Symantec: Fiscal 4Q13 Financial Results

Symantec Corp. reported the results of its fourth quarter and fiscal year 2013, ended March 29, 2013.

GAAP revenue for the fiscal fourth quarter was $1.748 billion, up 4% year-over-year and up 5% after adjusting for currency. For the fiscal year, GAAP revenue was $6.906 billion, up 3% year-over-year and up 5% after adjusting for currency.

"In a year of significant leadership changes and development of a new company strategy, the team remained focused on running the business to deliver better than expected results," said Steve Bennett, president and CEO, Symantec. "Our focus on operational change and repositioning the business in fiscal year 2014 will set the foundation to drive better execution long-term. Never have I been more optimistic about the opportunity in front of us to make a difference for our employees, customers and shareholders."

"We achieved better than expected March quarter results driven by double digit growth in our backup business and continued strength in data loss prevention and our other information security products," said James Beer, EVP and CFO, Symantec. "For the fiscal year 2013, we generated record revenue and deferred revenue, expanded non-GAAP operating margins by 60 basis points after adjusting for currency, and delivered double-digit non-GAAP earnings per share growth based on the success of our backup and information security businesses."

GAAP Results for 4Q13

• GAAP operating margin was 14.4% compared with 11.4% for the same quarter last year.
• GAAP net income was $188 million compared with net income of $559 million for the year-ago period.
• GAAP diluted earnings per share were $0.26 compared with $0.76 for the year ago quarter.
• GAAP deferred revenue as of March 29, 2013, was $4.017 billion compared with $3.973 billion as of March 30, 2012, up 1% year-over-year and up 3% after adjusting for currency.
• Cash flow from operating activities was $612 million compared with $687 million for the year ago period.

GAAP Results for FY13

• GAAP operating margin was 16.3% compared with 16.0% for fiscal year 2012.
• GAAP net income for the fiscal year 2013 was $765 million compared with $1.172 billion for fiscal year 2012.
• GAAP diluted earnings per share for the year were $1.08 compared with $1.57 for fiscal year 2012.
• Cash flow from operating activities was $1.593 billion compared with $1.901 billion for fiscal year 2012. Capital expenditures totalled $336 million resulting in free cash flow of $1.26 billion for the fiscal year.

The year-over-year change in our GAAP results was as expected and was driven by the completion of the sale of the Huawei Joint Venture in fiscal year 2012.

Non-GAAP Results for 4Q13

• Non-GAAP operating margin was 23.9% compared with 22.2% for the same quarter last year.
• Non-GAAP net income was $314 million, compared to $283 million for the year-ago period, an increase of 11% year-over-year.
• Non-GAAP diluted earnings per share were $0.44 compared with $0.38 for the year-ago quarter, an increase of 16% year-over-year.

Non-GAAP Results for the FY13

• Non-GAAP operating margin was 25.7%, compared with 25.2% for fiscal year 2012.
• Non-GAAP net income for the year was $1.258 billion, compared with $1.201 billion for fiscal year 2012, an increase of 5%.
• Non-GAAP diluted earnings per share were $1.77, compared with $1.61 for the year-ago period, an increase of 10%.

Business Segment and Geographic Highlights for 4Q13

• The Consumer segment represented 30% of total revenue and increased 1% year-over-year (3% after adjusting for currency).
• The Security and Compliance segment represented 30% of total revenue and increased 2% year-over-year (4% after adjusting for currency).
• The Storage and Server Management segment represented 36% of total revenue and increased 7% year-over-year on an actual and currency-adjusted basis.
• Services represented 4% of total revenue and increased 9% year-over-year (10% after adjusting for currency).
• International revenue represented 51% of total revenue and increased 2% year-over-year (4% after adjusting for currency).
• The EMEA region represented 28% of total revenue and increased 6% year-over-year (5% after adjusting for currency).
• The AsiaPac/Japan revenue represented 18% of total revenue and decreased 4% year-over-year (increased 1% after adjusting for currency).
• The Americas, including the United States, Latin America and Canada, represented 54% of total revenue and increased 6% year-over-year on an actual and currency-adjusted basis.

Capital Allocation
Symantec ended the quarter and fiscal year with cash, cash equivalents and short-term investments of $4.75 billion (including $1 billion to be utilized to retire our outstanding convertible debt in June 2013) compared to $3.21 billion for fiscal year 2012, an increase of 48%. During the quarter, Symantec repurchased 7 million shares for $125 million at an average price of $20.61. During the fiscal year 2013, the company repurchased 49 million shares at an average price of $16.98, equivalent to $826 million. At the end of the fourth quarter, Symantec had $1.2 billion remaining for future repurchases in the current board authorized stock repurchase plans.

Symantec’s board of directors has declared a quarterly cash dividend of $0.15 per common share to be paid on June 27, 2013 to all shareholders of record as of the close of business on June 19, 2013. The ex-dividend date will be June 17, 2013. Board approved the initiation of quarterly cash dividends to its shareholders in January of 2013. Future dividend declarations will be subject to board approval.