EXHIBIT 99.1
Novell Reports Second Quarter Fiscal 2003 Results
PROVO, UT., -- May 22, 2003 -- Novell, Inc. (Nasdaq: NOVL) today announced
financial results for its second fiscal quarter ended April 30, 2003. For the
quarter, Novell reported revenue of $276 million, compared to revenue of $274
million for the second fiscal quarter 2002, and $260 million for the first
fiscal quarter 2003. Net loss in the second fiscal quarter was $29 million, or
$0.08 per share. This compared to a second fiscal quarter 2002 net loss of $173
million, or $0.48 per share.
For the first six months of fiscal 2003, Novell reported revenue of $536
million and a net loss of $41 million, or $0.11 per share. For the first six
months of fiscal 2002, the company reported revenue of $552 million and a net
loss of $165 million, or $0.46 per share.
On a non-GAAP basis, adjusted net loss for the second fiscal quarter 2003
was $7 million, or $0.02 per share, which excludes $25 million in charges from
adjustments to facility-related restructuring and merger liabilities, and
impaired investments. This compares to non-GAAP adjusted net earnings for the
second quarter last year of $10 million, or $0.03 per share, which excludes $190
million in charges from the write-down of goodwill, impaired investments and
restructuring. 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.
"Despite the continued weak IT market, we posted a six percent revenue
increase over our first quarter and revenues were up slightly year-over-year,"
said Jack Messman, Novell(R) chairman, president and chief executive officer.
"The lack of profitability in the quarter was a disappointment, and we now plan
to lower our costs to improve our business performance overall. We're confident
we can do this while sustaining the momentum we've built around our newer
offerings.
"We were pleased to see sequential, and year-over-year, growth from our
Nsure(TM) identity management solutions, Nterprise(TM) GroupWise(R)
collaboration products and ZENworks(R) resource management. Each of these
offerings is gaining share in their respective markets. An important factor is
our expanded support of open standards.
"Especially noteworthy in the quarter were Novell's announcements of broad
support for Linux*," added Messman. "Through open standards, and especially
Linux, we are positioning Novell to participate in, and help lead the
significant improvements in cost-effective IT solutions that are now possible.
Virtually all enterprise customers are looking at the capabilities of Linux.
Novell has begun to deliver important value with offerings that run on Linux and
support how Linux co-exists, and easily interoperates, in customer
environments."
Among the larger contracts for software and services in the quarter, Novell
Nsure identity management solution customers included the state of Texas,
JPMorgan Chase, BRZ GmbH the Austrian government's federal IT center, Telecom
New Zealand and the largest airline network, Star Alliance, which supports
sixteen airlines worldwide. Novell Nterprise licensees included Premier Inc.,
one of the largest hospital buying groups in the United States, numerous
government agencies worldwide, Canon and AB Volvo.
During the second fiscal quarter, software license and maintenance revenue
was up one percent year-over-year to $165 million. Identity management and
secure Web services software had strong growth, up 36 percent year-over-year to
total $23 million in the second quarter. Novell brings these solutions to market
under the Nsure and exteNd(TM) brands. Cross-platform services software,
marketed under the Nterprise brand, declined 3 percent year-over-year to $142
million.
Revenue from worldwide services branded as NgageSM, including IT consulting
and other customer services, declined 5 percent year-over-year to $74 million.
Celerant management consulting revenue was up 15 percent year-over-year to $37
million.
By geography, revenue in the second fiscal quarter from the United States
was $126 million, down 12 percent from the same period in the prior year. The
Europe, Middle East and Africa region contributed $112 million in revenue, up 22
percent year-over-year. Revenue from Asia Pacific, including Japan, was $21
million, up 5 percent year-over-year. Canada and Latin America contributed $17
million, down 9 percent year-over-year, as growth in Canada was offset by
declines in Latin America.
On the balance sheet, cash and short-term investments were $626 million at
the end of the second fiscal quarter, compared with $636 million at the October
2002 fiscal year end. Cash flow from operations during the quarter was a
negative $26 million. For the trailing four quarters, cash flow from operations
was a positive $66 million. Days sales outstanding (DSO) was 61 days, up from 56
days in the prior quarter. Deferred revenue was $268 million, up 26 percent
year-over-year. Deferred revenue is predominately prepaid software maintenance
associated with Novell's large network site license business and will be
recognized in future periods.
