Altiris 8-K Altiris Reports Fourth Quarter and Fiscal Year 2005 Financial Results

Exhibit 99.1

Altiris Q4:05 Release

Version 9

Altiris Reports Fourth Quarter and Fiscal Year 2005 Financial Results

SALT LAKE CITY – February 1, 2006 – Altiris, Inc. (Nasdaq: ATRS), a pioneer of IT lifecycle management solutions that reduce the total cost of owning information technology, today announced financial results for the fourth quarter and fiscal year ended December 31, 2005.

For the fourth quarter, the company reported total revenue of $45.6 million, which does not include $7.2 million in revenue which was deferred to the first quarter of 2006. The company reported a net loss for the fourth quarter of $2.3 million, or ($0.08) per basic share, including charges of $2.1 million for the amortization of acquired intellectual property, $987,000 for amortization of intangible assets, $1.1 million in stock-based compensation and $124,000 in restructuring charges. On a Non-GAAP basis, net income was $1.5 million, or $0.05 per diluted share, for the fourth quarter of 2005, excluding the above-mentioned charges and applying a tax rate of 35 percent.

During the quarter, the company bundled its security solutions into a select number of suites. The delivery of license keys on suites is automated, while the delivery of license keys on security solutions has been a manual process and the license keys on security solutions were not delivered on time. As a result, the company was required to defer the entire value of the bundled suites.

If this licensing issue did not occur, Altiris would have reported total revenue of $52.8 million and Non-GAAP net income of $6.2 million, or $0.21 per diluted share, for the fourth quarter of 2005.

“We completed the strongest quarter of business in our history and delivered revenues and earnings well above guidance,” commented Greg Butterfield, chairman and CEO of Altiris. “As a result of the licensing issues, however, we deferred $7.2 million in revenue on specific sales of Client Management Suite, Server Management Suite and Total Management Suite. We will now recognize this revenue in the first quarter of 2006 where we expect total revenue to be in the range of $55 to $58 million. For fiscal year 2006, we expect total revenue to be in the range of $217 to $227 million.

“The fourth quarter wraps up a productive year for Altiris where we significantly advanced our business. We had more product releases than any other year in our history and won numerous awards for our first-class solutions. We added key technologies to our portfolio of solutions and they have been well received by customers and partners. We focused our go-to-market efforts to take better advantage of new opportunities and intensified our competitive advantage.

“As the industry evolves toward on-demand computing or service oriented architectures, we believe we are well-positioned to provide open solutions that enable lifecycle integration, audit-ready security and automated IT operations in the new service-based delivery models. Our business is stronger than ever and we are optimistic about our ability to expand our opportunities in 2006,” concluded Butterfield.

For calendar year 2005, the Company reported total revenue of $187.6 million and net income of $4.5 million, including charges of $8.8 million for the amortization of acquired intellectual property, $4.0 for amortization of intangible assets, $5.9 million in stock-based compensation, $3.7 million in restructuring charges and write offs of in-process research and development charges, offset by $10.0 million in legal settlement awards. On a Non-GAAP basis, the Company reported net income of $13.8 million, or $0.48 per diluted share, for calendar year 2005, excluding the previously mentioned charges and awards.

Earnings Call Information

Altiris, Inc. will broadcast a conference call discussing the company’s fourth quarter and 2005 year-end results today, Wednesday, February 1, 2006 beginning at 5:00 p.m. Eastern Time. To participate, please dial 866-249-6463. A live Webcast of the call will be available from the Investor Relations section of the company’s corporate website athttp://phx.corporate-ir.net/phoenix.zhtml?c=131071&p=irol-irhome. For those unable to listen to the live Webcast, a replay of the call will also be available on the Altiris Website, or by dialing 800-405-2236 and entering passcode 11050642.

