Exhibit 99.1
FOR IMMEDIATE RELEASE
Nov. 20, 2003
Novell Reports Fourth Quarter and Full Year Fiscal 2003 Results
- Novell continues its transition to Linux and returns to operating profitability.
- Company records non-recurring charges of $130 million, including writedowns of net deferred tax assets, long-term investments and intangible assets, and restructuring charges.
PROVO, Utah – Nov. 20, 2003 – Novell, Inc. (NASDAQ:NOVL) today announced financial results for its fourth fiscal quarter ended Oct. 31, 2003. For the quarter, Novell reported revenues of $287 million, compared to revenues of $300 million for the fourth fiscal quarter 2002, and $283 million for the third fiscal quarter 2003. Net loss in the fourth fiscal quarter 2003 was $109 million, or $0.29 loss per share, including $130 million in non-recurring charges, principally to increase a valuation allowance for net deferred tax assets. This compared to a net loss of $92 million, or $0.25 loss per share, for the fourth fiscal quarter 2002.
For Novell’s full year fiscal 2003, the company reported revenues of $1.1 billion and a net loss of $162 million, or $0.44 loss per share. Comparatively, revenues for the full year fiscal 2002 were $1.1 billion and a net loss of $247 million, or $0.68 loss per share.
On a non-GAAP basis, adjusted net income for the fourth fiscal quarter 2003 was $19 million, or $0.05 per share, which excludes a $119 million non-cash charge to increase a valuation allowance for net deferred tax assets that is further explained below, an $8 million restructuring charge, $3 million of charges related to the Ximian acquisition and impaired investments, and the related tax effects of these items. This compares to non-GAAP adjusted net income for the fourth quarter 2002 of $15 million, or $0.04 per share, which excludes $109 million in non-cash charges from the write-down of impaired real estate assets and venture investments. Full details on Novell’s reported results, including a reconciliation of the non-GAAP adjusted results, are included in the financial schedules that are a part of this release.
“We are pleased with the progress on operating profitability levels that we achieved in this quarter. Additionally, in our fourth quarter, we continued advancing toward many of the strategic goals we laid out at the beginning of our 2003 fiscal year,” said Jack L. Messman, Novell chairman, president and chief executive officer. “Building value for our shareholders has been a top priority for Novell during 2003. We feel that we are poised to enter fiscal year 2004 with a better positioned company in the marketplace.”
Novell has recently made two strategic moves to strengthen its products and services for the Linux platform. In August, Novell acquired Ximian, the leading provider of desktop and server solutions that enable enterprise Linux adoption. Shortly after the close of the fourth quarter, Novell agreed to acquire SUSE LINUX, one of the world’s leading suppliers of Linux software and services.
“Having taken important steps with both Ximian and SUSE LINUX, we feel that the open source movement can be brought into the mainstream more expeditiously and with greater momentum,” Messman said. “The customer can be reassured that mission-critical applications can indeed run on the Linux platform, reinforced by a worldwide technical support organization. We are responding to our customers, giving them the lower costs, flexibility and choice they have repeatedly told us they want.”
On the balance sheet, cash and short-term investments were $752 million at the end of the fourth fiscal quarter 2003, compared with $636 million a year ago. Cash flow from operations during the fourth fiscal quarter 2003 was $53 million. For the full year fiscal year 2003, cash flow from operations was $55 million. Days sales outstanding (DSO) in accounts receivable was 74 days at the end of the fourth fiscal quarter 2003, up from 70 days in the prior quarter. Deferred revenues were $322 million at the end of the fourth fiscal quarter 2003, up 17% percent year-over-year.
Non-cash valuation allowance for deferred tax assets
In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 109, “Accounting for Income Taxes,” in the fourth fiscal quarter 2003, the company provided a full valuation allowance against net deferred tax assets carried on its balance sheet. SFAS No. 109 requires an assessment of a company’s current and previous performance and other relevant factors when determining the need for such a valuation allowance. Under this pronouncement, factors such as current and previous operating losses are given greater weight than the outlook for future profitability in determining deferred tax asset carrying value. This adjustment will have no impact on the company’s cash flow or future prospects, nor does it alter the company’s ability to utilize the underlying tax net operating loss and credit carryforwards in the future.
A summary of Novell’s vision, mission and strategy can be accessed on the Novell Web site at: www.novell.com/company/ir/qresults.
Conference call notification and Web access detail
A live Webcast of a Novell conference call to discuss the quarter with financial analysts will be broadcast at 5 PM EST November 20, 2003, from Novell’s Investor Relations Web page: http://www.novell.com/company/ir/qresults/. The domestic conference call dial in number is 888-323-5254, password “Novell”, and the international dial in number is +1-773-756-4625, password “Novell”. Until December 3, an audio replay of the call will be available from the same page. A telephone replay of the conference call will be available after 7:30 PM EST November 20, through December 3, at 888-568-0698. The international replay number is +1-402-998-1472. A copy of this press release is posted on Novell’s Web site at: http://www.novell.com/company/ir/qresults/.
Legal notice regarding forward looking statements
This press release includes statements that are not historical in nature and that may be characterized as “forward-looking statements,” including those related to future financial and operating results, benefits and synergies of the company’s brands and strategies, future opportunities and the growth of the market for open source solutions. You should be aware that Novell’s actual results could differ materially from those contained in the forward-looking statements, which are based on current expectations of Novell management and are subject to a number of risks and uncertainties, including, but not limited to, Novell’s ability to integrate acquired operations and employees, Novell’s success in executing its Linux strategies, Novell’s ability to deliver on its one Net vision of the Internet, Novell’s ability to take a competitive position in the Linux industry, business conditions and the general economy, market opportunities, potential new business strategies, competitive factors, sales and marketing execution, shifts in technologies or market demand and the other factors described in Novell ‘s Annual Report on Form 10-K for the 2002 fiscal year. Novell disclaims any intention or obligation to update any forward looking statements as a result of developments occurring after the date of this press release.
