SAN JOSE, Calif.--(BUSINESS WIRE)-- Adobe Systems Incorporated (Nasdaq:ADBE) today announced financial results for its third quarter ended Aug. 28, 2009.
In the third quarter of fiscal 2009, Adobe achieved revenue of $697.5 million, compared to $887.3 million reported for the third quarter of fiscal 2008 and $704.7 million reported in the second quarter of fiscal 2009.
“We are pleased with the solid revenue and earnings results we were able to deliver in Q3,” said Shantanu Narayen, president and CEO of Adobe. “Our focus remains on driving growth in our core businesses, as well as investing in promising new opportunities.”
Third Quarter Fiscal 2009 GAAP Results
Adobe’s GAAP diluted earnings per share for the third quarter of fiscal 2009 were $0.26, based on 531.8 million weighted average shares. This compares with GAAP diluted earnings per share of $0.35 reported in the third quarter of fiscal 2008 based on 541.3 million weighted average shares, and GAAP diluted earnings per share of $0.24 reported in the second quarter of fiscal 2009 based on 528.0 million weighted average shares.
GAAP operating income was $167.6 million in the third quarter of fiscal 2009, compared to $219.5 million in the third quarter of fiscal 2008 and $161.4 million in the second quarter of fiscal 2009. As a percent of revenue, GAAP operating income in the third quarter of fiscal 2009 was 24.0 percent, compared to 24.7 percent in the third quarter of fiscal 2008 and 22.9 percent in the second quarter of fiscal 2009.
GAAP net income was $136.0 million for the third quarter of fiscal 2009, compared to $191.6 million reported in the third quarter of fiscal 2008 and $126.1 million in the second quarter of fiscal 2009.
Third Quarter Fiscal 2009 Non-GAAP Results
Non-GAAP diluted earnings per share for the third quarter of fiscal 2009 were $0.35. This compares with non-GAAP diluted earnings per share of $0.50 reported in the third quarter of fiscal 2008 and non-GAAP diluted earnings per share of $0.35 reported in the second quarter of fiscal 2009.
Adobe’s non-GAAP operating income was $237.1 million in the third quarter of fiscal 2009, compared to $351.9 million in the third quarter of fiscal 2008 and $237.7 million in the second quarter of fiscal 2009. As a percent of revenue, non-GAAP operating income in the third quarter of fiscal 2009 was 34.0 percent, compared to 39.7 percent in the third quarter of fiscal 2008 and 33.7 percent in the second quarter of fiscal 2009.
Non-GAAP net income was $186.1 million for the third quarter of fiscal 2009, compared to $269.1 million in the third quarter of fiscal 2008 and $185.0 million in the second quarter of fiscal 2009.
Reconciliation between GAAP and non-GAAP results is provided at the end of this press release.
Fourth Quarter Fiscal 2009 Financial Targets
For the fourth quarter of fiscal 2009, Adobe is targeting revenue of $690 million to $740 million, an operating margin of 23 percent to 27 percent on a GAAP basis, and 33 percent to 36 percent on a non-GAAP basis.
In addition, Adobe is targeting its share count to be between 530 million and 532 million. The Company also is targeting non-operating income to be between $1 million and $3 million. Adobe’s GAAP tax rate is expected to be approximately 23 percent and the non-GAAP tax rate is expected to be approximately 23.5 percent.
These targets lead to a fourth quarter diluted earnings per share target range of $0.23 to $0.29 on a GAAP basis, and an earnings per share target range of $0.33 to $0.39 on a non-GAAP basis.
Reconciliation between GAAP and non-GAAP financial targets is provided at the end of this press release.
The fourth quarter financial targets do not include the impact of Adobe’s acquisition of Omniture announced today, which is expected to close in the fourth quarter of Adobe’s 2009 fiscal year.
