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Symantec FY 2003 Record Revenues And Earnings

News Release

Symantec Closes Fiscal Year 2003 With Record Revenues And Earnings

Quarterly Revenue Grows 26 Percent Year-Over-Year

Symantec Corp. (Nasdaq: SYMC), the world leader in Internet security, today reported results for the fiscal fourth quarter and fiscal year ended March 28, 2003. Symantec posted revenue for the quarter of $390 million, a 26 percent increase compared to $311 million for the same quarter last year. Revenue for fiscal year 2003 was $1.407 billion, a 31 percent increase compared to $1.071 billion for fiscal year 2002.

"This is a strong final quarter that closes an exceptional year for Symantec," said John W. Thompson, Symantec Chairman and CEO. "Both the quarter and the year came in well ahead of expectations with record revenue and earnings during very challenging times. Our diverse set of customers, best-of-breed security solutions and unmatched geographic diversity all contributed to our success."

GAAP Results: Net income for the fiscal fourth quarter was $68 million, compared to $5 million from the same quarter last year. Earnings per share was $0.41, compared to earnings per share of $0.03 for the same quarter last year. For fiscal year 2003, Symantec reported net income of $248 million, compared to a net loss of $28 million for fiscal year 2002. Earnings per share was $1.54, compared to a net loss per share of $0.20 for fiscal year 2002.

Non-GAAP Results: Non-GAAP net income for the fiscal fourth quarter was $78 million, compared to $65 million from the same quarter last year. Non-GAAP earnings per share was $0.47, compared to earnings per share of $0.41 for the year-ago quarter. For fiscal year 2003, Symantec reported non-GAAP net income of $280 million, compared to $201 million in fiscal year 2002. Non-GAAP earnings per share was $1.72, compared to earnings per share of $1.30 for fiscal year 2002. Non-GAAP results, as outlined in the attached consolidated statements, exclude expenses from the amortization of goodwill, the amortization of other intangibles from acquisitions, acquired in-process research and development and restructuring and site closures as well as related income tax benefits. See "Use of Non-GAAP Financial Information" below.

Revenue Components

For the quarter, Symantec's worldwide enterprise security business represented 41 percent of total revenue and grew 32 percent compared to the same quarter last year. Symantec's consumer business grew 32 percent and represented 43 percent of total revenue.

International revenues represented 51 percent of total revenue in the fourth quarter and grew 28 percent over the same quarter last year. Sales in Europe, Middle East and Africa led the increase with 36 percent year-over-year growth while sales in the United States grew 23 percent.

Quarterly Highlights

- Symantec signed 152 contracts worldwide worth more than $100,000 each, including 28 worth more than $300,000 each and 9 worth more than $1 million each, during the quarter. Symantec signed new or extended agreements with customers including the United States Department of Treasury and Department of State; the New York State Office Of Cyber Security and Critical Infrastructure Coordination; General Dynamics, a market leader in defence systems and civilian transportation; Tribune Company, one of the country's premier media companies, operating businesses in broadcasting, publishing and on the Internet, reaching more than 80 percent of U.S. households; Maytag Corporation, a leading producer of home and commercial appliances; CNF Inc., a $4.8 billion management company of global supply chain services for commercial and industrial customers; Sealed Air, a leading global manufacturer of a wide range of food, protective and specialty packaging materials and systems; Belgacom, Belgium's leading telecommunications operator; MG Technologies, an international engineering and chemicals technology group based in Germany, and Unipol, an Italian insurance company.

- The industry's premier global early warning system was unveiled with the release of Symantec DeepSight Threat Management System 4.0. This unique early warning system provides enterprises a comprehensive birds-eye view of global Internet attacks in a timely manner, delivering quick analyses and countermeasures to protect against or even avoid malicious threats. The system gathers data from more than 19,000 partners in over 180 countries - the most extensive data network in the world.

- Symantec launched the first in a series of integrated mail security products, introducing a multi-layered spam prevention solution integrated with award-winning virus protection. With Symantec AntiVirus for SMTP Gateways 3.1, enterprises now have a single solution for turning their Internet e-mail gateways into a first line of defence against both the growing onslaught of unsolicited e-mail and the danger of malicious code.

