Corel Announces Profitable Fourth Quarter and Fiscal 1999: One-time Gain Results in Third Consecutive Profitable Quarter.Business Editors OTTAWA--(BUSINESS WIRE)--Jan. 18, 2000 COREL(NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CORL CORL Corel Corporation (stock symbol) CORL Coalition of Reef Lovers CORL capital outlay revenue limit CORL change-orientated reflective listening (psychotherapy) CORL Central Ontario Ringette League ) (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :COR cor (kor) [L.] heart. acute cor pulmonale acute overload of the right ventricle due to pulmonary hypertension, usually due to acute pulmonary embolism. .) Corel Corporation (company) Corel Corporation - A software publisher best known for the CorelDraw application. Founded in June 1985 by Dr. Michael Cowpland, Corel Corporation was originally a systems integration company. (NASDAQ:CORL) (TSE:COR) today announced results for its fourth quarter ended November November: see month. 30, 1999. Revenues for the fourth quarter of fiscal year 1999 were $60.9 million, compared to $67.2 million in the fourth quarter of fiscal 1998. Net profit for the quarter was $4.6 million or $0.07 per share fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. , compared to a profit of $6.8 million or $0.11 per share in the same period last year. Revenues for fiscal 1999 totaled $243.1 million compared to $246.8 million in fiscal 1998. Net profit for the fiscal year 1999 was $16.7 million or $0.26 per share fully diluted, compared with a loss of $30.4 million ($0.51) or per share reported for fiscal year 1998. All figures are reported in US currency. Corel pre-announced December 22, 1999 that based on preliminary estimates, the Company would report a loss of approximately $0.14 per share and the results from operations were consistent with that announcement. In the time following that announcement, the Company was able to recognize the tax value of certain losses and investment tax credits which had been deferred pending the outcome of a Revenue Canada review of Corel's 1993 to 1995 taxation years. "This review, which has been in progress for approximately three years, precluded Corel from recognizing certain tax attributes which had arisen in the taxation years subsequent to those under review," said Michael O'Reilly, Corel's executive vice president, finance and chief financial officer. "It has now become possible to quantify Quantify - A performance analysis tool from Pure Software. these amounts and as a result, Corel is able to report a positive adjustment totaling $14.5 million for the fourth quarter of fiscal 1999." Earlier this month, Mr. O'Reilly announced his intention to resign as Corel's chief financial officer. Mr. O'Reilly has now agreed to stay with Corel until June 30, 2000 as a financial consultant and advisor. As previously announced, Corel's operational results for the quarter were negatively affected by sales below anticipated levels, primarily in the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. retail channel for Corel's productivity applications. Additionally, the Company incurred higher than anticipated expenses in a number of areas including cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold , advertising and selling, general and administrative (SG&A) costs. "Overall, Corel has made significant progress in restoring its financial base while at the same time, maintaining the momentum of its flagship CorelDRAW and WordPerfect brands," said Mr. O'Reilly. "It is now in a strategic position to move forward aggressively to leverage those strengths into the Linux marketplace." Corel enjoyed strong inaugural sales of the new Corel(r) LINUX(r) OS, totaling $3.2 million for the quarter. "It should now be clear to everyone that Corel is financially among the top Linux players," said Dr. Michael Cowpland Michael Cowpland (born April 23, 1943) is a Canadian entrepreneur, businessman, and the founder and one-time president, chairman and CEO of Corel, a Canadian software company. Cowpland was born in Bexhill, Sussex, England and obtained a BSc. , Corel's president and chief executive officer. "Not only is Corel LINUX Corel Linux, also called Corel LinuxOS, was a Debian-based Linux distribution made by Corel that was released in late 1999. Corel later discontinued the distribution, but did not remove the former Corel Open Source Development website until March 2002. OS the most popular Linux software download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. on the CNET (body) CNET - Centre national d'Etudes des Telecommunications. The French national telecommunications research centre at Lannion. site, it is also one of the most popular Linux distributions  The external links in this article or section may require cleanup to comply with Wikipedia's content policies. among
consumers. With Corel WordPerfect See WordPerfect Office and WordPerfect Corporation. 8 for Linux continuing to be the
second-most popular Linux download, we think this provides tremendous