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 EDT May 22 from the Novell's
Investor Relations Web page: http://www.novell.com/company/ir/qresults/. Through
June 2, 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 EDT May
22, through June 2 at 888-446-2545. 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 Web-based 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 ability to
deliver on its one Net vision of the Internet, Novell's ability to take a
competitive position in the Web services 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 Ngage). 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.
###
Novell, GroupWise and ZENworks 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.
Novell, Inc.
Consolidated Unaudited Condensed Statements of Income
(In thousands, except per share data)
Fiscal Quarter Ended Year-to-Date
------------------------------------ ------------------------------------
Apr 30, 2003 Apr 30, 2002 Apr 30, 2003 Apr 30, 2002
--------------- --------------- --------------- ---------------
Net revenue
New software licenses $ 64,465 $ 70,448 $ 125,503 $ 142,086
Maintenance and services 211,502 203,405 410,435 409,626
--------------- --------------- --------------- ---------------
Total net revenue 275,967 273,853 535,938 551,712
--------------- --------------- --------------- ---------------
Cost of revenue
New software licenses 5,962 6,981 11,184 13,613
Maintenance and services 102,809 105,847 195,151 216,784
--------------- --------------- --------------- ---------------
Total cost of revenue 108,771 112,828 206,335 230,397
--------------- --------------- --------------- ---------------
Gross profit 167,196 161,025 329,603 321,315
--------------- --------------- --------------- ---------------
Operating expenses
Sales and marketing 101,737 82,145 200,042 167,621
Product development 48,354 42,385 91,276 85,398
General and administrative 30,939 31,055 58,284 61,380
Restructuring 8,675 19,100 8,675 19,100
--------------- --------------- --------------- ---------------
Total operating expenses 189,705 174,685 358,277 333,499
--------------- --------------- --------------- ---------------
Income (loss) from operations (22,509) (13,660) (28,674) (12,184)
Other income (expense), net (12,475) (18,382) (18,664) (7,928)
--------------- --------------- --------------- ---------------
Income (loss) before taxes (34,984) (32,042) (47,338) (20,112)
Income tax expense (benefit) (6,372) (2,293) (6,838) 1,286
--------------- --------------- --------------- ---------------
Income (loss) before accounting change (28,612) (29,749) (40,500) (21,398)
Cumulative effect of accounting change - (143,702) - (143,702)
--------------- --------------- --------------- ---------------
NET INCOME (LOSS) $ (28,612) $ (173,451) $ (40,500) $ (165,100)
=============== =============== =============== ===============
Net income (loss) per share:
Basic $ (0.08) $ (0.48) $ (0.11) $ (0.46)
Diluted $ (0.08) $ (0.48) $ (0.11) $ (0.46)
Weighted average shares:
Basic 368,746 362,754 368,411 362,591
Diluted 368,746 362,754 368,411 362,591
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.
Non-GAAP Adjusted Earnings Information
(In thousands, except per share data)
GAAP Non-GAAP
As Reported Adjustments Adjusted
--------------- --------------- ---------------
Fiscal quarter ended April 30, 2003
Net revenue $ 275,967 $ - $ 275,967
Gross profit 167,196 - 167,196
Income (loss) from operations (22,509) 10,792 (a) (11,717)
Income (loss) before taxes (34,984) 25,265 (b) (9,719)
Net income (loss) (28,612) 21,809 (c) (6,803)
Diluted net income (loss) per share $ (0.08) $ 0.06 (c) $ (0.02)
Fiscal quarter ended January 31, 2003
Net revenue $ 259,971 $ - $ 259,971
Gross profit 162,407 - 162,407
Income (loss) from operations (6,165) 255 (d) (5,910)
Income (loss) before taxes (12,354) 11,055 (e) (1,299)
Net income (loss) (11,888) 10,979 (f) (909)
Diluted net income (loss) per share $ (0.03) $ 0.03 (f) $ (0.00)
Fiscal quarter ended April 30, 2002
Net revenue $ 273,853 $ - $ 273,853
Gross profit 161,025 - 161,025
Income (loss) from operations (13,660) 20,065 (g) 6,405
Income (loss) before taxes (32,042) 46,050 (h) 14,008
Net income (loss) (173,451) 183,257 (i) 9,806
Diluted net income (loss) per share $ (0.48) $ 0.51 (i) $ 0.03
Footnotes related to adjustments:
(a) Reflects adjustments to prior restructuring reserves of $8.7 million and
merger reserves of $2.1 million.
(b) Reflects investment write downs of $13.7 million and a loss from the
acquisition of minority interest shares of $0.8 million, in addition to the
items in footnote (a).
