>>>I was wondering if anyone knows what the earnings/loss and revenue expectations are for the quarter just ending?<<<
Hi Frank,
I don't know anything. This was the expectation at the time of last quarter's earnings release according to M. O'Reilly: If final sales remain the same - and he said there's no reason to believe they won't - revenue could be close to US$69 million in the second quarter.
From this article:
Friday, March 27, 1998
Corel reports huge loss in first quarter
By JILL VARDY
Technology Reporter The Financial Post
ÿOTTAWA - Corel Corp. said yesterday first-quarter sales were little more than half those a year earlier - and it had another huge loss.
ÿBut second-quarter sales may be high enough to give the software maker its first profit in five quarters, officials suggested.
ÿThe Ottawa-based company reported a net loss of US$21.1 million (US36› a share) for the first quarter ended Feb. 28, on revenue of US$45.5 million. A year earlier it lost US$11.3 million (US19›) on sales of US$80.7 million.
ÿSeveral analysts, including Michel DeLavergne of Dlouhy Investments Inc., were expecting revenue of US$55 million to US$60 million.
ÿ"Even though the numbers are negative, we've made substantial progress in terms of restructuring the company," president and chief executive Michael Cowpland said in a conference call.
ÿHe said Corel has cut advertising spending by 50% and the inventory sitting in distributors' warehouses has shrunk "pretty well down to the ideal just-in-time type model we've been striving to achieve."
ÿInventory held by distributors is said to be down to about 70 days' worth of sales. So Corel's sales into distribution channels are expected to increase in the current quarter, better reflecting the US$80-million worth of products actually sold by distributors in the last quarter.
ÿChief financial officer Michael O'Reilly said in the latest quarter, sales to distributors (which the company reports as revenue) will roughly equal final sales to customers. If final sales remain the same - and he said there's no reason to believe they won't - revenue could be close to US$69 million in the second quarter.
ÿThat takes into account US$11.2-million worth of price reductions for Corel's WordPerfect software announced March 9. It cut WordPerfect prices to try to capture a bigger share of the market for software to run on cheap personal computers.
ÿIt's not guaranteed Corel can make a profit on US$69 million of revenue. But when O'Reilly was asked if it can break even on revenue of US$65 million, he replied, "you would be in the neighborhood there."
ÿThat's based on cost of sales of US$10 million and expenses of US$55.4 million in the first quarter for advertising, selling, administration, research and development, and depreciation - US$10 million less than a year earlier.
ÿDeLavergne indicated the break-even point might be closer to US$70 million, based on the US$55-million worth of expenses and a cost of sales of about 22% of revenue in the first quarter.
ÿCorel needs to turn a profit soon or risk running out of cash. Its cash position fell to US$18.9 million in the first quarter, US$12 million below the fourth-quarter 1997 level.
ÿExecutives told reporters yesterday key sales strategies include: building retail sales with price reductions; having more people working on corporate sales; and adding revenue through a new line of Java-based applications tools, Open-J and J-bridge. Those products, test versions of which are now available, won't bring in revenue until the end of the year, said vice-president of sales Don Sylvester.
ÿCowpland threw cold water on reports Adobe Inc. is seeking to buy Corel or some of its product lines. "We haven't had any approaches at all. Those are merely rumors," he said.
ÿAdobe, which competes with Corel in graphics software, leads in the Macintosh graphics market, while Corel has a strong hold on the Windows-based business.
ÿCorel stock (COS/TSE) closed at $2.95 yesterday, down 5›.
ÿ"It seems like a normal risk of doing business if we talk about lawsuits emanating out of the U.S.," O'Reilly said. "We intend to vigorously defend the claims in those suits."
ÿ |
