Corel Corporation Announces Strong Third Quarter Results.OTTAWA--(BUSINESS WIRE)--Sept. 20, 1999-- 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 third quarter ended August 31, 1999. Revenues for the third quarter of fiscal year 1999 were $71.3 million, compared to $71.1 million in the third quarter of fiscal 1998. Net profit for the quarter was $17.6 million or $0.26 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. ($0.17 per share from operations plus $0.09 per share from a non-recurring item), compared to a net loss of $7.8 million or ($0.13) per share in the same period last year. The total earnings per share of $0.26 for the quarter is the highest ever reported in the company's history. Cash at the end of the quarter stood at $23.8 million. All figures are reported in US currency. "I believe that this quarter fully delivers on the promise we made almost two years ago to return Corel to a position of financial strength and sustainable profitability," said Michael O'Reilly, Corel's executive vice president, finance and chief financial officer. "I believe that with the turn-around now behind us, Corel is in a solid position for growth, and our outlook for Q4 remains positive." "We've had a very strong quarter. We are pleased with the acceptance of our recent releases of CorelDRAW and WordPerfect and look forward to continued profitability with the development of these products for different segments of the market," 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. , president and chief executive officer of Corel Corporation. "As well, we are very positive about the future of Linux and the delivery of our new 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. , 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. , at the end of this year." 3rd Quarter 1999 Achievements - In June, Corel announced that one of Canada's largest law firms This list of the world's largest law firms by revenue is taken from The Lawyer and The American Lawyer and is ordered by 2006 revenue:[1]
- In June, Corel announced a worldwide licensing agreement with Hewlett-Packard Company, that would see Corel Print Office(r) 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 version included with some of HP's CD-Writer Plus products. Corel Print Office OEM version is available with the HP CD-Writer Plus 755Oi and 7500e models in English, French, Italian, German, Spanish, Dutch and Brazilian Portuguese Brazilian Portuguese (português brasileiro in Portuguese) is a group of dialects of Portuguese written and spoken by virtually all the 190 million inhabitants of Brazil and by a couple million Brazilian emigrants, mainly in the United States, United Kingdom, Portugal, . - In June, Corel announced that Paradox paradox, statement that appears self-contradictory but actually has a basis in truth, e.g., Oscar Wilde's "Ignorance is like a delicate fruit; touch it and the bloom is gone. (r) 9, the easy-to-use relational database relational database Database in which all data are represented in tabular form. The description of a particular entity is provided by the set of its attribute values, stored as one row or record of the table, called a tuple. designed for new users, experts and developers, was on store shelves. In August, Corel started shipping Paradox(r) 9 Developer's Edition, the new product designed specifically for Paradox developers. - In June, Corel announced that it would be joining forces with Channelware, a spinoff Spinoff A new, independent company created through selling or distributing new shares for an existing part of another company. Notes: Spinoffs may be done through a rights offering. of Nortel Networks (Nortel Networks Limited, Brampton, Ontario, www.nortelnetworks.com) A world leader in telecommunications products, which includes switching, wireless and broadband systems for service providers and carriers, telephones and systems for residential and business users, computer telephony , to rent its award-winning software applications to customers. The initiative involved net-based software application rentals of Corel Print House Magic 4 NetActive(tm) Version at Blockbuster block·bust·er n. 1. Something, such as a film or book, that sustains widespread popularity and achieves enormous sales. 2. A high-explosive bomb used for demolition purposes. 