Adobe Systems Inc. announces 1994 earnings; results include effect of business combination with Aldus Corp.MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--Jan. 4, 1994--Adobe Systems Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : ADBE ADBE Adobe Systems, Inc. (stock symbol) ) Wednesday Wednesday: see week. reported operating results for the 1994 fiscal year. Results for the year include the effect of its acquisition of Aldus Corp. and all comparative data include the Aldus data for the prior periods as well as the current year periods. Revenue for the fourth quarter ended Nov. 25, 1994, was $165,450,000, an increase of 15 percent from the $143,928,000 reported in the fourth quarter of fiscal 1993. The fourth quarter results include a one-time restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of $72,183,000. This charge was in conjunction with the Aldus acquisition and consists of severance pay Severance Pay Compensation that an employer gives to someone who is about to lose their job. Notes: Severance pay is not always paid to employees. It depends on the situation in which the employee is losing their job and whether legislation requires severance to be paid. for personnel lay-offs due to overlapping organizations, costs expected to be incurred in closing down duplicate DUPLICATE. The double of anything. 2. It is usually applied to agreements, letters, receipts, and the like, when two originals are made of either of them. Each copy has the same effect. facilities, transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). of the acquisition such as professional fees, and other expenses either incurred or expected to be incurred as a direct result of the acquisition for which no future economic benefit is expected to be derived. Adobe adobe (ədō`bē): see rammed earth. adobe Handmade sun-dried bricks formed from a mixture of heavy clay and straw found in arid regions. also incurred a write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. for in-process research and development acquired in conjunction with the purchase of LaserTools Corp. This charge was $12,424,000. Adobe purchased LaserTools in October for their low-end printing technology to help Adobe in that segment of the printing market. The effect of the restructuring charge and the write-off of in-process research and development was to create a loss for the company of $48,151,000 for the quarter and reported loss per share of 79 cents. This compares to net income of $20,426,000 and earnings per share of 34 cents in the fourth quarter of fiscal 1993. In addition to the restructuring charge and the write-off of in-process research and development, the company incurred one-time expenses during the quarter that are not included in the restructuring charge but were related to the Aldus acquisition. These charges included writing off certain capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. software development costs, transition personnel bonuses, and relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. expenses, among others, and totaled approximately $10 million. Without all of these non-recurring expenses, and using a more normal tax rate, net income would have been $30,587,000 and earnings per share would have been 48 cents. For the full year revenue was $597,772,000, an increase of 15 percent from $520,237,000 in fiscal 1993. Net income and earnings per share were $6,309,000 and 10 cents, respectively, compared to net income of $66,545,000 and per share earnings of $1.11 in 1993. Without the restructuring charge, the write-offs for the acquisition of Compumation by Aldus in the second quarter and LaserTools in the latest quarter, and the other non-recurring acquisition expenses, net income would have been $86,777,000 and earnings per share would have been $1.39. John Warnock John Warnock (b. October 6, 1940) is an American computer scientist best known as the co-founder with Charles Geschke of Adobe Systems Inc., the graphics and publishing software company. Although retired as CEO in 2001, he still co-chairs the board with Geschke. , chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Adobe Systems Adobe Systems Incorporated (pronounced a-DOE-bee IPA: /əˈdoʊbiː/) (NASDAQ: ADBE) (LSE: ABS) is an American computer software company headquartered in San Jose, California, USA. , said, "When you look at the underlying operating results of the company after the non-recurring items due to our two acquisitions, Adobe had an excellent quarter. I'm particularly pleased by our results in light of all of the work required to begin the integration of Adobe and Aldus. This required many of our employees to shoulder a very heavy work load and the quarterly results reflect that hard work." Licensing revenue for the fourth quarter was $40,939,000 compared to $36,374,000 in the fourth quarter of fiscal 1993, an increase of 13 percent. For all of 1994 licensing revenue increased 7 percent to $156,652,000 from $146,176,000 in fiscal 1993. The overall number of PostScript-based products shipped increased driving revenue growth despite ongoing reductions in most printer prices. PostScript The de facto standard page description language (PDL) in the graphics arts industry as well as in commercial printing. Developed by Adobe, many printers and most imagesetters support PostScript by having a built-in PostScript interpreter. equipped color machines and units utilizing the Configurable PostScript Interpreter A high-level programming language translator that translates and runs the program