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

To: A. Reader who wrote (556)	4/16/1998 6:48:00 AM
From: A. Reader	Read Replies (2) \| Respond to of 1094

Corel founder says 1998 should be profitable KANATA, Ont. (CP) - Shareholders grilled Corel founder Michael Cowpland on Wednesday over the software giant's mounting losses and the timing of stock sales that benefited Cowpland and other senior executives before Corel shares plunged last fall. One shareholder at Corel's annual meeting even suggested that Cowpland resign if the company doesn't turn a profit this fiscal year. Cowpland tried to reassure stockholders that 1997 was a transition year and that the company would rebound in 1998 on the strength of Dragon, voice-activated computer software that impressed shareholders with its speed and easy use during the meeting. Cowpland also has high hopes for a spiced up version of Java, a simple programming language that can be used over the Internet with a variety of other computer operating systems such as Windows. "No doubt last year we experienced an erosion in confidence," Cowpland said. "We've bottomed out. We're kind of on a road to recovery." As well, Cowpland predicted strong performances for the company's existing mainstay CorelDraw, and for WordPerfect and other products. Corel lost $231.7 million US in 1997, the worst year yet for the graphics software giant as it tried to go head-to-head with its number one competitor, Microsoft. The problems in 1997 have carried into 1998 with Corel announcing last month that its losses nearly doubled to $21.1 million US in the quarter ended Feb. 28. Corel has taken it on the chin ever since it decided to take on Microsoft with its version of WordPerfect. It's first attempt at releasing Java sputtered while the company decided to upgrade the software. And lawsuits against Corel are stacking up like pancakes at a Sunday brunch. The latest is by 1930s screen star Hedy Lamarr. She's suing Corel for several million dollars for using her image without her consent. Another suit is pending involving a Canadian over the use of his image. Corel is also facing three class action lawsuits in the United States brought by shareholders who allege Corel misled investors about its financial performance in 1997 while senior officers sold their holdings before Corel stock prices took a nosedive. Cowpland sold $20.5 million worth of the company's stock - a quarter of his holdings in the company he founded 12 years ago - one month before the share price dropped 40 per cent on the unexpected news that Corel would post huge losses in its third and fourth quarters. Cowpland said at the time he had no knowledge that trouble was on the horizon. He said he needed cash to cover personal debts. He dismissed the suits Wednesday as the "cost of doing business. It doesn't really affect us that much." The setbacks and the low value of Corel stock prompted some industry insiders to speculate Corel's misfortunes could leave it a target for a takeover. Cowpland said he was unaware of any takeover attempts. In fact, he said Corel is on the verge of huge growth. He's betting that the emerging market for computers under $1,000 will be a bonanza because it could create a similar market for affordable software. Corel has already knocked about 40 per cent off the price of some of its products to woo customers. Cowpland also points to estimates that 100 million computers will be sold this year and he hopes Corel software will end up in many of them. Stockholder Milan Stolarik said he expects Cowpland to produce. "He made a commitment that the company is going to be profitable by the end of this fiscal year. I think he should be made to perform. I want to hold him to it." At a later news conference, Cowpland appeared to back off from his promise to turn a profit. "The goal is to be profitable," he said. "There is no such thing as guarantees." In other business, Barbara McDougall, a former cabinet minister in the Brian Mulroney government, was appointed to Corel's seven-member board of directors. She joins former Ontario premier Bill Davis on the board. Asked what she brings to the company, McDougall responded: "I spent 20 years in the investment banking business. I can add, subtract and read balance sheets." southam.com

To: A. Reader who wrote (556)	4/16/1998 6:54:00 AM
From: A. Reader	Read Replies (1) \| Respond to of 1094