3. locations in two test markets. - In June, Corel announced that it had signed a deal with ShopNow.com to include ShopNow.com's technology in Corel eStore(tm). The inclusion of this technology means that Corel eStore has improved functionality and is a much easier shopping experience. - In June, Corel announced that it signed a graphics deal with Mattel, Inc. Corel and the Broderbund unit of The Learning Company, a division of Mattel, signed a strategic licensing agreement in which Corel, through its GraphicCorp division, will provide Broderbund with the online rights to over 1,000,000 clipart, photo and Web images. - In August, Corel and DirectWeb Inc., announced a partnership to bundle WordPerfect Office 2000 OEM and CorelDRAW Select Edition OEM with DirectWeb(tm)-branded computers. DirectWeb offers a subscription-based service to provide a complete, user-friendly solution for personal computing Refers to users working on their own computers rather than a terminal to a mainframe. Sometimes, the term refers to using computers at home for work and/or entertainment in contrast to business use only. See personal computer. and the Internet. In the third quarter of fiscal 1999, Corel continued to demonstrate its commitment to Linux. In June, Corel held the first meeting of the Corel Linux Advisory Council, a forum that allowed leaders in the open source and commercial Linux worlds to come together and discuss the challenges and opportunities facing Linux. - In July, Corel hosted the first annual Ottawa Linux Symposium The Ottawa Linux Symposium is an annual Linux conference held every year since 1999 in Ottawa, Canada. In 2007 the conference is being held a month before the GCC Summit. In recent years, around 750-800 people have attended the conference. with Rebel.com. The Ottawa Linux Symposium, run by Achilles Internet Ltd., was open to anyone interested, and provided the opportunity for Linux developers and system administrators to expand their knowledge of the Linux operating system. - In August, Corel and Rebel.com announced that they would be donating Linux software, hardware and services worth over a million dollars to the United Nations Development Programme's (UNDP UNDP United Nations Development Programme UNDP Unión Nacional para la Democracia y el Progreso (National Union for Democracy and Progress) ) Sustainable Development Sustainable development is a socio-ecological process characterized by the fulfilment of human needs while maintaining the quality of the natural environment indefinitely. The linkage between environment and development was globally recognized in 1980, when the International Union Networking Programme (SDNP SDNP Sustainable Development Networking Programme SDNP Singapore Duty Not Paid ). The donation will help strengthen computer and Internet capacity in developing countries where SDNP operates. - In August, Corel unveiled its distribution of its Linux operating system, Corel(r) LINUX(r), to the public for the first time. Corel LINUX will be available by the end of 1999 and Corel expects to deliver its office suite for Linux in early 2000. Corel is also currently developing its CorelDRAW(r) suite for Linux. Third Quarter 1999 Awards - Corel products won over 35 industry awards in the third quarter of 1999 alone. In June, Corel was declared the CRN CRN Computer Reseller News CRN Crown CRN Council for Responsible Nutrition CRN Crane CRN Community Recycling Network CRN Course Reference Number CRN Center for Responsible Nanotechnology CRN Cornish (SIL code, UK) Channel Champion by Computer Reseller An organization that sells hardware and software to the general public. Resellers purchase products from software publishers and hardware manufacturers. News. A sampling of the other awards are as follows: WordPerfect Office 2000 won a WinList award in the August '99 Edition of Winmag.com; Corel Print Office 2000 Mac won a Hot Picks award in the July '99 Edition of MacToday; CorelDRAW 9 won a World Class Award in the July '99 Edition of PC World. CorelDRAW 9 won over 20 industry awards in the third quarter of 1999. This press release may contain certain statements that are forward-looking as that term is defined by the US 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 customer demand, product ship schedules, PC shipment growth, product mix, competitive products and pricing, technological shifts and other issues discussed in the company's Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. . Corel Corporation Corel Corporation is an internationally recognized developer of award-winning graphics and business productivity applications. Development of market-leading products such as the CorelDRAW(tm) line of graphics applications and the Corel(r) WordPerfect(r) Suite of business tools is continually evolving to meet the demands of the corporate, retail and academic markets. Committed to performance, compatibility, value and open standards Specifications for hardware and software that are developed by a standards organization or a consortium involved in supporting a standard. Available to the public for developing compliant products, open standards imply "open systems;" that an existing component in a system can be replaced , Corel develops products for the Windows(r), Macintosh(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), Linux(r) and Java(tm) platforms. 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. (sm) 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 visit Corel's Web site at www.corel.com. Corel, WordPerfect, CorelDRAW 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 and company names are trademarks or registered trademarks of their respective companies.