Condensed Consolidated Statements of Income (In thousands, except per share data; unaudited) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| August 28, 2009 | August 29, 2008 |
| August 28, 2009 | August 29, 2008 | ||||||||||||
| Revenue: | ||||||||||||||||
| Products | $ | 649,865 | $ | 838,813 | $ | 2,052,119 | $ | 2,532,076 | ||||||||
| Services and support | 47,642 | 48,444 | 136,451 | 132,512 | ||||||||||||
| Total revenue | 697,507 | 887,257 | 2,188,570 | 2,664,588 | ||||||||||||
| Cost of revenue: | ||||||||||||||||
| Products | 49,365 | 84,623 | 164,041 | 202,657 | ||||||||||||
| Services and support | 15,682 | 26,228 | 50,367 | 73,535 | ||||||||||||
| Total cost of revenue | 65,047 | 110,851 | 214,408 | 276,192 | ||||||||||||
| Gross profit | 632,460 | 776,406 | 1,974,162 | 2,388,396 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 138,902 | 170,124 | 427,289 | 508,909 | ||||||||||||
| Sales and marketing | 231,320 | 271,439 | 724,020 | 813,399 | ||||||||||||
| General and administrative | 79,593 | 97,156 | 224,462 | 257,163 | ||||||||||||
| Restructuring charges | 65 | 1,194 | 15,866 | 2,625 | ||||||||||||
| Amortization of purchased intangibles | 14,978 | 17,024 | 45,654 | 51,222 | ||||||||||||
| Total operating expenses | 464,858 | 556,937 | 1,437,291 | 1,633,318 | ||||||||||||
| Operating income | 167,602 | 219,469 | 536,871 | 755,078 | ||||||||||||
| Non-operating income (expense): | ||||||||||||||||
| Interest and other income, net | 6,667 | 9,338 | 24,753 | 34,778 | ||||||||||||
| Interest expense | (460 | ) | (2,390 | ) | (1,872 | ) | (8,027 | ) | ||||||||
| Investment gains (losses), net | 607 | 2,097 | (18,444 | ) | 20,335 | |||||||||||
| Total non-operating income, net | 6,814 | 9,045 | 4,437 | 47,086 | ||||||||||||
| Income before income taxes | 174,416 | 228,514 | 541,308 | 802,164 | ||||||||||||
| Provision for income taxes | 38,371 | 36,906 | 122,757 | 176,267 | ||||||||||||
| Net income | $ | 136,045 | $ | 191,608 | $ | 418,551 | $ | 625,897 | ||||||||
| Basic net income per share | $ | 0.26 | $ | 0.36 | $ | 0.79 | $ | 1.15 | ||||||||
| Shares used in computing basic net income per share | 525,911 | 531,060 | 528,015 | 542,624 | ||||||||||||
| Diluted net income per share | $ | 0.26 | $ | 0.35 | $ | 0.79 | $ | 1.13 | ||||||||
| Shares used in computing diluted net income per share | 531,809 | 541,311 | 532,846 | 552,739 | ||||||||||||
| Condensed Consolidated Balance Sheets (In thousands, except per share data; unaudited) | ||||||||
| August 28, | November 28, | |||||||
| 2009 | 2008 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 1,132,144 | $ | 886,450 | ||||
| Short-term investments | 1,424,317 | 1,132,752 | ||||||
| Trade receivables, net of allowances for doubtful accounts of $6,153 and $4,128, respectively | 281,807 | 467,234 | ||||||
| Deferred income taxes | 72,163 | 110,713 | ||||||
| Prepaid expenses and other current assets | 80,503 | 137,954 | ||||||
| Total current assets | 2,990,934 | 2,735,103 | ||||||
| Property and equipment, net | 335,752 | 313,037 | ||||||
| Goodwill | 2,125,946 | 2,134,730 | ||||||
| Purchased and other intangibles, net | 117,384 | 214,960 | ||||||
| Investment in lease receivable | 207,239 | 207,239 | ||||||
| Other assets | 184,705 | 216,529 | ||||||
| Total assets | $ | 5,961,960 | $ | 5,821,598 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Trade payables | $ | 48,416 | $ | 55,840 | ||||
| Accrued expenses | 349,077 | 399,969 | ||||||
| Accrued restructuring | 8,230 | 35,690 | ||||||
| Income taxes payable | 20,332 | 27,136 | ||||||
| Deferred revenue | 188,328 | 243,964 | ||||||
| Total current liabilities | 614,383 | 762,599 | ||||||
| Long-term liabilities: | ||||||||
| Deferred revenue | 29,866 | 31,356 | ||||||
| Debt | 350,000 | 350,000 | ||||||
