Corel's Sales, Earnings Fall In Q4

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Canadian software company Corel reported a bigger fourth-quarter loss Friday as revenues fell and it incurred a number of one-time costs to integrate a recent acquisition.

The Ottawa-based maker of graphics software, reported a loss of $10.7 million, or 14 cents a share, in the quarter ended Nov. 30, compared with a loss of $8.6 million, or 12 cents a share, in the year ago period.

Revenues in the quarter fell to $31.6 million from $40.4 million.

Two analysts polled by Thomson Financial/First Call were expecting earnings of 2 cents per share.

The results included $8.5 million in non-recurring costs related to the integration of Micrografx, an acquisition that Corel officially completed on Oct. 30.

"Current economic conditions have played a part in the decline in our total revenues for Q4. Beyond that we did incur a number of one-time costs...for the recent acquisition, such as severance payments," Corel chief executive Derek Burney told analysts on a conference call.

Corel executives reiterated the firm's guidance for fiscal 2002, which it announced in December. Corel had forecast it will post a loss of $23 million to $31 million, but predicted revenues will rise to between $170 million and $180 million.

They said they expect revenues of $30 million to $35 million in the first quarter of fiscal 2002.

Corel said it expects to complete its previously announced acquisition of SoftQuad Software Ltd. by early to mid March. The two firms said Corel will provide SoftQuad with a bridge loan of up to $2 million until the acquisition is completed.

Corel said its cash, cash equivalents, short-term investments and restricted cash amounts stood at $122.4 million on Nov. 30, down from $128.6 million at the end of fiscal 2000.

For the full year Corel reported a net loss of $7.3 million, or 10 cents per share, compared with a loss of $55.3 million, or 80 cents per share, a year earlier. Revenues for fiscal 2001 fell to $134.3 million from $157.5 million.

Shares of Corel have hovered around $2 for the past 12 months, down sharply from a high of around $33 in December 1999, when the company's products for the Linux operating system excited investors. The shares closed at $1.90 Friday on Nasdaq and C$2.96 on the Toronto Stock Exchange.

($1-$1.59 Canadian)


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