Attention,
Well I figured It out, Here is the letter and the responce. The full letter I wrote them followes the responce as he replied to each part individually.
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Dear Mr. Marengi,
I am a faithfull Novell investor, and have been for 2 years now. You
can
see why I am not very pleased. I have just a few questions for you
and
would appreciate a response as soon as possible.
Dear Scott,
I'm Peter Troop, senior director investor relations at Novell. Joe
Marengi has read your email message and asked me to respond to the
questions you've raised. Incidentally, you may also contact the
Novell investor relations department by phone at (800) 317-3195.
When you hear the menu, press 5 to speak with someone in investor
relations.
In response to the series of questions you posed, the following
answers summarize opinion and commentary on Novell's business and
conveyed by the company through numerous public venues this year.
Novell's public statements include forward looking statements made
under the Safe Harbor Reform Act of 1996.*
I encourage you to access www.Novell.com and go to company
information, and the investor relations page,
www.novell.com/strategy/finance.html, to read *Corporate
Background Information* summaries. These materials provide an
overview of Novell strategy and direction, and reference press
releases, speeches, briefings and other Novell related information.
The Novell web page has an extraordinary amount of detail about
Novell products and services, their competitive positioning and
worldwide availability.
1Q. What is actually being done to enhance shareholder value?
Rebuilding shareholder value is an overriding priority for Novell's
management and board of directors. We intend to deliver to investors
the full value of Novell's leadership in network software and will not
be satisfied until we do.
Novell is the largest provider of network software in the world. We
are the world's fourth largest software company. Based on Novell's
third fiscal quarter, the company's annualized revenue run rate is at
$1.5 billion. Novell generates more than two times the revenue
Microsoft achieves from network software. In our most recent quarter
we delivered more than five times the revenue of Netscape. On the
earnings side, Netscape earned $528 thousand in profit, Novell $59
million.
In the third fiscal quarter, we returned after-tax profitability to
16 percent of revenue -- approximately even with the 16.6 percent of
revenue achieved in 1995. That places us in the top third of
companies in our industry, and well ahead of most other companies
regardless of their industry category.
To put our performance in perspective, Novell's rate of profitability
was ahead of Oracle, Informix, Silicon Graphics, Sybase, Adobe, 3Com,
and Sun in 1995.
In addition, through the first three quarters of fiscal 1996, Novell
spent $456 million to repurchase 33 million shares of stock in open
market transactions. These shares were then retired, enhancing the
value of shares held by investors.
Beyond this measure, over the last nine months Novell has:
* Refocused its business on its core network software strength;
* Refreshed its product lines across the board following accelerated
product development of ManageWise 2.1 (shipping since August);
IntranetWare and NetWare 4.11 (both began shipping on October 2); and
GroupWise 5, (due to ship in mid-October);
* Evolved the NetWare network operating system to IntranetWare, a
network solution for the rapidly expanding intranet and Internet
markets.
2Q. What does Novell have planed for future growth of the company?
To succeed as a technology company, Novell knows it must sustain
revenue growth. For fiscal 1997, our objective is to achieve
percentage revenue growth in the mid-teens over fiscal 1996.
Novell's third fiscal quarter 1996 results provide a baseline for
Novell's refocused network software business. The company's
objective is to grow revenue from the $365 million reported at the
end of that period.
Novell anticipates that as much as two thirds of its revenue next
year will come from new products that have been launched this fall.
In addition, in 1997 Novell anticipates gaining revenue from new
sources --network services software that runs on NT and UNIX as well
as on public data networks.
3Q. Why have you ignored so many of the investors e-mail. As acting
CEO of
OUR company don't you feel obligated to respond to the individual
investor.
There is a thread on the internet called Silicone Investor, it is
there
where the novell investors go to communicate with each other, are you
even
aware of this? Several investor have expressed concerns over your
failed
response to them.
Since being appointed president on August 29, Joe Marengi has had a
great many priorities and commitments to balance. We believe that
our investors largely understand that the most important action items
for him to focus on -- for the benefit of Novell customers, employees
and shareholders -- are turning around the company, making the
company more responsive to customers and leveraging Novell's
strengths to deliver revenue growth.
Joe has been speaking broadly with press, and intends to continue to
do so. As a public company this provides a most effective way for
Marengi and the company to meet their obligation to openly
disseminate information that relates to what we are trying to
accomplish. In particular, the hundreds of inches written about
Novell in computer industry trade press each week offers Investors an
opportunity to keep pace with ongoing commentary on Novell, its
products and business.