promise for the launching of our Linux application suites in the next
few months."During the fourth quarter, Corel continued to expand and augment aug·ment v. aug·ment·ed, aug·ment·ing, aug·ments v.tr. 1. To make (something already developed or well under way) greater, as in size, extent, or quantity: its Linux strategy, ramping up its affiliates program and bringing together tremendous expertise to make Corel a comprehensive, end-to-end end-to-end a pattern of anastomosis in which severed ends are matched and united, in contrast with other patterns such as end-to-side or side-to-side. Usually applied to anastomosis of the intestine. Linux products and services provider. Deals begun in the fourth quarter and now completed include LinuxForce, Newlix and OE/ONE.com, adding to existing relationships with Rebel.com and GraphOn Corp. "Corel's affiliates let us maintain our focus on providing the best desktop Linux This article or section is written like a personal reflection or and may require .Please [ improve this article] by rewriting this article or section in an . OS and the delivery of mainstream, marquee applications for Linux such as WordPerfect and CorelDRAW," said Dr. Cowpland. "At the same time, we are able to create tight integration with all other elements of Linux from technical support to software and hardware server needs, thin client connectivity and seamless access between Linux and Windows applications A program that is written to run under Microsoft's Windows operating system. Such applications typically run under all 32-bit versions of Windows, but earlier applications might also run under the 16-bit versions (Windows 3.x) as well. See Windows. and as of today, the stellar opportunities in the Information Appliance See Internet appliance. (hardware) Information Appliance - (IA) A consumer device that performs only a few targeted tasks and is controlled by a simple touch-screen interface or push buttons on the device's enclosure. arena." 4th Quarter 1999 Achievements * In September, Corel announced the formation of a strategic alliance with Inprise Corporation Inprise Corporation - Borland Software Corporation. , to accelerate commercial mainstreaming of Linux(r) technology. As part of the alliance, the companies formed a research-and-development partnership to facilitate the development of Corel's office productivity applications and Inprise's application development tools and enterprise solutions for the Linux operating system operating system (OS) Software that controls the operation of a computer, directs the input and output of data, keeps track of files, and controls the processing of computer programs. . * In September, Corel entered into a licensing agreement with Ultimatte Corporation. The agreement grants Corel the worldwide, perpetual PERPETUAL. That which is to last without limitation as to time; as, a perpetual statute, which is one without limit as to time, although not expressed to be so. right to distribute the PC and Macintosh versions of Ultimatte's KnockOut(tm) software application on a stand-alone basis and as part of Corel applications. * In October, Corel announced that it had signed a licensing agreement with GraphOn Corporation to include GraphOn's WinBridge(tm) web-enabling software in Corel applications. By adding WinBridge to its applications, Corel can provide an instant deployment solution that will allow users to access Corel's Windows(r) applications over any network connection, including the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the , regardless of the operating system on their desktop. * In November, Corel joined the fast-growing Application Service Provider (ASP asp, popular name for several species of viper, one of which, the European asp (Vipera aspis), is native to S Europe. It is also a name for the Egyptian cobra (Naja haja). ) Industry Consortium, an international advocacy group dedicated to fostering greater understanding and guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. for the fast-emerging application service provider segment of the computer industry. * In November, Corel and FutureLink Corp. announced a pilot program for Corel's new online initiative - subscription pricing via the Internet. FutureLink will remotely host WordPerfect(r) Office 2000 so that FutureLink clients can purchase monthly rental licenses for the software. * In November, Corel Corporation announced that it had signed a major bundling agreement with Toshiba in the European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. market. Corel(r) WordPerfect(r) Suite 8 OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and was to be bundled on Toshiba's consumer notebooks in Europe. * In November, Corel announced that it had signed a deal to transfer substantially all of its assets related to the CorelVIDEO(tm) product line to simply.com Inc. The sale of CorelVIDEO completes the business plan that Corel put into place in 1998 to concentrate on its core technologies. * In November, Corel Corporation announced the availability of the much-anticipated