Corel Corporation Announces Results for Second Quarter 2002.Business Editors 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. (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 ) (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :COR cor (kor) [L.] heart. acute cor pulmonale acute overload of the right ventricle due to pulmonary hypertension, usually due to acute pulmonary embolism. ) Company Accelerates Efforts to Improve Revenues and Streamline streamline, path of a fluid flowing steadily and without appreciable turbulence. A body is said to be streamlined if its shape offers the least possible resistance to a current of air, water, or other fluid. Operations 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. today announced results for its second quarter of fiscal 2002, ended May 31, 2002. All figures are reported in US currency. The company reported revenues for the second quarter of fiscal 2002 totaling $30.8 million, with a net loss of $6.3 million or $(0.07) per share, meeting consensus estimates. This compares with revenues of $31.2 million and a net loss of $3.1 million or $(0.04) per share for the previous quarter, as well as revenues of $36.0 million and a net income of $2.3 million or $0.02 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. for the second quarter of fiscal 2001. Cash, cash equivalents, marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has and restricted cash amounts at the end of the second quarter stood at $105.3 million. For the year to date, revenues were $61.8 million compared with $68.6 million in the prior year. Net loss for the year to date is $9.48 million, compared to a net income of $2.86 million over the same period last year. The company reported year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become of $212,000, compared with EBITDA of $8.5 million for the first six months of fiscal 2001. Based on current estimates, Corel Corporation expects results for the third quarter of fiscal 2002 to be consistent with second quarter 2002 results. In addition, for the fourth quarter of fiscal 2002, the company expects to grow its revenues by 15-20 per cent over its third quarter revenues as sales from new product releases begin to have an impact. The company will provide updated guidance on its fourth quarter expectations during its next quarterly financial reporting, scheduled for September September: see month. 2002. 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, commented: "The strength of the Corel brand and the growth in our European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. sales have provided a stabilized sta·bi·lize v. sta·bi·lized, sta·bi·liz·ing, sta·bi·liz·es v.tr. 1. To make stable or steadfast. 2. level of revenues despite the continued weakness in the economy and our lack of new product releases for our core products. Year-to-date sales in Europe, the Middle East and Africa Europe, the Middle East and Africa, usually abbreviated to EMEA, is a regional designation used for government, marketing and business purposes. It is particularly common amongst North American based companies, who often divide their international operations into the (EMEA (Europe, Middle East, Africa) Refers to that region of the world. For example, one might see products packaged differently for the UK, EMEA and Asia Pacific markets. ) are 20 per cent greater than the prior year, offsetting the decline in the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. market which reflects the fact that our established product lines are in the latter part of their life cycles and customers are anticipating new releases. We will be releasing CorelDRAW A drawing program for Windows and the Mac from Corel. Introduced in 1989, CorelDRAW has been Corel's flagship program, which became very popular due to its speed and features. CorelDRAW has been offered in various suites with other Corel programs, including at one time, the Corel VENTURA Graphics Suite 11 within the next two months and anticipate a strong reception as we focus our sales efforts on the stable base of customers who appreciate the quality and capabilities of Corel's graphics products. In addition, we have several other new product introductions planned for Q3 and Q4 and we continue to expand our customer base through partnerships with other industry leaders." Mr. Burney Bur·ney , Frances Known as "Fanny." 1752-1840. British writer best known for her witty and sophisticated letters and diaries covering the years from 1768 until her death. added: "We recognize the need to continue our operational improvements by concurrently con·cur·rent adj. 1. Happening at the same time as something else. See Synonyms at contemporary. 2. Operating or acting in conjunction with another. 