Macromedia Reports Fourth Quarter and Fiscal Year 2002 Results SAN FRANCISCO, April 24 /PRNewswire-FirstCall/ -- Macromedia, Inc. (Nasdaq: MACR - news) today announced fourth fiscal quarter and fiscal year 2002 results. Revenues for the quarter ended March 31, 2002 were $75.6 million, compared with revenues of $89.1 million reported in the same quarter a year ago. Pro forma net loss was $6.1 million, or a loss of $0.10 per share, for the fourth fiscal quarter 2002, compared with pro forma net income of $8.4 million, or diluted earnings per share of $0.15 for the same period in the prior year.
Revenues for the fiscal year ended March 31, 2002 totaled $324.8 million, compared with revenues of $376.4 million for the same period a year ago. Pro forma net loss for fiscal year 2002 was $28.1 million, or a loss of $0.48 per share, compared with pro forma net income of $66.9 million, or diluted earnings per share of $1.18, for fiscal year 2001.
Under accounting principles generally accepted in the United States (``GAAP''), net loss for the fourth fiscal quarter 2002 was $80.5 million, or a loss of $1.37 per share, compared with a net loss of $21.8 million, or a loss of $0.42 per share, for the same period last year. Net loss for the year ended March 31, 2002 on a GAAP basis was $305.9 million, or a loss of $5.26 per share, compared with net income of $13.4 million, or diluted earnings per share of $0.24, for the same period last year.
``This quarter, we kicked off a major new product cycle with the introduction of Macromedia Flash MX,'' said Rob Burgess, Macromedia chairman and chief executive officer. ``Our MX family of products will empower millions of developers to create rich Internet applications that radically enhance the user experience and reduce costs. We are all very encouraged about the initial market reaction to these great new products.''
Business Outlook
The Company said that it expects revenue growth to resume in the first fiscal quarter 2003 based on the Company's upcoming product cycle. Revenues are expected to be up 10% on a sequential basis. The Company also confirmed that a return to profitability on a pro forma basis is expected in the June quarter.
Pro Forma Results
Macromedia's pro forma results for the three months and year ended March 31, 2002 and 2001 differ from reported results in accordance with GAAP due to adjustments for the following items reported in its unaudited condensed consolidated results from operations:
-- Acquisition-related expenses -- Acquired in-process research and development -- Non-cash compensation expense -- Restructuring expenses -- Impairment and amortization of intangible assets -- Loss on investments, net -- Loss on equity affiliate -- Litigation settlement -- Operating results of AtomShockwave which were consolidated with Macromedia's results through December 31, 2000
Pro forma results for the three months and year ended March 31, 2002 reflect a benefit from income taxes at an effective tax rate of 20 percent. Recognition of this tax benefit results from the expected utilization of tax loss carryforwards generated in fiscal year 2002 to offset taxable income in future periods. Pro forma results for the three months and year ended March 31, 2001 reflect an effective tax rate of 23 percent and 19 percent, respectively.
Conference Call
Macromedia will host a conference call today to discuss fourth fiscal quarter and fiscal year 2002 results at 2:30pm PT /5:30 pm ET. A live Webcast of the conference call can be accessed at www.macromedia.com/MACR/. A replay of the conference call will be available on the Web site until May 15.
Except for the historical information contained herein, matters discussed in this news release may be considered forward looking statements that involve risks and uncertainties, including those related to customer acceptance of new products and services and new versions of existing products, the risk of integrating newly acquired technologies and products, the impact of competition, the risk of delay in product development and release dates, the economic conditions in the domestic and significant international markets, quarterly fluctuations of operating results, risks of product returns, risks associated with investment in international sales operations, and the other risks detailed from time to time in the Company's SEC reports, including without limitation, its quarterly reports on Form 10-Q and its annual report on Form 10-K for the year ended March 31, 2001 as they may be updated or amended with future filings. The actual results the Company achieves may differ materially from any forward looking statements due to such risks and uncertainties.
About Macromedia
Macromedia is passionate about what the Web can be. Its award-winning products empower designers and developers to efficiently create and deliver the most engaging experiences on the Web, and enable innovative Internet business applications. Headquartered in San Francisco, Macromedia has more than 1,400 employees worldwide and is available on the Internet at www.macromedia.com.
NOTE: Product names are trademarks or registered trademarks of Macromedia, Inc., as indicated.
Other product names or services may be trademarks or service marks of others.