Corel(r) LINUX(r) OS. Corel LINUX OS is a major leap forward in creating a large desktop market for Linux, and Corel launched a landmark version of the most user-friendly Linux OS distribution to date. * In November, Corel announced its first major Linux(r) OEM alliance, which will see its Linux operating system, Corel(r) LINUX(r), bundled with every computer motherboard Also called the "system board," it is the main printed circuit board in an electronic device, which contains sockets that accept additional boards. In a desktop computer, the motherboard contains the CPU, chipset, PCI bus slots, AGP slot, memory sockets and controller circuits for the package shipped worldwide by the PC Chips group of companies. PC Chips will also ship Corel(r) WordPerfect(r) 8 for Linux and Corel WordPerfect Suite See WordPerfect Office. 8 OEM (for Windows(r)) with its motherboards. * During the fourth quarter, Corel launched the following products: Corel GALLERY(tm) 1,300,000, Corel GALLERY(tm) 380,000, Corel Print Office(tm) 2000, Corel Print Office(tm) 2000 for Macintosh(r), WordPerfect(r) Family Pack, Print House(tm) 2000 for Macintosh(r), Corel(r) Custom Photo for the Macintosh(r) and Corel(r) Custom Photo for the PC. 4th Quarter 1999 Awards Corel products won 31 awards during the quarter. CorelDRAW 9 won 14 awards and Corel WordPerfect Office 2000 won six awards. A sampling of the awards are as follows: CorelDRAW 9 won a Reader's Choice Award, a Favorite Graphics Software award and an MVP (Multimedia Video Processor) A high-speed DSP chip from Texas Instruments, introduced in 1994. Officially introduced as the TMS320C80, it combines RISC technology with the functionality of four DSPs on one chip. Finalist award. WordPerfect Office A suite of office applications for Windows from Corel that includes WordPerfect, Quattro Pro, Corel Presentations, Paradox and CorelCENTRAL (PIM, scheduling, etc.). It is the successor to Corel WordPerfect Suite, which was the successor to Corel Office. 2000 won an Editor's Choice award, a Gold award and a Best Buy award. In November, Corel Corporation won several awards at COMDEX/Fall '99 on the strength of its new Linux(r) offerings and its core Windows(r) applications. On CNET, one of the world's largest download portals, the Corel LINUX OS is the most popular Linux download of any kind. Corel Corporation Corel Corporation is an internationally recognized developer of award-winning business productivity, graphics and operating system solutions on the Windows(r), Linux(r), UNIX UNIX Operating system for digital computers, developed by Ken Thompson of Bell Laboratories in 1969. It was initially designed for a single user (the name was a pun on the earlier operating system Multics). (r), Macintosh(r) and Java(tm) platforms. Corel also develops market-leading, Web-based solutions including applications, contents, e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. and online services. For access to these services and more information go to www.corel.com or www.corelcity.com. Corel is headquartered in Ottawa, Canada. Corel's common stock trades on the NASDAQ Stock Market Nasdaq stock market The first electronic stock market listing over 5000 companies. The Nasdaq stock market comprises two separate markets, namely the Nasdaq National Market, which trades large, active securities and the Nasdaq Smallcap Market that trades emerging growth companies. under the symbol CORL and on the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. under the symbol COR. This press release contains statements that are forward-looking as that term is defined by the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These statements are based on current expectations that are subject to risks and uncertainties. Actual results will differ due to factors such as shifts in customer demand, product shipment schedules, product mix, competitive products and pricing, technological shifts and other variables. Readers are referred to Corel's most recent reports filed with the Securities and Exchange Commission. Corel, WordPerfect, CorelDRAW, Corel LINUX OS, PHOTO-PAINT, Corel VENTURA A Windows desktop publishing program from Corel. It is a full-featured program suited for producing books and other long documents and includes several graphics functions from CorelDRAW. Corel VENTURA was formerly Ventura Publisher, developed by a company that was later acquired by Xerox. Publisher, Print House, Print Office, Gallery, Custom Photo and the Go Further logo are trademarks or registered trademarks of Corel Corporation or Corel Corporation Limited. Linux is a registered trademark of Linus Torvalds Linus Benedict Torvalds (born December 28 1969 in Helsinki, Finland) is a Finnish software engineer best known for initiating the development of the Linux kernel. . UNIX is a registered trademark of The Open Group. All other product names are trademarks of their respective companies. All other brands and products referenced herein are the trademarks or registered trademarks of their respective holders.
