EXHIBIT 99.1
News Release
FOR IMMEDIATE RELEASE
MEDIA CONTACT: INVESTOR CONTACT:
Melissa Martin Helyn Corcos
Symantec Corporation Symantec Corporation
408-517-8475 408-517-8324
Melissa_martin@symantec.com hcorcos@symantec.com
SYMANTEC REPORTS RECORD QUARTER WITH 48 PERCENT YEAR-OVER-YEAR REVENUE GROWTH
RAISES SEPTEMBER QUARTER AND FISCAL YEAR GUIDANCE
CUPERTINO, CALIF. - JULY 21, 2004 - Symantec Corp. (Nasdaq: SYMC), the global
leader in information security, today reported results for the fiscal first
quarter ended July 2, 2004. Symantec posted revenue for the quarter of $577
million, a 48 percent increase compared to $391 million for the same quarter
last year, driven by solid enterprise revenues and stronger than expected
consumer results.
GAAP RESULTS: Net income for the fiscal first quarter was $131 million, compared
to $59 million for the same quarter last year. Earnings per share was $0.37,
compared to earnings per share of $0.18 for the year-ago quarter.
NON-GAAP RESULTS: Non-GAAP net income for the fiscal first quarter was $142
million, compared to $75 million for the same quarter last year. Non-GAAP
earnings per share was $0.39, compared to earnings per share of $0.22 for the
year-ago quarter. Non-GAAP results and related reconciliation, as outlined in
the attached consolidated statements, exclude expenses from the amortization of
other intangibles from acquisitions, acquired in-process research and
development, restructuring charges, and patent settlement charges as well as
related income tax benefits. See "Use of Non-GAAP Financial Information" below.
"Our enterprise business continues to gain momentum as we enhance our offerings
to protect customers from a broadening array of threats and the consumer
business continues to perform above expectations," said John W. Thompson,
Symantec chairman and CEO. "As security and network management continue to
converge, we are well positioned with a broad portfolio of products and services
to address both consumer and enterprise customer needs."
REVENUE COMPONENTS
For the quarter, Symantec's worldwide enterprise business, including enterprise
security, enterprise administration, and services, represented 48 percent of
total revenue and grew 24%. Symantec's enterprise security business represented
35 percent of total revenue and grew 24 percent year-over-year; the enterprise
administration business represented 11 percent of
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SYMANTEC REPORTS RECORD QUARTER WITH 48 PERCENT REVENUE GROWTH
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revenues and grew 27 percent; and the services business represented 2 percent of
total revenue and grew 14 percent. Symantec's consumer business grew 79 percent
and represented 52 percent of total revenue.
International revenues represented 52 percent of total revenue in the first
quarter and grew 51 percent over the same quarter last year. The Americas,
including the United States, Latin America, and Canada, grew 43 percent. The
Europe, Middle East and Africa region recorded 49 percent growth and Japan/Asia
Pacific grew 62 percent.
BUSINESS OUTLOOK
Symantec is raising forward-looking guidance for the fiscal second quarter
ending Oct. 1, 2004, as follows:
- - Revenue is estimated at $580 million, an increase of $15 million from prior
guidance.
- - At this revenue guidance, GAAP earnings per share is estimated to be $0.34,
an increase of $0.02 from previous guidance.
- - At this revenue guidance, non-GAAP earnings per share is estimated to be
$0.37, an increase of $0.03 from previous guidance.
Symantec is raising forward-looking guidance for fiscal year 2005 ending April
1, 2005, as follows:
- - Revenue is estimated at $2.405 billion, an increase of $70 million from prior
guidance.
- - GAAP earnings per share is estimated at $1.48, an increase of $0.11 from
previous guidance.
- - Non-GAAP earnings per share is estimated at $1.57, an increase of $0.11 from
previous guidance.
Non-GAAP earnings per share excludes the pre-tax amortization of other
intangibles from acquisitions, acquired in-process research and development and
restructuring charges of approximately $14 million and $52 million for the
quarter ending Oct. 1, 2004, and the fiscal year ending April 1, 2005,
respectively.
QUARTERLY HIGHLIGHTS
- - During the quarter, the total number of transactions worldwide worth more
than $100,000 each was 225, including 55 worth more than $300,000 each and 6
worth more than $1 million each. Customers from the quarter include
Countrywide Financial, UPS, H&R BLOCK, EXEMPLA HEALTHCARE, a not-for-profit
community-based healthcare organization; and CHRISTUS HEALTH, a faith-based,
not-for-profit health system.
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SYMANTEC REPORTS RECORD QUARTER WITH 48 PERCENT REVENUE GROWTH
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- - International customers from the quarter include ZF FRIEDRICHSHAFEN, a
leading worldwide automotive supplier for driveline and chassis technology
based in Germany; LINDE AG, an international technology group based in
Germany with leading market positions in gas and engineering, material
handling, and refrigeration; RAIFFEISEN INFORMATIK AG, a technology company,
based in Switzerland, responsible for managing and securing the shared
infrastructure of the Raiffeisen Group, the third largest Bank in Switzerland
with more than 1,200 locations; GLOBUS GRUPPE, a part of MIGROS, the largest
retailer in Switzerland; GRUPO NACIONAL PROVINCIAL, a leading Mexican
insurance company; SAMSUNG ELECTRONICS CO LTD, a global leader in
semiconductor, telecommunication, digital media and digital convergence
technologies, based in Korea.