About Novell
Novell, Inc. is a leading provider of information solutions that deliver secure identity management (Novell® Nsure™), Web application development (Novell exteNd™) and cross-platform networking services (Novell Nterprise™), all supported by strategic consulting and professional services (Novell NgageSM). When the acquisition of SUSE LINUX is completed, Novell will expand its open source commitment and become the first to offer comprehensive Linux products and services for the enterprise from the desktop to the server. Novell’s vision of one Net – a world without information boundaries – helps customers realize the value of their information securely and economically. For more information, call Novell’s Customer Response Center at (888) 321-4CRC (4272) or visit http://www.novell.com. Press should visit http://www.novell.com/pressroom.
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Novell and Ximian are registered trademarks; exteNd, Nsure and Nterprise are trademarks; and Ngage is a service mark of Novell, Inc. in the United States and other countries. All third-party trademarks are the property of their respective owners.
Press Contact:
Bruce Lowry
Novell, Inc.
Phone: 415-591-6523
E-Mail: blowry@novell.com
Investor Relations Contact:
Bill Smith
Novell, Inc.
Phone: 800-317-3195
E-Mail: irmail@novell.com
Novell, Inc. Consolidated Unaudited Condensed Statements of Operations (In thousands, except per share data) Fiscal Quarter Fiscal Year ------------------------------------ ------------------------------------ Oct 31, 2003 Oct 31, 2002 Oct 31, 2003 Oct 31, 2002 ----------------- ----------------- ----------------- ----------------- Net revenue New software licenses $ 70,498 $ 94,301 $ 265,256 $ 319,281 Maintenance and services 216,251 206,034 840,240 815,039 ----------------- ----------------- ----------------- ----------------- Total net revenue 286,749 300,335 1,105,496 1,134,320 ----------------- ----------------- ----------------- ----------------- Cost of revenue New software licenses 5,140 9,464 22,210 31,175 Maintenance and services 96,197 99,735 392,939 418,243 ----------------- ----------------- ----------------- ----------------- Total cost of revenue 101,337 109,199 415,149 449,418 ----------------- ----------------- ----------------- ----------------- profit 185,412 191,136 690,347 684,902 ----------------- ----------------- ----------------- ----------------- Operating expenses Sales and marketing 88,314 94,552 380,826 358,742 Product development 44,304 48,801 183,758 169,247 General and administrative 24,300 31,642 110,963 122,588 Restructuring 8,042 - 43,067 19,100 Purchased in process R&D 920 - 920 3,000 Impairments - 80,350 - 80,350 ----------------- ----------------- ----------------- ----------------- Total operating expenses 165,880 255,345 719,534 753,027 ----------------- ----------------- ----------------- ----------------- Income (loss) from operations 19,532 (64,209) (29,187) (68,125) Other income (expense), net (3,442) (23,402) (25,823) (24,100) ----------------- ----------------- ----------------- ----------------- Income (loss) before taxes 16,090 (87,611) (55,010) (92,225) Income tax expense (benefit) 125,094 4,061 106,894 10,896 ----------------- ----------------- ----------------- ----------------- Income (loss) before accounting change (109,004) (91,672) (161,904) (103,121) Cumulative effect of accounting change - - - (143,702) ----------------- ----------------- ----------------- ----------------- Net income (loss) $ (109,004) $ (91,672) $ (161,904) $(246,823) ================= ================= ================= ================= Net income (loss) per share: Basic Before cumulative effect of accounting change $ (0.29) $ (0.25) $ (0.44) $ (0.28) Cumulative effect of accounting change - - - (0.40) ----------------- ----------------- ----------------- ----------------- Basic $ (0.29) $ (0.25) $ (0.44) $ (0.68) ================= ================= ================= ================= Diluted Before cumulative effect of accounting change $ (0.29) $ (0.25) $ (0.44) $ (0.28) Cumulative effect of accounting change - - - (0.40) ----------------- ----------------- ----------------- ----------------- Diluted $ (0.29) $ (0.25) $ (0.44) $ (0.68) ================= ================= ================= ================= Weighted average shares: Basic 373,876 364,884 370,545 363,569 Diluted 373,876 364,884 370,545 363,569 Certain reclassifications, none of which affect net income, have been made to the prior period amounts in order to conform to the current year's presentation.
Novell, Inc. Consolidated Unaudited Condensed Balance Sheets (In thousands) ASSETS Oct 31, 2003 Oct 31, 2002 ---------------------- ---------------------- Current assets Cash and short-term investments $ 751,852 $ 635,858 Receivables, net 232,492 214,827 Prepaid expenses 23,005 24,077 Deferred income taxes - 21,204 Other current assets 23,204 23,572 ---------------------- ---------------------- Total current assets 1,030,553 919,538 Property, plant and equipment, net 255,526 369,189 Goodwill 213,300 179,534 Intangible assets 10,800 36,351 Long-term investments 50,948 73,452 Deferred income taxes - 74,323 Other assets 6,526 12,678 ---------------------- ---------------------- Total assets $ 1,567,653 $ 1,665,065 ====================== ====================== LIABILITIES & STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 50,258 $ 57,241 Accrued compensation 101,164 87,778 Other accrued liabilities 117,073 134,850 Income taxes payable 35,493 36,294 Deferred revenue 322,470 275,344 ---------------------- ---------------------- Total current liabilities 626,458 591,507 Minority interests 6,725 8,016 Stockholders' equity 934,470 1,065,542 ---------------------- ---------------------- Total liabilities and stockholders' equity $ 1,567,653 $ 1,665,065 ====================== ====================== Certain reclassifications, none of which affect net income, have been made to the prior period amounts in order to conform to the current year's presentation.