MACROMEDIA, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands) (unaudited)
ASSETS March 31, 2002 March 31, 2001 Current assets: Cash, cash equivalents and short- term investments $161,971 $177,970 Accounts receivable, net 24,181 40,482 Prepaid expenses and other current assets 20,691 24,670 Deferred tax assets 9,854 12,663 Total current assets 216,697 255,785 Investment in equity affiliate -- 31,290 Property and equipment, net 49,189 114,604 Intangible assets, net 226,579 345,234 Other long-term assets 25,373 38,760 TOTAL ASSETS $517,838 $785,673
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $6,719 $8,273 Accrued liabilities 53,180 91,033 Accrued restructuring 12,224 -- Unearned revenue 24,791 16,982 Total current liabilities 96,914 116,288 Accrued restructuring, non- current 30,809 -- Other long-term liabilities 6,492 1,172 Total liabilities 134,215 117,460 Total stockholders' equity 383,623 668,213 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $517,838 $785,673
MACROMEDIA, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (In thousands, except per share data)
Three months ended Year ended March 31, March 31, 2002 2001* 2002 2001* (unaudited) (unaudited) Revenues $75,649 $89,077 $324,794 $389,600 Cost of revenues 10,050 10,161 42,546 42,398 Gross profit 65,599 78,916 282,248 347,202 Operating expenses: Sales and marketing 37,498 37,714 170,651 155,453 Research and development 26,079 23,447 110,118 107,670 General and administrative 10,913 9,570 43,693 39,000 Acquisition related expenses and acquired in-process research and development -- 18,000 -- 22,774 Non-cash compensation -- 100 -- 6,000 Restructuring expenses 42,281 -- 81,820 -- Impairment and amortization of intangible assets 28,489 8,314 114,532 9,872 Total operating expenses 145,260 97,145 520,814 340,769 Operating income (loss) (79,661) (18,229) (238,566) 6,433 Other income (expense): Interest and other income, net 854 2,687 6,400 14,178 Loss on investments, net (595) (8,836) (6,980) (13,836) Loss on equity affiliate -- -- (36,016) -- Litigation settlement -- -- (28,500) -- Total other income (expense) 259 (6,149) (65,096) 342 Minority interest -- -- -- 15,336 Income (loss) before income taxes (79,402) (24,378) (303,662) 22,111 Benefit (provision) for income taxes (1,111) 2,604 (2,266) (8,737) Net income (loss) ($80,513) ($21,774) ($305,928) $13,374 Net income (loss) per share Basic ($1.37) ($0.42) ($5.26) $0.26 Diluted ($1.37) ($0.42) ($5.26) $0.24 Weighted average common shares outstanding used in calculating net income (loss) per share Basic 58,945 52,268 58,190 50,842 Diluted 58,945 52,268 58,190 56,764
The above condensed consolidated statements of operations include allocation of non-cash compensation to cost of revenues, sales and marketing, research and development, and general and administrative expenses for the three months and year ended March 31, 2002.
* Included in the condensed consolidated statements of operations for the three months and year ended March 31, 2001 are the results of Allaire's operations from the date of the acquisition, March 20, 2001, through March 31, 2001.
MACROMEDIA, INC. AND SUBSIDIARIES Pro Forma Condensed Consolidated Statements of Operations Impact of Pro Forma Adjustments on Reported Net Income (Loss) In Accordance with GAAP (In thousands, except per share data) (unaudited)
Three months ended March 31, 2002 GAAP Adjustments* Pro forma* Revenues $75,649 -- $75,649 Cost of revenues 10,050 (16) 10,034 Gross profit 65,599 16 65,615 Operating expenses: Sales and marketing 37,498 (170) 37,328 Research and development 26,079 (173) 25,906 General and administrative 10,913 (42) 10,871 Acquired in-process research and development -- -- -- Non-cash compensation -- -- -- Restructuring expenses 42,281 (42,281) -- Impairment and amortization of intangible assets 28,489 (28,489) -- Total operating expenses 145,260 (71,155) 74,105 Operating income (loss) (79,661) 71,171 (8,490) Other income (expense): Interest and other income, net 854 -- 854 Loss on investments, net (595) 595 -- Total other income (expense) 259 595 854 Income (loss) before income taxes (79,402) 71,766 (7,636) Benefit (provision) for income taxes (1,111) 2,638 1,527 Net income (loss) ($80,513) 74,404 ($6,109) Net income (loss) per share Basic ($1.37) Diluted ($1.37) ($0.10) Weighted average common shares outstanding used in calculating net income (loss) per share Basic 58,945 Diluted 58,945 58,945
Three months ended March 31, 2001*** GAAP Adjustments** Pro forma**
Revenues $89,077 -- $89,077 Cost of revenues 10,161 -- 10,161 Gross profit 78,916 -- 78,916 Operating expenses: Sales and marketing 37,714 -- 37,714 Research and development 23,447 -- 23,447 General and administrative 9,570 -- 9,570 Acquired in-process research and development 18,000 (18,000) -- Non-cash compensation 100 (100) -- Restructuring expenses -- -- -- Impairment and amortization of intangible assets 8,314 (8,314) -- Total operating expenses 97,145 (26,414) 70,731 Operating income (loss) (18,229) 26,414 8,185 Other income (expense): Interest and other income, net 2,687 -- 2,687 Loss on investments, net (8,836) 8,836 -- Total other income (expense) (6,149) 8,836 2,687 Income (loss) before income taxes (24,378) 35,250 10,872 Benefit (provision) for income taxes 2,604 (5,105) (2,501) Net income (loss) ($21,774) 30,145 $8,371 Net income (loss) per share Basic ($0.42) Diluted ($0.42) $0.15 Weighted average common shares outstanding used in calculating net income (loss) per share Basic 52,268 Diluted 52,268 2,733 55,001
* The adjustments for the quarter ended March 31, 2002 represent the reversal of non-cash compensation expense, restructuring expenses, amortization of intangibles, and loss on investments. "Pro forma" results reflect an effective tax benefit of 20 percent.
