Adobe Systems Reports Record Quarterly and Annual Revenue.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 adobe (ədō`bē): see rammed earth. adobe Handmade sun-dried bricks formed from a mixture of heavy clay and straw found in arid regions. 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. and Adobe Creative Suite Adobe Creative Suite is a collection of graphic design, video editing, and web development applications made by Adobe Systems. The latest version, Adobe Creative Suite 3 (CS3), was announced on March 27, 2007; it introduced Universal binaries for all programs for the Apple Adoption Drives 29 Percent Year-Over-Year Annual Revenue Growth in Fiscal Year 2004 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 strong financial results for its fourth quarter and fiscal year ended December December: see month. 3, 2004. In the fourth quarter of fiscal 2004, Adobe achieved record revenue of $429.5 million, compared to $358.6 million reported for the fourth quarter of fiscal 2003 and $403.7 million reported in the third quarter of fiscal 2004. On a year-over-year basis, this represents 20 percent revenue growth. Adobe's fourth quarter revenue target range, revised upward on October October: see month. 26, 2004, was $410 to $425 million. "Q4 was an outstanding finish to a remarkable year," said 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. R. Chizen, president and chief executive officer. "The continued strength of Acrobat and our Creative Suite platform, combined with strong demand for our hobbyist hob·by 1 n. pl. hob·bies An activity or interest pursued outside one's regular occupation and engaged in primarily for pleasure. offerings, resulted in record revenue for the quarter. We also achieved more than $100 million in revenue and 50% year-over-year growth in our Intelligent Documents server business during the year. "Based on the planned release of a succession succession: see ecology. of new products throughout fiscal 2005, as well as the large market opportunities in front of us, we are reaffirming our double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. revenue growth target for fiscal 2005," Chizen said. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (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 fourth quarter of fiscal 2004 were $0.45. Non-GAAP diluted earnings per share, which does not include investment gains from the Company's venture program, were $0.44. Adobe's revised GAAP and non-GAAP fourth quarter earnings target range was $0.40 to $0.43 per share. GAAP net income was $113.5 million for the fourth quarter of fiscal 2004, compared to $83.3 million reported in the fourth quarter of fiscal 2003, and $104.5 million in the third quarter of fiscal 2004. On a year-over-year basis, GAAP net income grew 36 percent. Non-GAAP net income, which excludes, as applicable, a partial reversal reversal n. the decision of a court of appeal ruling that the judgment of a lower court was incorrect and is reversed. The result is that the lower court which tried the case is instructed to dismiss the original action, retry the case, or is ordered to change its of prior restructuring charges 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. , and investment gains and losses, was $110.4 million for the fourth quarter of fiscal 2004, compared to $83.0 million in the fourth quarter of fiscal 2003, and $105.6 million in the third quarter of fiscal 2004. On a year-over-year basis, non-GAAP net income grew 33 percent. GAAP diluted earnings per share for the fourth quarter of fiscal 2004 were $0.45 based on 250.3 million weighted average shares. This compares with GAAP diluted earnings per share of $0.34 reported in the fourth quarter of fiscal 2003, based on 245.5 million weighted average shares, and GAAP diluted earnings per share of $0.42 reported in the third quarter of fiscal 2004, based on 247.1 million weighted average shares. Adobe's 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 $146.4 million in the fourth quarter of fiscal 2004, compared to $115.3 million in the fourth quarter of fiscal 2003 and $140.3 million in the third quarter of fiscal 2004. As a percent of revenue, GAAP operating income in the fourth quarter of fiscal 2004 was 34.1 percent, compared to 32.1 percent in the fourth quarter of fiscal 2003 and 34.8 percent in the third quarter of fiscal 2004. Adobe's non-GAAP operating income, which excludes, as applicable, a partial reversal of prior restructuring charges, was $146.4 million in the fourth quarter of fiscal 2004, compared to $115.2 million in the fourth quarter of fiscal 2003 and $140.3 million in the third quarter of fiscal 2004. As a percent of revenue, non-GAAP operating