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Financial Highlights

                                                                                                                                                    NET INCOME*
                                     Symantec and its shareholders experienced a strong
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               R es t of W or ld
fiscal 1998 with successful financial performance and achievements. We have built                                            Ma r . 3 1, 19 9 8                                                                                                                                                                                                                                                                              $ 24,138
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         13%
shareholder value by implementing a long-time vision, bringing solutions to customers                                                                                                                                                                                                                                                                                                                                                                                                                                                                     N o rt h A me rica
                                                                                                                             Dec. 3 1, 19 9 7                                                                                                                                                                                                                                        $ 21,836
that meet their needs and executing our business strategy well.                                                                                                                                                                                                                                                                                                                                                                                                                          Eur ope,
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     Middle Ea s t
                                                                                                                             Sep. 3 0 , 19 9 7                                                                                                                                                                                                                                    $ 20,580
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 22%
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      a nd Afr ica

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              65%
                                                                                                                             Jun. 3 0 , 19 9 7                                                                                                                                                                                                                                 $ 18,535


                                                                                                                             Ma r . 3 1, 19 9 7                                                                                                         $ 8,269


                                                                                                                             Dec. 3 1, 19 9 6                                                                                                                                                                       $ 13,852
                                 NET INCOME PER SHARE – DILUTED

                                                                                                                                                    (in thousands)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 REVENUE BY REGION
            M a r. 3 1, 1 998                                               $ 0. 40                                                                * Quarterly operating results for the period ended March 31, 1997 includes                                                                                                                                                                                                                                                                                    (for March 1998 Quarter)
                                                                                                                                                    r e v e n u e a n d c h a r g e s r e la t e d t o t h e sa le of S y ma n t e c ’s n e t wor k in g b u sin e ss
                                                                                                                                                    u n it (se e N ot e 1 2 of N ot e s t o C on solid a t e d F in a n c ia l S t a t e me n t s).
            Dec . 3 1, 1 997                                            $ 0. 37


            Sep. 3 0, 1 997                                          $ 0. 35


             J un . 3 0, 1 997                                    $ 0. 32


            M a r. 3 1, 1 997                     $ 0. 15

                                                                                                                                                    CLOSING STOCK PRICES
            Dec . 3 1, 1 996                            $ 0. 25




                                                                                                                                                                    ........................................................




                                                                                                                                                                                                                                    ....................................




                                                                                                                                                                                                                                                                            ................




                                                                                                                                                                                                                                                                                                                              ..............................................




                                                                                                                                                                                                                                                                                                                                                                                      ....................................




                                                                                                                                                                                                                                                                                                                                                                                                                                   ................
                                                                                                                                   Ma r . 19 9 8                                                                                                                                                                                                                                                                                                                           $ 29.00
                                                                                                                                                                                                                                                                                                                    $ 20.88
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           I nter net T ools ,
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     R oya lties a nd Other
                                                                                                                                   Dec. 19 9 7                                                                                                                             $ 19.19                                                                                                                                                $ 27.00                                                                                  10%




                                                                                                                                                                                                                                                                            ........




                                                                                                                                                                                                                                                                                                                                                                                                                                   ........
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              Se curit y and
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              A ssist ance
                                                                                                                                   S e p. 19 9 7                                                                                                                           $ 19.44                                                                                                                                             $ 25.50




                                                                                                                                                                                                                                                                            .....................................




                                                                                                                                                                                                                                                                                                                                                                                                                                   .....................................
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  50%
                                                                                                                                   J u n. 19 9 7                                                                               $ 12.50                                                                                                                                            $ 20.38
                                 NET REVENUES




                                                                                                                                                                                                                                    ........




                                                                                                                                                                                                                                                                                                                                                                                      ...........................
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   40%

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           R emote
                                                                                                                                   Ma r . 19 9 7                                                                               $ 12.63                                                                                                                         $ 18.38




                                                                                                                                                                                                                                    .................




                                                                                                                                                                                                                                                                                                                              ........
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     Pr oductivity
             M a r. 3 1, 1 998                                                                        $ 156, 092
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         Solutions
                                                                                                                                   Dec. 19 9 6                                               $ 9.88                                                                                                                      $ 16.38


                                                                                                                                                                    .......




                                                                                                                                                                                                                                                                                                                              .......
             Dec . 3 1, 1 997                                                                      $ 148, 240


                                                                                                                                                   $0                                    $5                                                  $10                                       $15                                                     $20                                             $25                                             $30
            Sep. 3 0 , 1 997                                                                $ 139, 013

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         REVENUE BY BUSINESS UNIT
            J un . 3 0 , 1 997                                                            $ 135, 016
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   ( f o r F i s c a l Ye a r 1 9 9 8 )
                                                                                                                                                    (prices by Quarter)


            M a r. 3 1, 1 997                                                           $ 129, 706


             Dec . 3 1, 1 996                                                         $ 124, 081



                                 (in thousands)


                                                                                                                   = Fiscal 1998

                                                                                                                   = Fiscal 1997
™




                                                                                                                                                                                                                                   1998 Annual Report
                Corporate Profile                                                                             Symantec Corporation helps make users
                                                                                                              productive and keep their computers safe
                                                                                                              and reliable, anywhere and anytime. As the
                                                                                                              world leader in utility software for business
                                                                                                              and personal computing, Symantec is acclaimed
                                                                                                              for both its customer satisfaction and product
                                                                                                              brand recognition. The Company offers a
                                                                                                              broad range of solutions focused on addressing
                                                                                                              customer needs in three main areas: the
                                                                                                              Norton product line of anti-virus and PC-
                                                                                                              assistance products; products that cater to
                                                                                                              remote user productivity; and the Visual Café
                                                                                                              product lines in Internet development tools.


                                                                                                                                                                                                    The desktop.
                                                                                                              Founded in 1982, Symantec Corporation
                                                                                                              employs more than 2,300 people worldwide,
                                                                                                                                                                                                              A one-to-one customer relationship
                                                                                                              with headquarters in Cupertino, California.
                                                                                                                                                                                                                                    we build everyday.
                                                                                                              The stock is traded on NASDAQ under the
                                                                                                              symbol SYMC. Information on the Company
                                                                                                              and its products can be obtained by calling
                                                                                                              (800) 441-7234 toll free or (541) 334-6054,
                                                                                                              or accessed on the World Wide Web at
                                                                                                              www.symantec.com.




                                                                                                                                                                                         Table of Contents                         Letter to Shareholders   2
                                                                                                                                                                                                                                   Product Portfolio        9
                                                                                                                                                                                                                                   Financial Reports        11
                                                                                                                                                                                                                                   Corporate Directory      59




                                                                                                              The following letter and report contain forward-looking statements
that are subject to significant risks and uncertainties. Several important factors could cause actual results to differ materially from historical results and percentages and results
anticipated by the forward-looking statements contained in this report. Readers should pay particular attention to the risk factors described in the section entitled “Management’s
Discussion and Analysis of Financial Condition and Results of Operations.” Readers should carefully review the risk factors described in the other documents the Company
files from time to time with the Securities and Exchange Commission, including the Annual Report on Form 10-K as filed by Symantec Corporation June 5, 1998.
Letter to Shareholders




                              1




                         11
Symantec Corporation
                                                                                   10201 Torre Avenue
                                                                                   Cupertino, CA 95014
                                                                                   Gordon E. Eubanks, Jr.
                                                                                   President and Chief Executive Officer




To our shareholders,

I’m pleased to report to you that fiscal 1998 was the most successful year in Symantec’s
history, with record revenue and profit achieved in each quarter. Through the hard work of
our dedicated employees and partners, we met and surpassed the goals we set for ourselves,
and consolidated our position as the world leader in providing utility software for business
and personal computing.