- The Internet Security Threat Report was released, which provides the most comprehensive analysis of trends in cyber security activity. The report covers network-based attack activity, vulnerability discovery, and malicious code.

- Symantec extended its joint product offering with T-Online, one of Europe's largest Internet service providers, to include defence against hackers and online intrusions. Now T-Online's 10 million European customers can benefit from the unrivalled protection of both Norton AntiVirus and Norton Personal Firewall for one monthly subscription service fee.

Awards

Symantec products received the following awards from industry publications during the quarter:

- CRN's prestigious Channel Champion Awards for intrusion detection, firewall and antivirus solutions.

- CRN's "Product of the Year" for Symantec Enterprise Firewall in the software firewall category.

- PC Magazine named Norton Internet Security 2003 to Best of 2002 list.

- Virus Bulletin awards Symantec AntiVirus with VB 100% for the 19th time.

- CNET News.com named Norton AntiVirus, Norton Internet Security and Norton Personal Firewall to their Editor's Top Software List.

- SC Magazine gives Recommended Award to Norton Internet Security, Symantec Enterprise Security Manager and pcANYWHERE.

- SC Magazine provided Readers Trust Awards to Symantec Enterprise Security Manager, Symantec Client Security and Symantec Gateway Security.

- PC World listed Norton AntiVirus, Norton SystemWorks, and Norton Internet Security as top utilities in annual utilities guide.

- Computer Shopper readers named Norton SystemWorks as the Best Software of 2002 and received the Reader's Picks award.

Business Outlook

Management offers the following forward-looking guidance for the fiscal first quarter 2004 ending July 4, 2003:

- Revenue is expected to be in the range of $370 to $390 million.

- GAAP earnings per share is expected to be $0.34 at the midpoint of the revenue guidance.

- Non-GAAP earnings per share is expected to be $0.38 at the midpoint of the revenue guidance.

Management offers the following forward-looking guidance for fiscal year 2004, ending April 2, 2004:

- Revenue is expected to be approximately $1.65 billion.

- GAAP earnings per share is expected to be $1.75 at the stated revenue forecast.

- Non-GAAP earnings per share is expected to be $1.88 at the stated revenue forecast.

Non-GAAP earnings per share excludes the pre-tax amortization of intangibles from acquisitions of approximately $9 million and $34 million for the quarter ending July 4, 2003 and the fiscal year ending April 2, 2004, respectively.

USE OF NON-GAAP FINANCIAL INFORMATION: In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Symantec reports non-GAAP financial results. Non-GAAP net income and earnings per share exclude acquisition related charges, such as acquired in-process research and development and amortization of goodwill and other intangibles, and certain other charges, such as restructurings and site closures, as well as the tax effect of these items. Symantec's management believes these non-GAAP measures are useful to investors because they provide supplemental information that facilitates comparisons to prior periods. Management uses these non-GAAP measures to evaluate its financial results, develop budgets and manage expenditures. The method Symantec uses to produce non-GAAP results is not computed according to GAAP, is likely to differ from the methods used by other companies and should not be regarded as a replacement for corresponding GAAP measures. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to the comparable GAAP results, which is attached to this release and can be found on the investor relations Web site at www.symantec.com/invest/center.html.

Conference Call

Symantec has scheduled a conference call for 5:30 p.m. EDT/2:30 p.m. PDT today to discuss fiscal fourth quarter and fiscal year 2003 results, and to review guidance for the fiscal first quarter and fiscal year 2004. Interested parties may access the conference call on the Internet at http://www.symantec.com/invest/index.html. To listen to the live call, please go to the Web site at least 15 minutes early to register, download and install any necessary audio software. A replay will be available on the investor relations home page shortly after the call is completed.

About Symantec

Symantec, the world leader in Internet security technology, provides a broad range of content and network security software and appliance solutions to individuals, enterprises and service providers. The company is a leading provider of client, gateway and server security solutions for virus protection, firewall and virtual private network, vulnerability management, intrusion detection, Internet content and e-mail filtering, remote management technologies and security services to enterprises and service providers around the world. Symantec's Norton brand of consumer security products is a leader in worldwide retail sales and industry awards. Headquartered in Cupertino, Calif., Symantec has worldwide operations in 36 countries. For more information, please visit www.symantec.com.

