Corel Corporation Announces First Quarter Results.Business Editors OTTAWA--(BUSINESS WIRE)--March 29, 2001 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 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. .) today announced results for its first quarter ended February February: see month. 28, 2001. Revenues for the first quarter of fiscal year 2001 were $32.5 million, compared to $44.1 million in the first quarter of fiscal 2000. Net profit for the quarter was $534,000 or $0.01 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 net loss of $12.4 million or ($0.19) per share in the same period last year. Cash at the end of the quarter stood at $124.4 million. All figures are reported in US currency. "These results confirm our previously-announced expectations on the company's revenue and net income for Q1 2001," said John Blaine Blaine, city (1990 pop. 38,975), Anoka co., SE Minn., a suburb N of Minneapolis; settled 1862, inc. 1964. Diverse manufactures include medical equipment, gun parts, and optical components. The area was organized as a township in 1877 and was named in honor of James G. , chief financial officer at Corel Corporation. "We are managing the business for long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. , sustainable growth. Our goal is to ensure that the company has an exciting and prosperous future characterized char·ac·ter·ize tr.v. character·ized, character·iz·ing, character·iz·es 1. To describe the qualities or peculiarities of: characterized the warden as ruthless. 2. by steady, predictable performance." "We're we're Contraction of we are. we're we are pleased with the work we've we've Contraction of we have. we've have done to put this company back on a more solid financial footing," said Derek Burney Derek Hudson Burney (born 1939) is a Canadian businessman. He is also a former diplomat and political strategist for the Progressive Conservative government of Brian Mulroney. , president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Corel Corporation. "As our most recent results reflect, the actions taken over the past several months have paid off. I'm I'm Contraction of I am. Our Living Language Speakers of some scattered varieties of American English sometimes use I'm instead of I've or I have in present perfect constructions, as in particularly proud of the fierce commitment that our employees have demonstrated in supporting our new strategic direction. Our early profit is, in part, a testament to how quickly and enthusiastically they have embraced the challenge of turning this company around. "Over the short term, we will work swiftly to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the revenue opportunities that we foresee fore·see tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees To see or know beforehand: foresaw the rapid increase in unemployment. with the release of 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. 2002 in the spring. This will be followed in the summer with a full line of new creative product releases for both the Windows and Macintosh platforms. With the recent release of Mac OS X and the forthcoming release of Windows XP The previous client version of Windows. XP was a major upgrade to the client version of Windows 2000 with numerous changes to the user interface. XP improved support for gaming, digital photography, instant messaging, wireless networking and sharing connections to the Internet. - each offering new functionality at the 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. level - we believe customers still have plenty to look forward to in the realm of personal desktop computing computing - computer ." Q1 2001 Highlights Product Development - Corel (Corel Corporation, Ottawa, Ontario, www.corel.com) A leading Canadian software company, founded in 1985 by Dr. Michael Cowpland. For many years, it has been widely known for its award-winning CorelDRAW graphics programs for Windows, Mac and Unix. offered beta previews of Corel(R) KnockOut 1.5.1 masking software Software that is able to cut out or "knock out" one part of an image. An image editor can be used, but requires that the user trace the object with extreme precision, which may be impossible if it is very complicated. and Bryce Bryce is a given name and surname in English. It can refer to: People