| Income taxes payable | 137,296 | 123,182 | ||||||
| Deferred income taxes | 105,597 | 117,328 | ||||||
| Accrued restructuring | 4,967 | 6,214 | ||||||
| Other liabilities | 25,293 | 20,565 | ||||||
| Total liabilities | 1,267,402 | 1,411,244 | ||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, $0.0001 par value; 2,000 shares authorized | — | — | ||||||
| Common stock, $0.0001 par value | 61 | 61 | ||||||
| Additional paid-in-capital | 2,303,342 | 2,396,819 | ||||||
| Retained earnings | 5,331,957 | 4,913,406 | ||||||
| Accumulated other comprehensive income | 21,728 | 57,222 | ||||||
| Treasury stock, at cost (76,169 and 74,723 shares, respectively), net of reissuances | (2,962,530 | ) | (2,957,154 | ) | ||||
| Total stockholders’ equity | 4,694,558 | 4,410,354 | ||||||
| Total liabilities and stockholders’ equity | $ | 5,961,960 | $ | 5,821,598 | ||||
| Condensed Consolidated Statements of Cash Flows (In thousands; unaudited) | ||||||||
| Three Months Ended | ||||||||
| August 28, 2009 | August 29, 2008 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 136,045 | $ | 191,608 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
|
| ||||||
| Depreciation, amortization and accretion | 63,921 | 64,983 | ||||||
| Stock-based compensation expense, net of tax | 39,654 | 106,297 | ||||||
| Net investment gains | (3,190 | ) | (1,111 | ) | ||||
| Changes in deferred revenue | 4,879 | 16,018 | ||||||
| Changes in operating assets and liabilities | (4,628 | ) | (166,453 | ) | ||||
| Net cash provided by operating activities | 236,681 | 211,342 | ||||||
| Cash flows from investing activities: | ||||||||
| Purchases of short-term investments, net of sales and maturities | 7,572 | (168,586 | ) | |||||
| Purchases of property and equipment | (58,431 | ) | (39,810 | ) | ||||
| Purchases of long-term investments and other assets, net of sales | (5,035 | ) | (56,363 | ) | ||||
| Net cash used for investing activities | (55,894 | ) | (264,759 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Purchases of treasury stock | (350,000 | ) | (122,552 | ) | ||||
| Reissuances of treasury stock | 73,400 | 138,987 | ||||||
| Excess tax benefits from stock-based compensation | — | 14,306 | ||||||
| Net cash (used for) provided by financing activities | (276,600 | ) | 30,741 | |||||
| Effect of exchange rate changes on cash and cash equivalents | 1,177 | (5,514 | ) | |||||
| Net decrease in cash and cash equivalents | (94,636 | ) | (28,190 | ) | ||||
| Cash and cash equivalents at beginning of period | 1,226,780 | 1,162,453 | ||||||
| Cash and cash equivalents at end of period | $ | 1,132,144 | $ | 1,134,263 | ||||
| Third Quarter Fiscal Year 2009 Non-GAAP Results (In thousands, except per share data) The following tables show Adobe’s non-GAAP results reconciled to GAAP results included in this release. | ||||||||||||
|
| ||||||||||||
| Three Months Ended | ||||||||||||
| August 28, 2009 | August 29, 2008 | May 29, 2009 | ||||||||||
| Operating income: | ||||||||||||
| GAAP operating income | $ | 167,602 | $ | 219,469 | $ | 161,353 | ||||||
| Stock-based and deferred compensation expense | 40,526 | 48,260 | 43,284 | |||||||||
| Restructuring charges | 65 | 1,194 | 3,531 | |||||||||
| Amortization of purchased intangibles and technology license arrangements | 28,896 | 82,996 | 29,528 | |||||||||
| Non-GAAP operating income | $ | 237,089 | $ | 351,919 | $ | 237,696 | ||||||
| Net income: | ||||||||||||
| GAAP net income | $ | 136,045 | $ | 191,608 | $ | 126,071 | ||||||
| Stock-based and deferred compensation expense | 40,526 | 48,260 | 43,284 | |||||||||
| Restructuring charges | 65 | 1,194 | 3,531 | |||||||||
| Amortization of purchased intangibles and technology license arrangements | 28,896 | 82,996 | 29,528 | |||||||||
