Symantec Announces Fifth Consecutive Quarter of Record Earnings; Enterprise Revenue Increased 40%, Consumer RevenueIncreased 22%
January 19, 2000 04:31 PM
CUPERTINO, Calif.--(BUSINESS WIRE)--Jan. 19, 2000--Symantec Corporation, SYMC today announced record revenues of $201 million for the third fiscal 2000 quarter, an increase of 29 percent over the same quarter a year ago. Strong performance in the consumer market and continued momentum in the enterprise market contributed to the fifth consecutive quarter of record earnings.
Earnings per share before amortization of goodwill, one-time charges and divestitures was $0.59, representing a 37 percent increase from the same quarter last year. Net income before the amortization of goodwill, one-time charges and divestitures was $37 million, compared to $25 million the same quarter a year ago.
Earnings per share after the amortization of goodwill but before one-time charges and divestitures was $0.53, a 29 percent increase from the same quarter last year. Earnings per share after the amortization of goodwill and after one-time charges of $2.2 million but before divestitures was $0.50.
The divestiture of the ACT! and Visual Cafe product lines at the end of the quarter resulted in a one-time earnings per share increase of $0.91. As a result, earnings per share after the amortization of goodwill, one-time charges and including the impact of the divestitures was $1.41 per share.
"The worldwide team at Symantec has worked very hard to deliver outstanding results across the board. Strong retail demand during the busy holiday season, combined with a focused effort on reducing costs, produced very healthy profitability during the third quarter," said John W. Thompson, Symantec chairman, president and CEO. "In addition, for the fifth consecutive quarter, we have seen our enterprise license revenue grow by at least 40 percent year over year, continuing the momentum we've seen in this segment around the world."
Strong Consumer Performance
On a worldwide basis, Symantec's consumer revenue in the third fiscal quarter grew by 22 percent compared to the same period last year. The growth was driven by the shipment of nine new retail products late in the September quarter that led to strong retail demand in the December quarter.
Continuing a focus on the consumer suite strategy in the December quarter, Symantec launched Norton Internet Security, the only product that delivers a comprehensive set of security technologies to address the evolving needs of the consumer market, including a personal firewall combined with virus protection and URL filtering.
Continued Momentum in Enterprise
Enterprise revenue for the third fiscal 2000 quarter grew 40 percent compared to the same period last year and represents 46 percent of Symantec's total revenue.
New worldwide enterprise customers during the quarter included Deutsche Post, KPMG Hong Kong, and the University of Southern California.
During the quarter, Symantec announced the appointment of Phil Solk as vice president responsible for establishing Symantec's global Professional Services organization to help large companies identify and implement comprehensive security solutions for increasingly complex enterprise environments.
In addition, Symantec announced new enterprise products during the quarter including: Norton Ghost for NetWare 2.0, Speed Disk 5.0 for Windows NT Workstations and Norton AntiVirus for Firewalls 1.5.
Growth in International Markets
In the third fiscal 2000 quarter, international revenue represented 42 percent of total revenue, an increase of 30 percent from the same quarter a year ago. Driven by growth in the company's enterprise license business on a worldwide basis, Symantec's Europe, Middle East and Africa (EMEA) region grew by 18 percent. Revenue from the Asia Pacific and Japan regions grew 49 and 57 percent, respectively.
Product Awards
Symantec won more than 60 industry awards during the quarter including:
-- Windows Magazine WinList: Norton 2000 Corporate Edition, Norton
SystemWorks, Norton AntiVirus, WinFAX Pro
-- Norton Ghost 6.0 received the 1999 Test Center Recommended Award
from Computer Reseller News.
-- Home Office Computing Best Products of the Year: Norton 2000,
Norton SystemWorks, TalkWorks Pro, pcANYWHERE
-- PC World Editor's Pick awards: Norton Utilities and Norton
AntiVirus
-- CNET Recommends Awards: Norton 2000 and Norton SystemWorks
Conference Call
Symantec has scheduled a conference call for 5 p.m. EST today to discuss fiscal third quarter results. Interested parties may access the conference call on the Internet through Vcall at www.vcall.com. To listen to the live call, please go to the Web site at least 15 minutes early to register, download and install any necessary audio software.
About Symantec
Symantec, a world leader in Internet security technology, provides content security solutions to enterprise organizations and helps companies manage and support workforces that use computers and other mobile devices.
NOTE TO EDITORS: If you would like additional information on Symantec Corporation and its products, please view the Symantec Press Center at symantec.com on Symantec's Web site.
Brands and products referenced herein are the trademarks or registered trademarks of their respective holders. All prices noted are in US dollars and are valid only in the United States.
FORWARD LOOKING STATEMENT: This press release contains forward-looking statements. There are certain important factors that could cause Symantec's future development efforts to differ materially from those anticipated by some of the statements made above. Among these are the anticipation of the growth of certain market segments, the positioning of Symantec's products in those segments, the competitive environment in the software industry, dependence on other products, changes to operating systems and product strategy by vendors of operating systems, and the importance of new Symantec products. Additional information concerning those and other factors is contained in the "Risk Factors" section of the company's annual report on Form 10-K for the fiscal year ended April 2, 1999 and Form 10-Q for the period ended October 1, 1999.
