VA Linux Systems Reports Results for Second Fiscal Quarter, 2001.Business Editors/High-Tech Writers FREMONT Fremont (frē`mŏnt). 1 City (1990 pop. 173,339), Alameda co., W Calif., on San Francisco Bay; inc. 1956. Long an agricultural center, with champagne vineyards founded (1870) by Leland Stanford, it still ships fruits and vegetables. , Calif.--(BUSINESS WIRE)--Feb. 20, 2001 VA Linux Linux Nonproprietary operating system (OS) for digital computers. In 1991 Linus Torvalds of Finland began asking for volunteer programmers over the Internet to collaborate on the development of a UNIX-like OS for personal computers; the “1. Systems, Inc. (Nasdaq:LNUX) today reported revenue of $42.5 million for the second fiscal quarter, 2001, ended January January: see month. 27, 2001, an increase of 111% over the same quarter of fiscal 2000. VA Linux also reported a second quarter net loss, on a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma basis, excluding non-cash and non-recurring charges, of ($0.28) per share, compared to a loss of ($0.20) per share in the second quarter of fiscal 2000. This net loss per share is within the range indicated in the Company's press release dated January 16, 2001. VA Linux also reported that it established additional reserves for excess inventory and potentially uncollectible accounts Uncollectible account An account which cannot be collected by a company because the customer is not able to pay or is unwilling to pay. receivable of $14 million and $2.5 million, respectively. A conference call to review results will be held at 2:00 pm (Pacific) today. The call may be accessed via webcast at http://www.valinux.com or by dialing 800/230-1059 (access code 560387). "As we indicated on January 16, we have been affected by the overall economic slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. which has impacted demand for our products and services," said Larry Lar´ry n. 1. Same as Lorry, or Lorrie. M. Augustin, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of VA Linux Systems. "We have recognized the need to adapt to this new economic environment. We have established reserves to address financial exposures and we are restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). the Company to better compete. We intend to reduce our workforce by 25% from the 556 people we employed at the end of calendar 2000 and will take a restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. in the fiscal third quarter as a result. The amount of that charge will be determined later this quarter. The effect of the restructuring will be to position the Company to achieve profitability at lower revenue levels." "We believe that the overall slowdown in IT spending will ultimately create more demand for Open Source technologies among enterprise customers as they tighten their IT budgets. Our leadership in Linux and Open Source positions us to benefit from the adoption of those technologies by large corporations." Notable Quarterly Highlights: This quarter, D.H. Brown Associates, Inc. (DHBA DHBA D.H. Brown Associates, Inc. DHBA Deregister Hba ), a leading research and consulting firm Noun 1. consulting firm - a firm of experts providing professional advice to an organization for a fee consulting company business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a , rated VA as No. 1 in overall Linux strategy in DHBA's multi-client study on "Linux Strategies and Solutions." In a comparison with major competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. , VA Linux Systems was ranked highest in overall vendor positioning, value added Value Added The enhancement a company gives its product or service before offering the product to customers. Notes: This can either increase the products price or value. and Linux community leadership. The DHBA report recognized VA Linux as a "broad solutions provider" in the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the server market, highlighting VA Linux Systems' Build-to-Order Software Selector (programming) selector - 1. In Smalltalk or Objective C, the syntax of a message which selects a particular method in the target object. 2. An operation that returns the state of an object but does not alter that state. (BOSS) as a feature that "extends customization beyond the alternatives available from other suppliers." D.H. Brown also highlighted VA Linux Systems' leadership in founding and operating the Open Source Development Network (OSDN OSDN Open Source Development Network OSDN Open Source Developer Network (TM)), including SourceForge.net SourceForge.net is a centralized location for software developers to control and manage open source software development, and acts as a source code repository. SourceForge.net is operated by Sourceforge, Inc. (TM), the world's largest Open Source development site. Additional Highlights for the Quarter: -- Systems. In January, VA Linux introduced a new series of 1U servers for deployment in large-scale web farms for applications such as web serving, firewalls, DNS