EXHIBIT 99.1
Novell(R) News
FOR IMMEDIATE RELEASE
August 21, 2003
Novell Reports Third Fiscal Quarter 2003 Results
PROVO, Utah -- August 21, 2003 -- Novell, Inc. (NASDAQ:NOVL) today
announced financial results for its third fiscal quarter ended July 31, 2003.
For the quarter, Novell reported revenue of $283 million, compared to revenue of
$282 million for the third fiscal quarter 2002, and $276 million for the second
fiscal quarter 2003. Net loss in the third fiscal quarter 2003 was $12 million,
or $0.03 per share. This compared to net income of $10 million, or $0.03 per
share, for the third fiscal quarter 2002.
For the first nine months of fiscal 2003, Novell reported revenue of $819
million and a net loss of $53 million, or $0.14 per share. For the first nine
months of fiscal 2002, the company reported revenue of $834 million and a net
loss of $155 million, or $0.43 per share.
On a non-GAAP basis, adjusted net income for the third fiscal quarter 2003
was $7 million, or $0.02 per share, which excludes a $26 million restructuring
charge, a
$24 million charge for impaired intangible assets, $8 million in charges for
impaired investments, a gain on the sale of real estate of approximately $25
million, and the related tax effects of these items. This compares to non-GAAP
adjusted net income for the third quarter last year of $13 million, or $0.04 per
share, which excludes a $3 million charge for purchased in-process research and
development. 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.
During the quarter, Novell made decisions to lower its annual operating
expense by approximately $100 million, primarily through a workforce reduction
of 10 percent, or approximately 600 positions. The majority of the reductions
were made by quarter end, lowering total employment worldwide to approximately
5,700. Novell expects this workforce reduction to account for approximately $75
million of the anticipated savings in operating expense, with the full benefit
from the reduction being gained in the first fiscal quarter 2004. An additional
$25 million in annualized savings is expected from lower levels of non-salary
related operating expense.
"We are encouraged by our third quarter results," said Jack Messman, Novell
chairman, president and chief executive officer. "We took significant steps to
improve Novell's business performance through cost-cutting measures intended to
enhance our profitability beginning in our current fourth quarter. Novell also
continued to gain major new contracts based on the importance customers place on
secure identity management and application integration solutions. The
combination of these new solutions, our continued investment in NetWare(R)
development, expanding support for open standards and Linux, and the growing
importance of secure Web services, strengthens Novell overall.
"In the third quarter, Novell also made important announcements regarding
our Linux initiatives and the significant growth opportunities we see from this
market," Messman continued. "Novell is not diminishing support for its NetWare
product line. We are adding Linux. Novell plans to deliver a full range of
solutions to help customers maximize the value of investments in Linux and open
source. We are very pleased with positive customer and industry response which
included decisions by Dell Computer, Hewlett-Packard and IBM to offer Novell's
Linux solutions to their customers."
In June, the company announced Novell(R) Nterprise(TM) Linux Services with
file, print, messaging, directory and management services as an integrated
package that runs on Linux. Beta testing began in late July. It is due to ship
from Novell and its partners by calendar year-end.
Novell added to its Linux initiative on August 4, days after the close of
its third quarter, by acquiring Ximian, Inc., the leading provider of desktop
and server solutions that enable enterprise Linux adoption. Ximian, a small
private company with approximately 70 employees, becomes a product business unit
within Novell. Novell and Ximian share an objective to drive Linux adoption
among enterprise level decision makers for mission critical applications.
Among the larger contracts for software and services in the quarter, Novell
Nsure(TM) identity management and Nterprise(TM) solution customers included the
State of South Carolina, Pemex, the EnCana Corporation, the State of Georgia and
the Kuala Lumpur Stock Exchange.
During the third fiscal quarter, identity management and secure Web
services software had strong growth, up 34 percent year-over-year to total $26
million in the third quarter. Novell brings these solutions to market under the
Nsure and exteNd brands. Cross-platform services software, marketed under the
Nterprise brand, declined six percent year-over-year to $144 million. Total
software license and maintenance revenue was down one percent year-over-year to
$170 million.
