-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RrNNU2Vt2npk7HOVsE9MW5DFo+98JwiETg9PrYndiUdvouEtebfI+mOlRq2cslKa 8HVD0gFKafv/72OLGH0sTA== /in/edgar/work/20000626/0000890640-00-000017/0000890640-00-000017.txt : 20000920 0000890640-00-000017.hdr.sgml : 20000920 ACCESSION NUMBER: 0000890640-00-000017 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000620 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000626 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COREL CORP CENTRAL INDEX KEY: 0000890640 STANDARD INDUSTRIAL CLASSIFICATION: [7372 ] IRS NUMBER: 101151819 STATE OF INCORPORATION: A6 FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-20562 FILM NUMBER: 660385 BUSINESS ADDRESS: STREET 1: 1600 CARLING AVE STREET 2: OTTAWA ONTARIO K1Z 8R7 CITY: CANADA STATE: A6 ZIP: 00000 BUSINESS PHONE: 6137288200 MAIL ADDRESS: STREET 1: 1600 CARLING AVENUE STREET 2: OTTAWA ONTARIO K1Z 8R7 CITY: CANADA STATE: A6 ZIP: 00000 8-K 1 0001.htm FOR JUNE 20, 2000 8K doc

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 8-K

Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): June 20, 2000


COREL CORPORATION
(Exact name of registrant as specified in its charter)

Canada
(State of Other Jurisdiction of Incorporation)

 
0-20562
Not Applicable
 (Commission File Number)
(I.R.S. Employer Identification Number)

1600 Carling Avenue
Ottawa, Ontario, Canada    KIZ 8R7
(Address of principal executive offices including zip code)

(613) 728-8200
(Registrant's telephone number, including area code)

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)










Item 5.

On June 20, 2000, the corporation announced results for its second quarter ended May 31, 2000. Revenues for the second quarter of fiscal year 2000 were $36.6 million, producing a net loss of $23.6 million or ($0.36) per share. Cash at the end of the quarter stood at $9.9 million. During the same period last year, Corel reported revenues of $70.5 million, with a net profit of $9.2 million or $0.14 per share fully diluted.



See press release attached as Exhibit 99.1

Item 7. Financial Statements, Pro Forma Information and Exhibits

EXHIBITS.



(c) Exhibits



99.1 Press Release issued by Corel Corporation on June 20, 2000.



99.2 Financial Statements







SIGNATURES

Pursuant to the requirement of the Security Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: June 22, 2000

  COREL CORPORATION
  (Registrant)

  By:  /s/ John Blaine
 
  John Blaine
  Vice-President, Finance and Controller
  (Principal Accounting Officer)







EX-99.1 2 0002.htm PRESS RELEASE PRESS

Exhibit 99.1



For Immediate Release



Corel Announces Second Quarter Results



Ottawa, Canada - June 20, 2000 - Corel Corporation (NASDAQ: CORL, TSE: COR) today announced results for its second quarter ended May 31, 2000. Revenues for the second quarter of fiscal year 2000 were $36.6 million, producing a net loss of $23.6 million or ($0.36) per share. Cash at the end of the quarter stood at $9.9 million. During the same period last year, Corel reported revenues of $70.5 million, with a net profit of $ 9.2 million or $0.14 per share fully diluted. All figures are reported in US currency.



"These final numbers are consistent with what we reported last week during the release of our preliminary second quarter results," said John Blaine, executive vice president of finance and chief financial officer at Corel Corporation. "The results include some non-recurring costs associated with our proposed merger with Inprise/Borland Corporation and also losses of our equity investments, offset by a gain on the sale of GraphOn shares. We continue to work diligently towards finalizing our cost-reduction plan but it is not complete at this time."



"We've faced some challenges over the past three months but we've also enjoyed some noteworthy product successes," said Dr. Michael Cowpland, president and chief executive officer of Corel Corporation. "We are continuing our tradition of innovative product development, forging strong partnerships, acquiring complementary technologies and earning praise from the industry for our efforts."





Q2 Highlights



Product Development:



Corel announced that it is developing an enterprise edition of Corel® LINUX® OS. This new product will target the small to medium-sized enterprise market, offering front and back-end support for Linux as well as a migration path enabling users to move freely between multiple platforms. Corel is developing this product by combining its technology with that of its Linux affiliates - Rebel.com and GraphOn.

