VNU Net: Corel's financial woes worsenJun 15, 2000, 21:13 (0 Talkback[s])
(Other stories by Ian Lynch)
By Ian Lynch, VNU Net
Troubled Canadian software supplier Corel's second quarter loss may be double that expected, the company has reported.
Corel said revenue for its second quarter should be $37m to $38m, and it will report a loss of between $22m and $24m. Last month, the company said its loss would be similar to the $12m it lost in the first quarter of the year. One year ago, revenue was $70.5m for the same quarter.
The company's impoverished status came to light following the cancellation of a proposed merger with Inprise/Borland, which would have created a Linux powerhouse. Corel had previously warned the US Securities and Exchange Commission that it could run out of cash if the merger didn't go ahead.
Currently looking to replenish dwindling cash reserves through issuing more stock, Corel last week cut a fifth of its staff (320 jobs) in the first stage of its strategy to slash $40m per annum from annual expenses. Analysts said the cuts may raise half the desired $40m and more job losses may follow later.
John Blaine, chief financial officer at Corel, said: "While the revenue is less than originally expected, the company's expenses are also reduced from the first-quarter levels.
"The company is making progress toward its goal of realigning its cost structure." No reasons were given for the poor results, although Corel is currently in a quiet period after recently filing a prospectus for its refinancing.