Revenue from worldwide services branded as NgageSM, including IT consulting
and other customer services, declined three percent year-over-year to $76
million. Celerant management consulting revenue was up 16 percent year-over-year
to $37 million.
By geography, revenue in the third fiscal quarter from the United States
was $129 million, down 10 percent from the same period in the prior year. The
Europe, Middle East and Africa region contributed $113 million in revenue, up 11
percent year-over-year. Revenue from Asia Pacific, including Japan, was $23
million, up 15 percent year-over-year. Canada and Latin America contributed $17
million, up two percent year-over-year, as revenue growth in Canada was offset
by declines in Latin America.
On the balance sheet, cash and short-term investments were $739 million at
the end of the third fiscal quarter, compared with $636 million at the October
2002 fiscal year end. Novell received approximately $124 million in cash during
the quarter from a previously announced sale of real estate. Cash flow from
operations during the quarter was a positive $5 million. For the trailing four
quarters, cash flow from operations was a positive $35 million. Days sales
outstanding in accounts receivable (DSO) was 70 days, up from 61 days in the
prior quarter. Deferred revenue was $296 million, up 23 percent year-over-year.
Both the increases in DSO and deferred revenue largely reflect the timing of
renewal billings for prepaid software maintenance that will be recognized in
future periods. Maintenance revenue is associated with Novell's large network
site license business.
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 August 21 from Novell's
Investor Relations Web page: http://www.novell.com/company/ir/qresults/. Until
September 4, 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
August 21, through September 4, 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 the company's products. 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 and NetWare 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 Operations
(In thousands, except per share data)
Fiscal Quarter Ended Year-to-Date
------------------------------------ ------------------------------------
Jul 31, 2003 Jul 31, 2002 Jul 31, 2003 Jul 31, 2002
--------------- --------------- --------------- ---------------
Net revenue
New software licenses $ 69,255 $ 82,894 $ 194,758 $ 224,980
Maintenance and services 213,554 199,379 623,989 609,005
--------------- --------------- --------------- ---------------
Total net revenue 282,809 282,273 818,747 833,985
--------------- --------------- --------------- ---------------
Cost of revenue
New software licenses 5,886 8,098 17,070 21,711
Maintenance and services 101,591 101,724 296,742 318,508
--------------- --------------- --------------- ---------------
Total cost of revenue 107,477 109,822 313,812 340,219
--------------- --------------- --------------- ---------------
Gross profit 175,332 172,451 504,935 493,766
--------------- --------------- --------------- ---------------
Operating expenses
Sales and marketing 92,470 87,487 292,512 255,108
Product development 48,178 44,130 139,454 129,528
General and administrative 28,379 29,566 86,663 90,946
Restructuring 26,350 - 35,025 19,100
Purchased in process R&D - 3,000 - 3,000
--------------- --------------- --------------- ---------------
Total operating expenses 195,377 164,183 553,654 497,682
--------------- --------------- --------------- ---------------
Income (loss) from operations (20,045) 8,268 (48,719) (3,916)
Other income (expense), net (3,717) 7,230 (22,381) (698)
--------------- --------------- --------------- ---------------
Income (loss) before taxes (23,762) 15,498 (71,100) (4,614)
Income tax expense (benefit) (11,362) 5,549 (18,200) 6,835
--------------- --------------- --------------- ---------------
Income (loss) before accounting change (12,400) 9,949 (52,900) (11,449)
Cumulative effect of accounting change - - - (143,702)
--------------- --------------- --------------- ---------------
NET INCOME (LOSS) $ (12,400) $ 9,949 $ (52,900) $ (155,151)
=============== =============== =============== ===============
Net income (loss) per share:
Basic $ (0.03) $ 0.03 $ (0.14) $ (0.43)
Diluted $ (0.03) $ 0.03 $ (0.14) $ (0.43)
Weighted average shares:
Basic 371,484 364,211 369,435 363,131
Diluted 371,484 364,247 369,435 363,131
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 Jul 31, 2003 Oct 31, 2002
------------------- ------------------
Current assets
Cash and short-term investments $ 738,777 $ 635,858
Receivables, net 217,230 214,827
Prepaid expenses 27,596 24,077
Deferred income taxes 19,677 21,204
Other current assets 22,820 23,572
------------------
-------------------
Total current assets 1,026,100 919,538
Property, plant and equipment, net 258,908 369,189
Goodwill 178,297 179,534
Intangible assets 4,360 36,351
Long-term investments 51,039 73,452
Deferred income taxes 96,245 74,323
Other assets 7,792 12,678
------------------- ------------------
Total assets $1,622,741 $1,665,065
=================== ==================
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 48,263 $ 57,241
Accrued compensation 96,233 87,778
Other accrued liabilities 121,678 134,850
Income taxes payable 24,980 36,294
Deferred revenue 295,786 275,344
------------------- ------------------
Total current liabilities 586,940 591,507
Minority interests 8,016 8,016
Stockholders' equity 1,027,785 1,065,542
------------------- ------------------
Total liabilities and stockholders' equity $1,622,741 $1,665,065
=================== ==================
Novell, Inc.