3. Meeting or tending to meet at the same point; convergent. reducing our costs and improving efficiencies while providing the support necessary to successfully launch our new products. We believe that the combination of these cost reductions with the upcoming product releases will put us well on the road to profitability by Q4 of this fiscal year. Over the longer term, we are on track to meet our goal of gaining further traction Traction Definition Traction is the use of a pulling force to treat muscle and skeleton disorders. Purpose Traction is usually applied to the arms and legs, the neck, the backbone, or the pelvis. within the enterprise market with our smart graphics, cross-media publishing and process management solutions." About Corel Corporation Founded in 1985, Corel Corporation (www.corel.com) is a leading technology company that offers software for home and small business users, creative professionals and enterprise customers. With its headquarters in Ottawa Ottawa, city, Canada Ottawa (ŏt`əwə), city (1991 pop. 313,987), capital of Canada, SE Ont., at the confluence of the Ottawa and Rideau rivers. Hull, Que. , Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , 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 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. Specifically, this release contains forward-looking statements regarding the likely benefits from new product introductions and the need by the marketplace for the products under development; the programs being undertaken by the Company and expectations regarding the ability of the Company to increase sales and return to profitability and results in future quarters and for the year. The words "plan", "expect", "believe", "intend", "anticipate", "forecast", "target", "estimate" and similar expressions identify forward-looking statements. 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. In particular, there can be no assurance that the Company's cost reductions will be adequate or that the Company will achieve a level of revenue that will allow the Company to return to profitability, or that the Company will be able to successfully implement or complete the short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. and 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. programs being undertaken by the Company. Risk factors include shifts in customer demand, product shipment schedules, product mix, competitive products and pricing, technological shifts, the Company's effectiveness at executing its sales, marketing and development plan, the market acceptance of new products 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. (C) 2002 Corel Corporation. All rights reserved. Corel, CorelDRAW and the Corel logo are trademarks or registered trademarks of Corel Corporation and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. its subsidiaries in Canada, the US, and/or other countries. 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. and company names and logos are trademarks or registered trademarks of their respective companies.
COREL CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands of US$)
May 31, November 30,
2002 2001
----------------------------------------------------------------------
ASSETS (unaudited) (audited)
Current assets:
Cash and cash equivalents $46,233 $24,924
Restricted cash 19,362 19,367
Marketable securities 39,737 78,076
Accounts receivable
Trade 23,805 18,689
Other 314 1,272
Inventory 569 799
Prepaid expenses 4,078 1,779
----------------------------------------------------------------------
Total current assets 134,098 144,906
----------------------------------------------------------------------
Investments 9,229 9,886
Deferred financing charge 100 250
Capital assets 50,420 43,123
Goodwill 50,508 37,534
----------------------------------------------------------------------
Total assets $244,355 $235,699
----------------------------------------------------------------------
----------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $23,229 $27,862
Participation rights obligation 16,338 16,338
Income taxes payable 4,539 4,749
Deferred revenue 10,857 10,160
----------------------------------------------------------------------
Total current liabilities 54,963 59,109
Future income tax liability 10,358 4,967
----------------------------------------------------------------------
Total liabilities 65,321 64,076
----------------------------------------------------------------------
Shareholders' equity
Share capital 405,091 388,193
Contributed surplus 4,990 4,990
Deficit (231,047) (221,560)
----------------------------------------------------------------------
Total shareholders' equity 179,034 171,623
----------------------------------------------------------------------
Total liabilities and shareholders' equity $244,355 $235,699
----------------------------------------------------------------------
----------------------------------------------------------------------
COREL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
AND DEFICIT
(in thousands of US$, except per share data)
(unaudited)
Three months ended Six months ended
----------------------------------------------------------------------
May 31, May 31,
2002 2001 2002 2001
----------------------------------------------------------------------
Sales $30,762 $36,013 $61,976 $68,550
Cost of sales 5,677 6,908 11,514 13,150
----------------------------------------------------------------------
Gross profit 25,085 29,105 50,462 55,400
----------------------------------------------------------------------
Expenses
Advertising 4,474 4,338 8,894 9,755
Selling, general and
administrative 17,791 15,822 33,554 30,685