SYMANTEC CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
Three months ended Nine months ended
December 31, December 31,
1999 1998 1999 1998
(unaudited) (unaudited) (unaudited)(unaudited)
Net revenues $200,847 $155,206 $558,520 $423,010
Cost of revenues 30,799 26,488 92,064 68,108
---------- ---------- -------- ---------
Gross margin 170,048 128,718 466,456 354,902
Operating expenses:
Research and
development 28,674 24,407 83,583 75,143
Sales and
marketing 80,603 71,815 230,030 212,212
General and
administrative 12,673 8,436 31,427 26,692
Amortization of
intangibles,
excluding goodwill 250 90 657 97
------- -------- -------- ----------
Total operating
expenses 122,200 104,748 345,697 314,144
Operating income before
goodwill amortization,
in-process research
and development,
restructuring and other
expenses and divestitures 47,848 23,970 120,759 40,758
Interest income 3,116 2,676 7,829 11,157
Interest expense - (475) (22) (1,126)
Income, net of expense,
from sale of technologies
and product lines 3,159 9,850 13,059 35,198
Other income 771 420 982 2,500
---------- ---------- --------- ---------
Income before income taxes,
goodwill amortization,
in-process research and
development, restructuring,
other expenses and
divestitures 54,894 36,441 142,607 88,487
Provision for income taxes
before goodwill amortization,
in-process research and
development, restructuring,
other expenses and
divestitures 17,566 11,661 45,634 28,316
---------- -------- -------- ----------
After-tax income before
goodwill amortization,
in-process research and
development, restructuring,
other expenses and
divestitures $ 37,328 $ 24,780 $ 96,973 $ 60,171
========== ========== ======== ==========
Goodwill amortization 4,287 1,966 13,391 3,068
Tax benefit from goodwill
amortization (206) (629) (2,725) (982)
---------- ---------- -------- ----------
Net income before in-
process research and
development, restructuring,
other expenses and
divestitures $ 33,247 $ 23,443 $ 86,307 $ 58,085
========== ========== ======== =========
In-process research and
development, restructuring
and other expenses 2,246 7,560 6,259 38,655
Tax benefit from
in-process research and
development, restructuring
and other expenses (719) - (1,231) (6,013)
========== ========== ======== =========
Net income before
divestitures $ 31,720 $ 15,883 $ 81,279 $ 25,443
========== ========== ======== =========
Divestitures 86,808 - 86,808 -
Tax provision for
divestitures 29,515 - 29,515 -
========== ========== ======== =========
Net income $ 89,013 $ 15,883 $ 138,572 $ 25,443
========== ========== ======== =========
After-tax income per
share before goodwill
amortization, in-process
research and development,
restructuring, other
expenses and divestitures
- diluted $0.59 $ 0.43 $ 1.59 $ 1.02
========== ========== ========= =========
Net income per share
before in-process
research and development,
restructuring, other
expenses and
divestitures - diluted $0.53 $ 0.41 $ 1.41 $ 0.98
========== ========== ======== =========
Net income per share
before divestitures $ 0.50 $ 0.28 $ 1.33 $ 0.44
========== ========== ======== =========
Net income per
share - basic $ 1.52 $ 0.29 $ 2.42 $ 0.45
========== ========== ======== =========
Net income per
share - diluted $ 1.41 $ 0.28 $ 2.27 $ 0.44
========== ========= ======== =========
Shares used to compute
after-tax income per
share before goodwill
amortization, in-process
research and development,
restructuring, other
expenses and
divestitures - diluted 63,020 57,633 61,058 59,652
========== ========== ======== =========
Shares used to compute
net income per share
before in-process
research and development,
restructuring, other
expenses and
divestitures - diluted 63,020 57,633 61,058 59,652
========== ========== ======== =========
Shares used to compute
net income per
share before
divestitures 63,020 57,633 61,058 59,652
========== ========== ======== =========
Shares used to compute
basic net income
per share 58,400 55,531 57,265 56,675
========== ========== ======== =========
Shares used to compute
diluted net income
per share 63,020 57,633 61,058 59,652
========== ========== ======== =========
SYMANTEC CORPORATION
CONSOLIDATED BALANCE SHEETS
December 31, March 31,
(In thousands) 1999 1999
---------------- (Unaudited)
ASSETS
Current assets:
Cash, cash equivalents
and short-term investments $ 404,461 $ 192,755
Trade accounts receivable 45,708 76,386
Inventories 7,728 6,377
Deferred income taxes 41,972 22,636
Other 11,780 12,790
------ ------
Total current assets 511,649 310,944
Long-term investments - 4,270
Restricted investments 80,951 71,405
Equipment and leasehold
improvements 54,941 52,887
Deferred income taxes 34,913 5,519
Purchased product rights
and capitalized software 30,324 36,209
Goodwill 69,558 75,224
Other 10,033 7,018
------- -----
$ 792,369 $ 563,476
========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 42,101 $ 45,862
Accrued compensation and benefits 22,683 20,788
Deferred revenue 85,935 55,965
Other accrued expenses 56,572 75,954
Income taxes payable 23,065 18,339
------- ------
Total current liabilities 230,356 216,908
Long-term obligations 975 1,455
---- -----
Stockholders' equity:
Preferred stock - -
Common stock 591 569
Capital in excess of par value 399,147 315,698
Notes receivable from stockholders (24) (144)
Unearned compensation (839) -
Retained earnings 178,523 48,100
Accumulated other comprehensive loss (16,360) (19,110)
-------- --------
Total stockholders' equity 561,038 345,113
-------- -------
$ 792,369 $ 563,476
========== =========
CONTACT: Symantec Corporation Genevieve Haldeman, 408-725-2765 (media contact) glhaldeman@symantec.com Shelley Wilson, 408-446-8891 (investor contact) swilson@symantec.com
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