COREL CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS
QUARTER AND NINE MONTHS ENDED AUGUST 31, 1999
CONSOLIDATED STATEMENTS OF OPERATIONS
(US dollars, 000s omitted except per share data, unaudited)
Quarter ended Nine months ended
August 31 August 31
-----------------------------------------------------------
1999 1998 1999 1998
-----------------------------------------------------------
Sales $ 71,312 $ 71,083 $ 182,119 $ 179,585
Cost of sales 15,466 14,932 41,118 36,682
-----------------------------------------------------------
Gross Profit 55,846 56,151 141,001 142,903
Expenses:
Advertising 11,641 7,403 32,358 30,372
Selling, general
and
administrative 19,377 19,717 59,934 57,232
Research and
development 10,671 16,981 36,526 59,911
Depreciation and
amortization 1,895 2,465 4,568 10,445
Restructuring
charges - 15,880 - 15,880
Settlement
proceeds (6,342) - (6,342) -
Loss (gain) on
foreign exchange 319 (78) 265 675
-----------------------------------------------------------
37,561 62,368 127,309 174,515
-----------------------------------------------------------
Income (loss) from
operations 18,285 (6,217) 13,692 (31,612)
Interest expense
(income) (46) 154 283 994
-----------------------------------------------------------
Income (loss)
before income
taxes 18,331 (6,371) 13,409 (32,606)
Income taxes 737 1,463 1,275 4,624
-----------------------------------------------------------
Net income (loss) $17,594 $(7,834) $12,134 $(37,230)
Deficit beginning
of period (181,064) (174,552) (175,604) (145,156)
-----------------------------------------------------------
Deficit end
of period $(163,470) $(182,386) $(163,470) $(182,386)
-----------------------------------------------------------
Earnings per share:
Earnings (loss)
per common share
Basic $0.28 $(0.13) $0.20 $(0.63)
Fully Diluted $0.26 $(0.13) $0.18 $(0.63)
Weighted average
number of common
shares outstanding
(000s)
Basic 62,793 59,346 61,519 59,505
Fully Diluted 69,062 59,346 68,720 59,505
COREL CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS
AS AT AUGUST 31, 1999
CONSOLIDATED BALANCE SHEETS
(US dollars, 000s omitted)
-----------------------------------------------------------
August 31, 1999 November 30, 1998
(unaudited) (audited)
-----------------------------------------------------------
ASSETS
Current assets:
Cash and short-term
investments $23,792 $24,506
Accounts receivable
- Trade 47,359 45,789
- Other 2,494 877
Inventory 14,549 17,098
Deferred income taxes 1,642 2,495
Prepaid expenses 2,213 4,618
-----------------------------------------------------------
Total current assets 92,049 95,383
Investments 3,180 -
Capital assets 48,245 44,776
Total assets $ 143,474 $ 140,159
-----------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and
accrued liabilities $ 47,488 $ 58,209
Current portion of Novell
obligations 11,800 11,800
Income taxes payable 3,743 7,549
Deferred revenue 17,629 17,933
-----------------------------------------------------------
Total current liabilities 80,660 95,491
Novell obligations 9,085 16,085
Shareholders' equity:
Share capital 216,100 203,088
Contributed surplus 1,099 1,099
Deficit (163,470) (175,604)
-----------------------------------------------------------
Total shareholders' equity 53,729 28,583
-----------------------------------------------------------
Total liabilities and
shareholders' equity $ 143,474 $ 140,159
-----------------------------------------------------------
COREL CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS
QUARTER AND NINE MONTHS ENDED AUGUST 31, 1999
CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION
(US dollars, 000s omitted, unaudited)
-----------------------------------------------------------
Quarter ended Nine months ended
August 3 August 31
-----------------------------------------------------------
1999 1998 1999 1998
-----------------------------------------------------------
Cash provided by (used for):
Operations:
Net income
(loss) $ 17,594 $ (7,834) $ 12,134 $ (37,230)
Items which
do not involve
cash:
Depreciation and
amortization 5,741 5,528 14,436 19,877
Gain on disposal
of assets (33) (68) (80) (79)
Deferred income
taxes 44 969 853 556
Restructuring
charges - 3,086 - 3,086
Changes in non-cash
working capital (15,872) 4,502 (13,064) 17,205
-----------------------------------------------------------
7,474 6,183 14,279 3,415
-----------------------------------------------------------
Financing:
Issue of share
capital 2,799 - 13,012 -
Shares repurchased
for cancellation - - - (987)
Repayment of Novell
obligations (2,470) (2,961) (7,000) (7,125)
-----------------------------------------------------------
329 (2,961) 6,012 (8,112)
-----------------------------------------------------------
Investments:
Purchase of
investment - - (3,351) -
Purchase of
capital assets (509) (742) (17,750) (6,159)
Proceeds on
disposal of
assets 33 68 96 79
-----------------------------------------------------------
(476) (674) (21,005) (6,080)
-----------------------------------------------------------
Net increase
(decrease)
in cash 7,327 2,548 (714) (10,777)
Cash at
beginning of
period 16,465 17,304 24,506 30,629
-----------------------------------------------------------
Cash at
end of
period $ 23,792 $ 19,852 $ 23,792 $ 19,852
-----------------------------------------------------------
Cash is defined as cash and short-term investments.
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