NOTE TO EDITORS: If you would like additional information on Symantec Corporation and its products, please view the Symantec Press Center at http://www.symantec.com/PressCenter/ on Symantec's Web site. All prices noted are in US dollars and are valid only in the United States.

Symantec and the Symantec logo are trademarks or registered trademarks, in the United States and certain other countries, of Symantec Corporation. Additional company and product names may be trademarks or registered trademarks of the individual companies and are respectfully acknowledged.

FORWARD LOOKING STATEMENT: This press release contains forward-looking statements, including forecasts of future revenue and earnings, expected activities, and other financial and business results that involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from results expressed or implied by this press release. Such risk factors include, among others: the sustainability of recent growth rates, particularly in consumer products; the anticipation of the growth of certain market segments, particularly enterprise security; the positioning of Symantec's products in those segments; the competitive environment in the software industry; general market conditions, fluctuations in currency exchange rates, changes to operating systems and product strategy by vendors of operating systems; and whether Symantec can successfully develop new products and the degree to which these gain market acceptance. Actual results may differ materially from those contained in the forward-looking statements in this press release. Additional information concerning these and other risk factors is contained in the Risk Factors sections of Symantec's previously filed Form 10-Q for the quarter ended December 31, 2002. Symantec assumes no obligation to update any forward-looking information contained in this press release except as otherwise required by law.

SYMANTEC CORPORATION

GAAP Consolidated Statements of Operations

Three Months Ended Twelve Months Ended

March 31, March 31,

(In thousands, except per share data; unaudited) 2003 2002 2003 2002

Net revenues $ 390,039 $ 310,783 $ 1,406,946 $ 1,071,438

Cost of revenues 68,225 53,301 250,116 195,903

Gross margin 321,814 257,482 1,156,830 875,535

Operating expenses:

Research and development 54,417 43,774 197,271 163,979

Sales and marketing 145,486 112,545 525,029 425,951

General and administrative 22,488 16,148 74,442 55,131

Amortization of goodwill -- 48,997 -- 196,806

Amortization of other intangibles from acquisitions 793 536 2,787 2,144

Acquired in-process research and development -- -- 4,700 --

Restructuring, site closures and other 6,657 9,005 11,089 20,428

Litigation judgment -- 3,055 -- 3,055

Total operating expenses 229,841 234,060 815,318 867,494

Operating income 91,973 23,422 341,512 8,041

Interest income 9,296 9,083 37,704 31,717

Interest expense (5,291) (5,298) (21,166) (9,169)

Income, net of expense, from sale of technologies

and product lines 2,454 2,257 6,878 15,536

Other income (expense), net 128 399 (1,297) (627)

Income before income taxes 98,560 29,863 363,631 45,498

Provision for income taxes 30,417 25,084 115,193 73,649

Net income (loss) $ 68,143 $ 4,779 $ 248,438 $ (28,151)

Net income (loss) per share - diluted* $ 0.41 $ 0.03 $ 1.54 $ (0.20)

Shares used to compute net income (loss)

per share - diluted* 173,901 151,661 170,718 143,604

* For the three and twelve months ended March 31, 2003, diluted net income per share is calculated using the if-converted method. Under this method, the numerator excludes the interest expense from the 3% convertible subordinated debentures, net of income tax, of $3.6M and $14.4M for the three and twelve months ended March 31, 2003, respectively, and the denominator includes shares issuable from the assumed conversion of the 3% convertible subordinated debentures. For the three and twelve months ended March 31, 2002, diluted net income (loss) per share excludes the assumed conversion of the 3% convertible subordinated debentures, as their effect would be anti-dilutive.

SYMANTEC CORPORATION

Non-GAAP Consolidated Statements of Income

Non-GAAP amounts exclude all acquisition-related amortization, acquired in-process research and development and restructuring charges.

