Delaware | 0-15175 | 77-0019522 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
ADOBE SYSTEMS INCORPORATED | ||
By: | /s/ MARK GARRETT | |
Mark Garrett | ||
Executive Vice President and Chief Financial Officer |
Exhibit No. | Description | |
99.1 | Press release issued on June 19, 2012 entitled “Adobe Reports Strong Second Quarter Financial Results” |
• | Revenue in Q2 FY2012 was $1.124 billion, which represents 10 percent year-over-year growth. |
• | Diluted earnings per share were $0.45 on a GAAP-basis, and $0.60 on a non-GAAP basis. |
• | Operating income was $305.1 million and net income was $223.9 million on a GAAP-basis. Operating income was $404.4 million and net income was $299.6 million on a non-GAAP basis. |
• | Deferred revenue grew by $43.9 million quarter-over-quarter to a total of $592.8 million. |
• | Cash flow from operations was $448.2 million. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 1, 2012 | June 3, 2011 | June 1, 2012 | June 3, 2011 | ||||||||||||
Revenue: | |||||||||||||||
Products | $ | 871,022 | $ | 829,979 | $ | 1,679,543 | $ | 1,672,668 | |||||||
Subscription | 159,519 | 109,471 | 305,749 | 215,642 | |||||||||||
Services and support | 93,908 | 83,729 | 184,377 | 162,575 | |||||||||||
Total revenue | 1,124,449 | 1,023,179 | 2,169,669 | 2,050,885 | |||||||||||
Cost of revenue: | |||||||||||||||
Products | 40,074 | 34,666 | 65,742 | 65,383 | |||||||||||
Subscription | 54,823 | 47,329 | 103,603 | 95,207 | |||||||||||
Services and support | 36,021 | 27,206 | 69,838 | 56,250 | |||||||||||
Total cost of revenue | 130,918 | 109,201 | 239,183 | 216,840 | |||||||||||
Gross profit | 993,531 | 913,978 | 1,930,486 | 1,834,045 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development | 180,903 | 183,211 | 358,631 | 361,611 | |||||||||||
Sales and marketing | 386,459 | 348,690 | 745,422 | 676,768 | |||||||||||
General and administrative | 110,603 | 95,547 | 213,284 | 196,526 | |||||||||||
Restructuring charges | (2,191 | ) | (586 | ) | (5,016 | ) | (545 | ) | |||||||
Amortization of purchased intangibles | 12,614 | 10,392 | 24,043 | 20,627 | |||||||||||
Total operating expenses | 688,388 | 637,254 | 1,336,364 | 1,254,987 | |||||||||||
Operating income | 305,143 | 276,724 | 594,122 | 579,058 | |||||||||||
Non-operating income (expense): | |||||||||||||||
Interest and other income (expense), net | (1,128 | ) | (839 | ) | (3,913 | ) | (1,656 | ) | |||||||
Interest expense | (16,629 | ) | (16,727 | ) | (33,467 | ) | (33,747 | ) | |||||||
Investment gains (losses), net | 7,188 | 86 | 8,209 | 1,676 | |||||||||||
Total non-operating income (expense), net | (10,569 | ) | (17,480 | ) | (29,171 | ) | (33,727 | ) | |||||||
Income before income taxes | 294,574 | 259,244 | 564,951 | 545,331 | |||||||||||
Provision for income taxes | 70,698 | 29,808 | 155,866 | 81,304 | |||||||||||
Net income | $ | 223,876 | $ | 229,436 | $ | 409,085 | $ | 464,027 | |||||||
Basic net income per share | $ | 0.45 | $ | 0.46 | $ | 0.83 | $ | 0.92 | |||||||
Shares used to compute basic net income per share | 495,950 | 499,686 | 494,983 | 501,910 | |||||||||||
Diluted net income per share | $ | 0.45 | $ | 0.45 | $ | 0.81 | $ | 0.91 | |||||||
Shares used to compute diluted net income per share | 501,377 | 506,280 | 502,154 | 509,572 |
June 1, 2012 | December 2, 2011 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 951,238 | $ | 989,500 | |||
Short-term investments | 2,046,879 | 1,922,192 | |||||
Trade receivables, net of allowances for doubtful accounts of $14,161 and $15,080, respectively | 529,391 | 634,373 | |||||
Deferred income taxes | 79,360 | 91,963 | |||||
Prepaid expenses and other current assets | 163,939 | 133,423 | |||||
