Adobe Systems Reports First Quarter Results.Company Readies for Biggest Product Launch in its History SAN JOSE San Jose, city, United States San Jose (sănəzā`, săn hōzā`), city (1990 pop. 782,248), seat of Santa Clara co., W central Calif.; founded 1777, inc. 1850. , Calif. -- 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. Incorporated (Nasdaq:ADBE ADBE Adobe Systems, Inc. (stock symbol) ) today reported financial results for its first quarter ended March 2, 2007. In the first quarter of fiscal 2007, 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. achieved revenue of $649.4 million, compared to $655.5 million reported for the first quarter of fiscal 2006 and $682.2 million reported in the fourth quarter of fiscal 2006. Adobe's first quarter revenue target range was $640 to $670 million. "Q1 was a solid quarter for Adobe, as we came in at the high end of our earnings target range and were within our targeted range for revenue," said Bruce Chizen Bruce R. Chizen is the chief executive officer of Adobe Systems, based in San Jose, California. Chizen lives in Los Altos, California with his wife and children. Career , chief executive officer of Adobe. "As Adobe prepares for the biggest product launch in our history, we are excited about our opportunities and bullish Bullish Word used to describe an investor's attitude. Bullish refers to an optimistic outlook, while bearish means a pessimistic outlook. bullish about our prospects for another year of strong performance." GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). Results Adobe's GAAP diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the first quarter of fiscal 2007 were $0.24, based on 604.2 million weighted average shares. This compares with GAAP diluted earnings per share of $0.17 reported in the first quarter of fiscal 2006, based on 621.8 million weighted average shares, and GAAP diluted earnings per share of $0.30 reported in the fourth quarter of fiscal 2006, based on 602.2 million weighted average shares. Adobe's first quarter of fiscal 2007 GAAP earnings per share target range was $0.17 to $0.20. GAAP operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. was $146.3 million in the first quarter of fiscal 2007, compared to $130.0 million in the first quarter of fiscal 2006 and $163.4 million in the fourth quarter of fiscal 2006. As a percent of revenue, GAAP operating income in the first quarter of fiscal 2007 was 22.5 percent, compared to 19.8 percent in the first quarter of fiscal 2006 and 23.9 percent in the fourth quarter of fiscal 2006. GAAP net income was $143.9 million for the first quarter of fiscal 2007, compared to $105.1 million reported in the first quarter of fiscal 2006, and $183.2 million in the fourth quarter of fiscal 2006. Non-GAAP Results Non-GAAP diluted earnings per share for the first quarter of fiscal 2007 were $0.30. This compares with non-GAAP diluted earnings per share of $0.32 reported in the first quarter of fiscal 2006, and non-GAAP diluted earnings per share of $0.33 reported in the fourth quarter of fiscal 2006. Adobe's first quarter non-GAAP earnings per share target range was $0.28 to $0.30. Adobe's non-GAAP operating income was $222.5 million in the first quarter of fiscal 2007, compared to $252.4 million in the first quarter of fiscal 2006 and $255.8 million in the fourth quarter of fiscal 2006. As a percent of revenue, non-GAAP operating income in the first quarter of fiscal 2007 was 34.3 percent, compared to 38.5 percent in the first quarter of fiscal 2006 and 37.5 percent in the fourth quarter of fiscal 2006. Non-GAAP net income was $182.3 million for the first quarter of fiscal 2007, compared to $197.5 million in the first quarter of fiscal 2006, and $198.3 million in the fourth quarter of fiscal 2006. A reconciliation between GAAP and non-GAAP results is provided at the end of this press release. Adobe Provides Second Quarter Financial Targets and Reaffirms Fiscal Year 2007 Financial Targets For the second quarter of fiscal 2007, Adobe announced it is targeting revenue of $700 million to $740 million. The Company also is targeting a GAAP operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: of approximately 23 to 25 percent in the second quarter. On a non-GAAP basis, the Company is targeting a second quarter operating margin of approximately 36 to 37 percent. In addition, Adobe is targeting its share count to be between 605 million and 607 million shares in the second quarter of fiscal 2007. The Company also is targeting other income in its second quarter to be approximately $23 million to $24 million, with a GAAP tax rate of approximately 24 to 26 percent and a non-GAAP tax rate of approximately 25 to 27 percent. These targets lead to a second quarter GAAP earnings per share target range of approximately $0.23 to $0.26. On a non-GAAP basis, the Company is targeting earnings per share of approximately $0.34 to $0.36. For fiscal year 2007, Adobe announced it is reaffirming its annual revenue growth target of approximately 15 percent. The Company also reaffirmed it is targeting a GAAP operating margin of approximately 25 to 27 percent, and a non-GAAP operating margin of approximately 37 to 38 percent. A reconciliation between GAAP and non-GAAP targets is provided at the end of this press release. Forward Looking Statements Disclosure This press release contains forward looking statements, including those related to revenue, operating margin, other income, tax rate, share count and earnings per share, which involve risks and uncertainties that could cause actual results to differ materially. Factors that might cause or contribute to such differences include, but are not limited to: delays in development or shipment of Adobe's new products or major new versions of existing products, introduction of new products by existing and new competitors, failure to successfully manage transitions to new business models and markets, adverse changes in general economic or political conditions in any of the major countries in which Adobe does business, difficulty in predicting revenue from new businesses, failure to anticipate and develop new products in response to changes in demand for application software, computers, printers, or