NOVELL, INC. 
By WALTHAM, Mass., Dec. 2, 2010 /PRNewswire-FirstCall/ -- Novell, Inc. (Nasdaq: NOVL) today announced financial results for its fourth fiscal quarter and full fiscal year ended October 31, 2010. For the quarter, Novell reported net revenue of $207 million. This compares to net revenue of $216 million for the fourth fiscal quarter of 2009. GAAP income from operations for the fourth fiscal quarter of 2010 was $22 million. This compares to GAAP loss from operations of $259 million for the fourth fiscal quarter of 2009, which included a $279 million non-cash impairment charge to goodwill and intangible assets. GAAP net income in the fourth fiscal quarter of 2010 was $322 million, or $0.91 per share, which included $308 million in non-cash tax provision benefits, principally to release a valuation allowance for certain net deferred tax assets. This compares to a GAAP net loss of $256 million, or a $0.74 loss per share, for the fourth fiscal quarter of 2009. Foreign currency exchange rates favorably impacted net revenue by $1 million, operating expenses by $1 million and income from operations by $2 million compared to the same period last year.
On a non-GAAP basis, income from operations for the fourth fiscal quarter of 2010 was $38 million. This compares to non-GAAP income from operations of $37 million in the same period last year. Non-GAAP net income for the fourth fiscal quarter of 2010 was $25 million, or $0.07 per share. This compares to non-GAAP net income of $38 million, or $0.11 per share, for the fourth fiscal quarter of 2009. A reconciliation of GAAP to non-GAAP results is provided in the financial schedules as part of this press release. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures."
For the full fiscal year 2010, Novell reported net revenue of $812 million and GAAP income from operations of $84 million. Comparatively, net revenue for the full fiscal year 2009 was $862 million and GAAP loss from operations was $206 million, which included a $279 million non-cash impairment charge to goodwill and intangible assets. GAAP net income for the full fiscal year 2010 was $378 million or $1.07 per share, which included $308 million in non-cash tax provision benefits, principally to release a valuation allowance for certain net deferred tax assets. This compares to a net loss of $213 million, or a $0.62 loss per share, for the full fiscal year 2009. Foreign currency exchange rates favorably impacted net revenue by $4 million and unfavorably impacted operating expenses by $10 million and income from operations by $6 million compared to the prior fiscal year.
On a non-GAAP basis, income from operations for the full fiscal year 2010 was $131 million. This compares to non-GAAP income from operations of $139 million in the prior year. Non-GAAP net income for the full fiscal year 2010 was $97 million, or $0.27 per share. This compares to non-GAAP net income of $117 million, or $0.34 per share, for the full fiscal year 2009.
"I am pleased with our fourth quarter performance," said Ron Hovsepian, President and CEO of Novell. "We continue to see strong performance from our Linux business with invoicing for Linux, excluding Microsoft certificates, up over 40% from the year-ago period and the prior fiscal year. We also saw some stabilization in the Collaboration Solutions business with invoicing decreasing 3% over the year-ago period. In addition, we continue to invest in the business while improving our GAAP and non-GAAP operating margins, which were 11% and 19%, respectively, for the quarter. Finally, we were profitable on a GAAP net income basis for the quarter and for the full year, even excluding discrete tax items."
Cash, cash equivalents and short-term investments were $1.1 billion at October 31, 2010, up from $1.0 billion last quarter. Days sales outstanding in accounts receivable was 76 days at the end of the fourth fiscal quarter of 2010, up from 75 days at the end of the year-ago quarter. Total deferred revenue was $651 million at the end of the fourth fiscal quarter of 2010, down from $689 million at the end of the year-ago quarter. For the fourth fiscal quarter of 2010, cash flow from operations was $52 million. This compares to cash flow from operations of $51 million for the fourth fiscal quarter of 2009. For the full fiscal year 2010, cash flow from operations was $76 million. This compares to cash flow from operations of $69 million for the full fiscal year 2009.
Further details on Novell's reported results are included in the financial schedules that are a part of this release.
In addition, as previously publicly disclosed, Novell entered into an Agreement and Plan of Merger, dated as of November 21, 2010, with Attachmate Corporation, a Washington corporation, and Longview Software Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of Attachmate, upon the terms and subject to the conditions of which, Longview will be merged with and into Novell, with Novell continuing as the surviving corporation and a wholly-owned subsidiary of Attachmate.
Non-GAAP Financial Measures
We supplement our consolidated unaudited condensed financial statements presented in accordance with GAAP with certain non-GAAP financial measures. These non-GAAP measures include adjusted income from operations, adjusted operating margin, adjusted income from continuing operations, adjusted net income, adjusted income per share from continuing operations and adjusted net income per share. 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 same non-GAAP financial measures to evaluate performance, allocate resources, and determine compensation. The non-GAAP financial measures do not replace the presentation of our GAAP financial results, but they eliminate expenses and gains that are excluded from most analysts' consensus estimates, that are unusual, and/or that arise outside of the ordinary course of business, such as, but not limited to, those related to stock-based compensation, acquisition-related intangible asset amortization, restructuring, asset impairments, litigation judgments and settlements, strategic alternatives review, the sale of business operations, long-term investments, property, plant and equipment, and unusual and discrete income tax effects.
