UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
 
Date of Report (Date of Earliest Event Reported): May 7, 2019

Symantec Corporation
(Exact Name of Registrant as Specified in Charter)


Delaware
 
000-17781
 
77-0181864
(State or Other Jurisdiction
of Incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
 

350 Ellis Street, Mountain View, CA
94043
(Address of Principal Executive Offices)
(Zip Code)
 

Registrant’s Telephone Number, Including Area Code
(650) 527-8000


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):
 
[  ]      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
[  ]      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
[  ]      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
[  ]      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
 
Emerging growth company ☐
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
Trading Symbol
Name of each exchange on which registered
Common Stock, par value $0.01 per share
SYMC
The Nasdaq Stock Market LLC



Item 2.02.  Results of Operations and Financial Condition

On May 9, 2019, Symantec Corporation (the "Company") issued a press release announcing financial results for the fourth quarter and fiscal year ended March 29, 2019 .  The Company also posted to its website supplemental financial information. A copy of the press release is furnished as Exhibit 99.01 to this Current Report on Form 8-K and is incorporated herein by reference.
 
The information in this Item 2.02, including Exhibit 99.01 hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained in this Item 2.02, including Exhibit 99.01 hereto, shall not be incorporated by reference into any registration statement or other document filed with the Securities and Exchange Commission by the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such filing.
 
Item 5.02.  Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
 
Chief Executive Officer Transition
 
On May 9, 2019, the Company announced the appointment of Richard S. “Rick” Hill, 67 years old, as its interim President and Chief Executive Officer. Mr. Hill has served as a member of the Company’s Board of Directors (the “Board”) since January 2019 and will continue to serve on the Board. Mr. Hill has served as Chairman of the board of directors of Marvell Technology Group Ltd., a semiconductor company, since May 2016 and as a member of the boards of directors of Arrow Electronics, Inc., an electronic components and enterprise computing solutions company, since 2006, Cabot Microelectronics Corporation, a chemical mechanical planarization supplier, since June 2012, and Xperi, an electronic devices development company, since August 2012 and as its Chairman since March 2013. Previously, Mr. Hill served on the boards of directors of several technology companies, including Autodesk, Inc. from March 2016 to June 2018, Yahoo! Inc. from April 2016 to June 2017, Planar Systems, Inc. from June 2013 to December 2015 and LSI Corporation from 2007 to May 2014.  Mr. Hill received a Bachelor of Science degree in Bioengineering from the University of Illinois in Chicago and a Master of Business Administration from Syracuse University.
 
On May 9, 2019, Gregory S. Clark resigned from his roles as President and Chief Executive Officer of the Company and from the Board. Immediately following Mr. Clark’s resignation, the Board reduced the number of authorized directors from 13 to 12.
 
On May 9, 2019, Mr. Hill resigned his membership on the Audit Committee of the Board and Mr. Hill no longer serves on any Board committees.
 
There are no family relationships between Mr. Hill and any director or executive officer of the Company, and he has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.  Additionally, the details of Mr. Hill’s compensation have not been determined as of the date hereof.
 
In connection with Mr. Clark’s resignation, he entered into a Separation Agreement with the Company dated May 7, 2019 which is attached as Exhibit 10.01 hereto and is incorporated herein by reference

Appointment of Chief Financial Officer

On May 9, 2019, the Company also announced that Vincent Pilette accepted an offer to become the Executive Vice President and Chief Financial Officer of the Company effective May 21, 2019 (subject to adjustment under limited circumstances). Mr. Pilette, 47 years old, served as Chief Financial Officer of Logitech from September 2013 to May 2019. From January 2011 through August 2013, he was Chief Financial Officer of Electronics for Imaging, Inc. (EFI), a global technology imaging company. Prior to joining Electronics for Imaging, Mr. Pilette served in a variety of capacities at Hewlett-Packard Company (HP) from 1997 to December 2010, including Vice President of Finance for the Enterprise Server, Storage and Networking Group from January 2009 through December 2010 and Vice President of Finance for the HP Software Group from December 2005 through December 2008. Mr. Pilette has a master’s degree in engineering and business from Université Catholique de Louvain in Belgium and a master’s degree in business administration from Kellogg School of Management at Northwestern University.

A summary of the material terms and conditions of Mr. Pilette’s employment offer letter is set forth below. The summary is qualified in all respects by reference to Mr. Pilette’s employment offer letter, which is attached as Exhibit 10.02 hereto and is incorporated herein by reference. The employment offer letter has no specified term, and Mr. Pilette’s employment with the Company will be on an at-will basis. Mr. Pilette will be eligible to participate in Symantec’s employee and executive benefit programs, including the Company’s Executive Severance Plan and Executive Retention Plan.

Base Salary and Target Bonus . Pursuant to his employment offer letter, Mr. Pilette will receive an annual base salary of $650,000. He will also participate in the Company’s Executive Annual Incentive Plan and will have an annual bonus target of 100% of his annual base salary.

Equity Grants . The Company anticipates the Compensation and Leadership Development Committee of the Board will approve the grant of the following new-hire and long-term equity value awards for Mr. Pilette at the same time annual grants are approved for other executives: a $9 million new-hire award and a $5 million long-term incentive equity award for fiscal 2020. Each award will be comprised of 30% time-based restricted stock units (“RSUs”) and 70% performance-based restricted stock units (“PRUs”). In addition, contingent upon Mr. Pilette’s purchase of shares of the Company’s common stock on the public market with a fair market value of up to $10,000,000 within 30 days of his start date (or if later, no later than 10 days after the Company’s trading window opens) (the “Stock Purchase”), the Company will grant Mr. Pilette RSUs valued at 30% of the Stock Purchase, within 10 days of such purchase (the “Additional RSUs”). All RSUs, including the Additional RSUs, will have standard three-year vesting provisions and each of the compensation grants shall be subject to the terms and conditions applicable to grants made to all other executive officers of the Company for fiscal 2020; provided however, that if Mr. Pilette sells or otherwise disposes of any of the shares acquired in his Stock Purchase (other than upon a Change in Control as defined in the Executive Retention Plan) within three years of the grant of his Additional RSUs, Mr. Pilette will automatically forfeit all then-unvested shares subject to the Additional RSUs. The RSUs and PRUs shall be valued at the time the grants are formally approved and made by the Company’s Compensation and Leadership Development Committee.

There are no arrangements or understandings between Mr. Pilette and any other persons pursuant to which he was selected as Executive Vice President and Chief Financial Officer. There are also no family relationships between Mr. Pilette and any director or executive officer of the Company and he has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.

The press release announcing the foregoing leadership changes is filed as Exhibit 99.02 to this report.

Item 9.01.   Financial Statements and Exhibits
 
(d) Exhibits

Exhibit Number
Exhibit Title or Description
   
10.01
10.02
99.02
 
 
SIGNATURE
 
  Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
Symantec Corporation
     
Date: May 9, 2019
By:
/s/ Scott C. Taylor


Scott C. Taylor
   
Executive Vice President, General Counsel and
Secretary
 
Exhibit 10.01

SEPARATION AGREEMENT
 

This Separation Agreement (“ Agreement ”) is entered into between Gregory S. Clark (“ Executive ”) and Symantec Corporation (the “ Company ”).  Executive and the Company are sometimes herein referred to individually as a “ Party ” and collectively as the “ Parties .” The Company accepts the Executive’s resignation as President and Chief Executive Officer of the Company pursuant to the following terms.
 
1.              Separation Date :  Executive’s last day of employment with the Company is May 9, 2019   (the “ Separation Date ”). Executive will continue to receive his base salary and continue in Company’s benefits programs, subject to the terms and conditions of such programs through the Separation Date.   Executive agrees to, and by his signature below hereby does, resign from all positions, if any, that he may hold at the Company or any of its affiliated entities as a director, officer, manager, member, trustee or otherwise by reason of his employment with the Company, including as a member of the Board of Directors of the Company (the “ Board ”), effective as of the Separation Date.  The Current Report on Form 8-K to be filed on May 9, 2019 shall state that: “On May 9, 2019, Gregory S. Clark resigned from his roles as President and Chief Executive Officer of the Company and from the Board.”  The Company shall file the Agreement as an exhibit to its Current Report on Form 8-K which references Executive's separation and the Agreement.
 
