Symantec Reports Record First Quarter Earnings on 26% Revenue Growth; Strong Enterprise Performance and Worldwide Growth.CUPERTINO Cu·per·ti·no A city of western California west of San Jose. It has an electronics industry. Population: 50,000. , Calif. -- Symantec (Symantec Corporation, Cupertino, CA, www.symantec.com) A software company founded in 1982 by Dr. Gary Hendrix. It was acquired by Gordon Eubanks in 1984 and released its Q&A file manager the following year. In 1990, it merged with Peter Norton Computing, Inc. Corp. (Nasdaq:SYMC SYMC Symantec Corporation (stock symbol) ) today reported results for the first quarter of fiscal year 2006, ended July July: see month. 1, 2005. Symantec posted revenue for the quarter of $700 million, a 26 percent increase compared to $557 million for the same quarter last year. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). Results: GAAP net income for the fiscal first quarter was $199 million, compared to $117 million for the same quarter last year. Earnings per share was $0.27, compared to earnings per share of $0.16 for the year-ago quarter. Non-GAAP Results: Non-GAAP net income for fiscal first quarter was $199 million, compared to $128 million for the same quarter last year. Non-GAAP earnings per share was $0.27, 50 percent higher than the June June: see month. 2004 quarter's non-GAAP earnings per share of $0.18. Non-GAAP results, as outlined in the attached consolidated statements, exclude acquisition-related amortization of intangibles and amortization of deferred stock-based compensation, acquired IPR&D, 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. , integration planning charges related to the merger with VERITAS, and the related income tax benefits, and a reduction of taxes provided on earnings repatriated under the American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Jobs Creation Act. See "Use of Non-GAAP Financial Information" below. "Symantec's success in the quarter was paralleled by equally strong performance by VERITAS," said John W. Thompson
Revenue Components For the quarter, Symantec's worldwide enterprise business, including enterprise security, enterprise administration, and services, represented 49 percent of total revenue and grew 23 percent year-over-year. Symantec's enterprise security business represented 38 percent of total revenue and grew 26 percent; the enterprise administration business represented 10 percent of total revenue and grew 10 percent; and the services business represented 1 percent of total revenue and grew 85 percent. Symantec's consumer business represented 51 percent of total revenue and grew 28 percent. International revenues represented 51 percent of total revenue in the first quarter and grew 27 percent over the same quarter last year. The Americas A·mer·i·cas , the See America. , including 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. , Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. , and Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , represented 55 percent of total revenue and grew 25 percent. The Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). ,
Middle East, and Africa region represented 31 percent of total revenue
and grew 28 percent. Asia Pacific/Japan represented 14 percent of total
revenue and grew 22 percent.
VERITAS Results Revenue for VERITAS as a standalone stand·a·lone adj. Self-contained and usually independently operating: a standalone computer terminal. company was $529 million for the June quarter, up 9 percent year-over-year. Non-GAAP 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. and cost-of-sales were $407 million or 77 percent of revenue. Non-GAAP operating expenses and cost-of-sales exclude acquisition-related amortization of intangibles and amortization of deferred stock-based compensation, merger-related expenses, and related income tax benefits. The financial results of Symantec reported in this release do not include the operating results of VERITAS, since Symantec's merger with VERITAS was completed on July 2, 2005, after the close of Symantec's June quarter. Business Outlook The methodology for presenting combined historical financial information, as well as guidance for fiscal year 2006, will be reviewed in the conference call schedule for 5 p.m. ET/2 p.m. PT today. See "Conference Call" below. Quarterly Highlights --Symantec signed 274 contracts worldwide worth more than $100,000 each, including 15 deals worth more than $1 million each, during the quarter. Fifty-three percent of these deals included multiple Symantec enterprise products and services, an increase of 22 percent from the same quarter last year. --Symantec signed new or extended agreements with customers including Amica Mutual Insurance Amica Mutual Insurance is a mutual insurance company founded in 1907 and located in Lincoln, Rhode Island offering primarily