We closed fiscal 1998 with our sixth consecutive quarter of record revenue. Revenues in
fiscal 1998 grew 22% over revenues in fiscal 1997. We increased gross margins to 85% while
reducing operating expenses from 75% to 68% as a percentage of revenue. This resulted in
an improvement in profit-before-tax from 7% to 19%. Our international regions contributed
strongly to our growth. And by the end of fiscal 1998, the contribution from international
revenue grew to 35% up from 27% the year before.

This strong financial performance is a testament to the importance we place on serving the
needs of our customers. The Company’s corporate vision statement says it well: “We will
make our customers productive and keep their computers safe and reliable. Anywhere. Anytime.”

During the year, we undertook several major initiatives to strengthen our leadership role.
These included aggressive product and marketing efforts aimed at our retail and corporate
markets; programs that both reinforced and reflected our status as a truly global corporation;
and finally, the implementation of more efficient administrative and management processes
begun over the past several years.

I’d like to share with you some of the highlights of these efforts.

AN ENHANCED MARKET PRESENCE

Symantec’s principal business units—Security and Assistance and Remote Productivity
Solutions—showed strong growth in fiscal 1998.

Security and Assistance
   Led by the continued strength of our Norton AntiVirus and Utilities products, the
   Security and Assistance unit achieved a 28% increase in sales and comprised 50% of
   Company revenues. Two new products, Norton Uninstall Deluxe and Norton CrashGuard
   Deluxe, entered competitive market sectors near the end of calendar year 1997 and took


                                                                                                                       I
market share away from established solutions; both products placed high on PC Data’s
        Top Ten list of best-selling software in early 1998.

        To identify viruses before they become a problem for customers, we opened new
        Symantec AntiVirus Research Centers in the U.S. and Australia. These state-of-the art
        facilities are staffed by teams of highly experienced engineers to detect and repair
        computer viruses.

     Remote Productivity Solutions
        In a market in which a large percent of mobile professionals and telecommuters work
        significantly more hours while on the road than when in the office, Symantec achieved
        a 30% increase in sales in fiscal 1998 and comprised 40% of Company revenues. This
        was due largely to the success of our continuing upgrades to the WinFax PRO and
        pcANYWHERE product lines.

     Internet Tools
        The remaining 10% of the Company’s revenues is comprised of our third business unit;
        Internet Tools. Symantec’s Java development tools achieved increased revenues over fiscal
        1997 with products such as Visual Café for Java, which provides solutions to companies
        doing internal development for distributed applications, and Visual Page for Windows,
        which provides users with a fast and easy way to move important business documents
        and information to the web. Also, in 1997, Visual Café won the prestigious PC Magazine
        Technical Excellence Award. For reporting purposes, this business unit also includes
        royalties and other products nearing the end of their life cycle.

     Symantec is committed to enabling all of our products with web capabilities as part of our
     focus on delivering the features our customers are demanding. Users of ACT! 4.0, for
     example, can launch links to customer sites from within the program. Norton Utilities users
     can download, via our LiveUpdate web service, software drivers that may be missing from
     their systems, or which are more current than those they presently have. As an indication of
     the popularity of this feature, LiveUpdate requests average over 5.4 million per month.

     At the end of the fiscal year, Symantec had a total of five programs in the PC Data Top
     Ten list: Norton Uninstall Deluxe, Norton CrashGuard Deluxe, Norton Utilities 3.0, Norton


II
AntiVirus 4.0, and Norton AntiVirus Deluxe 4.0. Beginning the new year this way put
Symantec in the enviable and unprecedented position of being the first and only software
publisher to have five of the top ten best-selling software packages in a given month. And
because we realize that our customers look to us as they migrate to the new Windows 98
and Windows NT operating systems, all of our products, both existing and new, are Year
2000 compliant.

WORKING TOGETHER                       SUCCESS
                                FOR

As part of our strategy to strengthen the Company’s presence in worldwide corporate markets,
we announced a joint development, cross-licensing, and distribution arrangement with
Entrust Technologies, Inc., the leading provider of Certification Authority (CA) and public-
key encryption technology. This agreement will provide PC users with comprehensive security
solutions—based on award-winning, open technology from both companies—that offer
scalable certificate management and centralized key backup and recovery to the consumer,
workgroup, and enterprise.

The Company’s electronic commerce initiatives also experienced significant activity and
growth in fiscal 1998. The current Symantec storefront has 20 localized products—and
climbing. Our website, which has been redesigned to reflect the growing international
nature of our business, now receives an average of more than 3 million visitors each day.

INTERNAL IMPROVEMENTS

In fiscal 1998, we implemented a new product development process that raises the quality
not only of the solutions we provide, but also of the relationships we cultivate. We start by
allocating both the right people and the appropriate financial resources to the most important
step in the development cycle: understanding our customers.

Far more than just a traditional needs analysis, this process incorporates a significant amount
of input from customers at every stage along the way; specifically, what they do, how they do
it, and why they do it in that particular manner. And we don’t stop at mere market acceptance.
We continue with feedback and customer satisfaction surveys to bring the process full circle,
to always ensure that a customer’s experience matches or exceeds original expectations.


                                                                                                  III
On the operational side, in fiscal 1998 we continued our efforts to build excellence within
     our company by initiating programs that encouraged people to work together for common,
     customer-oriented results. One example of this was our company-wide management
     training programs, which we are pleased to say have had a significant impact in helping our
     managers build effective teams that communicate well across various disciplines. Such
     cross-functional teams have then subsequently been charged with reporting on corporate
     concerns—whether improving customer service or maintaining company values—in a
     timely and objective format.

     A C O M PA N Y                 MOVE
                       ON THE

     In May 1998, we announced an alliance with IBM to deliver a single family of anti-virus
     products that will be marketed under the Norton AntiVirus brand name. Symantec will
     license IBM’s immune system technology and combine it with our own technology to produce
     powerful new products and solutions. Also, IBM will recommend Norton AntiVirus to its
     corporate customers worldwide as the anti-virus solution of choice. We are extremely excited
     about the opportunities that will result from this unique technology and marketing partnership.

     We will continue to drive internal efficiencies by leveraging the scope and scale not only of
     our products and services, but of our talented workforce as well.

     As we enter fiscal 1999, we are confident that the trust placed in us by our shareholders will
     continue to be rewarded. And as always, I thank you for your support.




     Gordon E. Eubanks, Jr.
     PRESIDENT         CHIEF EXECUTIVE OFFICER
                 AND




IV
111




1
1v




     v


         1
Symantec Product Portfolio




Remote Productivity Solutions Business Unit


                                           ACT!® for Windows 3.1/95/NT                    ACT!® for Macintosh
ACT!
                                           ACT!® for Windows CE                           ACT!® for Psion
                                           ACT!® for Newton                               ACT!® for PalmPilot


                                           pcANYWHERE ® for Windows 3.1/95/NT/DOS         pcANYWHERE ® Express
pcANYWHERE
                                           pcANYWHERE ® Access Server                     pcANYWHERE ® for Windows CE


                                           Norton Mobile Essentials ™ for Windows 95
Norton Mobile Essentials


                                           Symantec Mobile Update ™ for Windows 95/NT
Symantec Mobile Update


                                           WinFax PRO™ for Windows 95/NT                  WinFax PRO™ for Windows 3.1
WinFax


