NEWS Sep. 27, 2001
Corel Profits on Decreased Revenue
Expanded product line, tightened operations highlight strategy
Corel has announced results for its third quarter, ended Aug. 31, showing a significant turnaround in income, but on lower revenues. A year ago, Corel was in a desperate situation, even going so far as to announce publicly that it might run out of money altogether. But the company has since focused on tightening its operations and releasing new and improved software packages.
So far, the tightening up angle seems to be working, but revenues are still down, meaning that the company just isn't selling as much as it did last year.
Revenues for the third quarter of fiscal year 2001 were $34.2 million, which compares with revenues of $36.4 million for the same quarter last year, and revenues of $36.0 million for the second quarter of fiscal 2001.
However, profit for the quarter was $500,000, which compares rather favorably with a loss of $10.7 million in the same quarter last year. Cash, cash equivalents and marketable securities at the end of the quarter stood at $123.8 million, compared with $11.6 million at the end of the third quarter in fiscal 2000.
Corel's year to date revenues for fiscal 2001 are $102.7 million with year to date net income of $3.4 million. Corel reported revenues of $117.1 million for the first nine months of fiscal 2000, producing a net loss of $46.8 million.
In the area of products, Corel has taken a number of initiatives not only to beef up its current product line but to expand it and to branch out with more equity to the Macintosh platform. This includes the release of Bryce 5 and Painter 7 for Macintosh and Mac OS X, as well as this week's release of Corel Graphics Suite 10 for Mac and Mac OS X.
However, the company says there may still be problems ahead owing to a potential decline in consumer confidence resulting from this months attacks on New York.
"The results of the past quarter indicate that our financially disciplined approach is working," said John Blaine, chief financial officer at Corel, in a prepared statement. "Despite the continuing economic uncertainty and the slowdown typically experienced in our third quarter, we were able to generate a profit. The coming quarter may present some obstacles given the decline in consumer confidence and the political developments of the past several weeks. Nevertheless, with a strong balance sheet and a continued emphasis on rigorous financial management, we believe we will be well equipped to address the challenges ahead."
For more information, visit http://www.corel.com.
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