Statement of Cash Flows
(Amounts in thousands)
Fiscal Quarter Ended Year-to-Date
----------------------------- ------------------------------
Jul 31, 2003 Jul 31, 2002 Jul 31, 2003 Jul 31, 2002
------------ ------------ ------------- -------------
Cash flows from operating activities
Net income $ (12,400) $ 9,949 $ (52,900) $ (155,151)
Adjustments to reconcile net income to net cash
provided (used) by operating activities
Gain on Sale of Fixed Assets (24,934) - (25,299) (8,762)
Depreciation and amortization 14,190 15,680 49,174 49,175
Loss on impaired goodwill and intangibles, net of tax 13,935 - 13,935 143,702
Loss on impaired investments and fixed assets 8,040 - 32,563 29,839
Non-cash restructuring charges 14,551 - 23,226 16,426
In-Process R&D expense - 3,000 - 3,000
Changes in assets and liabilities (7,885) 7,528 (38,689) (59,627)
------------ ------------ ------------- -------------
Net cash (used)/provided by operating activities 5,497 36,157 2,010 18,602
------------ ------------ ------------- -------------
Cash flows from financing activities
Issuance of common stock, net 807 (315) 7,805 6,861
------------ ------------ ------------- -------------
Net cash provided/(used) by financing activities 807 (315) 7,805 6,861
------------ ------------ ------------- -------------
Cash flows from investing activities
Expenditures for property, plant and equipment (8,828) (5,515) (30,605) (18,676)
Proceeds from the sale of property, plant and equipment 124,215 - 125,000 16,050
Short-term investment activity (44,438) 153,604 (117,240) 141,484
SilverStream acquisition - (102,561) - (102,561)
Other (1,100) (2,382) (280) (10,837)
------------ ------------ ------------- -------------
Net cash (used)/provided by investing activities 69,849 43,146 (23,125) 25,460
------------ ------------ ------------- -------------
Increase (decrease) in cash and cash equivalents 76,153 78,988 (13,310) 50,923
Cash and cash equivalents - beginning of period 374,524 309,862 463,987 337,927
------------ ------------ ------------- -------------
Cash and cash equivalents - end of period 450,677 388,850 450,677 388,850
Short-term investments- end of period 288,100 218,460 288,100 218,460
------------ ------------ ------------- -------------
Cash and short-term investments - end of period $ 738,777 $ 607,310 $ 738,777 $ 607,310
============ ============ ============= =============
Novell, Inc.
Non-GAAP Adjusted Earnings Information
(In thousands, except per share data)
GAAP Non-GAAP
As Reported Adjustments Adjusted
--------------- --------------- ---------------
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 (a) 6,805
Income (loss) before taxes (23,762) 33,526 (b) 9,764
Net income (loss) (12,400) 19,235 (c) 6,835
Diluted net income (loss) per share $ (0.03) $ 0.05 (c) $ 0.02
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 (d) (11,717)
Income (loss) before taxes (34,984) 25,265 (e) (9,719)
Net income (loss) (28,612) 21,809 (f) (6,803)
Diluted net income (loss) per share $ (0.08) $ 0.06 (f) $ (0.02)
Fiscal quarter ended July 31, 2002
Net revenue $ 282,273 $ - $ 282,273
Gross profit 172,451 - 172,451
Income (loss) from operations 8,268 3,000 (g) 11,268
Income (loss) before taxes 15,498 3,000 (g) 18,498
Net income (loss) 9,949 3,000 (g) 12,949
Diluted net income (loss) per share $ 0.03 $ 0.01 (g) $ 0.04
Footnotes related to adjustments:
(a) Reflects restructuring reserves of $26.4 million and an adjustment to prior merger reserves of $0.5 million.
