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SOURCE: Symantec
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May 02, 2007 16:05 ET
Symantec Closes Fiscal Year 2007 With Solid March Quarter
Results Underpinned by Strong Deferred Revenue Growth and Cash Flow Generation
CUPERTINO, CA -- (MARKET WIRE) -- May 2, 2007 -- Symantec Corp. (NASDAQ: SYMC) today reported
results of its fiscal fourth quarter and the fiscal year 2007, ended March
30, 2007. GAAP revenue for the March 2007 quarter was $1.357 billion and
non-GAAP revenue was $1.365 billion. Non-GAAP revenue grew 5 percent over
the comparable period a year ago.
For the 2007 fiscal year, GAAP revenue was $5.20 billion and non-GAAP
revenue was $5.25 billion. On a non-GAAP basis, 2007 fiscal year revenue
grew 5 percent compared to the 2006 fiscal year's non-GAAP revenue of $5
billion.
Symantec adopted Staff Accounting Bulletin 108 during the March quarter.
As such, the GAAP and non-GAAP results for the fiscal year 2007 and the
fiscal fourth quarter include the adoption of SAB 108. The resulting
changes to the previously reported amounts are immaterial to the quarter
and fiscal year.
GAAP deferred revenue at the end of March 2007 was $2.75 billion. Non-GAAP
deferred revenue grew 19 percent to $2.77 billion compared to $2.32
billion, adjusted for SAB 108 at the end of March 2006.
GAAP Results: GAAP net income for the fiscal fourth quarter was $61
million, compared to $119 million for the same quarter last year. GAAP
diluted earnings per share were $0.07, compared to earnings per share of
$0.11 for the same quarter last year. For fiscal year 2007, Symantec
reported net income of $404 million, compared to net income of $157 million
for fiscal year 2006. Diluted earnings per share were $0.41 compared to
earnings per share of $0.15 for fiscal year 2006. During the March
quarter, GAAP earnings per share were impacted by a $51 million
restructuring charge related to our recent reduction in force and further
facilities consolidation activities.
Non-GAAP Results: Non-GAAP net income for fiscal fourth quarter was $227
million, compared to $279 million for the same quarter last year. Non-GAAP
diluted earnings per share were $0.24, compared to earnings per share of
$0.26 for the year-ago quarter. For fiscal year 2007, Symantec reported
non-GAAP net income of $992 million, compared to $1.14 billion in fiscal
year 2006. Non-GAAP diluted earnings per share for the year were $1.01,
compared to earnings per share of $1 for fiscal year 2006. For a detailed
reconciliation of our GAAP to non-GAAP results, please refer to the
attached consolidated financial statements.
"The actions we implemented over the past few quarters to improve our
business operations allowed us to end our fiscal year with a solid March
quarter," said John W. Thompson, chairman and chief executive officer,
Symantec. "With a more stable operating environment and a much stronger
product portfolio, we look forward to a stronger fiscal year 2008."
Financial Highlights
For the quarter, Symantec's Consumer business represented 30 percent of
total non-GAAP revenue and grew 11 percent year-over-year. Services
represented 5 percent of total revenue and grew 31 percent year-over-year.
The Security and Data Management business represented 38 percent of total
revenue and grew 2 percent year-over-year. The Data Center Management
business represented 27 percent of total revenue and remained flat
year-over-year.
International revenues represented 52 percent of total non-GAAP revenue in
the fourth quarter and grew 9 percent
year-over-year. The Asia Pacific/Japan revenue for the quarter represented
14 percent of total revenue and grew 9 percent
year-over-year. The Americas, including the United States, Latin America,
and Canada, represented 54 percent of total revenue and increased 3 percent
year-over-year. The Europe, Middle East, and Africa region represented 32
percent of total revenue for the quarter and grew 7 percent
year-over-year.
