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Adobe Plans 35% Growth in 2006 in Wake of Macromedia Acquisition

With Macromedia Acquisition Complete, Company Looks to Future

Adobe completed its acquisition of Macromedia on December 5, timed to coincide with the beginning of its fiscal year. Now it has released record-setting results for its most recent quarter and year, reaching almost $2 billion in revenue for the year. It has projected a 35% revenue growth for 2006, fueled by the acquisition and growth throughout its newly expanded product line.

"The year 2005 was another remarkable year for Adobe," said Adobe CEO Bruce R. Chizen (pictured). 'We grew our business 18 percent, generated record profits, and for the third consecutive year, achieved record revenue for the fourth quarter and year.

"At the same time, we completed our acquisition of Macromedia, which positions us for future growth by accelerating our strategy to provide a powerful engagement platform. Going forward, we will meet a wider set of customer needs and have a significantly greater opportunity to expand into new markets, particularly in the mobile and enterprise segments." The company reported record revenue of $510.4 million in the most recent quarter, compared to $429.5 million reported for the fourth quarter of fiscal 2004 and $487.0 million reported in the third quarter of fiscal 2005. On a year-to-year basis, this represents 19 percent revenue growth, the company said.

It has now said that it expects 2006 revenues of $2.7 billion, and net earnings of 74 to 82 cents per share. For the just-completed 2005 FY, revenues totaled $1.966 billion. (Adobe's revenues were about $1.67 billion in fiscal 2004.)

The Macromedia acquisition was valued at approximately $3.4 billion, and has led to an overall reduction of between 650 and 700 jobs, or 10% of the workforce of the combined company, Chizen said.

The company also announced a trio of management changes. Peg Wynn has been appointed senior vice president of human resources and Garrett J. Ilg as president of Adobe Japan. The company also announced the resignation of Murray Demo, executive vice president, finance and chief financial officer, "who has made a personal decision to leave Adobe in order to spend more time with his family," the company said.

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