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SCO Releases 3Q Results |
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Wednesday, September 07 2005 @ 05:44 PM EDT
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Here is SCO's press release about their third quarter results. The second paragraph says it all:Revenue for the third quarter of fiscal year 2005 was $9,353,000 as compared to $11,205,000 for the comparable quarter of the prior year. The decrease in revenue in the third quarter of fiscal year 2005 from the comparable quarter of the prior year was primarily due to continued competitive pressures on the Company's UNIX products and services and a decrease in SCOsource licensing revenue. Oh, and this section of the forward-looking statements disclaimer: We wish to advise readers that a number of important factors could cause actual results to differ materially from historical results or those anticipated in such forward-looking statements. These factors include, but are not limited to, continued competitive pressure on its operating system products which could impact the profitability of the UNIX business, unforeseen legal costs related to our litigation, our inability to develop new products and services, and our inability to see our litigation through to its conclusion. Of course, Darl says they remain "committed to pursuing our legal strategy in the courtroom and look forward to presenting our case in February 2007." Investor's Business Daily sums up the quarter like this: SCO Group swings to quarterly loss - SAN FRANCISCO (MarketWatch) -- SCO Group(SCOX)after Wednesday's closing bell reported a third-quarter net loss of $2.37 million, or 13 cents a share. In the same period a year ago, the company reported earnings of $7.42 million, or 38 cents a share. Revenue at the Linden, Utah-based provider of UNIX software technology fell to $9.35 million from $11.2 million last year.
Darl also mentions some reviews of OpenServer 6. If you would like to see a review, check out Tom Henderson's on Techworld.
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LINDON, Utah, Sept. 7 /PRNewswire-FirstCall/ -- The SCO Group, Inc. (Nasdaq: SCOX - News), a leading provider of UNIX® software technology for distributed, embedded and network-based systems, today reported results for its fiscal third quarter ended July 31, 2005.
Revenue for the third quarter of fiscal year 2005 was $9,353,000 as compared to $11,205,000 for the comparable quarter of the prior year. The decrease in revenue in the third quarter of fiscal year 2005 from the comparable quarter of the prior year was primarily due to continued competitive pressures on the Company's UNIX products and services and a decrease in SCOsource licensing revenue.
The net loss attributable to common stockholders for the third quarter of fiscal year 2005 was $(2,372,000), or $(0.13) per diluted common share, as compared to net income available to common stockholders of $7,501,000 or $0.38 per diluted common share for the comparable quarter of the prior year. Included in the net income available to common stockholders for the third quarter of fiscal year 2004 was a one-time contribution of capital of $14,924,000 recorded as a dividend. Exclusive of this dividend, the net loss for the third quarter of fiscal year 2004 was $(7,423,000).
"The third quarter was a productive quarter for SCO," said Darl McBride, President and CEO of The SCO Group. "Our UNIX business operated profitably for the third consecutive quarter and we launched SCO OpenServer 6 which has received many favorable reviews and is showing traction with customers. We also recently concluded our annual SCO Forum event in Las Vegas and received positive feedback on our UNIX business from the partners, resellers and customers who attended the event."
McBride concluded, "Finally, we remain committed to pursuing our legal strategy in the courtroom and look forward to presenting our case in February 2007."
Revenue for the nine months ended July 31, 2005 was $27,476,000 as compared to $32,734,000 for the nine months ended July 31, 2004. The net loss attributable to common stockholders for the first nine months of fiscal year 2005 was $(7,295,000), or $(0.41) per diluted common share, as compared to a net loss attributable to common stockholders of $(9,711,000), or $(0.67) per diluted common share for the first nine months of fiscal year 2004.
Cash and cash equivalents and available-for-sale securities were $12,602,000 as of July 31, 2005. In addition, $3,579,000 is held in an escrow account and is classified as a component of restricted cash as of July 31, 2005, to be used to pay for certain expenses associated with our litigation.
UNIX Business
The Company released SCO OpenServer 6 on June 22, 2005 at an event for SCO's software and hardware partners, customers, and members of the media and analyst community in New York City at Yankee Stadium.
SCO OpenServer 6 has been the subject of numerous positive reviews by analysts and the media including eWeek, Networkworld and UnixReview. SCO resellers have received a high level of interest in this upgrade from their customers due to the product's increased performance, support for more powerful hardware and a broader array of applications as well as significant security and stability enhancements.