Security & Assistance Business Unit


                                           Norton AntiVirus ® for Windows                 Norton AntiVirus ® for Email Gateways
Norton AntiVirus
                                                             ®
                                                                                          Norton AntiVirus ® for NetWare
                                           Norton AntiVirus Deluxe for Windows
                                           Norton AntiVirus ® for Firewalls               Norton AntiVirus ® for Lotus Notes
                                           Norton AntiVirus ® for Windows NT Server       Norton AntiVirus ® for Macintosh


                                           Norton CrashGuard ™ Deluxe for Windows 95/NT
Norton CrashGuard


                                           Norton Your Eyes Only ® for Windows 95/NT      Norton Your Eyes Only ® Administrator
Norton Your Eyes Only


                                           Norton Utilities ® for Windows 3.1/95/NT/DOS   Norton Utilities ® for Windows 3.1/DOS
Norton Utilities
                                           Norton Utilities ® for Windows NT              Norton Utilities ® for Macintosh


                                           Norton Uninstall ™ Deluxe for Windows 95
Norton Uninstall


Norton Web Services™


I n t e r n e t To o l s B u s i n e s s U n i t


                                           Symantec Visual Café ™ for Java—Web            Symantec Visual Café ™ for Java—Database
Visual Café
                                              Development Edition for Windows 95/NT         Development Edition for Windows 95/NT
                                                                 ™
                                           Symantec Visual Café for Java—Professional
                                                                                          Symantec Visual Café ™ for Macintosh
                                              Development Edition for Windows 95/NT


                                           Symantec Visual Page ™ for Macintosh           Symantec Visual Page ™ for Windows 95/NT
Visual Page
Financial Contents


                                                                                FORWARD-LOOKING STATEMENTS
                                                                                                                                                                              the periods ended April 3, 1998, March 28,
                                                                                The following discussion contains forward-looking statements that are subject to risks
                                                                                                                                                                              1997and March 29, 1996, respectively.
                                                                                and uncertainties. There are several important factors that could cause actual results
                                                                                                                                                                              The fiscal accounting year ended April 3,
                                                                                to differ materially from those anticipated by the forward-looking statements con-
                                                                                                                                                                              1998 comprised 53 weeks of operations.
                                                                                tained in the following discussion. Readers should pay particular attention to the risk
                                                                                factors set forth in this section and in the section of this report entitled “Management’s
                                                                                Discussion and Analysis of Financial Condition and Results of Operations.”                    PRODUCTS AND SERVICES
                                                                                Nothing in this report shall impose upon Symantec or any person a duty to update
Part One     Item 1: Business                                              11                                                                                                 Symantec’s products, comprising utility
                                                                                any forward-looking statement.                                                                software for business and personal com-
             Item 2: Properties                                            18      This document contains reference to trademarks and trade names of other companies.         puting, are currently organized into the
                                                                                                                                                                              following three business units: Security and
             Item 3: Legal Proceedings                                     18
                                                                                                                                                                              Assistance; Remote Productivity Solutions;
                                                                                                                              Fifth Generation Systems, Inc. (“Fifth
                                                                                GENERAL

             Item 4: Submission of Matters to a Vote of Security Holders   18   Symantec Corporation (“Symantec” or the                                                       and Internet Tools, Royalties and Other.
                                                                                                                              Generation”) on October 4, 1993; and
                                                                                “Company”) is a world leader in utility                                                       The following table summarizes Symantec’s
                                                                                                                              Contact Software International, Inc.
                                                                                software for business and personal com-                                                       principal products by business unit:
                                                                                                                              (“Contact”) on June 2, 1993. The Company
                                                                                puting. Symantec’s business strategy is to    acquired Peter Norton Computing, Inc.
Part Two     Item 5: Market for Registrant’s Common Equity                 19
                                                                                satisfy customer needs by developing and      (“Norton”) on August 31, 1990 and con-          PRINCIPAL PRODUCTS
                      and Related Stockholder Matters                           marketing products across multiple            tinues to use the Norton brand name for            Security and Assistance
                                                                                operating platforms (currently those of       products subsequently developed and                Norton AntiVirus®
             Item 6: Selected Financial Data                               20   Microsoft Corporation and Apple               marketed by Symantec.                              Norton AntiVirus® for Macintosh
                                                                                Computer, Inc.) that make customers               All of these acquisitions were account-        Norton CrashGuard™ Deluxe
             Item 7: Management’s Discussion and Analysis of Financial     21
                                                                                productive and keep their computers safe      ed for as poolings of interests. Accordingly,      Norton Uninstall™ Deluxe
                      Condition and Results of Operations                       and reliable – anywhere, anytime.             all financial information has been restated        Norton Utilities®
                                                                                   The Company’s predecessor, C&E             to reflect the combined operations of              Norton Web Services™
             Item 8: Financial Statements and Supplementary Data           31   Software, Inc., a California corporation,     these companies and Symantec, with the             Norton Your Eyes Only®
                                                                                and that predecessor’s operating subsi-       exception of Fast Track, Intec and SLR,
             Item 9: Changes in and Disagreements with Accountants         31                                                                                                    Remote Productivity Solutions
                                                                                diary, Symantec Corporation, a California     each of which had results of operations
                                                                                                                                                                                 ACT!®
                      on Accounting and Financial Disclosure                    corporation, were formed in September         that were not material to Symantec’s
                                                                                                                                                                                 pcANYWHERE®
                                                                                1983 and March 1982, respectively. The        consolidated financial statements.
                                                                                                                                                                                 WinFax PRO™
                                                                                Company was incorporated in Delaware in           During fiscal 1997, in a move to focus
                                                                                April 1988 in connection with the Septem-     the Company’s product offerings on spe-            I n t e r n e t To o l s , R o y a l t i e s
Part Three   Item 10: Directors and Executive Officers of the Registrant   32
                                                                                ber 1988 reincorporation of the Company’s     cific customer needs, Symantec sold its            and Other
             Item 11: Executive Compensation                               33   predecessor and its operating subsidiary      FormFlow product line, acquired as part            Symantec Visual Café™
                                                                                into a single Delaware corporation.           of the Delrina acquisition, to JetForm                 (Database Development Edition)
             Item 12: Security Ownership of Certain Beneficial Owners      33      Since Symantec’s initial public offer-     Corporation (“JetForm”) and sold the               Symantec Visual Café™
                                                                                ing on June 23, 1989, the Company has         assets and technology of its networking                (Professional Development Edition)
                      and Management
                                                                                completed acquisitions of 15 companies.       business unit to the Hewlett-Packard               Symantec Visual Café™
             Item 13: Certain Relationships and Related Transactions       33   Companies acquired during the past five       Company (“Hewlett-Packard”). See fur-                  (Web Development Edition)
                                                                                years include: Fast Track, Inc. (“Fast        ther discussion in Item 7: Management’s
                                                                                Track”) on May 28, 1996; Delrina Corpo-                                                       Most of Symantec’s products that are
                                                                                                                              Discussion and Analysis of Financial
                                                                                ration (“Delrina”) on November 22, 1995;                                                      currently being developed and marketed
                                                                                                                              Condition and Results of Operations.
Part Four    Item 14: Exhibits, Financial Statement Schedules and          34
                                                                                Intec Systems Corporation (“Intec”) on                                                                          ™
                                                                                                                                                                              feature LiveUpdate, which enables the
                                                                                                                              Symantec has a 52/53-week fiscal account-
                      Reports on Form 8-K                                       August 31, 1994; Central Point Software,                                                      user, free of cost, to download application
                                                                                                                              ing year. Accordingly, all references as of
                                                                                Inc. (“Central Point”) on June 1, 1994;                                                       bug-fix patches via an Internet connection
                                                                                                                              and for the periods ended March 31, 1998,
             Signatures                                                    56   SLR Systems, Inc. (“SLR”) on May 31, 1994;                                                    to Symantec’s corporate website.
                                                                                                                              1997 and 1996 reflect amounts as of and for