income in the fourth quarter of fiscal 2004 was 34.1 percent, compared to 32.1 percent in the fourth quarter of fiscal 2003 and 34.8 percent in the third quarter of fiscal 2004. Adobe Reports Record Annual Revenue in Fiscal Year 2004 In fiscal 2004, Adobe achieved record revenue of $1.667 billion, compared to $1.295 billion in fiscal 2003. On a year-over-year basis, annual revenue grew 29 percent. Adobe's annual GAAP net income was $450.4 million in fiscal 2004, compared to $266.3 million in fiscal 2003. On a year-over-year basis, annual GAAP net income grew 69 percent. Adobe's annual non-GAAP net income, which does not, as applicable, include a partial reversal of restructuring charges, and investment gains and losses, was $448.5 million in fiscal 2004, compared to $275.0 million in fiscal 2003. On a year-over-year basis, annual non-GAAP net income grew 63 percent. GAAP diluted earnings per share for fiscal 2004 were $1.82. Non-GAAP diluted earnings per share for fiscal 2004, which does not include investment gains and losses, were $1.81. Adobe Provides First Quarter Financial Targets and Reaffirms Fiscal 2005 Targets For the first quarter of fiscal 2005, Adobe announced it is targeting revenue of $435 to $455 million, a gross margin of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 94 percent, and GAAP and non-GAAP operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: ranges of approximately 34 to 35 percent. As a percent of revenue, Adobe is targeting first quarter expenses as follows: Research & Development - approximately 19 percent Sales & Marketing - approximately 31 to 32 percent General & Administrative - approximately 9 percent In addition, Adobe is targeting its share count range to be between 254 and 255 million shares in the first quarter of fiscal 2005. The Company also is targeting other income in its first quarter to be approximately $3.5 million, and a tax rate of 25 percent. These targets lead to first quarter GAAP and non-GAAP earnings per share target ranges of $0.45 to $0.48. Adobe currently believes targeted non-GAAP earnings per share and non-GAAP operating margin results will not differ materially from targeted GAAP results. For fiscal 2005, the Company reaffirmed its full year target range of $1.85 to $1.9 billion in revenue, with an operating margin target range of approximately 34 to 35 percent. The Adobe Board of Directors declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. this quarter's cash dividend of $0.0125 per share, payable on January January: see month. 11, 2005, to stockholders of record as of December 28, 2004. Forward Looking Statements Disclosure This press release contains forward looking statements, including those related to revenue, product releases, gross margin, operating margin, operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , share count, tax rate, 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: adverse changes in general economic or political conditions in any of the major countries in which we do business, delays in development or shipment of our new products or major new versions of existing products, introduction of new products by existing and new competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. , difficulties in transitions to new business models or markets, changes in demand for application software, computers and printers, intellectual property 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. , changes to our distribution channel, the impact of 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. code, such as worms Worms (vôrms), city (1994 pop. 79,155), Rhineland-Palatinate, SW Germany, on the Rhine River. It is an industrial city and a leading wine trade center. and viruses, on our computer network and applications, interruptions or terminations in our relationships with our turnkey See turnkey system. assemblers This is a list of assemblers. Hundreds of assemblers have been written; some notable examples are:
A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and quarterly reports on Form 10-Q Form 10-Q See 10-Q. filed in 2004. The Company does not undertake an obligation to update forward looking statements. About Adobe Systems Incorporated Adobe is the world's leading provider of software solutions to create, manage and deliver high-impact, reliable digital content. For more information, visit www.adobe.com. (C) 2004 Adobe Systems Incorporated. All rights reserved. Adobe, the Adobe logo, Adobe Acrobat, and Adobe Creative Suite 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 and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. other countries. All other trademarks are the property of their respective owners.
