The media already are reporting that the SCO Group
"reported a net loss of $4.58 million or $0.23 per share for the first quarter, compared to a net loss of $2.96 million or $0.17 per share in the year ago quarter." Revenues declined as well, to
$7.34 million from $8.86 million in the prior-year quarter. "Despite our decrease in revenue and our increase in net loss incurred
during the first quarter, the UNIX business continued to generate positive
cash flow," said Darl McBride, president and CEO of The SCO Group.
The conference call is still in progress.
Call is over. Steven J. Vaughn-Nichols has the details, such as they are.
And for the historians, there is a 13G/A filed with the SEC by Canopy Group on February 15, that I just now noticed, memorializing that Canopy Group owned no SCO stock on December 31, 2005. The filing has zeroes from top to bottom. It's signed by Lewena Noorda, Chairman, Canopy Group.
UPDATE: Ashlee Vance in The Register, "SCO spends $4m to make $30k in Q1":
Say what you will about the SCO Group. The company is a model of consistency.
During its first quarter, SCO turned in lower Unix revenue, fading SCOsource revenues and a statement reminding everyone that it's waiting for the IBM lawsuit to pay out. This ritual of disappointment occurs every three months with little variation on the major themes....
The SCOsource licensing program has proved as unattractive as ever. The company sold just $30,000 worth of IP insurance - down from $70,000 last year.
I have a question: who gave them $30,000 for SCOsource? Anyone know where that comes from?
Here's SCO's press release with the financial details:
The SCO Group to Release First Quarter Financial Results and Host Conference Call After Close of Market on March 8, 2006
The SCO Group, Inc.
(Nasdaq: SCOX), a leading provider of UNIX(R) software technology for
distributed, embedded and network-based systems, today reported results for
its fiscal first quarter ended January 31, 2006.
Revenue for the first quarter of fiscal year 2006 was $7,343,000 as
compared to $8,865,000 for the comparable quarter of the prior year. The
decrease in revenue was primarily due to continued competitive pressures on
the Company's UNIX products and services.
The net loss for the first quarter of fiscal year 2006 was $(4,581,000),
or $(0.23) per diluted common share, as compared to a net loss of
$(2,961,000), or $(0.17) per diluted common share, for the comparable quarter
of the prior year. Included in the net loss for the first quarter of fiscal
year 2006 was $401,000 of stock-based compensation expense, which represented
the fair value of equity awards issued by the Company as required upon
adopting SFAS No. 123(R). Included in the net loss for the first quarter of
fiscal year 2005 was $15,000 of stock-based compensation expense.
"Despite our decrease in revenue and our increase in net loss incurred
during the first quarter, the UNIX business continued to generate positive
cash flow," said Darl McBride, president and CEO of The SCO Group. "We are
pleased with the recently announced general availability of our EdgeClick
digital services and believe that with the $10 million in gross proceeds
raised in our private placement in November, we can pursue our business
operations and see our lawsuit with IBM through to its conclusion."
Cash and cash equivalents and available-for-sale marketable securities
were $19,214,000 as of January 31, 2006. In addition, $1,758,000 of cash is
held in an escrow account and is classified as a component of restricted cash
as of January 31, 2006.
The Company's Business
During the first quarter of fiscal year 2006, the Company completed much
of the work leading to the general release of SCO's EdgeClick digital
services, which the Company announced was publicly available last week. The
Company now has several customers that are actively using the digital services
During the first quarter of fiscal year 2006, the Company completed work
with MySQL AB to allow the popular open source database platform to become
certified on SCO OpenServer 6. The completion of this certification is an
important step in permitting MySQL database customers to select SCO OpenServer
as a platform on which to run their MySQL database applications. This opens
up new markets for SCO.
Resellers and customers continue to implement OpenServer and UnixWare
solutions, and in some cases, customers are replacing competitive operating
systems with SCO OpenServer because of the significant performance and
reliability advantages SCO OpenServer offers.
As previously announced, The SCO Group will host a conference call at
5:00 p.m. EDT today, March 8, 2006, to discuss the fiscal first quarter
results. To participate in the teleconference, please call toll free
1-800-474-8920 or use the toll number 1-719-457-2727; confirmation code:
6227847, 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
The statements contained in this press release regarding the adequacy of
our cash to fund our business operations and our litigation with IBM 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 our 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 enhance our UNIX
operating systems and maintain our UNIX business. These and other factors
that could cause actual results to differ materially from those anticipated
are discussed in more detail in the Company's periodic and current filings
with the Securities and Exchange Commission, including the Company's Form 10-K
for the fiscal year ended October 31, 2005. These forward-looking statements
speak only as of the date on which such statements are made, and The SCO Group
undertakes no obligation to update such statements to reflect events or
circumstances arising after such date.
About The SCO Group
The SCO Group, Inc. (SCO) (Nasdaq: SCOX) 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
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 and UnixWare are
registered trademarks of The Open Group. MySQL is a registered trademark of
MySQL AB in the USA and other countries. 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)
January 31, October 31,
Cash and cash equivalents $12,018 $4,272
Restricted cash 2,670 5,690
Available-for-sale marketable securities 7,196 6,165
Accounts receivable, net 4,917 6,343
Other current assets 2,151 2,454
Total current assets 28,952 24,924
Property and equipment, net 563 578
Intangibles, net 2,030 2,707
Other assets 731 739
Total assets $32,276 $28,948
Accounts payable $2,241 $2,197
Accrued payroll and other expenses 5,202 5,774
Deferred revenue 3,637 3,841
Other current liabilities 2,461 4,443
Total current liabilities 13,541 16,255
Long-term liabilities 335 338
Common stock subject to rescission -- 1,018
Stockholders' equity 18,400 11,337
Total liabilities and stockholders' equity $32,276 $28,948
Condensed Consolidated Statements of Operations Data
(unaudited, in thousands, except per share data)
Three Months Ended
Products revenue $6,000 $7,304
SCOsource licensing revenue 30 70
Services revenue 1,313 1,491
Total revenue 7,343 8,865
Cost of products revenue 584 644
Cost of SCOsource licensing revenue 4,010 3,493
Cost of services revenue 637 749
Total cost of revenue 5,231 4,886
Gross margin 2,112 3,979
Sales and marketing 2,688 2,944
Research and development 1,871 2,088
General and administrative 1,592 1,763
Amortization of intangibles 592 593
Total operating expenses 6,743 7,388
Loss from operations (4,631) (3,409)
Equity in income (loss) of affiliate (8) 53
Other income, net 145 509
Loss before income taxes (4,494) (2,847)
Provision for income taxes (87) (114)
Net loss $(4,581) $(2,961)
Basic and diluted net loss per common share $(0.23) $(0.17)
Weighted average basic and diluted common
shares outstanding 20,062 17,751