(b) 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 (a).
(c) Reflects the items in footnotes (a) and (b), and the necessary related tax adjustments.
(d) Reflects adjustments to prior restructuring reserves of $8.7 million and merger reserves of $2.1 million.
(e) 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).
(f) Reflects the items in footnotes (d) and (e), and the necessary related tax adjustments.
(g) Reflects a charge for in-process R&D related to the SilverStream acquisition.
Novell, Inc.
Consolidated Unaudited Condensed Statements of Operations
(In thousands, except per share data)
$ %
Q3 2003 % Q3 2002 % Change Change
------------ ------- ------------ --------- ----------- ---------
Net revenue
New software licenses $ 69,255 24.5 $ 82,894 29.4 $ (13,639) (16.5)
Maintenance and services 213,554 75.5 199,379 70.6 14,175 7.1
------------ ------- ------------ --------- ----------- ---------
Total net revenue 282,809 100.0 282,273 100.0 536 0.2
------------ ------- ------------ --------- ----------- ---------
Cost of revenue
New software licenses 5,886 2.1 8,098 2.9 (2,212) (27.3)
Maintenance and services 101,591 35.9 101,724 36.0 (133) (0.1)
------------ ------- ------------ --------- ----------- ---------
Total cost of revenue 107,477 38.0 109,822 38.9 (2,345) (2.1)
------------ ------- ------------ --------- ----------- ---------
Gross profit 175,332 62.0 172,451 61.1 2,881 1.7
------------ ------- ------------ --------- ----------- ---------
Operating expenses
Sales and marketing 92,470 32.7 87,487 31.0 4,983 5.7
Product development 48,178 17.0 44,130 15.6 4,048 9.2
General and administrative 28,379 10.0 29,566 10.5 (1,187) (4.0)
Restructuring 26,350 9.3 - - 26,350 -
Purchased in process R&D - - 3,000 1.1 (3,000) (100.0)
------------ ------- ------------ --------- ----------- ---------
Total operating expenses 195,377 69.1 164,183 58.2 31,194 19.0
------------ ------- ------------ --------- ----------- ---------
Income (loss) from operations (20,045) (7.1) 8,268 2.9 (28,313) (342.4)
Other income (expense), net (3,717) (1.3) 7,230 2.6 (10,947) (151.4)
------------ ------- ------------ --------- ----------- ---------
Income (loss) before taxes (23,762) (8.4) 15,498 5.5 (39,260) (253.3)
Income tax expense (benefit) (11,362) (4.0) 5,549 2.0 (16,911) (304.8)
------------ ------- ------------ --------- ----------- ---------
NET INCOME (LOSS) $ (12,400) (4.4) $ 9,949 3.5 $ (22,349) (224.6)
============ ======= ============ ========= =========== =========
Net income (loss) per share:
Basic $ (0.03) $ 0.03 $ (0.06) (222.2)
Diluted $ (0.03) $ 0.03 $ (0.06) (222.2)
Weighted average shares:
Basic 371,484 364,211
Diluted 371,484 364,247
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)
$ %
Q3 2003 % Q2 2003 % Change Change
------------ ------- ------------ --------- ----------- ---------
Net revenue
New software licenses $ 69,255 24.5 $ 64,465 23.4 $ 4,790 7.4
Maintenance and services 213,554 75.5 211,502 76.6 2,052 1.0
------------ ------- ------------ --------- ----------- ---------
Total net revenue 282,809 100.0 275,967 100.0 6,842 2.5
------------ ------- ------------ --------- ----------- ---------
Cost of revenue
New software licenses 5,886 2.1 5,962 2.2 (76) (1.3)
Maintenance and services 101,591 35.9 102,809 37.3 (1,218) (1.2)