(c) Reflects the items in footnotes (a) and (b), and the necessary related tax
adjustments.
(d) Reflects integration charges.
(e) Reflects investment write downs of $10.8 million, in addition to the item
in footnote (d).
(f) Reflects the items in footnotes (d) and (e), and the necessary related tax
adjustments.
(g) Reflects restructuring charges of $19.1 million and integration charges of
$1 million.
(h) Reflects investment write downs of $24.4 million, a loss on the sale of
four subsidiaries of $1.6 million, and the items in footnote (g).
(i) Reflects cumulative effect of an accounting change related to goodwill
impairment of $143.7 million, the items in footnotes (g) and (h), and the
necessary related tax adjustments.
Novell, Inc.
Consolidated Unaudited Condensed Balance Sheets
(In thousands)
ASSETS Apr. 30, 2003 Oct. 31, 2002
------------------- ------------------
Current assets
Cash and short-term investments $ 626,397 $ 635,858
Receivables, net 183,672 214,827
Prepaid expenses 32,293 24,077
Deferred income taxes 19,420 21,204
Other current assets 25,166 23,572
------------------- ------------------
Total current assets 886,948 919,538
Property, plant and equipment, net 353,183 369,189
Goodwill 180,579 179,534
Intangible assets 30,092 36,351
Long-term investments 55,603 73,452
Deferred income taxes 83,791 74,323
Other assets 12,385 12,678
------------------- ------------------
Total assets $1,602,581 $1,665,065
=================== ==================
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 61,007 $ 57,241
Accrued compensation 78,498 87,778
Other accrued liabilities 124,338 134,850
Income taxes payable 28,764 36,294
Deferred revenue 267,546 275,344
------------------- ------------------
Total current liabilities 560,153 591,507
Minority interests 7,841 8,016
Stockholders' equity 1,034,587 1,065,542
------------------- ------------------
Total liabilities and stockholders' equity $1,602,581 $1,665,065
=================== ==================
Novell, Inc.
Consolidated Unaudited Condensed Statements of Income
(In thousands, except per share data)
$ %
Q2 2003 % Q2 2002 % Change Change
------------ ------- ------------ --------- ----------- ---------
Net revenue
New software licenses $ 64,465 23.4 $ 70,448 25.7 $ (5,983) (8.5)
Maintenance and services 211,502 76.6 203,405 74.3 8,097 4.0
------------ ------- ------------ --------- ----------- ---------
Total net revenue 275,967 100.0 273,853 100.0 2,114 0.8
------------ ------- ------------ --------- ----------- ---------
Cost of revenue
New software licenses 5,962 2.2 6,981 2.5 (1,019) (14.6)
Maintenance and services 102,809 37.3 105,847 38.7 (3,038) (2.9)
------------ ------- ------------ --------- ----------- ---------
Total cost of revenue 108,771 39.4 112,828 41.2 (4,057) (3.6)
------------ ------- ------------ --------- ----------- ---------
Gross profit 167,196 60.6 161,025 58.8 6,171 3.8
------------ ------- ------------ --------- ----------- ---------
Operating expenses
Sales and marketing 101,737 36.9 82,145 30.0 19,592 23.9
Product development 48,354 17.5 42,385 15.5 5,969 14.1
General and administrative 30,939 11.2 31,055 11.3 (116) (0.4)
Restructuring 8,675 3.1 19,100 7.0 (10,425) (54.6)
------------ ------- ------------ --------- ----------- ---------
Total operating expenses 189,705 68.7 174,685 63.8 15,020 8.6
------------ ------- ------------ --------- ----------- ---------
Income (loss) from operations (22,509) (8.2) (13,660) (5.0) (8,849) (64.8)
Other income (expense), net (12,475) (4.5) (18,382) (6.7) 5,907 32.1
------------ ------- ------------ --------- ----------- ---------
Income (loss) before taxes (34,984) (12.7) (32,042) (11.7) (2,942) (9.2)
Income tax expense (benefit) (6,372) (2.3) (2,293) (0.8) (4,079) (177.9)
------------ ------- ------------ --------- ----------- ---------