or load-balancing. -- Professional Services. In December, VA Linux announced the availability of "SourceForge OnSite," a ground-breaking subscription service built on the Web-based collaborative development system powering SourceForge.net, the world's largest Open Source development center. Installed behind customers' corporate firewalls, SourceForge OnSite provides a turn-key collaboration system -- fully customized, implemented and supported by VA Linux Professional Services -- for enterprise-class customers that want to leverage Open Source tools and methods for internal software development. Agilent Technologies' central research lab was one of the first VA Linux customers to deploy SourceForge OnSite to support its geographically distributed development teams. SourceForge OnSite also won the Show Favorite Award for Best Productivity Application at the LinuxWorld Conference and Expo held in New York City in February. -- Open Source Development Network (OSDN). VA Linux announced in January that it named Richard French as senior vice president of its Open Source Development Network division. OSDN also recently announced the highly anticipated release of Freshmeat II, the result of a year-long development effort to enhance freshmeat.net(TM). Founded in 1997, freshmeat.net is the largest index of Linux and Open Source software on the Web. OSDN, a division of VA Linux Systems, Inc., is the leading Linux and Open Source destination on the Internet. About VA Linux Systems VA Linux Systems is the world's Linux leader. The expert provider of Linux and Open Source solutions for the Web, VA Linux offers a single point of contact for Linux servers and storage -- featuring the industry's first Build-to-Order Software -- as well as professional consulting services Noun 1. consulting service - service provided by a professional advisor (e.g., a lawyer or doctor or CPA etc.) service - work done by one person or group that benefits another; "budget separately for goods and services" and support. VA Linux Systems' mission is to make its customers successful through the use of Linux and Open Source software in Internet infrastructure and enterprise-level software development. As part of its commitment to expanding the Open Source community, VA Linux Systems operates the Open Source Development Network (OSDN). A network of the leading Internet sites for Open Source development, distribution and discussion, OSDN includes SourceForge.net, freshmeat Freshmeat is a website that allows computer users to keep track of the latest software releases and updates as well as write/read reviews and articles, send or receive comments to or from the author, and many other features. .net, Slashdot This section needs additional to facilitate its . Please help [ improve this article] by adding reliable references Unverifiable material may be . This article has been tagged since July 2007. (TM) and Linux.com Linux.com is the name of a site owned by SourceForge, Inc. (formerly VA Software) and dedicated to providing news and services to the free and open source software community. See also Open Source Technology Group External links
Fremont (IPA: /ˈfriːmɒnt/) is a city in California that was incorporated on January 23, 1956, from the merger of five smaller communities: , VA Linux is located on the Web at http://www.valinux.com. In 2000, D.H. Brown Associates rated VA Linux Systems as No. 1 in overall Linux strategy among major systems vendors. Linux Journal Linux Journal is a monthly magazine published by Belltown Media, Inc. of Houston, Texas. The magazine has been published since March 1994. Linux Journal awarded VA Linux its 2000 Editors' Choice Award for "Best Web Server." In 2000, Deloitte & Touche named VA Linux as one of the fastest growing technology companies as part of its prestigious Silicon Valley Fast 50 Program and its North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. Fast 500 Program, based on percentage growth in revenues from 1995 to1999. International Data Corporation (IDC) ranked VA Linux Systems as a Top 3 Linux server vendor in the US in Q3 2000 based on factory revenue. Note Regarding Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. : This press release contains forward looking statements, including statements regarding VA Linux's future financial performance and results of operations; the Company's planned restructuring; the Company's sales strategy and anticipated benefits from such strategy; future growth of SourceForge.net and expected benefits of SourceForge This article is about the revision control system. For the website, see SourceForge.net. For the company, see SourceForge, Inc.. SourceForge is a collaborative revision control and software development management system. OnSite; successful adoption of Open Source technologies by large corporations; and VA Linux's ability to benefit from large corporation's adoption of Open Source technologies. Actual results may differ materially from those projected in such forward-looking statements due to