UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities and Exchange Act of 1934
May 29, 2008
Date of Report
(Date of earliest event reported)
NOVELL, INC.
(Exact name of registrant as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization) | 0-13351 (Commission File Number) | 87-0393339 (IRS Employer Identification Number) |
404 Wyman Street, Suite 500
Waltham, MA 02451
(Address of principal executive offices and zip code)
(781) 464-8000
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions.
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
| (17 CFR 240.14d-2(b)) |
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
| (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition.
On May 29, 2008, Novell, Inc. (“Novell”) issued a press release to report Novell's financial results for the second fiscal quarter ended April 30, 2008. A copy of the press release is attached to this current report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.
We disclosed non-GAAP financial measures in the press release for the fiscal quarters and first six months ended April 30, 2008 and April 30, 2007. These non-GAAP measures include adjusted income from operations, operating margin, income from continuing operations, net income, income per share from continuing operations and net income per share both of which are based on an adjusted number of diluted weighted average shares.
We provide non-GAAP financial measures to enhance an overall understanding of our current financial performance and prospects for the future and to enable investors to evaluate our performance in the same way that management does. Management uses these non-GAAP financial measures to evaluate performance, allocate resources, and determine bonuses.
The non-GAAP financial measures do not replace the presentation of our GAAP financial results, but they eliminate expenses and gains that are unusual, that are excluded from analysts' consensus estimates, and/or that arise outside of the ordinary course of business.
During the fiscal quarters and first six months ended April 30, 2008 and April 30, 2007, the following items were excluded from our GAAP income (loss) from operations to arrive at our non-GAAP income from operations and non-GAAP operating margin:
- Stock-based compensation expense – We excluded stock-based compensation expense incurred in the fiscal quarters and first six months ended April 30, 2008 and April 30, 2007 to be consistent with the way the financial community evaluates our performance and the methods used by analysts to calculate consensus estimates.
- Acquisition-related intangible asset amortization – We excluded acquisition-related intangible asset amortization incurred in the fiscal quarters and first six months ended April 30, 2008 and April 30, 2007 because such charges are unrelated to our core operating performance and the intangible assets acquired vary significantly based on the timing and magnitude of our acquisition transactions and the maturities of the businesses acquired.
- Restructuring expenses – We excluded restructuring expenses incurred in the fiscal quarters and first six months ended April 30, 2008 and April 30, 2007 because such expenses are not expected to recur once the restructuring is completed, currently targeted for the end of fiscal 2008.
- Purchased in-process research and development – We excluded purchased in-process research and development incurred in the fiscal quarter ended April 30, 2008 as the result of an acquisition that closed during the period because (1) acquisitions containing purchased in-process research and development occur infrequently; and (2) purchased in-process research and development distorts trends and is not considered part of our on-going, ordinary business.
- Litigation-related income – We excluded litigation-related income for a settlement recorded in the first six months ended April 30, 2007 because the claim did not arise in the ordinary course of our business.
- Acquisition integration costs – We excluded expenses incurred in the fiscal quarter ended April 30, 2008 associated with the integration of a company we acquired in the period because (1) acquisitions requiring substantial integration activities occur infrequently; and (2) expenses related to integration activities distort trends and are not considered part of our on-going, ordinary business.
- Stock-based compensation review expenses – We excluded expenses related to our self-initiated, voluntary review of historical stock-based compensation practices and related potential accounting impact incurred in the fiscal quarter and first six months ended April 30, 2007 because this type of review occurs infrequently and the expenses related to the review were not considered part of our on-going, ordinary business.
We excluded the items described above and the following items from our GAAP net income (loss) to arrive at our non-GAAP income from continuing operations, non-GAAP net income, non-GAAP income per share from continuing operations and non-GAAP net income per share:
- Gain on sale of venture capital funds – We excluded the gain on the sale of our venture capital funds recorded in the first six months ended April 30, 2007 because the sale of our venture capital fund portfolio resulted from our decision to eliminate this type of investment vehicle from our cash management program and, accordingly, was a one-time occurrence that was not considered part of our on-going, ordinary business.
- Gain on debenture repurchases – We excluded a gain from the repurchase of a portion of our outstanding 0.50% senior convertible debentures due 2024 recorded in the fiscal quarter ended April 30, 2008 because the repurchase of long-term debt securities occurs infrequently and is not considered part of our on-going, ordinary business.
- Gain on long-term investments – We excluded gains from the sale of long-term investments recorded in the fiscal quarter ended April 30, 2008 and the first six months ended April 30, 2007 because the sale of long-term investments under our former investment program is not considered part of our on-going business.
- Income tax adjustments – We adjusted our income taxes because we made adjustments, related to the excluded items indicated above, to our GAAP net income (loss).
- Income (loss) from discontinued operations, net of taxes – We excluded income (loss) from discontinued operations related to our Swiss and UK-based business consulting units recorded in the first six months ended April 30, 2008 and the fiscal quarter and first six months ended April 30, 2007 because (1) we have exited the business consulting segment; and (2) the sale of those business consulting units and the financial results related thereto were not considered part of our on-going, ordinary business.
We adjusted our number of weighted average shares to calculate our non-GAAP income per share from continuing operations and non-GAAP net income per share because we made adjustments, related to the excluded items indicated above, to our GAAP net income (loss).
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit Number | Description |
---|---|
99.1 | Press Release dated May 29, 2008. |
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Novell, Inc. (Registrant) | |
---|---|
Date: May 29, 2008 | By /s/ Dana C. Russell (Signature) Senior Vice President and Chief Financial Officer (Title) |
EXHIBIT INDEX
The following exhibit is filed as part of this current report on Form 8-K.
Exhibit Number | Description |
---|---|
Exhibit 99.1 | Press Release of Novell, Inc. dated May 29, 2008 |