Novell Reports First Fiscal Quarter 1998 Results: Earnings of $0.04 Per Share On $252 Million of Revenue
PR Newswire - February 24, 1998 16:02
PROVO, Utah, Feb. 24 /PRNewswire/ -- Novell, Inc. (Nasdaq: NOVL) today
reported revenue of $252 million and net income of $14 million for its first
fiscal quarter ended January 31, 1998. Earnings on a diluted basis were
$0.04 per share, including a contribution from operating profit for the first
time since the company's restructuring in mid-1997.
"First quarter fiscal 1998 results reflect the solid progress we've made
in stabilizing Novell's business and implementing the pragmatic recovery
strategy that we put in place in 1997," said Dr. Eric Schmidt, chairman and
CEO of Novell. "Our earnings of $0.04 were higher than we expected as costs
and expenses were lower due to tighter controls and new management practices
across every aspect of Novell's business."
First quarter operating expenses totaled $192 million, down $20 million
from the fourth quarter of 1997, and $45 million lower than the year-earlier
period.
"It is gratifying to me that at the six-month mark following our
restructuring we are seeing the effectiveness of our new management controls
and priorities. We have made further progress in aligning the business model,
clarifying focus around a handful of key initiatives, and expanding our
product portfolio. The company is executing plans it outlined last year to
become the leading provider of network platforms with advanced Internet
services."
During the quarter, Novell shipped new products that are part of the next
generation of Internet related solutions it is bringing to market through
1998. New products included BorderManager FastCache, NDS for NT, Netscape
Server products for NetWare servers, Year 2000 solutions for NetWare, and
ManageWise. In January the company met its schedule for launching a broad
public beta test of its NetWare 5 network server platform. The final NetWare 5
product, based on open Internet standards, is expected to ship in mid-1998.
On a geographic basis, the United States contributed 57 percent of total
revenue. The Europe, Middle East, and Africa region accounted for 28 percent
of revenue, and Asia Pacific and the Americas totaled 9 percent and 6 percent,
respectively.
On the balance sheet, cash and short-term investments were $1.045 billion
at the end of the first quarter, up $12 million from fiscal year-end 1997.
In the first quarter of fiscal 1997, before the restructuring of Novell's
business, the company reported revenue of $375 million and earnings of
$0.15 per share. In fourth quarter 1997, the first fiscal period following the
restructuring, Novell reported $269 million in revenue and earnings of
$0.02 per share. First quarter revenue of $252 million was lower than fourth
quarter fiscal 1997 primarily because of weakness in the Asia Pacific region.
Founded in 1983, Novell is the world's leading provider of network
software. The company offers a wide range of network solutions, education, and
support for distributed network, Internet, and small-business markets.
Information about Novell's complete range of products and services can be
accessed on the World Wide Web at novell.com.
Forward looking statements in this release are made under the Safe Harbor
Reform Act of 1996. These statements 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 results to
differ materially from projected statements can be found in Novell's 10-K and
10-Q filings, as well as the annual report.
Novell, Inc.
Consolidated Unaudited Condensed Balance Sheets
(In thousands)
Jan. 31, 1998 Oct. 31, 1997
ASSETS
Current assets
Cash and short-term investments $1,045,144 $1,033,473
Receivables, net 225,039 234,358
Inventories 9,178 10,656
Prepaid expenses 66,205 57,685
Deferred & refundable income taxes 119,833 134,210
Total current assets 1,465,399 1,470,382
Property, plant and equipment, net 363,508 373,865
Other assets 73,754 66,402
Total assets $1,902,661 $1,910,649
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $66,490 $82,759
Accrued compensation 48,041 51,397
Accrued marketing liabilities 24,059 27,728
Other accrued liabilities 83,336 85,157
Income taxes payable 4,831 --
Deferred revenue 83,586 74,915
Total current liabilities 310,343 321,956
Minority interests 20,711 23,276
Shareholders' equity 1,571,607 1,565,417
Total liabilities and
shareholders' equity $1,902,661 $1,910,649
Novell, Inc.
Consolidated Unaudited Condensed Statements of Income
(In thousands, except per share data)
First Fiscal Quarter Ended
Jan. 31, 1998 Jan. 31, 1997
Net sales $252,042 $374,847
Cost of sales 55,139 75,971
Gross profit 196,903 298,876
Operating expenses
Sales and marketing 101,735 127,890
Product development 57,786 71,755
General and administrative 32,450 37,731
Total operating expenses 191,971 237,376
Income from operations 4,932 61,500
Other income, net 14,643 13,777
Income before taxes 19,575 75,277
Income taxes 5,481 24,465
Net income $14,094 $50,812
Weighted average shares:
Basic* 351,031 346,506
Diluted* 352,971 347,095
Net income per share:
Basic* $0.04 $0.15
Diluted* $0.04 $0.15
* The Company has always reported net income per share on a diluted basis.
The calculation of diluted net income per share includes the effect of common
stock equivalents such as outstanding stock options, while the calculation of
basic net income per share does not.
SOURCE Novell, Inc.
/CONTACT: Peter Troop, 408-577-8975, or peter_troop@novell.com, or
Jonathan Cohen, 408-577-7268, or jcohen@novell.com, both of Novell, Inc./
/Company News On-Call: prnewswire.com or fax, 800-758-5804,
ext. 100266/
/Web site: novell.com
(NOVL)
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