Total current assets | 3,770,807 | 3,771,451 | |||||
Property and equipment, net | 573,566 | 527,828 | |||||
Goodwill | 4,122,813 | 3,849,217 | |||||
Purchased and other intangibles, net | 600,332 | 545,526 | |||||
Investment in lease receivable | 207,239 | 207,239 | |||||
Other assets | 91,075 | 89,922 | |||||
Total assets | $ | 9,365,832 | $ | 8,991,183 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Trade payables | $ | 69,416 | $ | 86,660 | |||
Accrued expenses | 555,024 | 554,941 | |||||
Capital lease obligations | 9,426 | 9,212 | |||||
Accrued restructuring | 18,337 | 80,930 | |||||
Income taxes payable | 58,326 | 42,634 | |||||
Deferred revenue | 535,115 | 476,402 | |||||
Total current liabilities | 1,245,644 | 1,250,779 | |||||
Long-term liabilities: | |||||||
Debt and capital lease obligations | 1,500,668 | 1,505,096 | |||||
Deferred revenue | 57,663 | 55,303 | |||||
Accrued restructuring | 12,148 | 7,449 | |||||
Income taxes payable | 151,671 | 156,958 | |||||
Deferred income taxes | 250,756 | 181,602 | |||||
Other liabilities | 47,636 | 50,883 | |||||
Total liabilities | 3,266,186 | 3,208,070 | |||||
Stockholders' equity: | |||||||
Preferred stock, $0.0001 par value; 2,000 shares authorized | — | — | |||||
Common stock, $0.0001 par value | 61 | 61 | |||||
Additional paid-in-capital | 2,886,953 | 2,753,896 | |||||
Retained earnings | 6,671,230 | 6,528,735 | |||||
Accumulated other comprehensive income | 20,615 | 29,950 | |||||
Treasury stock, at cost (106,847 and 109,294 shares, respectively), net of re-issuances | (3,479,213 | ) | (3,529,529 | ) | |||
Total stockholders' equity | 6,099,646 | 5,783,113 | |||||
Total liabilities and stockholders' equity | $ | 9,365,832 | $ | 8,991,183 |
Three Months Ended | |||||||
June 1, 2012 | June 3, 2011 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 223,876 | $ | 229,436 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation, amortization and accretion | 77,174 | 66,620 | |||||
Stock-based compensation expense | 62,959 | 73,403 | |||||
Unrealized investment (gains) losses | (4,235 | ) | 763 | ||||
Changes in deferred revenue | 43,814 | 38,629 | |||||
Changes in other operating assets and liabilities | 44,630 | (19,520 | ) | ||||
Net cash provided by operating activities | 448,218 | 389,331 | |||||
Cash flows from investing activities: | |||||||
Purchases of short-term investments, net of sales and maturities | (106,627 | ) | (61,166 | ) | |||
Purchases of property and equipment | (60,767 | ) | (37,501 | ) | |||
Sales (purchases) of long-term investments, intangibles and other assets, net | 19,134 | (3,808 | ) | ||||
Net cash used for investing activities | (148,260 | ) | (102,475 | ) | |||
Cash flows from financing activities: | |||||||
Purchases of treasury stock | (225,000 | ) | (420,015 | ) | |||
Re-issuance of treasury stock | 75,871 | 46,732 | |||||
Repayment of debt and capital lease obligations | (2,290 | ) | (1,455 | ) | |||
Excess tax benefits from stock-based compensation | 2,684 | 8,778 | |||||
Net cash used for financing activities | (148,735 | ) | (365,960 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (1,248 | ) | 6,423 | ||||
Net (decrease) increase in cash and cash equivalents | 149,975 | (72,681 | ) | ||||
Cash and cash equivalents at beginning of period | 801,263 | 900,156 | |||||
Cash and cash equivalents at end of period | $ | 951,238 | $ | 827,475 |
Three Months Ended | |||||||||||
June 1, 2012 | June 3, 2011 | March 2, 2012 | |||||||||
Operating income: | |||||||||||
GAAP operating income | $ | 305,143 | $ | 276,724 | $ | 288,979 | |||||
Stock-based and deferred compensation expense | 70,714 | 74,869 | 72,633 | ||||||||