                                                                                                                                                                                                                                11
                                                                                                                                                                                             S                C
                                                                                                                                                                                                 YMANTEC          ORPORATION
Security and Assistance                                                                                                                                                                                                                                        SALES AND MARKETING,
                                                       Norton Uninstall Deluxe is designed to          files, enable users to share files without     The software enables the user to run                           The program also builds Java applications
     The Security and Assistance business unit                                                         compromising security, lock access to a
                                                       add and remove programs and files from a                                                       Windows, Windows 95, Windows NT,                               and connects to multiple databases with-       INTERNATIONAL SALES AND
     is dedicated to being indispensable in                                                            personal computer when the personal
                                                       user’s hard drive. InstallGuard, a feature of                                                  Windows CE or MS-DOS applications                              out writing source code. The Database          CUSTOMER SUPPORT
     customers’ daily use of computers by                                                              computer is idle and prevent booting by
                                                       Norton Uninstall Deluxe, provides a one-                                                       remotely, transfer files and perform other                     Development Edition includes 100+              Symantec markets its products world-
     increasing productivity and keeping                                                               unauthorized users. The program runs
                                                       button “undo” of program installations,                                                        data operations.                                               JavaBeans (series of pre-written source        wide, utilizing a multi-channel strategy
     computers safe and reliable. Net revenues                                                                                                        WinFax PRO is designed to enable users
                                                                                                       on the Windows 95 and Windows NT
                                                       restoring a computer’s Windows registry                                                                                                                       code) and 20 database templates, and           of direct and indirect sales through inde-
     from this business unit comprised approxi-                                                        operating systems.
                                                       and hard drive to its original condition                                                       to send, receive and manage faxes. WinFax                      connects to over 30 commercially available     pendent software distributors, major
     mately 50% of total net revenues for the          prior to the installation. The program’s                                                       PRO provides background faxing, which                          databases via industry standard protocols      retail chains and resellers.
     fiscal years ended March 31, 1998 and             system cleanup tools ensure that registry,                                                     allows users to continue working on other                      (“JDBC” or “ODBC”).
                                                                                                       Remote Productivity Solutions
     1997 and 45% of total net revenues for                                                                                                                                                                          Symantec Visual Café (Professional
                                                       files, icons and other system options are                                                      applications while sending or receiving a
                                                                                                       The Remote Productivity Solutions                                                                                                                            Sales and Marketing
     the fiscal year ended March 31, 1996.                                                                                                                                                                           Development Edition) is designed to
                                                       set for optimum performance. Norton                                                            fax via the Internet or a fax machine.
                                                                                                       business unit focuses on helping remote                                                                                                                      Symantec sells its products to both indi-
     Norton AntiVirus and Norton                       Uninstall Deluxe runs on the Windows                                                           WinFax PRO also provides enhanced file                         provide a Java Integrated Development
                                                                                                       professionals remain productive –                                                                                                                            viduals and corporate users primarily
     AntiVirus for Macintosh run in a com-             95 and Windows NT operating systems.                                                           compression, increasing the speed at                           Environment solution for creating Java
                                                                                                       anywhere, anytime. This business unit                                                                                                                        through distributors and resellers.
     puter’s background and are designed to            Norton Utilities is a set of “tools” designed                                                  which faxes are transmitted. Other fea-                        applications and JavaBeans with features
                                                                                                       focuses on customer needs to access infor-                                                                                                                   Symantec products are made available to
     protect against, detect and eliminate com-        to address system-level operations. In                                                         tures include a paging function, which                         geared toward professional Java developers.
                                                                                                       mation, applications and data from any                                                                                                                       customers through channels that include:
     puter viruses. The software covers multiple       addition, Norton Utilities finds and                                                           enables the computer to page a user                            Advanced power tools include native
                                                                                                       location. Net revenues from this business                                                                                                                    distributors, retail, mail order, corporate
     sources of infection, including the Inter-        repairs problems with Windows 95 appli-                                                        upon receipt of an incoming fax or voice                       compilation, advanced Java Archive tools,
                                                                                                       unit comprised approximately 40% of                                                                                                                          resellers, value added resellers (“VARs”),
     net, floppy disks, email attachments, shared      cations and includes an interface to                                                           message, and a “call identify” function,                       Java Development Kit 1.1.5 support and
                                                                                                       total net revenues for the fiscal year ended                                                                                                                 original equipment manufacturers
     files and networks. The software enables          Norton Web Services, a paid subscription                                                       which allows a user to view an incoming                        Visual Page. In addition, to facilitate
                                                                                                       March 31, 1998 and approximately 35%                                                                                                                         (“OEMs”), partnerships, education, con-
     the user to download, via Symantec’s              service that locates and installs patches,                                                     fax or phone number. WinFax PRO runs                           easier discovery of problems with source
                                                                                                       of total net revenues for the fiscal years                                                                                                                   sulting, etc. Symantec also sells product
     LiveUpdate functionality, new virus defi-         updates and drivers specific to a user’s                                                       on the Windows, Windows 95 and                                 code, the program supports “debugging”
                                                                                                       ended March 31, 1997 and 1996.                                                                                                                               upgrades and certain of its products
     nitions created by the Symantec AntiVirus         installed hardware and software. The pro-                                                      Windows NT operating systems.                                  directly within a Web browser.
                                                                                                       ACT! is designed to combine a customiz-                                                                                                                      through the use of direct mail and over
                                 ™
     Research Center (SARC). The software                                                                                                                                                                            Symantec Visual Café (Web
                                                       gram also offers crash protection, limited      able database, calendar and activity                                                                                                                         the Internet. Symantec maintains distribu-
     runs under the Windows, Windows 95,                                                                                                                                                                             Development Edition) is designed to