Condensed Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
Three Months Ended Year Ended
------------------- -----------------------
Dec. 3, Nov. 28, Dec. 3, Nov. 28,
2004 2003 2004 2003
--------- --------- ----------- -----------
Revenue:
Products $420,204 $351,466 $1,633,959 $1,269,004
Services and support 9,298 7,120 32,622 25,745
--------- --------- ----------- -----------
Total revenue 429,502 358,586 1,666,581 1,294,749
--------- --------- ----------- -----------
Total cost of revenue:
Products 23,887 21,476 86,572 79,902
Services and support 5,485 3,751 17,806 13,120
--------- --------- ----------- -----------
Total cost of revenue 29,372 25,227 104,378 93,022
--------- --------- ----------- -----------
Gross profit 400,130 333,359 1,562,203 1,201,727
Operating Expenses:
Research and development 80,100 73,088 311,296 276,980
Sales and marketing 140,289 113,543 521,143 423,417
General and administrative 33,362 31,570 137,970 122,427
Restructuring and other
charges -- (105) -- (544)
--------- --------- ----------- -----------
Total operating
expenses 253,751 218,096 970,409 822,280
--------- --------- ----------- -----------
Operating income 146,379 115,263 591,794 379,447
Non-operating income:
Investment gain (loss) 4,158 379 2,506 (12,875)
Interest and other income 2,843 3,428 14,345 13,920
--------- --------- ----------- -----------
Total non-operating
income 7,001 3,807 16,851 1,045
--------- --------- ----------- -----------
Income before income taxes 153,380 119,070 608,645 380,492
Provision for income taxes 39,879 35,721 158,247 114,148
--------- --------- ----------- -----------
Net income $113,501 $83,349 $450,398 $266,344
========= ========= =========== ===========
Basic net income per share $0.47 $0.35 $1.89 $1.14
========= ========= =========== ===========
Shares used in computing
basic net income per share 239,870 235,899 238,829 234,246
========= ========= =========== ===========
Diluted net income per
share $0.45 $0.34 $1.82 $1.10
========= ========= =========== ===========
Shares used in computing
diluted net income per
share 250,310 245,512 247,813 241,450
========= ========= =========== ===========
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
(Unaudited)
Dec. 3, Nov. 28,
2004 2003
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $376,127 $189,917
Short-term investments 937,094 906,616
Trade receivables 141,945 146,311
Other receivables 25,495 27,731
Deferred income taxes 51,751 35,875
Other current assets 18,617 22,578
----------- -----------
Total current assets 1,551,029 1,329,028
----------- -----------
Property and equipment, net 99,675 77,007
Goodwill 110,287 95,971
Purchased and other intangibles, net 15,513 15,318
Investment in lease receivable 126,800 --
Other assets 55,328 37,721
----------- -----------
Total assets $1,958,632 $1,555,045
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade and other payables $43,192 $37,437
Accrued expenses 202,762 160,009
Income taxes payable 145,913 193,484
Deferred revenue 59,541 45,600
----------- -----------
Total current liabilities 451,408 436,530
----------- -----------
Other long-term liabilities 4,838 --
Deferred income taxes, long-term 78,909 17,715
Stockholders' equity:
Common stock, $0.0001 par value 29,576 29,576
Additional paid-in-capital 1,164,643 874,126
Retained earnings 2,238,807 1,800,398
Accumulated other comprehensive loss (2,289) (999)
Treasury stock at cost, net of re-issuances (2,007,260) (1,602,301)
----------- -----------
Total stockholders' equity 1,423,477 1,100,800
----------- -----------
Total liabilities and stockholders' equity $1,958,632 $1,555,045
=========== ===========
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended
-------------------
Dec. 3, Nov. 28,
2004 2003
--------- ---------
Cash flows from operating activities:
Net income $113,501 $83,349
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 17,802 12,774
Stock compensation expense 46 368
Deferred income taxes (2,172) 19,136
Provision for (recovery of) losses on
receivables (58) 738
Tax benefit from employee stock option plans 67,822 25,087
Net gains on sales and impairments of
investments (4,158) (379)
Non-cash restructuring and other charges -- (105)
Changes in operating assets and liabilities:
Receivables (30,291) (33,725)
Other current assets 6,424 10,191
Trade and other payables 6,531 5,367
Accrued expenses 33,065 10,237
Accrued restructuring charges (94) (873)
Income taxes payable (30,778) (7,541)
Deferred revenue 12,393 3,991
--------- ---------
Net cash provided by operating activities 190,033 128,615
--------- ---------
Cash flows from investing activities:
Purchases of short-term investments (223,471) (423,963)
Maturities and sales of short-term investments 223,529 222,063
Acquisitions of property and equipment (21,070) (12,590)
Purchases of long-term investments and other
assets (16,262) (4,840)
Proceeds from sale of equity securities and other
assets 2,788 4,742
--------- ---------
Net cash used for investing activities (34,486) (214,588)
--------- ---------
Cash flows from financing activities:
Purchase of treasury stock (200,015) (240)
Proceeds from issuance of treasury stock 221,145 132,321
Payment of dividends (2,982) (2,925)
--------- ---------
Net cash provided by financing activities 18,148 129,156
--------- ---------
Effect of foreign currency exchange rates on cash
and cash equivalents 3,732 2,273
--------- ---------
Net increase in cash and cash equivalents 177,427 45,456
Cash and cash equivalents at beginning of period 198,700 144,461
--------- ---------
Cash and cash equivalents at end of period $376,127 $189,917
========= =========
Non-GAAP Results
(In thousands, except per share data)
The following tables show the Company's non-GAAP results
reconciled to GAAP results included in this release. The Company's
non-GAAP results do not, as applicable, include restructuring and
other charges or investment gains and losses.