Research and development 7,572 5,733 14,709 11,418
Depreciation and
amortization 1,538 1,143 2,915 2,605
Loss on foreign exchange (239) 857 (82) 746
----------------------------------------------------------------------
31,136 27,893 59,990 55,209
----------------------------------------------------------------------
Income (loss)
from operations (6,051) 1,212 (9,528) 191
Loss on investment (119) (137)
Interest income 412 1,488 900 3,241
----------------------------------------------------------------------
Income (loss) before
income taxes (5,758) 2,700 (8,765) 3,432
Income tax expense (265) (56) (202) (254)
Share of loss in
equity investment (316) (318) (520) (318)
----------------------------------------------------------------------
Net Income (loss) $(6,339) $2,326 $(9,487) $2,860
Deficit beginning of
period (224,708) (213,702) (221,560) (214,236)
----------------------------------------------------------------------
Deficit end of period (231,047) (211,376) (231,047) (211,376)
----------------------------------------------------------------------
Earnings (loss) per share:
Net loss
Basic $(0.07) $0.03 $(0.11) $0.04
Diluted $(0.07) $0.02 $(0.11) $0.03
Average number of Common
Shares outstanding (000s)
Basic 90,117 73,719 85,465 73,688
Diluted 90,117 97,762 85,465 97,769
COREL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of US$)
(unaudited)
Six months ended
----------------------------------------------------------------------
May 31, May 31,
2002 2001
----------------------------------------------------------------------
Cash flows from operating activities:
Net income (loss) $(9,487) $2,860
Items which do not involve
cash or cash equivalents:
Depreciation 2,916 2,605
Amortization 6,824 5,665
Bad debt expense 52 2,708
Gain on disposal of assets (306)
Future income taxes (566) 139
Equity loss in investments 520 319
Loss on investment 137
Changes in operating assets and liabilities
Restricted cash 5 249
Accounts receivable (3,262) 5,515
Invent 230 2,145
Prepaid expenses (2,290) 352
Accounts payable and accrued
liabilities (8,161) (4,091)
Income taxes payable (210) (801)
Deferred revenue 697 (3,340)
----------------------------------------------------------------------
Net cash provided by operating activities $(12,595) $14,019
----------------------------------------------------------------------
Cash flows from financing activities:
Issuance of common stock 64 134
Reduction of Novell Obligations (10,000)
----------------------------------------------------------------------
Net cash used in financing activities $64 $(9,866)
----------------------------------------------------------------------
Cash flows from investing activities:
Purchase of investments (722)
Purchase of marketable securities 38,400 (20,480)
Purchase of capital assets (1,412) (5,415)
Acquisition of Micrografx Inc., net
of cash acquired (543)
Acquisition of SoftQuad Inc., net
of cash acquired (2,605)
Proceeds on disposal of assets 818
----------------------------------------------------------------------
Net cash provided by (used in)
investing activities $33,840 $(25,799)
----------------------------------------------------------------------
Net decrease in cash and cash
equivalents 21,309 (21,646)
Cash and cash equivalents at
beginning of period $24,924 $127,430
----------------------------------------------------------------------
Cash and cash equivalents
at end of period $46,233 $105,784
----------------------------------------------------------------------
----------------------------------------------------------------------
2. 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 by region from
consolidated operations is as follows:
Three Months Ended Six Months Ended
----------------------------------------------------------------------
May 31, May 31, May 31, May 31,
2002 2001 2002 2001
----------------------------------------------------------------------
By product line
Creative Products $15,998 $13,940 $32,319 $34,752
Business Applications 11,232 21,929 23,088 33,491
Other 3,532 144 6,569 307
----------------------------------------------------------------------
Total sales $30,762 $36,013 $61,976 $68,550
----------------------------------------------------------------------
----------------------------------------------------------------------
By sales channel
Retail packaged products $17,183 $22,499 $33,679 $39,707
OEM licenses 2,136 2,872 4,157 6,917
Corporate licenses 11,443 10,642 24,140 21,926
----------------------------------------------------------------------
Total sales $30,762 $36,013 $61,976 $68,550
----------------------------------------------------------------------
----------------------------------------------------------------------
By region
Canada $2,371 $2,834 $4,154 $4,680
United States 16,091 21,928 31,509 37,891
Europe, Middle East,
Africa 10,237 7,179 20,949 17,381
Other international 2,063 4,072 5,364 8,598
----------------------------------------------------------------------
Total sales $30,762 $36,013 $61,976 $68,550
----------------------------------------------------------------------
----------------------------------------------------------------------
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion