Corel Corporation Announces Second Quarter Results: Company Continues To Post Profits.Business Editors OTTAWA--(BUSINESS WIRE)--June 27, 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 second quarter ended May 31, 2001. Revenues for the second quarter of fiscal year 2001 were $36.0 million, which compares favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. with revenues of $36.6 million for the same quarter last year, and represents an 11 per cent increase over revenues of $32.5 for the first quarter of fiscal 2001. Cash, cash equivalents and 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 at the end of the quarter stood at $126.2 million, compared with $9.8 million at the end of the second quarter in fiscal 2000. All figures are reported in US currency. Net income for the quarter was $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. , compared with a net loss of $23.6 million or ($0.36) per share for the same period last year, and $534,000 or 1 cent per share in the first quarter of fiscal 2001. Corel's year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. total revenues for fiscal 2001 are $68.5 million. By comparison, 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. reported revenues of $80.7 million for the first six months of fiscal 2000, producing a net loss of $36.0 million or $(0.55) per share fully diluted. The company's year-to-date net profit is $2.8 million or $0.03 per share fully diluted. "This is the second consecutive quarter that we have posted a profit - a significant achievement, especially given the current economic uncertainty," 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 continue to improve Corel's financial position by managing our daily operations 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, rather than short-term gains Short-term gain (or loss) A profit or loss realized from the sale of securities held for less than a year that is taxed at normal income tax rates if the net total is positive. . Our ability to achieve these early profits is a testament to how much more efficiently we are running the business." "We are very pleased with our second-quarter results," 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. "We've we've Contraction of we have. we've have increased our total revenues and net profit over the previous quarter and we intend to continue that upward trend over the next several quarters. Today's results confirm that we are ahead of schedule in executing our new corporate growth strategy. Over 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. , we are moving rapidly to increase revenues by becoming truly a 'customer-centric' organization, in which our guiding philosophy is to anticipate our customers' needs. With that in mind, we have exciting plans in the works for the upcoming quarters, including the launch of a full complement of creative products optimized for Mac OS X." Q2 2001 Highlights Product Development: - Corel's flagship office suite, WordPerfect See WordPerfect Office. 1. (text, tool, product) WordPerfect - A word processor for a wide range of computers. The first version was sold in 1980 for Data General machines, and by the end of 1993 versions were on sale for MS-DOS, Microsoft Windows and Macintosh (R) Office 2002, hit store shelves on May 1, 2001, offering the latest versions of its core applications - WordPerfect(R) 10, Quattro Quattro may refer to:
Dragon NaturallySpeaking is the speech recognition software package produced by Nuance Communications for Windows PCs. (R) 5.0. - Marking a major milestone in its new corporate strategy, Corel geared up for the scheduled launch of five new creative products optimized for Mac(R) OS X over the next six months, further strengthening its offering to the Macintosh(R) community. Corporate News: - To introduce customers to its upcoming releases for Mac OS X, Corel provided Apple customers with the opportunity to select Corel's current design tools when purchasing hardware from the Apple online store. Products included in this offering are: KPT KPT Kai's Power Tools KPT Karachi Port Trust (Pakistan) KPT Konover Property Trust, Inc. KPT Kidney-Pancreas Transplantation KPT Kia Pride Tuning (Philippines) (R) 6, Bryce Bryce is a given name and surname in English. It can refer to: People
Industry Recognition: - 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 Professional Edition received a five out of five rating from PC Magazine in a recent issue of this industry-leading magazine. - 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 (R) 10 Graphics Suite won the prestigious 2001 World Class Award from PC World for Best Drawing Software. - CorelDRAW 10 Graphics Suite was also awarded "Best Graphic Software of 2000" by Digital Imaging, USA. 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 Adj. 1. award-winning - having received awards; "this award-winning bridge spans a distance of five miles" graphics and business productivity applications on the Windows(R), Macintosh(R), Linux Linux Nonproprietary operating system (OS) for digital computers. In 1991 Linus Torvalds of Finland began asking for volunteer programmers over the Internet to collaborate on the development of a UNIX-like OS for personal computers; the “1. (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 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 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, Quattro, Presentations, WordPerfect and the Corel logo are trademarks or registered trademarks of Corel Corporation or Corel Corporation Limited in Canada, the United States 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,
2001 2000
---------------------------------
ASSETS (unaudited) (audited)
Current assets:
Cash and cash equivalents $ 105,784 $ 127,430
Restricted cash 886 1,136