                                                       virus detection and repair and several          management, automatic history logging,                                                                                                                       tion relationships with major independent
                                                                                                                                                      I n t e r n e t To o l s , R o y a l t i e s a n d O t h e r
     Windows NT, MS-DOS, Macintosh and                 new optimization utilities to accelerate a                                                                                                                    provide a Rapid Application Java
                                                                                                       customizable reporting and communica-          The Internet Tools, Royalties and Other                                                                       distributors. These distributors stock
     Power Macintosh operating systems. The            computer’s performance. Norton Utilities                                                                                                                      Development and an HTML Web author-
                                                                                                       tions via mail merge, telephone, email and     business unit includes products providing                                                                     Symantec’s products for redistribution to
     Norton AntiVirus product line also includes       runs on the Windows, Windows 95,                                                                                                                              ing solution that provides support for
                                                                                                       fax into a single product. The product pro-    an easy-to-use Java development environ-                                                                      independent dealers, consultants and other
     support for Lotus Notes (Norton                   Windows NT, MS-DOS, Macintosh and                                                                                                                             Java Development Kit 1.1.5 and JavaBeans.
                                                                                                       vides extensive data sharing support for       ment, as well as revenue streams from the                                                                     resellers. Symantec also maintains relation-
     AntiVirus for Notes) and Novell NetWare           Power Macintosh operating systems.                                                                                                                            The program includes a drag-and-drop
                                                                                                       Local Area Network (“LAN”) teams and           sale to third-party computing companies                                                                       ships with major retailers while marketing
     (The Norton AntiVirus NetWare).                   Norton Web Services (“NWS”) is                                                                                                                                interface, professional templates and Java
                                                                                                       remote database synchronization for mobile     of certain of the Company’s software                                                                          to these retailers through independent
     Norton CrashGuard Deluxe runs in a                designed to deliver an online subscription-                                                                                                                   applet and JavaBeans libraries. This
                                                                                                       users and small mobile teams. ACT! runs        product lines and technologies, and                                                                           distributors. (See further discussion in
     computer’s background and is designed to          based service site that downloads Norton                                                                                                                      product did not generate material revenues
                                                                                                       on the Windows, Windows 95, Windows            revenues from products nearing the end                                                                        Item 7: Management’s Discussion and
     detect and fix a range of computer prob-          technology to Windows 95 users via an                                                                                                                         in any fiscal years presented. The Company
                                                                                                       NT, Windows CE, MS-DOS, Macintosh,             of their life cycle. Net revenues from this                                                                   Analysis of Financial Condition and
     lems, including computer crashes and hard         Internet connection. NWS features                                                                                                                             believes this product will generate increas-
                                                                                                       Newton and Psion operating systems.            business unit comprised approximately                                                                         Results of Operations - Retail Distribution
     disk fragmentation. When the program              Symantec’s LiveUpdate Pro, a service that                                                                                                                     ing revenue amounts in future periods,
                                                                                                       pcANYWHERE is designed to offer reli-          10%, 15% and 20% of total net revenues                                                                        Channel; New Distribution Channels.)
     detects a crash, it allows the computer           locates and installs patches, updates and                                                                                                                     but there can be no assurance this prod-
                                                                                                       able, fast and flexible PC-to-PC remote        for the fiscal years ended March 31, 1998,                                                                        The Company’s sales force works
     user to unfreeze the crash and save any           drivers specific to a user’s installed hard-                                                                                                                  uct will be commercially successful. The
                                                                                                       computing via serial or modem connec-          1997 and 1996, respectively.                                                                                  closely with its major distributor and
     open files. The program also optimizes            ware and software. NWS was released by                                                                                                                        Visual Café products run on Windows 95,
                                                                                                                                                      Symantec Visual Café (Database
                                                                                                       tions. pcANYWHERE enables the user                                                                                                                           reseller accounts to manage the flow of
     computer performance and provides basic           Symantec in December 1997. As such, this                                                                                                                      Windows NT and Macintosh operating
                                                                                                                                                      Development Edition) is designed to
                                                                                                       to control one PC remotely from the                                                                                                                          orders, inventory levels and sell-through
     virus detection and elimination. Norton           service did not generate material revenues                                                                                                                    systems. The Java program code devel-
                                                                                                       keyboard of another PC. The offsite            provide a solution for building business-                                                                     to customers, as well as working closely
     CrashGuard Deluxe includes an interface           in any fiscal years presented. The Company                                                                                                                    oped with these products, however, can
                                                                                                       remote PC, laptop or PC terminal con-          critical Java applications with database                                                                      with them to manage promotions and
     to Norton Web Services, a paid subscrip-          believes this service will generate increas-                                                                                                                  be deployed on any platform that sup-
                                                                                                       trols the operation of the distant host        connectivity. The program includes a                                                                          other selling activities. The Company also
     tion service that locates and installs patches,   ing revenue amounts in future periods,                                                                                                                        ports a Java Virtual Machine compliant
                                                                                                       PC. In addition to enabling a remote           forms designer for drag-and-drop Graphical                                                                    sells volume license programs (corporate
     updates and drivers specific to a user’s          but there can be no assurance this product                                                                                                                    with Sun Microsystems’ JDK standards.
                                                                                                       user to run a distant PC, pcANYWHERE           User Interface design and dbAWARE                                                                             site licenses) through its distribution and
     installed hardware and software. The              will be commercially successful.                optionally allows users at the host (dis-      project wizards that walk the user through                                                                    corporate reseller channels. (See further
     program runs on the Windows 95 and                Norton Your Eyes Only is designed to            tant) machine to view the operations           defining a data source, adding compo-                                                                         discussion in Item 7: Management’s
     Windows NT operating systems.                     encrypt and decrypt private computer            being conducted from the remote site.          nents and the interactions between them.                                                                      Discussion and Analysis of Financial