June Quarter 2007 Guidance
For the June 2007 quarter, GAAP revenue is estimated between $1.275 billion
and $1.305 billion. GAAP diluted earnings per share is estimated between
$0.00 and $0.02.
Non-GAAP revenue for the quarter is estimated between $1.295 billion and
$1.325 billion. Non-GAAP diluted earnings per share is estimated between
$0.18 and $0.20.
GAAP deferred revenue is expected to be in the range of $2.71 billion and
$2.75 billion. Non-GAAP deferred revenue is expected to be in the range of
$2.75 billion and $2.79 billion.
Cash flow from operations is expected to exceed the June 2006 results of
$368 million adjusted for SAB 108.
Fiscal Year 2008 Guidance
For the fiscal year ending March 28, 2008, GAAP revenue is estimated
between $5.59 billion and $5.69 billion. GAAP diluted earnings per share
for the fiscal year ending in March 2007 is expected between $0.45 and
$0.50.
Non-GAAP revenue is estimated between $5.65 billion and $5.75 billion.
Non-GAAP diluted earnings per share is estimated between $1.10 and $1.15.
Quarterly Highlights
-- Symantec signed 376 contracts worldwide worth more than $300,000 each,
including 99 worth more than $1 million each, during the quarter. Of those
376 contracts, 77 percent were multiple product deals.
-- In North America, Symantec signed new or extended agreements with
customers including Chevron, the second-largest integrated energy company
in the United States; San Antonio Independent School District, a K-12
district serving 55,000 students; Pittsburgh Public Schools, a K-12 school
district with 29,000 students; Audio Visual Services Corp., a leading
provider of audiovisual equipment rentals, staging services and related
technical support; EDS Canada, a wholly owned subsidiary of the global EDS
Corp.; Los Angeles Unified School District, the second largest school
district in the nation with 708,000 students and ESRI, the world leader in
GIS (geographic information system) mapping software and technology.
-- New or extended agreements with international customers included
Lufthansa Systems; Beijing Mobile, a subsidiary of China Mobile Ltd., the
leading mobile services provider in China; MBF, which provides trusted
solutions that aim to protect and enhance their customers' health and
financial wellbeing; Hong Kong Air Cargo Terminals Limited, the world's
leading air cargo terminal operator; IXE Banco S.A., a fast-growing Mexican
bank; Servicios Liverpool S.A. de C.V., a leading operator of shopping
centers in Mexico; Lotte Data Communication Co., a leading provider of
total IT services in Korea; IZB Informatik-Zentrum, the German IT service
provider and operator for secure datacenters for the Sparkassen finance
group; Vodafone D2 GmbH, the leading mobile communication provider in
Germany and Nanya Technology Corp., an innovator in DRAM design,
manufacturing, and sales.
Fiscal Year Highlights
-- Symantec unified its sales force to broaden account and opportunity
coverage.
-- The company consolidated two ERP systems to drive operational
efficiencies and improve the ease of transacting business.
-- The consumer team introduced two award-winning and market-leading
products -- Norton Internet Security 2007 and Norton 360.
-- Symantec entered into a multi-year contract with Hewlett Packard that
will result in new HP consumer PCs being delivered with a trial copy of
Norton Internet Security.
-- The Data Center Management Group rolled out the Data Center Foundation
suite of products, which is the only offering that allows data center
managers to standardize on solutions from a single vendor across disparate
operating systems.
-- Symantec repurchased $2.8 billion of its common stock.
-- Global Security Services introduced two new service offerings for
enterprise customers -- Symantec Operational Services and Symantec
Residency Services -- which provide enterprise customers with an extended
range of IT infrastructure management options to incorporate best
practices, improve efficiencies, and ultimately improve overall IT risk
management.
-- The Security and Data Management Group launched the Storage Foundation
Suite to help organizations protect themselves against risks across the
wide range of e-mail, instant messaging, Web communications, file sharing
and other information systems within the enterprise.