Three Months Ended Twelve Months Ended

March 31, March 31,

(In thousands, except per share data; unaudited) 2003 2002 2003 2002

Net revenues $ 390,039 $ 310,783 $1,406,946 $ 1,071,438

Cost of revenues 59,780 45,972 220,541 165,612

Gross margin 330,259 264,811 1,186,405 905,826

Operating expenses:

Research and development 54,417 43,774 197,271 163,979

Sales and marketing 145,486 112,545 525,029 425,951

General and administrative 22,488 16,148 74,442 55,131

Litigation judgment -- 3,055 -- 3,055

Total operating expenses 222,391 175,522 796,742 648,116

Operating income 107,868 89,289 389,663 257,710

Interest income 9,296 9,083 37,704 31,717

Interest expense (5,291) (5,298) (21,166) (9,169)

Income, net of expense, from sale of technologies

and product lines 2,454 2,257 6,878 15,536

Other income (expense), net 128 399 (1,297) (627)

Income before income taxes 114,455 95,730 411,782 295,167

Provision for income taxes 36,626 30,634 131,771 94,454

Net income $ 77,829 $ 65,096 $ 280,011 $ 200,713

Net income per share - diluted* $ 0.47 $ 0.41 $ 1.72 $ 1.30

Shares used to compute net income per share - diluted* 173,901 169,236 170,718 158,777

* For the three and twelve months ended March 31, 2003 and 2002, diluted net income per share is calculated using the if-converted method. Under this method, the numerator excludes the interest expense from the 3% convertible subordinated debentures, net of income tax, of $3.6M and $14.4M for the three and twelve months ended March 31, 2003, respectively, and $3.6M and $6.2M for the three and twelve months ended March 31, 2002, respectively, and the denominator includes shares issuable from the assumed conversion of the 3% convertible subordinated debentures.

SYMANTEC CORPORATION

Reconciliation of Non-GAAP Consolidated Statements of Income to the GAAP Consolidated Statements of Operations

Three Months Ended Twelve Months Ended

March 31, March 31,

(In thousands, except per share data; unaudited) 2003 2002 2003 2002

Non-GAAP net income $ 77,829 $ 65,096 $ 280,011 $ 200,713

Cost of revenues:

Amortization of other intangibles from acquisitions (8,445) (7,329) (29,575) (30,291)

Operating expenses:

Amortization of goodwill -- (48,997) -- (196,806)

Amortization of other intangibles from acquisitions (793) (536) (2,787) (2,144)

Acquired in-process research and development -- -- (4,700) --

Restructuring, site closures and other (6,657) (9,005) (11,089) (20,428)

Income tax benefit 6,209 5,550 16,578 20,805

Net income (loss) $ 68,143 $ 4,779 $ 248,438 $ (28,151)

Net income (loss) per share - diluted $ 0.41 $ 0.03 $ 1.54 $ (0.20)

Shares used to compute net income (loss)

per share - diluted 173,901 151,661 170,718 143,604

SYMANTEC CORPORATION

Consolidated Balance Sheets

March 31, March 31,

(In thousands) 2003 2002

ASSETS

Current assets:

Cash, cash equivalents and short-term investments $ 1,705,658 $ 1,375,051

Trade accounts receivable, net 149,664 89,223

Inventories, net 5,912 7,463

Deferred income taxes 92,284 68,621

Other 34,628 22,461

Total current assets 1,988,146 1,562,819

Restricted investments -- 124,313

Property, equipment and leasehold improvements, net 333,275 186,305

Deferred income taxes 7,986 6,207

Acquired product rights, net 73,125 65,219

Goodwill, net 833,449 525,868

Other, net 29,749 31,874

$ 3,265,730 $ 2,502,605

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable $ 67,720 $ 70,057

Accrued compensation and benefits 90,947 54,419

Deferred revenue 589,629 331,100

Other accrued expenses 69,363 66,422

Income taxes payable 76,965 52,777

Total current liabilities 894,624 574,775

Convertible subordinated debentures 599,998 600,000

Other long-term obligations 6,729 7,954

Commitments and contingencies

Stockholders' equity:

Preferred stock -- --

Common stock 1,488 1,436

Capital in excess of par value 1,335,028 1,194,173

Accumulated other comprehensive income (loss) 30,121 (53,013)

Unearned compensation -- (372)

Retained earnings 397,742 177,652

Total stockholders' equity 1,764,379 1,319,876

$ 3,265,730 $ 2,502,605


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