auto, home, and life insurance. The company is licensed in 49 US states with most business concentrated in the Northeastern United States, Florida, Texas, Company, the oldest mutual insurer An individual or company who, through a contractual agreement, undertakes to compensate specified losses, liability, or damages incurred by another individual. An insurer is frequently an insurance company and is also known as an underwriter. of automobiles in the United States; Baltimore County Public Schools Baltimore County Public Schools is the school district in charge of all public schools in Baltimore County, Maryland, United States. The school system is managed by the Board of Education, headquartered in Towson. The Superintendent is Dr. Joe Hairston. , one of the 25 largest school systems in the nation; First Horizon National Corporation, one of the nation's largest financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. companies; Inova Health System Inova Health System is a non-profit health organization based in Northern Virginia, USA. Hospitals under Inova provide most of the healthcare needs for citizens in Northern Virginia. The flagship hospital, Inova Fairfax Hospital, has won acclaims as one of the best hospitals in the nation. , a not-for-profit Not-for-profit An organization established for charitable, humanitarian, or educational purposes that is exempt from some taxes and in which no one in profits or losses. health care system based in Northern Virginia Northern Virginia (NoVA) consists of Arlington, Fairfax, Loudoun, and Prince William counties and the independent cities of Alexandria, Falls Church, Fairfax, Manassas, and Manassas Park. ; and Tellabs  This article or section is written like an .Please help [ rewrite this article] from a neutral point of view. Mark blatant advertising for , using . , which designs, develops, deploys, and supports solutions for telecom service providers in about 100 countries. --International customers from the quarter included ING Vysya Bank Ltd, a premier private sector bank with more than three million customers and 400 branches across India India, officially Republic of India, republic (2005 est pop. 1,080,264,000), 1,261,810 sq mi (3,268,090 sq km), S Asia. The second most populous country in the world, it is also sometimes called Bharat, its ancient name. India's land frontier (c. ; LG Electronics, one of the world's leading digital companies; Samsung Electronics Samsung Electronics (SEC, Hangul:삼성전자; KSE: 005930, KSE: 005935, LSE: SMSN, LSE: SMSD) is a South Korean multinational corporation and the world's largest and leading electronics and information technology company. Co. LTD, one of the world's largest microchip (1) Another term for a microminiaturized integrated circuit (a "chip"). (2) To insert an RFID tag beneath the skin of an animal. It is expected that some day, humans will be microchipped. makers and South Korea's top electronics company; and VIVO (Video In Video Out) Refers to a display adapter with analog video capture and analog video out (NTSC out) capabilities. See display adapter. , the largest cellular phone operator in Latin America with more than 37 million users. Conference Call Symantec has scheduled a conference call for 5 p.m. ET/2 p.m. PT today to discuss the results of the first quarter of fiscal year 2006, ended July 1, 2005, and to review guidance for the fiscal year 2006. Interested parties may access the conference call on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at http://www.symantec.com/invest/index.html. To listen to the live call, please go to the Web site at least 15 minutes early to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. , and install any necessary audio software. A replay and script of our officers' remarks will be available on the investor relations' home page shortly after the call is completed. About Symantec Symantec is the world leader in providing solutions to help individuals and enterprises assure the security, availability, and integrity of their information. Headquartered in Cupertino, Calif., Symantec has operations in more than 40 countries. More information is available at www.symantec.com. NOTE TO EDITORS: If you would like additional information on Symantec Corporation and its products, please view the Symantec Press Center at http://www.symantec.com/PressCenter/ on Symantec's Web site. All prices noted are in US dollars and are valid only in the United States. Symantec, the Symantec logo, VERITAS, and the VERITAS logo are trademarks or registered trademarks of Symantec Corporation or its affiliates in the United States and certain other countries. Additional company and product names may be trademarks or registered trademarks of the individual companies and are respectfully re·spect·ful adj. Showing or marked by proper respect. re·spect  ful·ly adv. acknowledged.