other non PC-devices, costs related to intellectual property acquisitions, disputes and litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , inability to protect Adobe's intellectual property from unauthorized copying, use, disclosure or malicious Involving malice; characterized by wicked or mischievous motives or intentions. An act done maliciously is one that is wrongful and performed willfully or intentionally, and without legal justification. DESERTION, MALICIOUS. attack, failure to realize the anticipated benefits of past or future acquisitions and difficulty in integrating such acquisitions, changes to Adobe's distribution channel, disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. of Adobe's business due to catastrophic events, interruptions or terminations in Adobe's relationships with turnkey See turnkey system. assemblers This is a list of assemblers. Hundreds of assemblers have been written; some notable examples are:
1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of Adobe's goodwill or intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. , unanticipated changes in, or interpretations of, Adobe's effective tax rates, Adobe's inability to attract and retain key personnel, and market risks associated with Adobe's equity investments. For further discussion of these and other risks and uncertainties, individuals should refer to Adobe's SEC filings. The financial information set forth in this press release reflects estimates based on information available at this time. These amounts could differ from actual reported amounts stated in Adobe's Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the first quarter ended March 2, 2007, which the company expects to file in April, 2007. Adobe does not undertake an obligation to update forward looking statements. About Adobe Systems Incorporated Adobe revolutionizes how the world engages with ideas and information - anytime, anywhere, and through any medium. For more information, visit www.adobe.com. [c] 2007 Adobe Systems Incorporated. All rights reserved. Adobe, Macromedia (Macromedia, Inc., San Francisco, CA, www.macromedia.com) A software company specializing in multimedia authoring tools that was acquired by Adobe Systems, Inc. in mid-2005. It was founded in 1992 by the merger of Authorware, Inc., which was founded in 1984, and MacroMind-Paracomp. , and the Adobe logo are either registered trademarks or trademarks of Adobe Systems Incorporated in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and/or other countries. All other trademarks are the property of their respective owners. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] The following table shows the Company's reconciliation of non-GAAP to GAAP operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. for the quarters ended March 2, 2007, March 3, 2006, and December 1, 2006. [TABLE OMITTED] The following table shows the Company's reconciliation of non-GAAP to GAAP operating margin for the quarter ended March 2, 2007, March 3, 2006, and December 1, 2006. [TABLE OMITTED] The following table shows the Company's reconciliation of non-GAAP to GAAP effective tax rate for the quarter ended March 2, 2007. [TABLE OMITTED] Second Quarter and Fiscal Year 2007 Non-GAAP Financial Targets The following tables show Adobe's non-GAAP financial targets reconciled to GAAP financial targets included in this release. [TABLE OMITTED] The following table shows Adobe's non-GAAP operating margin targets reconciled to GAAP operating margin targets included in this release for fiscal year 2007. [TABLE OMITTED] Adobe continues to provide all information required in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP, but believes evaluating its ongoing operating results may not be as useful if an investor is limited to reviewing only GAAP financial measures. Accordingly, Adobe uses non-GAAP financial information to evaluate its ongoing operations and for internal planning and forecasting purposes. Adobe's management does not itself, nor does it suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Adobe presents such non-GAAP financial measures in reporting its financial results to provide investors with an additional tool to evaluate Adobe's operating results in a manner that focuses on what Adobe believes to be its ongoing business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets . Adobe's management believes it is useful for itself and investors to review, as applicable, both GAAP information that includes the stock compensation impact of SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 123R, restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and other charges, amortization of purchased intangibles and incomplete technology, amortization of Macromedia deferred compensation, investment gains and losses, tax differences related to the timing and deductibility of the Macromedia acquisition and related charges and SFAS 123R stock-based compensation, the net tax impact of the R&D tax benefit, and the non-GAAP measures that exclude such information in order to assess the performance of Adobe's business and for planning and forecasting in subsequent periods. Whenever Adobe uses such a non-GAAP financial measure, it provides a reconciliation of the non-GAAP financial measure to the most closely applicable GAAP financial measure. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measure as detailed above. For the first quarter of fiscal year 2007 and for fiscal year 2006, Adobe's GAAP financial information and targets include the stock compensation impact of SFAS 123R, restructuring and other charges, amortization of purchased intangibles and incomplete technology, amortization of Macromedia deferred compensation, tax differences related to the timing and deductibility of the Macromedia acquisition and related charges and SFAS 123R stock-based compensation and the net tax impact of the R&D tax benefit. Also, in accordance with GAAP, Adobe incurs investment gains and losses from its venture program. These charges are otherwise unrelated to Adobe's ongoing business operations and are excluded from its non-GAAP financial information and targets. |
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