- The next version of Corel's flagship office suite, WordPerfect(R) Office 2002, neared the end of its beta cycle and was unveiled to top media and analysts in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. for evaluation. The upcoming release will be available for purchase this spring. - Corel announced that WordPerfect Office 2002 will include Net2Phone(R) software, the first application that integrates PC-to-Phone calling in an address book, in the CorelCENTRAL(TM) 10 personal information manager, one of the core applications in the upcoming release of Corel's flagship office suite. Corporate News - Corel introduced a new corporate strategy, designed to reposition the company for long-term growth and profitability. The company's primary engine for growth will be its creative products, with its business applications providing a stable and significant revenue source. Industry Recognition - Corel continued to receive industry recognition worldwide for its innovative technology and strategies. Among them, Corel was honored hon·or n. 1. High respect, as that shown for special merit; esteem: the honor shown to a Nobel laureate. 2. a. Good name; reputation. b. with the 'Best of e-tailVision Award' in the category of Best Product: Software. This prestigious award, was voted on by more than 34 e-tail companies during e-tailVision 2001, produced by Vision Events, a Gartner, Inc. company. It recognizes vendors that have a clear and concise multi-channel strategy that leverages the tools of the e-tailer. Other recent awards include: - CorelDRAW(R) 10: Editors' Choice Award for Illustration Software, PC Magazine; Winlist, Winmag.com; Editor's Choice, nine out of 10 rating, CNET (body) CNET - Centre national d'Etudes des Telecommunications. The French national telecommunications research centre at Lannion. ; Product of the Year, DTP/Graphics category, Infoweek.ch (Switzerland); Best Buy Award, Digit Magazine (UK); Product of the Year - Vector Graphics The representation of a digital image as points, lines and other geometric entities. All computer-aided design (CAD), drawing and diagramming programs create vector graphics formats, such as AI, DXF and WMF (see graphics formats). Software, PC World Komputer (Poland) - Corel Painter Painter is the name of a raster graphics software package used to create natural-looking artistic images using a computer. Originally available on the Macintosh, it is now also available for Windows. 6: Top Product Award, PC Magazin (Germany) - Corel KnockOut 1.5: Cool2 Award - The Best Imaging Products of 2000, Image Editing/Specialty Software category, PEI Corel Corporation Corel Corporation provides its customers with the creative tools they need to unleash their imaginations. With its heritage of software innovation and a solid franchise of loyal customers worldwide, Corel has earned its reputation as an internationally recognized developer of award-winning graphics and business productivity applications on the Windows(R), Macintosh(R), Linux(R) and 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) platforms. In 2001, Corel will continue to expand its support of the Web, delivering the Internet's versatility to customers through exciting Web-based applications See Web application. , content and services. Corel will also be developing applications for Microsoft's .NET platform as part of its commitment to provide customers with a full range of applications and services over 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 . With its headquarters in Ottawa, Canada, Corel continues to be one of Silicon Valley North's most exciting and influential software companies. 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. For more information on Corel Corporation, please visit www.corel.com This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. as 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, involving the company's expectations about future financial results and other matters. These statements reflect management's current forecast of certain aspects of the company's future business. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results of operations to differ materially from historical results or current expectations. The words "plan", "expect", "believe", "intend", "anticipate", "forecast", "target", "estimate" and similar expressions identify forward-looking statements. Risk factors include 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 for a more complete discussion of the other risks and uncertainties. The factors underlying forecasts are dynamic and subject to change. As a result, forecasts speak only as of the date they are given and do not necessarily reflect the company's outlook at any other point in time. The company does not undertake to update or review these forward-looking statements. Corel, CorelDRAW, CorelCENTRAL, Bryce, Painter, WordPerfect and the Corel logo are trademarks or registered trademarks of Corel Corporation or Corel Corporation Limited. All other product, font font or typeface or type family Assortment or set of type (alphanumeric characters used for printing), all of one coherent style. Before the advent of computers, fonts were expressed in cast metal that was used as a template for printing. , company names and logos are trademarks or registered trademarks of their respective companies.