at the same time. It translates one program statement into machine language, executes it, and then proceeds to the next statement. were key components of the revenue increase. Product revenue was $124,511,000 for the fourth quarter, an increase of nearly 16 percent over the $107,554,000 reported in the fourth quarter of fiscal 1993. For the year, application product sales were $441,120,000 compared to $374,061,000 in fiscal 1993, an increase of 18 percent. The fourth quarter revenue growth was fueled in particular by sales of Adobe Photoshop See Photoshop. which was released early in the quarter and experienced strong sales in all of Adobe's major markets domestically as well as in Europe and Japan. Adobe Illustrator A full-featured drawing program for Windows and Macintosh from Adobe. It provides sophisticated tracing and text manipulation capabilities as well as color separations. Included is Adobe Type Manager and a selection of Type 1 fonts. sales also remained good and added to the positive performance in the quarter. Revenue also grew year-to-year as sales continued to be good for Adobe's products on the Macintosh and Windows platforms. In addition, Adobe shipped Unix versions of Adobe Illustrator and Adobe Photoshop in 1994 and this added to the growth in revenue. The product revenue figure also includes sales of Adobe's prepress product line. Version 2.0 of the Acrobat Document exchange software from Adobe that allows documents to be displayed and printed the same on every computer. The Acrobat system created the Portable Document Format (PDF), which is widely used in commercial printing and on the Web. See PDF. product family was released near the end of the fourth quarter and systems integrators An individual or organization that builds systems from a variety of diverse components. With increasing complexity of technology, more customers want complete solutions to information problems, requiring hardware, software and networking expertise in a multivendor environment. and value added resellers See VAR. (company) value added reseller - (VAR, or "value added retailer") A company which sells something (e.g. computers) made by another company (an OEM) with extra components added (e.g. specialist software). are in the process of integrating Acrobat into solutions that they are building for their end user customers. The level of interest remains high and infrastructure building around Acrobat has continued this quarter. The company believes that it is making the appropriate level of investment in this product area. Adobe's board of directors declared a cash dividend for the fourth quarter of 5 cents per common share for shareholders of record as of Jan. 19, 1995, payable on Feb. 3, 1995. -0- Note to Editors: Adobe, the Adobe logo, Adobe Illustrator, Adobe Photoshop, Acrobat and PostScript are trademarks of Adobe Systems Inc., which may be registered in certain jurisdictions. Macintosh is a registered trademark of Apple Computer Inc. Windows is a trademark of Microsoft Corp.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
Quarters ended Years ended
Nov. 25, Nov. 26, Nov. 25, Nov. 26,
1994 1993 1994 1993
(unaudited) (audited)
Revenue: Licensing $ 40,939 $ 36,374 $ 156,652 $146,176 Application products 124,511 107,554 441,120 374,061 Total revenue 165,450 143,928 597,772 520,237 Direct costs 31,749 28,099 111,810 96,638 Gross margin 133,701 115,829 485,962 423,599 Operating expenses: Software development costs: Research and development 29,526 23,279 98,995 86,727 Amortization of capitalized software development costs 2,559 2,788 13,316 10,208 Sales, marketing and customer support 51,593 47,240 200,993 170,945 General and administrative 14,952 13,641 54,021 59,203 Write-off of acquired in- process research and development 12,424 --- 15,469 4,285 Merger transaction costs and restructuring charges 72,183 --- 72,183 --- Total operating expenses 183,237 86,948 454,977 331,368 Operating income (loss) (49,536) 28,881 30,985 92,231 Nonoperating income, net: Interest, investment and other income 3,387 1,622 9,012 12,829 Income (loss) before income taxes (46,149) 30,503 39,997 105,060 Provision for income taxes 2,002 10,077 33,688 38,515 Net income (loss) ($48,151) $ 20,426 $ 6,309 $ 66,545 Net income (loss) per share (79 cents) 34 cents 10 cents $ 1.11 Shares used in computing net income per share 60,856 60,231 61,620 60,144
Condensed Consolidated Balance Sheets
(in thousands)
(audited)
Nov. 25, 1994 Nov. 26, 1993
Assets: Cash and cash equivalents $ 190,091 $ 134,039 Short-term investments 210,269 174,946 Receivables 96,585 84,864 Inventories 9,619 10,779 Other current assets 7,837 9,821 Deferred income taxes, current 17,962 12,598 Property and equipment 39,104 49,135 Other assets 45,561 53,124 Deferred income taxes, long-term 8,475 534
$ 625,503 $ 529,840
Liabilities and shareholders' equity: Trade and other payables $ 30,840 20,925 Accrued expenses 79,000 59,114 Accrued restructuring charges 28,457 --- Income taxes payable 23,083 21,189 Deferred revenue 7,352 7,604 Put warrants --- 6,906 Common stock 142,207 90,199 Unrealized losses on investments (1,088) --- Retained earnings 319,704 328,207 Cumulative foreign currency translation adjustment (4,052) (4,304)
$ 625,503 $ 529,840
-0-
CONTACT: Adobe Systems Inc. Bruce Bruce, Scottish royal family descended from an 11th-century Norman duke, Robert de Brus. He aided William I in his conquest of England (1066) and was given lands in England. Nakao, 415/962-2071 |
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