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 September 19, 2012 entitled “Adobe Reports Third Quarter Fiscal 2012 Financial Results” |
• | Diluted earnings per share were $0.40 on a GAAP-basis, and $0.58 on a non-GAAP basis. |
• | Operating income was $278.3 million and net income was $201.4 million on a GAAP-basis. Operating income was $391.8 million and net income was $291.2 million on a non-GAAP basis. |
• | Cash flow from operations was $263.3 million. |
• | Adobe Creative Cloud paid subscriptions grew to approximately 200,000 in the third quarter. Adobe added approximately 8,000 Creative Cloud subscriptions per week during the quarter, exceeding the addition of 5,000 subscriptions per week that was assumed in its third quarter financial targets. |
• | Digital Marketing Suite achieved record quarterly revenue with 40 percent year-over-year growth. |
Three Months Ended | Nine Months Ended | ||||||||||||||
August 31, 2012 | September 2, 2011 | August 31, 2012 | September 2, 2011 | ||||||||||||
Revenue: | |||||||||||||||
Products | $ | 810,457 | $ | 811,920 | $ | 2,490,000 | $ | 2,484,588 | |||||||
Subscription | 172,920 | 114,555 | 478,669 | 330,197 | |||||||||||
Services and support | 97,203 | 86,737 | 281,580 | 249,312 | |||||||||||
Total revenue | 1,080,580 | 1,013,212 | 3,250,249 | 3,064,097 | |||||||||||
Cost of revenue: | |||||||||||||||
Products | 27,234 | 26,209 | 92,976 | 91,592 | |||||||||||
Subscription | 56,191 | 47,492 | 159,794 | 142,699 | |||||||||||
Services and support | 36,196 | 30,953 | 106,034 | 87,203 | |||||||||||
Total cost of revenue | 119,621 | 104,654 | 358,804 | 321,494 | |||||||||||
Gross profit | 960,959 | 908,558 | 2,891,445 | 2,742,603 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development | 189,145 | 181,039 | 547,776 | 542,650 | |||||||||||
Sales and marketing | 368,556 | 340,724 | 1,113,978 | 1,017,492 | |||||||||||
General and administrative | 110,249 | 98,493 | 323,533 | 295,019 | |||||||||||
Restructuring charges | 2,374 | 3,816 | (2,642 | ) | 3,271 | ||||||||||
Amortization of purchased intangibles | 12,331 | 10,376 | 36,374 | 31,003 | |||||||||||
Total operating expenses | 682,655 | 634,448 | 2,019,019 | 1,889,435 | |||||||||||
Operating income | 278,304 | 274,110 | 872,426 | 853,168 | |||||||||||
Non-operating income (expense): | |||||||||||||||
Interest and other income (expense), net | 1,217 | 33 | (2,696 | ) | (1,623 | ) | |||||||||
Interest expense | (17,253 | ) | (16,431 | ) | (50,720 | ) | (50,178 | ) | |||||||
Investment gains (losses), net | 944 | (993 | ) | 9,153 | 683 | ||||||||||
Total non-operating income (expense), net | (15,092 | ) | (17,391 | ) | (44,263 | ) | (51,118 | ) | |||||||
Income before income taxes | 263,212 | 256,719 | 828,163 | 802,050 | |||||||||||
Provision for income taxes | 61,855 | 61,618 | 217,721 | 142,922 | |||||||||||
Net income | $ | 201,357 | $ | 195,101 | $ | 610,442 | $ | 659,128 | |||||||
Basic net income per share | $ | 0.41 | $ | 0.39 | $ | 1.23 | $ | 1.32 | |||||||
Shares used to compute basic net income per share | 494,051 | 494,537 | 494,672 | 499,451 | |||||||||||
Diluted net income per share | $ | 0.40 | $ | 0.39 | $ | 1.22 | $ | 1.30 | |||||||
Shares used to compute diluted net income per share | 499,757 | 498,741 | 502,167 | 506,334 |
August 31, 2012 | December 2, 2011 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 1,162,380 | $ | 989,500 | |||
