Symantec 1997 Annual Report Download - page 21

Item 7: Management’s Discussion and
Analysis of Financial Condition and
Results of Operations
Forward-Looking Statements and Factors
That May Effect Future Results
The following discussion contains forward-looking state-
ments that are subject to risks and uncertainties. There are
several important factors that could cause actual results to
differ materially from those anticipated by the forward-
looking statements contained in the following discussion.
Readers should pay particular attention to the risk factors set
forth within this section. Nothing in this report shall impose
upon Symantec or any person a duty to update any forward
looking statement.
Overview
Symantec develops, markets and supports a diversified line
of application and system software products designed to
enhance individual and workgroup productivity. Founded in
1982, the Company has offices in the United States, Canada,
Asia, Australia, Europe, Africa and Latin America.
During the last three fiscal years, Symantec has acquired
the following companies:
Shares of Acquired
Symantec Company
Common Stock
Stock Options
Companies Acquired Date Acquired Issued Assumed
Fast Track, Inc. May 28, 1996 600,000 —
(“Fast Track”)
Delrina Corporation November 22, 1995 13,684,174*1,271,677
(“Delrina”)
Intec Systems Corporation August 31, 1994 133,332 —
(“Intec”)
Central Point Software, Inc. June 1, 1994 4,029,429 707,452
(“Central Point”)
SLR Systems, Inc. May 31, 1994 170,093 —
(“SLR”)
* Includes Delrina exchangeable stock that is traded on the Toronto Stock Exchange. Delrina
stockholders received Delrina exchangeable stock in exchange for Delrina common stock at a
rate of 0.61 per share. Delrina exchangeable stock may be converted into Symantec common
stock on a one-for-one basis at each stockholder’s option.
All of these acquisitions were accounted for as poolings
of interest. Accordingly, all financial information has been
restated to reflect the combined operations of these companies
and Symantec with the exception of Fast Track, Intec and
SLR, which had results of operations that were not material
to Symantec’s consolidated financial statements.
Results of Operations
The following table sets forth each item from the consoli-
dated statements of operations as a percentage of net revenues
and the percentage change in the total amount of each item
for the periods indicated.
Period-to-Period
Percentage
Increase (Decrease)
1997 1996
Year Ended March 31, Compared Compared
1997 1996 1995 to 1996 to 1995
Net revenues 100% 100% 100% 6% 3%
Cost of revenues 20 25 21 (14) 20
Gross margin 80 75 79 13 (1)
Operating expenses:
Research and development 19 21 17 (6) 34
Sales and marketing 47 52 44 (4) 21
General and administrative 77 7 4 12
Acquisition, restructuring
and other non-recurring
expenses 26 2 (69) 189
Total operating expenses 75 86 70 (8) 28
Operating income (loss) 5(11) 9 * *
Interest income 22 1 (4) 33
Interest expense —— — (6) (38)
Other income (expense), net —(1) — (21) *
Income (loss) before
income taxes 7(10) 10 * *
Provision (benefit) for
income taxes 1(1) 2 * *
Net income (loss) 6% (9)% 8% * *
* Percentage change is not meaningful.
Net Revenues
Net revenues increased 6% from $445 million in fiscal 1996
to $472 million in fiscal 1997. Net revenues increased 3%
from $431 million in fiscal 1995 to $445 million in fiscal 1996.
P r oduct Groups
During fiscal 1997, the Company experienced increased net
revenues from each of its core product groups: Remote
Productivity Solutions and Security and Assistance. The
Remote Productivity Solutions product group is focused on
helping remote professionals remain productive, by addressing
customer needs to access information, applications and data
from any location. The Security and Assistance product
group is dedicated to being indispensable to customers’ daily
use of computers by increasing productivity and keeping
computers safe and reliable.
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SYMANTEC CORPORATION