------------ ------- ------------ --------- ----------- ---------
Total cost of revenue 107,477 38.0 108,771 39.4 (1,294) (1.2)
------------ ------- ------------ --------- ----------- ---------
Gross profit 175,332 62.0 167,196 60.6 8,136 4.9
------------ ------- ------------ --------- ----------- ---------
Operating expenses
Sales and marketing 92,470 32.7 101,737 36.9 (9,267) (9.1)
Product development 48,178 17.0 48,354 17.5 (176) (0.4)
General and administrative 28,379 10.0 30,939 11.2 (2,560) (8.3)
Restructuring 26,350 9.3 8,675 3.1 17,675 203.7
------------ ------- ------------ --------- ----------- ---------
Total operating expenses 195,377 69.1 189,705 68.7 5,672 3.0
------------ ------- ------------ --------- ----------- ---------
Income (loss) from operations (20,045) (7.1) (22,509) (8.2) 2,464 10.9
Other income (expense), net (3,717) (1.3) (12,475) (4.5) 8,758 70.2
------------ ------- ------------ --------- ----------- ---------
Income (loss) before taxes (23,762) (8.4) (34,984) (12.7) 11,222 32.1
Income tax expense (benefit) (11,362) (4.0) (6,372) (2.3) (4,990) (78.3)
------------ ------- ------------ --------- ----------- ---------
NET INCOME (LOSS) $ (12,400) (4.4) $ (28,612) (10.4) $ 16,212 56.7
============ ======= ============ ========= =========== =========
Net income (loss) per share:
Basic $ (0.03) $ (0.08) $ 0.04 57.0
Diluted $ (0.03) $ (0.08) $ 0.04 57.0
Weighted average shares:
Basic 371,484 368,746
Diluted 371,484 368,746
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)
Year-to-date Year-to-date $ %
2003 % 2002 % Change Change
------------- ------- ------------ -------- ------------ ---------
Net revenue
New software licenses $ 194,758 23.8 $ 224,980 27.0 $ (30,222) (13.4)
Maintenance and services 623,989 76.2 609,005 73.0 14,984 2.5
------------- ------- ------------ -------- ------------ ---------
Total net revenue 818,747 100.0 833,985 100.0 (15,238) (1.8)
------------- ------- ------------ -------- ------------ ---------
Cost of revenue
New software licenses 17,070 2.1 21,711 2.6 (4,641) (21.4)
Maintenance and services 296,742 36.2 318,508 38.2 (21,766) (6.8)
------------- ------- ------------ -------- ------------ ---------
Total cost of revenue 313,812 38.3 340,219 40.8 (26,407) (7.8)
------------- ------- ------------ -------- ------------ ---------
Gross profit 504,935 61.7 493,766 59.2 11,169 2.3
------------- ------- ------------ -------- ------------ ---------
Operating expenses
Sales and marketing 292,512 35.7 255,108 30.6 37,404 14.7
Product development 139,454 17.0 129,528 15.5 9,926 7.7
General and administrative 86,663 10.6 90,946 10.9 (4,283) (4.7)
Restructuring 35,025 4.3 19,100 2.3 15,925 83.4
Purchased in process R&D - - 3,000 0.4 (3,000) (100.0)
------------- ------- ------------ -------- ------------ ---------
Total operating expenses 553,654 67.6 497,682 59.7 55,972 11.2
------------- ------- ------------ -------- ------------ ---------
Income from operations (48,719) (6.0) (3,916) (0.5) (44,803) (1,144.1)
Other income (expense), net (22,381) (2.7) (698) (0.1) (21,683) (3,106.4)
------------- ------- ------------ -------- ------------ ---------
Income (loss) before taxes (71,100) (8.7) (4,614) (0.6) (66,486) (1,441.0)
Income tax expense (benefit) (18,200) (2.2) 6,835 0.8 (25,035) (366.3)