2.              Final Wages : The Company shall pay Executive for all wages, salary, bonuses, commissions, reimbursable expenses, accrued vacation (if any), and any similar payments due Executive from the Company as of the Separation Date and through the date of payment. Executive agrees to submit to the Company, no later than ten (10) business days following the Separation Date, any outstanding expenses for reimbursement; such requests will be processed and, if approved, paid in accordance with the Company’s standard expense reimbursement policies.
 
3.              Return of Company Property :  By signing this Agreement, Executive hereby represents and warrants to the Company that Executive shall return to the Company on the Separation Date any and all property or data of the Company of any type whatsoever that may have been in Executive’s possession or control, including all keys, files, records (and copies thereof), equipment (including, but not limited to, computer hardware, software and printers, wireless handheld devices, cellular phones and pagers), and any other Company-owned property in his possession or control and shall leave intact all electronic Company documents, including, but not limited to, those that Executive developed or helped to develop during his employment.
 
4.              Non-disparagement :  In addition to any other existing obligations regarding non-disparagement, (i) Executive agrees that Executive will not, whether orally or in writing, make any disparaging statement or comments, either as fact or as opinion, about the Company or its products and services, business, technologies, market position, agents, representatives, directors, officers, shareholders, attorney’s, employees, vendors, affiliates, successors or assigns, or any person acting by, through, under or in concert with any of them, and (ii) the Company agrees that the Company, in its official, public or private statements, will not, and will use its best efforts to ensure that the current members of the Board and executive officers, for so long as they remain employed by or providing Board service to the Company, shall not make any disparaging statement or comments, either as fact or as opinion about Executive, including about Executive’s leadership at the Company. Nothing in this Agreement (including any agreements incorporated by reference herein) shall prohibit or restrict Executive or the Company from (a) initiating communications directly with, cooperating with, providing information to, causing information to be provided to, or otherwise assisting in an investigation by any governmental or regulatory agency, entity, or official(s) (collectively, “Governmental Authorities”) regarding a possible violation of any law; (b) responding to any inquiry or legal process directed to Executive individually from any such Governmental Authorities; (c) testifying, participating or otherwise assisting in an action or proceeding by any such Governmental Authorities relating to a possible violation of law; or (d) making any other disclosures that are protected under the whistleblower provisions of any applicable law.  Nothing in this section shall prohibit Executive or the Company from providing truthful information in response to a subpoena or other legal process.
 

5.              Indemnification : Executive will continue to be covered to the fullest extent by any indemnification agreement in place between Executive and the Company, and remain named as an insured on the director and officer liability insurance policy currently maintained by the Company.
 
6.              Complete and Voluntary Agreement :  This Agreement, together with the Non-Competition Agreement between the Company and Executive dated June 12, 2016, the Symantec Confidentiality and Intellectual Property Agreement and the Blue Coat Proprietary Information and Inventions Agreement, constitute the entire agreement between Executive and the Company with respect to the subject matter hereof and supersedes all prior negotiations and agreements, whether written or oral, relating to such subject matter, including the Employment Letter between the Company and Executive dated June 12, 2016 and the 2018 PRSU Agreement.
 
7.              Governing Law :  This Agreement shall be governed by and construed in accordance with the laws of the State of California.
 
8.              Effective Date :  This Agreement is effective as of the date set forth above.
 

 

 
[Signature Page to Separation Agreement Follows]
 
2

IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth below:
 


EXECUTIVE
 
SYMANTEC CORPORATION
     
/s/ Gregory S. Clark   /s/ Scott Taylor
Gregory S. Clark
 
Scott Taylor, EVP General Counsel
     
     
05/07/2019
  05/07/2019
Date
 
Date

 

 
[ Signature Page to Separation Agreement ]
 


Exhibit 10.02

April 26, 2019

Vincent Pilette
[Address]
[Address]

Dear Vincent ,

We are delighted to offer you the position of EVP, Chief Financial Officer at Symantec Corporation, in Mountain View CA, reporting to the Company’s Chief Executive Officer. You are joining a talented and passionate team driven to protect the world’s information and the people who use it. We do work that matters and we are confident you will find rewarding opportunities with us. 

Start Date
Your first day of employment is anticipated to be May 21, 2019, pending completion of your background verification and work authorizations.  If the Company has not filed its Form 10-K for the fiscal year ended March 29, 2019 (the “FY19 Form 10-K”) prior to your start date, you will join the Company initially as EVP, Finance, and will assume the title and position of EVP, Chief Financial Officer, on the date following the filing of the FY19 Form 10-K.

Salary
Your starting annual base salary will be $650,000.00, less applicable deductions and withholdings.

Executive Annual Incentive Plan
Based on your position, you will participate in the Executive Annual Incentive Plan, an incentive program that rewards achievement of Symantec Corporation’s financial objectives as well as your individual performance. At 100% of Company and individual performance, you will be eligible to receive an additional 100% of your annual base salary. To receive the award, you must satisfy the requirements of the Executive Annual Incentive Plan. Details of the Plan will be available to you once you begin your employment.

Stock
New Hire Award and Long Term Award
You will receive an equity award valued at $14,000,000 at the time of grant.  This award will be comprised of $9,000,000 which is intended to be your new hire equity award (“New Hire Award”) and $5,000,000 which is intended to be your fiscal 2020 long-term incentive equity award (“Long Term Award”).  The New Hire Award and Long Term Award will both be comprised of 30% time-based restricted stock units (RSUs) and 70% performance-based restricted stock units (PRUs) pursuant to the terms and conditions to be approved for senior executives for fiscal 2020.  We expect these awards will be made to you in June or July 2019 at the time of our annual executive grant.  T he number of RSUs to be granted will be calculated based on the average daily closing price of the Company’s common stock as reported on Nasdaq for the twenty (20) trading days ending on the last day of the month which precedes the month in which the grant is made.  The RSU portion of each award will have a 3-year vesting schedule, with 30% of the shares vesting approximately 1 year from the grant date on a designated vest date (the “First RSU Vest Date”), 30% vesting approximately 2 years from grant date on a designated vest date and the remaining 40% vesting approximately 3 years from grant on a designated vest date.  Details regarding your RSU and PRU vesting schedules and other terms and conditions of the grants will be provided in the RSU and PRU Award Agreements, which you will receive at the time of the grant.



Additional RSU
In addition to the New Hire Award and the Long Term Award, c ontingent upon your purchase of shares of the Company’s common stock on the public market with a fair market value of up to Ten Million Dollars ($10,000,000) within sixty (60) days following your Start Date (or if later, no later than ten (10) days after the Company’s trading window opens) (the “Stock Purchase”), the Company will grant you an RSU award valued at 30% of the Stock Purchase, within ten (10) days of such purchase, with the number of shares determined by dividing such dollar amount by the weighted average purchase price per share of the Stock Purchase, rounded up to the nearest whole share (the “Additional RSU”).  The Additional RSU will have a 3-year vesting schedule, with 30% of the shares vesting approximately 1 year from the grant date on a designated vest date, 30% vesting approximately 2 years from grant date on a designated vest date and the remaining 40% vesting approximately 3 years from grant on a designated vest date.  Details regarding your RSU vesting schedule and other terms and conditions of the grant will be provided in the RSU Award Agreement, which you will receive at the time of the grant , as well as the terms set forth in this letter. Notwithstanding the foregoing, if you sell or otherwise dispose of any of the shares acquired in your Stock Purchase (other than upon a Change in Control as defined in the Symantec Corporation Executive Retention Plan) within three (3) years of the grant, you will automatically forfeit all then-unvested shares subject to the Additional RSU.

Make Whole Protection
In the event of your termination of employment by the Company other than for Cause (as defined in the Symantec Corporation Executive Severance Plan) prior to the First RSU Vest Date, the Company will pay to you, in addition to any amounts payable to you under the Executive Severance Plan, an amount equal to (a) $1,300,000, plus (b) $2,940,000 multiplied by the FY20 percentage achievement under Symantec’s FY20 PRU plan (as determined by the Company’s Compensation and Leadership Development Committee (“CLDC”), at such time as it makes the determination for all FY20 PRU plan participants), not to exceed 100%; provided that such payment will be made   only if you sign, return within 45 days and do not revoke a Release of Claims on the Company form that will be provided to you.  Such payment will be paid to you in one lump sum within ten (10) days following, (i) the date the Release of Claims becomes non-revocable in the case of (a); and (ii) the later of (x) the date the Release of Claims becomes non-revocable, and (y) the CLDC determination, in the case of (b).

