Symantec Reports 39 Percent Revenue Growth in Fiscal First Quarter
Announces the Acquisitions of Recourse Technologies, Riptech and SecurityFocus
CUPERTINO, Calif. - July 17, 2002 - Symantec Corp. (Nasdaq: SYMC), the world leader in Internet security technology, today reported results for the fiscal first quarter 2003, ended June 30, 2002. Symantec posted revenue for the quarter of $316 million, a 39 percent increase compared to $228 million for the same quarter last year. Performance was driven by 35 percent growth in Symantec's enterprise security business and 90 percent growth in the consumer business, with strong growth across all geographies. In addition, Symantec announced the acquisitions of Recourse Technologies, Riptech, Inc. and SecurityFocus for a total of approximately $355 million in cash.
Pro Forma Results
Pro forma net income before one-time charges and the amortization of acquisition-related intangible assets for the fiscal first quarter was $65.6 million, compared to $33.9 million from the same quarter last year. Symantec reported pro forma earnings per share of $0.41, compared to pro forma earnings per share of $0.22 for the year-ago quarter.
Net income including one-time charges and the amortization of acquisition-related intangible assets for the first quarter was $56.6 million, compared to a net loss of $21.2 million from the same quarter last year. Symantec reported earnings per share of $0.36, compared to a net loss per share of $0.14 for the year-ago quarter. One-time charges for the quarter include expenses related to restructuring.
"During the quarter, we continued to see strength in our consumer business coupled with an acceleration in the growth of our enterprise security business," said John W. Thompson, Symantec Chairman and CEO. "The acquisitions we announced today bring next generation security technology, products and services that will help us to better serve the needs of our customers and continue to deliver strong top and bottom-line growth."
The acquisition of Recourse Technologies allows Symantec to deliver both a market-proven, gigabit-performance network intrusion detection product, ManHunt, and the industry-leading, host-based solution, IntruderAlert, to customers. Riptech, Inc., the premier provider of scalable, real-time managed security services, allows Symantec to offer global customers a cost-effective solution for protecting their networks across the broadest range of sensors
Combining SecurityFocus' world-class vulnerability database and early warning threat management products with Symantec's antivirus research and response capabilities will provide customers with the most comprehensive security protection available.
For the quarter, Symantec's worldwide enterprise security business represents 42 percent of total revenue and grew 35 percent compared to the same quarter last year. Performance in the enterprise security business was supported by 31 percent growth in firewall/VPN sales, 39 percent growth in vulnerability management sales and 41 percent growth in antivirus sales compared to the same quarter last year.
Symantec's enterprise administration business represents 18 percent of total revenue and declined 6 percent. However, the Ghost business continues to meet expectations with 20 percent growth compared to the same quarter last year. Symantec's security services business grew 60 percent during the quarter and represents 1 percent of total revenue. Symantec's consumer business represents 39 percent of total revenue and grew at 90 percent, supported by an unexpectedly strong 133 percent growth in consumer antivirus sales compared to a relatively lower level of sales in the same quarter last year.
International revenues represent 47 percent of total revenue in the first quarter and grew by 40 percent over the same quarter last year. Sales in Canada led the increase with 122 percent year-over-year growth followed by sales in Japan at 59 percent growth, sales in Europe, Middle East and Africa at 32 percent growth, sales in Latin America at 26 percent growth and sales in Asia Pacific at 23 percent growth.
- Symantec generated 126 contracts worldwide worth more than $100,000, including 23 worth more than $300,000 and five worth more than $1 million, during the quarter. Symantec signed new or extended agreements with customers including Hewlett Packard, Rohm and Haas Company, the US Army; the Hungarian Ministry of the Interior, the New York City Board of Education, Indiana University and the University of Texas M.D. Anderson Cancer Clinic.
- The company's enterprise success is punctuated by the continued expansion of its worldwide customer base, featuring contracts with 28 Global 500 and 16 Fortune 100 companies including six of the world's largest banks, three of the world's largest electronics companies, two of the world's largest auto makers, three of the world's largest pharmaceutical companies, three of the world's largest telecommunications companies and two of the largest health care providers in the United States.
- In a report entitled "Western European Security Software Forecast and Analysis 2001 ≠ 2006" (IDC #IS02J), industry analyst firm IDC ranked Symantec as "the new undisputed European security software champion," with 10 percent market share. The report analyzes five core Internet security markets and ranks companies' performance in each of them: Firewall/VPN, Secure Content Management, Intrusion Detection/Vulnerability Assessment, 3A security software, and Encryption software.
- Symantec shipped the high-end versions of the Symantec Gateway Security appliance during the quarter, earning recognition as being "in a class by itself" in a review by PC Magazine which also stated "Its wealth of features make the Gateway a solid, all-around security appliance for growing small and medium-size businesses and enterprise-branch offices."
- During the quarter, Symantec's Managed Security Services' security operations centers were awarded certification under the British Standard (BS) 7799, a comprehensive specification that defines the requirements for establishing, implementing, and documenting an effective information security management system. BS7799 certification at the security operations centers assures Symantec customers and partners that their information and data are protected through controlled procedures, policies, and best practices.
- Symantec Enterprise Firewall 7.0 earned Common Criteria Evaluation Assurance Level 4 (EAL4) certification. This prestigious certification assures customers that Symantec Enterprise Firewall has gone through a long and rigorous testing process and conforms to standards sanctioned by the International Standards Organization.
- Symantec's Norton AntiVirus and Norton SystemWorks continue to earn industry accolades with PC Magazine Editors' Choice awards and World Class Awards from PC World Magazine. Norton AntiVirus also earned the prestigious Editors' Choice award from CNET, based on its excellent track record against viruses, as well as its simple interface, ability to scan both incoming and outgoing e-mail attachments, and unique support for Windows XP.
Symantec has scheduled a conference call for 5 p.m. EDT today to discuss fiscal first quarter results and the acquisitions. Interested parties may access the conference call on the Internet at www.symantec.com/invest/. 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. In addition, conference call numbers are available. The listen-only number for domestic callers is 1-800-967-7184, while international listeners can dial 719-457-2633. A replay of the call will be available on the Internet at www.symantec.com/invest/ until Aug. 14, 2002.
Consolidated Financial Statements
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 STATEMENT:
This press release contains forward-looking statements, including forecasts of future revenue and 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; whether certain market segments, particularly enterprise security, grow as anticipated; the positioning of Symantec's products in those segments; the competitive environment in the software industry; ability to integrate acquired companies and technology; ability to retain key employees; ability to successfully combine product offerings and customer acceptance of combined products; 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 the degree to which these 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 Symantecís previously filed Form 10-K and Form 10-Q.
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