|
Waltham, MA Feb. 23, 2004 Novell, Inc. (NASDAQ:NOVL) today announced financial results for its first fiscal quarter ended January 31, 2004. For the quarter, Novell reported revenues of $267 million, compared to revenues of $260 million for the first fiscal quarter 2003. Net income in the first fiscal quarter 2004 was $10 million, or $0.03 per share. This compared to a net loss of $12 million, or $0.03 loss per share, for the first fiscal quarter 2003.
On a non-GAAP basis, adjusted net income for the first fiscal quarter 2004 was $11 million, or $0.03 per share, which excludes investment impairments of $1 million. This compares to non-GAAP adjusted net loss for the first fiscal quarter 2003 of $1 million, or $0.00 per share, which excludes investment impairments of $11 million. 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.
"I am encouraged by our performance during the quarter in what remains a challenging IT business environment." said Jack L. Messman, Novell® chairman, president and chief executive officer. "We showed steady progress in positioning Novell for high growth opportunities, including the Linux market, while completing a significant acquisition and continuing to work through a major reorganization of our North American operations. We are now focused on execution, and are moving quickly to deliver enterprise-class network services for mixed environments, including Linux."
On the balance sheet, cash and short-term investments were $605 million at the end of the first fiscal quarter 2004, compared with $651 million a year ago. This decline in cash and short-term investments is primarily attributable to the cash payment to SUSE® LINUX shareholders in connection with the previously announced acquisition, offset by positive cash flow, including cash flow from operations during the first fiscal quarter 2004 of $31 million. Days sales outstanding (DSO) in accounts receivable improved to 60 days at the end of the first fiscal quarter 2004, down from 74 days in the prior quarter. Deferred revenues were $294 million at the end of the first fiscal quarter 2004, up $29 million or 11% percent year-over-year.
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 will be broadcast at 5PM EST February 23, 2004, from Novell's Investor Relations Web page: http://www.novell.com/company/ir/qresults/. The domestic conference call dial in number is 888-323-5254, password "Novell", and the international dial in number is +1-773-756-4625, password "Novell".
The call will be archived on the Web site approximately 15 minutes after its conclusion, and will be available for telephone playback through midnight, March 8. The domestic toll-free replay number is 800-597-8358, and the international replay number is +1-402-220-0219.
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 open source 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 success in executing its Linux strategies, Novell's ability to deliver on its one Net vision of the Internet, Novell's ability to take a competitive position in the Linux 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 2003 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.
About Novell
Novell, Inc. is a leading provider of information solutions that deliver secure identity management (Novell Nsure), Web application development (Novell exteNd) and cross-platform networking services (Novell Nterprise), all supported by strategic consulting and professional services (Novell NgageSM). Active in the open source community with its Ximian® and SUSE Linux brands, Novell provides a full range of Linux products and services for the enterprise from the desktop to the server. Novell's vision of one Net a world without information boundaries helps customers realize the value of their information securely and economically. For more information, call Novell's Customer Response Center at (888) 321-4CRC (4272) or visit http://www.novell.com. Press should visit http://www.novell.com/pressroom.
Novell and Ximian 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. SUSE is a registered trademark of SUSE AG, a Novell company. *All third-party trademarks are the property of their respective owners.
Press Contact:
Bruce Lowry
Novell, Inc.
Phone: 415-591-6523
E-Mail: blowry@novell.com
Investor Relations Contact:
Bill Smith
Novell, Inc.
Phone: 800-317-3195
E-Mail: irmail@novell.com
 |
 |
|
Novell, Inc.