------------- ------- ------------ -------- ------------ ---------
Income (loss) before accounting change (52,900) (6.5) (11,449) (1.4) (41,451) (362.0)
Cumulative effect of accounting change,
net of tax - - (143,702) (17.2) 143,702 (100.0)
------------- ------- ------------ -------- ------------ ---------
NET INCOME (LOSS) $ (52,900) (6.5) $ (155,151) (18.6) $102,251 65.9
============= ======= ============ ======== ============ =========
Net income (loss) per share:
Basic
Before cumulative effect of accounting change $ (0.14) $ (0.03) $ (0.11) (354.2)
Cumulative effect of accounting change - (0.40) 0.40 100.0
------------- ------------ ------------ ---------
$ (0.14) $ (0.43) $ 0.28 66.5
============= ============ ============ =========
Diluted
Before cumulative effect of accounting change $ (0.14) $ (0.03) $ (0.11) (354.2)
Cumulative effect of accounting change - (0.40) 0.40 100.0
------------- ------------ ------------ ---------
$ (0.14) $ (0.43) $ 0.28 66.5
============= ============ ============ =========
Weighted average shares:
Basic 369,435 363,131
Diluted 369,435 363,131
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
Trailing Four Quarters
(in thousands, except per share data)
Last Four
Q4 2002 % Q1 2003 % Q2 2003 % Q3 2003 % Quarters %
----------- ------- ---------- ------- ----------- ------- ----------- ------- ---------- --------
Net revenue
New software licenses $ 94,301 31.4 $ 61,038 23.5 $ 64,465 23.4 $ 69,255 24.5 $ 289,059 25.8
Maintenance and services 206,034 68.6 198,933 76.5 211,502 76.6 213,554 75.5 830,023 74.2
----------- ------- ---------- ------- ----------- ------- ----------- ------- ---------- --------
Total net revenue 300,335 100.0 259,971 100.0 275,967 100.0 282,809 100.0 1,119,082 100.0
----------- ------- ---------- ------- ----------- ------- ----------- ------- ---------- --------
Cost of revenue
New software licenses 9,464 3.2 5,222 2.0 5,962 2.2 5,886 2.1 26,534 2.4
Maintenance and services 99,735 33.2 92,342 35.5 102,809 37.3 101,591 35.9 396,477 35.4
----------- ------- ---------- ------- ----------- ------- ----------- ------- ---------- --------
Total cost of revenue 109,199 36.4 97,564 37.5 108,771 39.4 107,477 38.0 423,011 37.8
----------- ------- ---------- ------- ----------- ------- ----------- ------- ---------- --------
Gross profit 191,136 63.6 162,407 62.5 167,196 60.6 175,332 62.0 696,071 62.2
----------- ------- ---------- ------- ----------- ------- ----------- ------- ---------- --------
Operating expenses
Sales and marketing 94,552 31.5 98,305 37.8 101,737 36.9 92,470 32.7 387,064 34.6
Product development 48,801 16.2 42,922 16.5 48,354 17.5 48,178 17.0 188,255 16.8
General and administrative 31,642 10.5 27,345 10.5 30,939 11.2 28,379 10.0 118,305 10.6
Restructuring - - - - 8,675 3.1 26,350 9.3 35,025 3.1
Impairments 80,350 26.8 - - - - - - 80,350 7.2
----------- ------- ---------- ------- ----------- ------- ----------- ------- ---------- --------
Total operating expenses 255,345 85.0 168,572 64.8 189,705 68.7 195,377 69.1 808,999 72.3
----------- ------- ---------- ------- ----------- ------- ----------- ------- ---------- --------
Income (loss) from operations (64,209) (21.4) (6,165) (2.4) (22,509) (8.2) (20,045) (7.1) (112,928) (10.1)
Other income (expense)
