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SAN FRANCISCO, CA—April 30, 2003—Macromedia,
Inc. (Nasdaq: MACR) today announced its fourth
quarter and fiscal year 2003 financial results.
Net revenues for the three months ended March 31,
2003 were $83.6 million, compared with net revenues
of $76.3 million reported for the comparable period
a year ago. Net income for the three months ended
March 31, 2003 was $6.9 million, or $0.11 per diluted
share, compared to a net loss of $83.4 million,
or $1.42 per share, for the comparable quarter
a year ago. Pro forma net income for the three
months ended March 31, 2003 was $8.3 million, or
$0.13 per diluted share, compared to a pro forma
net loss of $6.1 million, or $0.10 per share, for
the comparable quarter a year ago.
Net revenues for the fiscal year ended March 31,
2003 were $336.9 million, compared with net revenues
of $326.5 million for the prior fiscal year. Net
income for the twelve months ended March 31, 2003
was $1.6 million, or $0.03 per diluted share, compared
to a net loss of $308.8 million, or $5.31 per share,
for the prior fiscal year. Pro forma net income
for fiscal year 2003 was $24.7 million, or $0.40
per diluted share, compared to a pro forma net
loss of $28.1 million, or $0.48 per share, for
the fiscal year 2002. See “Pro Forma Results” below
for an explanation of pro forma adjustments.
"We made a lot of progress this year, returning
to revenue growth and profitability while investing
strongly in new lines of business," said Rob
Burgess, chairman and CEO, Macromedia. "Our
vision of radically improving the experience people
have on the Internet is resonating with everyone.
The coming year for us is all about execution as
we launch more products and services than ever
before."
Business Initiatives Update
In the past quarter, Macromedia has made advances
across its three major business initiatives:
design/development software, information convenience
software, and mobile and device software.
Design/Development Software
Macromedia Studio MX Plus, a special Windows edition
that adds Macromedia Contribute, Macromedia FreeHand
MX, and a DevNet Resource Kit Special Edition
for the same price began shipping this quarter.
Macromedia FreeHand MX was also introduced, which
added the Macromedia MX interface, increased
Mac OS X support, and Macromedia Flash integration.
Macromedia Flash MX Data Connection Kit, released
this quarter, includes Firefly components that
jumpstart the development of rich Internet applications
through pre-built connections to a range of data
sources.
Macromedia DevNet is a new software subscription
service. Developers and enterprises pay an annual
fee for access to a comprehensive set of tools,
servers, extensions, components, and other resources,
some of which are available first to DevNet subscribers.
Information Convenience Software
The Macromedia Information Convenience product
family provides solutions that enable non-technical
professionals to create and deliver great information
experiences without intricate technical training.
Macromedia Breeze, the product family added with
last quarter's acquisition of Presedia, enables
companies to deliver presentation and training
content online as Macromedia Flash content using
Microsoft PowerPoint to author their content.
Macromedia also unveiled an entirely new product
direction this quarter with Macromedia Central.
Macromedia Central builds on Macromedia Flash Player
to provide an application metaphor that brings
Internet applications offline, combining the responsiveness
of desktop applications with the flexibility of
web applications. The product will be out this
summer, and will provide a whole new way for Macromedia
Flash developers to sell applications and content.
Macromedia Contribute, which shipped its first
version in December, established itself as a strong
new product, with sales of more than 40,000 units
since its launch.
Mobile and Device Software
During the quarter, Macromedia signed an agreement
with Japanese mobile phone operator NTT DoCoMo,
Inc. to bring Macromedia Flash support to i-mode,
DoCoMo's proprietary 2G/3G mobile Internet platform,
in Japan. Macromedia also announced the availability
of Macromedia Flash Player 6 for Pocket PC 2002
devices such as those from Casio, HP, and Toshiba
this quarter. LeapFrog Enterprises, Inc. will
be utilizing Macromedia Flash in its new learning
platforms, the Leapster portable learning system,
scheduled for release in the fall.