Conference Call
Symantec has scheduled a conference call for 5 p.m. ET/2 p.m. PT today to
discuss results from the fiscal fourth quarter and fiscal year 2007
results, and to review guidance for the fiscal first quarter and fiscal
year 2008. 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.
About Symantec
Symantec is a global leader in infrastructure software, enabling businesses
and consumers to have confidence in a connected world. The company helps
customers protect their infrastructure, information and interactions by
delivering software and services that address risks to security,
availability, compliance and performance. Headquartered in Cupertino,
Calif., Symantec has operations in 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 visit the Symantec News Room at
http://www.symantec.com/news. All prices noted are in U.S. dollars and are
valid only in the United States.
Symantec and the Symantec Logo are trademarks or registered trademarks of
Symantec Corporation or its affiliates in the U.S. and other
countries. Other names may be trademarks of their respective owners.
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, earnings
per share, deferred revenue and cash flow from operations, as well as
projections of amortization of acquisition-related intangibles and
stock-based compensation. 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: maintaining customer and partner relationships;
the anticipated growth of certain market segments, particularly with regard
to security and storage; 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 our Form 10-K for the year ended March 31, 2006 and our Form
10-Q for the quarter ended Dec. 29, 2006. We assume no obligation to update
any
forward-looking information contained in this press release.
USE OF NON-GAAP FINANCIAL INFORMATION: Our results of operations have
undergone significant change due to a series of acquisitions, the impact of
SFAS 123(R) and other corporate events. To help our readers understand our
past financial performance and our future results, we supplement the
financial results that we provide in accordance with generally accepted
accounting principles, or GAAP, with non-GAAP financial measures. The
method we use to produce non-GAAP results is not computed according to GAAP
and may differ from the methods used by other companies. Our non-GAAP
results are not meant to be considered in isolation or as a substitute for
comparable GAAP measures and should be read only in conjunction with our
consolidated financial statements prepared in accordance with GAAP. Our
management regularly uses our supplemental non-GAAP financial measures
internally to understand, manage and evaluate our business and make
operating decisions. These non-GAAP measures are among the primary factors
management uses in planning for and forecasting future periods. Investors
are encouraged to review the reconciliation of our non-GAAP financial
measures to the comparable GAAP results, which is attached to our quarterly
earnings release and which can be found, along with other financial
information, on the investor relations page of our Web site at
www.symantec.com/invest.
SYMANTEC CORPORATION
Consolidated Balance Sheets
(In thousands)
March 31, March 31,
2007 2006
------------- ------------
(unaudited)
ASSETS
Current assets:
Cash and short-term investments $ 2,987,653 $ 2,865,802
Trade accounts receivable, net 666,968 670,937
Inventories 42,183 48,687
Current deferred income taxes 165,323 131,833
Other current assets 208,920 190,673
------------- ------------
Total current assets 4,071,047 3,907,932
Property and equipment, net 1,092,240 946,217
Acquired product rights, net 909,878 1,238,511
Other intangible assets, net 1,245,638 1,440,873
Goodwill 10,340,348 10,331,045
Other long-term assets 91,719 48,605
------------- ------------
$ 17,750,870 $ 17,913,183
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Convertible subordinated notes $ - $ 512,800
Accounts payable 149,131 167,135
Accrued compensation and benefits 307,824 277,170
Current deferred revenue 2,387,733 1,915,179
Other accrued expenses 234,915 185,882
Income taxes payable 238,486 419,401