various factors, including: VA Linux's quarterly sales cycle and fluctuation Fluctuation A price or interest rate change. in demand for our products and services, with increased fluctuation due to VA Linux's concentration of customers in the Internet infrastructure industry; competition with, and pricing pressures from, larger, more established companies and smaller, general purpose manufacturers; the fact that VA Linux has incurred and expects to continue to incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. substantial losses; VA Linux's reliance on sales of server products; VA Linux's success in expanding its services business; manufacturing and sourcing risks; the effectiveness of VA Linux's ongoing restructuring; the adequacy of VA Linux's additional reserves; the possibility of further deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in the general economy; the rate of growth and acceptance of Linux and the Open Source software development model; VA Linux's ability to continue to introduce new products and services, and to expand its business and operations, particularly internationally; VA Linux's ability to successfully penetrate international Internet-related and enterprise-level computing computing - computer markets; market acceptance of the SourceForge collaborative col·lab·o·rate intr.v. col·lab·o·rat·ed, col·lab·o·rat·ing, col·lab·o·rates 1. To work together, especially in a joint intellectual effort. 2. development system; VA Linux's ability to maintain and support the OSDN websites, including SourceForge.net and freshmeat.net; VA Linux's dependence upon an Open Source business model, independent third-party Linux developers, and its single source contract manufacturer and suppliers; VA Linux's dependence on its Internet-based businesses; the enforceability of the GNU General Public License A software license from the Free Software Foundation (FSF) that ensures every user receives the essential freedoms that define "free" software, which is free of restrictions (see free software). ; VA Linux's ability to attract, retain and motivate qualified personnel; VA Linux's acquisition strategy and its ability to successfully integrate acquired companies into its operations; market acceptance of Linux and Open Source software generally; rapid technological and market change; the impact of rapid evolution of the Linux market on our ability to forecast demand and results; claims and potential damages resulting from information, postings or software available on our Internet sites, or software distributed with our systems; changes in or interpretation of foreign laws or regulations; and risks associated with the Internet infrastructure and regulation. Investors should consult VA Linux's filings with the Securities and Exchange Commission, including its Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for its fiscal quarter ended October October: see month. 27, 2000, for further information regarding these and the other risks of the Company's business. These documents are available at the SEC Website: http://www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. . Note to Editors: VA Linux Systems, OSDN, freshmeat.net, Slashdot and SourceForge are trademarks of VA Linux Systems, Inc. Linux is a registered trademark of Linus Torvalds Linus Benedict Torvalds (born December 28 1969 in Helsinki, Finland) is a Finnish software engineer best known for initiating the development of the Linux kernel. . All other trademarks are property of their respective owners.
VA LINUX SYSTEMS, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Excluding non-cash expenses (1)
(In thousands, except per share data)
Three Months Ended Six Months Ended
---------------------- ----------------------
January 27, January 28, January 27, January 28,
2001 2000 2001 2000
---------- ---------- ---------- ----------
(unaudited) (unaudited)
Net revenues $ 42,513 $ 20,191 $ 98,575 $ 35,039
Cost of revenues (2) 35,660 17,356 79,110 30,243
---------- ---------- ---------- ----------
Gross profit 6,853 2,835 19,465 4,796
Operating expenses:
Sales and
marketing (3) 11,478 6,114 23,025 11,178
Research and
development 4,842 2,431 9,572 5,205
General and
administrative (4) 5,410 1,658 10,964 3,154
Total operating ---------- ---------- ---------- ----------
expenses 21,730 10,203 43,561 19,537
---------- ---------- ---------- ----------
Loss from operations (14,877) (7,368) (24,096) (14,741)
Interest and other
income, net 1,514 1,062 3,693 1,235
---------- ---------- ---------- ----------
Net loss $ (13,363) $ (6,306) $ (20,403) $ (13,506)
========== ========== ========== ==========
Pro forma basic
and diluted net
loss per share $ (0.28) $ (0.20) $ (0.44) $ (0.46)
Pro forma basic
and diluted
weighted-average
shares outstanding(5) 47,362 32,300 46,723 29,412
(1) Excludes amortization of goodwill and intangible assets,
amortization of compensation expense related to acquisitions,
amortization of deferred stock compensation, and the dividend related
to convertible preferred stock.