- - During the quarter Symantec announced and closed the acquisition of
Brightmail and launched Symantec Brightmail Anti-Spam Version 6.0, which
provides new non-English language filters and powerful administration
enhancements. This version includes a centralized Web-based control center,
consolidated logging and reporting, and global policies that can be created
on a per-user or per-group basis.
- - In addition, Symantec launched Symantec Client Security 2.0, a centrally
managed client security solution that integrates antivirus, firewall and
intrusion prevention technologies. The solution provides zero-day protection
for enterprise clients against blended threats and worms.
- - Symantec also announced Symantec Enterprise Firewall 8.0 for Windows and
Solaris platforms, which provides proactive, enterprise-class network and
application-level protection by integrating full application inspection,
application-layer proxies, stateful inspection and packet filtering
technology.
- - Symantec announced Symantec Client Migration 3.0, an easy-to-use solution
designed to reduce the costs and user downtime associated with PC migration.
The solution streamlines the migration process by automating many of the
repetitive tasks associated with PC migration.
- - During the quarter Symantec released Incident Manager 3.0, with improved
performance and usability it correlates security events in real time across
disparate security technologies and network tiers to identify, prioritize and
coordinate the resolution of security incidents. Incident Manager 3.0 is now
integrated with BMC Software's Remedy Help Desk and Action Request System (AR
System) enabling faster and more succinct communication between internal IT
and security teams. This will result in quicker response and resolution to
security incidents and vulnerabilities ensuring that businesses achieve a
greater level of business continuity.
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SYMANTEC REPORTS RECORD QUARTER WITH 48 PERCENT REVENUE GROWTH
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ABOUT SYMANTEC
Symantec is the global leader in information security providing a broad range of
software, appliances and services designed to help individuals, small and
mid-sized businesses, and large enterprises secure and manage their IT
infrastructure. Symantec's Norton brand of products is the worldwide leader in
consumer security and problem-solving solutions. Headquartered in Cupertino,
Calif., Symantec has operations in more than 35 countries. More information is
available at http://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 and Brightmail are trademarks or registered
trademarks, in the United States and certain other countries, of Symantec
Corporation. Additional company and product names may be trademarks or
registered trademarks of the individual companies and are respectfully
acknowledged.
FORWARD LOOKING STATEMENT: This press release contains forward-looking
statements, including forecasts of future revenue and earnings per share,
expected industry patterns, and other financial and business results that
involve 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: the sustainability of recent growth rates,
particularly in consumer products; the anticipation of the growth of certain
market segments, particularly enterprise security; the positioning of Symantec's
products in those segments; the competitive environment in the software
industry; general market conditions; fluctuations in currency exchange rates;
changes to operating systems and product strategy by vendors of operating
systems; and 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 in this press release.
Additional information concerning these and other risk factors is contained in
the Risk Factors sections of Symantec's recently filed Form 10-K. 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 with generally accepted accounting principles, or GAAP,
Symantec reports non-GAAP financial results. Non-GAAP net income and earnings
per share exclude acquisition related charges, such as amortization of other
intangibles and in-process research and development, and certain other
identified charges, such as restructuring and patent settlement, as well as the
tax effect of these items. 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 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 Web site at
www.symantec.com/invest/center.html.
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SYMANTEC REPORTS RECORD QUARTER WITH 48 PERCENT REVENUE GROWTH
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SYMANTEC CORPORATION
GAAP CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
June 30,
-------------------------
(In thousands, except per share data; unaudited) 2004 2003
- ------------------------------------------------------ --------- ---------
Net revenues $ 577,067 $ 391,124
Cost of revenues 100,261 67,578
--------- ---------
Gross profit 476,806 323,546
Operating expenses:
Research and development 72,884 60,605
Sales and marketing 187,932 141,837
General and administrative 24,285 26,372
Amortization of other intangibles from acquisitions 892 791
Acquired in-process research and development 2,262 --
Restructuring, site closures and other 860 568
Patent settlement -- 13,917
--------- ---------
Total operating expenses 289,115 244,090
Operating income 187,691 79,456
Interest income 9,318 10,097
Interest expense (5,291) (5,291)
Income, net of expense, from sale of technologies
and product lines -- 2,168
Other income (expense), net 1,120 (711)
--------- ---------
Income before income taxes 192,838 85,719
Provision for income taxes 61,667 26,938
--------- ---------
Net income $ 131,171 $ 58,781
========= =========
Net income per share - diluted* $ 0.37 $ 0.18
========= =========
Shares used to compute net income
per share - diluted* 367,926 349,976
========= =========
* For the three months ended June 30, 2004 and 2003, 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 each of the three months ended June 30,
2004 and 2003, and the denominator includes shares issuable from the assumed
conversion of the 3% convertible subordinated notes.