------------- ------------
Total current liabilities 3,318,089 3,477,567
Convertible senior notes 2,100,000 -
Long-term deferred revenue 366,050 248,273
Long-term deferred tax liabilities 343,848 493,956
Other long-term obligations 21,370 24,916
Stockholders' equity:
Common stock 8,994 10,409
Capital in excess of par value 10,061,144 12,426,690
Accumulated other comprehensive income 182,933 146,810
Deferred stock-based compensation - (43,595)
Retained earnings 1,348,442 1,128,157
------------- ------------
Total stockholders' equity 11,601,513 13,668,471
------------- ------------
$ 17,750,870 $ 17,913,183
============= ============
SYMANTEC CORPORATION
GAAP Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended Year Ended
March 31, March 31,
------------------------ ------------------------
2007 2006 2007 2006
----------- ----------- ----------- -----------
(unaudited) (unaudited)
Net revenues $ 1,357,217 $ 1,238,560 $ 5,199,366 $ 4,143,392
Cost of revenues:
Cost of revenues 221,390 194,385 873,493 667,579
Amortization of
acquired product
rights 84,873 88,769 342,333 314,290
----------- ----------- ----------- -----------
Cost of revenues 306,263 283,154 1,215,826 981,869
Gross profit 1,050,954 955,406 3,983,540 3,161,523
Operating expenses:
Sales and marketing 575,544 444,675 2,007,651 1,499,904
Research and
development 218,469 202,520 866,882 682,125
General and
administrative 79,266 71,418 316,783 228,563
Amortization of other
intangible assets 49,932 50,347 201,502 148,822
Acquired in-process
research and
development - 1,100 - 285,100
Restructuring 50,758 4,426 70,236 24,918
Integration 744 587 744 15,926
Patent settlement - - - 2,200
----------- ----------- ----------- -----------
Total operating
expenses 974,713 775,073 3,463,798 2,887,558
Operating income 76,241 180,333 519,742 273,965
Interest and other
income, net 36,068 21,508 139,113 106,754
Interest expense (6,245) (3,650) (27,233) (17,996)
----------- ----------- ----------- -----------
Income before income
taxes 106,064 198,191 631,622 362,723
Provision for income
taxes 45,169 79,378 227,242 205,871
----------- ----------- ----------- -----------
Net income $ 60,895 $ 118,813 $ 404,380 $ 156,852
=========== =========== =========== ===========
Net income per share --
diluted $ 0.07 $ 0.11 $ 0.41 $ 0.15
=========== =========== =========== ===========
Shares used to compute
net income per share -
diluted 932,985 1,064,293 983,261 1,025,856
=========== =========== =========== ===========
SYMANTEC CORPORATION
Reconciliation of Consolidated Statements of
Operations to Non-GAAP Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended Year Ended
March 31, March 31,
------------------------ ------------------------
2007 2006 2007 2006
----------- ----------- ----------- -----------
NET REVENUES:
GAAP net revenues $ 1,357,217 $ 1,238,560 $ 5,199,366 $ 4,143,392
Fair value
adjustment to
Veritas deferred
revenue (A) 7,565 61,307 53,300 301,788
Veritas net
revenue (B) 559,258
----------- ----------- ----------- -----------
Non-GAAP net
revenues $ 1,364,782 $ 1,299,867 $ 5,252,666 $ 5,004,438
=========== =========== =========== ===========
NET INCOME:
GAAP net income: $ 60,895 $ 118,813 $ 404,380 $ 156,852
Fair value
adjustment to
Veritas deferred
revenue (A) 7,565 61,307 53,300 301,788
Amortization of
acquired product
rights © 84,873 88,769 342,333 386,441
Executive
incentive
bonuses (D) - 5,241 3,995 10,472
Stock-based
compensation (E) 35,093 9,459 153,840 43,596
Restructuring (F) 50,758 4,426 70,236 24,918
Integration (G) 744 587 744 27,603
Amortization of
other intangible
assets (H) 49,932 50,347 201,502 195,586
Patent
settlement (I) - - - 2,200
Gain on sale of
strategic
investments (J) - - - (732)
Veritas
SEC legal
settlement (K) - - - 30,000
Acquired
in-process
research and
development (L) - 1,100 - 285,100
Gain on sale of
assets (M) (3,223) - (19,991) -
Income tax
effect on
above items (N) (59,869) (61,269) (217,862) (305,789)
Veritas net
loss (O) - - - (13,492)
----------- ----------- ----------- -----------
Non-GAAP net
income $ 226,768 $ 278,780 $ 992,477 $ 1,144,543
=========== =========== =========== ===========
NET INCOME
PER SHARE - DILUTED:
