JANUARY 20, 1998
Corel Announces Fourth Quarter 1997 Results Restates
First Three Quarters (Part I of V)
OTTAWA, ONTARIO--Today, Corel Corporation released its 1997 fourth
quarter financial results and results for its fiscal year ended
November 30, 1997. (All the financial information is expressed in
U.S. currency.) Revenues for the fourth quarter were $43.6
million, and for the full year were $260.6 million. The Company's
net loss for the 1997 fiscal year was $231.8 million or $3.34 per
share (fully diluted), which corresponds with the aggregate of the
previously reported results for the first three quarters and the
estimated loss for the fourth quarter of $95 million announced on
December 18, 1997. That estimate included a write-off of
approximately $28 million relating to the unamortized balance of
costs of certain JAVA technologies acquired through technology
exchange transactions during the first three quarters of fiscal
1997.
The result actually reported for the fourth quarter is a loss of
$67 million, or $1.00 per share (fully diluted). This differs from
the $95 million estimate because the revenues and the related
amortization of costs previously reported for the JAVA
technologies exchange transactions will be eliminated in the
audited financial statements for the year, thereby eliminating the
$28 million write-off in the fourth quarter. The accounting
treatment of these transactions in the first three quarters was
considered appropriate at the time. The treatment now adopted
results from further consideration by the Company's auditors in
connection with the year-end audit.
Applying this treatment for the first three quarters results in
reductions in revenues of $13 million, $13 million and $7 million,
producing losses of $11.3 million, $117.6 million and $35.9
million in the first, second, and third quarters, respectively.
The quarterly results as reported for the first three quarters are
restated accordingly. The full effects of the restatement are set
out in detail in the financial summaries released today.
As previously estimated, actual fourth quarter results indicate
the Company's cash position increased during the fourth quarter by
more than $8 million to $30.6 million in cash and short-term
investments. At the same time, current liabilities have remained
reasonably constant relative to the fourth quarter of fiscal 1996
while long-term debt relating to the acquisition of WordPerfect
technologies continues to decline. The Company has not borrowed or
required any additional financing throughout fiscal 1997. The
carrying value of the Company's inventories at the end of the
fourth quarter of fiscal 1997 has been reduced by more than 60
percent from its level at the end of the fourth quarter of fiscal
1996.
Dr. Michael Cowpland, president and CEO commented: "While the
results for the 1997 fiscal year are disappointing, the Company
remains strong and well positioned for a successful 1998. In our
continuing focus on core products, the Company divested a number
of product categories in 1997 that did not directly support our
key graphics and business productivity software lines. We see this
as enhancing our ability to provide approximately 25 million users
of CorelDraw and of the WordPerfect family of products with the
most effective graphics and office productivity tools available.
Our products continue to be well received in the marketplace. We
are convinced that this strategy will keep us on the competitive
edge, particularly in our growing corporate licensing market.
Further, our significant ongoing investment in Java is now
bringing us very close to the start of a new era in Webtop
computing, that combines the power of Java, dynamic HTML and XML.
As many leaders in our industry are acknowledging, the emergence
of this new type of technology may be one of the most compelling
events on the 1998 horizon and we are very excited about being at
the forefront." |