Corel's first marquee application for Linux - WordPerfect® Office 2000 for Linux® (Standard and Deluxe editions) - hit store shelves. Corel's office suite for Linux and Corel LINUX OS were among the top 10 best-selling Linux products in the US retail market during May, based on revenue figures tracked by PC Data, a market research firm. PC Data traced sales of a total of 105 Linux products last month.



Corel announced developments with its Linux graphics initiatives: CorelDRAW® for Linux® will be available in July, two months ahead of schedule, while the free download of Corel PHOTO-PAINT® for Linux® will be available this month. As well, Corel® Knockout 1.5, the masking software application for both Macintosh® and PC, hit store shelves in North America in May.



Partnerships and Acquisitions:



Corel acquired industry-leading professional graphics software products and technologies from MetaCreations Corporation: MetaCreations Painter&trade, Kai's Power Tools® (KPT®) and Bryce®.



Corel announced three strategic OEM agreements to bundle its Linux products with dual-boot computer systems offered by EBIZ Enterprises Inc., Polywell Computers Inc. and Computer Technology Link Corporation. These partnerships advance Corel's strategy to provide a bridge between Windows® and Linux.



In an effort to move Linux further into the mainstream, Corel entered into another agreement with EBIZ Enterprises allowing Corel to bundle EBIZ's Linux-based ISP with Corel LINUX OS.



Corel entered into a worldwide agreement with Linux Technology Ltd., a division of the PC Chips Group of Companies, to bring Corel® WordPerfect® 8 for Linux® to a new platform - Internet Appliances.



Corel made progress with its long-term strategy of offering its products and services over the Web. During the second quarter, Corel signed an agreement with C ME RUN, its first tier-one consumer ASP. Corel is also partnering with Spinway to provide free Internet access to all Corel customers.



Industry Awards:



Corel continued to receive industry recognition for its world-class products: CorelDRAW 9 won three awards, including CNET's Editor's Choice Award. WordPerfect Office 2000 for Linux (Deluxe Edition) was placed on Winmag.com's prestigious WinList and Corel LINUX OS was awarded the best New Product Award in the End User Software Category by Government Computer News at FOSE 2000.







Corel Corporation

Corel Corporation is an internationally recognized developer of award-winning business productivity, graphics and operating system solutions on the Windows®, Linux®, UNIX®, Macintosh® and Java&trade platforms. Corel also develops market-leading, Web-based solutions including applications, contents, e-commerce and online services. For access to these services and more information go to www.corel.com or www.corelcity.com. Corel is headquartered in Ottawa, Canada. Corel's common stock trades on the NASDAQ Stock Market under the symbol CORL and on the Toronto Stock Exchange under the symbol COR.

This press release contains statements that are forward looking as that term is defined by the United States Private Securities Litigation Reform Act of 1995. These statements are based on current expectations that are subject to risks and uncertainties. Actual results will differ due to factors such as shifts in customer demand, product shipment schedules, product mix, competitive products and pricing, technological shifts and other variables. Readers are referred to Corel's most recent reports filed with the Securities and Exchange Commission.



Corel, WordPerfect, CorelDRAW, Corel PHOTO-PAINT, Painter, Bryce, KPT, Kai's Power Tools and the Go further logo are trademarks or registered trademarks of Corel Corporation or Corel Corporation Limited. Linux is a registered trademark of Linus Torvalds. Windows is a registered trademark of Microsoft Corporation. Macintosh is a registered trademark of Apple Computer, Inc. KnockOut is a trademark of Ultimatte Corporation used under license. All other products, fonts, company names and logos are trademarks or registered trademarks of their respective owners.