12                                                                                                                                                                                                                                                                                                                 13
          S             C                                                                                                                                                                                                                                                       S             C
              YMANTEC       ORPORATION                                                                                                                                                                                                                                              YMANTEC       ORPORATION
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symc_annual1998

  • 1.
  • 2. Financial Highlights NET INCOME* Symantec and its shareholders experienced a strong R es t of W or ld fiscal 1998 with successful financial performance and achievements. We have built Ma r . 3 1, 19 9 8 $ 24,138 13% shareholder value by implementing a long-time vision, bringing solutions to customers N o rt h A me rica Dec. 3 1, 19 9 7 $ 21,836 that meet their needs and executing our business strategy well. Eur ope, Middle Ea s t Sep. 3 0 , 19 9 7 $ 20,580 22% a nd Afr ica 65% Jun. 3 0 , 19 9 7 $ 18,535 Ma r . 3 1, 19 9 7 $ 8,269 Dec. 3 1, 19 9 6 $ 13,852 NET INCOME PER SHARE – DILUTED (in thousands) REVENUE BY REGION M a r. 3 1, 1 998 $ 0. 40 * Quarterly operating results for the period ended March 31, 1997 includes (for March 1998 Quarter) r e v e n u e a n d c h a r g e s r e la t e d t o t h e sa le of S y ma n t e c ’s n e t wor k in g b u sin e ss u n it (se e N ot e 1 2 of N ot e s t o C on solid a t e d F in a n c ia l S t a t e me n t s). Dec . 3 1, 1 997 $ 0. 37 Sep. 3 0, 1 997 $ 0. 35 J un . 3 0, 1 997 $ 0. 32 M a r. 3 1, 1 997 $ 0. 15 CLOSING STOCK PRICES Dec . 3 1, 1 996 $ 0. 25 ........................................................ .................................... ................ .............................................. .................................... ................ Ma r . 19 9 8 $ 29.00 $ 20.88 I nter net T ools , R oya lties a nd Other Dec. 19 9 7 $ 19.19 $ 27.00 10% ........ ........ Se curit y and A ssist ance S e p. 19 9 7 $ 19.44 $ 25.50 ..................................... ..................................... 50% J u n. 19 9 7 $ 12.50 $ 20.38 NET REVENUES ........ ........................... 40% R emote Ma r . 19 9 7 $ 12.63 $ 18.38 ................. ........ Pr oductivity M a r. 3 1, 1 998 $ 156, 092 Solutions Dec. 19 9 6 $ 9.88 $ 16.38 ....... ....... Dec . 3 1, 1 997 $ 148, 240 $0 $5 $10 $15 $20 $25 $30 Sep. 3 0 , 1 997 $ 139, 013 REVENUE BY BUSINESS UNIT J un . 3 0 , 1 997 $ 135, 016 ( f o r F i s c a l Ye a r 1 9 9 8 ) (prices by Quarter) M a r. 3 1, 1 997 $ 129, 706 Dec . 3 1, 1 996 $ 124, 081 (in thousands) = Fiscal 1998 = Fiscal 1997
  • 3. 1998 Annual Report Corporate Profile Symantec Corporation helps make users productive and keep their computers safe and reliable, anywhere and anytime. As the world leader in utility software for business and personal computing, Symantec is acclaimed for both its customer satisfaction and product brand recognition. The Company offers a broad range of solutions focused on addressing customer needs in three main areas: the Norton product line of anti-virus and PC- assistance products; products that cater to remote user productivity; and the Visual Café product lines in Internet development tools. The desktop. Founded in 1982, Symantec Corporation employs more than 2,300 people worldwide, A one-to-one customer relationship with headquarters in Cupertino, California. we build everyday. The stock is traded on NASDAQ under the symbol SYMC. Information on the Company and its products can be obtained by calling (800) 441-7234 toll free or (541) 334-6054, or accessed on the World Wide Web at www.symantec.com. Table of Contents Letter to Shareholders 2 Product Portfolio 9 Financial Reports 11 Corporate Directory 59 The following letter and report contain forward-looking statements that are subject to significant risks and uncertainties. Several important factors could cause actual results to differ materially from historical results and percentages and results anticipated by the forward-looking statements contained in this report. Readers should pay particular attention to the risk factors described in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Readers should carefully review the risk factors described in the other documents the Company files from time to time with the Securities and Exchange Commission, including the Annual Report on Form 10-K as filed by Symantec Corporation June 5, 1998.
  • 5. Symantec Corporation 10201 Torre Avenue Cupertino, CA 95014 Gordon E. Eubanks, Jr. President and Chief Executive Officer To our shareholders, I’m pleased to report to you that fiscal 1998 was the most successful year in Symantec’s history, with record revenue and profit achieved in each quarter. Through the hard work of our dedicated employees and partners, we met and surpassed the goals we set for ourselves, and consolidated our position as the world leader in providing utility software for business and personal computing. We closed fiscal 1998 with our sixth consecutive quarter of record revenue. Revenues in fiscal 1998 grew 22% over revenues in fiscal 1997. We increased gross margins to 85% while reducing operating expenses from 75% to 68% as a percentage of revenue. This resulted in an improvement in profit-before-tax from 7% to 19%. Our international regions contributed strongly to our growth. And by the end of fiscal 1998, the contribution from international revenue grew to 35% up from 27% the year before. This strong financial performance is a testament to the importance we place on serving the needs of our customers. The Company’s corporate vision statement says it well: “We will make our customers productive and keep their computers safe and reliable. Anywhere. Anytime.” During the year, we undertook several major initiatives to strengthen our leadership role. These included aggressive product and marketing efforts aimed at our retail and corporate markets; programs that both reinforced and reflected our status as a truly global corporation; and finally, the implementation of more efficient administrative and management processes begun over the past several years. I’d like to share with you some of the highlights of these efforts. AN ENHANCED MARKET PRESENCE Symantec’s principal business units—Security and Assistance and Remote Productivity Solutions—showed strong growth in fiscal 1998. Security and Assistance Led by the continued strength of our Norton AntiVirus and Utilities products, the Security and Assistance unit achieved a 28% increase in sales and comprised 50% of Company revenues. Two new products, Norton Uninstall Deluxe and Norton CrashGuard Deluxe, entered competitive market sectors near the end of calendar year 1997 and took I
  • 6. market share away from established solutions; both products placed high on PC Data’s Top Ten list of best-selling software in early 1998. To identify viruses before they become a problem for customers, we opened new Symantec AntiVirus Research Centers in the U.S. and Australia. These state-of-the art facilities are staffed by teams of highly experienced engineers to detect and repair computer viruses. Remote Productivity Solutions In a market in which a large percent of mobile professionals and telecommuters work significantly more hours while on the road than when in the office, Symantec achieved a 30% increase in sales in fiscal 1998 and comprised 40% of Company revenues. This was due largely to the success of our continuing upgrades to the WinFax PRO and pcANYWHERE product lines. Internet Tools The remaining 10% of the Company’s revenues is comprised of our third business unit; Internet Tools. Symantec’s Java development tools achieved increased revenues over fiscal 1997 with products such as Visual Café for Java, which provides solutions to companies doing internal development for distributed applications, and Visual Page for Windows, which provides users with a fast and easy way to move important business documents and information to the web. Also, in 1997, Visual Café won the prestigious PC Magazine Technical Excellence Award. For reporting purposes, this business unit also includes royalties and other products nearing the end of their life cycle. Symantec is committed to enabling all of our products with web capabilities as part of our focus on delivering the features our customers are demanding. Users of ACT! 4.0, for example, can launch links to customer sites from within the program. Norton Utilities users can download, via our LiveUpdate web service, software drivers that may be missing from their systems, or which are more current than those they presently have. As an indication of the popularity of this feature, LiveUpdate requests average over 5.4 million per month. At the end of the fiscal year, Symantec had a total of five programs in the PC Data Top Ten list: Norton Uninstall Deluxe, Norton CrashGuard Deluxe, Norton Utilities 3.0, Norton II
