Exhibit 99.1
Revised Page 1 of 8 Novell, Inc. Consolidated Unaudited Condensed Statements of Operations (In thousands, except per share data) Fiscal Quarter Ended --------------------------------------- Jan 31, 2005 Jan 31, 2004 ----------------- ---------------- Net revenue New software licenses $ 44,296 $ 54,769 Maintenance and services 245,832 212,338 ----------------- ---------------- Total net revenue 290,128 267,107 ----------------- ---------------- Cost of revenue New software licenses 4,632 4,922 Maintenance and services 107,419 89,954 ----------------- ---------------- Total cost of revenue 112,051 94,876 ----------------- ---------------- Gross profit 178,077 172,231 ----------------- ---------------- Operating expenses Sales and marketing 94,009 81,769 Product development 48,993 50,199 General and administrative 28,240 26,257 Restructuring expenses 6,419 - Gain on sale of property, plant and equipment (1,589) - Gain on legal settlement (447,560) - ----------------- ---------------- Total operating expenses (271,488) 158,225 ----------------- ---------------- Income from operations 449,565 14,006 Other income (expense), net 5,035 2,477 ----------------- ---------------- Income before income taxes 454,600 16,483 Income tax expense 59,439 6,348 ----------------- ---------------- Net income $ 395,161 $ 10,135 ================= ================ Net income available to common stockholders - basic $ 390,891 $ 10,135 ================= ================ Net income available to common stockholders - diluted $ 392,384 $ 10,135 ================= ================ Net income per common share: Basic $ 1.04 $ 0.03 Diluted $ 0.90 $ 0.03 Weighted average shares: Basic 377,257 378,566 Diluted 435,467 391,371 Certain reclassifications, none of which affected net income, were made to the prior period amounts in order to conform to the current period's presentation.
Revised Page 2 of 8 Novell, Inc. Consolidated Unaudited Condensed Balance Sheets (In thousands) ASSETS Jan 31, 2005 Oct 31, 2004 ----------------- ----------------- Current assets Cash and cash equivalents $ 771,844 $ 434,404 Short-term investments 886,558 777,063 Receivables, net 201,328 269,431 Prepaid expenses 30,641 25,190 Other current assets 29,847 28,846 ----------------- ----------------- Total current assets 1,920,218 1,534,934 Property, plant and equipment, net 219,835 231,468 Long-term investments 57,511 55,986 Goodwill 362,307 391,088 Intangible assets, net 59,861 48,616 Other assets 28,577 29,456 ----------------- ----------------- Total assets $2,648,309 $2,291,548 ================= ================= LIABILITIES & STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 45,903 $ 55,956 Accrued compensation 105,473 126,612 Other accrued liabilities 89,113 98,983 Income taxes payable 56,560 37,077 Deferred revenue 343,104 374,186 ----------------- ----------------- Total current liabilities 640,153 692,814 Deferred income taxes 4,640 3,855 Senior convertible debentures 600,000 600,000 ----------------- ----------------- Total liabilities 1,244,793 1,296,669 Minority interests 6,364 6,515 Preferred stock 25,000 25,000 Stockholders' equity 1,372,152 963,364 ----------------- ----------------- Total liabilities and stockholders' equity $2,648,309 $2,291,548 ================= ================= Certain reclassifications, none of which affected net income, were made to the prior period amounts in order to conform to the current period's presentation.
Revised Page 3 of 8 Novell, Inc. Consolidated Unaudited Condensed Statements of Cash Flows (In thousands) Fiscal Quarter Ended --------------------------------- Jan 31, 2005 Jan 31, 2004 --------------- --------------- Cash flows from operating activities: Net income $ 395,161 $ 10,135 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 12,895 16,152 Stock plans' income tax benefits 4,260 - Utilization of previously reserved acquired NOLs 29,000 - Gain on sale of property, plant and equipment (1,589) - Impairment of investments 1,013 1,145 Changes in current assets and liabilities, excluding the effect of acquisitions 10,907 3,589 --------------- --------------- Net cash provided by operating activities 451,647 31,021 --------------- --------------- Cash flows from financing activities: Issuance of common stock, net 4,467 28,493 Payment of cash dividends on preferred stock (250) - --------------- --------------- Net cash provided by financing activities 4,217 28,493 --------------- --------------- Cash flows from investing activities: Purchases of property, plant and equipment (5,649) (5,466) Proceeds from the sale of property, plant and equipment 10,421 - Short-term investment activity (111,706) 45,266 Cash paid for acquisition of SUSE, net of cash acquired - (200,298) Other (11,490) (107) --------------- --------------- Net cash used in investing activities (118,424) (160,605) --------------- --------------- Increase (decrease) in cash and cash equivalents 337,440 (101,091) Cash and cash equivalents - beginning of period 434,404 366,932 --------------- --------------- Cash and cash equivalents - end of period $ 771,844 $ 265,841 =============== =============== Certain reclassifications, none of which affected net income, were made to the prior period amounts in order to conform to the current period's presentation.