Income (loss) before accounting change (28,612) (10.4) (29,749) (10.9) 1,137 3.8
Cumulative effect of accounting change - - (143,702) (52.5) 143,702 100.0
------------ ------- ------------ --------- ----------- ---------
NET INCOME (LOSS) $ (28,612) (10.4) $ (173,451) (63.3) $144,839 83.5
============ ======= ============ ========= =========== =========
Net income (loss) per share:
Basic
Before cumulative effect of accounting change $ (0.08) $ (0.08) $ 0.00 0.0
Cumulative effect of accounting change - (0.40) 0.40 100.0
------------ ------------ ----------- ---------
$ (0.08) $ (0.48) $ 0.40 83.8
============ ============ =========== =========
Diluted
Before cumulative effect of accounting change $ (0.08) $ (0.08) $ 0.00 0.0
Cumulative effect of accounting change - (0.40) 0.40 100.0
------------ ------------ ----------- ---------
$ (0.08) $ (0.48) $ 0.40 83.8
============ ============ =========== =========
Weighted average shares:
Basic 368,746 362,754
Diluted 368,746 362,754
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 Income
(In thousands, except per share data)
$ %
Q2 2003 % Q1 2003 % Change Change
------------ ------- ------------ --------- ----------- ---------
Net revenue
New software licenses $ 64,465 23.4 $ 61,038 23.5 $ 3,427 5.6
Maintenance and services 211,502 76.6 198,933 76.5 12,569 6.3
------------ ------- ------------ --------- ----------- ---------
Total net revenue 275,967 100.0 259,971 100.0 15,996 6.2
------------ ------- ------------ --------- ----------- ---------
Cost of revenue
New software licenses 5,962 2.2 5,222 2.0 740 14.2
Maintenance and services 102,809 37.3 92,342 35.5 10,467 11.3
------------ ------- ------------ --------- ----------- ---------
Total cost of revenue 108,771 39.4 97,564 37.5 11,207 11.5
------------ ------- ------------ --------- ----------- ---------
Gross profit 167,196 60.6 162,407 62.5 4,789 2.9
------------ ------- ------------ --------- ----------- ---------
Operating expenses
Sales and marketing 101,737 36.9 98,305 37.8 3,432 3.5
Product development 48,354 17.5 42,922 16.5 5,432 12.7
General and administrative 30,939 11.2 27,345 10.5 3,594 13.1
Restructuring 8,675 3.1 - - 8,675 -
------------ ------- ------------ --------- ----------- ---------
Total operating expenses 189,705 68.7 168,572 64.8 21,133 12.5
------------ ------- ------------ --------- ----------- ---------
Income (loss) from operations (22,509) (8.2) (6,165) (2.4) (16,344) (265.1)
Other income (expense), net (12,475) (4.5) (6,189) (2.4) (6,286) (101.6)
------------ ------- ------------ --------- ----------- ---------
Income (loss) before taxes (34,984) (12.7) (12,354) (4.8) (22,630) (183.2)
Income tax expense (benefit) (6,372) (2.3) (466) (0.2) (5,906) (1,267.4)
------------ ------- ------------ --------- ----------- ---------
NET INCOME (LOSS) $ (28,612) (10.4) $ (11,888) (4.6) $ (16,724) (140.7)
============ ======= ============ ========= =========== =========
Net income (loss) per share:
Basic $ (0.08) $ (0.03) $ (0.05) (140.2)
Diluted $ (0.08) $ (0.03) $ (0.05) (140.2)
Weighted average shares:
Basic 368,746 368,075
Diluted 368,746 368,075
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 Income
(In thousands, except per share data)
Year-to-date Year-to-date $ %
2003 % 2002 % Change Change
------------- ------- ------------ -------- ------------ ---------
Net revenue
New software licenses $ 125,503 23.4 $ 142,086 25.8 $ (16,583) (11.7)
Maintenance and services 410,435 76.6 409,626 74.2 809 0.2
------------- ------- ------------ -------- ------------ ---------
Total net revenue 535,938 100.0 551,712 100.0 (15,774) (2.9)
------------- ------- ------------ -------- ------------ ---------
Cost of revenue
New software licenses 11,184 2.1 13,613 2.5 (2,429) (17.8)
Maintenance and services 195,151 36.4 216,784 39.3 (21,633) (10.0)
------------- ------- ------------ -------- ------------ ---------