COREL CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS
QUARTER AND YEAR ENDED NOVEMBER 30, 1999
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT (US Dollars,
000s omitted except per share data)
Quarter ended Year Ended
November 30 November 30
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1999 1998 1999 1998
---------------------------------------------------------------------
Sales $ 60,932 $ 67,242 $ 243,051 $ 246,827
Cost of sales 18,398 14,879 59,516 51,561
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Gross profit 42,534 52,363 183,535 195,266
Expenses:
Advertising 15,606 11,454 47,964 41,826
Selling, general and
administrative 22,295 20,504 82,229 77,736
Research and development 3,523 12,024 40,049 71,935
Depreciation and
amortization 2,046 1,923 6,443 12,368
Restructuring charge - - - 15,880
Settlement proceeds - - (6,342) -
Loss (gain) on foreign
exchange (511) 236 (246) 911
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42,959 46,141 170,097 220,656
---------------------------------------------------------------------
Income (loss) from operations (425) 6,222 13,438 (25,390)
Interest expense (income) (93) 118 190 1,112
---------------------------------------------------------------------
Income (loss) before the
undernoted (332) 6,104 13,248 (26,502)
Income tax expense
(recovery) (5,221) (678) (3,946) 3,946
Loss on equity investment 307 - 478 -
---------------------------------------------------------------------
Net income (loss) 4,582 6,782 16,716 (30,448)
Deficit beginning
of period (163,470) (182,386) (175,604) (145,156)
---------------------------------------------------------------------
Deficit end of period $(158,888) $(175,604) $(158,888) $(175,604)
---------------------------------------------------------------------
---------------------------------------------------------------------
Earnings per share:
Net income (loss)
per common share
- Basic $ 0.07 $ 0.11 $ 0.27 $ (0.51)
- Fully diluted 0.07 0.10 0.26 (0.51)
Average number of
common shares
outstanding (000s)
- Basic 64,213 59,401 62,194 59,433
- Fully diluted 66,337 67,755 65,100 59,433
COREL CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS
AS AT NOVEMBER 30, 1999
CONSOLIDATED BALANCE SHEETS
(US Dollars, 000s omitted)
---------------------------------------------------------------------
November 30
---------------------------------------------------------------------
1999 1998
---------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 18,021 $ 22,393
Short-term investments - 2,113
Accounts receivable - Trade 54,770 45,789
- Other 3,954 877
Inventory 13,567 17,098
Income taxes recoverable 5,135 -
Deferred income taxes 1,642 2,495
Prepaid expenses 2,042 4,618
---------------------------------------------------------------------
Total current assets 99,131 95,383
Investments 2,873 -
Capital assets 49,697 44,776
---------------------------------------------------------------------
Total assets $ 151,701 $ 140,159
---------------------------------------------------------------------
---------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 50,284 $ 58,209
Current portion of Novell obligations 10,594 11,800
Income taxes payable - 7,549
Deferred revenue 18,472 17,933
---------------------------------------------------------------------
Total current liabilities 79,350 95,491
---------------------------------------------------------------------
Novell obligations 7,985 16,085
Shareholders' equity:
Share capital 222,155 203,088
Contributed surplus 1,099 1,099
Deficit (158,888) (175,604)
---------------------------------------------------------------------
Total shareholders' equity 64,366 28,583
Total liabilities and shareholders' equity $ 151,701 $ 140,159
---------------------------------------------------------------------
---------------------------------------------------------------------
COREL CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS
QUARTER AND YEAR ENDED NOVEMBER 30, 1999
CONSOLIDATED STATEMENTS OF CASH FLOWS
(US Dollars, 000s omitted)
Quarter ended Year Ended
November 30 November 30
---------------------------------------------------------------------
1999 1998 1999 1998
---------------------------------------------------------------------
Cash and cash equivalents provided by (used for):
Operations:
Net income (loss) $ 4,582 $ 6,782 $ 16,716 $ (30,448)
Items which do not
involve cash or cash
equivalents:
Depreciation and
amortization 4,852 5,812 19,117 25,689
Loss on equity
investments 307 - 478 -
Write-down of
short-term investment - - - 1,908
Gain on sale of
short-term investment - - (809) -
Deferred income taxes - (698) 853 (142)
Restructuring charges - - - 3,086
Changes in non-cash
working capital (12,957) (1,022) (26,470) 16,183
---------------------------------------------------------------------
Cash flows from (used in)
operating activities (3,216) 10,874 9,885 16,276
Financing:
Issue of share capital 6,055 209 12,767 209
Shares purchased for
cancellation - - - (987)
Repayment of Novell
obligations (2,306) (2,534) (9,306) (9,659)
---------------------------------------------------------------------
Cash from (used in)
financing activities 3,749 (2,325) 3,461 (10,437)
Investments:
Proceeds on sale of
short-term investment - - 2,922 1,624
Purchase of equity
investment - - (1,561) -
Purchase of capital
assets (6,327) (4,121) (19,198) (10,359)
Proceeds on disposal
of assets 23 226 119 305
---------------------------------------------------------------------
Cash flows used in
investing activities (6,304) (3,895) (17,718) (8,430)
Net increase (decrease) in
cash and cash equivalents (5,771) 4,654 (4,372) (2,591)
Cash and cash equivalents
at beginning of year 23,792 17,739 22,393 24,984
---------------------------------------------------------------------
Cash and cash equivalents
at end of period $ 18,021 $ 22,393 $ 18,021 $ 22,393
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