(2) Excludes a one-time inventory provision of $14 million in the
fiscal 2001 periods to establish a reserve for excess material.
(3) Excludes $997,000 of non-cash expense for stock grants to
consultants in the fiscal 2000 periods.
(4) Excludes a one-time provision for bad debt of $2.5 million in
the fiscal 2001 periods.
(5) Pro forma basic and diluted weighted-average shares includes
the conversion of convertible preferred stock using the if-converted
method into an equivalent number of common shares as if the shares had
been converted on the dates of issuance.
VA LINUX SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended Six Months Ended
---------------------- ----------------------
January 27, January 28, January 27, January 28,
2001 2000 2001 2000
---------- ---------- ---------- ----------
(unaudited) (unaudited)
Net revenues $ 42,513 $ 20,191 $ 98,575 $ 35,039
Cost of revenues 49,660 17,356 93,110 30,243
---------- ---------- ---------- ----------
Gross profit (7,147) 2,835 5,465 4,796
Operating expenses:
Sales and marketing 11,478 7,111 23,025 12,175
Research and
development 4,842 2,431 9,572 5,205
General and
administrative 7,910 1,658 13,464 3,154
Amortization of
deferred stock
compensation 2,694 4,258 5,388 7,113
Amortization of
compensation
expense related
to acquisitions 17,602 - 35,791 -
Amortization of
goodwill and
intangible assets 23,989 - 47,413 -
---------- ---------- ---------- ----------
Total operating
expenses 68,515 15,458 134,653 27,647
---------- ---------- ---------- ----------
Loss from operations (75,662) (12,623) (129,188) (22,851)
Interest and other
income, net 1,514 1,062 3,693 1,235
---------- ---------- ---------- ----------
Net loss $ (74,148) $ (11,561) $ (125,495) $ (21,616)
========== ========== ========== ==========
Dividend related
to convertible
preferred stock - - - (4,900)
---------- ---------- ---------- ----------
Net loss attributable
to common
stockholders $ (74,148) $ (11,561) $ (125,495) $ (26,516)
========== ========== ========== ==========
Basic and diluted net
loss per share $ (1.57) $ (0.50) $ (2.69) $ (1.73)
Weighted-average
shares
outstanding:
Basic and diluted 47,362 23,325 46,723 15,372
VA LINUX SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
January 27, July 28,
2001 2000
---------- ----------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 66,674 $ 123,849
Marketable securities 59,652 52,433
Accounts receivable, net 33,962 31,842
Inventories 1,393 1,018
Prepaid expenses and other current assets 8,769 2,156
---------- ----------
Total current assets 170,450 211,298
Property and equipment, net 19,915 10,316
Goodwill and intangible assets, net 326,730 362,744
Other assets 1,450 741
---------- ----------
$ 518,545 $ 585,099
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 20,159 $ 26,715
Accrued liabilities and other 24,715 11,285
Current portion of loans and notes payable 1,013 1,568
---------- ----------
Total current liabilities 45,887 39,568
Notes payable, net of current portion 1,026 1,104
Other long-term liabilities 1,036 552
Stockholders' equity:
Common stock 53 52
Additional paid-in capital 778,440 763,175
Deferred stock compensation (71,984) (109,686)
Accumulated other comprehensive loss (799) (47)
Accumulated deficit (235,114) (109,619)
---------- ----------
Total stockholders' equity 470,596 543,875
---------- ----------
$ 518,545 $ 585,099
========== ==========
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