Total cost of revenue 206,335 38.5 230,397 41.8 (24,062) (10.4)
------------- ------- ------------ -------- ------------ ---------
Gross profit 329,603 61.5 321,315 58.2 8,288 2.6
------------- ------- ------------ -------- ------------ ---------
Operating expenses
Sales and marketing 200,042 37.3 167,621 30.4 32,421 19.3
Product development 91,276 17.0 85,398 15.5 5,878 6.9
General and administrative 58,284 10.9 61,380 11.1 (3,096) (5.0)
Restructuring 8,675 1.6 19,100 3.5 (10,425) (54.6)
------------- ------- ------------ -------- ------------ ---------
Total operating expenses 358,277 66.9 333,499 60.4 24,778 7.4
------------- ------- ------------ -------- ------------ ---------
Income from operations (28,674) (5.4) (12,184) (2.2) (16,490) (135.3)
Other income (expense), net (18,664) (3.5) (7,928) (1.4) (10,736) (135.4)
------------- ------- ------------ -------- ------------ ---------
Income (loss) before taxes (47,338) (8.8) (20,112) (3.6) (27,226) (135.4)
Income tax expense (benefit) (6,838) (1.3) 1,286 0.2 (8,124) (631.7)
------------- ------- ------------ -------- ------------ ---------
Income (loss) before accounting change (40,500) (7.6) (21,398) (3.9) (19,102) (89.3)
Cumulative effect of accounting change, net of tax - 0.0 (143,702) (26.0) 143,702 100.0
------------- ------- ------------ -------- ------------ ---------
NET INCOME (LOSS) $ (40,500) (7.6) $ (165,100) (29.9) $124,600 75.5
============= ======= ============ ======== ============ =========
Net income (loss) per share:
Basic
Before cumulative effect of accounting change $ (0.11) $ (0.06) $ (0.05) (86.3)
Cumulative effect of accounting change - (0.40) 0.40 100.0
------------- ------------ ------------ ---------
$ (0.11) $ (0.46) $ 0.35 75.9
============= ============ ============ =========
Diluted
Before cumulative effect of accounting change $ (0.11) $ (0.06) $ (0.05) (86.3)
Cumulative effect of accounting change - (0.40) 0.40 100.0
------------- ------------ ------------ ---------
$ (0.11) $ (0.46) $ 0.35 75.9
============= ============ ============ =========
Weighted average shares:
Basic 368,411 362,591
Diluted 368,411 362,591
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 Income Statements
Trailing Four Quarters
(in thousands, except per share data)
Last Four
Q3 2002 % Q4 2002 % Q1 2003 % Q2 2003 % Quarters %
---------- -------- ---------- ------- ----------- ------- ----------- ------- ----------- -------
Net revenue
New software licenses $ 82,894 29.4 $ 94,301 31.4 $ 61,038 23.5 $ 64,465 23.4 $ 302,698 27.1
Maintenance and services 199,379 70.6 206,034 68.6 198,933 76.5 211,502 76.6 815,848 72.9
---------- -------- ---------- -------- ---------- ------- ----------- ------- ----------- -------
Total net revenue 282,273 100.0 300,335 100.0 259,971 100.0 275,967 100.0 1,118,546 100.0
---------- -------- ---------- -------- ---------- ------- ----------- ------- ----------- -------
Cost of revenue
New software licenses 8,098 2.9 9,464 3.2 5,222 2.0 5,962 2.2 28,746 2.6
Maintenance and services 101,724 36.0 99,735 33.2 92,342 35.5 102,809 37.3 396,610 35.5
---------- -------- ---------- -------- ---------- ------- ----------- ------- ----------- -------
Total cost of revenue 109,822 38.9 109,199 36.4 97,564 37.5 108,771 39.4 425,356 38.0
---------- -------- ---------- -------- ---------- ------- ----------- ------- ----------- -------
Gross profit 172,451 61.1 191,136 63.6 162,407 62.5 167,196 60.6 693,190 62.0
---------- -------- ---------- -------- ---------- ------- ----------- ------- ----------- -------
Operating expenses
Sales and marketing 87,487 31.0 94,552 31.5 98,305 37.8 101,737 36.9 382,081 34.2
Product development 44,130 15.6 48,801 16.2 42,922 16.5 48,354 17.5 184,207 16.5
General and administrative 29,566 10.5 31,642 10.5 27,345 10.5 30,939 11.2 119,492 10.7
Restructuring - - - - - - 8,675 3.1 8,675 0.8
