Symantec Reports 34 Percent Revenue Growth In Fiscal Second Quarter
Continues to See Strength in "Must-Have" Security Solutions Worldwide
CUPERTINO, Calif. - Oct. 16, 2002 - Symantec Corp. (Nasdaq: SYMC), the world leader in Internet security, today reported results for the fiscal second quarter 2003, ended Sept. 27, 2002. Symantec posted revenue for the quarter of $325 million, a 34 percent increase compared to $242 million for the same quarter last year. Performance was driven by continued strength in the company's collection of "must-have" security solutions for individuals and enterprises around the globe.
Pro Forma Results: Pro forma net income before one-time charges and the amortization of acquisition-related intangible assets for the fiscal second quarter was $60 million, compared to $42 million from the same quarter last year. Symantec reported pro forma earnings per share of $0.38, compared to pro forma earnings per share of $0.28 for the year-ago quarter.
GAAP Results: Net income including one-time charges and the amortization of acquisition-related intangible assets for the second quarter was $52 million, compared to a net loss of $12 million from the same quarter last year. Symantec reported earnings per share of $0.33, compared to a net loss per share of $0.08 for the year-ago quarter. GAAP results, as outlined in the attached consolidated statements, includes expenses from the amortization of goodwill, the amortization of other intangibles from acquisitions, acquired in-process research and development, and restructuring and site closures as well as related income tax benefits.
"In the face of today's difficult economy and the challenge of successfully integrating four acquisitions, we continue to demonstrate our commitment to deliver great value for customers and strong financial results for our investors," said John W. Thompson, Symantec chairman and CEO. "Our business, both consumer and enterprise, is firing on all cylinders across every region."
For the quarter, Symantec's worldwide enterprise security business grew 30 percent compared to the same quarter last year and represented 44 percent of total revenue. Performance in the enterprise security business was supported by 61 percent growth in firewall/VPN sales and 36 percent growth in antivirus sales compared to the same quarter last year. Symantec's security services revenue grew 102 percent compared to the same quarter last year, supported by 127 percent growth in managed security services.
Symantec's consumer business grew 68 percent and represented 38 percent of total revenue, supported by continued strength in consumer antivirus revenue, which grew 76 percent compared to the same quarter last year. Symantec's enterprise administration business represented 16 percent of total revenue and declined 2 percent.
International revenues grew 45 percent over the same quarter last year and represented 47 percent of total revenue in the second quarter. Symantec posted growth in every region. Sales in Europe, Middle East and Africa led the increase with 55 percent year-over-year growth followed by 51 percent growth in Japan, 35 percent growth in Canada, 26 percent growth in the United States and 24 percent growth in Asia Pacific.
- Symantec generated 116 contracts worldwide worth more than $100,000, including 28 worth more than $300,000 and five worth more than $1 million, during the quarter. Symantec signed new or extended agreements with customers including Siemens, Stanford University, Advance Medical Devices, Los Alamos National Laboratories and NCR Corporation, a leading worldwide global technology company.
- The company's enterprise success is punctuated by the continued expansion of its worldwide customer base, featuring contracts with 26 Global 500 and 15 Fortune 100 companies including one of the world's largest petroleum companies, two of the world's largest telecommunications companies, four of the world's largest banks, two of the world's largest pharmaceutical companies and two of the world's largest auto manufacturers.
- Symantec's Managed Security Services business continues to expand, with 55 new deals during the quarter. We now have more than 600 MSS customers including ChoicePoint, the leading provider of identification and credential verification services; Parsons Brinkerhoff, a world-leading transportation engineering firm; People's Bank, the largest state-chartered bank in Connecticut; and the Screen Actors Guild Pension and Health Plan.
- The partnership with Northrop Grumman Corp.'s Information Technology sector resulted in a contract with the US Department of Defense (DOD) for an agency-wide license to use Symantec's antivirus solutions across the agency's desktops, servers and gateways. The total value of the contract including a one-year base and four one-year option periods is $16.5 million.
- On Oct. 1, Symantec unveiled its strategy to provide enterprises with a comprehensive, proactive approach to create and manage effective security environments. A unifying structure to the Symantec enterprise security strategy is the Symantec Enterprise Security Architecture, an open, standards-based framework that enables Symantec and third-party vendor solutions to work together to provide secure, manageable and scalable enterprise security. The company announced the Symantec Security Management System, a comprehensive set of management applications that improves the effectiveness of the information security environment by delivering proactive control of the security infrastructure and correlated information for better decision-making.
- In addition, Symantec unveiled the first integrated security solution for network clients and remote users, Symantec Client Security, with antivirus, personal firewall and intrusion detection technologies to effectively protect desktops against today's blended threats. Integrated central management of these multiple technologies offers IT administrators the powerful combination of lowering the total cost of ownership and increasing the security of the network client - frequently, the most costly and least secure IT asset.
- Symantec also unveiled its comprehensive intrusion detection and prevention product line showcasing the planned integration of recently-acquired Recourse Technologies' multi-gigabit ManHunt and highly scalable Symantec Host Intrusion Detection 4.0.
- Symantec launched the 2003 line of consumer security solutions including Norton Internet Security, Norton AntiVirus, Norton Personal Firewall and Norton SystemWorks. The new solutions include enhanced privacy control features to address spam and basic intrusion detection to automatically block malicious attacks. New features also include the scanning of instant messages, heuristic-based proactive worm blocking and web optimization tools.
Symantec has scheduled a conference call for 4:30 p.m. EDT today to discuss fiscal second quarter results. 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. In addition, conference call numbers are available. The dial-in number for domestic listeners is 1-800-967-7184, while international listeners can dial 1-719-457-2633. A replay of the call will be available on the Internet at http://www.symantec.com/invest/index.html until Nov. 15, 2002.
Consolidated Financial Statement
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:
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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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