Novell won't release its fourth-quarter financial results until Dec. 1, according to information on the company's Web site and a Thursday 8-K filing with the U.S. Securities and Exchange Commission (SEC). Recent comments from Novell's new second-in-command earlier this week had suggested that the software vendor's results would appear imminently in tandem with restructuring news. The company's financial year ended Oct. 31.
It's been a busy week for the troubled software company. Tuesday saw the appointment of Ron Hovsepian as the company's president and chief operating officer, a role that hasn't existed at Novell since 2002, according to a company spokesman. "It's essentially a new position that Ron's taking," the spokesman said earlier this week. Then, on Wednesday, Novell announced plans to lay off 600 of its 5,800-strong global workforce in a move to refocus around three key businesses -- Linux, identity and resource-management software.
Early on Wednesday, Hovsepian had said that the restructuring news was due to be announced at the same time as the software vendor's fourth-quarter financial results. He was speaking after giving a keynote address at the Open Source Business Conference (OSBC) East in Newton, Massachusetts. So, it was somewhat surprising that the layoffs announcement came less than seven hours later on Wednesday without the financials news.
Novell is due to issue a press release with an overview of its fourth-quarter financial results on Dec. 1 at 4 p.m. ET, with a one-hour conference call with the company's executives to follow at 5 p.m. ET, according to information on the investor relations section of Novell's Web site and in an 8-K report filed with the SEC Thursday. In neither place did Novell provide a reason for the delay in releasing its financial results. No one at Novell was available to comment Friday regarding the delay.
Novell filed two other 8-K reports with the SEC Thursday. One in relation to the layoffs, which according to the filing will be completed by the end of the first quarter of fiscal 2006 on Jan. 31, 2006. Total expenses in relation to the restructuring plan will be between US$30 million and US$35 million to be recorded in the fourth quarter of fiscal 2005, the filing stated. Breaking down those costs, around US$23 million to US$26 million relate to employee severance arrangements and between US$7 million to US$9 million relate to facilities and other expense items.
The other SEC filing concerns Hovsepian's promotion. His annual base salary has been increased from US$500,000 to US$650,000, the filing stated, and, as of Oct. 31, he received 300,000 shares of restricted common stock for a purchase price of $0.10 per share.
An interesting wrinkle is an amendment to Hovsepian's existing severance agreement, adding an additional event whereby he could receive severance benefits from Novell. "In the event that Mr. Hovsepian does not succeed Jack L. Messman as the chief executive officer of Novell, and Mr. Hovsepian resigns from Novell within one year of the date that Mr. Messman ceases to serve as Novell's chief executive officer, Mr. Hovsepian will receive" severance benefits and "will not be bound by the non-competition provisions of the agreement, but he will be required to provide Novell with 120 days' notice prior to the termination of his employment," the SEC filing states.
In its most recent financial report, released Aug. 25, Novell reported poor third-quarter results, with net income plummeting 91 percent to US$2.1 million, while revenue fell 4.7 percent to US$290.2 million.
In other Novell news, the company has reached a settlement with Interland over pending litigation between the two companies, according to an SEC filing Interland made Thursday. Interland provides Web-hosting services for small to midsize businesses.
Novell sued Interland in 1999 over royalties it claimed in relation to sales of Novell's software made by Interland and a predecessor acting for Interland during 1994 to 1998. As part of the settlement, Interland has agreed to purchase US$900,000 in products and services from Novell. The 8-K filing notes, "Neither party admits any of the claims or allegations of the other party as part of the settlement."