Legal Notice Regarding Forward-Looking Statements
This press release may include statements that are not historical in nature and that may be characterized as "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including those related to future financial and operating results, targets, and prospects; future opportunities; market leadership and positioning; short-term and long-term trends; the macroeconomic environment; customer priorities; timing of realization of projections; functionality, characteristics, quality and performance capabilities of Novell's products and technology; and results achievable and benefits attainable through deployment of Novell's products and provision of services. Forward-looking statements forecasting growth in financial metrics are predicated on assumptions regarding improvements in the overall economy and the markets served by the Company and in which the Company operates, the timing of which are impossible to accurately predict. Actual results may differ materially from the results discussed in or implied by such forward-looking statements, which are based upon information that is currently available to us and/or management's current expectations and speak only as of the date hereof. We are subject to a number of risks, including, among others, the risk that the merger may be delayed or may not be consummated, the risk that the definitive merger agreement may be terminated in circumstances that require Novell to pay Attachmate a termination fee of $60 million; risks related to the diversion of management's attention from Novell's ongoing business operations; risks regarding the failure of Attachmate to obtain the necessary financing to complete the merger; the effect of the announcement of the merger on Novell's business relationships (including, without limitation, partners and customers), operating results and business generally; and risks related to obtaining the requisite consents to the merger, including, without limitation, the timing (including possible delays) and receipt of regulatory approvals from various governmental entities (including any conditions, limitations or restrictions placed on these approvals) and the risk that one or more governmental entities may deny approval, as well as risks related to indirect sales, growth rates of our business units, renewal of SUSE® Linux Enterprise Server subscriptions with customers who have received certificates from Microsoft, decline rates of Open Enterprise Server and NetWare® revenue, development of products and services, the intelligent workload management market, software vulnerabilities, delays in product releases, reliance on open source software, adequacy of renewal rates, uncertain economic conditions, competition, rapid technological changes, failure to expand brand awareness, adequacy of technical support, pricing pressures, system failures, integration of acquisitions, industry consolidation, challenges resulting from a global business, foreign research and development operations, loss of key employees, intellectual property infringement, litigation matters, unpredictable financial results, impairments, the timing of revenue recognition, our investments and effective use of our cash.
A detailed discussion of these and other factors that could affect our results is included in our SEC filings, including, but not limited to, our Quarterly Report on Form 10-Q for the period ended April 30, 2010 filed with the SEC on June 8, 2010 and our Current Report on Form 8-K filed with the SEC on November 22, 2010 (as amended), which may be obtained by calling (800) 317- 3195, or at our Investor Relations web page at: www.novell.com/company/ir.
We expressly disclaim any obligation, except as required by law, or undertaking to update or revise any forward-looking statements contained in this press release to reflect any change of expectations with regard thereto or to reflect any change in events, conditions, or circumstances on which any such forward-looking statement is based, in whole or in part.
Additional Information About the Merger and Where to Find It
In connection with the merger, Novell intends to file relevant materials with the SEC, including a proxy statement. Investors and security holders of Novell are urged to read these documents (if and when they become available) and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information about Novell, the merger and the other parties to the merger. Investors and security holders may obtain these documents (and any other documents filed by Novell and Attachmate with the SEC) free of charge at the SEC's website at http://www.sec.gov. In addition, the documents filed with the SEC by Novell may be obtained free of charge by directing such request to: Novell Investor Relations at 1-800-317-3195 or from the investor relations portion of Novell's website at http://www.novell.com/company/ir/. Investors and security holders are urged to read the definitive proxy statement and the other relevant materials when they become available before making any voting or investment decision with respect to the merger.
Novell and its directors and executive officers may be deemed to be participants in the solicitation of proxies from Novell's stockholders in respect of the merger. Information regarding Novell's directors and executive officers is contained in Novell's Annual Report on Form 10-K for the fiscal year ended October 31, 2009, its proxy statement for its 2010 Annual Meeting of Stockholders, dated February 26, 2010, and subsequent filings which Novell has made with the SEC. Stockholders may obtain additional information about the directors and executive officers of Novell and their respective interests with respect to the merger by security holdings or otherwise, which may be different than those of Novell's stockholders generally, by reading the definitive proxy statement and other relevant documents regarding the merger, when filed with the SEC. Each of these documents is, or will be, available as described above.
About Novell
Novell, Inc. (NASDAQ: NOVL), a leader in intelligent workload management, through WorkloadIQ(TM), helps organizations securely deliver and manage computing services across physical, virtual and cloud computing environments. We help customers reduce the cost, complexity, and risk associated with their IT systems through our solutions for identity and security, systems management, collaboration and Linux-based operating platforms. With our infrastructure software and ecosystem of partnerships, Novell integrates mixed IT environments, allowing people and technology to work as one. For more information, visit www.novell.com.
