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Adobe Systems Reports Strong Q1 Fiscal 2003 Results

Friday, March 14, 2003

Press release from the issuing company

SAN JOSE, Calif. — March 13, 2003 — Adobe Systems Incorporated, the leader in network publishing, today reported financial results for its first quarter ended February 28, 2003 that exceeded the Company's prior revenue and earnings per share target ranges. In the first quarter of fiscal 2003, Adobe achieved revenue of $296.9 million, compared to $267.9 million reported for the first quarter of fiscal 2002 and $294.7 million reported in the fourth quarter of fiscal 2002. Adobe's first quarter revenue target range was $275 to $290 million. Pro forma diluted earnings per share for the first quarter of fiscal 2003, which does not include an investment loss from the Company's venture program, were $0.25. Adobe's first quarter pro forma earnings target range was $0.21 to $0.23 per share. "Our second consecutive quarter of double digit revenue growth is an excellent start to 2003," said Bruce Chizen, president and CEO. "These results are particularly encouraging given our strong product line up for the remainder of the year, beginning with a new version of Acrobat targeted to launch in Q2." GAAP net income was $54.2 million for the first quarter of fiscal 2003, compared to 49.8 million reported in the first quarter of fiscal 2002, and $40.1 million in the fourth quarter of fiscal 2002. This represents 9 percent year-over-year growth in GAAP net income. Pro forma net income, which does not include restructuring and other charges, acquired in-process research and development, and investment gains and losses, was $58.9 million for the first quarter of fiscal 2003, compared to $52.8 million in the first quarter of fiscal 2002, and $59.1 million in the fourth quarter of fiscal 2002. This represents 12 percent year-over-year growth in pro forma net income. GAAP diluted earnings per share for the first quarter of fiscal 2003 were $0.23, based on 235.3 million weighted average shares. This compares with diluted earnings per share of $0.20 reported in the first quarter of fiscal 2002, based on 245.2 million weighted average shares, and diluted earnings per share of $0.17 reported in the fourth quarter of fiscal 2002, based on 238.4 million weighted average shares. Adobe's pro forma operating profit, which does not include the amortization of goodwill, restructuring and other charges, and acquired in-process research and development, was $80.5 million in the first quarter of fiscal 2003, compared to $72.7 million in the first quarter of fiscal 2002 and $83.8 million in the fourth quarter of fiscal 2002. As a percent of revenue, pro forma operating profit for the first quarter was 27.1 percent, compared to 27.1 percent in the first quarter of fiscal 2002 and 28.4 percent in the fourth quarter of fiscal 2002. For the second quarter of fiscal 2003, the Company announced that it is targeting revenue at $300 to $315 million, a gross margin of 92 percent, and, GAAP and pro forma operating margin ranges of 26 to 28 percent. As a percent of revenue, Adobe is targeting second quarter expenses as follows: Research & Development - approximately 21 to 22 percent Sales & Marketing - approximately 33 to 34 percent General & Administrative - approximately 10 percent In addition, Adobe is targeting its share count range to be between 238 and 240 million shares in the second quarter of fiscal 2003. The Company also is targeting other income to be approximately $2 to $3 million, and a tax rate of 30 percent. These targets lead to GAAP and pro forma target ranges of $0.24 to $0.27 earnings per share in the quarter. The Adobe Board of Directors declared this quarter's cash dividend of $0.0125 per share, payable on April 7, 2003 to stockholders of record as of March 24, 2003.

 

 

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