News Release
Symantec Announces Strong First Quarter Financial Results
Raises Fiscal Year 2004 Guidance
CUPERTINO, Calif. – July 23, 2003 – Symantec Corp. (Nasdaq: SYMC), the world leader in Internet security, today reported
results for the fiscal first quarter 2004 ended July 4, 2003. Symantec posted revenue for the quarter of US$391 million,
a 24 percent increase compared to $316 million for the same quarter last year.
GAAP Results: Net income for the fiscal first quarter was $68 million, compared to $57 million for the same quarter last
year. Earnings per share was $0.41, compared to earnings per share of $0.36 for the year-ago quarter.
Non-GAAP Results: Non-GAAP net income for the fiscal first quarter was $75 million, compared to $66 million for the same
quarter last year. Non-GAAP earnings per share was $0.45, compared to earnings per share of $0.41 for the year-ago
quarter. Non-GAAP results, as outlined in the attached consolidated statements, exclude expenses from the amortization
of other intangibles from acquisitions and restructuring and site closures as well as related income tax benefits. See
“Use of Non-GAAP Financial Information” below.
“We continue to see strong performance across all segments of our business around the world, despite the difficult
economic environment,” said John W. Thompson, Symantec Chairman and CEO. “We believe our investments in the broadest
range of security technologies and services delivered to the most diverse set of customers in our segment will continue
to fuel the future growth of our company.”
Revenue Components
For the quarter, Symantec’s worldwide enterprise security business represented 42 percent of total revenue and grew 25
percent compared to the same quarter last year. Symantec’s consumer business grew 35 percent and represented 43 percent
of total revenue. Symantec’s enterprise administration business declined 11 percent in line with expectations and
represented 13 percent of total revenue while the services business grew 160 percent and represented 2 percent of total
revenue.
International revenues represented 51 percent of total revenue in the first quarter and grew 33 percent over the same
quarter last year. The Europe, Middle East and Africa region led the increase for the quarter with 55 percent growth,
followed by Latin America with 25 percent growth. Japan recorded 12 percent year-over-year growth with Asia Pacific at 8
percent growth. The United States grew at 16 percent.
Business Outlook
Management offers the following forward-looking guidance for the fiscal second quarter 2004 ending Oct. 3, 2003:
- Revenue is expected to be in the range of $375 to $395 million.
- GAAP earnings per share is expected to be $0.38 at the midpoint of the revenue guidance.
- Non-GAAP earnings per share is expected to be $0.41 at the midpoint of the revenue guidance.
Management offers the following forward-looking guidance for fiscal year 2004, ending April 2, 2004, updated to reflect
the actual results from the fiscal first quarter and estimated results for the fiscal second quarter:
- Revenue is expected to be approximately $1.665 billion.
- GAAP earnings per share is expected to be $1.82 at the stated revenue forecast, up 7 cents from previous guidance
provided in April.
- Non-GAAP earnings per share is expected to be $1.96 at the stated revenue forecast, up 8 cents from previous guidance
provided in April.
Non-GAAP earnings per share excludes the pre-tax amortization of intangibles and restructuring charges from acquisitions
of approximately $6 million and $25 million for the quarter ending Oct. 3, 2003 and the fiscal year ending April 2,
2004, respectively.
Quarterly Highlights
- Symantec signed 152 contracts worldwide worth more than $100,000 each, including 30 worth more than $300,000 each and
4 worth more than $1 million each, during the quarter. Symantec signed new or extended agreements with customers
including Alcoa; The University of Texas; Home Box Office; the State of Minnesota Dept. of Human Services; Time Inc.;
Premier Inc., a leading health care alliance in the United States; Kroger Co., one of the nation’s largest retail
grocery chains; the U.S. Department of Veterans Affairs; the U.S. Department of Education; the U. S. Transportation
Safety Administration; and News Corporation, a diversified international media and entertainment company.
- Around the world, Symantec signed contracts with customers including Fortis Bank, an international financial services
provider in the fields of insurance, banking and investments; Actia, a worldwide group of leading companies specialised
in vehicle electronics and diagnostics; Pechiney, an international business group whose three core businesses are
primary aluminium, aluminium conversion and packaging; Vivarte, a leading European manufacturer of shoes; Kredyt Bank,
one of Poland’s largest banks and financial services companies; Samsung in Korea; and Bank of China.
- During the quarter, Symantec introduced the latest update to the Symantec Security Management System. Symantec
Incident Manager 2.0 uses real-time, automated correlation to identify and prioritise security incidents, allowing
enterprises to proactively secure their network against known threats and respond to new attacks in real time.
- Symantec also launched Symantec ManHunt 3.0, providing multi-gigabit network intrusion detection, real-time threat
analysis, and proactive prevention and response capabilities to protect organizations against emerging threats and
denial-of-service attacks; Symantec Decoy Server, a “honeypot” intrusion detection system (IDS) that detects, contains
and monitors unauthorized access and system misuse as it happens; and Symantec Host IDS 4.1, scalable intrusion
detection and prevention capabilities for business critical servers.
- In addition, Symantec released Symantec Vulnerability Assessment, which provides greater control of the network
infrastructure through the identification and prioritisation of vulnerabilities and by providing extensive information
on remediation actions. During the quarter, Symantec also launched an update to the world’s leading remote control
solution. pcAnywhere 11.0 extends beyond remote control by providing IT administrators integrated remote management
tools and enhanced file transfer to further accelerate helpdesk and server support problem resolution.
- HP joined the Symantec Technology Partner Program with its HP OpenView management software. HP’s participation in the
program will focus on joint marketing activities around the Smart Plug-in being designed to integrate the Symantec
Enterprise Security Architecture with HP OpenView Operations. Symantec’s integration effort is expected to allow HP
OpenView customers to view actionable security incident alerts within their network infrastructure management console.
Conference Call
Symantec has scheduled a conference call for 5 p.m. EDT/2 p.m. PDT today to discuss fiscal first quarter 2004 results,
and to review guidance for the fiscal second quarter. 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 the script of our officers’ remarks
will be available on the investor relations home page shortly after the call is completed.
About Symantec
Symantec, the world leader in Internet security technology, provides a broad range of content and network security
software and appliance solutions to individuals, enterprises and service providers. The company is a leading provider of
client, gateway and server security solutions for virus protection, firewall and virtual private network, vulnerability
management, intrusion detection, Internet content and e-mail filtering, remote management technologies and security
services to enterprises and service providers around the world. Symantec’s Norton brand of consumer security products is
a leader in worldwide retail sales and industry awards. Headquartered in Cupertino, Calif., Symantec has worldwide
operations in 36 countries. For more information, please visit 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 and the Symantec logo are trademarks or registered trademarks, in the United States and certain other
countries, of Symantec Corporation. 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 activities, 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; the anticipation of the
growth of certain market segments, particularly enterprise security; the positioning of Symantec's products in those
segments; the competitive environment in the software industry; 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 Symantec’s previously filed Form
10-K for the fiscal year ended March 28, 2003. Symantec assumes no obligation to update any forward-looking information
contained in this press release except as otherwise required by law.
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 net income and earnings per share
exclude acquisition related charges, such as amortization of goodwill and other intangibles, and certain other charges,
such as restructurings and site closures, as well as the tax effect of these items. 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/center.html.
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