The Company's UNIX business was profitable during the third quarter. This marks the third consecutive quarter of profitability for the UNIX business, and SCO's executive team remains committed to running a profitable UNIX business in future quarters.
Conference Call
As previously announced, The SCO Group will host a conference call at 5:00 p.m. EDT today, September 7, 2005 to discuss its third quarter results. To participate in the teleconference, please call toll free 877-502-9276 or use the toll number 913-981-5591; confirmation code: 7700475, approximately five minutes prior to the time stated above. A listen-only Web cast of the call will be broadcast live with a replay available the following day. The Web cast and replay may be accessed from http://ir.sco.com/medialist.cfm.
Forward-Looking Statements
The statements contained in this press release regarding (i) our legal strategy and (ii) the future profitability of our UNIX business that are not historical facts are forward-looking statements and are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to risks and uncertainties. We wish to advise readers that a number of important factors could cause actual results to differ materially from historical results or those anticipated in such forward-looking statements. These factors include, but are not limited to, continued competitive pressure on its operating system products which could impact the profitability of the UNIX business, unforeseen legal costs related to our litigation, our inability to develop new products and services, and our inability to see our litigation through to its conclusion. These and other factors could cause actual results to differ materially from those anticipated are discussed in more detail in the Company's filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date on which such statements are made, and SCO undertakes no obligation to update such statements to reflect events or circumstances arising after such date.
About SCO
The SCO Group, Inc. (Nasdaq: SCOX - News) is a leading provider of UNIX software technology for distributed, embedded and network-based systems, offering SCO OpenServer for small to medium business and UnixWare for enterprise applications and digital network services. SCO's highly innovative and reliable solutions help millions of customers to grow their businesses every day, from SCO OpenServer on main street to UnixWare on Wall Street, and beyond. SCO owns the core UNIX operating system originally developed by AT&T/Bell Labs and is the exclusive licensor to UNIX-based system software providers.
Headquartered in Lindon, Utah, SCO has a worldwide network of thousands of resellers and developers. SCO Global Services provides reliable localized support and services to partners and customers. For more information on SCO products and services, visit http://www.sco.com.
SCO and the associated SCO logo are trademarks or registered trademarks of The SCO Group, Inc. in the U.S. and other countries. UNIX is a registered trademark of The Open Group. All other brand or product names are or may be trademarks of, and are used to identify products or services of, their respective owners.
Condensed Consolidated Balance Sheets Data
(unaudited, in thousands)
July 31, October 31,
2005 2004
Assets:
Cash and cash equivalents $6,526 $12,693
Restricted cash 4,004 8,283
Available-for-sale securities 6,076 18,756
Accounts receivable, net 4,947 6,638
Other current assets 2,376 1,870
Total current assets 23,929 48,240
Property and equipment, net 578 649
Intangibles, net 3,383 5,413
Other assets 1,118 1,098
Total assets $29,008 $55,400
Liabilities:
Accounts payable $1,337 $7,854
Accrued payroll and accrued expenses 5,449 7,224
Accrued compensation to law firms -- 7,956
Deferred revenue 4,021 4,877
Other current liabilities 2,059 4,916
Total current liabilities 12,866 32,827
Long-term liabilities 340 343
Common stock subject to rescission 1,104 528
Stockholders' equity 14,698 21,702
Total liabilities and stockholders' equity $29,008 $55,400
Condensed Consolidated Statements of Operations Data
(unaudited, in thousands, except per share data)
Three Months Ended Nine Months Ended
July 31, July 31,
2005 2004 2005 2004
Products revenue $7,953 $8,929 $23,095 $27,056
SCOsource licensing
revenue 32 678 132 709
Services revenue 1,368 1,598 4,249 4,969
Total revenue 9,353 11,205 27,476 32,734
Cost of products revenue 695 741 1,902 2,364
Cost of SCOsource
licensing revenue 3,085 7,396 9,467 15,486
Cost of services revenue 700 878 2,195 3,273
Total cost of revenue 4,480 9,015 13,564 21,123
Gross margin 4,873 2,190 13,912 11,611
Operating expenses:
Sales and marketing 2,935 4,233 8,835 13,952
Research and
development 1,940 2,592 6,137 8,167
General and
administrative 1,647 1,889 5,446 5,793
Loss on impairment of
long-lived assets -- -- -- 2,139
Severance and
exit costs -- -- -- 682
Amortization of
intangibles 593 593 1,779 1,973
Stock-based compensation -- 270 22 868
Total operating
expenses 7,115 9,577 22,219 33,574
Loss from operations (2,242) (7,387) (8,307) (21,963)
Equity in income (loss)
of affiliate (19) 41 51 115
Other income
(expense), net (27) 99 1,282 6,284
Loss before income taxes (2,288) (7,247) (6,974) (15,564)
Provision for
income taxes (84) (176) (321) (1,270)
Net loss (2,372) (7,423) (7,295) (16,834)
Contribution from
(dividends on)
convertible preferred
stock -- 14,924 -- 7,123
Net income available
(loss applicable) to
common stockholders $(2,372) $7,501 $(7,295) $(9,711)
Basic net income (loss)
per common share $(0.13) $0.49 $(0.41) $(0.67)
Diluted net income
(loss) per
common share $(0.13) $0.38 $(0.41) $(0.67)
Weighted average basic
common shares
outstanding 17,993 15,242 17,885 14,389
Weighted average
diluted common shares
outstanding 17,993 19,912 17,885 14,389
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Authored by: MathFox on Wednesday, September 07 2005 @ 05:56 PM EDT |
If there are any... Please check with the original first.
