Large Enterprise Transactions and International Performance Drive Results
CUPERTINO, Calif. - Jan. 19, 2005 -
Symantec Corp. (Nasdaq:SYMC), the global leader in information security, today reported results for its fiscal third quarter ended Dec. 31, 2004. Symantec posted revenue for the quarter of $695 million, a 41 percent increase compared to $494 million for the same quarter last year, driven by strong performance in all business segments.
GAAP Results: Net income for the fiscal third quarter was $164 million, compared to $111 million for the same quarter last year. Earnings per share was $0.22, a 38 percent increase compared to earnings per share of $0.16 for the year-ago quarter.
Non-GAAP Results: Non-GAAP net income for the fiscal third quarter was $175 million, compared to $120 million for the same quarter last year. Non-GAAP earnings per share was $0.24, a 41 percent increase compared to earnings per share of $0.17 for the year-ago quarter. Non-GAAP results, as outlined in the attached consolidated statements and related reconciliation, exclude amortization of other intangibles from acquisitions, amortization of deferred stock-based compensation, 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.
"All business segments had strong double digit growth as customers continue to turn to Symantec to manage the integrity of their information assets," said John W. Thompson, Symantec chairman and CEO. "Solid online business, a record number of large enterprise transactions, both in size and number, and incredible international performance underpinned our success in the quarter."
For the quarter, Symantec's worldwide enterprise business, including enterprise security, enterprise administration, and services, represented 48 percent of total revenue and grew 33 percent year-over-year. Symantec's enterprise security business represented 35 percent of total revenue and grew 29 percent; the enterprise administration business represented 11 percent of total revenue and grew 46 percent; and the services business represented 2 percent of total revenue and grew 37 percent. Symantec's consumer business represented 52 percent of total revenue and grew 49 percent.
International revenues represented 54 percent of total revenue in the third quarter and grew 41 percent over the same quarter last year. The Americas, including the United States, Latin America, and Canada, represented 51 percent of total revenue and grew 39 percent. The Europe, Middle East and Africa region represented 35 percent of total revenue and grew 39 percent. Japan/Asia Pacific represented 14 percent of total revenue and grew 53 percent.
Symantec is providing forward-looking guidance for the fiscal fourth quarter ending April 1, 2005, as follows:
- Revenue is estimated between $690 million and $710 million.
- At the mid-point of revenue guidance, GAAP earnings per share is estimated to be $0.23.
- At the mid-point of revenue guidance, non-GAAP earnings per share is estimated to be $0.24.
Symantec is raising forward-looking guidance for fiscal year 2005 ending April 1, 2005, as follows:
- Revenue is estimated to be $2.570 billion.
- By business segment we are estimating revenue growth for fiscal year 2005 as follows:
- Deferred revenue is expected to be approximately $1.35 billion based on the mid-point of fiscal fourth quarter revenue guidance.
- GAAP earnings per share is estimated at $0.80.
- Non-GAAP earnings per share is estimated at $0.86.
Non-GAAP earnings per share guidance excludes the pre-tax amortization of other intangibles from acquisitions, amortization of deferred stock-based compensation, acquired in-process research and development and restructuring charges of approximately $14 million and $64 million for the fiscal quarter and year ending April 1, 2005, respectively.
- During the quarter the total number of transactions worldwide
worth more than $100,000 each was 410, including 122 worth more
than $300,000 and 25 worth more than $1 million each. Overall, 132
more large enterprise transactions were generated compared to the
- Symantec signed new or extended agreements with customers including
CIGNA, an employee benefits company; EarthLink,
one of the nation's leading Internet service providers; SAS,
the leader in business intelligence; AgriBank, FCB,
a financial intermediary providing wholesale funds and services;
APAC Customer Services, Inc., a leading provider
of customer interaction solutions; HDR, an architectural, engineering,
and consulting firm; Andrew Corporation, a global communications
equipment and systems supplier; APL, a global container
transportation company; Alcan, a global leader
in aluminum and packaging, as well as aluminum recycling; Select
Medical Corporation, a leading operator of specialty hospitals
in the United States; Northeastern Regional Information
Center (NERIC), a department of the New York Capital Regional
Board of Cooperative Educational Services; Capital Health,
Canada's largest integrated academic health region, providing complete
health services to 1.6 million residents across central and northern
Alberta; and West Virginia University.
- International customers from the quarter included Wipro,
a leading IT solutions and services provider in application development,
system integration, product implementation and consulting services;
SOLVAY S.A., an international chemical and pharmaceutical
group with headquarters in Brussels; Dexia Groupe,
the second largest financial group in Belgium; Belgacom,
the leading Internet service provider and operator in Belgium; Ballast
Nedam, one of the largest construction companies in The
Netherlands; Swift, a financial industry-owned
co-operative supplying secure, standardized messaging services and
interface software; Telstra, Australia's leading
telecommunications and information services company; GLOBO.COM,
the leading video and broadband provider in Brazil; and HypoVereinsbank
AG, the second largest quoted bank in Germany.
Symantec has scheduled a conference call for 5 p.m. ET/2 p.m. PT today
to discuss fiscal third quarter 2005 results, and to review guidance
for the fiscal fourth quarter and fiscal year 2005. Interested parties
may access the conference call on the Internet 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, 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.
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/about/news/release/index.jsp 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 acknowledged.
FORWARD LOOKING STATEMENTS:
This press release contains forward-looking statements, including forecasts of future revenue, deferred revenue and GAAP and non-GAAP 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-Q. Symantec assumes no obligation to update any forward-looking information contained in this press release.
USE OF NON-GAAP FINANCIAL
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, amortization of deferred stock-based compensation
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/index.html
Additional Information and Where to Find It
Symantec Corporation and VERITAS Software Corporation intend to file
a registration statement on Form S-4 containing a joint proxy statement/prospectus
in connection with the merger transaction involving Symantec and VERITAS
Software. Investors and security holders are urged to read this filing
when it becomes available because it will contain important information
about the merger transaction.
Investors and security holders may obtain
free copies of these documents (when they are available) and other
documents filed with the SEC at the SEC's web site at www.sec.gov
In addition, investors and security holders may obtain free copies
of the documents filed with the SEC by Symantec by contacting Symantec
Investor Relations at 408-517-8239. Investors and security holders
may obtain free copies of the documents filed with the SEC by VERITAS
Software by contacting VERITAS Software Investor Relations at 650-527-4523.
Symantec, VERITAS Software and their directors
and executive officers may be deemed to be participants in the solicitation
of proxies from the stockholders of Symantec and VERITAS Software
in connection with the merger transaction. Information regarding the
special interests of these directors and executive officers in the
merger transaction will be included in the joint proxy statement/prospectus
of Symantec and VERITAS Software described above. Additional information
regarding the directors and executive officers of Symantec is also
included in Symantec's proxy statement for its 2004 Annual Meeting
of Stockholders, which was filed with the SEC on July 30, 2004. Additional
information regarding the directors and executive officers of VERITAS
Software is also included in VERITAS Software's proxy statement for
its 2004 Annual Meeting of Stockholders, which was filed with the
SEC on July 21, 2004. These documents are available free of charge
at the SEC's web site at www.sec.gov
and from Investor Relations at Symantec and VERITAS Software as described