NetWare, Novell, the Novell logo, the N Logo, and SUSE are registered trademarks and WorkloadIQ is a trademark 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
--------------------
Oct 31, 2010 Oct 31, 2009
------------ ------------
Net revenue:
Software licenses $31,256 $31,382
Maintenance and subscriptions 153,277 159,902
Services (1) 21,978 24,351
------ ------
Total net revenue 206,511 215,635
------- -------
Cost of revenue:
Software licenses 2,538 2,967
Maintenance and subscriptions 22,517 24,276
Services 20,013 20,426
Total cost of revenue 45,068 47,669
------ ------
Gross profit 161,443 167,966
------- -------
Operating expenses:
Sales and marketing 67,841 68,760
Product development 41,718 45,756
General and administrative 23,652 26,948
Other operating expenses (2) 6,225 285,636
----- -------
Total operating expenses 139,436 427,100
Income (loss) from operations 22,007 (259,134)
Operating margin % 10.7% -120.2%
Other income, net:
Interest income, net 2,588 3,208
Other income (expense) 353 (2,392)
Total other income, net 2,941 816
----- ---
Income (loss) from continuing
operations before taxes 24,948 (258,318)
Income tax (benefit) expense (296,640) (2,629)
-------- ------
Income (loss) from continuing
operations 321,588 (255,689)
Income from discontinued operations 610 -
--- ---
Net income (loss) $322,198 $(255,689)
======== =========
Diluted earnings (loss) per share:
Continuing operations $0.90 $(0.74)
Net income (loss) $0.91 $(0.74)
Weighted average shares 356,010 347,043
Fiscal Year Ended
-----------------
Oct 31, 2010 Oct 31, 2009
------------ ------------
Net revenue:
Software licenses $105,108 $116,919
Maintenance and subscriptions 618,542 640,745
Services (1) 88,221 104,521
------ -------
Total net revenue 811,871 862,185
------- -------
Cost of revenue:
Software licenses 8,506 9,174
Maintenance and subscriptions 88,447 92,613
Services 76,652 85,044
Total cost of revenue 173,605 186,831
------- -------
Gross profit 638,266 675,354
------- -------
Operating expenses:
Sales and marketing 282,402 295,998
Product development 160,188 181,383
General and administrative 101,118 102,172
Other operating expenses (2) 10,121 302,293
------ -------
Total operating expenses 553,829 881,846
Income (loss) from operations 84,437 (206,492)
Operating margin % 10.4% -23.9%
Other income, net:
Interest income, net 10,790 15,275
Other income (expense) 6,860 (12,757)
Total other income, net 17,650 2,518
------ -----
Income (loss) from continuing
operations before taxes 102,087 (203,974)
Income tax (benefit) expense (275,279) 10,666
-------- ------
Income (loss) from continuing
operations 377,366 (214,640)
Income from discontinued operations 610 1,904
--- -----
Net income (loss) $377,976 $(212,736)
======== =========
Diluted earnings (loss) per share:
Continuing operations $1.07 $(0.62)
Net income (loss) $1.07 $(0.62)
Weighted average shares 353,447 345,493
(1) Services includes professional services, technical support and
training services.
(2) See Page 9 of 12 for a detail of other operating expenses.
Revisions were made to prior period amounts in order to conform to
the current period's presentation.
Novell, Inc.
Consolidated Unaudited Condensed Balance Sheets
(In thousands)
Oct 31, 2010 Oct 31, 2009
------------ ------------
Assets
Current assets:
Cash and cash equivalents $685,594 $591,656
Short-term investments 441,096 391,809
Restricted cash - 53,033
Receivables, net 171,607 177,898
Prepaid expenses 16,233 17,708
Current deferred income taxes 49,169 5,521
Other current assets 33,725 26,747
------ ------
Total current assets 1,397,424 1,264,372
Property, plant and equipment, net 156,033 170,459
Long-term investments - 10,303
Goodwill 353,415 356,033
Intangible assets, net 28,746 36,621
Deferred income taxes 243,583 26,717
Other assets 46,797 38,403
------ ------
Total assets $2,225,998 $1,902,908
========== ==========
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable $26,785 $37,628
Accrued compensation 83,181 87,928
Other accrued liabilities 86,223 97,154
Deferred revenue 487,590 495,245
------- -------
Total current liabilities 683,779 717,955
Deferred income taxes 7,622 8,403
Other long-term liabilities 35,655 48,502
Long-term deferred revenue 163,394 193,526
------- -------
Total liabilities 890,450 968,386
Stockholders' equity 1,335,548 934,522
--------- -------
Total liabilities and
stockholders' equity $2,225,998 $1,902,908
========== ==========
Revisions were made to prior period amounts in order to conform to
the current period's presentation.
Novell, Inc.
Consolidated Unaudited Condensed Statements of Cash Flows
(In thousands)
Fiscal Quarter Ended
--------------------
Oct 31, 2010 Oct 31, 2009
------------ ------------
Cash flows from operating
activities
Net income (loss) $322,198 $(255,689)
Adjustments to reconcile net
income (loss) to net cash
provided
by operating activities:
Stock-based compensation
expense 8,232 5,683
Depreciation and amortization 7,896 9,657
Change in accounts receivable
allowances (1,166) 827
Utilization of previously
reserved acquired net
operating losses - 2,125
Net gain on sale of property,
plant and equipment - (2,199)
Gain on debenture repurchases - -
Income from discontinued
operations (610) -
Impairment of long-term
investments - -
Net gain on sale of
previously impaired
investments (218) (300)
Impairment of goodwill and
intangible assets - 279,135
Gain on sale of subsidiaries - -
Deferred income taxes (272,654) (3,071)
Changes in assets and
liabilities, excluding the
effect of acquisitions and