Purchased in-process R&D 3,000 1.1 - - - - - - 3,000 0.3
Impairments - - 80,350 26.8 - - - - 80,350 7.2
--------- --------- ---------- ------- ----------- ------- ----------- ------- ----------- -------
Total operating expenses 164,183 58.2 255,345 85.0 168,572 64.8 189,705 68.7 777,805 69.5
--------- -------- ---------- -------- ----------- ------- ----------- ------- ----------- -------
Income (loss) from operations 8,268 2.9 (64,209) (21.4) (6,165) (2.4) (22,509) (8.2) (84,615) (7.6)
Other income (expense)
Investment income 5,268 1.9 (23,595) (7.9) (7,140) (2.7) (10,459) (3.8) (35,926) (3.2)
Other, net 1,962 0.7 193 0.1 951 0.4 (2,016) (0.7) 1,090 0.1
---------- -------- ---------- -------- ---------- ------- ----------- ------- ----------- -------
Other income (expense), net 7,230 2.6 (23,402) (7.8) (6,189) (2.4) (12,475) (4.5) (34,836) (3.1)
Income (loss) before taxes 15,498 5.5 (87,611) (29.2) (12,354) (4.8) (34,984) (12.7) (119,451) (10.7)
Income tax expense (benefit) 5,549 2.0 4,061 1.4 (466) (0.2) (6,372) (2.3) 2,772 0.2
---------- -------- ---------- -------- ---------- ------- ----------- ------- ----------- -------
NET INCOME (LOSS) $ 9,949 3.5 $(91,672) (30.5) $ (11,888) (4.6) $(28,612) (10.4) $ (122,223) (10.9)
========== ======== ========== ======== ========== ======= =========== ======= =========== =======
Net income (loss) per share:
Basic $ 0.03 $ (0.25) $ (0.03) $ (0.08) $ (0.33)
Diluted $ 0.03 $ (0.25) $ (0.03) $ (0.08) $ (0.33)
=========== ========== =========== =========== ===========
Weighted average shares:
Basic 364,211 364,884 368,075 368,746 366,479
Diluted 364,247 364,884 368,075 368,746 366,479
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
(In thousands)
$ %
Revenue by Solution Q2 2003 % Q2 2002 % Change Change
------------ ------- ----------- ------- ----------- ---------
IT Software and Solutions
Identity Management & Secure Web Services $ 22,669 8.2 $ 16,630 6.1 $ 6,039 36.3
Cross Platform Services
Management & Collaboration 62,884 22.8 60,093 21.9 2,791 4.6
Services Platforms & Storage 79,130 28.6 86,959 31.7 (7,829) (9.0)
------------ ------- ----------- ------- ----------- ---------
Total Cross Platform Services 142,014 51.4 147,052 53.6 (5,038) (3.4)
------------ ------- ----------- ------- ----------- ---------
Total Software Licenses & Maintenance 164,683 59.6 163,682 59.7 1,001 0.6
Worldwide Services * 74,401 27.0 77,992 28.5 (3,591) (4.6)
------------ ------- ----------- ------- ----------- ---------
Total IT Software and Solutions 239,084 86.6 241,674 88.2 (2,590) (1.1)
Celerant Management Consulting 36,883 13.4 32,179 11.8 4,704 14.6
------------ ------- ----------- ------- ----------- ---------
Total Net Revenue $275,967 100.0 $273,853 100.0 $ 2,114 0.8
============ ======= =========== ======= =========== =========
* includes consulting, technical services, and training
$ %
Revenue by Business Category Q2 2003 % Q2 2002 % Change Change
------------ ------- ----------- ------- ----------- ---------
New Software Licenses $ 64,465 23.4 $ 70,448 25.7 $ (5,983) (8.5)
Maintenance and Services 211,502 76.6 203,405 74.3 8,097 4.0
------------ ------- ----------- ------- ----------- ---------
Total Net Revenue $275,967 100.0 $273,853 100.0 $ 2,114 0.8
============ ======= =========== ======= =========== =========
$ %
Revenue by Geography Q2 2003 % Q2 2002 % Change Change
------------ ------- ----------- ------- ----------- ---------
U.S. $125,844 45.6 $143,061 52.2 $ (17,217) (12.0)
Europe, Middle East & Africa 112,318 40.7 92,244 33.7 20,074 21.8
Asia Pacific 20,908 7.6 19,920 7.3 988 5.0
Canada & Latin America 16,897 6.1 18,628 6.8 (1,731) (9.3)
------------ ------- ----------- ------- ----------- ---------
Total Net Revenue $275,967 100.0 $273,853 100.0 $ 2,114 0.8
============ ======= =========== ======= =========== =========
Novell, Inc.