COWPLAND ON HOT SEAT By STUART McCARTHY -- Business Editor ÿ Corel Corp. CEO Michael Cowpland fended off calls for his resignation from disgruntled shareholders yesterday and insisted the software company will be profitable this year. ÿA crowd of several hundred people took in yesterday's annual meeting at the Corel Centre to hear the company's mea culpa over its fall from grace and the plunge in share value. ÿDespite the opponents on the floor however, 95% of the 31 million shares voted at the meeting were in favor of the latest slate of board of directors, which returned Cowpland as chairman, president and CEO and added former Tory cabinet minister Barbara McDougall, now the chairwoman of AT&T Canada Long Distance. ÿShareholder Milan Stolarik, complained shares plunged over the past 18 months "due to a large extent to poor management" of Corel. ÿ"My challenge to Michael Cowpland is, if it (Corel) is not profitable in 1998, will you resign," Stolarik asked to solid applause. ÿCowpland said Corel still faced massive competition from a "juggernaut" named Microsoft. ÿ"If you think you can manage more successfully against that juggernaut, congratulations to you," Cowpland told Stolarik. ÿHe said Corel's 12-year track record speaks for itself and that while the stock is at bargain basement prices compared to two years ago, "the potential upside to our stock is immense" with new Java-based software applications and the network computer called NetWinder, poised for the market. ÿCowpland also said he's willing to sell of a minority stake in the Corel Computer Corp. subsidiary. ÿCowpland, said he was "prepared to review progress next year, but we intend to make a profit." ÿCowpland said Corel has worked to stop the loss of share in existing legal and government vertical markets. The legal field, which slipped to a 70% share is now up to 73%. ÿA new version of WordPerfect 8 with voice recognition, should help corporate sales. ÿA demonstration of the software functioned quickly and accurately in response to voice commands and received positive applause as did a prototype of the Java based jSuite. ÿBoard member Paul LaBarge, of the law firm of LaBarge Weinstein, could be seen counseling him against answering several questions, including a projection of revenues. ÿLaBarge also dismissed the impact of several recent lawsuits including a class action against Corel as being the "very favorable blood sport for U.S. attorneys." ÿWhile Cowpland said Corel shares have been the "fastest growing stock in the country, albeit admittedly from a small base" since hitting an all-time low of $2.05 in December, things could have been much worse for the valuation. Shares closed up 20› yesterday to $4.10. ÿAnalyst Duncan Stewart of Terra Capital Corp. said Corel's shares were nearly delisted from the TSE 300 at the low point because it came close to falling below the market capitalization required. ÿ"It was touch and go for a while," said Stewart. "All the index-based mutual funds would have had to dump it." ÿStewart said "Cowpland was a little less enthusiastic" at the meeting that he was in Toronto two weeks ago after inking a deal to put WordPerfect in all Ontario schools. ÿThe picture presented yesterday "was more realistic," he said. canoe.com

To: A. Reader who wrote (556)	4/16/1998 7:00:00 AM
From: A. Reader	Respond to of 1094

Shareholders put Corel CEO on hot seat Cowpland challenged to put job on line KANATA, Ont. -- Minutes after Michael Cowpland repeated his pledge that struggling Corel Corp. will return to profitability this year, shareholders challenged him to put his executive seat where is mouth is. "If it is not profitable, will you resign as president and CEO of this company?" asked Milan Stolarik, who owns 1,500 Corel shares. His question generated loud applause at Corel's annual shareholder meeting yesterday at the Corel Centre arena in Kanata, a few kilometres west of Ottawa. Mr. Stolarik, who said he was upset about the precipitous drop in Corel's share price over the past year, later added that he would want to see Mr. Cowpland remain as Ottawa-based Corel's chairman. Corel lost $231.7-million (U.S.) in the year ended Nov. 30, 1997, largely because revenue from its WordPerfect line of office software virtually evaporated in the face of tough competition from Microsoft Corp.'s Office software program. Mr. Cowpland did not accept Mr. Stolarik's challenge. Instead, he said Corel's woes did not result from mismanagement but were a natural result of competing against the "juggernaut" of Microsoft, based in Redmond, Wash. "If you can manage smoothly against that juggernaut, well then, congratulations to you." He said Corel will edge into the black this fiscal year, but added that profitability isn't the only measure of success. "There's more to a company than one number." Other shareholders had equally tough questions for Mr. Cowpland, including one about his controversial sale of $20.5-million (Canadian) worth of Corel shares last August, just a few weeks before the stock fell on news of deep losses in the third quarter. Shareholder Greg Landry said he was shaken by Mr. Cowpland's sale of shares, as well as Corel's restatement of its revenue for fiscal 1997. Corel's auditors told it to delete $30-million (U.S.) in revenue derived from technology exchanges. "For us, it is an erosion of confidence," said Mr. Landry, who lives in Peterborogh, Ont. Mr. Cowpland did not respond directly to the question about his stock transactions, saying they were an individual matter unrelated to the value of the company. He has previously said he sold the shares to cover personal debts. The restatement of financial results is the basis for five shareholder lawsuits in the United States that are seeking class-action status. Corel said the suits have no merit, and that it will contest them vigorously. Mr. Cowpland acknowledged that some investors have lost confidence in his company, but said new technologies will help boost Corel's value. He noted that he remains Corel's largest individual shareholder, with a 10.9-per-cent stake, even after the August stock sale of a quarter of his holdings. "I have the most at stake in the upward mobility of the stock." Mr. Cowpland said new office software, based on the Java programming language, will be released in July. Corel is already selling bridging software that allows programs written for a particular computer operating system to work with a formerly incompatible operating system. The company also expects to start selling its network computer shortly, after months of delays. Despite the heated questions from shareholders, Corel's slate of nominees for its board of directors was handily approved. Barbara McDougall, the former federal Conservative cabinet minister, joined the seven-member board, to become the only woman currently on the board. globeandmail.com