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Technology Stocks : Novell (NOVL) dirt cheap, good buy? -- Ignore unavailable to you. Want to Upgrade?

To: p friend who wrote (31641)	5/16/2000 4:40:00 PM
From: p friend	Respond to of 42771

and also from RB thread ... By: nabsisbananas Reply To: None Monday, 15 May 2000 at 9:12 AM EDT Post # of 11304 Eric has read your message and asked me to respond. I'm director investor relations. First off, the company very much appreciates your frustration, and is starkly aware of how it needs to perform. However much the circumstances of Novell having to pre-announce Q2 have impacted the immediate valuation of the stock, management focus is still very much to the longer-term. It's what ultimately matters in the delivery of shareholder value. And as to the "fun just beginning" comment, Eric is anticipating the competitive power of the company's one Net vision, Net services product strategy, and the long-term market opportunity they represent. To Dr. Schmidt's credit, the last three years have significantly strengthened Novell. First, he and his team stopped what had been five years of revenue and earnings decline. And even now, irrespective of the negative issues in Q2, as a global $1.3 billion company with over 5,500 employees Novell is succeeding at many levels. At the end of Novell's first fiscal quarter in January 2000, cash and short term investments were up $52 million from its fiscal 1999 year end, to $947 million. The company has no debt. Over the last 18 months Novell has maintained its cash balance at almost $1 billion while spending over $900 million of cash generated from operations to repurchase its common shares. The action lowers its overall share count and delivers value to its shareholders. In Q1 of FY 2000 Novell generated cash flow from operations of $141 million. Major uses of cash during the quarter, in addition to share repurchase, included $136 million of long-term and venture capital investments including a $100 million Novell investment in March First (formerly Whittman Hart.) At the end of Q1 deferred revenue on the Novell balance sheet from pre-paid maintenance contracts had grown significantly to $181 million, up $44 million, or 32% year-over-year due to continued growth in large account customer licensing programs, In most cases technology companies that find themselves with failed strategies and uncertain management, as did Novell before Schmidt joined in 1997, don't change... they don't come back from their failures. They brought Novell back around what's become a one Net vision and a Net services product strategy. The intention is to make Novell the network software leader in a world where business is defined by how people are connected across networks. 18 months ago products were the big issue... we've fixed that. 9 months ago, market messaging was the issue...we're actively fixing that. Today sales process, solution-selling and expansion into new markets are the issues... and we are well underway to implementing necessary change. Irrespective of the immediate business issues that the company is facing, Novell is confident in its one Net vision, Net services product strategy, and the long-term market opportunity they represent. Novell is entering new markets - - Solaris, Linux, xSPs and the Internet - - with new products. It is engaging established customers around new Net services offerings. But it is also encountering lengthened selling cycles, and now significant disruption in the traditional computer reseller channel. Yet, overall, the company is confident that it will ultimately succeed in these new markets and more broadly as a business to business Internet software provider... but it will take time, the company has said at least the next six months to address the sales issues. Again, the company appreciates your concern and support... Peter Troop Investor Relations 408-967-8150