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Adobe Systems Reports First Quarter Results Exceeds Operating Profit Target

Friday, March 16, 2001

Press release from the issuing company

San Jose, Calif., (March 15, 2001) (NASDAQ:ADBE) -Adobe Systems Incorporated today reported financial results for its first quarter ended March 2, 2001. In the first quarter of fiscal 2001, Adobe achieved revenue of $329 million, compared to $282.2 million reported for the first quarter of fiscal 2000 and $355.2 million reported in the fourth quarter of fiscal 2000. This represents 17 percent year over year revenue growth, with application revenue growth of 20 percent. Pro forma diluted earnings per share for the first quarter of fiscal 2001, which excludes non-operating gains and losses, were $0.33. This exceeds the original operating profit target the Company gave on December 14, 2000. "We are pleased to report excellent year over year pro forma operating profit growth of 33 percent and solid year over year revenue growth of 17 percent in a difficult economic environment," said Bruce R. Chizen, president and chief executive officer of Adobe. "Although we are disappointed in not meeting our original revenue target, we did demonstrate our ability to proactively manage our business," added Chizen. Net income, which includes non-operating gains and losses, was $69.8 million for the first quarter of fiscal 2001, compared to $64.6 million reported in the first quarter of fiscal 2000, and $79.2 million in the fourth quarter of fiscal 2000. Including non-operating gains and losses, diluted earnings per share for the first quarter of fiscal 2001 were $0.28 based on 253.6 million weighted average shares. This compares with diluted earnings per share of $0.26 reported in the first quarter of fiscal 2000, based on 253 million weighted average shares, and diluted earnings per share of $0.31 reported in the fourth quarter of fiscal 2000, based on 257.3 million weighted average shares. Excluding the amortization of goodwill, restructuring and other charges, and the write-off of in-process research and development, Adobe's operating profit was $119.0 million in the first quarter of fiscal 2001, compared to $89.5 million in the first quarter of fiscal 2000 and $127.5 million in the fourth quarter of fiscal 2000. This represents 33 percent year-over-year operating profit growth. As a percent of revenue, operating profit for the first quarter was 36.2 percent, compared to 31.7 percent in the first quarter of fiscal 2000 and 35.9 percent in the fourth quarter of fiscal 2000. Adobe also announced that, due to the challenging and uncertain economic environment, it is adjusting its fiscal 2001 operating model targets. The Company is lowering its second quarter fiscal 2001 year-over-year revenue growth target to approximately 15 percent and is not providing second half fiscal 2001 revenue targets. Regarding the second half of fiscal 2001, Chizen stated, "As we look out further, economic conditions become more challenging to gauge. Although we do not currently see a major slowdown in our business in Europe and Japan, the potential for a global slowdown causes us to defer providing updated second half targets until we have better visibility. Notwithstanding the economic environment, we will continue to focus on operational excellence."

 

 

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