Revised Page 4 of 8 Novell, Inc. Unaudited Non-GAAP Adjusted Earnings Information (In thousands, except per share data) GAAP Non-GAAP As Reported Adjustments Adjusted -------------- -------------- ---------------- Fiscal quarter ended January 31, 2005 Net revenue $ 290,128 $ - $ 290,128 Gross profit 178,077 - 178,077 Income from operations 449,565 (442,730) (a) 6,835 Income before income taxes 454,600 (441,717) (b) 12,883 Net income 395,161 (385,095) (c) 10,066 Net income available to common stockholders - diluted 392,384 (382,547) (d) 9,837 Diluted net income per common share $ 0.90 $ (0.87) (d) $ 0.03 Diluted weighted average shares 435,467 (52,074) (e) 383,393 Fiscal quarter ended October 31, 2004 Net revenue $ 300,657 $ - $ 300,657 Gross profit 190,252 - 190,252 Income from operations 14,612 8,916 (f) 23,528 Income before income taxes 14,860 10,317 (g) 25,177 Net income 13,265 10,317 (g) 23,582 Net income available to common stockholders - diluted 14,757 10,317 (h) 25,074 Diluted net income per common share $ 0.03 $ 0.03 (h) $ 0.06 Diluted weighted average shares 438,106 - 438,106 Fiscal quarter ended January 31, 2004 Net revenue $ 267,107 $ - $ 267,107 Gross profit 172,231 - 172,231 Income from operations 14,006 - 14,006 Income before income taxes 16,483 1,145 (i) 17,628 Net income 10,135 1,145 (i) 11,280 Net income available to common stockholders - diluted 10,135 1,145 (i) 11,280 Diluted net income per common share $ 0.03 $ 0.00 (i) $ 0.03 Diluted weighted average shares 391,371 - 391,371 Footnotes related to adjustments: (a) Reflects a net gain on a legal settlement of $447.6 million, restructuring provisions of $6.4 million and a gain on the sale of property, plant and equipment of $1.6 million. (b) Reflects the items in footnote (a) and long-term investment impairments of $1 million. (c) Reflects the items in footnotes (a) and (b) and the related tax adjustments. (d) Reflects the items in footnotes (a), (b) and (c), a $4 million decrease in the allocation of earnings to preferred stockholders, and the addition of $1.5 million in convertible debt interest expense. (e) Reflects potential common shares related to convertible debt that are anti-dilutive when included with other dilutive shares in computing non-GAAP diluted net income per common share. (f) Reflects restructuring provisions of $8.9 million. (g) Reflects the item in footnote (f) and net long-term investment impairments of $1.4 million. (h) Reflects the items in footnotes (f) and (g), for which there were no tax adjustments. (i) Reflects long-term investment impairments of $1.1 million, for which there were no tax adjustments.
