CUPERTINO, Calif. – May 9, 2006 – Symantec Corp. (NASDAQ: SYMC) today reported results for the fiscal fourth quarter and the fiscal year ended March 31, 2006. GAAP revenue for the March 2006 quarter was $1.24 billion and non-GAAP revenue was $1.30 billion. Non-GAAP revenue includes $61 million of deferred revenue that has been eliminated from GAAP results as part of the purchase accounting associated with the acquisition of VERITAS Software Corporation. Non-GAAP revenue grew one percent over the combined Symantec and Veritas revenue for the March 2005 quarter of $1.29 billion.
For the 2006 fiscal year, GAAP revenue was $4.14 billion and non-GAAP revenue was $5.00 billion. Non-GAAP revenue for the fiscal year includes $302 million of deferred revenue that has been eliminated from GAAP results as part of the purchase accounting associated with the acquisition of VERITAS as well as $559 million in historic VERITAS revenue for the quarter ended March 31, 2005. On a non-GAAP basis, 2006 fiscal year revenue grew eight percent compared to the 2005 fiscal year's combined non-GAAP revenue of $4.63 billion.
GAAP Results: GAAP net income for the fiscal fourth quarter was $119 million, compared to $120 million for the same quarter last year. Earnings per share were $0.11, compared to earnings per share of $0.16 for the same quarter last year. For fiscal year 2006, Symantec reported net income of $157 million, compared to net income of $536 million for fiscal year 2005. Earnings per share were $0.16, compared to earnings per share of $0.74 for fiscal year 2005.
Non-GAAP Results: Non-GAAP net income for fiscal fourth quarter was $279 million, compared to $314 million for the same quarter last year. Non-GAAP earnings per share were $0.26, compared to earnings per share of $0.26 for the year-ago quarter. For fiscal year 2006, Symantec reported non-GAAP net income of $1.14 billion, compared to $1.05 billion in fiscal year 2005. Non-GAAP earnings per share for the year were $1.00, compared to earnings per share of $0.86 for fiscal year 2005.
Non-GAAP results, as presented in the attached consolidated financial statements, exclude certain GAAP expenses, net of tax, and include the results of operations of VERITAS for the applicable periods, including adjustments based on the fair values of assets acquired and liabilities assumed as of the acquisition date of July 2, 2005, and deferred revenue that was eliminated as a result of purchase accounting for the VERITAS acquisition.
"By staying focused on execution, the worldwide Symantec team delivered a solid fiscal fourth quarter," said John W. Thompson, Symantec chairman and chief executive officer. "Performance in all segments and regions was quite strong during the quarter, driven by solid demand for our email archiving, storage, and compliance solutions as well as Norton Internet Security. In addition, our enterprise and consumer antivirus segments performed well in a stable pricing environment."
For the quarter, Symantec's enterprise security business represented 22 percent of total revenue and grew nine percent year-over-year on a combined non-GAAP basis year-over-year. Services revenue represented four percent of total revenue and grew 16 percent year-over-year. The storage management segment represented 23 percent of total revenue and grew two percent year-over-year. The data protection segment comprised 23 percent of total revenue and declined eight percent. Symantec's consumer business represented 28 percent of total revenue and held steady on a combined non-GAAP basis year-over-year.
International revenues for the March quarter represented 50 percent of non-GAAP revenue and grew five percent on a combined non-GAAP basis over the same quarter last year. Asia Pacific/Japan revenue for the quarter represented 13 percent of total revenue and grew nine percent on a combined non-GAAP basis year-over-year. The Europe, Middle East, and Africa region represented 32 percent of total revenue for the quarter and grew three percent year-over-year. The Americas, including the United States, Latin America, and Canada, represented 55 percent of total revenue and declined two percent year-over-year.
June Quarter Forecast
For the June 2006 quarter, GAAP revenue is estimated between $1.20 billion and $1.23 billion. This excludes approximately $25 million of deferred revenue that was lost through the purchase accounting for the VERITAS transaction. GAAP fully diluted earnings per share for the June quarter are estimated between $0.05 and $0.07.