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When people start to comment on the form of a message, it is a sign that they
have problems to accept the truth of the message.
[ Reply to This | # ]
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Authored by: Anonymous on Wednesday, September 07 2005 @ 05:57 PM EDT |
This looks very bad for the company [ Reply to This | # ]
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Authored by: MathFox on Wednesday, September 07 2005 @ 06:04 PM EDT |
If you post links, follow the instructions on the comment page and select HTML
mode. We do appreciate a few lines of description what the link is about.
<a href="http://www.example.net/" >link text</a>
---
When people start to comment on the form of a message, it is a sign that they
have problems to accept the truth of the message.
[ Reply to This | # ]
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Authored by: Anonymous on Wednesday, September 07 2005 @ 06:07 PM EDT |
6.1 million (unrestricted) cash reduction in nine months. 6.5 million in
unrestricted cash left. 17 months
to Feb 2007. But the good new is, the
accrued compensation with the
attorneys is cleared, so I guess they are current
with with BSF's bills. [ Reply to This | # ]
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Authored by: webster on Wednesday, September 07 2005 @ 06:11 PM EDT |
...right from the mouth:
"...our inability to see our litigation through to its
conclusion."
No need to speculate. This is a Factor and a Fact. Where is M$ when they need
them?
---
webster
>>>>>>> LN 3.0 >>>>>>>>>[ Reply to This | # ]
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Authored by: Anonymous on Wednesday, September 07 2005 @ 06:37 PM EDT |
Hey, everybody!
Here's the windup (press release)....
Here's the pitch (conference call)....
So what nuggets can we find in this?
1) SCOsource licensing is decreasing. This is the Linux licenses, right?
Which means people are not renewing.
2) OpenSewer6 grabs press and attention, and revenue still drops. Not good.
3) I also notice the little throwaway line about "not seeing the
litigation through to the conclusion". That's the first time that has been
spelled out as a distinct possibility, right? I think the last one was phrased
a little more hopefully, but I could be wrong.
4) They are bragging about the attention OpenSewer6 is getting. Why aren't they
bragging about sales figures? Advance or otherwise?
All I can think of is the end of "Animal House." "Remain calm!
Everything is under control! All is well!"
All that's missing is the wookie, and I think that'll pop up with the conference
call.
Dobre utka,
The Blue Sky Ranger
"You call me a fool, you say it's a crazy scheme.
"This one's for real. I already bought the team."
--Steely Dan
"Deacon Blues"[ Reply to This | # ]
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Authored by: B1ff! on Wednesday, September 07 2005 @ 06:45 PM EDT |
"SCO owns the core UNIX operating system originally developed by
AT&T/Bell Labs and is the exclusive licensor to UNIX-based system software
providers."
They must be reading too much Groklaw![ Reply to This | # ]
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- Its the core - Authored by: Anonymous on Wednesday, September 07 2005 @ 07:11 PM EDT
- Its the core - Authored by: tiger99 on Wednesday, September 07 2005 @ 08:06 PM EDT
- Its the core - Authored by: archonix on Thursday, September 08 2005 @ 07:18 AM EDT
- Its the core - Authored by: tiger99 on Thursday, September 08 2005 @ 08:21 AM EDT
- Its the core-wrong - Authored by: Anonymous on Thursday, September 08 2005 @ 08:51 AM EDT
- Its the core - Authored by: Anonymous on Thursday, September 08 2005 @ 09:08 AM EDT
- Its the core - Authored by: Anonymous on Thursday, September 08 2005 @ 12:25 PM EDT
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Authored by: Anonymous on Wednesday, September 07 2005 @ 06:52 PM EDT |
The word "traction" in this statement ;-
"we launched SCO OpenServer 6 which has received many favorable reviews and
is showing traction with customers."
fascinates me so much......