Novell, Inc. Consolidated Unaudited Condensed Statements of Cashflows (In thousands) Fiscal Quarter Fiscal Year ---------------------------------- ---------------------------------- Oct 31, 2003 Oct 31, 2002 Oct 31, 2003 Oct 31, 2002 ----------------- --------------- ---------------- ---------------- Cash flows from operating activities Net income $ (109,004) $ (91,672) $ (161,904) $ (246,823) Adjustments to reconcile net income to net cash provided (used) by operating activities: Gain on sale of fixed assets - - (25,299) (8,762) Depreciation and amortization 11,884 19,610 61,058 68,785 Loss on impaired goodwill and intangibles, net of tax - - 13,935 143,702 Loss on impaired investments and fixed assets 2,172 108,083 34,735 137,922 Non-cash restructuring charges 8,042 - 31,268 16,426 In-process R&D expense 920 - 920 3,000 Changes in assets and liabilities 138,982 (3,149) 100,293 (62,776) ------------ ------------ ------------ ------------ Net cash provided by operating activities 52,996 32,872 55,006 51,474 ------------ ------------ ------------ ------------ Cash flows from financing activities: Issuance of common stock, net 12,276 6,325 20,081 13,186 ------------ ------------ ------------ ------------ Net cash provided by financing activities 12,276 6,325 20,081 13,186 ------------ ------------ ------------ ------------ Cash flows from investing activities: Expenditures for property, plant and equipment (8,863) (8,934) (39,468) (27,610) Proceeds from the sale of property, plant and equipment - - 125,000 16,050 Short-term investment activity (96,630) 49,795 (213,870) 191,279 Silverstream acquisition - (414) - (102,975) Ximian acquisition (40,205) - (40,205) - Other (3,319) (4,507) (3,599) (15,344) ------------ ------------ ------------ ------------ Net cash (used)/provided by investing activities (149,017) 35,940 (172,142) 61,400 ------------ ------------ ------------ ------------ (Decrease) increase in cash and cash equivalents (83,745) 75,137 (97,055) 126,060 Cash and cash equivalents - beginning of period 450,677 388,850 463,987 337,927 ------------ ------------ ------------ ------------ Cash and cash equivalents - end of period 366,932 463,987 366,932 463,987 Short-term investments- end of period 384,920 171,871 384,920 171,871 ------------ ------------ ------------ ------------ Cash and short-term investments - end of period $ 751,852 $ 635,858 $ 751,852 $ 635,858 ============ ============ ============ ============
Novell, Inc. Unaudited Non-GAAP Adjusted Earnings Information (In thousands, except per share data) GAAP Non-GAAP As Reported Adjustments Adjusted ------------------- ------------------ ------------------ Fiscal quarter ended October 31, 2003 Net revenue $ 286,749 $ - $ 286,749 Gross profit 185,412 - 185,412 Income (loss) from operations 19,532 8,962 (a) 28,494 Income (loss) before taxes 16,090 11,134 (b) 27,224 Net income (loss) (109,004) 128,062 (c) 19,058 Diluted net income (loss) per share $ (0.29) $ 0.34 (c) $ 0.05 Fiscal quarter ended July 31, 2003 Net revenue $ 282,809 $ - $ 282,809 Gross profit 175,332 - 175,332 Income (loss) from operations (20,045) 26,850 (d) 6,805 Income (loss) before taxes (23,762) 33,526 (e) 9,764 Net income (loss) (12,400) 19,235 (f) 6,835 Diluted net income (loss) per share $ (0.03) $ 0.05 (f) $ 0.02 Fiscal quarter ended October 31, 2002 Net revenue $ 300,335 $ - $ 300,335 Gross profit 191,136 - 191,136 Income (loss) from operations (64,209) 81,169 (g) 16,960 Income (loss) before taxes (87,611) 108,902 (h) 21,291 Net income (loss) (91,672) 106,576 (i) 14,904 Diluted net income (loss) per share $ (0.25) $ 0.29 (i) $ 0.04 Footnotes related to adjustments: (a) Reflects restructuring reserves of $8.0 million and in-process R&D expense of $0.9 million. (b) Reflects the items in footnote (a) and investment write downs of $2.2 million. (c) Reflects the items in footnotes (a) and (b), the necessary related tax adjustments, and a writedown of deferred tax assets of $119 million. (d) Reflects restructuring reserves of $26.4 million and an adjustment to prior merger reserves of $0.5 million. (e) Reflects impairment loss on intangible assets of $23.6 million, gain on sale of facilities in San Jose, CA of $24.9 million, and investment write downs of $8.0 million, in addition to the items in footnote (d). (f) Reflects the items in footnotes (d) and (e), and the necessary related tax adjustments. (g) Reflects asset impairments of $80.4 million and integration charges of $0.8 million. (h) Reflects the items in footnote (g) and investment writedowns of $27.7 million. (i) Reflects the items in footnotes (g) and (h), and the necessary related tax adjustments.