Benefits
You are eligible to participate in a wide variety of generous employee benefit plans, including Symantec’s Stock Purchase Plan, matching 401(k) savings and investment plan, and health insurance, among many others. For information on your Symantec U.S. Benefits, please visit our www.symantecbenefits.com website. Choosing the right combination of benefits is an important personal decision. Use this site to learn your options and discuss your current and future needs with your family. After your start date, you can enroll in the benefits that best fit your life.




Confidential and Proprietary Information
Your offer of employment is conditioned upon your fully and truthfully completing the enclosed Symantec Confidentiality and Intellectual Property Agreement (CIPA). By signing the CIPA and accepting this offer, you  represent and warrant to us that: 1) you are not subject to any terms or conditions that restrict or may restrict your ability to carry out your duties for Symantec; 2) you will not bring with you or use to perform your job any confidential or proprietary material of any former employer or any other party; 3) you will hold in confidence any confidential or proprietary information received as an employee of Symantec; (4) you will assign to Symantec any inventions that you make while employed by Symantec in accordance with the terms of the CIPA; and (5) you will abide by all terms of the CIPA.

Company Policies
As a Symantec employee, you will be subject to and are expected to adhere to and comply with all applicable Company policies, including but not limited to, our Code of Conduct.  Symantec reserves the right to change these policies at any time in its sole discretion.  If you have questions or concerns about these policies, please contact your recruiter.

Mutual Arbitration Agreement
Symantec values each of its employees and fosters good relations with, and among, all of its employees. It recognizes, however, that disagreements occasionally occur.  Symantec believes that the resolution of such disagreements is best accomplished by internal dispute resolution and, where that fails, by external arbitration. For these reasons, Symantec has adopted a Mutual Arbitration Agreement, a copy of which is enclosed.  While we hope that you will participate in this arbitration program, if you do not wish to do so, you have the right to opt out by following the instructions to submit a signed opt-out form along with a copy of this signed offer letter.  If you do not return a signed opt-out form with this offer letter, the arbitration program will be in effect.

Employment Status
This letter does not constitute a contract of employment for any specific period of time but creates an “employment at will” relationship. This means that you do not have a contract of employment for any particular duration. You are free to resign at any time for any reason. Similarly, Symantec is free to terminate your employment at any time for any reason.  Any statements or representation to the contrary, or that contradict any provision of this letter, are superseded by this offer letter.  Participation in any of Symantec’s stock or benefit programs is not assurance of continued employment for any particular period of time.  Any modification of this at-will provision must be in writing and signed by the Company CEO.

Work Authorization
Federal law requires that Symantec document an employee’s authorization to work in the United States. To comply, Symantec must have a completed Form I-9 for you on your first working day. You agree to provide Symantec with documentation required by the Form I-9 to confirm you are authorized to work in the United States. If you have any questions about this requirement, which applies to U.S. citizens and non-U.S. citizens alike, contact your recruiter.



Background Verification
This offer is subject to and contingent upon successful completion of a background check, which may include a credit check.   You may also be subject to additional background verifications and re-checks during the course of your employment as determined by business needs and consistent with Company policy and applicable law.  Failure to successfully complete these additional verifications or re-checks may result in reassignment, an opportunity to apply for alternative internal positions, or termination of your employment.

Please review this offer and confirm your acceptance by the end of business on May 1, 2019 by signing in the space indicated below and emailing (scanning) to                  .  Please also sign and return any additional forms as described in this letter.  Should you have any questions about this offer, do not hesitate to call          at        .

Vincent, we are very pleased to have you come to work at Symantec. We will continue to be the leading force in protecting the world’s information and the people who use it—and we look forward to you joining us to make a difference in the world.

Sincerely,

/s/ Amy Cappellanti-Wolf
Amy Cappellanti-Wolf
SVP, Chief HR Officer

I hereby accept the terms and conditions of the offer of employment stated in this letter.



/s/ Vincent Pilette
5/1/2019
 
Vincent Pilette
Date
 



Exhibit 99.01



MEDIA CONTACT:     INVESTOR CONTACT:  
Lauren Armstrong
 
Cynthia Hiponia
Symantec Corp.
 
Symantec Corp.
(650) 448-7352
 
(650) 527-8020
Lauren_Armstrong@symantec.com
 
Cynthia_Hiponia@symantec.com

 

Symantec Reports Fiscal Fourth Quarter and Full Year 2019 Results

Q4 GAAP revenue of $1.189 billion and non-GAAP revenue of $1.195 billion

Fiscal year 2019 GAAP revenue of $4.731 billion and non-GAAP revenue of $4.762 billion

Cash flow from operating activities for fiscal year 2019 was $1.495 billion, up 57% year-over-year

Company repurchased 11 million shares and retired $600 million in debt during the fourth quarter 2019


MOUNTAIN VIEW, Calif. – May 9, 2019 – Symantec Corp. (NASDAQ: SYMC) today reported results for its fourth quarter and full fiscal year 2019 ended March 29, 2019.

“We achieved company revenue in the fourth quarter in line with guidance and generated strong cash flow from operating activities,” said Richard S. Hill, Symantec Interim President and CEO. “Our Consumer Cyber Safety segment continued to deliver solid results, and we were pleased with increases in average revenue per user, both year-over-year and sequentially. However, our Enterprise Security revenue was below our guidance range due to lower than expected bookings, which led to year-over-year reported billings declining greater than we anticipated.  Despite this weakness, we remain confident in our Integrated Cyber Defense strategy, which has produced a strong and competitive product portfolio.  Moving forward, in Enterprise Security we are focused on operational discipline, increasing sales productivity, expanding operating margins and managing the shift to our ratable cloud delivered solutions. In Consumer Cyber Safety we will continue to execute on multiple initiatives to drive revenue growth. With industry-leading solutions across both our enterprise and consumer businesses, we are optimistic that we are well positioned to execute against a growing opportunity in the cyber defense market.”

To help readers understand our past financial performance and our future results, we supplement the financial results that we provide in accordance with generally accepted accounting principles, or GAAP, with non-GAAP financial measures. The methods we use to produce non-GAAP results are not in accordance with GAAP and may differ from the methods used by other companies. Additional information regarding our non-GAAP measures are provided below.

Fourth Quarter Fiscal 2019 Financial Highlights
·
GAAP revenue was $1.189 billion, non-GAAP revenue was $1.195 billion
·
GAAP operating margin of 9%, non-GAAP operating margin of 29%
·
GAAP diluted EPS was $0.05, non-GAAP diluted EPS was $0.39
·
Cash flow from operating activities of $547 million

Fiscal Year 2019 Financial Highlights
·
GAAP revenue was $4.731 billion, non-GAAP revenue was $4.762 billion
·
GAAP operating margin of 8%, non-GAAP operating margin of 30%
·
GAAP diluted EPS was $0.05, non-GAAP diluted EPS was $1.59
·
Cash flow from operating activities of $1.495 billion

(More)



Leadership Changes

In a separate press release issued today, Symantec announced that Richard S. Hill has been named Interim President and CEO, effective immediately.  Mr. Hill succeeds Greg Clark, who has stepped down as President and CEO and as a member of the Symantec Board, also effective immediately. The Company will commence a search process to find a permanent CEO.

Vincent Pilette, CFO of Logitech and former VP of Finance for Hewlett Packard Enterprise’s server, storage and networking business, has been appointed Executive Vice President and Chief Financial Officer of Symantec, effective May 21, 2019. Mr. Pilette’s appointment follows a comprehensive search process initiated in connection with Nicholas Noviello’s departure as EVP and CFO to pursue other opportunities, as announced on January 31, 2019.


First Quarter and Fiscal Year 2020 Guidance

First Quarter Fiscal 2020
GAAP
Non-GAAP
Revenue
$1.171B - $1.201B
$1 . 175B - $1 . 205B
Operating Margin
5% - 7%
25% - 27%
EPS (Diluted)
$0.01 - $0.05
$0.30 - $0.34
Fiscal Year 2020
Revenue
$4.750B - $4.890B
$4 . 760B - $4 . 900B
Operating Margin
13% - 15%
31% - 33%
EPS (Diluted)
$0.57 - $0.73
$1.65 - $1.80

Symantec's Board of Directors has declared a quarterly cash dividend of $0.075 per common share to be paid on June 26, 2019, to all shareholders of record as of the close of business on June 10, 2019 .

For additional details regarding Symantec’s results and outlook, please see the Supplemental Information on the investor relations page of our website at: http://www.symantec.com/invest .