COREL CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands of US$)
February 28, November 30,
2001 2000
------------ ------------
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $124,456 $127,430
Restricted cash 912 1,136
Accounts receivable
Trade 20,410 28,620
Other 1,711 773
Inventory 2,222 3,117
Future tax asset 479 479
Prepaid expenses 1,551 1,050
------------ ------------
Total current assets 151,741 162,605
------------ ------------
Investments 12,718 11,996
Future tax asset 965 965
Deferred financing charge 475 550
Capital assets 38,625 42,471
------------ ------------
Total assets $204,524 $218,587
------------ ------------
------------ ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $20,174 $28,441
Novell obligation 5,000 10,000
Income taxes payable 6,355 6,595
Deferred revenue 9,720 10,907
------------ ------------
Total current liabilities 41,249 55,943
------------ ------------
Shareholders' equity
Share capital 371,987 371,890
Contributed surplus 4,990 4,990
Deficit (213,702) (214,236)
------------ ------------
Total shareholders' equity 163,275 162,644
------------ ------------
Total liabilities and shareholders' equity $204,524 $218,587
------------ ------------
------------ ------------
COREL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
AND DEFICIT
(in thousands of US$, except per share data)
Three months ended
February 28,
2001 2000
(unaudited)
--------------------------
Sales $32,537 $44,141
Cost of sales 6,242 14,989
--------------------------
Gross profit 26,295 29,152
--------------------------
Expenses
Advertising 5,417 12,726
Selling, general and administrative 14,863 21,904
Research and development 5,685 11,447
Depreciation and amortization 1,462 1,733
Gain on foreign exchange (111) (6)
--------------------------
27,316 47,804
--------------------------
Loss from operations (1,021) (18,652)
Gain on investment 8,940
Interest income 1,753 17
--------------------------
Income (loss) before income taxes 732 (9,695)
Income tax expense (198) (2,442)
Share of loss in equity investment (264)
--------------------------
Net income (loss) $534 ($12,401)
--------------------------
--------------------------
Earnings (loss) per share:
Basic $0.01 ($0.19)
Diluted $0.01 ($0.19)
Weighted average number of Common Shares
outstanding (000s)
Basic 73,657 65,653
Diluted 97,757 65,653
COREL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of US$)
(unaudited)
Three months ended
--------------------------
February 28, February 29,
2001 2000
------------ ------------
Cash flows from operating activities:
Net income (loss) $534 ($12,401)
Items which do not involve cash or
cash equivalents:
Depreciation 1,413 1,836
Amortization 2,760 2,723
Bad debt expense 1,213
Gain on disposal of assets (214)
Future income taxes (133)
Gain on sale of investments (8,940)
Share of loss in equity investments 264
Changes in operating assets and liabilities:
Restricted cash 224
Accounts receivable 6,059 24,297
Inventory 895 2,994
Income taxes recoverable 2,567
Prepaid expenses (501) (432)
Accounts payable and accrued liabilities (4,267) (4,571)
Income taxes payable (240)
Deferred revenue (1,187) (2,350)
------------ ------------
Net cash provided by operating activities 6,689 5,854
------------ ------------
Financing activities:
Issuance of common stock 97 1,916
Reduction of Novell obligations (5,000) (1,979)
------------ ------------
Net cash used in financing activities (4,903) (63)
------------ ------------
Investing activities:
Proceeds on sale of investments 8,940
Purchase of investments (722) (770)
Purchase of capital assets (4,763) (2,720)
Proceeds on disposal of assets 725
------------ ------------
Net cash provided by (used in)
investing activities (4,760) 5,450
------------ ------------
Increase (decrease) in cash and
cash equivalents (2,974) 11,241
Cash and cash equivalents at beginning
of the period 127,430 18,021
Cash and cash equivalents at end
of the period $124,456 $29,262
------------ ------------
------------ ------------
Schedule A
Segmented information
The Company has only one global operating segment as detailed in
the consolidated financial statements included herein.
The company sells its products worldwide from four geographic
regions. A summary of sales by product, channel and region from
consolidated operations is as follows:
Three Months Ended
February 28/29
2001 2000
--------------------------
By product
Creative Products $ 20,812 $ 19,767
Business Applications 11,562 22,084
Other 163 2,290
--------------------------
Total sales $ 32,537 $ 44,141
--------------------------
--------------------------
By sales channel
Retail packaged products $ 17,208 $ 22,793
OEM licenses 4,045 4,495
Corporate licenses 11,284 16,853
--------------------------
Total sales $ 32,537 $ 44,141
--------------------------
--------------------------
By region
Canada $ 1,846 $ 3,307
United States 15,963 18,589
Europe 10,202 16,156
Other international 4,526 6,089
--------------------------
Total sales $ 32,537 $ 44,141
--------------------------
--------------------------
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