dispositions (12,085) 15,250
------- ------
Net cash provided by
operating activities 51,593 51,418
------ ------
Cash flows from investing
activities
Purchases of property, plant
and equipment (2,410) (7,324)
Net proceeds from the sale of
property, plant and
equipment - 10,748
Short-term investment
activity (1,936) (5,199)
Long-term investment
activity 218 300
Change in restricted cash 17,723 (25)
Cash proceeds from sale of
discontinued operations 233 -
Net cash paid for
acquisitions - -
Other 6,520 1,330
----- -----
Net cash provided by (used
in) investing activities 20,348 (170)
------ ----
Cash flows from financing
activities
Issuances of common stock 1,292 641
Excess tax effects from
stock-based compensation 2,226 13
Debt repayment - (4,087)
Debenture repurchases - -
--- ---
Net cash provided by (used
in) financing activities 3,518 (3,433)
----- ------
Effect of exchange rate
changes on cash 5,085 6,977
----- -----
Increase (decrease) in cash
and cash equivalents 80,544 54,792
Cash and cash equivalents -
beginning of period 605,050 536,864
------- -------
Cash and cash equivalents -
end of period $685,594 $591,656
======== ========
Fiscal Year Ended
-----------------
Oct 31, 2010 Oct 31, 2009
------------ ------------
Cash flows from operating
activities
Net income (loss) $377,976 $(212,736)
Adjustments to reconcile net
income (loss) to net cash
provided
by operating activities:
Stock-based compensation
expense 29,057 25,881
Depreciation and amortization 30,298 40,675
Change in accounts receivable
allowances (1,833) 444
Utilization of previously
reserved acquired net
operating losses - 2,580
Net gain on sale of property,
plant and equipment - (2,199)
Gain on debenture repurchases - (11)
Income from discontinued
operations (610) (1,904)
Impairment of long-term
investments - 5,466
Net gain on sale of previously
impaired investments (7,413) (300)
Impairment of goodwill and
intangible assets - 279,135
Gain on sale of subsidiaries - (16)
Deferred income taxes (261,878) 8,610
Changes in assets and
liabilities, excluding the
effect of acquisitions and
dispositions (90,050) (76,855)
------- -------
Net cash provided by operating
activities 75,547 68,770
------ ------
Cash flows from investing
activities
Purchases of property, plant
and equipment (17,648) (22,087)
Net proceeds from the sale of
property, plant and equipment - 10,748
Short-term investment
activity (42,663) 5,100
Long-term investment activity 8,847 4,209
Change in restricted cash 53,033 (332)
Cash proceeds from sale of
discontinued operations 938 1,036
Net cash paid for acquisitions - (48,472)
Other 7,899 7,228
----- -----
Net cash provided by (used in)
investing activities 10,406 (42,570)
------ -------
Cash flows from financing
activities
Issuances of common stock 8,940 3,566
Excess tax effects from stock-
based compensation 2,226 (2,775)
Debt repayment - (4,658)
Debenture repurchases - (125,537)
--- --------
Net cash provided by (used in)
financing activities 11,166 (129,404)
------ --------
Effect of exchange rate
changes on cash (3,181) 14,826
------ ------
Increase (decrease) in cash
and cash equivalents 93,938 (88,378)
Cash and cash equivalents -
beginning of period 591,656 680,034
------- -------
Cash and cash equivalents -
end of period $685,594 $591,656
======== ========
Novell, Inc.
Unaudited Non-GAAP Adjusted Income From Operations
(In thousands)
Fiscal Quarter Ended
--------------------
Oct 31,
2010 Oct 31, 2009
-------- ------------
GAAP income (loss) from operations $22,007 $(259,134)
------- ---------
Adjustments:
Stock-based compensation expense:
Cost of revenue 876 512
Sales and marketing 2,385 1,659
Product development 2,151 1,721
General and administrative 2,820 1,791
----- -----
Sub-total 8,232 5,683
----- -----
Acquisition-related intangible asset
amortization:
Cost of revenue 1,129 2,098
Sales and marketing 630 2,706
--- -----
Sub-total 1,759 4,804
----- -----
Other operating expenses (income):
Restructuring expense - 8,700
Strategic alternatives review expense 6,225 -
Litigation related activity - -
Gain on sale of subsidiaries - -
Net gain on sale of property, plant
and equipment - (2,199)
IT outsourcing transition costs - -
Impairment of goodwill and intangible
assets - 279,135
--- -------
Sub-total 6,225 285,636
----- -------
Total operating adjustments 16,216 296,123
Non-GAAP income from operations $38,223 $36,989
======= =======
Non-GAAP operating margin % 18.5% 17.2%
Fiscal Year Ended
-----------------
Oct 31, 2010 Oct 31, 2009
------------ ------------
GAAP income (loss) from operations $84,437 $(206,492)
------- ---------
Adjustments:
Stock-based compensation expense:
Cost of revenue 3,053 2,649
Sales and marketing 8,038 7,015
Product development 8,227 9,332
General and administrative 9,739 6,885
----- -----
Sub-total 29,057 25,881
------ ------
Acquisition-related intangible asset
amortization:
Cost of revenue 4,895 9,984
Sales and marketing 2,980 7,296
----- -----
Sub-total 7,875 17,280
----- ------
Other operating expenses (income):
Restructuring expense 2,774 25,200
Strategic alternatives review expense 9,222 -
Litigation related activity (1,875) -
Gain on sale of subsidiaries - (16)
Net gain on sale of property, plant
and equipment - (2,199)
IT outsourcing transition costs - 173
Impairment of goodwill and intangible
assets - 279,135
--- -------
Sub-total 10,121 302,293
------ -------
Total operating adjustments 47,053 345,454
Non-GAAP income from operations $131,490 $138,962
======== ========
Non-GAAP operating margin % 16.2% 16.1%
Novell, Inc.