FORWARD LOOKING STATEMENTS: This press release contains statements regarding our financial and business results which may be considered forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. within the meaning of the U.S. federal securities laws. These statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from results expressed or implied by this press release. Such risk factors include, among others: whether Symantec and VERITAS can successfully integrate their businesses, maintain customer and partner relationships and leverage synergies; the sustainability of recent growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. , particularly in consumer products; the anticipation of the growth of certain market segments, particularly enterprise security and international; the competitive environment in the software industry; changes to operating systems Operating systems can be categorized by technology, ownership, licensing, working state, usage, and by many other characteristics. In practice, many of these groupings may overlap. and product strategy by vendors of operating systems; general market conditions; fluctuations in currency exchange rates; the timing and market acceptance of new product releases and upgrades; whether Symantec can successfully develop new products and integrate acquired businesses, and the degree to which these products and businesses gain market acceptance. Actual results may differ materially from those contained in the forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. in this press release. Additional information concerning these and other risk factors is contained in the Risk Factors sections of Symantec's Form 10-K Form 10-K 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. for the fiscal year ended April 1, 2005 and in the Form S-4 Registration Statement filed in connection with the merger of Symantec and VERITAS . Symantec assumes no obligation to update any forward-looking information contained in this press release. USE OF NON-GAAP FINANCIAL INFORMATION: In addition to reporting financial results 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 generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting , or GAAP, Symantec reports non-GAAP financial results. Non-GAAP net income and earnings per share exclude amortization of acquisition-related intangibles, amortization of deferred stock-based compensation, in-process research and development, and certain other identified charges, such as 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). , patent settlement, and integration planning expenses associated with the VERITAS merger, as well as the tax effect of these items, and the one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. tax effect associated with the company's cash repatriation Repatriation The process of converting a foreign currency into the currency of one's own country. Notes: If you are American, converting British Pounds back to U.S. dollars is an example of repatriation. under the American Jobs Creation Act. Symantec's management believes these non-GAAP measures are useful to investors because they provide supplemental information that facilitates comparisons to prior periods. Management uses these non-GAAP measures to evaluate its financial results, develop budgets and manage expenditures. The method Symantec uses to produce non-GAAP results is not computed according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. GAAP, is likely to differ from the methods used by other companies and should not be regarded as a replacement for corresponding GAAP measures. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to the comparable GAAP results, which is attached to this release and can also be found on the investor relations Investor relations The process by which the corporation communicates with its investors. Web site at www.symantec.com/invest/center.html.
SYMANTEC CORPORATION
GAAP Consolidated Statements of Income
Three Months Ended
June 30,
(In thousands, except per share data; unaudited) 2005 2004
-------- --------
Net revenues (1) $699,942 $556,634
Cost of revenues:
Cost of sales 105,782 89,011
Amortization of acquired product rights 11,013 11,250
Total cost of revenues 116,795 100,261
Gross profit 583,147 456,373
Operating expenses:
Sales and marketing 211,109 187,932
Research and development 91,233 72,884
General and administrative 30,388 24,285
Amortization of other intangibles from
acquisitions 1,739 892
Amortization of deferred stock-based
compensation 2,785 --
Patent settlement 2,200 --
Acquired in-process research and development -- 2,262
Restructuring 3,474 860
Integration planning 7,901 --
Total operating expenses 350,829 289,115
Operating income 232,318 167,258
Interest and other income, net 22,758 10,438
Interest expense -- (5,291)
Income before income taxes 255,076 172,405
Provision for income taxes 56,443 55,128
Net income $198,633 $117,277
Net income per share - diluted (2) $ 0.27 $ 0.16
Shares used to compute net income
per share - diluted (2) 737,211 735,852
(1) Net revenues for the quarter ended June 2004 include a $20
million reduction to correct for an understatement of deferred
revenue.
(2) Share and per share amounts for the three months ended June
30, 2004 retroactively reflect the two-for-one stock split
effected as a stock dividend, which occurred on November 19, 2004.
For the three months ended June 30, 2004, diluted net income per
share is calculated using the if-converted method. Under this
method, the numerator excludes the interest expense from the 3%
convertible subordinated notes, net of income tax, of $3.6M for
the three months ended June 30, 2004, and the denominator includes
shares issuable from the assumed conversion of the 3% convertible
subordinated notes.
SYMANTEC CORPORATION
Non-GAAP Consolidated Statements of Income
Non-GAAP amounts exclude all acquisition related amortization of
intangibles and amortization of deferred stock-based compensation,
acquired IPR&D, restructuring charges, integration planning charges
related to our merger with VERITAS, reduction of foreign taxes
provided on earnings repatriated under the Jobs Act, and related
income tax benefits.
