Corel Corporation Releases Preliminary Financial Results for First Quarter 2001: Company Expects to Report Profit Ahead of Schedule
Updated: Thursday, March 22, 2001 09:27 AM ET
OTTAWA--(BUSINESS WIRE)--March 22, 2001--Corel Corporation (Nasdaq:CORL, news, msgs)(TSE:COR.) today announced that it expects to report a net income of up to $0.5 million for the first quarter ended February 28, 2001, ahead of its previously stated target of profitability by the third quarter of fiscal 2001.
Revenues for the first quarter are now expected to be approximately $32.5 million, which is lower than the company's internal expectations. These expected results compare with a net loss of $12.4 million or ($0.19) per share on revenues of $44.1 million for the same period last year. All figures are reported in US currency.
"We are pleased with these early signs of success with our new strategic direction for the company," said Derek Burney, president and CEO of Corel Corporation. "By returning the company to profitability earlier than anticipated, we are executing ahead of schedule one of the major milestones of our new growth strategy.
"While our revenues were lower than we expected, our positive operating cash flow and earnings make it clear our hard work is paying off. We are committed to executing on our strategy for growth and are squarely focused on capitalizing on both the near and longer term opportunities. The immediate horizon includes the first major upgrade to our office suite in two years and the introduction of a full line of new graphics applications for the PC and Macintosh platforms."
Cost of sales and operating expenses for this quarter are expected to be between $33 and $34 million resulting in a loss from operations of up to $1.5 million as compared to $62.8 million in costs and $18.7 million in operating losses for the same quarter last year. Interest income is expected to offset the operating loss and yield a modest net income. Final results, net of non-cash items, are also expected to demonstrate positive operating cash flow before payment of Novell obligations and other non-operating items.
"We are very pleased and encouraged by our overall results. We are steadily improving the integrity of Corel's financial position by putting the potential for long-term growth ahead of short-term revenue gains," said John Blaine, chief financial officer at Corel Corporation. "We have contained our costs in this quarter and further strengthened our balance sheet. In addition, we continue our efforts to establish an effective and sustainable cost-to-revenue relationship for the company. We believe we are on track to meet our long-term goal of 20 per cent CAGR in revenues over the next three years."
As a result of the continuing economic uncertainty and the sharper than expected decline in revenues from its business applications products, the company cannot, at this time, determine whether the shortfall in first quarter revenues will be deferred to later quarters when new versions of the company's products are scheduled for release, or whether profitability will be sustained in the second quarter.
The preliminary revenue and earnings results in this news release are estimates and may change upon completion of the normal financial review and analysis process.
Corel executives will host a teleconference on March 29, 2001 at 5:00 PM Eastern to discuss the company's final financial results. A question-and-answer session will follow the announcement. Company officials will have no further comment until that time.
To participate in the teleconference, media and analysts should dial 1-800-478-9326 or (416) 695-5801 in North America. Callers outside North America should dial (country access code) + 800-3276-6311 approximately ten minutes prior to the start of the announcement. An instant replay will be provided starting one hour after the end of the teleconference. This replay service will be available for 24 hours only and will end on March 30, 2001. The instant replay number is (416) 695-5800 and the passcode is 725298. A live Webcast and replay of the event will also be available at the Corel Investor Relations Web site - www.corel.com/investor
Corel Corporation
Corel Corporation provides its customers with the creative tools they need to unleash their imaginations. With its heritage of software innovation and a solid franchise of loyal customers worldwide, Corel has earned its reputation as an internationally recognized developer of award-winning graphics and business productivity applications on the Windows(R), Macintosh(R), Linux(R) and UNIX(R) platforms. In 2001, Corel will continue to expand its support of the Web, delivering the Internet's versatility to customers through exciting Web-based applications, content and services. Corel will also be developing applications for Microsoft's .NET platform as part of its commitment to provide customers with a full range of applications and services over the Internet. With its headquarters in Ottawa, Canada, Corel continues to be one of Silicon Valley North's most exciting and influential software companies. Corel's common stock trades on the NASDAQ Stock Market under the symbol CORL and on the Toronto Stock Exchange under the symbol COR. For more information on Corel Corporation, please visit www.corel.com.
This press release contains forward-looking statements as defined by the United States Private Securities Litigation Reform Act of 1995, involving the company's expectations about future financial results and other matters. These statements reflect management's current forecast of certain aspects of the company's future business. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results of operations to differ materially from historical results or current expectations. The words "plan", "expect", "believe", "intend", "anticipate", "forecast", "target", "estimate" and similar expressions identify forward-looking statements. Risk factors include shifts in customer demand, product shipment schedules, product mix, competitive products and pricing, technological shifts and other variables. Readers are referred to Corel's most recent reports filed with the Securities and Exchange Commission for a more complete discussion of the other risks and uncertainties. The factors underlying forecasts are dynamic and subject to change. As a result, forecasts speak only as of the date they are given and do not necessarily reflect the company's outlook at any other point in time. The company does not undertake to update or review these forward-looking statements.
Corel and the Go further logo are trademarks or registered trademarks of Corel Corporation or Corel Corporation Limited. All other products, fonts, company names and logos are trademarks or registered trademarks of their respective owners. |