  • 7. AntiVirus 4.0, and Norton AntiVirus Deluxe 4.0. Beginning the new year this way put Symantec in the enviable and unprecedented position of being the first and only software publisher to have five of the top ten best-selling software packages in a given month. And because we realize that our customers look to us as they migrate to the new Windows 98 and Windows NT operating systems, all of our products, both existing and new, are Year 2000 compliant. WORKING TOGETHER SUCCESS FOR As part of our strategy to strengthen the Company’s presence in worldwide corporate markets, we announced a joint development, cross-licensing, and distribution arrangement with Entrust Technologies, Inc., the leading provider of Certification Authority (CA) and public- key encryption technology. This agreement will provide PC users with comprehensive security solutions—based on award-winning, open technology from both companies—that offer scalable certificate management and centralized key backup and recovery to the consumer, workgroup, and enterprise. The Company’s electronic commerce initiatives also experienced significant activity and growth in fiscal 1998. The current Symantec storefront has 20 localized products—and climbing. Our website, which has been redesigned to reflect the growing international nature of our business, now receives an average of more than 3 million visitors each day. INTERNAL IMPROVEMENTS In fiscal 1998, we implemented a new product development process that raises the quality not only of the solutions we provide, but also of the relationships we cultivate. We start by allocating both the right people and the appropriate financial resources to the most important step in the development cycle: understanding our customers. Far more than just a traditional needs analysis, this process incorporates a significant amount of input from customers at every stage along the way; specifically, what they do, how they do it, and why they do it in that particular manner. And we don’t stop at mere market acceptance. We continue with feedback and customer satisfaction surveys to bring the process full circle, to always ensure that a customer’s experience matches or exceeds original expectations. III
  • 8. On the operational side, in fiscal 1998 we continued our efforts to build excellence within our company by initiating programs that encouraged people to work together for common, customer-oriented results. One example of this was our company-wide management training programs, which we are pleased to say have had a significant impact in helping our managers build effective teams that communicate well across various disciplines. Such cross-functional teams have then subsequently been charged with reporting on corporate concerns—whether improving customer service or maintaining company values—in a timely and objective format. A C O M PA N Y MOVE ON THE In May 1998, we announced an alliance with IBM to deliver a single family of anti-virus products that will be marketed under the Norton AntiVirus brand name. Symantec will license IBM’s immune system technology and combine it with our own technology to produce powerful new products and solutions. Also, IBM will recommend Norton AntiVirus to its corporate customers worldwide as the anti-virus solution of choice. We are extremely excited about the opportunities that will result from this unique technology and marketing partnership. We will continue to drive internal efficiencies by leveraging the scope and scale not only of our products and services, but of our talented workforce as well. As we enter fiscal 1999, we are confident that the trust placed in us by our shareholders will continue to be rewarded. And as always, I thank you for your support. Gordon E. Eubanks, Jr. PRESIDENT CHIEF EXECUTIVE OFFICER AND IV
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  • 11. Symantec Product Portfolio Remote Productivity Solutions Business Unit ACT!® for Windows 3.1/95/NT ACT!® for Macintosh ACT! ACT!® for Windows CE ACT!® for Psion ACT!® for Newton ACT!® for PalmPilot pcANYWHERE ® for Windows 3.1/95/NT/DOS pcANYWHERE ® Express pcANYWHERE pcANYWHERE ® Access Server pcANYWHERE ® for Windows CE Norton Mobile Essentials ™ for Windows 95 Norton Mobile Essentials Symantec Mobile Update ™ for Windows 95/NT Symantec Mobile Update WinFax PRO™ for Windows 95/NT WinFax PRO™ for Windows 3.1 WinFax Security & Assistance Business Unit Norton AntiVirus ® for Windows Norton AntiVirus ® for Email Gateways Norton AntiVirus ® Norton AntiVirus ® for NetWare Norton AntiVirus Deluxe for Windows Norton AntiVirus ® for Firewalls Norton AntiVirus ® for Lotus Notes Norton AntiVirus ® for Windows NT Server Norton AntiVirus ® for Macintosh Norton CrashGuard ™ Deluxe for Windows 95/NT Norton CrashGuard Norton Your Eyes Only ® for Windows 95/NT Norton Your Eyes Only ® Administrator Norton Your Eyes Only Norton Utilities ® for Windows 3.1/95/NT/DOS Norton Utilities ® for Windows 3.1/DOS Norton Utilities Norton Utilities ® for Windows NT Norton Utilities ® for Macintosh Norton Uninstall ™ Deluxe for Windows 95 Norton Uninstall Norton Web Services™ I n t e r n e t To o l s B u s i n e s s U n i t Symantec Visual Café ™ for Java—Web Symantec Visual Café ™ for Java—Database Visual Café Development Edition for Windows 95/NT Development Edition for Windows 95/NT ™ Symantec Visual Café for Java—Professional Symantec Visual Café ™ for Macintosh Development Edition for Windows 95/NT Symantec Visual Page ™ for Macintosh Symantec Visual Page ™ for Windows 95/NT Visual Page
  • 12. Financial Contents FORWARD-LOOKING STATEMENTS the periods ended April 3, 1998, March 28, The following discussion contains forward-looking statements that are subject to risks 1997and March 29, 1996, respectively. and uncertainties. There are several important factors that could cause actual results The fiscal accounting year ended April 3, to differ materially from those anticipated by the forward-looking statements con- 1998 comprised 53 weeks of operations. tained in the following discussion. Readers should pay particular attention to the risk factors set forth in this section and in the section of this report entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” PRODUCTS AND SERVICES Nothing in this report shall impose upon Symantec or any person a duty to update Part One Item 1: Business 11 Symantec’s products, comprising utility any forward-looking statement. software for business and personal com- Item 2: Properties 18 This document contains reference to trademarks and trade names of other companies. puting, are currently organized into the following three business units: Security and Item 3: Legal Proceedings 18 Assistance; Remote Productivity Solutions; Fifth Generation Systems, Inc. (“Fifth GENERAL Item 4: Submission of Matters to a Vote of Security Holders 18 Symantec Corporation (“Symantec” or the and Internet Tools, Royalties and Other. Generation”) on October 4, 1993; and “Company”) is a world leader in utility The following table summarizes Symantec’s Contact Software International, Inc. software for business and personal com- principal products by business unit: (“Contact”) on June 2, 1993. The Company puting. Symantec’s business strategy is to acquired Peter Norton Computing, Inc. Part Two Item 5: Market for Registrant’s Common Equity 19 satisfy customer needs by developing and (“Norton”) on August 31, 1990 and con- PRINCIPAL PRODUCTS and Related Stockholder Matters marketing products across multiple tinues to use the Norton brand name for Security and Assistance operating platforms (currently those of products subsequently developed and Norton AntiVirus® Item 6: Selected Financial Data 20 Microsoft Corporation and Apple marketed by Symantec. Norton AntiVirus® for Macintosh Computer, Inc.) that make customers All of these acquisitions were account- Norton CrashGuard™ Deluxe Item 7: Management’s Discussion and Analysis of Financial 21 productive and keep their computers safe ed for as poolings of interests. Accordingly, Norton Uninstall™ Deluxe Condition and Results of Operations and reliable – anywhere, anytime. all financial information has been restated Norton Utilities® The Company’s predecessor, C&E to reflect the combined operations of Norton Web Services™ Item 8: Financial Statements and Supplementary Data 31 Software, Inc., a California corporation, these companies and Symantec, with the Norton Your Eyes Only® and that predecessor’s operating subsi- exception of Fast Track, Intec and SLR, Item 9: Changes in and Disagreements with Accountants 31 Remote Productivity Solutions diary, Symantec Corporation, a California each of which had results of operations ACT!® on Accounting and Financial Disclosure corporation, were formed in September that were not material to Symantec’s pcANYWHERE® 1983 and March 1982, respectively. The consolidated financial statements. WinFax PRO™ Company was incorporated in Delaware in During fiscal 1997, in a move to focus April 1988 in connection with the Septem- the Company’s product offerings on spe- I n t e r n e t To o l s , R o y a l t i e s Part Three Item 10: Directors and Executive Officers of the Registrant 32 ber 1988 reincorporation of the Company’s cific customer needs, Symantec sold its and Other Item 11: Executive Compensation 33 predecessor and its operating subsidiary FormFlow product line, acquired as part Symantec Visual Café™ into a single Delaware corporation. of the Delrina acquisition, to JetForm (Database Development Edition) Item 12: Security Ownership of Certain Beneficial Owners 33 Since Symantec’s initial public offer- Corporation (“JetForm”) and sold the Symantec Visual Café™ ing on June 23, 1989, the Company has assets and technology of its networking (Professional Development Edition) and Management completed acquisitions of 15 companies. business unit to the Hewlett-Packard Symantec Visual Café™ Item 13: Certain Relationships and Related Transactions 33 Companies acquired during the past five Company (“Hewlett-Packard”). See fur- (Web Development Edition) years include: Fast Track, Inc. (“Fast ther discussion in Item 7: Management’s Track”) on May 28, 1996; Delrina Corpo- Most of Symantec’s products that are Discussion and Analysis of Financial ration (“Delrina”) on November 22, 1995; currently being developed and marketed Condition and Results of Operations. Part Four Item 14: Exhibits, Financial Statement Schedules and 34 Intec Systems Corporation (“Intec”) on ™ feature LiveUpdate, which enables the Symantec has a 52/53-week fiscal account- Reports on Form 8-K August 31, 1994; Central Point Software, user, free of cost, to download application ing year. Accordingly, all references as of Inc. (“Central Point”) on June 1, 1994; bug-fix patches via an Internet connection and for the periods ended March 31, 1998, Signatures 56 SLR Systems, Inc. (“SLR”) on May 31, 1994; to Symantec’s corporate website. 1997 and 1996 reflect amounts as of and for 11 S C YMANTEC ORPORATION
