updated the company’s strategy today during a Webcast. The update provided insight into strategy for fiscal 2002, including new market opportunities, financial projections and further details on the Micrografx and SoftQuad acquisitions.
Corel President and CEO, Derek Burney and Chief Financial Officer, John Blaine, outlined a three-point initiative which will see the company segment the market to address key customer profiles; make strategic investments to capture new markets; and develop solutions for emerging markets.
“With our financial house in order, healthy cash reserves and a well-defined strategic plan, we are prepared to enter a new phase of growth,” said Burney. “Our future business will capitalize on the company’s technology assets, both organic and acquired, as we invest to capture high-growth emerging markets and establish ourselves as a leading provider of enterprise solutions in the areas of technical illustration, Enterprise Process Management and XML content solutions. While these investments will impact our bottom line in the short term, we are confident they will pave the way for significant growth over the long term.”
While the company expects revenues in 2002 to be between $170 million and $180 million — an increase over 2001 revenues — they still expect to see a loss. Due to the planned strategic investments, Corel expects to report a loss of between $23 million and $31 million or a loss of between $0.20 and $0.27 per share. These figures do not include non-cash amortization costs for the acquisitions of Micrografx, Inc. and SoftQuad Software Ltd.
Corel did not comment during the presentation on its fiscal fourth quarter, which ended November 30.
“We are pleased with the progress we’ve made over the past year to rebuild the company and lay the foundation for future growth, especially in light of the economic slowdown experienced in the latter part of 2001,” said Blaine. “In fiscal 2002, we will be making strategic investments to support Corel’s entry into high-growth markets while continuing to build the company’s equity in key customer segments. The financial rigor we’ve demonstrated over the past year will continue to guide all decision making surrounding these investments.”
Corel said that it now expects its acquisition of SoftQuad to close prior to the end of the first quarter, ending February 28, 2002. Representatives from both Corel and SoftQuad are now waiting for regulatory approval of the required filings and continue to work on the details of a comprehensive integration plan for the two companies. Details of the integration plan will be announced following the closing of the deal.