Conference Call

Symantec has scheduled a conference call for 5:00 p.m. ET / 2:00 p.m. PT today to discuss its results for its fourth quarter and full year fiscal 2019 ended March 29, 2019 and to review guidance. Interested parties may access the conference call through Symantec’s Investor Relations website at http://investor.symantec.com/investor-relations/events-calendar/ . For telephone access to the conference, call (877) 475-6198 within the United States or (970) 297-2372 from outside the United States. Please call 15 minutes early and give the operator conference ID number 4593466.

A replay and our prepared remarks will be available on the investor relations home page shortly after the call is completed.

About Symantec

Symantec Corporation (NASDAQ: SYMC), the world’s leading cyber security company, helps organizations, governments and people secure their most important data wherever it lives. Organizations across the world look to Symantec for strategic, integrated solutions to defend against sophisticated attacks across endpoints, cloud and infrastructure. Likewise, a global community of more than 50 million people and families rely on Symantec’s Norton and LifeLock product suites to protect their digital lives at home and across their devices. Symantec operates one of the world’s largest civilian cyber intelligence networks, allowing it to see and protect against the most advanced threats. For additional information, please visit  www.symantec.com  or connect with us on Facebook , Twitter , and LinkedIn .


NOTE TO EDITORS: If you would like additional information on Symantec Corporation and its products, please visit the Symantec News Room at http://www.symantec.com/news . All prices noted are in U.S. dollars and are valid only in the United States.

Symantec, the Symantec logo and the Checkmark logo are trademarks or registered trademarks of Symantec Corporation or its affiliates in the U.S. and other countries. Other names may be trademarks of their respective owners.

Forward-Looking Statements: This press release contains statements which may be considered forward-looking within the meaning of the U.S. federal securities laws, including the information contained under the caption “ First Quarter and Fiscal Year 2020 Guidance ” and the statements regarding Symantec’s leadership changes and Symantec’s prospects for growth and value creation, Symantec’s planned cash dividend, as well as other projected financial and business results, including demand for its products and services, Symantec’s enhanced capabilities, and Symantec’s continued cost and operating efficiencies. These statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from results expressed or implied in this press release. Such risk factors include those related to: retention of existing executive leadership team members; difficulties in improving sales execution and product development during leadership transitions; general business and economic conditions; our ability to integrate acquired businesses and realize the expected benefits of the acquisitions; matters arising out of our completed Audit Committee investigation and the ongoing U.S. Securities and Exchange Commission investigation; fluctuations and volatility in Symantec’s stock price; the ability of Symantec to successfully execute strategic plans; the ability to maintain customer and partner relationships; the ability of Symantec to achieve its cost and operating efficiency goals; the anticipated growth of certain market segments; Symantec’s sales pipeline and business strategy; fluctuations in tax rates and foreign currency exchange rates; the timing and market acceptance of new product releases and upgrades; and the successful development of new products and the degree to which these products gain market acceptance. Actual results may differ materially from those contained in the forward-looking statements in this press release. Symantec assumes no obligation, and does not intend, to update these forward-looking statements as a result of future events or developments. Additional information concerning these and other risk factors is contained in the Risk Factors sections of Symantec’s most recent reports on Form 10-K and Form 10-Q.

USE OF NON-GAAP FINANCIAL INFORMATION: We use non-GAAP measures of adjusted revenues, operating margin, net income and earnings per share, which are adjusted from results based on GAAP to include certain purchase accounting adjustments and exclude certain expenses, gains and losses. Additionally, we provide the non-GAAP metric of reported billings (previously referred to as implied billings).  These non-GAAP financial measures are provided to enhance the user’s understanding of our past financial performance and our prospects for the future. Our management team uses these non-GAAP financial measures in assessing Symantec’s performance, as well as in planning and forecasting future periods. These non-GAAP financial measures are not computed according to GAAP and the methods we use to compute them may differ from the methods used by other companies. Non-GAAP financial measures are supplemental, should not be considered a substitute for financial information presented in accordance with GAAP and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Readers are encouraged to review the reconciliation of our non-GAAP financial measures to the comparable GAAP results, which is attached to our quarterly earnings release and which can be found, along with other financial information including Supplemental Information, on the investor relations page of our website at: http://www.symantec.com/invest .




SYMANTEC CORPORATION
 
Condensed Consolidated Balance Sheets (1)
 
(In millions, unaudited)

   
March 29, 2019
   
March 30, 2018 (2)
 
ASSETS
       
Current assets:
       
Cash and cash equivalents
  $ 1,791     $ 1,774  
Short-term investments
   
252
     
388
 
Accounts receivable, net
   
708
     
809
 
Other current assets
   
435
     
522
 
Total current assets
   
3,186
     
3,493
 
Property and equipment, net
   
790
     
778
 
Intangible assets, net
   
2,250
     
2,643
 
Goodwill
   
8,450
     
8,319
 
Other long-term assets
   
1,262
     
526
 
Total assets
  $ 15,938     $ 15,759  
LIABILITIES AND STOCKHOLDERS’ EQUITY
         
Current liabilities:
         
Accounts payable
  $ 165     $ 168  
Accrued compensation and benefits
   
257
     
262
 
Current portion of long-term debt
   
491
     
—
 
Contract liabilities (3)
   
2,320
     
2,368
 
Other current liabilities
   
533
     
372
 
Total current liabilities
   
3,766
     
3,170
 
Long-term debt
   
3,961
     
5,026
 
Long-term contract liabilities (3)
   
736
     
735
 
Deferred income tax liabilities
   
577
     
592
 
Long-term income taxes payable
   
1,076
     
1,126
 
Other long-term liabilities
   
84
     
87
 
Total liabilities
   
10,200
     
10,736
 
Total stockholders’ equity
   
5,738
     
5,023
 
Total liabilities and stockholders’ equity
  $ 15,938     $ 15,759  

(1) We adopted the new revenue recognition accounting standard (ASC 606) on a modified retrospective basis during Q1 FY19. The results as of March 29, 2019 are presented under the new revenue recognition accounting standard, while prior period amounts are not adjusted and continue to be reported under the prior revenue recognition accounting standard (ASC 605).
(2) Derived from audited consolidated financial statements.
(3) As a result of the new revenue recognition accounting standard (ASC 606), amounts we have previously referred to as deferred revenue are now referred to as contract liabilities, which consist of the total of what is now identified as deferred revenue and customer deposit liabilities in all schedules throughout this document.


SYMANTEC CORPORATION
 
Condensed Consolidated Statements of Operations (1)
 
(In millions, except per share data, unaudited)
 
   
Three Months Ended
   
Year Ended
 
   
March 29, 2019
   
March 30, 2018
   
March 29, 2019
   
March 30, 2018 (2)
 
Net revenues
  $ 1,189     $ 1,210     $ 4,731     $ 4,834  
Cost of revenues
   
279
     
264
     
1,050
     
1,032
 
Gross profit
   
910
     
946
     
3,681
     
3,802
 
Operating expenses:
                               
Sales and marketing
   
378
     
354
     
1,493
     
1,593
 
Research and development
   
236
     
257
     
913
     
956
 
General and administrative
   
102
     
143
     
447
     
574
 
Amortization of intangible assets
   
51
     
54
     
207
     
220
 
Restructuring, transition and other costs
   
36
     
132
     
241
     
410
 
Total operating expenses
   
803
     
940
     
3,301
     
3,753
 
Operating income
   
107
     
6
     
380
     
49
 
Interest expense
   
(51
)    
(57
)    
(208
)    
(256
)
Gain (loss) on divestiture
   
—
     
(5
)    
—
     
653
 
Other expense, net
   
(4
)    
(9
)    
(64
)    
(9
)
Income (loss) from continuing operations before income taxes
   
52
     
(65
)    
108
     
437
 
Income tax expense (benefit)
   
22
     
(7
)    
92
     
(690
)
Income (loss) from continuing operations
   
30
     
(58
)    
16
     
1,127
 
Income (loss) from discontinued operations, net of income taxes
   
4
     
(1
)    
15
     
11
 
Net income (loss)
  $ 34     $ (59 )   $ 31     $ 1,138  
                                 
Income (loss) per share - basic:
                               
Continuing operations
  $ 0.05     $ (0.09
)
  $ 0.03     $ 1.83  
Discontinued operations
  $ 0.01     $  (0.00 )
  $ 0.02     $ 0.02  
Net income (loss) per share - basic (3)
  $ 0.05     $  (0.10 )
  $ 0.05     $ 1.85  
                                 
Income (loss) per share - diluted:
                               
Continuing operations
  $ 0.05     $ (0.09 )   $ 0.02     $ 1.69  
Discontinued operations
  $ 0.01     $ (0.00 )   $ 0.02     $ 0.02  
Net income (loss) per share - diluted (3)
  $ 0.05     $ (0.10 )   $ 0.05     $ 1.70  
                                 
Weighted-average shares outstanding:
                               
Basic
   
637
     
621
     
632
     
616
 
Diluted
   
662
     
621
     
661
     
668
 

(1) We adopted the new revenue recognition accounting standard (ASC 606) on a modified retrospective basis during Q1 FY19. The results for Q4 FY19 and FY19 are presented under the new revenue recognition accounting standard, while prior period amounts are not adjusted and continue to be reported under the prior revenue recognition accounting standard (ASC 605).
(2) Derived from audited consolidated financial statements.
(3) Net income (loss) per share may not add due to rounding.

