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Novell Reports Third Fiscal Quarter Results |
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Net Income Of $59 Million, 17 Cents Per Share Orem, UT -- August 22, 1996 -- Novell, Inc. (NASDAQ:NOVL) today reported revenue of $365 million for its third fiscal quarter ended July 27, 1996. Net income was $59 million, or 16 percent of revenue. On a per share basis, net income was $0.17 on 352 million weighted average shares outstanding. Third quarter results compare with year-earlier earnings of $0.27 and revenue of $538 million, which included $89 million of revenue from sold and discontinued business lines. Novell sold its personal productivity applications and UnixWare product lines during the first half of fiscal 1996 as it focused on the network software business. Robert J. Frankenberg, Novell chairman and chief executive officer said, "Novell has bounced back. NetWare 4 unit sales to distribution in quarter three were up 17 percent from quarter one. We have returned to profitability with a $114-million improvement over the second quarter and brought revenue and earnings to near first quarter levels, excluding the sold and discontinued business lines." "With historic issues behind us, we are extending our network operating system into a comprehensive platform for the rapidly expanding intranet and Internet markets." "We will continue to leverage our traditional server operating systems business, as we increase our emphasis on the burgeoning market for network services software. As customers migrate their corporate networks to full-service intranets, Novell is ideally positioned to provide standards-based, cross platform network services, including directory, security, file, messaging, print, Web, and management." Revenue from NetWare server operating system products totaled $216 million in third quarter 1996, compared with $295 million in the year earlier period. Of this total, NetWare 4 revenue increased slightly to $131 million. NetWare 3 revenue declined by $80 million to $85 million, reflecting both upgrades to NetWare 4 and increased competition. In the enterprise network market, the growth in corporate, channel, and OEM license programs continued strong in the third quarter. Licensing increased 26 percent over the year-earlier period and accounted for 36 percent of revenue, driven by upgrades and new adoptions of NetWare 4 by major customers with large networks. Revenue from Novell's newer network services market, consisting of GroupWise messaging, ManageWise network management, host connectivity, Internet server, and TCP/IP software, contributed $85 million, compared with $87 million a year earlier. Strong growth in GroupWise and ManageWise revenue was offset by declines in host connectivity and TCP/IP software sales. Novell expects its network services market to expand as the company unbundles services from its operating system and provides them across additional server platforms, including Microsoft NT and Unix. On the balance sheet, cash and short-term investments totaled $1.0 billion, compared with $1.3 billion at October 28, 1995. During the third quarter, Novell repurchased 10 million shares of outstanding common stock for $137 million. Year-to-date in fiscal 1996, Novell has purchased 33 million shares for $444 million. Founded in 1983, Novell (NASDAQ: NOVL) is the world's leading provider of network software. The company offers a wide range of network solutions for distributed network, Internet, intranet and small-business markets. Novell education and technical support programs are the most comprehensive in the network computing industry. Information about Novell's complete range of products and services can be accessed on the World Wide Web at http://www.novell.com.
Press Contact: Novell, Inc.
Third
Fiscal Quarter Ended Nine Months Ended
July 27, July 29, July 27, July 29,
1996 1995 1996 1995
__________ __________ __________ __________
Net sales $ 365,091 $ 537,922 $ 991,190 $1,560,655
Cost of sales 75,618 125,600 240,243 366,930
__________ __________ __________ __________
Gross profit 289,473 412,322 750,947 1,193,725
Operating expenses
Sales and mktg. 124,853 149,010 375,610 437,187
Product dev. 60,345 89,788 208,701 272,605
General and
administrative 34,299 39,368 107,568 109,132
Restructuring
charges -- -- 18,442 --
__________ __________ __________ __________
Total operating
expenses 219,497 278,166 710,321 818,924
__________ __________ __________ __________
Income from
operations 69,976 134,156 40,626 374,801
Other income,
net 14,736 19,176 56,420 45,278
__________ __________ __________ __________
Income
before taxes 84,712 153,332 97,046 420,079
Income taxes 25,953 51,366 30,085 140,726
__________ __________ __________ __________
Net income $ 58,759 $ 101,966 $ 66,961 $ 279,353
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Weighted average shares
outstanding 352,129 376,494 362,052 374,302
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Net income
per share $ 0.17 $ 0.27 $ 0.18 $ 0.75
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Novell, Inc.
July 27, October 28,
1996 1995
__________ __________
Cash and short-term
investments $ 993,712 $1,321,231
Receivables, net 400,977 470,437
Inventories 12,709 23,025
Prepaid expenses 31,749 50,576
Deferred income taxes 77,539 59,913
___________ ___________
Total current assets 1,516,686 1,925,182
Property, plant
and equipment, net 381,405 390,452
Other assets 49,350 101,196
___________ ___________
Total assets $1,947,441 $2,416,830
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LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 74,374 $ 116,305
Accrued compensation 58,315 97,637
Accrued marketing
liabilities 48,476 72,339
Other accrued
liabilities 117,398 90,623
Income taxes payable -- 29,942
Deferred revenue 35,335 54,099
___________ ___________
Total current
liabilities 333,898 460,945
Minority interests 17,034 17,623
Put warrants 90,025 --
Shareholders' equity 1,506,484 1,938,262
___________ ___________
Total liabilities and
shareholders' equity $1,947,441 $2,416,830
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