Three Months Ended
June 30,
(In thousands, except per share data; unaudited) 2005 2004
-------- --------
Net revenues (1) $699,942 $556,634
Cost of revenues 105,782 89,011
Gross profit 594,160 467,623
Operating expenses:
Sales and marketing 211,109 187,932
Research and development 91,233 72,884
General and administrative 30,388 24,285
Total operating expenses 332,730 285,101
Operating income 261,430 182,522
Interest and other income, net 22,758 10,438
Interest expense -- (5,291)
Income before income taxes 284,188 187,669
Provision for income taxes 85,256 60,054
Net income $198,932 $127,615
Net income per share - diluted (2) $ 0.27 $ 0.18
Shares used to compute net income per share -
diluted (2) 737,211 735,852
(1) Net revenues for the quarter ended June 2004 include a $20
million reduction to correct for an understatement of deferred
revenue.
(2) Share and per share amounts for the three months ended June
30, 2004 retroactively reflect the two-for-one stock split
effected as a stock dividend, which occurred on November 19, 2004.
For the three months ended June 30, 2004, diluted net income per
share is calculated using the if-converted method. Under this
method, the numerator excludes the interest expense from the 3%
convertible subordinated notes, net of income tax, of $3.6M for
the three months ended June 30, 2004, and the denominator includes
shares issuable from the assumed conversion of the 3% convertible
subordinated notes.
SYMANTEC CORPORATION
Reconciliation of Non-GAAP Gross Profit, Operating Expenses and
Consolidated Statements of Income to the GAAP Gross Profit, Operating
Expenses and Consolidated Statements of Income
Three Months Ended
June 30,
(In thousands, except per share data; unaudited) 2005 2004
-------- --------
Non-GAAP gross profit $594,160 $467,623
Cost of revenues:
Amortization of acquired product rights (11,013) (11,250)
GAAP gross profit $583,147 $456,373
Non-GAAP operating expenses $332,730 $285,101
Operating expenses:
Amortization of other intangibles from
acquisitions 1,739 892
Amortization of deferred stock-based
compensation 2,785 --
Patent settlement 2,200 --
Acquired in-process research and development -- 2,262
Restructuring 3,474 860
Integration planning 7,901 --
Total operating expenses 18,099 4,014
GAAP operating expenses $350,829 $289,115
Non-GAAP net income $198,932 $127,615
Cost of revenues (11,013) (11,250)
Operating expenses (18,099) (4,014)
Reduction of foreign taxes provided on earnings
repatriated 19,611 --
Income tax benefit 9,202 4,926
GAAP net income $198,633 $117,277
Non-GAAP and GAAP net income per share - diluted
Non-GAAP net income per share - diluted $ 0.27 $ 0.18
GAAP net income per share - diluted $ 0.27 $ 0.16
Shares used to compute net income
per share - diluted 737,211 735,852
SYMANTEC CORPORATION
Consolidated Balance Sheets
June 30, March 31,
(In thousands) 2005 2005
ASSETS ------------ ------------
Current assets:
Cash and short-term investments $3,351,149 $3,206,587
Trade accounts receivable, net 241,248 285,325
Inventories 15,346 19,118
Current deferred income taxes 97,668 97,279
Other current assets 84,697 79,973
Total current assets 3,790,108 3,688,282
Property and equipment, net 382,486 382,689
Acquired product rights, net 120,547 127,619
Other intangible assets, net 29,001 30,739
Goodwill 1,372,641 1,365,213
Other long-term assets 19,276 19,679
---------- ----------
$5,714,059 $5,614,221
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 87,959 $ 74,685
Accrued compensation and benefits 98,821 140,543
Current deferred revenue 1,155,107 1,215,537
Other accrued expenses 85,194 91,033
Income taxes payable 177,234 179,225
Total current liabilities 1,604,315 1,701,023
Long-term deferred revenue 113,293 114,724
Long-term deferred tax liabilities 74,324 88,613
Other long-term obligations 3,442 4,408
Stockholders' equity:
Common stock 7,138 7,105
Capital in excess of par value 2,456,241 2,412,947
Accumulated other comprehensive income 163,208 191,938
Deferred stock-based compensation (18,285) (21,070)
Retained earnings 1,310,383 1,114,533
Total stockholders' equity 3,918,685 3,705,453
---------- ----------
$5,714,059 $5,614,221
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