Industry Awards
Macromedia products were recognized by a variety
of organizations:
- Reader's Choice Award, Macromedia Flash Communication
Server MX, Streaming Media Magazine
- Best Up and Coming Streaming Company, Streaming
Media Magazine
- Productivity Award, Business Integration and
Data Tools, ColdFusion MX, 13th Annual Software
Development Excellence and Productivity Awards
Business Outlook – First Quarter
Fiscal Year 2004
For the quarter ending June 30, 2003, Macromedia
expects net revenues to be in the range of $80
to $85 million, with gross margins in the 88 to
90 percent range, and operating profit margin between
5 and 10 percent. For the fiscal year ending March
31, 2004, the company expects net revenues to increase
10 to 20 percent from fiscal year 2003 results
and expects operating profit margin to be between
10 and 20 percent. These forward-looking statements
are subject to risks and uncertainties discussed
below and actual results may differ materially.
Pro Forma Results
Macromedia’s pro forma results for the three
and twelve months ended March 31, 2003 and 2002,
differ from corresponding results reported under
U.S. GAAP due to adjustments for the following
items reported in its consolidated results from
operations:
- Non-cash charges for:
- The amortization of deferred stock compensation resulting from the issuance of stock options to employees at an exercise price below the fair-market value on the date of grant;
- The amortization of acquired intangible assets;
- Impairments and related write-downs of certain acquired intangible assets; and;
- The write-off of acquired in-process research and development associated with business combinations.
- Costs and related expenditures associated
with our fiscal year 2002 restructuring plan
to deliver cost synergies associated with our
March 2001 acquisition of Allaire Corporation.
- Cash gains from non-marketable cost-basis
investments.
- Losses on non-marketable cost-basis
and available-for-sale investments resulting
from an other-than-temporary decline in the fair-market
value of these investments.
- Loss resulting from our equity investment
in AtomShockwave in fiscal year 2002.
- Net Charges for certain litigation
settlements.
- Cash gain on the sale of acquired technology.
Pro forma results
for the three and twelve months ended March 31,
2003 and 2002, reflect an assumed tax rate of 20
percent, reflecting U.S. federal and state income
taxes and foreign taxes at rates other than U.S.
statutory rates. See the attached reconciliation
of GAAP and pro forma results.
Reclassifications
Historical net revenues and expenses have been
reclassified to conform to the current year’s
presentation. These reclassifications did not
impact current or previously recorded net income.
These reclassifications, which involved the presentation
of shipping and handling fees billed and certain
out-of-pocket expenses reimbursed by customers,
will be more fully described in our report Form
10-K to be filed with the Securities and Exchange
Commission.
Conference Call
Macromedia’s fourth quarter and fiscal year
2003 financial results teleconference and simultaneous
webcast is scheduled to begin at 2:30 p.m. Pacific
Time / 5:30 p.m. Eastern Time on Wednesday, April
30, 2003. To access the live webcast, please visit
www.macromedia.com/MACR/ at least 30 minutes
prior to the start of the conference call to download
any necessary audio or plug-in software. A replay
of the conference call will be available on the
company’s website. The conference call will
also be broadcasted using our new product Breeze.
About Macromedia
Experience matters. Macromedia, Inc. is motivated by
the belief that great experiences build great businesses. Our software
empowers millions of business users, developers, and designers to create
and deliver effective, compelling and memorable experiences – on
the Internet, on fixed media, on wireless, and on digital devices.
Cautionary Note About Forward Looking Statements
Matters discussed in this news release may
be considered forward looking statements, including
those under the heading “Business Outlook” that
relate to expected future financial results
which involve risks and uncertainties, such
risk and uncertainties include those related
to general adverse economic conditions in the
markets in which we participate, customer acceptance
of new products and services and new versions
of existing products, the risk of adequately
evolving our internal systems and processes
in a dynamic business environment, new regulations
and other legislative actions that may materially
increase the cost of compliance and doing business,
risks associated with participating in international
markets, including, but not limited to, foreign
policies, market instability, and regulations
in the applicable foreign countries, the risk
of integrating newly acquired technologies
and products, the impact of competition, the
risk of delays in product development and release
dates, the economic condition in the domestic
and significant international markets in which
the company operates, dependence on the growth
of the Internet, quarterly fluctuations of
the operating results, the dependence on distributors
and risks of product returns, risk associated
with potential litigations, volatility of the
company’s stock and other risks detailed
from time to time in the company’s filings
with the SEC, including without limitation,
its annual report on Form 10-K for the fiscal
year ended March 31, 2002, and its quarterly
reports on Form 10-Q, 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.
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