Unaudited Non-GAAP Adjusted Net Income
(In thousands, except per share data)
Fiscal Quarter Ended
--------------------
Oct 31, 2010 Oct 31, 2009
------------ ------------
GAAP net income (loss) $322,198 $(255,689)
-------- ---------
Operating adjustments (detailed above) 16,216 296,123
Non-operating expenses (income)
adjustments:
Net gain on sale of previously
impaired investments (218) (300)
Gain on debenture repurchases - -
Impairment of long-term investments - -
Sub-total (218) (300)
---- ----
Total pre-tax adjustments 15,998 295,823
Income tax adjustments (312,118) (2,130)
Income from discontinued operations (610) -
---- ---
Total net adjustments (296,730) 293,693
Non-GAAP net income and non-GAAP
income
from continuing operations $25,468 $38,004
======= =======
GAAP net income (loss) per share $0.91 $(0.74)
Total adjustments detailed above (0.84) 0.85
----- ----
Non-GAAP net income per share and
non-GAAP
income from continuing operations per
share $0.07 $0.11
===== =====
GAAP weighted average shares 356,010 347,043
Change from basic to diluted weighted
average shares - 1,707
--- -----
Non-GAAP weighted average shares 356,010 348,750
======= =======
Fiscal Year Ended
-----------------
Oct 31, 2010 Oct 31, 2009
------------ ------------
GAAP net income (loss) $377,976 $(212,736)
-------- ---------
Operating adjustments (detailed above) 47,053 345,454
Non-operating expenses (income)
adjustments:
Net gain on sale of previously
impaired investments (7,413) (300)
Gain on debenture repurchases - (11)
Impairment of long-term investments - 5,466
Sub-total (7,413) 5,155
------ -----
Total pre-tax adjustments 39,640 350,609
Income tax adjustments (320,153) (19,219)
Income from discontinued operations (610) (1,904)
---- ------
Total net adjustments (281,123) 329,486
Non-GAAP net income and non-GAAP
income
from continuing operations $96,853 $116,750
======= ========
GAAP net income (loss) per share $1.07 $(0.62)
Total adjustments detailed above (0.80) 0.96
----- ----
Non-GAAP net income per share and
non-GAAP
income from continuing operations per
share $0.27 $0.34
===== =====
GAAP weighted average shares 353,447 345,493
Change from basic to diluted weighted
average shares - 2,328
--- -----
Non-GAAP weighted average shares 353,447 347,821
======= =======
Novell, Inc.
Consolidated Unaudited Condensed Segment Results
(in thousands)
Fiscal
Quarter
Ended
October
31,
2010
Security,
Management and
Operating
Platforms %
---------- ---
Net revenue:
Software licenses $18,915 14.7
Maintenance and
subscriptions 93,360 72.8
Services 16,044 12.5
------ ----
Total net revenue 128,319 100.0
------- -----
Cost of revenue:
Software licenses 1,938 1.5
Maintenance and
subscriptions 14,546 11.3
Services 14,627 11.4
Total cost of revenue 31,111 24.2
------ ----
Gross profit 97,208 75.8
------ ----
Operating expenses:
Sales and marketing 52,139 40.6
Product development 31,239 24.3
General and
administrative 13,419 10.5
Other operating expenses - -
Total operating expenses 96,797 75.4
------ ----
Income (loss) from
operations $411 0.3
==== ===
Fiscal
Quarter
Ended
July
31,
2010
Security,
Management and
Operating
Platforms %
---------- ---
Net revenue:
Software licenses $15,819 12.8
Maintenance and
subscriptions 92,333 74.8
Services 15,354 12.4
------ ----
Total net revenue 123,506 100.0
------- -----
Cost of revenue:
Software licenses 1,842 1.5
Maintenance and
subscriptions 14,428 11.7
Services 13,165 10.7
Total cost of revenue 29,435 23.8
------ ----
Gross profit 94,071 76.2
------ ----
Operating expenses:
Sales and marketing 54,949 44.5
Product development 29,720 24.1
General and
administrative 13,854 11.2
Other operating expenses - -
Total operating expenses 98,523 79.8
------ ----
Income (loss) from
operations $(4,452) (3.6)
======= ====
Fiscal
Quarter
Ended
October
31,
2009
Security,
Management and
Operating
Platforms %
---------- ---
Net revenue:
Software licenses $19,430 14.8
Maintenance and
subscriptions 94,189 71.6
Services 17,859 13.6
------ ----
Total net revenue 131,478 100.0
------- -----
Cost of revenue:
Software licenses 2,247 1.7
Maintenance and
subscriptions 14,816 11.3
Services 14,908 11.3
Total cost of revenue 31,971 24.3
------ ----
Gross profit 99,507 75.7
------ ----
Operating expenses:
Sales and marketing 51,305 39.0
Product development 35,077 26.7
General and
administrative 16,294 12.4
Other operating expenses - -
Total operating expenses 102,676 78.1
------- ----
Income (loss) from
operations $(3,169) (2.4)
======= ====
Fiscal
Quarter
Ended
October
31,
2010
Collaboration
Solutions %
--------- --
Net revenue:
Software licenses $12,341 15.8
Maintenance and
subscriptions 59,917 76.6
Services 5,934 7.6
----- ---
Total net revenue 78,192 100.0
------ -----
Cost of revenue:
Software licenses 408 0.5
Maintenance and
subscriptions 6,822 8.7
Services 4,722 6.0
Total cost of revenue 11,952 15.3
------ ----
Gross profit 66,240 84.7
------ ----
Operating expenses:
Sales and marketing 12,687 16.2
Product development 8,328 10.7
General and
administrative 7,413 9.5
Other operating expenses - -
Total operating expenses 28,428 36.4
------ ----
Income (loss) from
operations $37,812 48.4
