Symantec Reports First Quarter Results
Q1 Revenue $153 Million; Earnings Per Share $0.40
Eighth Consecutive Quarter of Record Earnings
Cupertino, Calif --July 16, 1998-- Symantec Corporation (Nasdaq: SYMC) today announced its earnings for the first fiscal quarter of 1999, ended July 3, 1998. Net revenue was $153 million, a 13 percent increase over the same quarter in 1997. Income before in-process research and development charges was a record $24 million. Earnings per share increased by 25 percent to $0.40, before in-process research and development charges, compared to $0.32 for the first quarter in 1997. Net loss after in-process research and development charges was $1.4 million or $0.02 per share. Days Sales Outstanding (DSO) for the quarter were 37 days compared to 38 days in the prior quarter.
"Our revenue this quarter was impacted by weakness in the worldwide retail software market and limited growth in Asia due to the weakened Yen," said Gordon Eubanks, president and CEO of Symantec Corporation. "Retail sales in June were stronger than in April and May and we expect the retail sector to perform well over the next several months. In the corporate sector we continue to beat our competitors and win major customers including Bell Atlantic and Hong Kong Bank. A number of significant partnerships we announced this quarter will further strengthen our presence in the corporate sector."
A number of new products are scheduled to be launched in the current quarter. These include Norton 2000, a comprehensive corporate Year 2000 solution for desktop PCs and distributed computing environments. Norton 2000 includes data scanning as well as an application scan database and BIOS test and fix. In addition, Norton 2000 includes Symantec's powerful LiveUpdate and Norton System Center to make it easier for corporations to update and distribute software throughout an enterprise.
pcTelecommute is the industry's first telecommuting solution. The product is easy-to-use and provides integrated features, productivity tools, and support that will help make telecommuting easier to implement. Gartner Group estimates that there will be 55 million telecommuters by the year 2000.
For the first fiscal quarter 1999, international revenue contributed 32 percent of total revenue, up one point from the same quarter a year ago. Revenue from North America, Europe, Middle East and Africa (EMEA) and Rest of World grew 10 percent, 25 percent and 14 percent respectively compared to the same quarter a year before.
In Europe, Symantec strengthened its presence in key anti-virus markets. In the UK and France, independent research revealed that the company has established clear leadership in the retail sector for both revenue and units.
Symantec strengthened its presence in the corporate sector by announcing a wide ranging anti-virus technology, distribution and OEM agreement with IBM and the purchase of Binary Research Limited, Auckland, New Zealand. These alliances resulted in in-process research and development charges of $29 million.
Symantec has licensed IBM's immune system anti-virus technology and patents and will combine it with its own technology to produce a new single family of Norton AntiVirus products. Within a few weeks of announcing the alliance, Symantec has successfully transitioned Bell Atlantic from IBM Antivirus to Norton AntiVirus and is in the process of transitioning several large corporate customers totaling over 300,000 seats.
With the acquisition of Binary Research Limited, which produces Ghost, the industry leading disk cloning technology, Symantec now offers corporate customers a more cost effective and efficient solution to help manage personal computer systems.
A number of new products and upgrades were launched during the first fiscal quarter. These include Norton Mobile Essentials, Symantec Mobile Update, Norton System Center, Norton Protected Desktop Solution, Norton AntiVirus for Macintosh 5.0 and Visual Page 2.0.
Symantec continued to demonstrate its leadership in a number of market and technology areas. The company maintained its leadership of PC Data's Top Selling Windows Software list. Seven Symantec products were in the top twenty Windows Business Software lists in both April and May, including four in the top ten.
Symantec's usage of the Internet as a means of delivering improved service to customers was further enhanced in the quarter with the introduction of weekly virus definition updates via LiveUpdate. In addition, registered users of Norton Web Services increased 50 percent during the quarter to 150,000 users and the number of customers registering their ownership of Symantec products via LiveReg increased to 1.3 million. Following the launch of the company's re-designed web site this quarter, page views per day have grown 25 percent and international page views have increased 141 percent.
Internationally, Symantec announced in July that it had received permission from the Chinese government to distribute and sell Norton AntiVirus to corporate and retail customers and launched a localized Chinese version of the product. An office was also opened in South Africa to provide in-country support and customer service.
Symantec products continued to demonstrate leadership through media awards and recognition in the first quarter:
Consolidated Balance Sheets
- Windows Magazine included Norton AntiVirus, Norton Utilities and Norton Uninstall Deluxe in the Win 100 list.
- Norton Utilities, pcANYWHERE and Visual Café all appeared on the PC/Computing "A-list" of top software products.
- The 1998 Networld + Interop "Best of Show" award was given to Symantec's Mobile Update.
- Consumer Digest approved Norton Utilities and deemed it a "Best Buy."
- Visual Café was given the "Well-Connected" award from Network Computing and pcANYWHERE received the Network Computing "Editor's Choice" award.
- Internet Computing awarded Norton AntiVirus for Windows NT Server with the "Net Best Pick."
- Norton Utilities received the Computer Shopper "Editor's Pick" award.
Consolidated Statements of Operations
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 3, 1998.
Symantec is the world leader in utility software for business and personal computing.
Symantec products and solutions help make users productive and keep their computers
safe and reliable anywhere and anytime. Symantec offers a broad range of solutions
and is acclaimed as a leader in both customer satisfaction and product brand
recognition. Symantec is traded on Nasdaq under the symbol SYMC. More information
on the company and its products can be obtained at www.symantec.com.
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respective holders. All prices noted are in US dollars and are valid only in the United States.