  • 13. Security and Assistance SALES AND MARKETING, Norton Uninstall Deluxe is designed to files, enable users to share files without The software enables the user to run The program also builds Java applications The Security and Assistance business unit compromising security, lock access to a add and remove programs and files from a Windows, Windows 95, Windows NT, and connects to multiple databases with- INTERNATIONAL SALES AND is dedicated to being indispensable in personal computer when the personal user’s hard drive. InstallGuard, a feature of Windows CE or MS-DOS applications out writing source code. The Database CUSTOMER SUPPORT customers’ daily use of computers by computer is idle and prevent booting by Norton Uninstall Deluxe, provides a one- remotely, transfer files and perform other Development Edition includes 100+ Symantec markets its products world- increasing productivity and keeping unauthorized users. The program runs button “undo” of program installations, data operations. JavaBeans (series of pre-written source wide, utilizing a multi-channel strategy computers safe and reliable. Net revenues WinFax PRO is designed to enable users on the Windows 95 and Windows NT restoring a computer’s Windows registry code) and 20 database templates, and of direct and indirect sales through inde- from this business unit comprised approxi- operating systems. and hard drive to its original condition to send, receive and manage faxes. WinFax connects to over 30 commercially available pendent software distributors, major mately 50% of total net revenues for the prior to the installation. The program’s PRO provides background faxing, which databases via industry standard protocols retail chains and resellers. fiscal years ended March 31, 1998 and system cleanup tools ensure that registry, allows users to continue working on other (“JDBC” or “ODBC”). Remote Productivity Solutions 1997 and 45% of total net revenues for Symantec Visual Café (Professional files, icons and other system options are applications while sending or receiving a The Remote Productivity Solutions Sales and Marketing the fiscal year ended March 31, 1996. Development Edition) is designed to set for optimum performance. Norton fax via the Internet or a fax machine. business unit focuses on helping remote Symantec sells its products to both indi- Norton AntiVirus and Norton Uninstall Deluxe runs on the Windows WinFax PRO also provides enhanced file provide a Java Integrated Development professionals remain productive – viduals and corporate users primarily AntiVirus for Macintosh run in a com- 95 and Windows NT operating systems. compression, increasing the speed at Environment solution for creating Java anywhere, anytime. This business unit through distributors and resellers. puter’s background and are designed to Norton Utilities is a set of “tools” designed which faxes are transmitted. Other fea- applications and JavaBeans with features focuses on customer needs to access infor- Symantec products are made available to protect against, detect and eliminate com- to address system-level operations. In tures include a paging function, which geared toward professional Java developers. mation, applications and data from any customers through channels that include: puter viruses. The software covers multiple addition, Norton Utilities finds and enables the computer to page a user Advanced power tools include native location. Net revenues from this business distributors, retail, mail order, corporate sources of infection, including the Inter- repairs problems with Windows 95 appli- upon receipt of an incoming fax or voice compilation, advanced Java Archive tools, unit comprised approximately 40% of resellers, value added resellers (“VARs”), net, floppy disks, email attachments, shared cations and includes an interface to message, and a “call identify” function, Java Development Kit 1.1.5 support and total net revenues for the fiscal year ended original equipment manufacturers files and networks. The software enables Norton Web Services, a paid subscription which allows a user to view an incoming Visual Page. In addition, to facilitate March 31, 1998 and approximately 35% (“OEMs”), partnerships, education, con- the user to download, via Symantec’s service that locates and installs patches, fax or phone number. WinFax PRO runs easier discovery of problems with source of total net revenues for the fiscal years sulting, etc. Symantec also sells product LiveUpdate functionality, new virus defi- updates and drivers specific to a user’s on the Windows, Windows 95 and code, the program supports “debugging” ended March 31, 1997 and 1996. upgrades and certain of its products nitions created by the Symantec AntiVirus installed hardware and software. The pro- Windows NT operating systems. directly within a Web browser. ACT! is designed to combine a customiz- through the use of direct mail and over ™ Research Center (SARC). The software Symantec Visual Café (Web gram also offers crash protection, limited able database, calendar and activity the Internet. Symantec maintains distribu- runs under the Windows, Windows 95, Development Edition) is designed to virus detection and repair and several management, automatic history logging, tion relationships with major independent I n t e r n e t To o l s , R o y a l t i e s a n d O t h e r Windows NT, MS-DOS, Macintosh and new optimization utilities to accelerate a provide a Rapid Application Java customizable reporting and communica- The Internet Tools, Royalties and Other distributors. These distributors stock Power Macintosh operating systems. The computer’s performance. Norton Utilities Development and an HTML Web author- tions via mail merge, telephone, email and business unit includes products providing Symantec’s products for redistribution to Norton AntiVirus product line also includes runs on the Windows, Windows 95, ing solution that provides support for fax into a single product. The product pro- an easy-to-use Java development environ- independent dealers, consultants and other support for Lotus Notes (Norton Windows NT, MS-DOS, Macintosh and Java Development Kit 1.1.5 and JavaBeans. vides extensive data sharing support for ment, as well as revenue streams from the resellers. Symantec also maintains relation- AntiVirus for Notes) and Novell NetWare Power Macintosh operating systems. The program includes a drag-and-drop Local Area Network (“LAN”) teams and sale to third-party computing companies ships with major retailers while marketing (The Norton AntiVirus NetWare). Norton Web Services (“NWS”) is interface, professional templates and Java remote database synchronization for mobile of certain of the Company’s software to these retailers through independent Norton CrashGuard Deluxe runs in a designed to deliver an online subscription- applet and JavaBeans libraries. This users and small mobile teams. ACT! runs product lines and technologies, and distributors. (See further discussion in computer’s background and is designed to based service site that downloads Norton product did not generate material revenues on the Windows, Windows 95, Windows revenues from products nearing the end Item 7: Management’s Discussion and detect and fix a range of computer prob- technology to Windows 95 users via an in any fiscal years presented. The Company NT, Windows CE, MS-DOS, Macintosh, of their life cycle. Net revenues from this Analysis of Financial Condition and lems, including computer crashes and hard Internet connection. NWS features believes this product will generate increas- Newton and Psion operating systems. business unit comprised approximately Results of Operations - Retail Distribution disk fragmentation. When the program Symantec’s LiveUpdate Pro, a service that ing revenue amounts in future periods, pcANYWHERE is designed to offer reli- 10%, 15% and 20% of total net revenues Channel; New Distribution Channels.) detects a crash, it allows the computer locates and installs patches, updates and but there can be no assurance this prod- able, fast and flexible PC-to-PC remote for the fiscal years ended March 31, 1998, The Company’s sales force works user to unfreeze the crash and save any drivers specific to a user’s installed hard- uct will be commercially successful. The computing via serial or modem connec- 1997 and 1996, respectively. closely with its major distributor and open files. The program also optimizes ware and software. NWS was released by Visual Café products run on Windows 95, Symantec Visual Café (Database tions. pcANYWHERE enables the user reseller accounts to manage the flow of computer performance and provides basic Symantec in December 1997. As such, this Windows NT and Macintosh operating Development Edition) is designed to to control one PC remotely from the orders, inventory levels and sell-through virus detection and elimination. Norton service did not generate material revenues systems. The Java program code devel- keyboard of another PC. The offsite provide a solution for building business- to customers, as well as working closely CrashGuard Deluxe includes an interface in any fiscal years presented. The Company oped with these products, however, can remote PC, laptop or PC terminal con- critical Java applications with database with them to manage promotions and to Norton Web Services, a paid subscrip- believes this service will generate increas- be deployed on any platform that sup- trols the operation of the distant host connectivity. The program includes a other selling activities. The Company also tion service that locates and installs patches, ing revenue amounts in future periods, ports a Java Virtual Machine compliant PC. In addition to enabling a remote forms designer for drag-and-drop Graphical sells volume license programs (corporate updates and drivers specific to a user’s but there can be no assurance this product with Sun Microsystems’ JDK standards. user to run a distant PC, pcANYWHERE User Interface design and dbAWARE site licenses) through its distribution and installed hardware and software. The will be commercially successful. optionally allows users at the host (dis- project wizards that walk the user through corporate reseller channels. (See further program runs on the Windows 95 and Norton Your Eyes Only is designed to tant) machine to view the operations defining a data source, adding compo- discussion in Item 7: Management’s Windows NT operating systems. encrypt and decrypt private computer being conducted from the remote site. nents and the interactions between them. Discussion and Analysis of Financial 12 13 S C S C YMANTEC ORPORATION YMANTEC ORPORATION