 
SYMANTEC CORPORATION
 
Condensed Consolidated Statements of Cash Flows
 
(In millions, unaudited)
 
   
Three Months Ended
   
Year Ended
 
   
March 29,
2019
   
March 30,
2018
   
March 29,
2019
   
March 30,
2018 (1)
 
OPERATING ACTIVITIES:
                         
Net income (loss)
  $ 34     $ (59 )   $ 31     $ 1,138  
(Income) loss from discontinued operations, net of income taxes
   
(4
)    
1
     
(15
)    
(11
)
Adjustments:
                               
Amortization and depreciation
   
158
     
155
     
615
     
640
 
Impairments of long-lived assets
   
2
     
34
     
10
     
81
 
Stock-based compensation expense
   
87
     
162
     
352
     
610
 
Loss from equity interest
   
17
     
26
     
101
     
26
 
Deferred income taxes
   
(52
)    
(27
)    
(70
)    
(1,848
)
(Gain) loss on divestiture
   
—
     
5
     
—
     
(653
)
Other
   
18
     
8
     
(14
)    
45
 
Changes in operating assets and liabilities, net of acquisitions and divestiture:
                               
Accounts receivable, net
   
16
     
(132
)    
113
     
(170
)
Accounts payable
   
(29
)    
(9
)    
6
     
(4
)
Accrued compensation and benefits
   
28
     
20
     
2
     
(33
)
Contract liabilities
   
145
     
354
     
215
     
541
 
Income taxes payable
   
84
     
(74
)    
67
     
880
 
Other assets
   
(33
)    
(187
)    
(32
)    
(199
)
Other liabilities
   
76
     
(1
)    
114
     
(86
)
Net cash provided by continuing operating activities
   
547
     
276
     
1,495
     
957
 
Net cash used in discontinued operating activities
   
—
     
(10
)    
—
     
(7
)
Net cash provided by operating activities
   
547
     
266
     
1,495
     
950
 
INVESTING ACTIVITIES:
                               
Purchases of property and equipment
   
(54
)    
(37
)    
(207
)    
(142
)
Payments for acquisitions, net of cash acquired
   
(139
)
   
1
     
(180
)    
(401
)
Proceeds from divestiture, net of cash contributed and transaction costs
   
—
     
(13
)    
—
     
933
 
Purchases of short-term investments
   
—
     
(28
)    
—
     
(436
)
Proceeds from maturities and sales of short-term investments
   
20
     
24
     
139
     
49
 
Proceeds from sale of property
   
—
     
—
     
26
     
—
 
Other
   
(7
)    
(4
)    
(19
)    
(24
)
Net cash used in investing activities
   
(180
)    
(57
)    
(241
)    
(21
)
FINANCING ACTIVITIES:
                               
Repayments of debt
   
(600
)    
(570
)    
(600
)    
(3,210
)
Net proceeds from sales of common stock under employee stock incentive plans
   
11
     
38
     
19
     
121
 
Tax payments related to restricted stock units
   
(5
)    
(10
)    
(173
)    
(107
)
Dividends and dividend equivalents paid
   
(48
)    
(48
)    
(217
)    
(211
)
Repurchases of common stock
   
(234
)    
—
     
(234
)    
—
 
Payment for dissenting LifeLock shareholder settlement
   
—
     
—
     
—
     
(68
)
Other
   
(4
)    
—
     
(4
)    
—
 
Net cash used in financing activities
   
(880
)    
(590
)    
(1,209
)    
(3,475
)
Effect of exchange rate fluctuations on cash and cash equivalents
   
(5
)    
13
     
(28
)    
73
 
Change in cash and cash equivalents
   
(518
)    
(368
)    
17
     
(2,473
)
Beginning cash and cash equivalents
   
2,309
     
2,142
     
1,774
     
4,247
 
Ending cash and cash equivalents
  $ 1,791     $ 1,774     $ 1,791     $ 1,774  

(1) Derived from audited consolidated financial statements.
 

SYMANTEC CORPORATION

Reconciliation of Selected GAAP Measures to Non-GAAP Measures (1) (2)

(In millions, except per share data, unaudited)
 
   
Three Months Ended
   
Year Ended
 
   
March 29, 2019
   
March 30, 2018
   
March 29, 2019
   
March 30, 2018
 
Net revenues
  $ 1,189     $ 1,210     $ 4,731     $ 4,834  
Contract liabilities fair value adjustment
   
6
     
12
     
31
     
126
 
Net revenues (Non-GAAP)
  $ 1,195     $ 1,222     $ 4,762     $ 4,960  
                                 
Operating income
  $ 107     $ 6     $ 380     $ 49  
Contract liabilities fair value adjustment
   
6
     
12
     
31
     
126
 
Stock-based compensation
   
87
     
162
     
352
     
610
 
Amortization of intangible assets
   
111
     
112
     
443
     
453
 
Restructuring, transition and other costs
   
36
     
132
     
241
     
410
 
Acquisition-related costs
   
—
     
9
     
3
     
60
 
Litigation settlement
   
—
     
2
     
(5
)
   
2
 
Operating income (Non-GAAP)
  $
347
    $
435
    $ 1,445
    $ 1,710
 
                                 
Operating margin
   
9
%    
0
%    
8
%    
1
%
Operating margin (Non-GAAP)
   
29
%    
36
%    
30
%    
34
%
                                 
Net income (loss)
  $ 34     $ (59 )   $ 31     $ 1,138  
Adjustments to income (loss) from continuing operations:
                               
Contract liabilities fair value adjustment
   
6
     
12
     
31
     
126
 
Stock-based compensation
   
87
     
162
     
352
     
610
 
Amortization of intangible assets
   
111
     
112
     
443
     
453
 
Restructuring, transition and other costs
   
36
     
132
     
241
     
410
 
Acquisition-related costs
   
—
     
9
     
3
     
60
 
Litigation settlement
   
—
     
2
     
(5
)
   
2
 
Non-cash interest expense
   
7
     
9
     
26
     
50
 
(Gain) loss on divestiture and gain on sale of assets
   
—
     
2
     
—
     
(656
)
Loss from equity interest
   
17
     
26
     
101
     
26
 
Income tax reform
   
—
     
151
     
—
     
(659
)
Other income tax effects and adjustments
   
(38
)
   
(261
)
   
(158
)
   
(434
)
Total adjustment from continuing operations
   
226
     
356
     
1,034
     
(12
)
Total adjustment from discontinued operations
   
(4
)
   
1
     
(15
)
   
(11
)
Net income (Non-GAAP)
  $ 256     $ 298     $ 1,050     $ 1,115  
                                 
Diluted net income (loss) per share
  $ 0.05     $ (0.10 )   $ 0.05     $ 1.70  
Adjustments to diluted net income per share:
                               
Contract liabilities fair value adjustment
   
0.01
     
0.02
     
0.05
     
0.19
 
Stock-based compensation
   
0.13
     
0.26
     
0.53
     
0.91
 
Amortization of intangible assets
   
0.17
     
0.18
     
0.67
     
0.68
 
Restructuring, transition and other costs
   
0.05
     
0.21
     
0.36
     
0.61
 
Acquisition-related costs
   
—
     
0.01
     
0.00
     
0.09
 
Litigation settlement
   
—
     
0.00
     
(0.01
)
   
0.00
 
Non-cash interest expense
   
0.01
     
0.01
     
0.04
     
0.07
 
(Gain) loss on divestiture and gain on sale of assets
   
—
     
0.00
     
—
     
(0.98
)
Loss from equity interest
   
0.03
     
0.04
     
0.15
     
0.04
 
Income tax reform
   
—
     
0.24
     
—
     
(0.99
)
Other income tax effects and adjustments
   
(0.06
)
   