Non-GAAP Financial Measures

In this earnings release and during our earnings conference call and Webcast as described above, we use or plan to discuss certain Non-GAAP financial measures. Generally, a Non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States of America, or GAAP. A reconciliation between Non-GAAP and GAAP measures can be found in the accompanying tables and on the Investor Relations Section of our website atwww.altiris.com. We believe that, while these Non-GAAP measures are not a substitute for GAAP results, they provide a basis for evaluating the Company’s cash requirements for ongoing operating activities. These Non-GAAP measures have been reconciled to the nearest GAAP measure as required under SEC rules. We compute Non-GAAP net income by adjusting GAAP net income before taxes for amortization of acquisition-related intellectual property, amortization of other acquired intangible assets such as customer lists and work force, restructuring charges and stock-based compensation. In addition, we used a Non-GAAP tax rate of 35 percent for the fourth quarters of 2005 and 2004.

About Altiris

Altiris, Inc. is a pioneer of IT lifecycle management software that allows IT organizations to easily manage, secure and service desktops, notebooks, thin clients, handhelds, industry-standard servers, and heterogeneous software including Windows, Linux and

UNIX. Altiris automates and simplifies IT projects throughout the life of an asset to reduce the cost and complexity of management. Altiris client and mobile, server, security and IT asset management solutions natively integrate via a common Web-based console and repository. For more information, visitwww.altiris.com.

Altiris is a registered trademark of Altiris, Inc. in the U.S. and in other countries. ManageFusion is a trademark of Altiris, Inc. in the U.S. and in other countries.

Note on Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including but not limited to, statements regarding our expectations for revenue and earnings in the first quarter of 2006 and fiscal year 2006, our position in the market to capitalize on new opportunities including the new service-based delivery models, and the strength of our business as we move into 2006. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ, including, but not limited to, the following: uncertainty regarding the impact that FAS 123(R) may have on the calculation of shares used to calculate earnings per share; uncertainty concerning the reconciliation of the Non-GAAP revenue and earnings guidance to GAAP measures for the first quarter and fiscal year 2006; changes in the demand for our products; changes in economic conditions generally or technology spending in particular; changes in the competitive dynamics of our markets, including strategic alliances and consolidation among our competitors or strategic partners; deterioration of our relationships with Dell, HP, Fujitsu Siemens Computers, Microsoft and other OEMs and strategic partners; our inability to develop and expand our VAR, systems integrator and other distribution channels; our inability to compete effectively in an increasingly competitive market; our inability to implement and maintain adequate internal systems and effective internal control over financial reporting, which may result in unexpected fluctuations in our quarterly financial results; our inability to align our expenses with anticipated revenues and Company strategy; our inability to manage expenses; our inability to achieve the anticipated benefits of recently acquired businesses; slower than expected closure rates on larger transactions; disruptions in our business and operations as a result of acquisitions; difficulties and delays in product development and bringing products to market; the length and complexity of our product sales cycle; our failure to continue to meet the sophisticated and changing needs of our customers; risks inherent in doing business internationally; changes in relevant accounting standards and securities laws and regulations, and such other risks as identified in our Quarterly Report on Form 10-Q for the period ended September 30, 2005 as filed with the Securities and Exchange Commission and all subsequent filings, which contain and identify important factors that could cause the actual results to differ materially from those contained in our projections or forward-looking statements. Altiris assumes no obligation, and does not intend, to update these forward-looking statements.

(TABLES TO FOLLOW)

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Altiris contact:	Investor contacts:
Susan Richards	Erica Abrams, Vanessa Lehr
Altiris Inc.	The Blueshirt Group for Altiris
801-805-2783	415-217-7722
srichards@altiris.com	erica@blueshirtgroup.com
	vanessa@blueshirtgroup.com

Altiris, Inc.