Restructuring charges | (2,191 | ) | (586 | ) | (2,825 | ) | |||||
Amortization of purchased intangibles | 30,704 | 25,372 | 27,864 | ||||||||
Non-GAAP operating income | $ | 404,370 | $ | 376,379 | $ | 386,651 | |||||
Net income: | |||||||||||
GAAP net income | $ | 223,876 | $ | 229,436 | $ | 185,209 | |||||
Stock-based and deferred compensation expense | 70,714 | 74,869 | 72,633 | ||||||||
Restructuring charges | (2,191 | ) | (586 | ) | (2,825 | ) | |||||
Amortization of purchased intangibles | 30,704 | 25,372 | 27,864 | ||||||||
Investment (gains) losses | (7,188 | ) | (86 | ) | (1,021 | ) | |||||
Income tax adjustments | (16,290 | ) | (49,131 | ) | 2,647 | ||||||
Non-GAAP net income | $ | 299,625 | $ | 279,874 | $ | 284,507 | |||||
Diluted net income per share: | |||||||||||
GAAP diluted net income per share | $ | 0.45 | $ | 0.45 | $ | 0.37 | |||||
Stock-based and deferred compensation expense | 0.14 | 0.15 | 0.15 | ||||||||
Restructuring charges | — | — | (0.01 | ) | |||||||
Amortization of purchased intangibles | 0.06 | 0.05 | 0.06 | ||||||||
Investment (gains) losses | (0.01 | ) | — | — | |||||||
Income tax adjustments | (0.04 | ) | (0.10 | ) | — | ||||||
Non-GAAP diluted net income per share | $ | 0.60 | $ | 0.55 | $ | 0.57 | |||||
Shares used in computing diluted net income per share | 501,377 | 506,280 | 500,378 |
Three Months Ended | |||||||||||
June 1, 2012 | June 3, 2011 | March 2, 2012 | |||||||||
Operating expenses: | |||||||||||
GAAP operating expenses | $ | 688,388 | $ | 637,254 | $ | 647,976 | |||||
Stock-based and deferred compensation expense | (66,224 | ) | (70,707 | ) | (68,102 | ) | |||||
Restructuring charges | 2,191 | 586 | 2,825 | ||||||||
Amortization of purchased intangibles | (12,614 | ) | (10,392 | ) | (11,429 | ) | |||||
Non-GAAP operating expenses | $ | 611,741 | $ | 556,741 | $ | 571,270 |
Three Months Ended | |||
June 1, 2012 | |||
Effective income tax rate: | |||
GAAP effective income tax rate | 24.0 | % | |
Stock-based and deferred compensation expense | (1.2 | )% | |
Investment (gains) losses | 0.1 | % | |
Amortization of purchased intangibles | (0.4 | )% | |
Non-GAAP effective income tax rate | 22.5 | % |
Third Quarter Fiscal 2012 | |||||||
Low | High | ||||||
Diluted net income per share: | |||||||
GAAP diluted net income per share | $ | 0.38 | $ | 0.43 | |||
Stock-based and deferred compensation expense | 0.16 | 0.16 | |||||
Amortization of purchased intangibles | 0.06 | 0.06 | |||||
Income tax adjustments | (0.04 | ) | (0.04 | ) | |||
Non-GAAP diluted net income per share | $ | 0.56 | $ | 0.61 | |||
Shares used to compute diluted net income per share | 502.0 | 501.0 |
Three Months Ended | |||
August 31, 2012 | |||
Effective income tax rate: | |||
GAAP effective income tax rate | 23.5 | % | |
Stock-based and deferred compensation expense | (1.0 | ) | |
Non-GAAP effective income tax rate | 22.5 | % |
Fiscal 2012 Previous Targets | Fiscal 2012 Adjusted Targets | ||||||||||||||
Low | High | Low | High | ||||||||||||
Diluted net income per share: | |||||||||||||||
GAAP diluted net income per share | $ | 1.63 | $ | 1.73 | $ | 1.69 | $ | 1.76 | |||||||
Stock-based and deferred compensation expense | 0.65 | 0.64 | 0.60 | 0.59 | |||||||||||
Amortization of purchased intangibles | 0.24 | 0.24 | 0.24 | 0.24 | |||||||||||
Income tax adjustments | (0.14 | ) | (0.13 | ) | (0.12 | ) | (0.12 | ) | |||||||
Restructuring charges | — | — | (0.01 | ) | (0.01 | ) | |||||||||
Non-GAAP diluted net income per share | $ | 2.38 | $ | 2.48 | $ | 2.40 | $ | 2.46 | |||||||
Shares used to compute diluted net income per share | 504.0 | 502.0 | 501.0 | 501.0 |