Non-GAAP revenue for the June quarter is estimated between $1.22 billion and $1.25 billion, including about $25 million of deferred revenue. Non-GAAP fully diluted earnings per share are forecasted between $0.20 and $0.21 excluding approximately $145 million of expenses related to the amortization of acquisition-related intangibles and deferred compensation charges, net of estimated income taxes.
Fiscal Year 2007 Forecast
For the fiscal year ending March 2007, GAAP revenue is estimated in the range of $5.2 billion to $5.4 billion, excluding about $55 million in lost deferred revenue from the VERITAS merger. GAAP fully diluted earnings per share for the fiscal year ending in March 2007 are estimated between $0.46 and $0.57.
Non-GAAP revenue is estimated in the range of $5.3 billion to $5.5 billion, including about $55 million in deferred revenue from the VERITAS merger. Non-GAAP fully diluted earnings per share are estimated between $1.05 and $1.15, excluding approximately $555 million in expenses related to the amortization of acquisition-related intangibles and stock-based compensation charges, net of estimated income taxes.Quarterly Highlights
-- Symantec signed 1,142 contracts worldwide worth more than $100,000 each, including 91 worth more than $1 million each, during the quarter. Nearly 50 percent of these deals included multiple Symantec enterprise products and services. -- Symantec signed new or extended agreements with the following customers including Ascendsys Sdn Bhd, a leading Malaysian-based security services provider; AXA Australia, one of the largest financial services organizations in the world; City of Miami Beach, a prominent South Florida city government; First Data Corporation, one of the world's leading providers of financial, electronic- transaction services and solutions; Guaranty Bank, a full-service federal savings bank headquartered in Milwaukee, Wisconsin; Hutchison Telecoms, which provides mobile telecommunications and multimedia services to more than one million Australian customers; ING Canada, one of Canada's foremost financial services companies; New Century Mortgage Corp., one of the America's premier mortgage finance companies; Reynolds & Reynolds, a $1 billion software and automotive services organization; Sprint Nextel Corporation, an industry leader in telecommunications product and service delivery; The City of Jacksonville, the city government of America's 14th largest city.
Symantec has scheduled a conference call for 5 p.m. ET/2 p.m. PT today to discuss fiscal fourth quarter and fiscal year 2006 results, and to review guidance for the fiscal first quarter 2007. 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.
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FORWARD LOOKING STATEMENTS: This press release contains statements regarding our financial and business results which may be considered forward-looking within the meaning of the U.S. federal securities laws, including statements relating to projections of future revenue and earnings per share for the first quarter and year of fiscal 2007, and projections of deferred revenue, amortization of acquisition related intangibles and deferred compensation charges. These statements are subject to 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 in this press release. Such risk factors include those related to: the acquisition of VERITAS, including the successful integration of VERITAS' businesses, maintenance of customer and partner relationships and leveraging of synergies; the anticipated growth of certain market segments, particularly the enterprise security and international markets; the competitive environment in the software industry; changes to operating systems and product strategy by vendors of operating systems; fluctuations in currency exchange rates; the timing and market acceptance of new product releases and upgrades; the successful development of new products and integration of 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 section of Symantec's Form 10-Q for the quarter ended December 31, 2005. 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. All references to "combined non-GAAP" financial information for pre-acquisition periods include the results of Symantec and VERITAS for like fiscal quarter (i.e., combining the results of Symantec for the March 2005 fiscal quarter with the results of VERITAS for the December 2004 fiscal quarter), and have been adjusted to exclude certain expenses, net of tax, and include adjustments based on the fair values of assets acquired and liabilities assumed as of the acquisition date of July 2, 2005 and deferred revenue that was eliminated as a result of purchase accounting for the VERITAS acquisition. Symantec's management believes the non-GAAP measures used in this release 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, may 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. Additional information regarding the reconciliation, along with additional pro forma financial information, can be found on the investor relations page of Symantec's Web site, along with additional pro forma financial information for the combined company, at www.symantec.com/invest/center.html.