Novell Reports Financial Results for Second-Quarter 2008

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<p><strong>Waltham, Mass. &mdash; May 29</strong><br />Novell Inc. announced financial results for its second fiscal quarter, ending April 30. For the quarter, Novell reported net revenue of $236 million. This compares to net revenue of $232 million for the second fiscal quarter 2007.<br /><br />Income from operations for the second fiscal quarter 2008 was $2 million, compared to a loss from operations of $12 million for the second fiscal quarter 2007. Income from continuing operations in the second fiscal quarter 2008 was $6 million, or $0.02 per share. This compares to a loss from continuing operations of $1 million, or $0.00 loss per share, for the second fiscal quarter 2007. <br /><br />Foreign currency exchange rates favorably impacted revenue by $8 million, unfavorably impacted operating expenses by $9 million and negatively impacted income from operations by $1 million year over year. <br /><br />On a non-GAAP basis, income from operations for the second fiscal quarter 2008 was $16 million. This compares to non-GAAP income from operations of $9 million in the year-ago quarter. Non-GAAP income from continuing operations for the second fiscal quarter 2008 was $21 million, or $0.06 per share. This compares to non-GAAP income from continuing operations of $16 million, or $0.05 per share, for the second fiscal quarter 2007. <br /><br />For the second fiscal quarter 2008, Novell reported $30 million of product revenue from Open Platform Solutions, of which $29 million was from Linux platform products, up 31 percent year over year. Product revenue from identity and security management was $31 million, of which identity and access management was $27 million, up 13 percent year-over-year. </p><p>Product revenue from systems and resource management was $41 million, up 15 percent year over year. Workgroup product revenue of $92 million was down 1 percent year over year. <br /><br />"Our business continues to gain momentum, with strong product revenue growth in Linux, identity and systems and resource management," said Ron Hovsepian, president and CEO of Novell. "We are encouraged by our results and remain confident we will achieve our financial objectives for fiscal 2008." <br /><br />Cash, cash equivalents and short-term investments were $1.4 billion at April 30, down from $1.8 billion in the year-ago quarter, primarily due to the acquisition of PlateSpin and the repurchase of a portion of our debentures. Days sales outstanding in accounts receivable was 66 days at the end of the second fiscal quarter 2008, up from 64 days at the end of the year-ago quarter. <br /><br />Total deferred revenue was $702 million at the end of the second fiscal quarter 2008, up from $700 million at the end of the year-ago quarter. Cash flow from operations was a negative $18 million for the second fiscal quarter 2008. This compares to negative cash flow from operations of $29 million in the second fiscal quarter 2007. <br /><br /><strong>Financial Outlook </strong><br /></p><ul><li>Novell management reiterates the following financial guidance for the full fiscal year 2008: </li><li>Net revenue is expected to be between $940 million and $970 million. </li><li>Non-GAAP operating margin is expected to be between 7 percent and 9 percent, excluding all acquisition-related intangible asset amortization.</li></ul>

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