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CA Technologies (CA)

F4Q 2011 Earnings Call

May 12, 2011 5:00 pm ET

Executives

George Fischer - Executive Vice President of Worldwide Sales and Operations

David Dobson - Executive Vice President and Group Executive of Customer Solutions Group

Kelsey Doherty - Senior Vice President of Investor Relations

William McCracken - Chief Executive Officer, Director, Member of Compliance & Risk Committee and Member of Special Litigation Committee

Nancy Cooper - Chief Financial Officer and Executive Vice President

Analysts

Philip Rueppel

S. Kirk Materne - Evercore Partners Inc.

Derek Bingham - Goldman Sachs Group Inc.

Matthew Hedberg - RBC Capital Markets, LLC

John DiFucci - JP Morgan Chase & Co

Shaul Eyal - Oppenheimer & Co. Inc.

Walter Pritchard - Citigroup Inc

Kevin Buttigieg - Collins Stewart LLC

Michael Turits - Raymond James & Associates, Inc.

Gregg Moskowitz - Cowen and Company, LLC

Presentation

Operator

Good day, everyone, and welcome to CA Technologies Fourth Quarter and Full Year 2011 Earnings Conference Call. Today's call is being recorded. At this time, I would like to turn the call over to Kelsey Doherty, Senior Vice President of Investor Relations. Please go ahead, ma'am.

Kelsey Doherty

Thank you, and good afternoon, everyone. Welcome to CA Technologies Fourth Quarter and Full Year Fiscal 2011 Earnings Call.

Joining me today are Bill McCracken, our Chief Executive Officer; and Nancy Cooper, our Chief Financial Officer. Also on the call and available to answer questions are David Dobson, our Executive Vice President and Group Executive, Customer Solutions Group; and George Fischer, Executive Vice President and Group Executive, Worldwide Sales and Operations.

Bill will open the call with an overview of the quarter and the year. Then Nancy will review our fourth quarter results and provide details of our full year fiscal 2012 guidance. Bill will return to conclude, and we will take your questions.

As a reminder, this conference call is being broadcast on Thursday, May 12, 2011 over the telephone and the Internet. The information shared in this call is effective as of today's date and will not be updated. All content is the property of CA Technologies, and is protected by U.S. and international copyright law and may not be reproduced or transcribed in any way without the expressed written consent of CA Technologies. We consider your continued participation in this call as consent to our recording.

During this call, non-GAAP financial measures will be discussed. Please note, all non-GAAP operating measures are being reported excluding share-based compensation expense. Prior period non-GAAP metrics also reflect this change for comparative purposes.

Reconciliations to the most directly comparable GAAP financial measures are included in the earnings release, which was filed on Form 8-K earlier today, as well as in our supplemental earnings materials, all of which are available on our website at investor.ca.com.

Today's discussion will include forward-looking statements subject to risks and uncertainties, and actual results could differ materially from these forward-looking statements. Please refer to our SEC filings for a detailed discussion of potential risks.

So with that, let me turn the call over to Bill.

William McCracken

Thanks, Kelsey, and good afternoon to everyone. Thank you for joining us.

Before we begin, and as you may have read in the press release this afternoon, Nancy Cooper is retiring. I expect to announce her replacement very soon and she has agreed to stay in her role until I have announced her replacement. On behalf of the CA Technologies team, I thank Nancy for her continued service and her contributions.

And now, let me review our results and outlook. As we said at the beginning of the year, fiscal year 2011 was both a growth and investment year. These investments have driven strength and improvements in many areas. We set out to accomplish a great deal this year, and we did what we set out to do. We also had some challenges in some products and in EMEA. We are addressing them head-on, and are still making good overall progress as a company. And the guidance we are providing this afternoon shows that we expect fiscal year 2012 to be even stronger than 2011.

Our strategy is the right one, and it's working. That is focusing on mainframe, distributed, cloud and Software-as-a-Service solutions. Our vendor-agnostic approach is what customers tell me they need and are buying. No one else can claim the breadth of our solutions. We are investing in geographic expansion and in new account acquisition through business partners. Both are gaining traction. In fact, just last week, we announced a strategic initiative with VCE, the virtual computing environment company. In addition, CA Technologies was named by HP as a Strategic AllianceOne Partner. Our two companies will work together on expanding routes to market and joint development projects. More details will be made available in the coming weeks.

Last week, we also hosted more than 130 executives from 98 partner organizations worldwide at our Partner Summit in New York City. And what I'm hearing from our partners is they see a new level of commitment and focus on our mutual success. We have effectively integrated our acquisitions, and we are now investing in them to accelerate growth.

For example, during the fourth quarter, we invested an incremental $14 million or $0.02 of earnings per share. This included almost doubling the number of employees at Nimsoft and integrating new technologies. We combined Inteq service desk with Nimsoft monitoring, which has created the first integrated IT management-as-a-service solution called Nimsoft Unified Manager. We are also rationalizing our business, including this afternoon's announcement that we've reached an agreement to sell our Internet Security business to Updata Partners. These actions further focus our resources on areas of strategic importance to CA Technologies.

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