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Novell Reports First Fiscal Quarter 1998 Results: |
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Earnings of $0.04 Per Share On $252 Million of Revenue PROVO, Utah February 24, 1998 Novell, Inc. (NASDAQ:NOVL) today reported revenue of $252 million and net income of $14 million for its first fiscal quarter ended January 31, 1998. Earnings on a diluted basis were $0.04 per share, including a contribution from operating profit for the first time since the company's restructuring in mid-1997. "First quarter fiscal 1998 results reflect the solid progress we've made in stabilizing Novell's business and implementing the pragmatic recovery strategy that we put in place in 1997," said Dr. Eric Schmidt, chairman and CEO of Novell. "Our earnings of $0.04 were higher than we expected as costs and expenses were lower due to tighter controls and new management practices across every aspect of Novell's business." First quarter operating expenses totaled $192 million, down $20 million from the fourth quarter of 1997, and $45 million lower than the year-earlier period. "It is gratifying to me that at the six-month mark following our restructuring we are seeing the effectiveness of our new management controls and priorities. We have made further progress in aligning the business model, clarifying focus around a handful of key initiatives, and expanding our product portfolio. The company is executing plans it outlined last year to become the leading provider of network platforms with advanced Internet services." During the quarter, Novell shipped new products that are part of the next generation of Internet related solutions it is bringing to market through 1998. New products included BorderManager FastCache, NDS for NT, Netscape Server products for NetWare servers, Year 2000 solutions for NetWare, and ManageWise. In January the company met its schedule for launching a broad public beta test of its NetWare 5 network server platform. The final NetWare 5 product, based on open Internet standards, is expected to ship in mid-1998. On a geographic basis, the United States contributed 57 percent of total revenue. The Europe, Middle East, and Africa region accounted for 28 percent of revenue, and Asia Pacific and the Americas totaled 9 percent and 6 percent, respectively. On the balance sheet, cash and short-term investments were $1.045 billion at the end of the first quarter, up $12 million from fiscal year-end 1997. In the first quarter of fiscal 1997, before the restructuring of Novell's business, the company reported revenue of $375 million and earnings of $0.15 per share. In fourth quarter 1997, the first fiscal period following the restructuring, Novell reported $269 million in revenue and earnings of $0.02 per share. First quarter revenue of $252 million was lower than fourth quarter fiscal 1997 primarily because of weakness in the Asia Pacific region. Founded in 1983, Novell (NASDAQ:NOVL) is the world's leading provider of network software. The company offers a wide range of network solutions, education, and support for distributed network, Internet, and small-business markets. Information about Novell's complete range of products and services can be accessed on the World Wide Web at http://www.novell.com. Forward looking statements in this release are made under the Safe Harbor Reform Act of 1996. These statements are based on current expectations and actual results may differ materially due to risks, uncertainties, and other factors. Additional information covering factors that could cause results to differ materially from projected statements can be found in Novell's 10-K and 10-Q filings, as well as the annual report.
Press Contacts:
Jonathan Cohen Novell, Inc. Consolidated Unaudited Condensed Statements of Income (In thousands, except per share data)
First Fiscal Quarter Ended
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Jan 31, 1998 Jan 31, 1997
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Net sales $252,042 $374,847
Cost of sales 55,139 75,971
________ ________
Gross profit 196,903 298,876
Operating expenses
Sales and marketing 101,735 127,890
Product development 57,786 71,755
General and administrative 32,450 37,731
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Total operating expenses 191,971 237,376
Income from operations 4,932 61,500
Other income, net 14,643 13,777
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Income before taxes 19,575 75,277
Income taxes 5,481 24,465
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Net income $14,094 $50,812
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Weighted average shares:
Basic* 351,031 346,506
Diluted* 352,971 347,095
Net income per share:
Basic* $0.04 $0.15
Diluted* $0.04 $0.15
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* The Company has always reported net income per share on a diluted basis. The calculation of diluted net income per share includes the effect of common stock equivalents such as outstanding stock options, while the calculation of basic net income per share does not. Novell, Inc.Consolidated Unaudited Condensed Balance Sheets (In thousands)
ASSETS Jan 31, 1998 Oct 31, 1997
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Current assets
Cash and short-term investments $1,045,144 $1,033,473
Receivables, net 225,039 234,358
Inventories 9,178 10,656
Prepaid expenses 66,205 57,685
Deferred& refundable income taxes 119,833 134,210
__________ __________
Total current assets 1,465,399 1,470,382
Property, plant and equipment, net 363,508 373,865
Other assets 73,754 66,402
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Total assets $1,902,661 $1,910,649
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LIABILITIES& SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $66,490 $82,759
Accrued compensation 48,041 51,397
Accrued marketing liabilities 24,059 27,728
Other accrued liabilities 83,336 85,157
Income taxes payable 4,831 --
Deferred revenue 83,586 74,915
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Total current liabilities 310,343 321,956
Minority interests 20,711 23,276
Shareholders' equity 1,571,607 1,565,417
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Total liabilities and shareholders' equity $1,902,661 $1,910,649
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