======= ====
Fiscal
Quarter
Ended
July
31,
2010
Collaboration
Solutions %
--------- ---
Net revenue:
Software licenses $9,149 12.1
Maintenance and
subscriptions 60,126 79.7
Services 6,199 8.2
----- ---
Total net revenue 75,474 100.0
------ -----
Cost of revenue:
Software licenses 325 0.4
Maintenance and
subscriptions 6,755 9.0
Services 4,834 6.4
Total cost of revenue 11,914 15.8
------ ----
Gross profit 63,560 84.2
------ ----
Operating expenses:
Sales and marketing 13,708 18.2
Product development 7,743 10.3
General and
administrative 7,615 10.1
Other operating expenses - -
Total operating expenses 29,066 38.5
------ ----
Income (loss) from
operations $34,494 45.7
======= ====
Fiscal
Quarter
Ended
October
31,
2009
Collaboration
Solutions %
--------- ---
Net revenue:
Software licenses $11,952 14.2
Maintenance and
subscriptions 65,713 78.1
Services 6,492 7.7
----- ---
Total net revenue 84,157 100.0
------ -----
Cost of revenue:
Software licenses 384 0.5
Maintenance and
subscriptions 7,603 9.0
Services 5,101 6.1
Total cost of revenue 13,088 15.6
------ ----
Gross profit 71,069 84.4
------ ----
Operating expenses:
Sales and marketing 13,090 15.6
Product development 8,958 10.6
General and
administrative 8,863 10.5
Other operating expenses - -
Total operating expenses 30,911 36.7
------ ----
Income (loss) from
operations $40,158 47.7
======= ====
Fiscal
Quarter
Ended
October
31,
2010
Common
Unallocated
-----------
Net revenue:
Software licenses $-
Maintenance and
subscriptions -
Services -
---
Total net revenue -
---
Cost of revenue:
Software licenses 192
Maintenance and
subscriptions 1,149
Services 664
Total cost of revenue 2,005
-----
Gross profit (2,005)
------
Operating expenses:
Sales and marketing 3,015
Product development 2,151
General and
administrative 2,820
Other operating expenses 6,225
Total operating expenses 14,211
------
Income (loss) from
operations $(16,216)
========
Fiscal
Quarter
Ended
July
31,
2010
Common
Unallocated
-----------
Net revenue:
Software licenses $-
Maintenance and
subscriptions -
Services -
---
Total net revenue -
---
Cost of revenue:
Software licenses 188
Maintenance and
subscriptions 1,350
Services 620
Total cost of revenue 2,158
-----
Gross profit (2,158)
------
Operating expenses:
Sales and marketing 2,135
Product development 1,937
General and
administrative 1,836
Other operating expenses 878
Total operating expenses 6,786
-----
Income (loss) from
operations $(8,944)
=======
Fiscal
Quarter
Ended
October
31,
2009
Common
Unallocated
-----------
Net revenue:
Software licenses $-
Maintenance and
subscriptions -
Services -
---
Total net revenue -
---
Cost of revenue:
Software licenses 336
Maintenance and
subscriptions 1,857
Services 417
Total cost of revenue 2,610
-----
Gross profit (2,610)
------
Operating expenses:
Sales and marketing 4,365
Product development 1,721
General and
administrative 1,791
Other operating expenses 285,636
Total operating expenses 293,513
-------
Income (loss) from
operations $(296,123)
=========
Fiscal
Quarter
Ended
October
31,
2010
Total %
----- --
Net revenue:
Software licenses $31,256 15.1
Maintenance and
subscriptions 153,277 74.2
Services 21,978 10.6
------ ----
Total net revenue 206,511 100.0
------- -----
Cost of revenue:
Software licenses 2,538 1.2
Maintenance and
subscriptions 22,517 10.9
Services 20,013 9.7
Total cost of revenue 45,068 21.8
------ ----
Gross profit 161,443 78.2
------- ----
Operating expenses:
Sales and marketing 67,841 32.9
Product development 41,718 20.2
General and
administrative 23,652 11.5
Other operating expenses 6,225 3.0
Total operating expenses 139,436 67.5
------- ----
Income (loss) from
operations $22,007 10.7
======= ====
Fiscal
Quarter
Ended
July
31,
2010
Total %
----- ---
Net revenue:
Software licenses $24,968 12.5
Maintenance and
subscriptions 152,459 76.6
Services 21,553 10.8
------ ----
Total net revenue 198,980 100.0
------- -----
Cost of revenue:
Software licenses 2,355 1.2
Maintenance and
subscriptions 22,533 11.3
Services 18,619 9.4
Total cost of revenue 43,507 21.9
------ ----
Gross profit 155,473 78.1
------- ----
Operating expenses:
Sales and marketing 70,792 35.6
Product development 39,400 19.8
General and
administrative 23,305 11.7
Other operating expenses 878 0.4
Total operating expenses 134,375 67.5
------- ----
Income (loss) from
operations $21,098 10.6
======= ====
Fiscal
Quarter
Ended
October
31,
2009
Total %
----- ---
Net revenue:
Software licenses $31,382 14.6
Maintenance and
subscriptions 159,902 74.2
Services 24,351 11.3
------ ----
Total net revenue 215,635 100.0
------- -----
Cost of revenue:
Software licenses 2,967 1.4
Maintenance and
subscriptions 24,276 11.3
Services 20,426 9.5
Total cost of revenue 47,669 22.1
------ ----
Gross profit 167,966 77.9
------- ----
Operating expenses:
Sales and marketing 68,760 31.9
Product development 45,756 21.2
General and
administrative 26,948 12.5
Other operating expenses 285,636 132.5
Total operating expenses 427,100 198.1
------- -----
Income (loss) from
operations $(259,134) (120.2)
========= ======
Revisions were made to prior period amounts in order to conform to
the current period's presentation.