Are they super-glueing copies so they stick to potential customers hands?
Is it such a bloated product that customers need a farm tractor to take it
away?
Have they instructed resellers to polish their floors so highly that potential
customers can't get 'traction' to get away?
Or is it the friction between the product wrapping and a customer as they try to
ram it down their throat?
The mind boggles......but what a lovely non-sensical phrase.
I've just gotta use it at work.
;-)
No I think it's a nice smokescreen for investors, so Darl just for you, let me
call a spade a spade for you so that these innocent souls know what you mean.
And I won't even charge you......
You mean this :-
"People are politely looking at it but no-ones buying it."
Have a nice day.....[ Reply to This | # ]
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Authored by: Anonymous on Wednesday, September 07 2005 @ 06:54 PM EDT |
Where's the $50M they owe Novell? [ Reply to This | # ]
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Authored by: Anonymous on Wednesday, September 07 2005 @ 07:30 PM EDT |
In the big things that everyone politely avoids discussing department...
SCO doesn't mention the injunction that Novell is seeking to freeze SCO assets
until trial.
SCO doesn't mention the money Novell claims it is owed.
SCO has gone from the attacker to the attacked. Novell has risen up to challenge
SCO's claims about the ownership of Unix copyrights.
The SCO house of cards is about to experience Katrina. Bleak prospects is giving
them too much. The company is effectively dead. They have falling product
revenue. No licensing revenue. No legal case. Novell is attacking and may
succeed in capturing their assets. There is little left. SCO will run out of
money long before it gets to trial. The vultures are circling.
This has become a wonderfully uplifting day.
philc (I didn't log in)[ Reply to This | # ]
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Authored by: Anonymous on Wednesday, September 07 2005 @ 08:09 PM EDT |
what happens when they die? Novell's claims alone are enough to finish them off
(provided, of course, they survive even that long). So what happens to SCO's
claims when SCO dies??? Will they forever remain unresolved?[ Reply to This | # ]
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Authored by: sacs on Wednesday, September 07 2005 @ 08:37 PM EDT |
I'm not a business major, but:
SCOsource licensing revenue 32
Cost of SCOsource licensing revenue 3,085
does not look like a good business model to me.
*snigger*
[ Reply to This | # ]
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- Business 101 - Authored by: Anonymous on Wednesday, September 07 2005 @ 09:28 PM EDT
- Business 101 - Authored by: aj on Thursday, September 08 2005 @ 03:14 AM EDT
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Authored by: haphazard on Wednesday, September 07 2005 @ 08:50 PM EDT |
I've got an audio capture of the conference call, in WAV and Ogg Vorbis formats,
if anyone wants it. I'm not currently able to host it myself, unfortunately,
but would be willing to email and/or upload if someone wants to make it
available... just let me know where. The WAV is approximately 220 MB in size,
and the Ogg is about 8 MB.
I didn't have a chance to clean it up, so there's
about 5m45s of dead space at the beginning.
--- "I'm too sexy for my
code." -Awk Sed Fred
[ Reply to This | # ]
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Authored by: _Arthur on Wednesday, September 07 2005 @ 09:35 PM EDT |
As far as I know the latest Mi2g publicity stunt "Study" was in 2004.
They couldn't have possibly recommended OpenServer 6 Legend which was
released in mid-2005.
To what "independent study" is Darl referring to ?
Mi2g claims to have analyzed "more than 235,000 successful attacks".
If one suppose that their logs are at Router/Firewall level (they don't say),
how do they detect a "sucessful attack" ? Did 235,000 of their
clients got hacked thru their Mi2G firewall ?? They won't reveal how
many computers were so monitored, or how many under each OS:
Windows (several flavors), Linux, MacOSX, BSD UNIX, and SCO Openserver 5.x
If they were monitoring less than 200,000 computers (they are a very
small company) it means their stats refects that some hapless computer
was "hacked" a thousand times in a row. Not a real life situation
for Linux computers at least.
