SAN JOSE, Calif., March 26 /PRNewswire/ -- Adobe Systems Incorporated
(Nasdaq: ADBE) today reported financial results for its first quarter of
fiscal 1998 ended February 27, 1998. For the first quarter, Adobe achieved
$197.8 million in total revenues, compared to $226.5 million in the first
quarter of fiscal 1997. Net income reported for the first quarter of fiscal
1998 was $26.7 million, or $0.38 per share based on 69.6 million weighted
average shares compared to $46.5 million, or $0.63 per share for the first
quarter of 1997, based on 73.9 million weighted average shares.
On a normalized basis, excluding non-recurring items such as investment
gains and acquisition related charges, net income was $22.9 million, or
$0.33 per share. This compares with normalized net income for the first
quarter of fiscal 1997 of $45.4 million, or $0.61 per share. All earnings per
share amounts represent diluted earnings per share as defined in Statement of
Financial Accounting Standards No. 128.
Application products' revenues for the first quarter of fiscal 1998 were
$156.0 million, compared to $175.0 million reported for the same quarter of
fiscal 1997. Macintosh revenues were down 36%, while Windows revenues
continued to show strength, up 18% over the first quarter of 1997. For the
quarter, 59% of Adobe's total application products' revenues (excluding
platform-independent and UNIX products) came from the products for the Windows
platform and 41% were related to the Macintosh platform. This compares to
44% for Windows and 56% for Macintosh in the first quarter of 1997.
Adobe's revenues during the quarter were adversely affected by continuing
weak demand in Asia, a decline in Macintosh platform revenues, and a slowdown
in North American revenues. Also by comparison, the first fiscal quarter of
1997 benefited from revenue momentum related to two major product releases
-- Adobe(R) Photoshop(R) 4.0 released just before the quarter began, and Adobe
PageMaker(R) 6.5 released during the quarter.
"We anticipated a slowdown in revenue momentum during this period of no
new major product releases. This was compounded by external factors in Asia
and in the Macintosh market," said John Warnock, Chairman and Chief Executive
Officer of Adobe. "Looking ahead we recently added significant talent to our
senior sales management team, with Fred Snow as Executive Vice President of
Worldwide Field Operations, Rick Dyer as Vice President of North American
Sales Field and Marketing, and Judi Webster as Vice President, Worldwide
Channels and Global Accounts. We are also continuing to focus our product
development efforts to deliver an exciting series of new releases throughout
the remainder of the year."
During the first quarter Adobe repurchased 3.0 million shares of its
common stock under stock repurchase programs previously authorized by the
Board of Directors. These repurchase programs are intended to enhance
stockholder value by reducing the number of outstanding shares net of
offsetting increases due to employee stock purchases and stock option
exercises. At quarter end, the number of outstanding shares of common stock
was 66.4 million, compared to 68.8 million at the end of the fourth quarter of
1997. The timing and size of any future stock repurchases are subject to
market conditions, stock prices and Adobe's cash position and other cash
requirements going forward.
On December 1, 1997, under its venture dividend program, Adobe dividended
one share of Siebel Systems stock for every 300 shares of Adobe stock held by
stockholders of record on October 31, 1997, with cash paid for holdings of
less than 7,500 Adobe shares and for fractional shares of Siebel Systems
stock. Also, the Board of Directors declared a cash dividend for Adobe's
first quarter of $0.05 per common share for Adobe's stockholders of record as
of April 3, 1998, payable on April 17, 1998.
About Adobe Systems
Based in San Jose, Calif., Adobe Systems Incorporated develops and
supports software products to help people express and use information in more
imaginative and meaningful ways, across all print and electronic media. For
more information, visit Adobe's home page at www.adobe.com.
NOTE: Adobe, the Adobe logo, Photoshop and PageMaker are registered
trademarks of Adobe Systems Incorporated.
Condensed Consolidated Statements of Income
(In thousands, except per share data)
Quarters Ended
Unaudited Unaudited
February 27 February 28
1998 1997
Revenue:
Licensing $41,851 $ 51,460
Application products 155,962 174,999
Total revenue 197,813 226,459
Direct costs 29,986 34,289
Gross profit 167,827 192,170
Operating expenses:
Research and development 46,427 38,197
Sales, marketing and
customer support 71,834 72,038
General and administrative 24,076 17,496
Acquired in-process technology 3,818 --
Other non-recurring items -- (2,359)
Total operating expenses 146,155 125,372
Operating income 21,672 66,798
Nonoperating income, net:
Investment gain (loss) 12,462 (624)
Interest and other income 8,501 6,993
Total nonoperating income, net 20,963 6,369
Income before income taxes 42,635 73,167
Income tax provision 15,891 26,683
Net income $26,744 $46,484
Basic net income per share $.39 $.65
Shares used in computing basic
net income per share 67,762 71,493
Diluted net income per share $.38 $.63
Shares used in computing
diluted net income per share 69,585 73,939
Condensed Consolidated Statements of Income - Normalized
(In thousands, except per share data)
Quarters Ended
Unaudited Unaudited
February 27 February 28
1998 1997
Revenue:
Licensing $41,851 $51,460
Application products 155,962 174,999
Total revenue 197,813 226,459
Direct costs 29,986 34,289
Gross profit 167,827 192,170
Operating expenses:
Research and development 46,427 38,197
Sales, marketing and customer support 71,834 72,038
General and administrative 21,693 17,496
Total operating expenses 139,954 127,731
Operating income 27,873 64,439
Nonoperating income, net:
Interest and other income 8,501 6,993
Income before income taxes 36,374 71,432
Income tax provision 13,458 26,073
Net income $22,916 $45,359
Basic net income per share $.34 $.63
Shares used in computing basic
net income per share 67,762 71,493
Diluted net income per share $.33 $.61
Shares used in computing diluted
net income per share 69,585 73,939
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
Unaudited Audited
February 27 November 28
1998 1997
Assets
Current assets:
Cash and cash equivalents $106,653 $267,576
Short-term investments 271,545 235,380
Receivables 115,019 130,974
Other current assets 48,765 45,016
Total current assets 541,982 678,946
Property and equipment 84,539 80,978
Other assets 203,138 180,147
Total assets $829,659 $940,071
Liabilities and Stockholders' Equity
Current liabilities:
Trade and other payables $42,929 $57,857
Accrued expenses 94,766 102,741
Income taxes payable 44,098 48,343
Deferred revenue 13,902 15,706
Total current liabilities 195,695 224,647
Stockholders' equity:
Common stock, $0.0001 par value 7 7
Additional paid-in capital 312,072 291,274
Retained earnings 687,383 663,861
Unrealized gains on investments 827 3,590
Cumulative foreign currency
translation adjustment (4,858) (4,620)
Treasury stock at cost (3,017 and
5,176 shares in 1998 and
1997, respectively) (361,467) (238,688)
Total stockholders' equity 633,964 715,424
Total liabilities and
stockholders' equity $829,659 $940,071
SOURCE Adobe Systems, Inc.
/CONTACT: analysts, Sharon Wienbar, Director, Investor Relations,
408-536-4416, or wienbar@adobe.com, or media, Wendy Strickman, Director,
Public Relations, 408-536-4033, or wstrick@adobe.com, both of Adobe Systems,
Inc./
/Web site: adobe.com
(ADBE) |