Short-term investments | 2,084,983 | 1,922,192 | |||||
Trade receivables, net of allowances for doubtful accounts of $14,516 and $15,080, respectively | 566,671 | 634,373 | |||||
Deferred income taxes | 57,024 | 91,963 | |||||
Prepaid expenses and other current assets | 139,115 | 133,423 | |||||
Total current assets | 4,010,173 | 3,771,451 | |||||
Property and equipment, net | 619,392 | 527,828 | |||||
Goodwill | 4,126,548 | 3,849,217 | |||||
Purchased and other intangibles, net | 576,948 | 545,526 | |||||
Investment in lease receivable | 207,239 | 207,239 | |||||
Other assets | 89,713 | 89,922 | |||||
Total assets | $ | 9,630,013 | $ | 8,991,183 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Trade payables | $ | 58,446 | $ | 86,660 | |||
Accrued expenses | 547,812 | 554,941 | |||||
Capital lease obligations | 11,093 | 9,212 | |||||
Accrued restructuring | 14,803 | 80,930 | |||||
Income taxes payable | 31,910 | 42,634 | |||||
Deferred revenue | 505,646 | 476,402 | |||||
Total current liabilities | 1,169,710 | 1,250,779 | |||||
Long-term liabilities: | |||||||
Debt and capital lease obligations | 1,499,881 | 1,505,096 | |||||
Deferred revenue | 54,687 | 55,303 | |||||
Accrued restructuring | 12,706 | 7,449 | |||||
Income taxes payable | 151,946 | 156,958 | |||||
Deferred income taxes | 253,626 | 181,602 | |||||
Other liabilities | 48,764 | 50,883 | |||||
Total liabilities | 3,191,320 | 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 | 2,961,799 | 2,753,896 | |||||
Retained earnings | 6,815,375 | 6,528,735 | |||||
Accumulated other comprehensive income | 22,511 | 29,950 | |||||
Treasury stock, at cost (106,102 and 109,294 shares, respectively), net of re-issuances | (3,361,053 | ) | (3,529,529 | ) | |||
Total stockholders' equity | 6,438,693 | 5,783,113 | |||||
Total liabilities and stockholders' equity | $ | 9,630,013 | $ | 8,991,183 |
Three Months Ended | |||||||
August 31, 2012 | September 2, 2011 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 201,357 | $ | 195,101 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation, amortization and accretion | 74,110 | 64,009 | |||||
Stock-based compensation expense | 74,013 | 68,800 | |||||
Unrealized investment (gains) losses | (851 | ) | 2,029 | ||||
Changes in deferred revenue | (32,445 | ) | 1,360 | ||||
Changes in other operating assets and liabilities | (52,844 | ) | (6,171 | ) | |||
Net cash provided by operating activities | 263,340 | 325,128 | |||||
Cash flows from investing activities: | |||||||
Purchases of short-term investments, net of sales and maturities | (37,426 | ) | (161,163 | ) | |||
Purchases of property and equipment | (77,432 | ) | (65,475 | ) | |||
Purchases of long-term investments, intangibles and other assets, net | (4,362 | ) | (2,935 | ) | |||
Acquisitions, net of cash | — | (70,549 | ) | ||||
Net cash used for investing activities | (119,220 | ) | (300,122 | ) | |||
Cash flows from financing activities: | |||||||
Purchases of treasury stock | — | (150,000 | ) | ||||
Re-issuance of treasury stock | 60,948 | 56,180 | |||||
Proceeds from debt and capital lease obligations | 3,152 | — | |||||
Repayment of debt and capital lease obligations | (2,316 | ) | (4,179 | ) | |||
Excess tax benefits from stock-based compensation | 1,172 | 318 | |||||
