced payroll solution that offers multiple interfaces and will feature full integration with QuickBooks;
  • QuickBooks Assisted Payroll Service (formerly QuickBooks Deluxe), an assisted self-service offering that integrates with QuickBooks; and
  • QuickBooks Do-It-Yourself Payroll (formerly QuickBooks Basic), do-it-yourself software that provides tax tables and calculations and integrates with QuickBooks.

Intuit said it has a unique opportunity to offer its new Complete Payroll Service to the approximately 300,000 QuickBooks customers using a competitive outsourced service. The company will launch this QuickBooks-integrated product next month. Customers will be able to load historic payroll data directly into QuickBooks with just one mouse-click. The service also features local tax filing, third-party payments and flexible reporting. Additional functionality that will benefit customers will be introduced in subsequent years.

Vertical Business Management Solutions
Intuit has created a new "Right for My Business" growth engine in the past year through the acquisition of companies that provide business management solutions tailored to meet the needs of specific vertical industries. Intuit's goal is to create a $500 million-$1 billion Vertical Business Management Solutions business in the next five years, with a pro forma operating margin of 30 percent or higher.

Intuit acquired four companies in fiscal 2002, all targeted to industries that require specialized business management solutions:

  • Construction management
  • Durable goods wholesaling
  • Property and real estate management
  • Public sector organizations

The company's acquisition strategy is to buy well-run, profitable companies, with strong management teams and proven products and services. Intuit then builds on those strengths with its brand, financial resources and management expertise to turbo-charge growth.

Intuit Confirms Fiscal 2003 Guidance; Provides Long-Term Growth Goals
Intuit confirmed the fiscal 2003 financial guidance that it provided on Aug. 14, 2002. The company expects:

  • Revenue of $1.70 billion-$1.80 billion, or growth of 25-33 percent.
  • Pro forma operating income of $400 million-$425 million, or growth of 42-50 percent.
  • Pro forma EPS of $1.30-$1.36, or growth of 34-40 percent.
  • A pro forma operating margin of approximately 23 percent.

Bennett said Intuit's long-range growth goals are for annual organic revenue growth of 15-20 percent and pro forma operating income growth 1.5-2 times the revenue growth rate. Revenue from acquisitions would be in addition to organic revenue. For acquired companies, organic revenue is defined as any revenue in excess of the revenue the company had for the 12 months before it was acquired. The company expects about 63 percent of its fiscal 2003 revenue growth to come from its organic businesses and about 37 percent from acquisitions. In fiscal 2002, organic businesses drove 85 percent of Intuit's revenue growth.

Intuit's policy is to not confirm, update or otherwise comment on its financial projections except in compliance with Regulation FD.
 
About Intuit Inc.
Intuit Inc. (NASDAQ: INTU) is a leading provider of business and financial management solutions for small businesses, consumers and accounting professionals. Its flagship products and services, including QuickBooks®, Quicken® and TurboTax®, simplify small business management and payroll processing, personal finance, and tax preparation and filing.

Founded in 1983, Intuit has annual revenue of more than $1.3 billion. The company has over 6,000 employees with major offices in 11 states across the U.S. and offices in Canada, Japan and the United Kingdom. More information can be found at www.intuit.com.
 

Cautions About Forward-Looking Statements
This press release includes forward-looking statements about future financial results and other events that have not yet occurred, including predictions about businesses Intuit has acquired, Intuit's new product and service strategies and offerings and its expected results for fiscal 2003. Statements with words like "expect," "anticipate" or "believe," and statements in the future tense, are forward-looking statements. Actual results may differ materially from Intuit's expressed expectations because of risks and uncertainties about the future. Some of the important factors that could cause Intuit's results to differ are listed below. More details about these and other risks are included in Intuit's fiscal 2001 Form 10-K and other SEC filings and at www.intuit.com/company/investors/considerations.html. The company will not update the information in this press release if any forward-looking statement later turns out to be inaccurate.

  • Intuit's revenue and earnings are highly seasonal, which causes significant quarterly fluctuations in its revenue and net income.
  • Integrating acquired businesses creates challenges for Intuit's operational, financial and management information systems, as well as for its product development processes. If Intuit is unable to adequately address these and other issues presented by growth through acquisitions, Intuit may not fully realize the intended benefits (including financial benefits) of its acquisitions.
  • The anticipated benefits of Intuit's recent acquisitions (including but not limited to the expected financial impact for fiscal 2003) will depend on a number of variables, including its ability to retain personnel, acquire and retain customers and offer quality products at competitive prices.
  • It is too early to ensure that Intuit's "Right for My Business" strategy will generate substantial and sustained revenue growth in the small business accounting and business management segments.
  • As Intuit expands its product and service offerings and the markets it serves, Intuit must expand and modify its operational infrastructure and its direct and third-party distribution channels. In addition, the complexity of Intuit's revenue models increases and Intuit becomes subject to additional regulatory requirements such as broker-dealer regulation. If Intuit is unable to support its expanded businesses, they may not achieve sustainable financial viability or broad customer acceptance.
  • Intuit expects to continue to do acquisitions, which could put a strain on its resources and be expensive and time consuming.
  • Acquisition-related charges can substantially reduce Intuit's net income, and cause significant fluctuations in net income. Under the new accounting standards relating to accounting for goodwill, Intuit'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.
  • Intuit faces competitive pressures in all of its businesses, which can have a negative impact on its 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 Intuit's financial results in future years.
  • Intuit does not expect that the revenue and profit growth rates experienced by its payroll business during the past two years will be sustainable long-term, either on a year-over-year basis or on a sequential quarter basis.
  • If Intuit does not provide accurate and timely services such as payroll information, cash deposits or tax return filings in its employer services businesses, Intuit faces potential liability to customers, additional expense to correct product errors and loss of customers.
  • Intuit relies on three vendors to handle substantially all outsourced aspects of manufacturing and distribution for its primary retail desktop software products. If one of these vendors fails to perform, it could have severe negative consequences for Intuit's software businesses.
  • The long-term viability of Intuit's personal finance business depends upon its ability to provide new products and services that attract customers and that can generate revenue from sources other than advertising.
  • If Intuit fails to maintain reliable and responsive service levels for its electronic tax offerings, it could lose revenue and customers.
  • If Intuit experiences significant problems or delays in the development of its tax products, Intuit could lose revenue and customers.
  • Intuit faces risks relating to customer privacy and security and increasing governmental regulation, which could hinder the growth of its businesses.
  • Despite Intuit'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 product return reserves, particularly for Intuit's tax preparation software.
  • A continuation of the recent general decline in economic conditions could lead to significantly reduced demand for Intuit's products and services.

Pro Forma Financial Information
Intuit presents pro forma financial information using the same consistent standards from quarter to quarter and year to year. 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 net income and earnings per share exclude discontinued operations, 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 information, the method Intuit uses may differ from the methods used by other companies.

Intuit, the Intuit logo, Quicken, QuickBooks and TurboTax, among others, are registered trademarks and/or registered service marks of Intuit Inc. in the United States and other countries. Quicken.com and Blue Ocean Software, 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.