Novell reports second quarter fiscal 2003 results
Novell, Inc. (NASDAQ: NOVL) today announced financial results for its second fiscal quarter ended April 30, 2003. For the quarter, Novell reported revenue of $276 million, compared to revenue of $274 million for the second fiscal quarter 2002, and $260 million for the first fiscal quarter 2003. Net loss in the second fiscal quarter was $29 million, or $0.08 per share. This compared to a second fiscal quarter 2002 net loss of $173 million, or $0.48 per share.
For the first six months of fiscal 2003, Novell reported revenue of $536 million and a net loss of $41 million, or $0.11 per share. For the first six months of fiscal 2002, the company reported revenue of $552 million and a net loss of $165 million, or $0.46 per share.
On a non-GAAP basis, adjusted net loss for the second fiscal quarter 2003 was $7 million, or $0.02 per share, which excludes $25 million in charges from adjustments to facility-related restructuring and merger liabilities, and impaired investments. This compares to non-GAAP adjusted net earnings for the second quarter last year of $10 million, or $0.03 per share, which excludes $190 million in charges from the write-down of goodwill, impaired investments and restructuring. Full details on Novell's reported results, including a reconciliation of the non-GAAP adjusted results, are included in the financial schedules that are a part of this release.
"Despite the continued weak IT market, we posted a six percent revenue increase over our first quarter and revenues were up slightly year-over-year," said Jack Messman, Novell® chairman, president and chief executive officer. "The lack of profitability in the quarter was a disappointment, and we now plan to lower our costs to improve our business performance overall. We're confident we can do this while sustaining the momentum we've built around our newer offerings.
"We were pleased to see sequential, and year-over-year, growth from our Nsure™ identity management solutions, Nterprise™ GroupWise® collaboration products and ZENworks® resource management. Each of these offerings is gaining share in their respective markets. An important factor is our expanded support of open standards.
"Especially noteworthy in the quarter were Novell's announcements of broad support for Linux*," added Messman. "Through open standards, and especially Linux, we are positioning Novell to participate in, and help lead, the significant improvements in cost-effective IT solutions that are now possible. Virtually all enterprise customers are looking at the capabilities of Linux. Novell has begun to deliver important value with offerings that run on Linux and support how Linux co-exists, and easily interoperates, in customer environments."
Among the larger contracts for software and services in the quarter, Novell Nsure identity management solution customers included the state of Texas, JPMorgan Chase, BRZ GmbH, the Austrian government's federal IT center, Telecom New Zealand and the largest airline network, Star Alliance, which supports sixteen airlines worldwide. Novell Nterprise licensees included Premier Inc., one of the largest hospital buying groups in the United States, numerous government agencies worldwide, Canon and AB Volvo.
During the second fiscal quarter, software license and maintenance revenue was up one percent year-over-year to $165 million. Identity management and secure Web services software had strong growth, up 36 percent year-over-year to total $23 million in the second quarter. Novell brings these solutions to market under the Nsure and exteNd™ brands. Cross-platform services software, marketed under the Nterprise brand, declined 3 percent year-over-year to $142 million.
Revenue from worldwide services branded as NgageSM, including IT consulting and other customer services, declined 5 percent year-over-year to $74 million. Celerant management consulting revenue was up 15 percent year-over-year to $37 million.
By geography, revenue in the second fiscal quarter from the United States was $126 million, down 12 percent from the same period in the prior year. The Europe, Middle East and Africa region contributed $112 million in revenue, up 22 percent year-over-year. Revenue from Asia Pacific, including Japan, was $21 million, up 5 percent year-over-year. Canada and Latin America contributed $17 million, down 9 percent year-over-year, as growth in Canada was offset by declines in Latin America.
On the balance sheet, cash and short-term investments were $626 million at the end of the second fiscal quarter, compared with $636 million at the October 2002 fiscal year end. Cash flow from operations during the quarter was a negative $26 million. For the trailing four quarters, cash flow from operations was a positive $66 million. Days sales outstanding (DSO) was 61 days, up from 56 days in the prior quarter. Deferred revenue was $268 million, up 26 percent year-over-year. Deferred revenue is predominately prepaid software maintenance associated with Novell's large network site license business and will be recognized in future periods.
A summary of Novell's vision, mission and strategy can be accessed on the Novell Web site at: www.novell.com/company/ir/qresults.
Conference call notification and Web access detail
A live Webcast of a Novell conference call to discuss the quarter with financial analysts will be broadcast at 5 PM EDT May 22 from the Novell's Investor Relations Web page: http://www.novell.com/company/ir/qresults/. Through June 2, an audio replay of the call will be available from the same page. A telephone replay of the conference call will be available after 7:30 PM EDT May 22, through June 2 at 888-446-2545. A copy of this press release is posted on Novell's Web site at: http://www.novell.com/company/ir/qresults/.
Legal notice regarding forward looking statements
This press release includes statements that are not historical in nature and that may be characterized as "forward-looking statements," including those related to future financial and operating results, benefits and synergies of the company's brands and strategies, future opportunities and the growth of the market for Web based solutions. You should be aware that Novell's actual results could differ materially from those contained in the forward-looking statements, which are based on current expectations of Novell management and are subject to a number of risks and uncertainties, including, but not limited to, Novell's ability to integrate acquired operations and employees, Novell's ability to deliver on its one Net vision of the Internet, Novell's ability to take a competitive position in the Web services industry, business conditions and the general economy, market opportunities, potential new business strategies, competitive factors, sales and marketing execution, shifts in technologies or market demand and the other factors described in Novell 's Annual Report on Form 10 K for the 2002 fiscal year. Novell disclaims any intention or obligation to update any forward looking statements as a result of developments occurring after the date of this press release.
Novell, Inc. (Nasdaq: NOVL) delivers Software for the Open Enterprise™. With more than 50,000 customers in 43 countries, Novell helps customers manage, simplify, secure and integrate their technology environments by leveraging best-of-breed, open standards-based software. With over 20 years of experience, more than 5,000 employees, 5,000 partners and support centers around the world, Novell helps customers gain control over their IT operating environment while reducing cost. More information about Novell can be found at http://www.novell.com.
Novell, GroupWise and ZENworks are registered trademarks; exteNd, Nsure and Nterprise are trademarks; and Ngage is a service mark of Novell, Inc. in the United States and other countries.* All third-party trademarks are the property of their respective owners.
Ready to talk? Fill out the form below, or call .
* Required Fields