Novell, Inc. Consolidated Unaudited Condensed Statements of Operations (In thousands, except per share data) $ % Q4 2003 % Q4 2002 % Change Change ----------------- ---------- ----------------- ----------- ----------------- ---------- Net revenue New software licenses $ 70,498 24.6 $ 94,301 31.4 $ (23,803) (25.2) Maintenance and services 216,251 75.4 206,034 68.6 10,217 5.0 ----------------- ---------- ----------------- ----------- ----------------- ---------- Total net revenue 286,749 100.0 300,335 100.0 (13,586) (4.5) ----------------- ---------- ----------------- ----------- ----------------- ---------- Cost of revenue New software licenses 5,140 1.8 9,464 3.2 (4,324) (45.7) Maintenance and services 96,197 33.5 99,735 33.2 (3,538) (3.5) ----------------- ---------- ----------------- ----------- ----------------- ---------- Total cost of revenue 101,337 35.3 109,199 36.4 (7,862) (7.2) ----------------- ---------- ----------------- ----------- ----------------- ---------- Gross profit 185,412 64.7 191,136 63.6 (5,724) (3.0) ----------------- ---------- ----------------- ----------- ----------------- ---------- Operating expenses Sales and marketing 88,314 30.8 94,552 31.5 (6,238) (6.6) Product development 44,304 15.5 48,801 16.2 (4,497) (9.2) General and administrative 24,300 8.5 31,642 10.5 (7,342) (23.2) Restructuring 8,042 2.8 - - 8,042 - Purchased in process R&D 920 0.3 - - 920 - Impairments - - 80,350 26.8 (80,350) - ----------------- ---------- ----------------- ----------- ----------------- ---------- Total operating expenses 165,880 57.8 255,345 85.0 (89,465) (35.0) ----------------- ---------- ----------------- ----------- ----------------- ---------- Income (loss) from operations 19,532 6.8 (64,209) (21.4) 83,741 130.4 Other income (expense), net (3,442) (1.2) (23,402) (7.8) 19,960 85.3 ----------------- ---------- ----------------- ----------- ----------------- ---------- Income (loss) before taxes 16,090 5.6 (87,611) (29.2) 103,701 118.4 Income tax expense (benefit) 125,094 43.6 4,061 1.4 121,033 2,980.4 ----------------- ---------- ----------------- ----------- ----------------- ---------- Net income (loss) $(109,004) (38.0) $ (91,672) (30.5) $ (17,332) (18.9) ================= ========== ================= =========== ================= ========== Net income (loss) per share: Basic $ (0.29) $ (0.25) $ (0.04) (16.0) Diluted $ (0.29) $ (0.25) $ (0.04) (16.0) Weighted average shares: Basic 373,876 364,884 Diluted 373,876 364,884 Certain reclassifications, none of which affect net income, have been made to the prior period amounts in order to conform to the current year's presentation.to the current year's presentation.
Novell, Inc. Consolidated Unaudited Condensed Statements of Operations (In thousands, except per share data) $ % Q4 2003 % Q3 2003 % Change Change ----------------- ---------- ---------------- ---------- ----------------- ---------- Net revenue New software licenses $ 70,498 24.6 $ 69,255 24.5 $ 1,243 1.8 Maintenance and services 216,251 75.4 213,554 75.5 2,697 1.3 ----------------- ---------- ---------------- ---------- ----------------- ---------- Total net revenue 286,749 100.0 282,809 100.0 3,940 1.4 ----------------- ---------- ---------------- ---------- ----------------- ---------- Cost of revenue New software licenses 5,140 1.8 5,886 2.1 (746) (12.7) Maintenance and services 96,197 33.5 101,591 35.9 (5,394) (5.3) ----------------- ---------- ---------------- ---------- ----------------- ---------- Total cost of revenue 101,337 35.3 107,477 38.0 (6,140) (5.7) ----------------- ---------- ---------------- ---------- ----------------- ---------- Gross profit 185,412 64.7 175,332 62.0 10,080 5.7 ----------------- ---------- ---------------- ---------- ----------------- ---------- Operating expenses Sales and marketing 88,314 30.8 92,470 32.7 (4,156) (4.5) Product development 44,304 15.5 48,178 17.0 (3,874) (8.0) General and administrative 24,300 8.5 28,379 10.0 (4,079) (14.4) Restructuring 8,042 2.8 26,350 9.3 (18,308) (69.5) Purchased in process R&D 920 0.3 -- 920 - ----------------- ---------- ---------------- ---------- ----------------- ---------- Total operating expenses 165,880 57.8 195,377 69.1 (29,497) (15.1) ----------------- ---------- ---------------- ---------- ----------------- ---------- Income (loss) from operations 19,532 6.8 (20,045) (7.1) 39,577 197.4 Other income (expense), net (3,442) (1.2) (3,717) (1.3) 275 7.4 ----------------- ---------- ---------------- ---------- ----------------- ---------- Income (loss) before taxes 16,090 5.6 (23,762) (8.4) 39,852 167.7 Income tax expense (benefit) 125,094 43.6 (11,362) (4.0) 136,456 1,201.0 ----------------- ---------- ---------------- ---------- ----------------- ---------- Net income (loss) $(109,004) (38.0) $ (12,400) (4.4) $ (96,604) (779.1) ================= ========== ================ ========== ================= ========== Net income (loss) per share: Basic $ (0.29) $ (0.03) $ (0.26) (871.8) Diluted $ (0.29) $ (0.03) $ (0.26) (871.8) Weighted average shares: Basic 373,876 371,484 Diluted 373,876 371,484 Certain reclassifications, none of which affect net income, have been made to the prior period amounts in order to conform to the current year's presentation.