Corel Press Contact:

Catherine Hughes

(613) 728-0826 ext. 1659

catherineh@corel.ca

Corel Financial Contact:



John Hladkowicz (Director of Investor Relations)

(613) 728-0826 ext. 1194

johnh@corel.ca

EX-99.2 3 0003.htm FINANCIAL STATEMENTS FINANCIAL STATEMENTS





COREL CORPORATION

CONSOLIDATED BALANCE SHEETS

(in thousands of US$)

May 31,

 November 30,
2000 1999
ASSETS

(unaudited)

(audited)
Current assets:
Cash and cash equivalents $ 9,864 $ 18,021
Accounts receivable
Trade 21,745 54,770
Other 1,408 3,954
Inventory 9,920 13,567
Income taxes recoverable . . . . . . . . . . . . . . . . . . . . - 5,135
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . 1,870 1,642
Prepaid expenses 2,564 2,042
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . 47,371 99,131
Investments 3,092 2,873
Capital assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,754 49,697
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 106,217 $ 151,701
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 43,793 $ 50,284
Current portion of long term debt 7,758 10,594
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . 996 -
Deferred revenue 15,492 18,472
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . 68,039 79,350
Long term portion of Novell obligations. . . . . . 6,916 7,985
Shareholders' equity
Share capital 225,068 222,155
Contributed surplus 1,099 1,099
Deficit (194,905) (158,888)
Total shareholders' equity . . . . . . . . . . . . . . . . . . . . . 31,262 64,366
Total liabilities and shareholders' equity . . . . . . . . . . $ 106,217 $ 151,701





COREL CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

AND DEFICIT

(in thousands of US$, except per share data)

(unaudited)

Three months ended Six months ended
May 31, May 31, May 31, May 31,
2000 1999 2000 1999
Sales $ 36,639 $ 70,501 $ 80,780 $ 110,807
Cost of sales 11,292 14,092 26,281 25,652
Gross profit 25,347 56,409 54,499 85,155
Expenses
Advertising 9,948 11,946 22,674 20,717
Selling, general and administrative 23,915 21,618 45,819 40,557
Research and development 12,306 12,395 23,753 25,855
Depreciation and amortization 2,004 1,043 3,737 2,673
Loss (gain) on foreign exchange 475 (303) 469 (54)
48,648 46,699 96,452 89,748
Income (loss) from operations (23,301) 9,710 (41,953) (4,593)
Gain on investment 1,204 - 10,144 -
Interest expense (income) (46) 192 (63) 329
Income (loss) before income taxes (22,051) 9,518 (31,746) (4,922)
Income tax expense (recovery) (496) 339 (2,938) 538
Share of loss in equity investment . . . . . . . . . . . . . . . . . (1,071) - (1,335) -
Net Income (loss) $(23,618) $ 9,179 $(36,019) $ (5,460)
Deficit beginning of period . . . . . . . . . . . . . . . . . . . . . . . (171,288) (190,243) (158,888) (175,604)
Deficit end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . (194,906) (181,064) (194,906) (181,064)
Earnings (loss) per share:
Net loss
Basic $ (0.36) $ 0.15 $ (0.55) $ (0.09)
Fully diluted $ (0.36) $ 0.14 $ (0.55) $ (0.09)
Average number of Common Shares outstanding (000s)
Basic 65,810 61,560 65,832 60,860
Fully diluted 65,810 69,193 65,832 60,860



COREL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands of US$)

(unaudited)



Six months ended
May 31, May 31,
2000 1999
Cash flows from operating activities:
Net income (loss) $ (36,019) (5,460)
Items which do not involve cash or cash equivalents:
Depreciation and amortization 10,272 8,648
Deferred income taxes (228) 648
Equity loss in investments . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,444 -
Gain on investment . . . . . . . . . . . . . . . . . . . . . . . . . . . (10,144) -
Change in non-cash working capital 26,356 2,808
Cash flows from (used in) operating activities $ (8,319) $ 6,805
Cash flows from financing activities:
Issue of share capital 2,912 10,213
Reduction of Novell Obligations (3,905) (4,530)
Cash flows from (used in) financing activities . . . . . . . . . . . . . . . . . (993) 5,683
Cash flows from investing activities:
Purchase of investments (1,663) (3,351)
Net change in capital assets (7,326) (17,241)
Proceeds on disposal of investment . . . . . . . . . . . . . . . . . . . . . . . 10,144 -
Proceeds on disposal of assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . - 63
Cash flows used in investing activities 1,155 (20,529)
Net increase (decrease) in cash and cash equivalents (8,157) (8,041)
Cash and cash equivalents at beginning of period 18,021 24,506
Cash and cash equivalents at end of period $ 9,864 $ 16,465






COREL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



1. Basis of Presentation



The accompanying unaudited interim consolidated financial statements of Corel Corporation (the "Company") have been prepared by the Company in accordance with accounting principles generally accepted in Canada. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Corel Corporation Limited, Corel International Corporation, Corel, Inc. and its wholly-owned subsidiary, Corel Corporation (U.S.A.).



