Novell (NOVL) dirt cheap, good buy? Message Board

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Technology Stocks : Novell (NOVL) dirt cheap, good buy?

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To: vinod Khurana who wrote (17445)	9/20/1997 6:25:00 PM
From: Jim McCormack	of 42771

95-97 Revenue Breakdown and Thoughts for Q4 -97 95 95 95 96 96 96 96 97 97 97 97 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Educ 41 41 ? 41 35 39 36 32 32 20 22* UNIX 22 20 ? 31 18 18 12 10 9 8 6* Netware 244 295 ? 230 65 216 243 253 169 39 132* Net Svs 77 93 ? 93 49 92 94 80 63 24 40* Totals 384 449 ? 395 167 365 385 375 273 91 200* * My estimates for Q4-97 - A nice Round 200 - possibly lower...more like 180. Educ - The Service, Education, and Other category as teh Sec FIlings call it. Well - I can't see this improving. I so I'm trending it down sequentially year to year. After the last channel stuff exercise the group rebounded 4 million but this time I'm calling for 2 million dollar bounce. Unix - This group is royalty payments from SCO and now that they have a new release the users who upgrade trade in a product that paid Novel a royalty for one that does not. It will continue to decline.... I peg it to come in at 6 million. Netware - This is both Box and OEM license revenues for both 3.X and 4.X lines. Lumping all this together in the Filing is "Crap". As a shareholder I think they should break it out by product. How can we analyze such a broad category effectively? That being said... We now that 3.X is down to 35 million 2nd quarter and decreasing 50% per quarter sequentially (Call it 17 then). Netware 4.X was 132 - and I am inclined cut it to 115 to reflect lighter demand (Moab has frozen the market - people are waiting IMHO) Network Services - Managewise, Groupwise, Border Manager, Misc TCP/IP tools gateways routers.... I'm giving them the Channel rebound that is modeled after the bounce in the category sfter the last channel stuffing episode - 40 million. The revenues are really at the discretion of the company. Ideally you match the reseller "Sell through - to end consumers" with your corporate "Sell Into the Channel - the distributers, vars, Resellers" (They stock it on shelves and in the warehouse while they "Sell it through" to the actual users). That gives you an accurate picture of where things are going. However, under the current model investors can never tell if the demand is matched accurately because we don't get numbers from Novell to indicate how the Balancing act is going. That leads to overly optomistic views every time (Two times at least in 2 years). I think Eric also said 200 million right? And given the way Novl can easily manipulate the channel so they can reach any number Eric wants them to I think I'll stick close to his number..... Margin is going to hell and They can't cut expenses fast enough. I see many, many more layoffs. They simply do not need all these people. They must reduce expenses. The big Red training engine is slowing and its time to cut that division. Start by reorganizing the Ed department and keep going.... Eric is also taking much too long to formulate his team. Still no COO and things are very grim. The new team needs time to get oriented and lay plans... We are looking at losses for 2 more quarters as I see it. Jim

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