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SYMANTEC REPORTS RECORD QUARTER WITH 48 PERCENT REVENUE GROWTH
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SYMANTEC CORPORATION
NON-GAAP CONSOLIDATED STATEMENTS OF INCOME
NON-GAAP AMOUNTS EXCLUDE ALL ACQUISITION RELATED AMORTIZATION OF INTANGIBLES,
ACQUIRED IPR&D, PATENT SETTLEMENT AND RESTRUCTURING CHARGES.
Three Months Ended
June 30,
-------------------------
(In thousands, except per share data; unaudited) 2004 2003
- ------------------------------------------------------ --------- ---------
Net revenues $ 577,067 $ 391,124
Cost of revenues 89,011 58,813
--------- ---------
Gross profit 488,056 332,311
Operating expenses:
Research and development 72,884 60,605
Sales and marketing 187,932 141,837
General and administrative 24,285 26,372
--------- ---------
Total operating expenses 285,101 228,814
Operating income 202,955 103,497
Interest income 9,318 10,097
Interest expense (5,291) (5,291)
Income, net, from sale of technologies
and product lines -- 2,168
Other income (expense), net 1,120 (711)
--------- ---------
Income before income taxes 208,102 109,760
Provision for income taxes 66,593 35,123
--------- ---------
Net income $ 141,509 $ 74,637
========= =========
Net income per share - diluted* $ 0.39 $ 0.22
========= =========
Shares used to compute net income per share - diluted* 367,926 349,976
========= =========
* For the three months ended June 30, 2004 and 2003, 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 each of the three months ended June 30,
2004 and 2003, and the denominator includes shares issuable from the assumed
conversion of the 3% convertible subordinated notes.
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SYMANTEC REPORTS RECORD QUARTER WITH 48 PERCENT REVENUE GROWTH
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SYMANTEC CORPORATION
RECONCILIATION OF NON-GAAP GROSS PROFIT, OPERATING EXPENSES AND CONSOLIDATED
STATEMENTS OF INCOME TO THE GAAP GROSS MARGIN, OPERATING EXPENSES AND
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
June 30,
-------------------------
(In thousands, except per share data; unaudited) 2004 2003
- ------------------------------------------------------- --------- ---------
Non-GAAP gross profit $ 488,056 $ 332,311
Cost of revenues:
Amortization of acquired product rights (11,250) (8,765)
--------- ---------
GAAP gross profit $ 476,806 $ 323,546
========= =========
Non-GAAP operating expenses $ 285,101 $ 228,814
Operating expenses:
Amortization of other intangibles from acquisitions 892 791
Acquired in-process research and development 2,262 --
Restructuring, site closures and other 860 568
Patent settlement -- 13,917
--------- ---------
Total operating expenses 4,014 15,276
GAAP operating expenses $ 289,115 $ 244,090
========= =========
Non-GAAP net income $ 141,509 $ 74,637
Cost of revenues (11,250) (8,765)
Operating expenses (4,014) (15,276)
Income tax benefit 4,926 8,185
--------- ---------
GAAP net income $ 131,171 $ 58,781
========= =========
NON-GAAP AND GAAP NET INCOME PER SHARE - DILUTED:
Non-GAAP net income per share - diluted $ 0.39 $ 0.22
GAAP net income per share - diluted $ 0.37 $ 0.18
Shares used to compute net income
per share - diluted 367,926 349,976
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SYMANTEC REPORTS RECORD QUARTER WITH 48 PERCENT REVENUE GROWTH
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SYMANTEC CORPORATION
CONSOLIDATED BALANCE SHEETS
June 30, March 31,
(In thousands) 2004 2004
- ------------------------------------------------------ ----------- -----------
ASSETS
Current assets:
Cash, cash equivalents and short-term investments $ 2,338,728 $ 2,410,331
Trade accounts receivable, net 250,202 259,152
Inventories 14,747 15,134
Deferred income taxes 109,962 98,438
Other current assets 68,915 59,079
----------- -----------
Total current assets 2,782,554 2,842,134
Property, equipment and leasehold improvements, net 379,279 378,367
Acquired product rights, net 138,747 120,938
Goodwill 1,352,271 1,080,759
Other long-term assets 30,588 34,300
----------- -----------
$ 4,683,439 $ 4,456,498
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 73,746 $ 71,654
Accrued compensation and benefits 86,280 116,770
Current deferred revenue 946,462 878,716
Other accrued expenses 84,205 92,595
Income taxes payable 149,945 127,305
----------- -----------
Total current liabilities 1,340,638 1,287,040
Convertible subordinated notes 599,976 599,987
Long-term deferred revenue 97,741 92,481
Deferred tax liability 55,053 44,750
Other long-term obligations 5,698 6,032
Stockholders' equity:
Common stock 3,136 3,119
Capital in excess of par value 1,645,131 1,573,466
Accumulated other comprehensive income 134,887 125,484
Deferred stock-based compensation (8,303) --
Retained earnings 809,482 724,139
----------- -----------
Total stockholders' equity 2,584,333 2,426,208
----------- -----------
$ 4,683,439 $ 4,456,498
=========== ===========
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