Novell, Inc. Consolidated Unaudited Condensed Statements of Operations (In thousands, except per share data) Fiscal Year Fiscal Year $ % 2003 % 2002 % Change Change ---------------- --------- ---------------- --------- ---------------- --------- Net revenue New software licenses $ 265,256 24.0 $ 319,281 28.1 $ (54,025) (16.9) Maintenance and services 840,240 76.0 815,039 71.9 25,201 3.1 ---------------- --------- ---------------- --------- ---------------- --------- Total net revenue 1,105,496 100.0 1,134,320 100.0 (28,824) (2.5) ---------------- --------- ---------------- --------- ---------------- --------- Cost of revenue New software licenses 22,210 2.0 31,175 2.7 (8,965) (28.8) Maintenance and services 392,939 35.5 418,243 36.9 (25,304) (6.1) ---------------- --------- ---------------- --------- ---------------- --------- Total cost of revenue 415,149 37.6 449,418 39.6 (34,269) (7.6) ---------------- --------- ---------------- --------- ---------------- --------- Gross profit 690,347 62.4 684,902 60.4 5,445 0.8 ---------------- --------- ---------------- --------- ---------------- --------- Operating expenses Sales and marketing 380,826 34.4 358,742 31.6 22,084 6.2 Product development 183,758 16.6 169,247 14.9 14,511 8.6 General and administrative 110,963 10.0 122,588 10.8 (11,625) (9.5) Restructuring 43,067 3.9 19,100 1.7 23,967 125.5 Purchased in process R&D 920 0.1 3,000 0.3 (2,080) (69.3) Impairments - - 80,350 7.1 (80,350) - ---------------- --------- ---------------- --------- ---------------- --------- Total operating expenses 719,534 65.1 753,027 66.4 (33,493) (4.4) ---------------- --------- ---------------- --------- ---------------- --------- Income from operations (29,187) (2.6) (68,125) (6.0) 38,938 57.2 Other income (expense), net (25,823) (2.3) (24,100) (2.1) (1,723) (7.1) ---------------- --------- ---------------- --------- ---------------- --------- Income (loss) before taxes (55,010) (5.0) (92,225) (8.1) 37,215 40.4 Income tax expense (benefit) 106,894 9.7 10,896 1.0 95,998 881.0 ---------------- --------- ---------------- --------- ---------------- --------- Income (loss) before accounting change (161,904) (14.6) (103,121) (9.1) (58,783) (57.0) Cumulative effect of accounting change, net of tax - - (143,702) (12.7) 143,702 - ---------------- --------- ---------------- --------- ---------------- --------- Net income (loss) $ (161,904) (14.6) $ (246,823) (21.8) $ 84,919 34.4 ================ ========= ================ ========= ================ ========= Net income (loss) per share: Basic Before cumulative effect of accounting change $ (0.44) $ (0.28) $ (0.15) (54.0) Cumulative effect of accounting change - (0.40) 0.40 - ---------------- ---------------- ---------------- --------- Basic $ (0.44) $ (0.68) $ 0.24 35.6 ================ ================ ================ ========= Diluted Before cumulative effect of accounting change $ (0.44) $ (0.28) $ (0.15) (54.0) Cumulative effect of accounting change - (0.40) 0.40 - ---------------- ---------------- ---------------- --------- Diluted $ (0.44) $ (0.68) $ 0.24 35.6 ================ ================ ================ ========= Weighted average shares: Basic 370,545 363,569 Diluted 370,545 363,569 Certain reclassifications, none of which affect net income, have been made to the prior period amounts in order to conform to the current year's presentation.
NOVELL, INC. Consolidated Unaudited Condensed Statements of Operations Fiscal Year 2003 (In thousands, except per share data) Fiscal Year Q1 2003 % Q2 2003 % Q3 2003 % Q4 2003 % 2003 % ----------- ------ --------- ------ ---------- ------ ---------- ------ ---------- ------ Net revenue New software licenses $ 61,038 23.5 $ 64,465 23.4 $ 69,255 24.5 $ 70,498 24.6 $ 265,256 24.0 Maintenance and services 198,933 76.5 211,502 76.6 213,554 75.5 216,251 75.4 840,240 76.0 ----------- ------ --------- ------ ---------- ------ ---------- ------ ---------- ------ Total net revenue 259,971 100.0 275,967 100.0 282,809 100.0 286,749 100.0 1,105,496 100.0 ----------- ------ --------- ------ ---------- ------ ---------- ------ ---------- ------ Cost of revenue New software licenses 5,222 2.0 5,962 2.2 5,886 2.1 5,140 1.8 22,210 2.0 Maintenance and services 92,342 35.5 102,809 37.3 101,591 35.9 96,197 33.5 392,939 35.5 ----------- ------ --------- ------ ---------- ------ ---------- ------ ---------- ------ Total cost of revenue 97,564 37.5 108,771 39.4 107,477 38.0 101,337 35.3 415,149 37.6 ----------- ------ --------- ------ ---------- ------ ---------- ------ ---------- ------ Gross profit 162,407 62.5 167,196 60.6 175,332 62.0 185,412 64.7 690,347 62.4 ----------- ------ --------- ------ ---------- ------ ---------- ------ ---------- ------ Operating expenses Sales and marketing 98,305 37.8 101,737 36.9 92,470 32.7 88,314 30.8 380,826 34.4 Product development 42,922 16.5 48,354 17.5 48,178 17.0 44,304 15.5 183,758 16.6 General and administrative 27,345 10.5 30,939 11.2 28,379 10.0 24,300 8.5 110,963 10.0 Restructuring - - 8,675 3.1 26,350 9.3 8,042 2.8 43,067 3.9 Purchased in-process R&D - - - - - - 920 0.3 920 0.1 ----------- ------ --------- ------ ---------- ------ ---------- ------ ---------- ------ Total operating expenses 168,572 64.8 189,705 68.7 195,377 69.1 165,880 57.8 719,534 65.1 ----------- ------ --------- ------ ---------- ------ ---------- ------ ---------- ------ Income (loss) from operations (6,165) (2.4) (22,509) (8.2) (20,045) (7.1) 19,532 6.8 (29,187) (2.6) Other income (expense) Investment income (7,140) (2.7) (10,459) (3.8) (5,016) (1.8) 913 0.3 (21,702) (2.0) Other, net 951 0.4 (2,016) (0.7) 1,299 0.5 (4,355) (1.5) (4,121) (0.4) ----------- ------ --------- ------ ---------- ------ ---------- ------ ---------- ------ Other income (expense), net (6,189) (2.4) (12,475) (4.5) (3,717) (1.3) (3,442) (1.2) (25,823) (2.3) Income (loss) before taxes (12,354) (4.8) (34,984) (12.7) (23,762) (8.4) 16,090 5.6 (55,010) (5.0) Income tax expense (benefit) (466) (0.2) (6,372) (2.3) (11,362) (4.0) 125,094 43.6 106,894 9.7 ----------- ------ --------- ------ ---------- ------ ---------- ------ ---------- ------ Net income (loss) $ (11,888) (4.6) $(28,612) (10.4) $(12,400) (4.4) $(109,004) (38.0) $(161,904) (14.6) =========== ====== ========= ====== ========== ====== ========== ====== ========= ======= Net income (loss) per share: Basic $ (0.03) $ (0.08) $ (0.03) $ (0.29) $ (0.44) Diluted $ (0.03) $ (0.08) $ (0.03) $ (0.29) $ (0.44) ============ =========== ============ ============ =========== Weighted average shares: Basic 368,075 368,746 371,484 373,876 370,545 Diluted 368,075 368,746 371,484 373,876 370,545 Certain reclassifications, none of which affect net income, have been made to the prior period amounts in order to conform to the current year's presentation.
