Symantec Closes Fiscal Year 2004 with Record Revenue and Earnings Growth
Raises Fiscal Year 2005 Guidance
CUPERTINO, Calif. - April 28, 2004
- Symantec Corp. (Nasdaq: SYMC), the global leader in information
security, today reported results for the fiscal fourth quarter and
the fiscal year ended April 2, 2004. Symantec posted revenue for the
quarter of $556 million, a 43 percent increase compared to $390 million
for the same quarter last year. Revenue for fiscal year 2004 was $1.870
billion, a 33 percent increase compared to $1.407 billion for fiscal
GAAP Results: Net income for the fiscal fourth quarter was $117 million, compared to $68 million for the same quarter last year. Earnings per share was $0.33, compared to earnings per share of $0.21 for the same quarter last year. For fiscal year 2004, Symantec reported net income of $371 million, compared to net income of $248 million for fiscal year 2003. Earnings per share was $1.07, compared to earnings per share of $0.77 for fiscal year 2003.
Non-GAAP Results:Non-GAAP net income for fiscal fourth quarter was $126 million, compared to $78 million for the same quarter last year. Non-GAAP earnings per share was $0.35, compared to earnings per share of $0.23 for the year-ago quarter. For fiscal year 2004, Symantec reported non-GAAP net income of $411 million, compared to $280 million in fiscal year 2003. Non-GAAP earnings per share was $1.18, compared to earnings per share of $0.86 for fiscal year 2003. Non-GAAP results and related reconciliation, as outlined in the attached consolidated statements, exclude expenses from the amortization of other intangibles from acquisitions, 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.
"We continue to execute on our vision of helping customers secure and manage their IT infrastructure, with last quarter's performance capping off a tremendously successful year," said John W. Thompson, Symantec chairman and CEO. "We are encouraged by the building momentum in the enterprise segment and, once again, the consumer segment turned in a stellar performance."
For the quarter, Symantec's worldwide enterprise business, including enterprise security, enterprise administration, and services represented 52 percent of total revenue and grew 29 percent year-over-year. Symantec's enterprise security business represented 38 percent of total revenue and grew 30 percent; the enterprise administration business represented 12 percent of total revenue and grew 26 percent; and the services represented 2 percent of total revenue and grew 32 percent compared to the same quarter last year. Symantec's consumer business represented 48 percent of total revenue and grew 62 percent year-over-year.
International revenues represented 53 percent of total revenue in the fourth quarter and grew 48 percent over the same quarter last year. Japan led the increase for the quarter with 66 percent growth, followed by Canada with 50 percent growth. The Europe, Middle East and Africa region recorded 48 percent growth, Asia Pacific recorded 36 percent growth and Latin America grew 12 percent. The United States grew 37 percent.
Symantec is raising forward-looking guidance for the fiscal first quarter ending July 2, 2004, as follows:
- Revenue is expected to be in the range of $525 to $555 million, an increase of $40 million from prior guidance.
- GAAP earnings per share is expected to be $0.30 at the midpoint of revenue guidance.
- Non-GAAP earnings per share is expected to be $0.33 at the midpoint of revenue guidance.
Symantec is raising forward-looking guidance for fiscal year 2005 ending April 1, 2005, as follows:
- Revenue is estimated at $2.335 billion, an increase of $160 million from prior guidance and a 25 percent increase over fiscal year 2004.
- At the guided annual revenue, the quarterly revenue estimates are as follows: Jun-04 $540 million; Sep-04 $565 million; Dec-04 $615 million; and Mar-05 $615 million.
- By business segment we are estimating the following revenue growth and mix for fiscal year 2005:
- Consumer Products 28% growth, 48% mix
- Enterprise Security 18% growth, 37% mix
- Enterprise Administration 34% growth, 13% mix
- Services 19% growth, 2% mix
- GAAP earnings per share is estimated at $1.37, a 28 percent increase over fiscal year 2004.
- Non-GAAP earnings per share is estimated at $1.46, a 24 percent increase over fiscal year 2004.
- Earnings per share by quarter is estimated to be as follows:
- GAAP Jun-04 $0.30; Sep-04 $0.32; Dec-04 $0.37; Mar-05 $0.38
- Non-GAAP Jun-04 $0.33; Sep-04 $0.34; Dec-04 $0.39; Mar-05 $0.40
- GAAP gross margin is forecasted to average 82.8 percent for the full year, with non-GAAP forecasted at 84.7 percent.
- GAAP operating income is estimated at $719 million or 31 percent of revenue for the full year, with non-GAAP estimated at $771 million or 33 percent of revenue.
- Common Stock Equivalents (CSE's) are expected to grow by approximately 3 percent over the next year.
Non-GAAP forward-looking guidance for fiscal year 2005 excludes the pre-tax amortization of other intangibles from previous acquisitions of approximately $13 million per quarter, or $52 million for the entire fiscal year.
- Symantec signed 264 contracts worldwide worth more than $100,000 each, including 70 worth more than $300,000 and 11 worth more than $1 million each, during the quarter.
- Symantec signed new or extended agreements with customers including
Knight Ridder, the nation's second-largest newspaper
publisher; The Guardian Life Insurance Company,
the fourth largest mutual life insurance company in the United States;
Fifth Third, a diversified financial services company;
Hughes Supply, one of the nation's largest diversified
wholesale distributors; Flextronics, the leading
Electronics Manufacturing Services provider focused on delivering
operational services to technology companies; FrontBridge
Technologies, the enterprise market leader for email security
and message management services; MerckKGaA, an
international leader in its core field of pharmaceuticals and chemicals
based in Germany; Tata Consultancy Services, one
of the world's largest global software consulting and services organizations;
Benic Solutions Corporation, a fully-owned subsidiary
of Kawasaki Heavy Industries, Ltd. based in Japan, providing information
system and IT management services for Kawasaki.
- During the quarter, the company released the Symantec Gateway Security 300 Series appliance. This easy-to-use appliance delivers security and networking capabilities including firewall, intrusion prevention, intrusion detection, antivirus policy enforcement, content filtering and virtual private networking (VPN) functionality to provide small business secure high-speed access, reliable connectivity and ample bandwidth at an affordable price.
- In addition, Symantec launched the Symantec Clientless VPN Gateway 4400 series. The new appliance line provides customers easy-to-manage, secure remote access to corporate networks, allowing enterprises to roll out secure remote access to meet business objectives and increase efficiency.
- Symantec announced the new Symantec Managed Security Services Secure Internet Interface, which provides clients with greater visibility into their security posture and a deeper perspective on how to mitigate risks in the global threat landscape. It also provides enhanced device tracking and management, and expanded administration capabilities to help client organizations better enforce their security model through the Secure Internet Interface.
- Symantec also introduced Enterprise Security Manager (ESM) for the Federal Information Security Management Act of 2002 (FISMA). Based on system security requirements of FISMA, Symantec ESM for FISMA provides specific, pre-configured security policies, which allow government agencies to audit their environments for compliance.
Consolidated Financial Statements
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. Non-GAAP gross margin, operating expenses, operating income,
net income and earnings per share exclude acquisition related charges,
such as amortization of other intangibles 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, where
applicable. 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 be found on the investor relations Web site at www.symantec.com/invest
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/PressCenter/ 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 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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