Consolidated Unaudited Condensed Statements of Operations
(In thousands, except per share data)
|
|
| |
Fiscal Quarter Ended |
| |
Jan 31, 2004
|
|
Jan 31, 2003
|
| Net revenue |
| |
New software licenses |
$ 54,769 |
|
$ 61,038 |
| |
Maintenance and services |
212,338 |
|
198,933 |
| Total net revenue |
267,107 |
|
259,971 |
|
| Cost of revenue |
| |
New software licenses |
4,922 |
|
5,222 |
| |
Maintenance and services |
89,954 |
|
92,342 |
| Total cost of revenue |
94,876 |
|
97,564 |
|
| Gross profit |
172,231 |
|
162,407 |
|
| Operating expenses |
| |
Sales and marketing |
81,769 |
|
98,305 |
| |
Product development |
50,199 |
|
42,922 |
| |
General and administrative |
26,257 |
|
27,345 |
| Total operating expenses |
158,225 |
|
168,572 |
|
| Income (loss) from operations |
14,006 |
|
(6,165) |
|
| Other income (expense), net |
2,477 |
|
(6,189) |
|
| Income (loss) before taxes |
16,483 |
|
(12,354) |
|
| Income tax expense (benefit) |
6,348 |
|
(466) |
|
Net income (loss)
|
$ 10,135 |
|
$ (11,888) |
|
| Net income (loss) per common share: |
| |
Basic |
$ 0.03 |
|
$ (0.03) |
| |
Diluted |
$ 0.03 |
|
$ (0.03) |
|
| Weighted average shares: |
| |
Basic |
380,106 |
|
368,075 |
| |
Diluted |
392,111 |
|
368,075 |
|
| Certain reclassifications, none of which affect net income, have been made to the prior period amounts in order to conform to the current year's presentation. |
|
|
|
Novell, Inc.
Consolidated Unaudited Condensed Balance Sheets
(In thousands)
|
|
| ASSETS |
|
Jan 31, 2004 |
|
Oct 31, 2003 |
|
| Current assets |
| |
Cash and short-term investments |
|
$ 605,154 |
|
$ 751,852 |
| |
Receivables, net |
|
176,287 |
|
232,492 |
| |
Prepaid expenses |
|
28,810 |
|
23,005 |
| |
Other current assets |
|
25,380 |
|
23,204 |
| Total current assets |
|
835,631 |
|
1,030,553 |
|
| Property, plant and equipment, net |
|
254,236 |
|
255,526 |
| Long-term investments |
|
51,798 |
|
50,948 |
| Goodwill |
|
401,973 |
|
213,300 |
| Intangible assets, net |
|
52,728 |
|
10,800 |
| Other assets |
|
6,371 |
|
6,526 |
|
| Total assets |
|
$ 1,602,737 |
|
$ 1,567,653 |
|
| LIABILITIES & STOCKHOLDERS' EQUITY |
|
| Current liabilities |
|
| |
Accounts payable |
|
$ 57,275 |
|
$ 50,258 |
| |
Accrued compensation |
|
92,332 |
|
101,164 |
| |
Other accrued liabilities |
|
113,579 |
|
117,073 |
| |
Income taxes payable |
|
39,690 |
|
35,493 |
| |
Deferred revenue |
|
294,343 |
|
322,470 |
| Total current liabilities |
|
597,219 |
|
626,458 |
|
| Deferred income taxes |
|
17,097 |
|
- |
|
| Total liabilities |
|
614,316 |
|
626,458 |
|
| Minority interests |
|
7,035 |
|
6,725 |
|
| Stockholders' equity |
|
981,386 |
|
934,470 |
|
| Total liabilities and stockholders' equity |
|
$ 1,602,737 |
|
$ 1,567,653 |
|
| Certain reclassifications, none of which affect net income, have been made to the prior period amounts in order to conform to the current year's presentation. |
|
|
|
Novell, Inc.
