Symantec Reports Record Revenue and Double Digit non-GAAP EPS Growth
• Initiating cash dividend of $0.15 per share equivalent to a 2.5% dividend yield
• Organic revenue growth in constant currency of 4% in Q4 and 3% in FY13
• Expansion of constant currency non-GAAP operating margin of 140 basis points in Q4 and 60 basis points in FY13
• FY13 content, maintenance, and subscription revenue growth of 5% in constant currency
MOUNTAIN VIEW, Calif. – Symantec Corp. (Nasdaq: SYMC) today reported the results of its fourth quarter and fiscal year 2013, ended March 29, 2013. GAAP revenue for the fiscal fourth quarter was $1.748 billion, up 4 percent year-over-year and up 5 percent after adjusting for currency. For the fiscal year, GAAP revenue was $6.906 billion, up 3 percent year-over-year and up 5 percent after adjusting for currency.
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“In a year of significant leadership changes and development of a new company strategy, the team remained focused on running the business to deliver better than expected results,” said Steve Bennett, president and chief executive officer, Symantec. “Our focus on operational change and repositioning the business in fiscal year 2014 will set the foundation to drive better execution long-term. Never have I been more optimistic about the opportunity in front of us to make a difference for our employees, customers and shareholders.”
“We achieved better than expected March quarter results driven by double digit growth in our backup business and continued strength in data loss prevention and our other information security products,” said James Beer, executive vice president and chief financial officer, Symantec. “For the fiscal year 2013, we generated record revenue and deferred revenue, expanded non-GAAP operating margins by 60 basis points after adjusting for currency, and delivered double-digit non-GAAP earnings per share growth based on the success of our backup and information security businesses.”
GAAP Results for the Fourth Quarter of Fiscal Year 2013
• GAAP operating margin was 14.4 percent compared with 11.4 percent for the same quarter last year.
• GAAP net income was $188 million compared with net income of $559 million for the year-ago period.
• GAAP diluted earnings per share were $0.26 compared with $0.76 for the year ago quarter.
• GAAP deferred revenue as of March 29, 2013, was $4.017 billion compared with $3.973 billion as of March 30, 2012, up 1 percent year-over-year and up 3 percent after adjusting for currency.
• Cash flow from operating activities was $612 million compared with $687 million for the year ago period.
GAAP Results for Fiscal Year 2013
• GAAP operating margin was 16.3 percent compared with 16.0 percent for fiscal year 2012.
• GAAP net income for the fiscal year 2013 was $765 million compared with $1.172 billion for fiscal year 2012.
• GAAP diluted earnings per share for the year were $1.08 compared with $1.57 for fiscal year 2012.
• Cash flow from operating activities was $1.593 billion compared with $1.901 billion for fiscal year 2012. Capital expenditures totalled $336 million resulting in free cash flow of $1.26 billion for the fiscal year.
The year-over-year change in our GAAP results was as expected and was driven by the completion of the sale of the Huawei Joint Venture in fiscal year 2012.
Non-GAAP Results for the Fourth Quarter of Fiscal Year 2013
• Non-GAAP operating margin was 23.9 percent compared with 22.2 percent for the same quarter last year.
• Non-GAAP net income was $314 million, compared to $283 million for the year-ago period, an increase of 11 percent year-over-year.
• Non-GAAP diluted earnings per share were $0.44 compared with $0.38 for the year-ago quarter, an increase of 16 percent year-over-year.
Non-GAAP Results for the Fiscal Year 2013
• Non-GAAP operating margin was 25.7 percent, compared with 25.2 percent for fiscal year 2012.
• Non-GAAP net income for the year was $1.258 billion, compared with $1.201 billion for fiscal year 2012, an increase of 5 percent.
• Non-GAAP diluted earnings per share were $1.77, compared with $1.61 for the year-ago period, an increase of 10 percent.
Business Segment and Geographic Highlights for the Quarter
• The Consumer segment represented 30 percent of total revenue and increased 1 percent year-over-year (3 percent after adjusting for currency).
• The Security and Compliance segment represented 30 percent of total revenue and increased 2 percent year-over-year (4 percent after adjusting for currency).
• The Storage and Server Management segment represented 36 percent of total revenue and increased 7 percent year-over-year on an actual and currency-adjusted basis.
• Services represented 4 percent of total revenue and increased 9 percent year-over-year (10 percent after adjusting for currency).
• International revenue represented 51 percent of total revenue and increased 2 percent year-over-year (4 percent after adjusting for currency).
• The Europe, Middle East and Africa region represented 28 percent of total revenue and increased 6 percent year-over-year (5 percent after adjusting for currency).
• The Asia Pacific/Japan revenue represented 18 percent of total revenue and decreased 4 percent year-over-year (increased 1 percent after adjusting for currency).
• The Americas, including the United States, Latin America and Canada, represented 54 percent of total revenue and increased 6 percent year-over-year on an actual and currency-adjusted basis.
Symantec ended the quarter and fiscal year with cash, cash equivalents and short-term investments of $4.75 billion (including $1 billion to be utilized to retire our outstanding convertible debt in June 2013) compared to $3.21 billion for fiscal year 2012, an increase of 48 percent. During the quarter, Symantec repurchased 7 million shares for $125 million at an average price of $20.61. During the fiscal year 2013, the Company repurchased 49 million shares at an average price of $16.98, equivalent to $826 million. At the end of the fourth quarter, Symantec had $1.2 billion remaining for future repurchases in the current board authorized stock repurchase plans.
Symantec’s Board of Directors has declared a quarterly cash dividend of $0.15 per common share to be paid on June 27, 2013 to all shareholders of record as of the close of business on June 19, 2013. The ex-dividend date will be June 17, 2013.
Symantec’s Board of Directors approved the initiation of quarterly cash dividends to its shareholders in January of 2013. Future dividend declarations will be subject to Board approval.
Symantec has scheduled a conference call for 5 p.m. ET/2 p.m. PT today to discuss the results from the fiscal 2013 fourth quarter and fiscal year, ended March 29, 2013, and to review guidance. Interested parties may access the conference call on the Internet at http://www.symantec.com/invest. To listen to the live call, please go to the website 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.
Symantec protects the world’s information, and is a global leader in security, backup and availability solutions. Our innovative products and services protect people and information in any environment – from the smallest mobile device, to the enterprise data center, to cloud-based systems. Our world-renowned expertise in protecting data, identities and interactions gives our customers confidence in a connected world. More information is available at www.symantec.com or by connecting with Symantec at: go.symantec.com/socialmedia.
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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 projections of future revenue, earnings per share and deferred revenue, as well as projections of amortization of acquisition-related intangibles and stock-based compensation and restructuring charges. 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: general economic conditions; 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. We assume no obligation, and do not intend, to update these forward-looking statements as a result of future events or developments. Additional information concerning these and other risks factors is contained in the Risk Factors sections of our Form 10-K for the year ended March 30, 2012 and our Current Report on Form 8-K filed on June 11, 2012.
USE OF NON-GAAP FINANCIAL INFORMATION: Our results of operations have undergone significant change due to a series of acquisitions, the impact of stock-based compensation, impairment charges 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 website at www.symantec.com/invest.
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