Investment income (23,595) (7.9) (7,140) (2.7) (10,459) (3.8) (5,016) (1.8) (46,210) (4.1)
Other, net 193 0.1 951 0.4 (2,016) (0.7) 1,299 0.5 427 0.0
----------- ------- ---------- ------- ----------- ------- ----------- ------- ---------- --------
Other income (expense), net (23,402) (7.8) (6,189) (2.4) (12,475) (4.5) (3,717) (1.3) (45,783) (4.1)
Income (loss) before taxes (87,611) (29.2) (12,354) (4.8) (34,984) (12.7) (23,762) (8.4) (158,711) (14.2)
Income tax expense (benefit) 4,061 1.4 (466) (0.2) (6,372) (2.3) (11,362) (4.0) (14,139) (1.3)
----------- ------- ---------- ------- ----------- ------- ----------- ------- ---------- --------
NET INCOME (LOSS) $(91,672) (30.5) $ (11,888) (4.6) $(28,612) (10.4) $(12,400) (4.4) $(144,572) (12.9)
=========== ======= ========== ======= =========== ======= =========== ======= ========== ========
Net income (loss) per share:
Basic $ (0.25) $ (0.03) $ (0.08) $ (0.03) $ (0.39)
Diluted $ (0.25) $ (0.03) $ (0.08) $ (0.03) $ (0.39)
=========== ========== =========== =========== ==========
Weighted average shares:
Basic 364,884 368,075 368,746 371,484 368,297
Diluted 364,884 368,075 368,746 371,484 368,297
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 Q3 2003 % Q3 2002 % Change Change
------------ ------- ----------- ------- ----------- ---------
IT Software and Solutions
Identity Management & Secure Web Services $ 26,318 9.3 $ 19,576 6.9 $ 6,742 34.4
Cross Platform Services
Management & Collaboration 65,707 23.2 64,121 22.7 1,586 2.5
Services Platforms & Storage 78,669 27.8 89,086 31.6 (10,417) (11.7)
------------ ------- ----------- ------- ----------- ---------
Total Cross Platform Services 144,376 51.0 153,207 54.3 (8,831) (5.8)
------------ ------- ----------- ------- ----------- ---------
Total Software Licenses & Maintenance 170,694 60.3 172,783 61.2 (2,089) (1.2)
Worldwide Services * 75,576 26.8 77,949 27.6 (2,373) (3.0)
------------ ------- ----------- ------- ----------- ---------
Total IT Software and Solutions 246,270 87.1 250,732 88.8 (4,462) (1.8)
Celerant Management Consulting 36,539 12.9 31,541 11.2 4,998 15.8
------------ ------- ----------- ------- ----------- ---------
Total Net Revenue $282,809 100.0 $282,273 100.0 $ 536 0.2
============ ======= =========== ======= =========== =========
* includes consulting, technical services, and training
$ %
Revenue by Business Category Q3 2003 % Q3 2002 % Change Change
------------ ------- ----------- ------- ----------- ---------
New Software Licenses $ 69,255 24.5 $ 82,894 29.4 $ (13,639) (16.5)
Maintenance and Services 213,554 75.5 199,379 70.6 14,175 7.1
------------ ------- ----------- ------- ----------- ---------
Total Net Revenue $282,809 100.0 $282,273 100.0 $ 536 0.2
============ ======= =========== ======= =========== =========
$ %
Revenue by Geography Q3 2003 % Q3 2002 % Change Change
------------ ------- ----------- ------- ----------- ---------
U.S. $129,261 45.7 $143,268 50.8 $ (14,007) (9.8)
Europe, Middle East & Africa 113,495 40.1 102,278 36.2 11,217 11.0
Asia Pacific 23,235 8.2 20,241 7.2 2,994 14.8
Canada & Latin America 16,818 6.0 16,486 5.8 332 2.0
------------ ------- ----------- ------- ----------- ---------
Total Net Revenue $282,809 100.0 $282,273 100.0 $ 536 0.2
============ ======= =========== ======= =========== =========
Novell, Inc.