Novell, Inc.
Unaudited Trended Segment Revenue by Software Licenses and
Maintenance and Services
(In thousands)
Fiscal Year
Q4 2009 % 2009 %
------- -- ---- --
Security, management and operating
platforms
Open platform solutions
Linux platform products
Software licenses $- - $- -
Maintenance and subscriptions 39,011 18.1 149,162 17.3
------ -------
39,011 18.1 149,162 17.3
Other open platform products
Software licenses 21 0.0 125 0.0
Maintenance and subscriptions 1,979 0.9 7,592 0.9
----- -----
2,000 0.9 7,717 0.9
Total open platform solutions 41,011 19.0 156,879 18.2
------ ---- ------- ----
Identity and security management
Identity, access and compliance
management
Software licenses 10,360 4.8 31,908 3.7
Maintenance and subscriptions 19,606 9.1 80,340 9.3
------ ------
29,966 13.9 112,248 13.0
Other identity and security
management
Software licenses 426 0.2 1,965 0.2
Maintenance and subscriptions 1,781 0.8 6,837 0.8
----- -----
2,207 1.0 8,802 1.0
Total identity and security
management 32,173 14.9 121,050 14.0
------ ---- ------- ----
Systems and resource management
Software licenses 8,623 4.0 33,806 3.9
Maintenance and subscriptions 31,812 14.8 126,963 14.7
Total systems and resource
management 40,435 18.8 160,769 18.6
Total security, management and
operating platforms 113,619 52.7 438,698 50.9
Collaboration solutions
OES and NetWare-related
Software licenses 5,504 2.6 20,232 2.3
Maintenance and subscriptions 38,080 17.7 157,524 18.3
------ -------
43,584 20.2 177,756 20.6
Collaboration
Software licenses 3,827 1.8 14,822 1.7
Maintenance and subscriptions 20,477 9.5 85,123 9.9
------ ------
24,304 11.3 99,945 11.6
Other collaboration solutions
Software licenses 2,621 1.2 14,061 1.6
Maintenance and subscriptions 7,156 3.3 27,204 3.2
----- ------
9,777 4.5 41,265 4.8
Total collaboration solutions 77,665 36.0 318,966 37.0
Total software licenses,
maintenance
and subscriptions
Software licenses 31,382 14.6 116,919 13.6
Maintenance and subscriptions 159,902 74.2 640,745 74.3
------- -------
Total product revenue 191,284 88.7 757,664 87.9
------- ---- ------- ----
Services 24,351 11.3 104,521 12.1
------ ---- ------- ----
Total net revenue $215,635 100.0 $862,185 100.0
======== ===== ======== =====
Q3 2010 % Q4 2010 %
------- -- ------- --
Security, management and operating
platforms
Open platform solutions
Linux platform products
Software licenses $- - $- -
Maintenance and subscriptions 35,506 17.8 36,256 17.6
------ ------
35,506 17.8 36,256 17.6
Other open platform products
Software licenses 1 0.0 70 0.0
Maintenance and subscriptions 2,108 1.1 2,505 1.2
----- -----
2,109 1.1 2,575 1.2
Total open platform solutions 37,615 18.9 38,831 18.8
------ ---- ------ ----
Identity and security management
Identity, access and compliance
management
Software licenses 7,991 4.0 10,912 5.3
Maintenance and subscriptions 22,502 11.3 21,856 10.6
------ ------
30,493 15.3 32,768 15.9
Other identity and security management
Software licenses 260 0.1 393 0.2
Maintenance and subscriptions 1,303 0.7 1,072 0.5
----- -----
1,563 0.8 1,465 0.7
Total identity and security management 32,056 16.1 34,233 16.6
------ ---- ------ ----
Systems and resource management
Software licenses 7,567 3.8 7,540 3.7
Maintenance and subscriptions 30,914 15.5 31,671 15.3
Total systems and resource management 38,481 19.3 39,211 19.0
Total security, management and
operating platforms 108,152 54.4 112,275 54.4
Collaboration solutions
OES and NetWare-related
Software licenses 5,225 2.6 6,128 3.0
Maintenance and subscriptions 35,161 17.7 35,478 17.2
------ ------
40,386 20.3 41,606 20.1
Collaboration
Software licenses 1,980 1.0 3,271 1.6
Maintenance and subscriptions 18,978 9.5 18,867 9.1
------ ------
20,958 10.5 22,138 10.7
Other collaboration solutions
Software licenses 1,944 1.0 2,942 1.4
Maintenance and subscriptions 5,987 3.0 5,572 2.7
----- -----
7,931 4.0 8,514 4.1
Total collaboration solutions 69,275 34.8 72,258 35.0
Total software licenses, maintenance
and subscriptions
Software licenses 24,968 12.5 31,256 15.1
Maintenance and subscriptions 152,459 76.6 153,277 74.2
------- -------
Total product revenue 177,427 89.2 184,533 89.4
------- ---- ------- ----
Services 21,553 10.8 21,978 10.6
------ ---- ------ ----
Total net revenue $198,980 100.0 $206,511 100.0
======== ===== ======== =====
Fiscal Year Change from
2010 % Q4 2009 to Q4 2010
---- -- ------------------
Security, management and
operating platforms
Open platform solutions
Linux platform products
Software licenses $- - $-
Maintenance and subscriptions 144,411 17.8 (2,755)
------- ------
144,411 17.8 (2,755)
Other open platform products
Software licenses 109 0.0 49