Revised Page 5 of 8 Novell, Inc. Consolidated Unaudited Condensed Statements of Operations (In thousands, except per share data) Fiscal Year Trailing Four Q1 2004 % Q4 2004 % 2004 % Q1 2005 % Quarters % ----------- -------- --------- ------- ------------ ------ --------- -------- ------------------- Net revenue New software licenses $ 54,769 20.5 $ 61,994 20.6 $ 234,037 20.1 $ 44,296 15.3 $ 223,564 18.8 Maintenance and services 212,338 79.5 238,663 79.4 931,880 79.9 245,832 84.7 965,374 81.2 ----------- -------- --------- ------- ------------ ------ --------- -------- ------------------- Total net revenue 267,107 100.0 300,657 100.0 1,165,917 100.0 290,128 100.0 1,188,938 100.0 ----------- -------- --------- ------- ------------ ------ --------- -------- ------------------- Cost of revenue New software licenses 4,922 1.8 6,859 2.3 23,478 2.0 4,632 1.6 23,188 2.0 Maintenance and services 89,954 33.7 103,546 34.4 392,201 33.6 107,419 37.0 409,666 34.5 ----------- -------- --------- ------- ------------ ------ --------- -------- ------------------- Total cost of revenue 94,876 35.5 110,405 36.7 415,679 35.7 112,051 38.6 432,854 36.4 ----------- -------- --------- ------- ------------ ------ --------- -------- ------------------- Gross profit 172,231 64.5 190,252 63.3 750,238 64.3 178,077 61.4 756,084 63.6 ----------- -------- --------- ------- ------------ ------ --------- -------- ------------------- Operating expenses Sales and marketing 81,769 30.6 96,156 32.0 362,569 31.1 94,009 32.4 374,809 31.5 Product development 50,199 18.8 47,332 15.7 198,614 17.0 48,993 16.9 197,408 16.6 General and administrative 26,257 9.8 23,236 7.7 102,437 8.8 28,240 9.7 104,420 8.8 Restructuring expenses - - 8,916 3.0 22,903 2.0 6,419 2.2 29,322 2.5 Gain on sale of property, plant and equipment - - - - (1,977) (0.2) (1,589) (0.5) (3,566) (0.3) Gain on legal settlement - - - - - - (447,560) (154.3) (447,560) (37.6) ----------- -------- --------- ------- ------------ ------ --------- -------- ------------------- Total operating expenses 158,225 59.2 175,640 58.4 684,546 58.7 (271,488) (93.6) 254,833 21.4 ----------- -------- --------- ------- ------------ ------ --------- -------- ------------------- Income from operations 14,006 5.2 14,612 4.9 65,692 5.6 449,565 155.0 501,251 42.2 ----------- -------- --------- ------- ------------ ------ --------- -------- ------------------- Other income (expense) Investment income 3,512 1.3 4,436 1.5 17,986 1.5 8,440 2.9 22,914 1.9 Other, net (1,035) (0.4) (4,188) (1.4) (8,704) (0.7) (3,405) (1.2) (11,074) (0.9) ----------- -------- --------- ------- ------------ ------ --------- -------- ------------------- Other income (expense), net 2,477 0.9 248 0.1 9,282 0.8 5,035 1.7 11,840 1.0 ----------- -------- --------- ------- ------------ ------ --------- -------- ------------------- Income before income taxes 16,483 6.2 14,860 4.9 74,974 6.4 454,600 156.7 513,091 43.2 Income tax expense 6,348 2.4 1,595 0.5 17,786 1.5 59,439 20.5 70,877 6.0 ----------- -------- --------- ------- ------------ ------ --------- -------- ------------------- Net income $ 10,135 3.8 $ 13,265 4.4 $ 57,188 4.9 $ 395,161 136.2 $ 442,214 37.2 =========== ======== ========= ======= ============ ====== ========= ======== =================== Beneficial conversion feature - - - - (25,680) (2.2) - - (25,680) (2.2) Allocation of earnings to preferred stockholders - - (139) (0.0) (275) (0.0) (4,145) (1.4) (4,525) (0.4) Preferred stock dividends - - (125) (0.0) (416) (0.0) (125) (0.0) (541) (0.0) ----------- -------- --------- ------- ------------ ------ --------- -------- ------------------- Net income available to common stockholders - basic $ 10,135 3.8 $ 13,001 4.3 $ 30,816 2.6 $ 390,891 134.7 $ 411,468 34.6 =========== ======== ========= ======= ============ ====== ========= ======== =================== Net income available to common stockholders - diluted $ 10,135 3.8 $ 14,757 4.9 $ 30,816 2.6 $ 392,384 135.2 $ 414,936 34.9 =========== ======== ========= ======= ============ ====== ========= ======== =================== Net income per common share: Basic $ 0.03 $ 0.03 $ 0.08 $ 1.04 $ 1.08 Diluted $ 0.03 $ 0.03 $ 0.08 $ 0.90 $ 0.99 =========== ========= ============ ========= ============ Weighted average shares: Basic 378,566 375,154 379,665 377,257 379,338 Diluted 391,371 438,106 390,324 435,467 418,470 Certain reclassifications, none of which affected net income, were made to the prior period amounts in order to conform to the current period's presentation.