Solution Category, Business Category & Geography Revenue
(In thousands)
$ %
Revenue by Solution Q3 2003 % Q2 2003 % Change Change
------------ ------- ----------- ------- ----------- ---------
IT Software and Solutions
Identity Management & Secure Web Services $ 26,318 9.3 $ 22,669 8.2 $ 3,649 16.1
Cross Platform Services
Management & Collaboration 65,707 23.2 62,884 22.8 2,823 4.5
Services Platforms & Storage 78,669 27.8 79,130 28.6 (461) (0.6)
------------ ------- ----------- ------- ----------- ---------
Total Cross Platform Services 144,376 51.0 142,014 51.4 2,362 1.7
------------ ------- ----------- ------- ----------- ---------
Total Software Licenses & Maintenance 170,694 60.3 164,683 59.6 6,011 3.7
Worldwide Services * 75,576 26.8 74,401 27.0 1,175 1.6
------------ ------- ----------- ------- ----------- ---------
Total IT Software and Solutions 246,270 87.1 239,084 86.6 7,186 3.0
Celerant Management Consulting 36,539 12.9 36,883 13.4 (344) (0.9)
------------ ------- ----------- ------- ----------- ---------
Total Net Revenue $282,809 100.0 $275,967 100.0 $ 6,842 2.5
============ ======= =========== ======= =========== =========
* includes consulting, technical services, and training
$ %
Revenue by Business Category Q3 2003 % Q2 2003 % Change Change
------------ ------- ----------- ------- ----------- ---------
New Software Licenses $ 69,255 24.5 $ 64,465 23.4 $ 4,790 7.4
Maintenance and Services 213,554 75.5 211,502 76.6 2,052 1.0
------------ ------- ----------- ------- ----------- ---------
Total Net Revenue $282,809 100.0 $275,967 100.0 $ 6,842 2.5
============ ======= =========== ======= =========== =========
$ %
Revenue by Geography Q3 2003 % Q2 2003 % Change Change
------------ ------- ----------- ------- ----------- ---------
U.S. $129,261 45.7 $125,844 45.6 $ 3,417 2.7
Europe, Middle East & Africa 113,495 40.1 112,318 40.7 1,177 1.0
Asia Pacific 23,235 8.2 20,908 7.6 2,327 11.1
Canada & Latin America 16,818 6.0 16,897 6.1 (79) (0.5)
------------ ------- ----------- ------- ----------- ---------
Total Net Revenue $282,809 100.0 $275,967 100.0 $ 6,842 2.5
============ ======= =========== ======= =========== =========
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 $ 72,132 8.8 $ 53,055 6.4 $ 19,077 36.0
Cross Platform Services
Management & Collaboration 185,135 22.6 181,356 21.7 3,779 2.1
Services Platforms & Storage 237,107 29.0 268,908 32.3 (31,801) (11.8)
------------ ------- ----------- ------- ----------- ---------
Total Cross Platform Services 422,242 51.6 450,264 54.0 (28,022) (6.2)
------------ ------- ----------- ------- ----------- ---------
Total Software Licenses & Maintenance 494,374 60.4 503,319 60.4 (8,945) (1.8)
Worldwide Services * 222,405 27.2 237,943 28.5 (15,538) (6.5)
------------ ------- ----------- ------- ----------- ---------
Total IT Software and Solutions 716,779 87.6 741,262 88.9 (24,483) (3.3)
Celerant Management Consulting 101,968 12.4 92,723 11.1 9,245 10.0
------------ ------- ----------- ------- ----------- ---------
Total Net Revenue $818,747 100.0 $833,985 100.0 $ (15,238) (1.8)
============ ======= =========== ======= =========== =========
* includes consulting, technical services, and training
Year-to-date Year-to-date $ %
Revenue by Business Category 2003 % 2002 % Change Change
------------ ------- ----------- ------- ----------- ---------
New Software Licenses $194,758 23.8 $224,980 27.0 $ (30,222) (13.4)
Maintenance and Services 623,989 76.2 609,005 73.0 14,984 2.5
------------ ------- ----------- ------- ----------- ---------
Total Net Revenue $818,747 100.0 $833,985 100.0 $ (15,238) (1.8)
============ ======= =========== ======= =========== =========
Year-to-date Year-to-date $ %
Revenue by Geography 2003 % 2002 % Change Change
------------ ------- ----------- ------- ----------- ---------
U.S. $378,835 46.3 $433,756 52.0 $ (54,921) (12.7)
Europe, Middle East & Africa 329,158 40.2 292,000 35.0 37,158 12.7
Asia Pacific 62,000 7.6 59,210 7.1 2,790 4.7
Canada & Latin America 48,754 5.9 48,819 5.9 (65) (0.1)
------------ ------- ----------- ------- ----------- ---------
Total Net Revenue $818,747 100.0 $833,785 100.0 $ (15,038) (1.8)
============ ======= =========== ======= =========== =========
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
========== ====== ========== ====== ================= ========= ================== ======