The only way I can make sense of their statistic, is that they call a mere
Port Scan a "Sucessful Attack". Elsewhere in their study, they say
that virus attacks are not tallied, only "manual attacks".
Yeah manual attacks detected by automatic software, whatever.
Sorry for the rant.[ Reply to This | # ]
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Authored by: kb8rln on Wednesday, September 07 2005 @ 09:48 PM EDT |
"our inability to see our litigation through to its conclusion."
quote from forward looking statment.
Since SCOX will not be
able to bring to a conclusion that we "really did not have a case" then there
will be no case for the SEC.
All the others SCOX vs companies in court
will see there is no money left and go away.
I wish some one will get
jail time out of this scam.
Richard Rager
--- Director Of
Infrastructure Technology (DOIT)
Really this is my Title so I not a Lawyer.
[ Reply to This | # ]
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Authored by: Anonymous on Wednesday, September 07 2005 @ 09:59 PM EDT |
"a leading provider of UNIX® software technology"
It looks like they are no longer claiming that they own Unix.[ Reply to This | # ]
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Authored by: Anonymous on Wednesday, September 07 2005 @ 10:17 PM EDT |
To quote from the Techworld article:
"The only real change to the standard
open source bundle (which typically comprises Apache, Tomcat, Java, Java Server
Pages, Mozilla, SAMBA, PostGreSQL and MySQL) included with OpenServer 6 is that
Apache 2.0.3 is installed to serve up help files that are HTML representations
of actual Open Server 6 system documents."
I thought SCO had declared
the GPL unconstitutional. So why are they shipping FOSS in their bundle? Have
the license owners for these items considered revoking SCO's license given their
terrible behavior and GPL license violations (as detailed elsewhere in Groklaw)?[ Reply to This | # ]
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Authored by: rm6990 on Thursday, September 08 2005 @ 03:52 AM EDT |
It appears SCO is in free fall mode. Even more so than before. Unless I am
reading the numbers wrong, in just under a year SCO burned through almost half
of their cash on hand. And they expect to make it to trial in 2007? It isn't
even 2006 yet.
The executives don't care though, they dumped their stock 2 years ago. Anyone
think they will be buying their airline tickets soon?[ Reply to This | # ]
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Authored by: Anonymous on Thursday, September 08 2005 @ 04:14 AM EDT |
"These factors include, but are not limited to <...> unforeseen legal
costs related to our litigation, our inability to develop new products and
services, and our inability to see our litigation through to its
conclusion."
Kinda reads like a memo in support of Novell's motion to freeze assets in trust,
don't it?
Translation: "We're getting hammered from all sides, we have no business,
and our legal scam is collapsing faster than we thought."[ Reply to This | # ]
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Authored by: Anonymous on Thursday, September 08 2005 @ 05:15 AM EDT |
"its", not "our"? Backing away from the train wreck, are
we? Already moved on in your heart, Darl?[ Reply to This | # ]
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Authored by: Sandtreader on Thursday, September 08 2005 @ 08:25 AM EDT |
Among all the other bad news, they seem to have written down intangibles from
$5.4m to $3.4m (approx) over the last year. Intangibles includes IPR and (ahem)
goodwill - folks round here might have written the latter to zero a long time
ago, but I doubt SCOx would see it that way!
I guess they are probably straight-line amortising them from purchase a good
time ago, but that's treating them as wasting assets. Surely it's hard to
square the putative values put on 'their' intellectual property quoted in the
court cases with a total of $3.4m in the accounts?
It also implies that the $8m+ annual R&D they are doing isn't adding
anything to the IPR value. I know if I burned that much without adding anything
to the balance sheet the board would have something to say about it!
What's the standard on recognition of IPR intangibles in the US - particularly
as this is a company which is stating that IPR is its major value. Is there a
further breakdown of this line available anywhere?
[ Reply to This | # ]
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Authored by: UglyGreenTroll on Thursday, September 08 2005 @ 10:45 AM EDT |
I don't understand why SCO doesn't sell it's Unix business. The ill will they've
generated among their prospective clients is so large it should be an entry in
their balance sheet (joke).
Can you imagine being a salesman for
SCO?
I'm from SCO and I'm here to help you.
Aren't you the
guys who sue their own customers?
Well, that's very
rare.
In someone else's hands, their Unix business might
be worth something. Certainly more than it is now.
Perhaps there are reasons
for holding on to it associated with their litigation.
[ Reply to This | # ]
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