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Novell Reports First Fiscal Quarter 2000 Results |
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Revenue of $316 Million and Earnings of $0.13 Per Share PROVO, Utah Feb. 17, 2000 Novell, Inc. (NASDAQ: NOVL) today reported revenue of $316 million for its first fiscal quarter ended Jan. 31, 2000, an 11 percent increase over the $286 million recorded in the first quarter of fiscal 1999. Net income was $45 million in the quarter, up 55 percent from $29 million in the prior year. Earnings on a diluted basis were $0.13 per share, compared with $0.08 in the year-earlier period. Novell tightly managed expenses during the first fiscal quarter, which is seasonally the company's weakest revenue quarter. Total operating expenses declined by $5 million from the fourth fiscal quarter 1999. The operating margin for the first fiscal quarter was 15 percent. Revenue from directory-enabled NetWare server software totaled $154 million in the first quarter, up 6 percent from the first quarter of 1999. Directory-enabled Net services applications grew 10 percent to $80 million. Service, training and consulting revenue increased 37 percent to $50 million. Older pre-directory products were up 4 percent to $32 million. On a geographic basis, United States revenue was $166 million in the first quarter, up 6 percent year-over-year. The Europe, Middle East, and Africa region increased 6 percent to $99 million. In the Asia Pacific region, revenue of $27 million was up 22 percent. Revenue in the Americas region outside the U.S. increased 72 percent to $25 million. Strong revenue performance in November and December was followed by a slowdown in January purchases as customers transitioned to the new year. "During the first quarter, the delivery of NDS eDirectory established the necessary foundation for an entire category of new Net services products from Novell." said Dr. Eric Schmidt, Novell chairman and chief executive officer. "These new products will significantly advance e-business which is at the center of Novell's efforts in FY2000. Notably, multi-million object deployments of eDirectory by CNN and Alta Vista during the quarter marked Novell's initial foray into the market space defined by Internet content providers." In addition to NDS eDirectory, Novell shipped seven important new products in the quarter including NetWare 5.1 and the Novell Internet Messaging System. The company expanded the number of OEMs licensed to ship its Internet Caching System (ICS) to 11, the most recent agreement with Fujitsu Siemens. Novell has created the largest OEM and sales channel for caching and content management. Compaq and Dell, the first OEMs with shipping ICS-based products have begun to gain noteworthy customers including AT&T, Datek Online, Teliscan, Sara Lee and Perot Systems. On the balance sheet, cash and short-term investments were $948 million at the end of the first quarter, compared with $895 million at the Oct. 1999 fiscal year-end. In addition to the $45 million of net income, collections on receivables, and a refund associated with the tax settlement reported in the fourth quarter of fiscal 1999, led to very strong cash flow from operations of $141 million. Days sales outstanding of trade receivables was 68 days, down from 75 days at the end of fiscal 1999. Deferred revenue primarily from maintenance associated with Novell's site-license business increased to $181 million up 31 percent from year-over-year. During the quarter, the company spent $89 million to repurchase 3.7 million shares of Novell common stock. On Aug. 19, 1999 the Novell board of directors authorized up to $500 million for a share repurchase program through Oct.31, 2000. Over the two fiscal periods since this authorization, the company has spent $288 million to purchase and retire 13 million shares of common stock. Business Outlook Novell's business objective, over the longer-term, is to grow its revenue from Net services software products that rely on NDS eDirectory to support e-business. Novell Directory Services® (NDS) eDirectory runs on Sun Solaris, Microsoft NT and Novell NetWare operating systems. In 2000 it will be available for Linux and Compaq Tru64. Scalable e-business applications and services can be built on NDS eDirectory. Novell intends to build a new generation of Net services, complemented with partnerships with other software vendors and consulting service providers, to support customers in deploying business processes across the Internet. Novell is expanding the number of Net services applications it offers to manage and control business networks. The company is entering new software product categories where it has not historically competed. In addition, Novell is actively pursuing areas of the Internet market that are still in an embryonic stage of development. Among others, Novell plans to bring new software products to market between now and the end of fiscal 2000 that address electronic commerce infrastructure, personal identity control, quality of service, policy-based management, cache management, and public key security. 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. About Novell Novell, Inc. (NASDAQ:NOVL), is a leading provider of Net services software that delivers services to secure and power all types of networks the Internet, intranets, and extranets; wired to wireless; corporate and public across leading operating systems. Novell's Net services software provides the foundation for one Net-a single global network that supports new applications and forms of business. Net services software gives IT organizations a way to adapt and accelerate their transformation to e-business, simplify the management and control of all networks, create a secure foundation for doing business on the Net, and help deliver a consistent and high-quality experience to end users in all locations. Worldwide channel, consulting, education and technical support programs, along with strategic alliances, combine Novell Net services software with third-party products and services to form complete Net solutions. For information on Novell's complete range of products and services, contact Novell's Customer Response Center at (888) 321-4CRC (4272), or visit Novell's Web site at http://www.novell.com. Press may access Novell announcements and company information on the World Wide Web at http://www.novell.com/pressroom. In addition, detailed comparisons between Novell products and competitive offerings from other vendors are available on the Web at http://www.novell.com/advantage. Novell, NetWare, Novell Directory Services and NDS are registered trademarks, and eDirectory, Novell Internet Messaging System and Novell Internet Caching System are trademarks of Novell, Inc. in the United States and other countries. All third-party trademarks are the property of their respective owners.
Press Contacts:
Jonathan Cohen
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