In the opinion of Management, these unaudited interim consolidated financial statements reflect all adjustments, which are of a normal and recurring nature, necessary to state fairly the results for the periods presented.



These financial statements should be read in conjunction with the Company's audited financial statements as of November 30, 1998 and 1999 and for each of the three years in the period ended November 30, 1999 including notes thereto, included in the Company's Annual Report for the year ended November 30, 1999. The consolidated results of operations for the second fiscal quarter are not necessarily indicative of the results to be expected for any future period. The Company adopted SOP 98-9, "Modification of SOP 97-2, Software Revenue Recognition with Respect to Certain Transactions", in Q1 fiscal 2000. This has not had a material impact on the Company's financial results.



These financial statements have been prepared using generally accepted accounting principles that are applicable to a going concern, which assumes that the Company will realize its assets and discharge its liabilities in the normal course of business. As such, the financial statements do not reflect adjustments in the carrying values of the assets and liabilities, the reported revenues and expenses, and the balance sheet classifications used, that would be necessary if the going concern assumption were not appropriate, and such adjustments could be material.

Based on the prospects for revenue and the cost structure currently in place at Corel, Corel expects that results for the next quarter will be similar to those experienced in the second quarter of fiscal 2000 and accordingly, management believes that the Company needs to secure additional equity or debt financing immediately and to effect a significant cost reduction plan in the near term. The Company is currently pursuing the public offering as described in note 3, the contemplated proceeds of which management believes are necessary for the Company to continue to meet its liabilities and other commitments as they become due. If such proposed issuance of common shares and common share purchase warrants does not occur, other sources of financing are not secured, the contemplated cost reduction plan is not completed and successfully implemented in the near term and /or Corel's operating results do not improve, the Company's ability to continue would be in substantial doubt and the going concern assumption detailed in the preceding paragraph may not be appropriate.

2. Segmented information



The Company has only one global operating segment as detailed in the consolidated financial statements included herein.



The company sells its products worldwide from three geographic regions. A summary of sales by product, channel, region and by major customer from consolidated operations is as follows:

Three Months Ended Six Months Ended
May 31, 2000 May 31, 1999 May 31, 2000 May 31, 1999
By product
Professional & Consumer Graphics software . . . $ 17,227 $ 26,718 $ 36,619 $ 41,809
Productivity software . . . . . . . . . . . . . . . . . . . . . 16,788 43,762 39,247 68,623
Linux operating system and applications. . . . . . . . . . . 2,626 - 4,916 -
Video Communications (2) 21 (2) 375
Total sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 36,639 $ 70,501 $ 80,780 $ 110,807



By sales channel
Retail packaged products $ 18,877 $ 43,874 $ 41,794 $ 61,089
OEM licenses 4,502 7,251 8,855 13,371
Corporate licenses 13,260 19,376 30,131 36,347
Total sales $ 36,639 $ 70,501 $ 80,780 $ 110,807


By region
North America $ 22,359 $ 47,346 $ 46,089 $ 72,075
Europe 8,149 17,685 22,940 31,247
Other international 6,131 5,470 11,751 7,485
Total sales $ 36,639 $ 70,501 $ 80,780 $ 110,807


By major customer
Navarre Corporation $ 4,833 $ 574 $ 7,983 $ 640
Ingram Micro 542 22,123 974 28,628
Merisel 0 8,953 527 11,781
$ 5,375 $ 31,650 $ 9,484 $ 41,049




3. Subsequent Event - Prospectus Filing



On May 29, 2000, the Company filed a preliminary short form prospectus with the securities commissions of Ontario, Alberta and British Columbia for a public offering of 7,299,270 common shares and 3,649,635 common share purchase warrants for gross proceeds of Cdn. $30 million. The common share purchase warrants are exercisable at a price of Cdn. $4.56 for a period of 12 months from their date of issue.



The Company intends to file a final short form prospectus relating to the sale and issue of the common shares and the common share purchase warrants upon completion by the securities commissions of the review of the materials filed by the Company with the securities commissions.

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