Corel's survival still up in the air
Industry watchers are starting to think there will be no fairy-tale ending for Corel,
no hero on a white horse coming to the rescue. The company is continuing to slide
and its salvation may come in the guise of a takeover, not a turnaround.
"It's just like a desperate man that's clutching onto things that might support his
weight in the water," says Richard Morochove, a Toronto-based computer
consultant. "Every few months, Corel has a new magic wand that it waves in an
attempt to save the company."
But the magic will have to be pretty sophisticated to save the Ottawa-based Corel
Corp. The company hasn't been in the black since the last quarter of 1996, when it
recorded net income of $6.5 million. And despite a pledge by CEO and president
Michael Cowpland that 1997 would be "a banner year," last year turned out to be
one of the bleakest for a company that was once the darling of the Canadian
computer industry.
Five straight losing quarters and a $104-million write-down of outdated
WordPerfect software have left the company reeling. Cowpland has promised
Corel will be profitable by the end of the current fiscal year. Nevertheless, some
shareholders are raising questions about Cowpland's future with the company.
"I view Cowpland as the Pollyanna of the computer industry," Morochove says.
"Things are always great. Corel's stock price is down? Well, he says, then that's a
tremendous buying opportunity."
Despite talk by Don Sylvester, Corel's senior vice-president of sales, about an
"orderly divestment of non-core businesses," industry experts say the company has
to do something about tumbling sales. Indeed, if Corel is concentrating on its main
products, then shareholders must be concerned about the drop in sales during the
first quarter of 1998. Sales for that period were $45.5 million, less than half of the
$93.7 million the company recorded during the first quarter of 1997.
Sylvester says the company's focus on the core aspects of its business will be
reflected in the bottom line.
"We're very focused on true end-user demand," he says. "We've built a
professional, confident sales force. It's our contention that software, more than
ever, requires the skill set that is akin to managing consumer packaged goods. The
technology isn't enough to optimize your success." ......
Note: The rest of this article is worth reading too.
Regards to all - Kurt
plesman.com |