Novell, Inc. Solution Category, Business Category & Geography Revenue (Unaudited) (In thousands) $ % Revenue by Solution Q4 2003 % Q4 2002 % Change Change -------------- -------- ------------- -------- ------------- ---------- IT Software and Solutions Identity Management & Secure Web Services $ 25,623 8.9 $ 30,027 10.0 $ (4,404) (14.7) Cross Platform Services Management & Collaboration 64,148 22.4 64,178 21.4 (30) (0.0) Services Platforms & Storage 82,691 28.8 94,153 31.3 (11,462) (12.2) -------------- -------- ------------- -------- ------------- ---------- Total Cross Platform Services 146,839 51.2 158,331 52.7 (11,492) (7.3) -------------- -------- ------------- -------- ------------- ---------- Total Software Licenses & Maintenance 172,462 60.1 188,359 62.7 (15,897) (8.4) Worldwide Services * 76,926 26.8 79,468 26.5 (2,542) (3.2) -------------- -------- ------------- -------- ------------- ---------- Total IT Software and Solutions 249,388 87.0 267,827 89.2 (18,439) (6.9) Celerant Management Consulting 37,361 13.0 32,508 10.8 4,853 14.9 -------------- -------- ------------- -------- ------------- ---------- Total Net Revenue $ 286,749 100.0 $ 300,335 100.0 $ (13,586) (4.5) ============== ======== ============= ======== ============= ========== * includes consulting, technical services, and training $ % Revenue by Business Category Q4 2003 % Q4 2002 % Change Change -------------- -------- ------------- -------- ------------- ---------- New Software Licenses $ 70,498 24.6 $ 94,301 31.4 $ (23,803) (25.2) Maintenance and Services 216,251 75.4 206,034 68.6 10,217 5.0 -------------- -------- ------------- -------- ------------- ---------- Total Net Revenue $ 286,749 100.0 $ 300,335 100.0 $ (13,586) (4.5) ============== ======== ============= ======== ============= ========== $ % Revenue by Geography Q4 2003 % Q4 2002 % Change Change -------------- -------- ------------- -------- ------------- ---------- U.S. $ 133,534 46.6 $ 148,817 49.6 $ (15,283) (10.3) Europe, Middle East & Africa 113,683 39.6 110,863 36.9 2,820 2.5 Asia Pacific 24,500 8.5 22,629 7.5 1,871 8.3 Canada & Latin America 15,032 5.2 18,026 6.0 (2,994) (16.6) -------------- -------- ------------- -------- ------------- ---------- Total Net Revenue $ 286,749 100.0 $ 300,335 100.0 $ (13,586) (4.5) ============== ======== ============= ======== ============= ========== Certain reclassifications, none of which affect net income, have been made to the prior period amounts in order to conform to the current year's presentation.
Novell, Inc. Solution Category, Business Category & Geography Revenue (Unaudited) (In thousands) $ % Revenue by Solution Q4 2003 % Q3 2003 % Change Change -------------- ------- ------------- ------- ------------- -------- IT Software and Solutions Identity Management & Secure Web Services $ 25,623 8.9 $ 26,099 9.2 $ (476) (1.8) Cross Platform Services Management & Collaboration 64,148 22.4 63,178 22.3 970 1.5 Services Platforms & Storage 82,691 28.8 81,417 28.8 1,274 1.6 -------------- ------- ------------- ------- ------------- -------- Total Cross Platform Services 146,839 51.2 144,595 51.1 2,244 1.6 -------------- ------- ------------- ------- ------------- -------- Total Software Licenses & Maintenance 172,462 60.1 170,694 60.4 1,768 1.0 Worldwide Services * 76,926 26.8 75,576 26.7 1,350 1.8 -------------- ------- ------------- ------- ------------- -------- Total IT Software and Solutions 249,388 87.0 246,270 87.1 3,118 1.3 Celerant Management Consulting 37,361 13.0 36,539 12.9 822 2.2 -------------- ------- ------------- ------- ------------- -------- Total Net Revenue $ 286,749 100.0 $ 282,809 100.0 $ 3,940 1.4 ============== ======= ============= ======= ============= ======== * includes consulting, technical services, and training $ % Revenue by Business Category Q4 2003 % Q3 2003 % Change Change -------------- ------- ------------- ------- ------------- -------- New Software Licenses $ 70,498 24.6 $ 69,255 24.5 $ 1,243 1.8 Maintenance and Services 216,251 75.4 213,554 75.5 2,697 1.3 -------------- ------- ------------- ------- ------------- -------- Total Net Revenue $ 286,749 100.0 $ 282,809 100.0 $ 3,940 1.4 ============== ======= ============= ======= ============= ======== $ % Revenue by Geography Q4 2003 % Q3 2003 % Change Change -------------- ------- ------------- ------- ------------- -------- U.S. $ 133,534 46.6 $ 129,261 45.7 $ 4,273 3.3 Europe, Middle East & Africa 113,683 39.6 113,495 40.1 188 0.2 Asia Pacific 24,500 8.5 23,235 8.2 1,265 5.4 Canada & Latin America 15,032 5.2 16,818 5.9 (1,786) (10.6) -------------- ------- ------------- ------- ------------- -------- Total Net Revenue $ 286,749 100.0 $ 282,809 100.0 $ 3,940 1.4 ============== ======= ============= ======= ============= ======== Certain reclassifications, none of which affect net income, have been made to the prior period amounts in order to conform to the current year's presentation.