Marketable securities 20,480 -
Accounts receivable
Trade 19,515 28,620
Other 1,655 773
Inventory 972 3,117
Future tax assets 479 479
Prepaid expenses 698 1,050
---------------------------------
Total current assets 150,469 162,605
---------------------------------
Investments 12,399 11,996
Future tax asset 826 965
Deferred financing charge 400 550
Capital assets 35,255 42,471
---------------------------------
Total assets $ 199,349 $ 218,587
---------------------------------
---------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and
accrued liabilities $ 20,350 $ 28,441
Current portion of Novell
Obligation - 10,000
Income taxes payable 5,794 6,595
Deferred revenue 7,567 10,907
---------------------------------
Total current liabilities 33,711 55,943
Shareholders' equity
Share capital 372,024 371,890
Contributed surplus 4,990 4,990
Deficit (211,376) (214,236)
---------------------------------
Total shareholders' equity 165,638 162,644
---------------------------------
Total liabilities and
shareholders' equity $ 199,349 $ 218,587
---------------------------------
---------------------------------
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,
2001 2000 2001 2000
----------------------------------------
Sales $36,013 $36,639 $ 68,550 $80,780
Cost of sales 6,908 11,292 13,150 26,281
----------------------------------------
Gross profit 29,105 25,347 55,400 54,499
----------------------------------------
Expenses
Advertising 4,338 9,948 9,755 22,674
Selling, general
and administrative 15,822 23,915 30,685 45,819
Research and development 5,733 12,306 11,418 23,753
Depreciation and
amortization 1,143 2,004 2,605 3,737
Loss on foreign exchange 857 475 746 469
----------------------------------------
27,893 48,648 55,209 96,452
----------------------------------------
Income (loss) from
operations 1,212 (23,301) 191 (41,953)
Gain on investment - 1,204 - 10,144
Interest income 1,488 46 3,241 63
----------------------------------------
Income (loss) before
income taxes 2,700 (22,051) 3,432 (31,746)
Income tax expense (56) (496) (254) (2,938)
Share of loss in
equity investment (318) (1,071) (318) (1,335)
----------------------------------------
Net Income (loss) $2,326 $(23,618) $2,860 $(36,019)
Deficit beginning
of period (213,702) (171,289) (214,236) (158,888)
----------------------------------------
Deficit end of period (211,376) (194,907) (211,376) (194,907)
----------------------------------------
Earnings (loss) per share:
Net loss
Basic $ 0.03 $ (0.36) $ 0.04 $ (0.55)
Fully diluted $ 0.02 $ (0.36) $ 0.03 $ (0.55)
Average number of Common
Shares outstanding (000s)
Basic 73,718 65,810 73,688 65,832
Fully diluted 97,762 65,810 97,769 65,832
COREL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of US$)
(unaudited)
Six months ended
----------------------------
May 31, May 31,
2001 2000
----------------------------
Cash flows from operating activities:
Net income (loss) $ 2,860 $ (36,019)
Items which do not involve cash
or cash equivalents:
Depreciation 2,605 3,737
Amortization 5,664 6,632
Bad debt expense 2,708 -
Gain on disposal of assets (306) -
Future income taxes 139 (228)
Equity loss in investments 319 1,335
Gain on investment - (10,144)
Other - 111
Changes in operating assets
and liabilities
Restricted cash 250 -
Accounts receivable 5,322 35,571
Inventory 2,145 3,647
Prepaid expenses 352 (522)
Accounts payable and
accrued liabilities (4,091) (15,491)
Income taxes payable (801) 996
Income taxes recoverable - 5,135
Deferred revenue (3,340) (2,980)
-------------------------
Net cash provided by operating
activities $ 13,826 $ (8,220)
-------------------------
Cash flows from financing activities:
Issuance of common stock 134 2,913
Reduction of Novell Obligations (10,000) (3,905
-------------------------
Net cash used in financing activities $ (9,866) $ (992)
-------------------------
Cash flows from investing activities:
Purchase of investments (722) (1,663)
Purchase of marketable securities (20,287) -
Purchase of capital assets (5,415) (7,426)
Proceeds on disposal of investment - 10,144
Proceeds on disposal of assets 818 -
-------------------------
Net cash provided by (used in)
investing activities $(25,606) $ 1,055
-------------------------
Net decrease in cash and
cash equivalents (21,646) (8,157)
Cash and cash equivalents
at beginning of period $127,430 $ 18,021
-------------------------
Cash and cash equivalents
at end of period $105,784 $ 9,864
-------------------------
-------------------------
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, region and by major
customer from consolidated operations is as follows:
Three Months Ended Six Months Ended
-----------------------------------------
May 31, May 31, May 31, May 31,
2001 2000 2001 2000
-----------------------------------------
By product line
Creative Products $ 13,940 $ 17,911 $ 34,752 $ 37,678
Business Applications 21,929 18,919 33,491 41,003
Other 144 (191) 307 2,099
-----------------------------------------
Total sales $ 36,013 $ 36,639 $ 68,550 $ 80,780
-----------------------------------------
-----------------------------------------
By sales channel
Retail packaged products $ 22,499 $ 18,877 $ 39,707 $ 41,670
OEM licenses 2,872 4,503 6,917 8,998
Corporate licenses 10,642 13,259 21,926 30,112
-----------------------------------------
Total sales $ 36,013 $ 36,639 $ 68,550 $ 80,780
-----------------------------------------
-----------------------------------------
By region
Canada $ 2,834 $ 4,268 $ 4,680 $ 7,575
United States 21,928 17,098 37,891 35,687
Europe 7,179 9,161 17,381 25,317
Other international 4,072 6,112 8,598 12,201
-----------------------------------------
Total sales $ 36,013 $ 36,639 $ 68,550 $ 80,780
-----------------------------------------
-----------------------------------------
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