GAAP net
income per
share $ 0.07 $ 0.11 $ 0.41 $ 0.15
Stock-based
compensation
adjustment
per share (E, N) 0.03 0.01 0.12 0.03
Other
non-GAAP
adjustments
per share (A-D,F-O) 0.14 0.14 0.48 0.82
----------- ----------- ----------- -----------
Non-GAAP net
income per share $ 0.24 $ 0.26 $ 1.01 $ 1.00
=========== =========== =========== ===========
SHARES USED
TO COMPUTE NET INCOME
PER SHARE - DILUTED:
GAAP Shares
used to compute net
income per share 932,985 1,064,293 983,261 1,025,856
Converted
incremental
Veritas shares* - - - 121,663
----------- ----------- ----------- -----------
Non-GAAP
Shares used
to compute
net income
per share 932,985 1,064,293 983,261 1,147,519
=========== =========== =========== ===========
* Converted incremental Veritas shares equals Veritas historical shares
multiplied by the exchange ratio of 1.1242.
The non-GAAP financial measures included in the table above are non-GAAP
net revenue, non-GAAP net income and non-GAAP net income per share, which
adjust for the following items: business combination accounting entries,
expenses related to acquisitions, stock-based compensation expense,
restructuring charges and charges related to the amortization of other
intangible assets, and certain other items. We believe that the
presentation of these non-GAAP financial measures is useful to investors,
and such measures are used by our management, for the reasons associated
with each of the adjusting items as described below.
(A) Fair value adjustment to Veritas deferred revenue. We include revenue
associated with Veritas deferred revenue that was excluded as a result of
purchase accounting adjustments to fair value because we believe they are
reflective of ongoing operating results.
(B) Veritas' net revenue. This amount represents Veritas' net revenue for
the three months ended March 31, 2005. We include Veritas' net revenue
because we believe it is useful in comparing the ongoing operating results
of the combined company with pre-merger results of the two companies.
© Amortization of acquired product rights. The amounts recorded as
amortization of acquired product rights arise from prior acquisitions and
are non-cash in nature. We exclude these expenses because we believe they
are not reflective of ongoing operating results in the period incurred and
are not directly related to the operation of our business.
(D) Executive incentive bonuses. Consists of bonuses related to the
Veritas acquisition and executive sign-on bonuses for newly hired
executives. We exclude these amounts because they arise from prior
acquisitions and other infrequent events and we believe they are not
directly related to the operation of our business. For the three months and
year ended March 31, 2007 and 2006, executive incentive bonuses were
allocated as follows:
Three months ended Year ended
March 31, March 31,
--------------------- ---------------------
2007 2006 2007 2006
---------- ---------- ---------- ----------
Sales and marketing $ - $ 298 $ 1,595 $ 1,866
Research and development - 1,466 1,800 2,832
General and administrative - 3,477 600 5,774
---------- ---------- ---------- ----------
Total executive incentive
bonuses $ - $ 5,241 $ 3,995 $ 10,472
========== ========== ========== ==========
(E) Stock-based compensation. Consists of expenses for employee stock
options, restricted stock units, and employee stock purchase plan
determined in accordance with APB 25 and SFAS 123(R) pre and post adoption
of SFAS 123(R) on April 1, 2006, respectively. We exclude these stock-based
compensation expenses because they are non-cash expenses that we believe
are not reflective of ongoing operating results. Further, we believe it is
useful to investors to understand the impact of the application of SFAS
123(R) to our results of operations. For the three months and year ended
ended March 31, 2007 and 2006, stock-based compensation was allocated as
follows:
Three months Year
ended ended
March 31, March 31,
-------------- --------------
2007 2007
-------------- --------------
(in thousands)
Cost of revenues $ 3,454 $ 16,437
Sales and marketing 12,084 55,855
Research and development 12,325 57,132
General and administrative 7,230 24,416
-------------- --------------
Total stock-based
compensation $ 35,093 $ 153,840
============== ==============
Three months ended Year ended
March 31, March 31,
2006 2006
-------- -------- -------- -------- -------- --------
Symantec Veritas Total Symantec Veritas Total
-------- -------- -------- -------- -------- --------
(in thousands) (In thousands)
Cost of revenues $ - $ 901 $ 901
Sales and marketing 3,962 - 3,962 13,314 1,482 14,796
Research and
development 3,971 - 3,971 17,497 2,062 19,559
General and
administrative 1,526 - 1,526 7,151 1,189 8,340
-------- -------- -------- -------- -------- --------
Total stock-based
compensation $ 9,459 $ - $ 9,459 $ 37,962 $ 5,634 $ 43,596
======== ======== ======== ======== ======== ========
(F) Restructuring. These amounts arise from severance, benefits,
outplacement services, and excess facilities resulting from our company
restructurings and we believe they are not directly related to the
operation of our business.
(G) Integration. Consists of expenses incurred for consulting services and
other professional fees associated with integration activities of
acquisitions. We believe they are not directly related to the operation of
our business. Operating expenses for the three months and year ended March
31, 2007 included $744K of integration expenses in Sales and Marketing. For
the three months and year ended March 31, 2006, integration expenses were
allocated as follows:
Three months ended Year ended
March 31, March 31,
2006 2006
-------- -------- -------- -------- -------- --------
Symantec Veritas Total Symantec Veritas Total
-------- -------- -------- -------- -------- --------
(in thousands) (in thousands)
Cost of revenues $ - $ - $ - $ - $ 1,057 $ 1,057
Sales and marketing - - - 2,340 3,094 5,434
Research and
development - - - 1,158 2,700 3,858
General and
administrative 587 - 587 12,428 4,826 17,254
-------- -------- -------- -------- -------- --------
Total integration
expenses $ 587 $ - $ 587 $ 15,926 $ 11,677 $ 27,603
======== ======== ======== ======== ======== ========
(H) Amortization of other intangible assets. The amounts recorded as
amortization of other intangible assets arise from prior acquisitions and
are non-cash in nature. We exclude these expenses because we believe they
are not reflective of ongoing operating results in the period incurred and
not directly related to the operation of our business.
(I) Patent settlement. On May 12, 2005, we resolved the Altiris patent
litigation matter with a cross-licensing agreement that resolved all legal
claims between the companies. We exclude the amount of this settlement
that was attributed to benefits in and prior to the period in which the
settlement was reached because it arose from a specific litigation matter
and we believe it is not directly related to the operation of our business.
(J) Gain on sale of strategic investments. We have equity investments in
privately held companies for business and strategic purposes. We exclude
the gain on sale of strategic investments because we believe it is not
reflective of ongoing operating results in the period incurred and is not
directly related to the operation of our business.
(K) Veritas SEC legal settlement. Prior to our acquisition of Veritas,
Veritas accrued a $30 million penalty based on settlement discussions with
the SEC. We include this settlement because we include the Veritas net
loss, per note O below, and we do not believe this settlement was directly
related to the operation of Veritas' business. This settlement was paid in
February 2007.
(L) Acquired in-process research and development. The amounts recorded as
acquired in-process research and development arise from prior acquisitions
and are non-cash in nature. We exclude these expenses because we believe
they are not reflective of ongoing operating results in the period incurred
and not directly related to the operation of our business.
(M) Gain on sale of assets. We exclude the gain on sale of Milpitas and
Maidenhead buildings because we believe it is not reflective of ongoing
operating results in the period incurred and is not directly related to the
operation of our business.
(N) Income tax effect on above items. This amount adjusts the provision
for income taxes to reflect the effect of the non-GAAP adjustments on
non-GAAP operating income.
(O) Veritas net loss. This amount represents Veritas net loss for the
three months ended March 31, 2005. We include the Veritas net loss
because we believe it is useful in comparing the ongoing operating results
of the combined company with pre-merger results of the two companies.
SYMANTEC CORPORATION
Reconciliation of GAAP Revenue Components to Non-GAAP Revenue Components
(In thousands)
(Unaudited)
Three Months Ended March 31, 2007
-----------------------------------------
GAAP Non-GAAP
Symantec Adjustments Non-GAAP
-----------------------------------------
Net Revenues $ 1,357,217 $ 7,565 A $ 1,364,782
Revenue By Segment:
Security and Data Management $ 516,649 $ 2,964 A $ 519,613
Data Center Management $ 362,917 $ 4,609 A $ 367,526
Services $ 69,358 $ - A $ 69,358
Consumer $ 408,218 $ 1 A $ 408,219
Other $ 75 $ (9) A $ 66
Revenue by Geography:
Americas (*) $ 729,747 $ 4,711 A $ 734,458
EMEA $ 442,395 $ 2,339 A $ 444,734
Asia Pacific/Japan $ 185,075 $ 515 A $ 185,590
Total U.S. Revenue $ 654,747 $ 4,401 A $ 659,148
Total International Revenue $ 702,470 $ 3,164 A $ 705,634
Three Months Ended March 31, 2006
-----------------------------------------
GAAP Non-GAAP
Symantec Adjustments Non-GAAP
-----------------------------------------
Net Revenues $ 1,238,560 $ 61,307 A $ 1,299,867
Revenue By Segment:
Security and Data Management $ 493,459 $ 18,423 A $ 511,882
Data Center Management $ 328,277 $ 39,139 A $ 367,416
Services $ 49,241 $ 3,751 A $ 52,992
Consumer $ 367,579 $ - A $ 367,579
Other $ 4 $ (6) A $ (2)
Revenue by Geography:
Americas (*) $ 673,833 $ 40,648 A $ 714,481
EMEA $ 399,523 $ 15,315 A $ 414,838
Asia Pacific/Japan $ 165,204 $ 5,344 A $ 170,548
Total U.S. Revenue $ 611,362 $ 38,465 A $ 649,827
Total International Revenue $ 627,198 $ 22,842 A $ 650,040
We believe the non-GAAP revenue measures set forth above are useful to
investors, and such items are used by our management, because revenue
associated with Veritas deferred revenue that was excluded as a result
of purchase accounting adjustments to fair value is reflective of
ongoing operating results.
* The Americas revenue includes the U.S., Latin America, and Canada.
Footnote:
A To include Veritas' deferred revenue that was excluded as a result of
adjustments to fair value.
SYMANTEC CORPORATION
Reconciliation of GAAP deferred revenue
to non-GAAP deferred revenue
(Unaudited)
March 31, March 31,
2007 2006
----------- -----------
Deferred revenue reconciliation (in thousands)
GAAP deferred revenue $ 2,753,783 $ 2,163,452
Add back:
Fair value adjustment to Veritas deferred
revenue (1) 17,958 57,529
----------- -----------
Non-GAAP deferred revenue (2) $ 2,771,741 $ 2,220,981
===========
Add back:
SAB 108 adjustment 100,084
-----------
Non-GAAP deferred revenue adjusted for
SAB 108 (2)(3) $ 2,321,065
===========
(1) Fair value adjustment to Veritas deferred revenue. We include revenue
associated with Veritas deferred revenue that was excluded as a result of
purchase accounting adjustments to fair value because we believe it is
reflective of ongoing operating results.
(2) We believe that providing the non-GAAP item set forth above is useful
to investors, and such item is used by our management, for the reasons
associated with the adjusting item as described.