Although Joe may not be able to answer questions personally, he has
asked me and my staff to respond to investor inquiries. We are well
versed in Novell's strategic direction, market opportunities,
management priorities, and competitive issues, and will be able to
assist you by email, regular mail, or again, by telephone -- 800-317
3195, and press 5 when you hear the menu.
4Q. Why are you not countering the hype of NT?
In October, Novell launched a $20 million worldwide advertising
campaign to support the launch of our new products and intranet
solutions. It's the largest new product media budget in the
company's history and will support advertising in leading
publications, including Business Week, Financial Times, Fortune,
Forbes, Newsweek, Wired, Sports Illustrated and the Wall Street
Journal. It will also fund banner advertising and commercials in
more than 25 online media, such as America On Line, Netscape, CNN
Interactive, and Hot Wired.
Our objective is to reach beyond Novell's traditional decision maker
audience to target the full range of today's network purchasers and
influencers -- CEOs, COOs, CIOs, and other executives -- who are
increasingly involved in purchase decisions for network software and
services.
These campaigns are intended to significantly increase awareness of
Novell as the world's largest network software company and a major
Internet and intranet player. Novell will build on these efforts
with continuous advertising in fiscal 1997.
As to NT -- support for NT in network solutions is one of the key
points of value for Novell network software. Today, as has
traditionally been the case, the typical client on a Novell network
is a Microsoft client, whether DOS, Windows 3.1, Windows 95 or NT --
although Novell anticipates this will be less relevant in the future
as network browsers emerge as the universal network client,
irrespective of the underlying operating system.
This fall Novell intends to ship a new release of the NetWare client
for Windows NT that fully supports the Novell Directory Service and
embraces NT at the desktop. This advanced network client software
has been in open beta for two months.
Novell network services that support NT servers are important to
Novell customers. Novell's ManageWise software manages both NT
servers and IntranetWare servers; Novell's GroupWise runs on NT
servers as well as IntranetWare and Unix servers. In 1997 Novell
will bring Novell Directory Services and other network services to
both NT and Unix servers.
According to IDC, the market research firm, Novell IntranetWare and
NetWare server operating environments outsell Microsoft NT network
servers by more than two to one. As a general purpose operating
system similar to UNIX, NT has limitations providing network
services. Novell's products are specialized network platforms and
deliver significantly better network performance, security,
scalability and reliability.
5Q. What do you have planned for the 1 billion in cash?
Novell's strong cash position gives the company tremendous
flexibility. Joe views Novell's cash as one of the larger venture
capital pools in Silicon Valley. With many of the business issues of
the last year behind us, the cash will be an important factor in
investments we make in technologies that are synergistic with our
network software business.
6Q. Do you have the authority to talk to other companies about
mergers and
acquisitions?
Joe Marengi, as president of Novell, has full authority to represent
Novell in discussions with his counterparts in other companies. In
addition, questions of mergers and acquisitions would always involve
the Novell board of directors.
Mr. Marengi these are just some of my concers about Novell, I know
you are
in the eye of a hurricane right now, trying to stay focused, but I
would
appreciate it if you take the time to answer these questions.
Best of luck to you moving the NEW NOVELL foward, I am eagerly
anticipating
your reply.
Thank You
Scott Phillips
* Statements made under the Safe Harbor Reform Act of 1996 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 actual results to differ materially
from projected statements can be found in Novell's 10K and 10Q
filings, as well as the annual report.
>>> End of Message >>
>>> Scott Phillips - 10/1/96 1:38 AM >>>
Dear Mr. Marengi,
I am a faithfull Novell investor, and have been for 2 years now. You
can
see why I am not very pleased. I have just a few questions for you
and
would appreciate a response as soon as possible.
1. What is actually being done to enhance shareholder value?
2. What does Novell have planed for future growth of the company?
3. Why have you ignored so many of the investors e-mail. As acting
CEO of
OUR company don't you feel obligated to respond to the individual
investor.
There is a thread on the internet called Silicone Investor, it is
there
where the novell investors go to communicate with each other, are you
even
aware of this? Several investor have expressed concerns over your
failed
responce to them.
4. Why are you not countering the hype of NT?
5. What do you have planned for the 1 billion in cash?
6. Do you have the authority to talk to other companies about
mergers and
aquisitions?
Mr. Marengi these are just some of my concers about Novell, I know
you are
in the eye of a hurricane right now, trying to stay focused, but I
would
appreciate it if you take the time to answer these questions.
Best of luck to you moving the NEW NOVELL foward, I am eagerly
anticipating
your reply.
Thank You
Scott Phillips
Stockholder
======================================================
Well? What do you guys think? Let me Know, as it sounds good to me!!!!!
Later,
Scott |