Three Months Ended
----------------------------------
Dec. 3, Nov. 28, Sept. 3,
2004 2003 2004
---------- ----------- -----------
GAAP operating income $146,379 $115,263 $140,314
Restructuring and other
charges -- (105) --
---------- ----------- -----------
Non-GAAP operating income $146,379 $115,158 $140,314
========== =========== ===========
GAAP net income $113,501 $83,349 $104,461
Restructuring and other
charges, net of tax -- (74) --
Investment (gain) loss, net
of tax (3,077) (265) 1,106
---------- ----------- -----------
Non-GAAP net income $110,424 $83,010 $105,567
========== =========== ===========
Diluted net income per share:
GAAP net income $0.45 $0.34 $0.42
Restructuring and other
charges, net of tax -- -- --
Investment (gain) loss, net
of tax (0.01) -- 0.01
---------- ----------- -----------
Non-GAAP net income $0.44 $0.34 $0.43
========== =========== ===========
Shares used in computing
diluted net income per share 250,310 245,512 247,113
========== =========== ===========
Year Ended
--------------------
December November
3, 28,
2004 2003
--------- ----------
GAAP net income $450,398 $266,344
Restructuring and other charges, net of tax -- (381)
Investment (gain) loss, net of tax (1,854) 9,013
--------- ----------
Non-GAAP net income $448,544 $274,976
========= ==========
Diluted net income per share:
GAAP net income $1.82 $1.10
Restructuring and other charges, net of tax -- --
Investment (gain) loss, net of tax (0.01) 0.04
--------- ----------
Non-GAAP net income $1.81 $1.14
========= ==========
Shares used in computing diluted net income per
share 247,813 241,450
========= ==========
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 it believes that 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 both GAAP information that includes charges and investment gains and losses discussed below and the non-GAAP measures that exclude such charges and investment gains and losses in order to assess the performance of Adobe's business and for planning and forecasting in subsequent periods. Adobe's non-GAAP operating income excludes, as applicable, 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. Non-GAAP net income and non-GAAP diluted earnings per share exclude, as applicable, restructuring and other charges and investment gains and losses. Management believes that the inclusion of these non-GAAP financial measures provides consistency Consistency can refer to:
Adobe excludes restructuring and other charges, including (i) employee severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when and other termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. benefits, (ii) lease termination costs and other expenses associated with exiting facilities, and (iii) other costs associated with terminating contracts, from its non-GAAP financial measure of operating income and net income. Adobe's management does not consider these restructuring costs as a normal component of its expenses related to ongoing operations as such charges have occurred only periodically and have not been directly linked to the level of Adobe's business activities in the quarter in which such charges occur. As a result, Adobe's management believes it is useful for itself and investors to review both GAAP information that includes such charges and non-GAAP measures of operating income and net income that exclude these charges to have a better understanding of the overall performance of Adobe's ongoing business operations and its performance in the periods presented. In accordance with GAAP, Adobe records 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. |
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