(3) The GAAP SAB 108 adjustment was applied on April 1, 2006. We believe
that providing a non-GAAP deferred revenue balance as of March 31, 2006
that is adjusted for SAB 108 allows comparison of our deferred revenue
balance on a consistent basis.
SYMANTEC CORPORATION
Guidance - Reconciliation of projected GAAP revenue and earnings per share
to non-GAAP revenue and earnings per share
(Unaudited)
Q1 FY'08 Total FY'08
----------------- -----------------
Revenue reconciliation (in billions)
GAAP revenue range $ 1.275 - $ 1.305 $ 5.59 - $ 5.69
Add back:
Fair value adjustment to Veritas
deferred revenue (1) 0.006 0.016
Fair value adjustment to Altiris
deferred revenue (2) 0.014 0.044
----------------- -----------------
Non-GAAP revenue range* $ 1.295 - $ 1.325 $ 5.65 - $ 5.75
================= =================
Earnings per share reconciliation
GAAP earnings per share range $ 0.00 - $ 0.02 $ 0.45 - $ 0.50
Add back:
Stock-based compensation, net of
tax (3) 0.03 0.14
Fair value adjustment to Veritas and
Altiris deferred revenue,
amortization of acquired product
rights and other intangible
assets, and restructuring (1,2,4,5) 0.15 0.51
----------------- -----------------
Non-GAAP earnings per share range* $ 0.18 - $ 0.20 $ 1.10 - $ 1.15
================= =================
*We believe that providing a forecast of the non-GAAP items set forth above
is useful to investors, and such items are used by our management, for the
reasons associated with each of the adjusting items as described below.
(1) Fair value adjustment to Veritas deferred revenue. We include revenue
associated with Veritas deferred revenue that was excluded as a result of
purchase accounting adjustments to fair value because we believe they are
reflective of ongoing operating results.
(2) Fair value adjustment to Altiris deferred revenue. We include revenue
associated with Altiris deferred revenue that was excluded as a result of
purchase accounting adjustments to fair value because we believe they are
reflective of ongoing operating results.
(3) Stock-based compensation, net of tax. Consists of expenses for
employee stock options, restricted stock units, and employee stock purchase
plan determined in accordance SFAS 123(R). We exclude these stock-based
compensation expenses because they are non-cash expenses that we believe
are not reflective of ongoing operating results. Further, we believe it is
useful to investors to understand the impact of the application of SFAS
123(R) to our results of operations.
(4) Amortization of acquired product rights and other intangible assets.
The amounts recorded as amortization of acquired product rights and other
intangible assets arise from prior acquisitions and are non-cash in nature.
We exclude these expenses because we believe they are not reflective of
ongoing operating results in the period incurred and not directly related
to the operation of our business.
(5) Restructuring. This amount arises from severance, benefits,
outplacement services, and excess facilities resulting from our company
restructuring. We exclude this amount because we believe it is not
reflective of ongoing operating results in the period incurred and not
directly related to the operation of our business.
SYMANTEC CORPORATION
Guidance - Reconciliation of projected GAAP deferred revenue
to non-GAAP deferred revenue
(Unaudited)
June 30, 2007
---------------
Deferred revenue reconciliation (in billions)
GAAP deferred revenue $ 2.71 - $ 2.75
Add back:
Fair value adjustment to Veritas deferred revenue (*) $ 0.01
Fair value adjustment to Altiris deferred revenue (*) $ 0.03
---------------
Non-GAAP deferred revenue (**) $ 2.75 - $ 2.79
===============
(*) Fair value adjustment to Veritas and Altiris deferred revenue. We
include revenue associated with Veritas and Altiris deferred revenue that
was excluded as a result of purchase accounting adjustments to fair value
because we believe it is reflective of ongoing operating results.
(**) We believe that providing the non-GAAP item set forth above is useful
to investors, and such item is used by our management, for the reasons
associated with the adjusting item as described above.