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Adobe Reports Q3 Results, Meets Earnings Target; Sees Growth in Q4

Friday, September 13, 2002

Press release from the issuing company

SAN JOSE, Calif.--Sept. 12, 2002--Adobe Systems Incorporated, the leader in network publishing, today reported that its financial results for the third quarter ended August 30, 2002 met its revised revenue and earnings target ranges. In the third quarter of fiscal 2002, Adobe achieved revenue of 284.9 million, compared to $292.1 million reported for the third quarter of fiscal 2001 and $317.4 million reported in the second quarter of fiscal 2002. Adobe's revised third quarter revenue target range was between $270 and $290 million. Pro forma diluted earnings per share for the third quarter of fiscal 2002, which does not include amortization of goodwill and purchased intangibles, and investment gains and losses, were $0.22. Adobe's revised third quarter pro forma earnings target range was between $0.18 and $0.23 per share. "I am pleased that Adobe is reporting revenue and earnings at the high end of our revised third quarter targets," said Bruce R. Chizen, president and chief executive officer of Adobe. "I am also encouraged that despite a challenging economic environment, we are planning forgrowth in Q4." GAAP net income was $47.2 million for the third quarter of fiscal 2002, compared to $40.3 million reported in the third quarter of fiscal 2001, and $54.3 million in the second quarter of fiscal 2002. Pro forma net income, which does not include restructuring and other charges, acquired in-process research and development, amortization of goodwill and purchased intangibles, and investment gains and losses, was $52.5 million for the third quarter of fiscal 2002, compared to $69.1 million in the third quarter of fiscal 2001, and $67.4 million in the second quarter of fiscal 2002. GAAP diluted earnings per share for the third quarter of fiscal 2002 were $0.19, based on 243.4 million weighted average shares. This compares with diluted earnings per share of $0.16 reported in the third quarter of fiscal 2001, based on 248.6 million weighted average shares, and diluted earnings per share of $0.22 reported in the second quarter of fiscal 2002, based on 247.7 million weighted average shares. Adobe's pro forma operating profit, which does not include restructuring and other charges, acquired in-process research and development, and amortization of goodwill and purchased intangibles, was $73 million in the third quarter of fiscal 2002, compared to $96.4 million in the third quarter of fiscal 2001 and $96.4 million in the second quarter of fiscal 2002. As a percent of revenue, pro forma operating profit for the third quarter was 25.6 percent, compared to 33 percent in the third quarter of fiscal 2001 and 30.4 percent in the second quarter of fiscal 2002. For the fourth quarter of fiscal 2002, the Company announced that it is updating its targeted revenue range to $285 to $300 million, with a gross margin of 91 percent, and a pro forma operating margin range of 26 to 29 percent. As a percent of revenue, Adobe is targeting Q4 expenses as follows: Research & Development -- approximately 21 to 22 percent Sales & Marketing -- approximately 32 to 34 percent General & Administrative -- approximately 9 percent In addition, Adobe is targeting its share count range to be between 240 and 242 million shares in the fourth quarter of fiscal 2002. The Company also is targeting other income to be approximately $2 million to $3 million, and a tax rate of 32 percent. These targets lead to a pro forma target range of $0.21 to $0.25 per share in the quarter. The Adobe Board of Directors declared this quarter's cash dividend of $0.0125 per share, payable on October 8, 2002 to stockholders of record as of September 24, 2002.

 

 

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