| Resolution of an income tax audit | — | (20,712 | ) | — | ||||||||
| Investment (gains) losses | (607 | ) | (2,097 | ) | 1,805 | |||||||
| Income tax adjustments | (18,804 | ) | (32,199 | ) | (19,182 | ) | ||||||
| Non-GAAP net income | $ | 186,121 | $ | 269,050 | $ | 185,037 | ||||||
| Diluted net income per share: | ||||||||||||
| GAAP diluted net income per share | $ | 0.26 | $ | 0.35 | $ | 0.24 | ||||||
| Stock-based and deferred compensation expense | 0.08 | 0.09 | 0.08 | |||||||||
| Restructuring charges | — | — | 0.01 | |||||||||
| Amortization of purchased intangibles and technology license arrangements | 0.05 | 0.15 | 0.06 | |||||||||
| Resolution of an income tax audit | — | (0.04 | ) | — | ||||||||
| Income tax adjustments | (0.04 | ) | (0.05 | ) | (0.04 | ) | ||||||
| Non-GAAP diluted net income per share | $ | 0.35 | $ | 0.50 | $ | 0.35 | ||||||
| Shares used in computing diluted net income per share | 531,809 | 541,311 | 528,013 | |||||||||
| Three Months Ended | ||||||||||||
| August 28, 2009 | August 29, 2008 | May 29, 2009 | ||||||||||
| Operating expenses: | ||||||||||||
| GAAP operating expenses | $ | 464,858 | $ | 556,937 | $ | 471,312 | ||||||
| Stock-based and deferred compensation expense | (39,899 | ) | (46,841 | ) | (41,892 | ) | ||||||
| Restructuring charges | (65 | ) | (1,194 | ) | (3,531 | ) | ||||||
| Amortization of purchased intangibles and technology license arrangements | (14,978 | ) | (33,802 | ) | (15,284 | ) | ||||||
| Non-GAAP operating expenses | $ | 409,916 | $ | 475,100 | $ | 410,605 | ||||||
| Three Months Ended | ||||||||||||
| August 28, 2009 | August 29, 2008 | May 29, 2009 | ||||||||||
| Operating margin: | ||||||||||||
| GAAP operating margin | 24.0 | % | 24.7 | % | 22.9 | % | ||||||
| Stock-based and deferred compensation expense | 5.8 | 5.4 | 6.1 | |||||||||
| Restructuring charges | — | 0.1 | 0.5 | |||||||||
| Amortization of purchased intangibles and technology license arrangements | 4.2 | 9.5 | 4.2 | |||||||||
| Non-GAAP operating margin | 34.0 | % | 39.7 | % | 33.7 | % | ||||||
| Three Months | ||||||||||||
| August 28, 2009 | ||||||||||||
| Effective income tax rate: | ||||||||||||
| GAAP effective income tax rate | 22.0 | % | ||||||||||
| Stock-based and deferred compensation expense | 0.9 | |||||||||||
| Amortization of purchased intangibles | 0.6 | |||||||||||
| Non-GAAP effective income tax rate | 23.5 | % | ||||||||||
| Fourth Quarter Fiscal Year 2009 Non-GAAP Financial Targets (In millions, except per share data) The following tables show the Company’s fourth quarter fiscal year 2009 non-GAAP financial targets reconciled to GAAP financial targets included in this release. | ||||||||
| Fourth Quarter Fiscal 2009 | ||||||||
| Low | High | |||||||
| Operating margin: | ||||||||
| GAAP operating margin | 23.0 | % | 27.0 | % | ||||
| Stock-based and deferred compensation expense | 5.8 | 5.2 | ||||||
| Amortization of purchased intangibles | 4.2 | 3.8 | ||||||
| Non-GAAP operating margin | 33.0 | % |
| 36.0 | % | |||
| Fourth Quarter Fiscal 2009 | ||||||||
| Low | High | |||||||
| Diluted net income per share: | ||||||||
| GAAP diluted net income per share | $ | 0.23 | $ | 0.29 | ||||
| Stock-based and deferred compensation expense | 0.08 | 0.08 | ||||||
| Amortization of purchased intangibles | 0.05 | 0.05 | ||||||
| Income tax adjustments | (0.03 | ) | (0.03 | ) | ||||
| Non-GAAP diluted net income per share | $ | 0.33 | $ | 0.39 | ||||
| Shares used in computing diluted net income per share | 532.0 | 530.0 | ||||||
| Fourth Quarter Fiscal 2009 | ||||||||
| GAAP effective income tax rate | 23.0 | % | ||||||
| Stock-based and deferred compensation expense | 0.3 | |||||||
| Amortization of purchased intangibles | 0.2 | |||||||
| Non-GAAP effective income tax rate | 23.5 | % | ||||||
No comments:
Post a Comment