Consolidated Balance Sheets

(Unaudited)

(in 000’s)

	December 31, 2005			December 31, 2004
ASSETS
Current assets:
Cash and marketable securities	$	153,269		$	183,447
Accounts receivable, net		45,547			40,056
Prepaid expenses and other current assets		3,382			4,171
Deferred tax asset		851			1,757
Total current assets		203,049			229,431
Property and equipment, net		6,564			5,713
Intangible assets, net		33,936			26,516
Goodwill		67,615			16,425
Other assets		330			157
Total Assets	$	311,494		$	278,242
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of capital lease obligations	$	1,518		$	994
Accounts payable		2,406			2,661
Accrued salaries and benefits		12,508			12,106
Other accrued expenses		5,988			13,951
Deferred revenue		57,270			38,007
Total current liabilities		79,690			67,719
Capital lease obligations, net of current portion		1,634			871
Other accrued expenses, non-current		57			-
Deferred tax liability, non-current		266			2,755
Deferred revenue, non-current		4,857			4,689
Total liabilities		86,504			76,034
Stockholders’ equity:
Common stock		3			3
Additional paid-in capital		216,876			194,789
Deferred compensation		(3,183	)		(255	)
Accumulated other comprehensive income		(401	)		444
Retained earnings		11,695			7,227
Total stockholders’ equity		224,990			202,208
Total liabilities and stockholders’ equity	$	311,494		$	278,242

Altiris, Inc.

Consolidated Statements of Operations

(Unaudited)

(in 000’s, except per share data)

	Three Months Ended December 31						Twelve Months Ended December 31
	2005			2004			2005			2004
Revenue:
Software	$	22,498		$	30,555		$	103,449		$	105,601
Services		23,103			17,879			84,191			60,964
Total revenue		45,601			48,434			187,640			166,565
Cost of revenue:
Software		755			322			1,333			1,162
Amortization of acquired intellectual properties		2,139			1,498			8,853			4,907
Services		8,185			5,876			27,447			20,654
Total cost of revenue		11,079			7,696			37,633			26,723
Gross profit		34,522			40,738			150,007			139,842
Operating expenses:
Sales and marketing		20,673			19,282			78,663			65,643
Research and development		9,306			7,841			39,366			31,414
General and administrative		5,193			4,533			21,443			14,718
Amortization of intangible assets		987			693			4,001			2,725
Restructuring charge		124			—			2,142			—
Write-off of in-process research and development		—			—			1,600			—
Stock-based compensation		1,148			157			5,942			613
Total operating expenses		37,431			32,506			153,157			115,113
Income (loss) from operations		(2,909	)		8,232			(3,150	)		24,729
Other income, net		820			1,613			11,839			2,647
Income (loss) before income taxes		(2,089	)		9,845			8,689			27,376
Provision for income taxes		(210	)		(3,296	)		(4,221	)		(10,652	)
Net income (loss)	$	(2,299	)	$	6,549		$	4,468		$	16,724
Basic net income (loss) per share	$	(0.08	)	$	0.24		$	0.16		$	0.63
Diluted net income (loss) per share	$	(0.08	)	$	0.23		$	0.16		$	0.61
Basic shares		27,926			26,997			27,593			26,612
Diluted shares		27,926			27,967			28,521			27,539
Non-GAAP ADJUSTMENTS
GAAP income (loss) before income taxes	$	(2,089	)	$	9,845		$	8,689		$	27,376
Add back:
Amortization of acquired intellectual properties		2,139			1,498			8,853			4,907
Amortization of intangible assets		987			693			4,001			2,725
Write-off of in-process research and development		—			—			1,600			—
Restructuring charge		124			—			2,142			—
Symantec litigation settlement		—			—			(10,000	)		—
Stock-based compensation		1,148			157			5,942			613
Non-GAAP income before income taxes		2,309			12,193			21,227			35,621
Non-GAAP provision for income taxes (35%)		(808	)		(4,268	)		(7,429	)		(12,467	)
Non-GAAP net income	$	1,501		$	7,925		$	13,798		$	23,154
Non-GAAP net income per share:
Basic	$	0.05		$	0.29		$	0.50		$	0.87
Diluted	$	0.05		$	0.28		$	0.48		$	0.84
Shares used to compute Non-GAAP net income per share:
Basic		27,926			26,997			27,593			26,612
Diluted		28,681			27,967			28,521			27,539