Revised Page 6 of 8 Novell, Inc. Unaudited Trended Solutions Category, Business Category & Segment Revenue (In thousands) Fiscal Year Trailing Four Revenue by solution Q1 2004 % Q4 2004 % 2004 % Q1 2005 % Quarters % --------------------- ------------- ------- ------------- ------- ------------- ------- ------------- ------- IT software and solutions Identity-based computing Identity management & web services $ 22,472 8.4 $ 28,288 9.4 $ 101,531 8.7 $ 26,843 9.3 $ 105,902 8.9 Resource management 29,329 11.0 33,602 11.2 124,337 10.7 29,969 10.3 124,977 10.5 --------------------- ------------- ------- ------------- ------- ------------- ------- ------------- ------- Total identity-based computing 51,801 19.4 61,890 20.6 225,868 19.4 56,812 19.6 230,879 19.4 --------------------- ------------- ------- ------------- ------- ------------- ------- ------------- ------- Cross platform services Linux & platform services 77,871 29.2 84,795 28.2 349,593 30.0 82,151 28.3 353,873 29.8 Collaboration & other products 29,339 11.0 32,101 10.7 123,544 10.6 26,720 9.2 120,925 10.2 --------------------- ------------- ------- ------------- ------- ------------- ------- ------------- ------- Total cross platform services 107,210 40.1 116,897 38.9 473,137 40.6 108,871 37.5 474,798 39.9 --------------------- ------------- ------- ------------- ------- ------------- ------- ------------- ------- Total software licenses & maintenance 159,011 59.5 178,787 59.5 699,005 60.0 165,683 57.1 705,677 59.4 Worldwide services 70,763 26.5 82,689 27.5 304,848 26.1 80,396 27.7 314,481 26.5 --------------------- ------------- ------- ------------- ------- ------------- ------- ------------- ------- Total IT software and solutions 229,774 86.0 261,476 87.0 1,003,853 86.1 246,079 84.8 1,020,158 85.8 Celerant consulting 37,333 14.0 39,181 13.0 162,064 13.9 44,049 15.2 168,780 14.2 --------------------- ------------- ------- ------------- ------- ------------- ------- ------------- ------- Total net revenue $ 267,107 100.0 $ 300,657 100.0 $ 1,165,917 100.0 $ 290,128 100.0 $ 1,188,938 100.0 ===================== ============= ======= ============= ======= ============= ======= ============= ======= Revenue by business category New software licenses $ 54,769 20.5 $ 61,994 20.6 $ 234,037 20.1 $ 44,296 15.3 $ 223,564 18.8 Maintenance and services 212,338 79.5 238,663 79.4 931,880 79.9 245,832 84.7 965,374 81.2 --------------------- ------------- ------- ------------- ------- ------------- ------- ------------- ------- Total net revenue $ 267,107 100.0 $ 300,657 100.0 $ 1,165,917 100.0 $ 290,128 100.0 $ 1,188,938 100.0 ===================== ============= ======= ============= ======= ============= ======= ============= ======= Revenue by segment North America $ 115,760 43.3 $ 132,824 44.2 $ 514,477 44.1 $ 123,763 42.7 $ 522,480 43.9 EMEA 87,851 32.9 99,197 33.0 378,273 32.4 95,551 32.9 385,973 32.5 Asia Pacific 14,819 5.5 15,482 5.1 61,774 5.3 14,671 5.1 61,626 5.2 Latin America 5,788 2.2 5,336 1.8 21,026 1.8 5,219 1.8 20,457 1.7 Japan 5,556 2.1 8,637 2.9 28,304 2.4 6,875 2.4 29,623 2.5 Celerant Consulting 37,333 14.0 39,181 13.0 162,063 13.9 44,049 15.2 168,779 14.2 --------------------- ------------- ------- ------------- ------- ------------- ------- ------------- ------- Total net revenue $ 267,107 100.0 $ 300,657 100.0 $ 1,165,917 100.0 $ 290,128 100.0 $ 1,188,938 100.0 ===================== ============= ======= ============= ======= ============= ======= ============= ======= Certain reclassifications were made to the prior period amounts in order to conform to the current period's presentation. $13.5 million Q3 2004 payment from The Canopy Group, Inc. is recorded in Linux & Platform Services as maintenance and services revenue in North America.
