Symantec 2007 Annual Report Download - page 3

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DEAR STOCKHOLDERS,
Symantec ended Fiscal 2007 on a strong note to close out what proved to be one of the
most challenging fiscal years in our 25-year history. It was a year of transition marked by the
implementation of several major, but necessary, changes in our operations as we continue
to evolve our business. We believe we are now positioned for a more successful 2008.
2007 — A TRANSITION YEAR
One of the most significant changes was implemented on the first day of the new fiscal
year when we integrated our enterprise sales teams. We aligned our model with a more
typical industry approach that provides better account and opportunity coverage, while
leveraging our broad product portfolio.
We also undertook a large scale business process and systems consolidation project,
which integrated our two enterprise resource planning systems into a single enhanced
system allowing us to implement new buying programs, drive operational efficiencies,
and create a platform to improve the ease of transacting business with our customers
and partners. This project was important as it provides the foundation for scaling our
business and lowering our costs over time.
We also took action to better align our operating expenses with our revenue expectations
and implemented several cost-saving initiatives. We have reduced new hiring throughout
most of the company, reduced our employee base by 5 percent, lowered our spending on
contractors, consultants, and travel-related expenses, and we continue our facilities
consolidation activities around the world. We believe these actions will result in annu-
alized cost savings of at least $200 million.
And finally, we fortified our strength at the endpoint with the acquisition of Altiris. We
believe the combination of Symantec and Altiris will enable our customers to better
manage and enforce security policies at the endpoint, identify and protect against
threats, as well as remediate and manage IT assets. We are pleased with how swiftly we
were able to close the transaction and with the progress we have made toward inte-
grating Altiris into Symantec.
FINANCIAL PERFORMANCE
Fiscal 2007 was a tough year financially for Symantec. We achieved record revenue and
earnings per share; however, these results were well below our initial forecast. Our
deferred revenue grew faster than expected and cash flow from operations was strong.
Given the recurring nature of our business model, deferred revenue and cash flow from
operations are important metrics in measuring the overall strength of our business.
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