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Caldera International Reports Third Quarter Results

Sep 06, 2001, 17:27 (0 Talkback[s])

OREM, Utah--Sept. 6, 2001-- Caldera International Inc., Thursday reported revenue of $18.9 million for the quarter ended July 31, 2001.

This is the first quarter to include the results from the acquisition of the assets and operations from Tarantella Inc. This acquisition significantly increased the net revenue and operating expenses of the company.

The company reported a net loss for the quarter ended July 31, 2001 of $18.8 million, or $0.34 per basic and diluted common share, which includes non-cash charges of $9.8 million. Exclusive of the effects of the non-cash charges, the pro forma net loss for the quarter ended July 31, 2001 would have been $9.0 million or $0.16 per basic and diluted common share.

For the nine months ended July 31, 2001, the company's net loss was $40.3 million, or $0.89 per basic and diluted common share, which included non-cash charges of approximately $16.0 million. Exclusive of the effects of the non-cash charges, the pro forma net loss for the nine months ended July 31, 2001 would have been $24.3 million or $0.54 per basic and diluted common share.

Results for the three- and nine-month periods ended July 31, 2001, are not comparable to the results for the three and nine-month periods of the prior year because of the significant changes in the operations of the company as a result of the major acquisition completed in May 2001.

Corporate Restructuring

"The company expects to commence additional restructuring actions in the fourth quarter of fiscal 2001 to adjust its organizational structure and reduce its workforce in accordance with revenue expectations and worldwide economic conditions," said Ransom Love, president and chief executive officer of Caldera International Inc.

Love continued, "The company has already taken action to streamline its organizational structure through consolidating operations into two business lines and eliminating one layer of senior management. In so doing, I will assume the responsibilities of president and chief operating officer in addition to my present duties as CEO."

The company expects that it will record restructuring charges during the fourth quarter of fiscal 2001 in connection with these planned actions.

Proposed Stock Consolidation

The board of directors of the company has unanimously approved submitting to the stockholders a proposal to consolidate the issued and outstanding common stock of the company on the basis of one share for each six shares previously outstanding. The consolidation will not be implemented until after the stockholders' meeting, which the company intends to schedule in the near future.

Financial Outlook

The following statements are based on current expectations. These statements are forward-looking and actual results may differ materially.

-- For the fourth quarter of fiscal 2001, the company expects net revenue to be $15 to $20 million.
-- For the fourth quarter of fiscal 2001 the company expects the operating loss to be $20 to $24 million. This estimate includes restructuring costs and non-cash charges. The net loss is expected to be approximately $0.35 to $0.42 per basic and diluted common share based on the estimated weighted average number of common shares outstanding of approximately 57.1 million.

Conference Call

As previously announced, Caldera International will host a conference call at 5 p.m. EDT today, Sept. 6, 2001, to discuss third quarter results. To participate in the teleconference, please call 800/289-0436, confirmation code 468003, approximately five minutes prior to the time stated above.

A Webcast replay will be available approximately four hours following the end of the call at http://ir.caldera.com/conference.html.

Caldera International Inc.

Caldera International is the leader in "Unifying UNIX with Linux for Business." Based in Orem, Caldera has representation in 82 countries and has 15,000+ resellers worldwide. For more information on Caldera products and services, visit http://www.caldera.com.

Caldera, OpenLinux, UnixWare, Open UNIX, Caldera Volution and "Unifying UNIX with Linux for Business" are trademarks or registered trademarks of Caldera International Inc.

LINUX is a registered trademark of Linus Torvalds.

UNIX is a registered trademark of The Open Group in the United States and other countries.

Forward-Looking Statements

The statements set forth above include forward-looking statements that involve risks and uncertainties. The company wishes to advise readers that a number of important factors could cause actual results to differ materially from those in the forward-looking statements.

Those factors include the ability of the company to successfully integrate the operation of the recently acquired assets and operations which are significantly larger than the historical operations of the company, the continued acceptance in the marketplace of the historical products of the acquired operations, the ability of the company to develop and successfully introduce products integrating its products and services with those historically offered by the recently acquired operations, the failure of recently introduced and new products to operate as designed due to incompatibility with some platforms or other defects; our reliance on developers in the open source community; new and changing technologies and customer acceptance of those technologies; the company's ability to compete effectively with other companies; failure of our brand to achieve the broad recognition necessary to succeed; unenforceability of the GNU general public license and other Open Source licenses; our reliance on third party developers of components of our software offerings; claims of infringement of third-party intellectual property rights; and disruption in the company's distribution sales channel.

These and other factors, which could cause actual results to differ materially, are discussed in more detail in the company's filings with the Securities and Exchange Commission.

                      Caldera International Inc.
                 Condensed Consolidated Balance Sheets

                                            July 31,   Oct. 31,
                                              2001       2000
                                              (in thousands)

Cash                                        $ 25,407   $ 36,560
Available-for-sale securities                 11,936     54,179
Accounts receivable, net                      16,161      1,545
Other current assets                           4,820      1,700
  Total current assets                        58,324     93,984

Property and equipment, net                    6,577      1,589
Other assets,  net                           100,300     11,945
  Total assets                              $165,201   $107,518

Current liabilities                           31,492      5,304
Long-term liabilities                          8,515         --
Minority interest                                173         --
Stockholders' equity                         125,021    102,214
  Total liabilities and
   stockholders' equity                     $165,201   $107,518

                      Caldera International Inc.
            Condensed Consolidated Statements of Operations

                          Three Months Ended       Nine Months Ended 
                               July 31,                July 31,
                           2001        2000        2001        2000
                           (in thousands, except per share amounts)

Net Revenue              $ 18,857    $  1,188    $ 21,509    $  3,102
Cost of Revenue             6,005       1,231       8,990       2,863
    Gross margin
    (deficit)              12,852         (43)     12,519         239

Operating Expenses:
  Sales and marketing      13,029       4,625      23,407      10,504
  Research and
   development              6,662       1,111      10,757       3,391
  General and
   administrative           2,691       1,986       5,772       4,490
  In-process research
   and development          1,500          --       1,500          --
   arrangement with
   SCO                         --          --         602          --
  Write-down of
   investments              2,600          --       6,910          --
  Amortization of
   goodwill and
   intangibles              5,332          --       5,332          --
   compensation               391       1,043         982       4,001
    Total operating
     expenses              32,205       8,765      55,262      22,386
Loss From Operations      (19,353)     (8,808)    (42,743)    (22,147)

Equity in Loss of
 Affiliate                     --          --        (648)         --

Other Income, Net             769       1,288       3,358       2,149

Loss Before Income
 Taxes                    (18,584)     (7,520)    (40,033)    (19,998)

Provision for Income
 Taxes                       (241)        (11)       (290)        (38)

Net Loss                 $(18,825)   $ (7,531)   $(40,323)   $(20,036)

Dividends Related to
 Preferred Stock               --          --          --     (12,253)

Net Loss
 Attributable to
 Common Stockholders     $(18,825)   $ (7,531)   $(40,323)   $(32,289)

Basic and Diluted Net
 Loss Per Common Share   $  (0.34)   $  (0.19)   $  (0.89)   $  (1.05)

Weighted Average
 Common Shares
 Outstanding               55,766      39,037      45,074      30,822