Revised Page 7 of 8 Novell, Inc. Unaudited Trended Solutions Revenue by New Software Licenses and Maintenance and Services (In thousands) Fiscal Year Trailing Four Q1 2004 % Q4 2004 % 2004 % Q1 2005 % Quarters % -------------- ------- -------------- ------- -------------- -------- -------------- ------- -------------- -------- IT software and solutions Identity-based computing Identity management & web services New software licenses $ 8,075 3.0 $ 12,016 4.0 $ 40,545 3.5 $ 9,724 3.4 $ 42,195 3.5 Maintenance and services 14,397 5.4 16,272 5.4 60,986 5.2 17,119 5.9 63,707 5.4 -------------- ------- -------------- ------- -------------- -------- -------------- ------- -------------- -------- 22,472 8.4 28,288 9.4 101,531 8.7 26,843 9.3 105,902 8.9 -------------- ------- -------------- ------- -------------- -------- -------------- ------- -------------- -------- Resource management New software licenses 10,114 3.8 11,242 3.7 40,505 3.5 6,938 2.4 37,330 3.1 Maintenance and services 19,215 7.2 22,360 7.4 83,832 7.2 23,031 7.9 87,648 7.4 -------------- ------- -------------- ------- -------------- -------- -------------- ------- -------------- -------- 29,329 11.0 33,602 11.2 124,337 10.7 29,969 10.3 124,977 10.5 -------------- ------- -------------- ------- -------------- -------- -------------- ------- -------------- -------- Cross platform services Linux & platform services New software licenses 26,314 9.9 25,457 8.5 107,698 9.2 20,829 7.2 102,213 8.6 Maintenance and services 51,557 19.3 59,338 19.7 241,895 20.7 61,322 21.1 251,660 21.2 -------------- ------- -------------- ------- -------------- -------- -------------- ------- -------------- -------- 77,871 29.2 84,795 28.2 349,593 30.0 82,151 28.3 353,873 29.8 -------------- ------- -------------- ------- -------------- -------- -------------- ------- -------------- -------- Collaboration & other products New software licenses 10,267 3.8 13,278 4.4 45,288 3.9 6,805 2.3 41,827 3.5 Maintenance and services 19,072 7.1 18,823 6.3 78,255 6.7 19,915 6.9 79,098 6.7 -------------- ------- -------------- ------- -------------- -------- -------------- ------- -------------- -------- 29,339 11.0 32,101 10.7 123,544 10.6 26,720 9.2 120,925 10.2 -------------- ------- -------------- ------- -------------- -------- -------------- ------- -------------- -------- Total software, licenses & maintenance New software licenses 54,769 20.5 61,994 20.6 234,037 20.1 44,296 15.3 223,564 18.8 Maintenance and services 104,242 39.0 116,793 38.8 464,968 39.9 121,387 41.8 482,113 40.5 -------------- ------- -------------- ------- -------------- -------- -------------- ------- -------------- -------- 159,011 59.5 178,787 59.5 699,005 60.0 165,683 57.1 705,677 59.4 -------------- ------- -------------- ------- -------------- -------- -------------- ------- -------------- -------- Worldwide services 70,763 26.5 82,689 27.5 304,848 26.1 80,396 27.7 314,481 26.5 -------------- ------- -------------- ------- -------------- -------- -------------- ------- -------------- -------- Total IT software and solutions New software licenses 54,769 20.5 61,994 20.6 234,037 20.1 44,296 15.3 223,564 18.8 Maintenance and services 175,005 65.5 199,483 66.3 769,816 66.0 201,783 69.5 796,595 67.0 -------------- ------- -------------- ------- -------------- -------- -------------- ------- -------------- -------- 229,774 86.0 261,476 87.0 1,003,853 86.1 246,079 84.8 1,020,158 85.8 -------------- ------- -------------- ------- -------------- -------- -------------- ------- -------------- -------- Celerant consulting 37,333 14.0 39,181 13.0 162,064 13.9 44,049 15.2 168,780 14.2 -------------- ------- -------------- ------- -------------- -------- -------------- ------- -------------- -------- Total net revenue New software licenses 54,769 20.5 61,994 20.6 234,037 20.1 44,296 15.3 223,564 18.8 Maintenance and services 212,338 79.5 238,663 79.4 931,880 79.9 245,832 84.7 965,374 81.2 -------------- ------- -------------- ------- -------------- -------- -------------- ------- -------------- -------- Total net revenue $ 267,107 100.0 $ 300,657 100.0 $ 1,165,917 100.0 $ 290,128 100.0 $ 1,188,938 100.0 ============== ======= ============== ======= ============== ======== ============== ======= ============== ======== Certain reclassifications were made to the prior period amounts in order to conform to the current period's presentation. $13.5 million Q3 2004 payment from The Canopy Group, Inc. is recorded in Linux & Platform Services as maintenance and services revenue.
Revised Page 8 of 8 Novell, Inc. Major IT Software and Solutions Included Within Reported Line Items Identity-Based Computing Identity Management & Web Services > Identity Manager (DirXML) > Web Services (exteNd) > eDirectory > BorderManager > SecureLogin > iChain Resource Management > ZEN Products > Red Carpet Products Cross platform services Linux & Platform Services > NetWare > SUSE LINUX Enterprise Server > SUSE LINUX Professional > Small Business Suite > Cluster Services Collaboration & Other Products > GroupWise > Other Products Worldwide services > IT Consulting Services > Technical Support Services > Training Services