(0.42
)
   
(0.24
)
   
(0.65
)
Total adjustment from continuing operations
   
0.34
     
0.57
     
1.56
     
(0.02
)
Total adjustment from discontinued operations
   
(0.01
)
   
0.00
     
(0.02
)
   
(0.02
)
Incremental dilution effect
   
—
     
(0.04
)
   
—
     
—
 
Diluted net income per share (Non-GAAP) (3)
  $ 0.39     $ 0.44     $ 1.59     $ 1.67  
                                 
Diluted weighted-average shares outstanding
   
662
     
621
     
661
     
668
 
Incremental dilution
   
—
     
54
     
—
     
—
 
Diluted weighted-average shares outstanding (Non-GAAP) (4)
   
662
     
675
     
661
     
668
 

(1) This presentation includes non-GAAP measures. Non-GAAP financial measures are supplemental and should not be considered a substitute for financial information presented in accordance with GAAP.  For a detailed explanation of these non-GAAP measures, please see Appendix A.
(2) We adopted the new revenue recognition accounting standard (ASC 606) on a modified retrospective basis during Q1 FY19. The results for Q4 FY19 and FY19 are presented under the new revenue recognition accounting standard, while prior period amounts are not adjusted and continue to be reported under the prior revenue recognition accounting standard (ASC 605).
(3) Net income per share amounts may not add due to rounding.
(4) Diluted GAAP and non-GAAP weighted-average shares outstanding are the same, except in periods in which there is a GAAP loss from continuing operations. In accordance with GAAP, we do not present dilution for GAAP in periods in which there is a loss from continuing operations. However, if there is non-GAAP net income, we present dilution for non-GAAP weighted-average shares outstanding in an amount equal to the dilution that would have been presented had there been GAAP income from continuing operations for the period.
 

SYMANTEC CORPORATION
 
Reconciliation of GAAP Revenue to Non-GAAP Reported Billings (1)(2)(3)
 
(In millions, unaudited)
 
    Three Months Ended
 
    March 29, 2019     March 30, 2018  
Total Company Reported Billings (Non-GAAP)
           
Total revenue
 
$
1,189
   
$
1,210
 
Add: Contract liabilities (end of period)
    3,056
      3,103  
Less: Contract liabilities (beginning of period)
   
(2,915
)     (2,730 )
Other contract liabilities adjustments (4)
    2       15
 
Reported billings (Non-GAAP)
 
$
1,332
   
$
1,598
 
                 
Enterprise Security Reported Billings (Non-GAAP)
               
Total revenue
 
$
584
   
$
597
 
Add: Contract liabilities (end of period)
    2,002       2,010  
Less: Contract liabilities (beginning of period)
    (1,876 )     (1,685 )
Other contract liabilities adjustments (4)
    2       15
 
Reported billings (Non-GAAP)
 
$
712
   
$
937
 
                 
Consumer Cyber Safety Reported Billings (Non-GAAP) (5)
               
Total revenue
 
$
605
   
$
613
 
Add: Contract liabilities (end of period)
    1,054       1,093  
Less: Contract liabilities (beginning of period)
    (1,039 )     (1,045 )
Reported billings (Non-GAAP)
 
$
620
   
$
661
 

(1) This presentation includes non-GAAP measures. Non-GAAP financial measures are supplemental and should not be considered a substitute for financial information presented in accordance with GAAP.  For a detailed explanation of these non-GAAP measures, please see Appendix A.
(2) We adopted the new revenue recognition accounting standard (ASC 606) on a modified retrospective basis during Q1 FY19. The results for Q4 FY19 and FY19 are presented under the new revenue recognition accounting standard, while prior period amounts are not adjusted and continue to be reported under the prior revenue recognition accounting standard (ASC 605).
(3) Reported billings was previously referred to as implied billings. The calculation did not change.
(4) Other contract liabilities adjustments include the change in contract liabilities related to Veritas discontinued operations.
(5) Consumer Cyber Safety was previously named Consumer Digital Safety.

 
SYMANTEC CORPORATION
 
Guidance and Reconciliation of GAAP to Non-GAAP Revenue, Operating Income and EPS (1) (2)
 
(In millions, except per share data, unaudited)
 
First Quarter Fiscal Year 2020
                 
                   
Revenue Guidance
                 
GAAP revenue range
 
$1,171
     
—
   
$1,201
 
Adjustment:
                       
Contract liabilities fair value adjustment
         
$4
         
Non-GAAP revenue range
 
$1,175
     
—
   
$1,205
 
                         
Operating Margin Guidance and Reconciliation
                       
GAAP operating margin
   
5
%
   
—
     
7
%
Adjustments:
                       
Contract liabilities fair value adjustment
           
0
%
       
Stock-based compensation
           
8
%
       
Amortization of intangible assets
           
10
%
       
Restructuring, transition and other costs
           
2
%
       
Non-GAAP operating margin
   
25
%
   
—
     
27
%
                         
Earnings Per Share Guidance and Reconciliation
                       
GAAP diluted income per share range (3)
 
$0.01
     
—
   
$0.05
 
Adjustments:
                       
Contract liabilities fair value adjustment
         
$0.01
         
Stock-based compensation
         
$0.14
         
Amortization of intangible assets
         
$0.17
         
Restructuring, transition and other costs
         
$0.03
         
Other
         
$0.01
         
Income tax effects and adjustments
         
 
($0.07
)
       
Non-GAAP diluted earnings per share range (3)
 
$0.30
     
—
   
$0.34
 
                         
Fiscal Year 2020
                       
                         
Revenue Guidance
                       
GAAP revenue range
 
$4,750
     
—
   
$4,890
 
Adjustment:
                       
Contract liabilities fair value adjustment
         
$10
         
Non-GAAP revenue range
 
$4,760
     
—
   
$4,900
 
                         
Operating Margin Guidance and Reconciliation
                       
GAAP operating margin
   
13
%
   
—
     
15
%
Adjustments:
                       
Contract liabilities fair value adjustment
           
0
%
       
Stock-based compensation
           
7
%
       
Amortization of intangible assets
           
10
%
       
Restructuring, transition and other costs
           
1
%
       
Non-GAAP operating margin
   
31
%
   
—
     
33
%
                         
Earnings Per Share Guidance and Reconciliation
                       
GAAP diluted income per share range (3)
 
$0.57
     
—
   
$0.73
 
Adjustments:
                       
Contract liabilities fair value adjustment
         
$0.02
         
Stock-based compensation
         
$0.53
         
Amortization of intangible assets
         
$0.70
         
Restructuring, transition and other costs
         
$0.08
         
Other
         
$0.03
         
Income tax effects and adjustments
         
 
($0.29
)
       
Non-GAAP diluted earnings per share range (3)
 
$1.65
     
—
   
$1.80
 

(1) This presentation includes non-GAAP measures. Non-GAAP financial measures are supplemental and should not be considered a substitute for financial information presented in accordance with GAAP.  For a detailed explanation of these non-GAAP measures, please see Appendix A.
(2) Amounts may not add due to rounding.
(3) GAAP income per share, adjustments per share and non-GAAP income per share are calculated using diluted share count of 650 million and a range of 634 million to 644 million for Q1 FY20 and FY20, respectively.


SYMANTEC CORPORATION
Appendix A
Explanation of Non-GAAP Measures

 
Objective of non-GAAP measures :  We believe our presentation of non-GAAP financial measures, when taken together with corresponding GAAP financial measures, provides meaningful supplemental information regarding the Company’s operating performance for the reasons discussed below. Our management team uses these non-GAAP financial measures in assessing Symantec’s performance, as well as in planning and forecasting future periods. Due to the importance of these measures in managing the business, we use non-GAAP measures in the evaluation of management’s compensation. These non-GAAP financial measures are not computed according to GAAP and the methods we use to compute them may differ from the methods used by other companies.  Non-GAAP financial measures are supplemental and should not be considered a substitute for financial information presented in accordance with GAAP and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP.

Contract liabilities adjustment :  Our non-GAAP net revenues eliminate the impact of contract liabilities purchase accounting adjustments required by GAAP. GAAP requires an adjustment to the liability for acquired contract liabilities such that the liability approximates how much we, the acquirer, would have to pay a third party to assume the liability. We believe that eliminating the impact of this adjustment improves the comparability of revenues between periods. Also, although the adjustment amounts will never be recognized in our GAAP financial statements, we do not expect the acquisitions to affect the future renewal rates of revenues excluded by the adjustments. In addition, our management uses non-GAAP net revenues, adjusted for the impact of purchase accounting adjustments to assess our operating performance and overall revenue trends. Nevertheless, non-GAAP net revenues has limitations as an analytical tool and should not be considered in isolation or as a substitute for GAAP net revenues. We believe these adjustments are useful to investors as an additional means to reflect revenue trends of our business. However, other companies in our industry may not calculate these measures in the same manner which may limit their usefulness for comparative purposes.