Solution Category, Business Category & Geography Revenue
(In thousands)
$ %
Revenue by Solution Q2 2003 % Q1 2003 % Change Change
------------ ------- ----------- ------- ----------- ---------
IT Software and Solutions
Identity Management & Secure Web Services $ 22,669 8.2 $ 23,145 8.9 $ (476) (2.1)
Cross Platform Services
Management & Collaboration 62,884 22.8 56,544 21.8 6,340 11.2
Services Platforms & Storage 79,130 28.6 79,308 30.4 (178) (0.2)
------------ ------- ----------- ------- ----------- ---------
Total Cross Platform Services 142,014 51.4 135,852 52.2 6,162 4.5
------------ ------- ----------- ------- ----------- ---------
Total Software Licenses & Maintenance 164,683 59.6 158,997 61.1 5,686 3.6
Worldwide Services * 74,401 27.0 72,428 27.9 1,973 2.7
------------ ------- ----------- ------- ----------- ---------
Total IT Software and Solutions 239,084 86.6 231,425 89.0 7,659 3.3
Celerant Management Consulting 36,883 13.4 28,546 11.0 8,337 29.2
------------ ------- ----------- ------- ----------- ---------
Total Net Revenue $275,967 100.0 $259,971 100.0 $ 15,996 6.2
============ ======= =========== ======= =========== =========
* includes consulting, technical services, and training
$ %
Revenue by Business Category Q2 2003 % Q1 2003 % Change Change
------------ ------- ----------- ------- ----------- ---------
New Software Licenses $ 64,465 23.4 $ 61,038 23.5 $ 3,427 5.6
Maintenance and Services 211,502 76.6 198,933 76.5 12,569 6.3
------------ ------- ----------- ------- ----------- ---------
Total Net Revenue $275,967 100.0 $259,971 100.0 $ 15,996 6.2
============ ======= =========== ======= =========== =========
$ %
Revenue by Geography Q2 2003 % Q1 2003 % Change Change
------------ ------- ----------- ------- ----------- ---------
U.S. $125,844 45.6 $123,729 47.6 $ 2,115 1.7
Europe, Middle East & Africa 112,318 40.7 103,345 39.8 8,973 8.7
Asia Pacific 20,908 7.6 17,857 6.9 3,051 17.1
Canada & Latin America 16,897 6.1 15,040 5.7 1,857 12.3
------------ ------- ----------- ------- ----------- ---------
Total Net Revenue $275,967 100.0 $259,971 100.0 $ 15,996 6.2
============ ======= =========== ======= =========== =========
Novell, Inc.
Solution Category, Business Category & Geography Revenue
(In thousands)
Year-to-date Year-to-date $ %
Revenue by Solution 2003 % 2002 % Change Change
------------ ------- ----------- ------- ----------- ---------
IT Software and Solutions
Identity Management & Secure Web Services $ 45,814 8.5 $ 33,478 6.1 $ 12,336 36.8
Cross Platform Services
Management & Collaboration 119,428 22.3 117,235 21.2 2,193 1.9
Services Platforms & Storage 158,438 29.6 179,822 32.6 (21,384) (11.9)
------------ ------- ----------- ------- ----------- ---------
Total Cross Platform Services 277,866 51.9 297,057 53.8 (19,191) (6.5)
------------ ------- ----------- ------- ----------- ---------
Total Software Licenses & Maintenance 323,680 60.4 330,535 59.9 (6,855) (2.1)
Worldwide Services * 146,829 27.4 159,994 29.0 (13,165) (8.2)
------------ ------- ----------- ------- ----------- ---------
Total IT Software and Solutions 470,509 87.8 490,529 88.9 (20,020) (4.1)
Celerant Management Consulting 65,429 12.2 61,183 11.1 4,246 6.9
------------ ------- ----------- ------- ----------- ---------
Total Net Revenue $535,938 100.0 $551,712 100.0 $ (15,774) (2.9)
============ ======= =========== ======= =========== =========
* includes consulting, technical services, and training
Year-to-date Year-to-date $ %
Revenue by Business Category 2003 % 2002 % Change Change
------------ ------- ----------- ------- ----------- ---------
New Software Licenses $125,503 23.4 $142,087 25.8 $ (16,584) (11.7)
Maintenance and Services 410,435 76.6 409,625 74.2 810 0.2
------------ ------- ----------- ------- ----------- ---------
Total Net Revenue $535,938 100.0 $551,712 100.0 $ (15,774) (2.9)
============ ======= =========== ======= =========== =========
Year-to-date Year-to-date $ %
Revenue by Geography 2003 % 2002 % Change Change
------------ ------- ----------- ------- ----------- ---------
U.S. $249,574 46.6 $290,488 52.7 $ (40,914) (14.1)
Europe, Middle East & Africa 215,663 40.2 189,922 34.4 25,741 13.6
Asia Pacific 38,765 7.2 38,970 7.1 (205) (0.5)
Canada & Latin America 31,936 6.0 32,332 5.8 (396) (1.2)
------------ ------- ----------- ------- ----------- ---------
Total Net Revenue $535,938 100.0 $551,712 100.0 $ (15,774) (2.9)
============ ======= =========== ======= =========== =========
Novell, Inc.