Novell, Inc. Solution Category, Business Category & Geography Revenue (Unaudited) (In thousands) Fiscal Year Fiscal Year $ % Revenue by Solution 2003 % 2002 % Change Change -------------- ------- ------------- ------- ------------- -------- IT Software and Solutions Identity Management & Secure Web Services $ 96,977 8.8 $ 82,610 7.3 $ 14,367 17.4 Cross Platform Services Management & Collaboration 243,071 22.0 238,969 21.1 4,102 1.7 Services Platforms & Storage 326,788 29.6 369,781 32.6 (42,993) (11.6) -------------- ------- ------------- ------- ------------- -------- Total Cross Platform Services 569,859 51.5 608,750 53.7 (38,891) (6.4) -------------- ------- ------------- ------- ------------- -------- Total Software Licenses & Maintenance 666,836 60.3 691,360 60.9 (24,524) (3.5) Worldwide Services * 299,331 27.1 317,728 28.0 (18,397) (5.8) -------------- ------- ------------- ------- ------------- -------- Total IT Software and Solutions 966,167 87.4 1,009,088 89.0 (42,921) (4.3) Celerant Management Consulting 139,329 12.6 125,232 11.0 14,097 11.3 -------------- ------- ------------- ------- ------------- -------- Total Net Revenue $ 1,105,496 100.0 $ 1,134,320 100.0 $ (28,824) (2.5) ============== ======= ============= ======= ============= ======== * includes consulting, technical services, and training Fiscal Year Fiscal Year $ % Revenue by Business Category 2003 % 2002 % Change Change -------------- ------- ------------- ------- ------------- -------- New Software Licenses $ 265,256 24.0 $ 319,281 28.1 $ (54,025) (16.9) Maintenance and Services 840,240 76.0 815,039 71.9 25,201 3.1 -------------- ------- ------------- ------- ------------- -------- Total Net Revenue $ 1,105,496 100.0 $ 1,134,320 100.0 $ (28,824) (2.5) ============== ======= ============= ======= ============= ======== Fiscal Year Fiscal Year $ % Revenue by Geography 2003 % 2002 % Change Change -------------- ------- ------------- ------- ------------- -------- U.S. $ 512,368 46.3 $ 582,573 51.4 $ (70,205) (12.1) Europe, Middle East & Africa 442,841 40.1 403,064 35.5 39,777 9.9 Asia Pacific 86,500 7.8 81,839 7.2 4,661 5.7 Canada & Latin America 63,787 5.8 66,844 5.9 (3,057) (4.6) -------------- ------- ------------- ------- ------------- -------- Total Net Revenue $ 1,105,496 100.0 $ 1,134,320 100.0 $ (28,824) (2.5) ============== ======= ============= ======= ============= ======== Certain reclassifications, none of which affect net income, have been made to the prior period amounts in order to conform to the current year's presentation.
Novell, Inc. Solutions Category, Business Category & Geography Revenue Fiscal Year 2003 (Unaudited) (In thousands) Fiscal Year Revenue by Solution Q1 2003 % Q2 2003 % Q3 2003 % Q4 2003 % 2003 % ----------- ----- --------- ----- ---------- ----- --------- ----- ---------- ---- IT Software and Solutions Identity Management & Secure Web Services $ 22,903 8.8 $ 22,352 8.1 $ 26,099 9.2 $ 25,623 8.9 $ 96,977 8.8 Cross Platform Services Management & Collaboration 54,742 21.1 61,003 22.1 63,178 22.3 64,148 22.4 243,071 22.0 Services Platforms & Storage 81,352 31.3 81,328 29.5 81,417 28.8 82,691 28.8 326,788 29.6 ----------- ----- --------- ----- ---------- ----- --------- ----- ---------- ---- Total Cross Platform Services 136,094 52.3 142,331 51.6 144,595 51.1 146,839 51.2 569,859 51.5 ----------- ----- --------- ----- ---------- ----- --------- ----- ---------- ---- Total Software Licenses & Maintenance 158,997 61.2 164,683 59.7 170,694 60.4 172,462 60.1 666,836 60.3 Worldwide Services * 72,428 27.9 74,401 27.0 75,576 26.7 76,926 26.8 299,331 27.1 ----------- ----- --------- ----- ---------- ----- --------- ----- ---------- ---- Total IT Software and Solutions 231,425 89.0 239,084 86.6 246,270 87.1 249,388 87.0 966,167 87.4 Celerant Management Consulting 28,546 11.0 36,883 13.4 36,539 12.9 37,361 13.0 139,329 12.6 ----------- ----- --------- ----- ---------- ----- --------- ----- ---------- ---- Total Net Revenue $ 259,971 100.0 $ 275,967 100.0 $ 282,809 100.0 $ 286,749 100.0 $1,105,496 100.0 =========== ===== ========= ===== ========== ===== ========= ===== ========== ===== * includes consulting, technical services, and training Fiscal Year Revenue by Business Category Q1 2003 % Q2 2003 % Q3 2003 % Q4 2003 % 2003 % ----------- ----- --------- ----- ---------- ----- --------- ----- ---------- ---- New Software Licenses $ 61,038 23.5 $64,465 23.4 $ 69,255 24.5 $70,498 24.6 $265,256 24.0 Maintenance and Services 198,933 76.5 211,502 76.6 213,554 75.5 216,251 75.4 840,240 76.0 ----------- ----- --------- ----- ---------- ----- --------- ----- ---------- ---- Total Net Revenue $ 259,971 100.0 $ 275,967 100.0 $ 282,809 100.0 $ 286,749 100.0 $1,105,496 100.0 =========== ===== ========= ===== ========== ===== ========= ===== ========== ===== Fiscal Year Revenue by Geography Q1 2003 % Q2 2003 % Q3 2003 % Q4 2003 % 2003 % ----------- ----- --------- ----- ---------- ----- --------- ----- ---------- ---- U.S. $ 123,729 47.6 $ 125,844 45.6 $ 129,261 45.7 $ 133,534 46.6 $ 512,368 46.3 Europe, Middle East & Africa 103,345 39.8 112,318 40.7 113,495 40.1 113,683 39.6 442,841 40.1 Asia Pacific 17,857 6.9 20,908 7.6 23,235 8.2 24,500 8.5 86,500 7.8 Canada & Latin America 15,040 5.8 16,897 6.1 16,818 5.9 15,032 5.2 63,787 5.8 ----------- ----- --------- ----- ---------- ----- --------- ----- ---------- ---- Total Net Revenue $ 259,971 100.0 $ 275,967 100.0 $ 282,809 100.0 $ 286,749 100.0 $1,105,496 100.0 =========== ===== ========= ===== ========== ===== ========= ===== ========== ===== Certain reclassifications, none of which affect net income, have been made to the prior period amounts in order to conform to the current year's presentation.
Novell, Inc. Solutions Category, Business Category & Geography Revenue Fiscal Year 2002 (Unaudited) (In thousands) Fiscal Year Revenue by Solution Q1 2002 % Q2 2002 % Q3 2002 % Q4 2002 % 2002 % ----------- ----- --------- ----- --------- ----- --------- ----- ---------- ----- IT Software and Solutions Identity Management & Secure Web Services$ 16,828 6.1 $ 16,376 6.0 $ 19,378 6.9 $ 30,028 10.0 $ 82,610 7.3 Cross Platform Services Management & Collaboration 54,577 19.6 58,244 21.3 61,970 22.0 64,178 21.4 238,969 21.1 Services Platforms & Storage 95,185 34.3 89,008 32.5 91,435 32.4 94,153 31.3 369,781 32.6 ----------- ----- --------- ----- --------- ----- --------- ----- ---------- ----- Total Cross Platform Services 149,762 53.9 147,252 53.8 153,405 54.3 158,331 52.7 608,750 53.7 ----------- ----- --------- ----- --------- ----- --------- ----- ---------- ----- Total Software Licenses & Maintenance 166,590 60.0 163,628 59.8 172,783 61.2 188,359 62.7 691,360 60.9 Worldwide Services * 82,266 29.6 78,045 28.5 77,949 27.6 79,468 26.5 317,728 28.0 ----------- ----- --------- ----- --------- ----- --------- ----- ---------- ----- Total IT Software and Solutions 248,856 89.6 241,673 88.2 250,732 88.8 267,827 89.2 1,009,088 89.0 Celerant Management Consulting 29,003 10.4 32,180 11.8 31,541 11.2 32,508 10.8 125,232 11.0 ----------- ----- --------- ----- --------- ----- --------- ----- ---------- ----- Total Net Revenue $ 277,859 100.0 $ 273,853 100.0 $ 282,273 100.0 $ 300,335 100.0 $1,134,320 100.0 =========== ===== ========= ===== ========= ===== ========= ===== ========== ====== * includes consulting, technical services, and training Fiscal Year Revenue by Business Category Q1 2002 % Q2 2002 % Q3 2002 % Q4 2002 % 2002 % ----------- ----- --------- ----- --------- ----- --------- ----- ---------- ----- New Software Licenses $ 71,638 25.8 $ 70,448 25.7 $ 82,894 29.4 $ 94,301 31.4 $ 319,281 28.1 Maintenance and Services 206,221 74.2 203,405 74.3 199,379 70.6 206,034 68.6 815,039 71.9 ----------- ----- --------- ----- --------- ----- --------- ----- --------- ------ Total Net Revenue $ 277,859 100.0 $ 273,853 100.0 $ 282,273 100.0 $ 300,335 100.0 $1,134,320 100.0 =========== ===== ========= ===== ========= ===== ========= ===== ========== ====== Fiscal Year Revenue by Geography Q1 2002 % Q2 2002 % Q3 2002 % Q4 2002 % 2002 % ----------- ----- --------- ----- --------- ----- --------- ----- ---------- ----- U.S. $ 147,428 53.1 $ 143,060 52.2 $ 143,268 50.8 $ 148,817 49.6 $ 582,573 51.4 Europe, Middle East & Africa 97,678 35.2 92,245 33.7 102,278 36.2 110,863 36.9 403,064 35.5 Asia Pacific 19,050 6.9 19,919 7.3 20,241 7.2 22,629 7.5 81,839 7.2 Canada & Latin America 13,703 4.9 18,629 6.8 16,486 5.8 18,026 6.0 66,844 5.9 ----------- ----- --------- ----- --------- ----- --------- ----- ---------- ----- Total Net Revenue $ 277,859 100.0 $ 273,853 100.0 $ 282,273 100.0 $ 300,335 100.0 $1,134,320 100.0 =========== ===== ========= ===== ========= ===== ========= ===== ========== ====== Certain reclassifications, none of which affect net income, have been made to the prior period amounts in order to conform to the current year's presentation.