Maintenance and subscriptions 8,088 1.0 526
----- ---
8,197 1.0 575
Total open platform solutions 152,608 18.8 (2,180)
------- ---- ------
Identity and security
management
Identity, access and
compliance management
Software licenses 34,508 4.3 552
Maintenance and subscriptions 88,637 10.9 2,250
------ -----
123,145 15.2 2,802
Other identity and security
management
Software licenses 1,416 0.2 (33)
Maintenance and subscriptions 4,926 0.6 (709)
----- ----
6,342 0.8 (742)
Total identity and security
management 129,487 15.9 2,060
------- ---- -----
Systems and resource
management
Software licenses 29,549 3.6 (1,083)
Maintenance and subscriptions 126,502 15.6 (141)
Total systems and resource
management 156,051 19.2 (1,224)
Total security, management and
operating platforms 438,146 54.0 (1,344)
Collaboration solutions
OES and NetWare-related
Software licenses 20,831 2.6 624
Maintenance and subscriptions 144,794 17.8 (2,602)
------- ------
165,625 20.4 (1,978)
Collaboration
Software licenses 9,555 1.2 (556)
Maintenance and subscriptions 77,282 9.5 (1,610)
------ ------
86,837 10.7 (2,166)
Other collaboration solutions
Software licenses 9,140 1.1 321
Maintenance and subscriptions 23,902 2.9 (1,584)
------ ------
33,042 4.1 (1,263)
Total collaboration solutions 285,504 35.2 (5,407)
Total software licenses,
maintenance
and subscriptions
Software licenses 105,108 12.9 (126)
Maintenance and subscriptions 618,542 76.2 (6,625)
------- ------
Total product revenue 723,650 89.1 (6,751)
------- ---- ------
Services 88,221 10.9 (2,373)
------ ---- ------
Total net revenue $811,871 100.0 $(9,124)
======== ===== =======
Change from
Q4 2009 to Q4 2010 FY 2009 to FY 2010
------------------ ------------------
Security, management and
operating platforms
Open platform solutions
Linux platform products
Software licenses - $- -
Maintenance and
subscriptions (7.1) (4,751) (3.2)
---- ------ ----
(7.1) (4,751) (3.2)
Other open platform
products
Software licenses 233.3 (16) (12.8)
Maintenance and
subscriptions 26.6 496 6.5
---- --- ---
28.8 480 6.2
Total open platform
solutions (5.3) (4,271) (2.7)
---- ------ ----
Identity and security
management
Identity, access and
compliance management
Software licenses 5.3 2,600 8.1
Maintenance and
subscriptions 11.5 8,297 10.3
---- ----- ----
9.4 10,897 9.7
Other identity and
security management
Software licenses (7.7) (549) (27.9)
Maintenance and
subscriptions (39.8) (1,911) (28.0)
----- ------ -----
(33.6) (2,460) (27.9)
Total identity and
security management 6.4 8,437 7.0
--- ----- ---
Systems and resource
management
Software licenses (12.6) (4,257) (12.6)
Maintenance and
subscriptions (0.4) (461) (0.4)
Total systems and
resource management (3.0) (4,718) (2.9)
Total security,
management and operating
platforms (1.2) (552) (0.1)
Collaboration solutions
OES and NetWare-related
Software licenses 11.3 599 3.0
Maintenance and
subscriptions (6.8) (12,730) (8.1)
---- ------- ----
(4.5) (12,131) (6.8)
Collaboration
Software licenses (14.5) (5,267) (35.5)
Maintenance and
subscriptions (7.9) (7,841) (9.2)
---- ------ ----
(8.9) (13,108) (13.1)
Other collaboration
solutions
Software licenses 12.2 (4,921) (35.0)
Maintenance and
subscriptions (22.1) (3,302) (12.1)
----- ------ -----
(12.9) (8,223) (19.9)
Total collaboration
solutions (7.0) (33,462) (10.5)
Total software licenses,
maintenance
and subscriptions
Software licenses (0.4) (11,811) (10.1)
Maintenance and
subscriptions (4.1) (22,203) (3.5)
---- ------- ----
Total product revenue (3.5) (34,014) (4.5)
---- ------- ----
Services (9.7) (16,300) (15.6)
---- ------- -----
Total net revenue (4.2) $(50,314) (5.8)
==== ======== ====
Novell, Inc.
Major IT Software and Solutions Included Within
Reported Line Items
Security, Management and Operating Platforms
Open Platform Solutions
Linux Platform Products
> SUSE LINUX Enterprise Server
> SUSE LINUX Enterprise Desktop
Other Open Platform Products
> SUSE Engineering
Identity and Security Management
Identity, Access and Compliance Management
> Identity Manager
> SecureLogin
> Access Manager
> Sentinel
Other Identity and Security Management
> eDirectory
Systems and Resource Management
> ZENworks Suite
> ZENworks Patch Management
> ZENworks Asset Management
> ZENworks Linux Management
> ZENworks Configuration Management
> PlateSpin
> Business Service Management
Collaboration Solutions
Open Enterprise Server and NetWare-Related
> Open Enterprise Server (OES)
> NetWare
> Cluster Services
Collaboration
> GroupWise
> Teaming + Conferencing
Other Collaboration Solutions
> BorderManager
Services
> Professional Services
> Technical Support Services
> Training Services
SOURCE Novell, Inc.
