Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Corel - Investors with no Humor -- Ignore unavailable to you. Want to Upgrade?

To: Mark Sobkowicz who wrote (514)	3/27/1998 12:52:00 PM
From: A. Reader	Read Replies (1) \| Respond to of 1094

Hi Mark, Thanks. Just wanted to re-post the article. Canoe has a way of removing these forever from their archives. Kurt P. 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."

To: Mark Sobkowicz who wrote (514)	3/31/1998 5:25:00 PM
From: Mark Sobkowicz	Read Replies (1) \| Respond to of 1094

Corel launches family of software tools for Java " Whether this strategy proves more lucrative than the last one remains to be seen. Even Corel admits there's not much chance of revenue from the new products this year. Don Sylvester, senior sales vice-president, predicts they will offer a "hyper-growth revenue opportunity" for the company. That's not an unrealistic prediction, analysts say. One of the strongest themes in the software industry is the desire to take software applications off the computer and put them on the server, making them cheaper and easier to control and change. Java, designed to run on any type of operating system, is the most logical way to achieve that." canoe.com