Inventory fair value adjustment :  Purchase accounting requires us to measure acquired inventory at fair value. The fair value of inventory reflects the acquired company’s cost of manufacturing plus a portion of the expected profit margin. These non-GAAP adjustments to our cost of revenues exclude the expected profit margin component that is recorded under purchase accounting associated with our acquisitions. We believe the adjustments are useful to investors as an additional means to reflect cost of revenues and gross margin trends of our business.

Stock-based compensation :  This consists of expenses for employee restricted stock units, performance-based awards, bonus share programs, stock options and our employee stock purchase plan, determined in accordance with GAAP.  We evaluate our performance both with and without these measures because stock-based compensation is a non-cash expense and can vary significantly over time based on the timing, size, nature and design of the awards granted, and is influenced in part by certain factors that are generally beyond our control, such as the volatility of the market value of our common stock. In addition, for comparability purposes, we believe it is useful to provide a non-GAAP financial measure that excludes stock-based compensation to facilitate the comparison of our results to those of other companies in our industry.

Amortization of intangible assets :  Amortization of intangible assets consists of amortization of acquisition-related intangibles assets such as developed technology, customer relationships and trade names acquired in connection with business combinations. We record charges relating to the amortization of these intangibles within both cost of revenues and operating expenses in our GAAP financial statements.  Under purchase accounting, we are required to allocate a portion of the purchase price to intangible assets acquired and amortize this amount over the estimated useful lives of the acquired intangible assets. However, the purchase price allocated to these assets is not necessarily reflective of the cost we would incur to internally develop the intangible asset. Further, amortization charges for our acquired intangible assets are inconsistent in size and are significantly impacted by the timing and valuation of our acquisitions. We eliminate these charges from our non-GAAP operating results to facilitate an evaluation of our current operating performance and provide better comparability to our past operating performance.


Restructuring, transition and other costs :  Restructuring charges are costs associated with a formal restructuring plan and are primarily related to employee severance and benefit arrangements. Other charges include facilities and other exit and disposal costs, including asset write-offs. Transition costs are associated with formal discrete strategic information technology initiatives and primarily consist of consulting charges associated with our enterprise resource planning and supporting systems and costs to automate business processes.  In addition, transition costs include expenses associated with our divestitures. We exclude restructuring, transition and other costs from our non-GAAP results as we believe that these costs are incremental to core activities that arise in the ordinary course of our business and do not reflect our current operating performance, and that excluding these charges facilitates a more meaningful evaluation of our current operating performance and comparisons to our past operating performance.

Acquisition-related costs :  These represent the transaction and business integration costs related to significant acquisitions that are charged to operating expense in our GAAP financial statements. These costs include incremental expenses incurred to affect these business combinations such as advisory, legal, accounting, valuation, and other professional or consulting fees. We exclude these costs from our non-GAAP results as they have no direct correlation to the operation of our business, and because we believe that the non-GAAP financial measures excluding these costs provide meaningful supplemental information regarding the spending trends of our business. In addition, these costs vary, depending on the size and complexity of the acquisitions, and are not indicative of costs of future acquisitions.

Litigation settlement :  We may periodically incur charges or benefits related to litigation settlements.  We exclude these charges and benefits when associated with a significant settlement because we do not believe they are reflective of ongoing business and operating results.

Non-cash interest expense and amortization of debt issuance costs :  In accordance with GAAP, we separately account for the value of the conversion feature on our convertible notes as a debt discount that reflects our assumed non-convertible debt borrowing rates. We amortize the discount and debt issuance costs over the term of the related debt. We exclude the difference between the imputed interest expense, which includes the amortization of the conversion feature and of the issuance costs, and the coupon interest payments because we believe that excluding these costs provides meaningful supplemental information regarding the cash cost of our convertible debt and enhance investors’ ability to view the Company’s results from management’s perspective.

Gain on divestitures :  We periodically recognize gains on divestitures, including in fiscal 2018 related to our WSS and PKI solutions. We have excluded these gains for purposes of calculating our non-GAAP results. We believe making these adjustments facilitates a better evaluation of our current operating performance and comparisons to past operating results.

Gain (loss) from equity interest :  We record gains or losses in equity method investments representing net income or loss attributable to our noncontrolling interest in companies over which we have limited control and visibility.  We exclude such gains and losses in full because we lack control over the operations of the investee and the related gains and losses are not indicative of our ongoing core results.

Income tax effects and adjustments :  Prior to the third quarter of fiscal 2018, we used a projected long-term non-GAAP tax rate that reflected the elimination of the effects of the non-GAAP adjustments to our operating results described above and significant discrete items, as well as certain unique GAAP reporting requirements under discontinued operations as a result of the sale of our information management business (Veritas) in order to provide better consistency across the interim financial reporting periods. Starting with the third quarter of fiscal 2018, as a result of U.S. tax reform, we use a non-GAAP tax rate that excludes (1) the discrete impacts of changes in tax legislation, (2) most other significant discrete items, (3) certain unique GAAP reporting requirements under discontinued operations and (4) the income tax effects of the non-GAAP adjustment to our operating results described above. We believe making these adjustments facilitates a better evaluation of our current operating performance and comparisons to past operating results. Our tax rate is subject to change for a variety of reasons, such as significant changes in the geographic earnings mix due to acquisition and divestiture activities or fundamental tax law changes in major jurisdictions where we operate.

Discontinued operations :  In August 2015, we entered into a definitive agreement to sell the assets of Veritas to Carlyle. The transaction closed on January 29, 2016. The results of Veritas are presented as discontinued operations in our Consolidated Statements of Operations and thus have been excluded from non-GAAP net income and segment results for all reported periods.


Diluted GAAP and non-GAAP weighted-average shares outstanding :  Diluted GAAP and non-GAAP weighted-average shares outstanding are the same, except in periods that there is a GAAP loss from continuing operations. In accordance with GAAP, we do not present dilution for GAAP in periods in which there is a loss from continuing operations. However, if there is non-GAAP net income, we present dilution for non-GAAP weighted-average shares outstanding in an amount equal to the dilution that would have been presented had there been GAAP income from continuing operations for the period.

Reported billings (previously referred to as implied billings) :  We define reported billings as total revenue plus the change in adjusted contract liabilities. The change in contract liabilities excludes contract liabilities acquired or divested during the period as well as the change in contract liabilities related to discontinued operations that does not amortize to revenue from continuing operations. We consider reported billings to be a useful metric for management and investors because it facilitates an analysis of changes in contract liabilities balances that are an indicator of the health and visibility of our business. There are several limitations related to the use of reported billings versus revenue calculated in accordance with GAAP. First, reported billings include amounts that have not yet been recognized as revenue. Second, our calculation of reported billings may be different from other companies in our industry, some of which may not use reported billings, may calculate reported billings differently, may have different reported billing frequencies, or may use other financial measures to evaluate their performance, all of which could reduce the usefulness of reported billings as a comparative measure. We compensate for these limitations by providing specific information regarding GAAP revenue and evaluating reported billings together with revenue calculated in accordance with GAAP.



Exhibit 99.02

FINAL SYMC Release (RH Interim)


Symantec Announces Leadership Changes

Board Member Rick Hill Appointed Interim President and CEO; Greg Clark Steps Down

Seasoned Finance Executive Vincent Pilette Appointed EVP and CFO

MOUNTAIN VIEW, Calif., May 9, 2019 – Symantec Corporation (NASDAQ: SYMC) (the “Company”) today announced the following leadership changes:

•
Richard S. Hill, current Symantec director and former Chairman and CEO of Novellus Systems, has been appointed Interim President and Chief Executive Officer, effective immediately. Mr. Hill succeeds Greg Clark, who has stepped down as President and CEO and as a member of the Symantec Board, also effective immediately. The Company will commence a search process to find a permanent CEO.
•
Vincent Pilette, CFO of Logitech and former VP of Finance for Hewlett Packard Enterprise’s server, storage and networking business, has been appointed Executive Vice President and Chief Financial Officer of Symantec. He is anticipated to join the Company on May 21, 2019. Mr. Pilette’s appointment follows a comprehensive search process initiated in connection with Nicholas Noviello’s departure as EVP and CFO as announced on January 31, 2019.