Net cash provided by (used for) financing activities | 62,956 | (97,681 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | 4,066 | 14,412 | |||||
Net increase (decrease) in cash and cash equivalents | 211,142 | (58,263 | ) | ||||
Cash and cash equivalents at beginning of period | 951,238 | 827,475 | |||||
Cash and cash equivalents at end of period | $ | 1,162,380 | $ | 769,212 |
Three Months Ended | |||||||||||
August 31, 2012 | September 2, 2011 | June 1, 2012 | |||||||||
Operating income: | |||||||||||
GAAP operating income | $ | 278,304 | $ | 274,110 | $ | 305,143 | |||||
Stock-based and deferred compensation expense | 80,682 | 64,115 | 70,714 | ||||||||
Restructuring charges | 2,374 | 3,816 | (2,191 | ) | |||||||
Amortization of purchased intangibles | 30,410 | 24,103 | 30,704 | ||||||||
Non-GAAP operating income | $ | 391,770 | $ | 366,144 | $ | 404,370 | |||||
Net income: | |||||||||||
GAAP net income | $ | 201,357 | $ | 195,101 | $ | 223,876 | |||||
Stock-based and deferred compensation expense | 80,682 | 64,115 | 70,714 | ||||||||
Restructuring charges | 2,374 | 3,816 | (2,191 | ) | |||||||
Amortization of purchased intangibles | 30,410 | 24,103 | 30,704 | ||||||||
Investment (gains) losses | (944 | ) | 993 | (7,188 | ) | ||||||
Income tax adjustments | (22,685 | ) | (15,326 | ) | (16,290 | ) | |||||
Non-GAAP net income | $ | 291,194 | $ | 272,802 | $ | 299,625 | |||||
Diluted net income per share: | |||||||||||
GAAP diluted net income per share | $ | 0.40 | $ | 0.39 | $ | 0.45 | |||||
Stock-based and deferred compensation expense | 0.16 | 0.13 | 0.14 | ||||||||
Restructuring charges | — | 0.01 | — | ||||||||
Amortization of purchased intangibles | 0.06 | 0.05 | 0.06 | ||||||||
Investment (gains) losses | — | — | (0.01 | ) | |||||||
Income tax adjustments | (0.04 | ) | (0.03 | ) | (0.04 | ) | |||||
Non-GAAP diluted net income per share | $ | 0.58 | $ | 0.55 | $ | 0.60 | |||||
Shares used in computing diluted net income per share | 499,757 | 498,741 | 501,377 |
Three Months Ended | |||||||||||
August 31, 2012 | September 2, 2011 | June 1, 2012 | |||||||||
Operating expenses: | |||||||||||
GAAP operating expenses | $ | 682,655 | $ | 634,448 | $ | 688,388 | |||||
Stock-based and deferred compensation expense | (75,762 | ) | (60,195 | ) | (66,224 | ) | |||||
Restructuring charges | (2,374 | ) | (3,816 | ) | 2,191 | ||||||
Amortization of purchased intangibles | (12,331 | ) | (10,376 | ) | (12,614 | ) | |||||
Non-GAAP operating expenses | $ | 592,188 | $ | 560,061 | $ | 611,741 |
Three Months Ended | |||
August 31, 2012 | |||
Effective income tax rate: | |||
GAAP effective income tax rate | 23.5 | % | |
Stock-based and deferred compensation expense | (0.7 | ) | |
Amortization of purchased intangibles | (0.3 | ) | |
Non-GAAP effective income tax rate | 22.5 | % |
Fourth Quarter Fiscal 2012 | |||||||
Low | High | ||||||
Diluted net income per share: | |||||||
GAAP diluted net income per share | $ | 0.34 | $ | 0.39 | |||
Stock-based and deferred compensation expense | 0.17 | 0.17 | |||||
Amortization of purchased intangibles | 0.06 | 0.06 | |||||
Income tax adjustments | (0.05 | ) | (0.05 | ) | |||
Restructuring charges | 0.01 | 0.01 | |||||
Non-GAAP diluted net income per share | $ | 0.53 | $ | 0.58 | |||
Shares used to compute diluted net income per share | 502.0 | 500.0 |
Three Months Ended | |||
November 30, 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 | % |