Consolidated Unaudited Condensed Statements of Cashflows
(In thousands)
|
|
| |
Fiscal Quarter Ended |
| |
Jan 31, 2004
|
|
Jan 31, 2003
|
| Cash flows from operating activities: |
|
| |
Net income (loss) |
$ 10,135 |
|
$ (11,888) |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
| |
Gain on sale of fixed assets |
- |
|
(365) |
| |
Depreciation and amortization |
16,152 |
|
17,252 |
| |
Loss on impaired investments |
1,146 |
|
10,800 |
| |
Changes in assets and liabilities |
3,588 |
|
7,076 |
|
| |
Net cash provided by operating activities |
31,021 |
|
22,875 |
|
| Cash flows from financing activities: |
|
| |
Issuance of common stock, net |
28,493 |
|
1,147 |
|
| |
Net cash provided by financing activities |
28,493 |
|
1,147 |
|
| Cash flows from investing activities: |
|
| |
Expenditures for property, plant and equipment |
(11,973) |
|
(13,852) |
| |
Proceeds from the sale of property, plant and equipment |
- |
|
785 |
| |
Short-term investment activity |
45,266 |
|
(166,651) |
| |
Cash paid for SUSE Linux |
(211,468) |
|
- |
| |
Cash received from SUSE Linux |
11,170 |
|
- |
| |
Other |
6,400 |
|
3,531 |
|
| |
Net cash used by investing activities |
(160,605) |
|
(176,187) |
|
| Decrease in cash and cash equivalents |
(101,091) |
|
(152,165) |
|
| Cash and cash equivalents beginning of period |
366,932 |
|
463,987 |
|
| Cash and cash equivalents end of period |
265,841 |
|
311,822 |
|
| Short-term investments- end of period |
339,313 |
|
338,933 |
|
| Cash and short-term investments end of period |
$ 605,154 |
|
$ 650,755 |
|
| Certain reclassifications, none of which affect net income, have been made to the prior period amounts in order to conform to the current year's presentation. |
|
|
|
Novell, Inc.
Unaudited Non-GAAP Adjusted Earnings Information
(In thousands, except per share data)
|
|
| |
GAAP
As Reported |
Adjustments |
Non-GAAP
Adjusted |
| |
| Fiscal quarter ended January 31, 2004 |
|
| Net revenue |
$ 267,107 |
$ - |
$ 267,107 |
| Gross profit |
172,231 |
- |
172,231 |
| Income (loss) from operations |
14,006 |
- |
14,006 |
| Income (loss) before taxes |
16,483 |
1,145 (a) |
17,628 |
| Net income (loss) |
10,135 |
1,145 (a) |
11,280 |
| Diluted net income (loss) per common share |
$ 0.03 |
$ 0.00
(a) |
$ 0.03 |
|
| Fiscal quarter ended October 31, 2003 |
|
| Net revenue |
$ 286,749 |
$ - |
$ 286,749 |
| Gross profit |
185,412 |
- |
185,412 |
| Income (loss) from operations |
19,532 |
8,962 (b) |
28,494 |
| Income (loss) before taxes |
16,090 |
11,134 (c) |
27,224 |
| Net income (loss) |
(109,004) |
128,062 (d) |
19,058 |
| Diluted net income (loss) per common share |
$ (0.29) |
$ 0.34 (d) |
$ 0.05 |
|
| Fiscal quarter ended January 31, 2003
|
|
| Net revenue |
$ 259,971 |
$ - |
$ 259,971 |
| Gross profit |
162,407 |
- |
162,407 |
| Income (loss) from operations |
(6,165) |
255 (e) |
(5,910) |
| Income (loss) before taxes |
(12,354) |
11,055 (f) |
(1,299) |
| Net income (loss) |
(11,888) |
10,979 (g) |
(909) |
| Diluted net income (loss) per common share |
$ (0.03) |
$ 0.03 (g) |
$ - |
|
|
Footnotes related to adjustments:
- Reflects investment write-downs.
- Reflects restructuring reserves of $8.0 million and in-process R&D expense of $0.9 million.
- Reflects the items in footnote (b) and investment write-downs of $2.2 million.
- Reflects the items in footnotes (b) and (c), the necessary related tax adjustments, and a write-down of deferred tax assets of $119 million.
- Reflects integration charges.
- Reflects the item in footnote (e) and investment write-downs of $10.8 million.
- Reflects the items in footnotes (e) and (f), and the necessary related tax adjustments.
|
|