** The adjustments for the quarter ended March 31, 2001 represent acquired in-process research and development charges, non-cash compensation expense, amortization of intangibles, and loss on investments. "Pro forma" results reflect an effective tax provision of 23 percent and reflect the dilutive impact of stock options on earnings per share.
*** Included in the condensed consolidated statements of operations for the three months and year ended March 31, 2001 are the results of Allaire's operations from the date of the acquisition, March 20, 2001, through March 31, 2001.
The above unaudited condensed consolidated statements of operations include allocation of non-cash compensation to cost of revenues, sales and marketing, research and development, and general and administrative expenses for the three months ended March 31, 2002.
MACROMEDIA, INC. AND SUBSIDIARIES Pro Forma Condensed Consolidated Statements of Operations Impact of Pro Forma Adjustments on Reported Net Income (Loss) In Accordance with GAAP (In thousands, except per share data) (unaudited) Year ended March 31, 2002 GAAP Adjustments* Pro forma* Revenues $324,794 -- $324,794 Cost of revenues 42,546 (62) 42,484 Gross profit 282,248 62 282,310 Operating expenses: Sales and marketing 170,651 (294) 170,357 Research and development 110,118 (265) 109,853 General and administrative 43,693 (68) 43,625 Acquisition related expenses and acquired in-process research and development -- -- -- Non-cash compensation -- -- -- Restructuring expenses 81,820 (81,820) -- Impairment and amortization of intangible assets 114,532 (114,532) -- Total operating expenses 520,814 (196,979) 323,835 Operating income (loss) (238,566) 197,041 (41,525) Other income (expense): Interest and other income, net 6,400 -- 6,400 Loss on investments, net (6,980) 6,980 -- Loss on equity affiliate (36,016) 36,016 -- Litigation settlement (28,500) 28,500 -- Total other income (expense) (65,096) 71,496 6,400 Minority interest -- -- -- Income (loss) before income taxes (303,662) 268,537 (35,125) Benefit (provision) for income taxes (2,266) 9,291 7,025 Net income (loss) ($305,928) $277,828 ($28,100) Net income (loss) per share Basic ($5.26) Diluted ($5.26) ($0.48) Weighted average common shares outstanding used in calculating net income (loss) per share Basic 58,190 Diluted 58,190 58,190
Year ended March 31, 2001*** GAAP Adjustments** Pro forma** Revenues $389,600 ($13,166) $376,434 Cost of revenues 42,398 (1,718) 40,680 Gross profit 347,202 (11,448) 335,754 Operating expenses: Sales and marketing 155,453 (11,744) 143,709 Research and development 107,670 (19,036) 88,634 General and administrative 39,000 (5,361) 33,639 Acquisition related expenses and acquired in-process research and development 22,774 (22,774) -- Non-cash compensation 6,000 (6,000) -- Restructuring expenses -- -- -- Impairment and amortization of intangible assets 9,872 (9,872) -- Total operating expenses 340,769 (74,787) 265,982 Operating income (loss) 6,433 63,339 69,772 Other income (expense): Interest and other income, net 14,178 (927) 13,251 Loss on investments, net (13,836) 13,836 -- Loss on equity affiliate -- -- -- Litigation settlement -- -- -- Total other income (expense) 342 12,909 13,251 Minority interest 15,336 (15,336) -- Income (loss) before income taxes 22,111 60,912 83,023 Benefit (provision) for income taxes (8,737) (7,411) (16,148) Net income (loss) $13,374 $53,501 $66,875 Net income (loss) per share Basic $0.26 Diluted $0.24 $1.18 Weighted average common shares outstanding used in calculating net income (loss) per share Basic 50,842 Diluted 56,764 14 56,778
* The fiscal year 2002 adjustments represent the reversal of non-cash compensation expense, restructuring expenses, amortization of intangibles, loss on investments, loss on equity affiliate, and litigation settlement. "Pro forma" results reflect an effective tax benefit of 20 percent.
** The fiscal year 2001 adjustments represent the reversal of acquisition related expenses and acquired in-process research and development, non-cash compensation expense, amortization of intangibles, loss on investments, minority interest, and the operating results of a previously consolidated subsidiary, AtomShockwave. "Pro forma" results reflect an effective tax provision of 19 percent and reflect the dilutive impact of stock options on earnings per share.
*** Included in the condensed consolidated statements of operations for the three months and year ended March 31, 2001 are the results of Allaire's operations from the date of the acquisition, March 20, 2001, through March 31, 2001.
The above condensed consolidated statements of operations include allocation of non-cash compensation to cost of revenues, sales and marketing, research and development, and general and administrative expenses for the year ended March 31, 2002.
SOURCE: Macromedia, Inc. |