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June 12, 1997updated 05 Sep 2016 12:55pm

COREL ISSUES PROFIT WARNING – CHARGES $113M TO Q2

By CBR Staff Writer

Having announced in April that the company is right on track Corel Corp has just given early warning of a $113.7m charge to profits which will drive a truck through its second quarter results. In its first quarter this year, the Ottawa-based supplier of software applications turned over $94m and made a slim net profit of just $1.0m. Having rescued WordPerfect from Novell Inc 18 months ago, Corel capitalized some of the purchase costs to reflect the value of the newly acquired licenses on the balance sheet. With the release of WordPerfect Suite 8 this month (CI No 3,165) and the company’s continuing focus on newer Java based applications, Corel has been forced to re-value its intangible assets. Around $104.9m of the one time charge relates to a reduction in the carrying value of older versions of WordPerfect and related applications. The remaining $8.8m represents the write off of deferred development costs on Multimedia compact disk collections.

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