Solutions Category, Business Category & Geography Revenue
Trailing Four Quarters
(In thousands)
Last Four
Revenue by Solution Q3 2002 % Q4 2002 % Q1 2003 % Q2 2003 % Quarters %
---------- ------ ---------- ------ --------- ------- --------- ----- ------------ ------
IT Software and Solutions
Identity Management & Secure Web Services $ 19,576 6.9 $ 31,865 10.6 $ 23,145 8.9 $ 22,669 8.2 $ 97,255 8.7
Cross Platform Services
Management & Collaboration 64,121 22.7 66,003 22.0 56,544 21.7 62,884 22.8 249,552 22.3
Services Platforms & Storage 89,086 31.6 91,935 30.6 79,308 30.5 79,130 28.6 339,459 30.3
--------- ------ ---------- ------ ---------- ------ --------- -------- --------- ------
Total Cross Platform Services 153,207 54.3 157,938 52.6 135,852 52.2 142,014 51.4 589,011 52.7
--------- ------ ---------- ------ ---------- ------ --------- -------- --------- ------
Total Software Licenses & Maintenance 172,783 61.2 189,803 63.2 158,997 61.1 164,683 59.6 686,266 61.4
Worldwide Services * 77,949 27.6 78,023 26.0 72,428 27.9 74,401 27.0 302,801 27.1
--------- ------ ---------- ------ --------- ------- --------- -------- --------- ------
Total IT Software and Solutions 250,732 88.8 267,826 89.2 231,425 89.0 239,084 86.6 989,067 88.4
Celerant Management Consulting 31,541 11.2 32,509 10.8 28,546 11.0 36,883 13.4 129,479 11.6
--------- ------ ---------- ------ --------- ------- --------- ------- ---------- ------
Total Net Revenue $ 282,273 100.0 $ 300,335 100.0 $ 259,971 100.0 $ 275,967 100.0 $ 1,118,546 100.0
========== ====== ========== ====== ========= ======= ========= ====== =========== ======
* includes consulting, technical services, and training
Last Four
Revenue by Business Category Q3 2002 % Q4 2002 % Q1 2003 % Q2 2003 % Quarters %
---------- ------ ---------- ------ ----------------- --------- ------------------ ------
New Software Licenses $ 82,894 29.4 $ 94,301 31.4 $ 61,038 23.5 $ 64,465 23.4 $ 302,698 27.1
Maintenance and Services 199,379 70.6 206,034 68.6 198,933 76.5 211,502 76.6 815,848 72.9
---------- ------ ---------- ------ --------- ------ --------- ------- --------- ------
Total Net Revenue $ 282,273 100.0 $ 300,335 100.0 $ 259,971 100.0 $ 275,967 100.0 $ 1,118,546 100.0
========== ====== ========== ====== ========= ====== ========= ====== =========== ======
Last Four
Revenue by Geography Q3 2002 % Q4 2002 % Q1 2003 % Q2 2003 % Quarters %
---------- ------ ---------- ------ ----------------- --------- ------------------ ------
U.S. $ 143,268 50.8 $ 148,817 49.6 $ 123,729 47.6 $ 125,844 45.6 $ 541,658 48.4
Europe, Middle East & Africa 102,278 36.2 110,863 36.9 103,345 39.7 112,318 40.7 428,804 38.3
Asia Pacific 20,241 7.2 22,629 7.5 17,857 6.9 20,908 7.6 81,635 7.3
Canada & Latin America 16,486 5.8 18,026 6.0 15,040 5.8 16,897 6.1 66,449 5.9
---------- ------ ---------- ------ --------- ------- --------- ------- ---------- ------
Total Net Revenue $ 282,273 100.0 $ 300,335 100.0 $ 259,971 100.0 $ 275,967 100.0 $1,118,546 100.0
========== ====== ========== ====== ========= ======= ========= ======= ========== ======