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Caldera International Reports First Quarter; Meets Revenue and Lower Operating Costs Expectations

Feb 28, 2002, 01:27 (0 Talkback[s])

PRESS RELEASE: OREM, Utah --Feb. 27, 2002-- Caldera International, Inc. (NASDAQ:CALD) today reported revenue of $17.9 million for the three months ended January 31, 2002, in line with the Company's previous guidance.

  "This is the third quarter the Company has operated within the guidelines of our operating model. We are pleased to have met our revenue projections in each of these past three quarters," said Ransom Love, President and CEO of Caldera. "The past quarter included sales to many of our widely recognized accounts including Daimler Chrysler, CVS Pharmacies, Walgreens, Target, McDonald's, Eckerd and Safeway, demonstrating corporate confidence in Caldera's products and future."

The Company reported a net loss to common stockholders for the three months ended January 31, 2002 of $11.0 million or $0.19 per common share, including non-cash and restructuring charges of $6.4 million. "As a result of our ongoing expense reduction measures, costs of continuing operations this quarter were $3.5 million less than the previous quarter," said Love. Exclusive of the restructuring charge of $5.3 million, the net loss for the first quarter would have been $5.7 million, or $0.10 per basic and diluted share.

Results for the three-month period ended January 31, 2002, are not comparable to the results for the three-month period of the prior year because of the significant changes in the operations of the Company as a result of a major acquisition completed in the third quarter of 2001.

Caldera will hold its Annual Shareholder's Meeting on March 4, 2002, at which the Company is anticipating shareholders will approve a proposal for a one-for-four reverse stock split of its common stock. Assuming this consolidation occurs, the 57.3 million weighted average shares currently outstanding would be reduced to approximately 14.3 million, which will affect the per share calculations.

Financial outlook

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

-- For the second quarter of fiscal 2002 ending April 30, 2002, we expect net revenue to be $16 to $18 million.
-- For the second quarter of fiscal 2002, we expect the gross margin to remain fairly consistent at 68 percent and operating costs to decrease by 3 to 5 percent as a result of continuing expense improvements.
-- For our fiscal year ending October 31, 2002, we expect net revenue of $68 to $72 million.

Conference Call

As previously announced, the Company will host a conference call at 5:00 p.m. EST today, February 27, 2001, to discuss first quarter results. To participate in the teleconference, please call (800) 289-0437, confirmation code 557672 approximately five minutes prior to the time stated above. A listen only Webcast of the call will be broadcast live with a replay available several hours following the call. The Webcast and replay may be accessed from http://ir.caldera.com/conference.html.

Caldera International, Inc.

Caldera International (Nasdaq: CALD) provides "Powerful Choices" for businesses through its UNIX, Linux and Volution product lines and services. Based in Orem, UT, Caldera has representation in 82 countries and 16,000+ resellers worldwide. Caldera Global Services provides reliable localized support and services to partners and customers. For more information on Caldera products and services, visit http://www.caldera.com.

Caldera, the Caldera logos, Caldera Volution, OpenLinux, SCO and the associated SCO logo, and SCO OpenServer are trademarks or registered trademarks of Caldera International, Inc. in the U.S. and other countries. Caldera Global Services is a service mark of Caldera International, Inc. UNIX is a registered trademark of The Open Group in the United States and other countries. Linux is a registered trademark of Linus Torvalds. All other brand or product names are or may be trademarks of, and are used to identify products or services of, their respective owners.

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. These factors include the ability of the Company to successfully meet its revenue projections, which are based in part, on 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 ability of the Company to continue to manage its cost reductions without adversely affecting customer service and employee productivity; the ability of recently introduced and new products to operate as designed, including compatibility with various platforms in the absence of other defects; the Company's 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.

                            (in thousands)

                                         January 31,     October 31,
                                               2002            2001

   Cash and cash equivalents          $       26,105  $       22,435
   Available-for-sale securities                  --           5,943
   Accounts receivable, net                   13,082          16,742
   Other current assets                        3,489           3,438
                                     ---------------- ----------------
                                     ---------------- ----------------
     Total current assets                     42,676          48,558

   Property and equipment, net                 3,989           6,116
   Goodwill and intangibles                   16,902          17,686
   Other assets                                2,434           2,499
                                     ---------------- ----------------
     Total assets                     $       66,001  $       74,859
                                     ================ ================

   Current liabilities                        34,850          34,157
   Long-term liabilities                       6,869           5,925
   Minority interest                             173             173
   Stockholders' equity                       24,109          34,604
                                     ---------------- ---------------
     Total liabilities and 
       stockholders' equity           $       66,001  $       74,859
                                     ================ ===============

                      CALDERA INTERNATIONAL, INC.
                 (in thousands, except per share data)

                                         Three Months Ended Jan. 31,
                                          2002                 2001
                                          ----                 ----

   Revenue                            $    17,913       $     1,054
   Cost of revenue                          5,596             1,177
                                     ------------------ --------------
                                     ------------------ --------------
      Gross margin (deficit)               12,317              (123)
                                     ------------------ --------------
                                     ------------------ --------------

   Sales and marketing expense              8,371             5,520
   Research and development expense         5,367             1,869
   General and administrative 
     expense                                2,724             1,748
   Amortization of goodwill and 
     intangibles                              840                --
   Restructuring charge                     5,261                --
   Non-cash compensation                      265               334
   Non-recurring cost sharing 
     charge                                    --               602
                                     ------------------ --------------
      Total operating expenses             22,828            10,073
                                     ------------------ --------------
                                     ------------------ --------------
   Loss from operations                   (10,511)          (10,196)
   Equity loss in affiliate                    --              (648)
   Other income (expense), net               (333)            1,028
                                     ------------------ --------------
                                     ------------------ --------------
   Loss before income taxes               (10,844)           (9,816)
   Provision for income taxes                (162)              (27)
                                     ------------------ --------------
                                     ------------------ --------------
   Net loss                          $    (11,006)      $    (9,843)
                                     ================== ==============
   Basic and diluted net loss per 
     common share                    $       (0.19)     $      (0.25)
                                     ================== ==============
   Weighted average common 
      shares outstanding                    57,341            39,588
                                     ================== ==============