Daniel H. Schulman, Chairman of the Symantec Board of Directors, said, “Symantec has a significant opportunity to further enhance shareholder value by continuing to build on the leadership and momentum of both our Enterprise and Consumer Cyber Safety segments. As we enter into a new financial year, Greg and the Board agreed that now is the right time to transition leadership, and we are confident in Rick’s ability to drive the Company forward while we work to identify a permanent CEO.”

Mr. Schulman continued, “Rick is a highly-regarded technology executive with a track record in enterprise computing solutions, and decades of experience leading public companies in the semiconductor and systems industries. His years of relevant leadership experience coupled with his familiarity with our organization make him a natural fit for the Interim CEO role and will allow him to seamlessly take on the responsibilities.”

Mr. Hill, who has served as a Director since January 2019 and who has been named Interim President and CEO of Symantec, said, “I’d like to thank Greg Clark and the full team at Symantec, who have done an outstanding job of building a strategy and solutions that defend enterprises and consumers from the ever increasing cyber threat landscape. Symantec is the only company in the world with a platform built on extensive cyber telemetry and advanced cyber analytics to dynamically defend and inoculate its customers against sophisticated cyber attacks. I look forward to working closely with the Board and management team in executing on the market opportunity within cyber security and am proud to lead Symantec during this interim time while we transition to permanent leadership in the Company.”

Mr. Schulman added, “The Board extends its deep appreciation to Greg for his leadership and contributions to our Company since becoming CEO. He has led Symantec through a time of great transformation, including the combination with Blue Coat and the acquisition of LifeLock, which redefined the cybersecurity landscape. We wish him all the best in his future endeavors.”

Mr. Clark, who has served as CEO since Symantec’s acquisition of Blue Coat in 2016, said, “It has been a privilege to lead this great organization and I am proud of all that the team has accomplished in nearly three years. Together, we’ve built a large installed base of customers and brought to market some of the world’s most powerful cyber defense solutions. As Symantec enters its next phase of growth and value creation, it is the right time for the Board to identify the next generation of leadership. With Rick as Interim President and CEO and a world class team in place, I have no doubt this will be a seamless transition for our customers, partners, employees and shareholders.”


Mr. Pilette, who currently serves as CFO of Logitech and has been appointed Symantec’s new EVP and CFO, said, “I join Symantec with a deep background in operations and as an investor in the Company. Symantec is known for its R&D strengths, its iconic brands, and the breadth of its portfolio, and I am eager to work with the management team to drive growth across our Enterprise and Consumer segments and deliver value to our customers, partners and shareholders. Having met Rick three years ago, I continue to be impressed by his focus on operational excellence and strong record of execution. I am very pleased to be joining him and the entire team as we work to enhance our financial and operational discipline, and improve our results and margins.”

Mr. Hill continued, “Having participated in the CFO search process in my capacity as a Board member, I am delighted to welcome Vincent to Symantec. In addition to his financial and operational acumen, he brings a proven track record of driving results throughout his decades-long career as a financial executive in the technology industry, across our Enterprise and Consumer segments. I look forward to working with Vincent and know he will be an excellent partner to me and the management team both during this interim period and for the long term.”

Mr. Hill added, “ During the CEO search process and beyond, we will benefit from our deep bench of leaders, including Art Gilliland and Samir Kapuria, to help maintain continuity and leadership across our Enterprise and Consumer organizations. As Symantec continues to execute our strategy for these pivotal business segments, I can think of no two better leaders than Art and Samir to continue driving results and ensuring we achieve the goal of making our cyber world a safer place.”

Following the changes announced today, the size of Symantec’s Board has decreased from 13 to 12 members, 11 of whom are independent.

Fourth Quarter and Full Year 2019 Financial Results

As announced in a separate press release issued today, Symantec disclosed financial results for its fiscal fourth quarter and full year fiscal 2019, which ended on March 29, 2019. The Company will host a conference call today, May 9, 2019, at 2:00 p.m. PT to discuss the leadership transition and financial results.

About Richard S. Hill

Mr. Hill has been a member of Symantec’s Board since January 2019. Mr. Hill has served as Chairman of the board of directors of Marvell Technology Group Ltd., a semiconductor company, since May 2016 and as a member of the boards of directors of Arrow Electronics, Inc., an electronic components and enterprise computing solutions company, since 2006, Cabot Microelectronics Corporation, a chemical mechanical planarization supplier, since June 2012, and Xperi, an electronic devices development company, since August 2012 and as its Chairman since March 2013. Previously, Mr. Hill served on the boards of directors of several technology companies, including Autodesk, Inc. from March 2016 to June 2018, Yahoo! Inc. from April 2016 to June 2017, Planar Systems, Inc. from June 2013 to December 2015 and LSI Corporation from 2007 to May 2014. Mr. Hill also served as CEO of Novellus Systems, Inc. from December 1993 to June 2012 and held the title of Chairman/CEO at Novellus from May 1996 to June 2012. Mr. Hill received a Bachelor of Science degree in Bioengineering from the University of Illinois in Chicago and a Master of Business Administration from Syracuse University.

About Vincent Pilette

Mr. Pilette has substantial expertise as a senior financial executive of technology companies. He brings over 20 years of financial management experience in the U.S. and EMEA, most recently as Chief Financial Officer of Logitech International S.A., from September 2013 to May 2019. During his tenure at Logitech, he was responsible for the company’s financial strategies and worldwide finance organization, managing consolidated revenues of almost three billion dollars (U.S.), tax, treasury, accounting, financial planning and analysis, and communication with an international base of shareholders trading Logitech shares on the SIX Swiss Exchange and the Nasdaq Global Market. In addition, Mr. Pilette was a key partner to Logitech’s CEO to shape and direct the implementation of all aspects of the company’s business strategies. Prior to Logitech, Mr. Pilette served as Chief Financial Officer of Electronics for Imaging (EFI), a global technology imaging company, and as Vice President of Finance for Hewlett Packard Enterprise’s multi-billion dollar server, storage and networking business. He holds an M.S. in engineering and business from Université Catholique de Louvain in Belgium and an M.B.A. from Kellogg School of Management at Northwestern University in Chicago.


About Symantec

Symantec Corporation (NASDAQ: SYMC), the world's leading cyber security company, helps organizations, governments and people secure their most important data wherever it lives. Organizations across the world look to Symantec for strategic, integrated solutions to defend against sophisticated attacks across endpoints, cloud and infrastructure. Likewise, a global community of more than 50 million people and families rely on Symantec's Norton and LifeLock product suites to protect their digital lives at home and across their devices. Symantec operates one of the world's largest civilian cyber intelligence networks, allowing it to see and protect against the most advanced threats. For additional information, please visit www.symantec.com or connect with us on Facebook, Twitter, and LinkedIn.

Forward-Looking Statements

This press release contains statements which may be considered forward-looking within the meaning of the U.S. federal securities laws, including statements regarding the Company’s leadership changes and Symantec’s prospects for growth and value creation. These statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from results expressed or implied in this press release. Such risk factors include those related to: retention of existing executive leadership team members; difficulties in improving sales execution and product development during leadership transitions; general business and economic conditions; our ability to integrate acquired businesses and realize the expected benefits of the acquisitions; matters arising out of our completed Audit Committee investigation and the ongoing U.S. Securities and Exchange Commission investigation; fluctuations and volatility in Symantec’s stock price; the ability of Symantec to successfully execute strategic plans; the ability to maintain customer and partner relationships; the ability of Symantec to achieve its cost and operating efficiency goals; the anticipated growth of certain market segments; Symantec’s sales pipeline and business strategy; fluctuations in tax rates and foreign currency exchange rates; the timing and market acceptance of new product releases and upgrades; and the successful development of new products and the degree to which these products gain market acceptance. Actual results may differ materially from those contained in the forward-looking statements in this press release. Symantec assumes no obligation, and does not intend, to update these forward-looking statements as a result of future events or developments. Additional information concerning these and other risk factors is contained in the Risk Factors sections of Symantec’s most recent reports on Form 10-K and Form 10-Q.

Contacts

Symantec Corporation
Lauren Armstrong, 650-448-7352
Media Relations
Lauren_Armstrong@symantec.com

Cynthia Hiponia, 650-527-8020
Investor Relations
Investor_Relations@symantec.com