COMPANY PRESS RELEASE: Adobe Systems Incorporated has reported financial results for its fourth quarter and fiscal year ended November 30, 2001.
For the fourth quarter of fiscal 2001 Adobe achieved revenue of $264.5 million, compared to $355.2 million reported for the fourth quarter of fiscal 2000 and $292.1 million reported in the third quarter of fiscal 2001.
In fiscal 2001, Adobe achieved revenue of $1.230 billion, compared to $1.266 billion in fiscal 2000.
Despite ongoing weakness in the global economy, Adobe continues to generate outstanding profit margins. In fiscal 2001, Adobe delivered a pro forma operating margin of 33 percent for the year, said Bruce R. Chizen, president and chief executive officer of Adobe.
During the fiscal year, Adobe achieved 41 percent annual growth in its Adobe Acrobat business. Commenting on Adobe’s future growth opportunities, Chizen added, Adobe is driving the transformation from paper-based processes to electronic workflows.
Pro forma diluted earnings per share for the fourth quarter of fiscal 2001, which excludes restructuring and other charges, amortization of goodwill and purchased intangibles, and investment gains and losses, were $0.20.
Net income, which includes non-operating gains and losses, was $34.3 million for the fourth quarter of fiscal 2001, compared to $79.2 million reported in the fourth quarter of fiscal 2000, and $40.3 million in the third quarter of fiscal 2001. Annual net income was $205.6 million in fiscal 2001, compared to $287.8 million in fiscal 2000.
Including non-operating gains and losses, diluted earnings per share for the fourth quarter of fiscal 2001 were $0.14 based on 243.4 million weighted average shares. This compares with diluted earnings per share of $0.31 reported in the fourth quarter of fiscal 2000, based on 257.3 million weighted average shares, and diluted earnings per share of $0.16 reported in the third quarter of fiscal 2001, based on 248.6 million weighted average shares.
Excluding restructuring and other charges, the amortization of goodwill and purchased intangibles, and acquired in-process research and development, Adobe’s pro forma operating profit was $67.9 million in the fourth quarter of fiscal 2001, compared to $127.5 million in the fourth quarter of fiscal 2000 and $96.4 million in the third quarter of fiscal 2001. As a percent of revenue, pro forma operating profit for the fourth quarter was 25.7 percent, compared to 35.9 percent in the fourth quarter of fiscal 2000 and 33 percent in the third quarter of fiscal 2001.
During the fourth quarter, Adobe implemented a restructuring that resulted in a worldwide reduction in force of 247 employees. A restructuring charge of $12.1 million was taken in the fourth quarter as part of this program for employee severance and related benefits.
Based on our assumption of continued economic weakness in all of our major markets, we are targeting our Q1 fiscal 2002 revenue at $265 to $280 million, said Murray J. Demo, senior vice president and chief financial officer of Adobe.
For the first quarter of fiscal 2002, the Company also announced that it is targeting revenue of $265 million to $280 million, a gross margin of 92 to 93 percent, and an operating margin of between 25 to 28 percent. As a percent of revenue, Adobe said it is targeting expenses by category as follows:
Research & Development approximately 20 to 21 percent
Sales & Marketing approximately 34 to 35 percent
General & Administrative approximately 10 to 11 percent
In addition, Adobe is targeting its share count range to be between 245 and 246 million shares in the first quarter of fiscal 2002. The Company also is targeting other income to be approximately $4 million in the first quarter, and a tax rate of 32 percent.
These targets lead to a pro forma earnings per share target range in Q1 fiscal 2002 of $0.20 to $0.22 per share.
For fiscal 2002, the Company also stated that its economic assumptions, and annual revenue and operating targets remain unchanged from October 30, 2001.
The Adobe Board of Directors declared this quarter’s cash dividend of $0.0125 per share, payable on January 17, 2002 to stockholders of record as of January 3, 2002.