VA Linux Systems Reports Record Quarterly Revenue
FREMONT, Calif. November 16, 2000 VA Linux Systems, Inc. (Nasdaq: LNUX) today reported record revenue of $56.1 million for the fiscal first quarter, 2001, ended October 27, 2000, an increase of 278% compared to the same period of fiscal 2000 and an increase of 11% compared to the prior fiscal quarter. VA Linux also reported a fourth quarter net loss, excluding non-cash items, of ($0.15) per share, an improvement from ($0.27) per share in the first quarter of fiscal 2000. These revenue and EPS results are in line with indications provided in the Company's press release dated November 6, 2000. A conference call to review the results for the first fiscal quarter will held at 2:00 p.m. PST. The call may be accessed by dialing (800) 230-1074 (access code 543537) or via live Webcast at http://tm.intervu.net/template/smirror/ivtemplates/ccbn/2000/november/16/ipc-ccbn-lnux-11162000-35091-rl-8.ram. The conference call will also be available for replay at (800) 475-6701 (access code 543537).
"While top and bottom-line results did not meet our expectations for this quarter, we remain optimistic about our prospects for growth in the future. We remain committed to profitability, excluding non-cash charges, no later than the end of calendar 2001 and we anticipate revenue for fiscal 2001 to be approximately 2.25 times fiscal 2000 revenue." said Dr. Larry M. Augustin, president and CEO, VA Linux Systems. "Our recent introductions of new products and services introductions continues to differentiate us as the leading provider of complete Linux solutions, leveraging our Linux expertise through systems, professional services and the Web. In addition, we expect our initiatives to broaden the customer base to to position us for further success in the future."
Other Notable Quarterly Highlights
In September, the International Data Corporation (IDC) released its Worldwide Quarterly Server Tracker for calendar Q2 2000, ranking VA Linux second in the US, ahead of Dell and IBM, and third worldwide in Linux server market share, in terms of factory revenue. IDC's data shows that VA Linux grew its US revenue market share to 20% in calendar Q2 2000. From calendar Q1 to Q2 2000, the overall market for Linux servers grew by 54% in the US, sequentially.
Additional Highlights for the Quarter:
About VA Linux Systems
VA Linux Systems (Nasdaq: LNUX) 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 highly customized Linux servers and storage - featuring the industry's first Build-to-Order Software - as well as professional consulting services and support. VA Linux Systems' mission is to make its customers successful through the use of Linux and Open Source - whether they are e-businesses rapidly expanding their Internet infrastructures, or technology companies leveraging the power and methodology of Open Source software development. As part of its commitment to expanding the Open Source community, VA Linux Systems operates the Open Source Development Network (OSDNä). A network of the leading Internet sites for Open Source development, distribution and discussion, OSDN includes SourceForgeä, Freshmeat.net, Slashdot.org and Linux.com. Founded in 1993 and headquartered in Fremont, California with offices across North America, Europe and Japan, VA Linux is located on the Web at http://www.valinux.com.
Note Regarding Forward-Looking Statements: This press release contains forward looking statements, including statements regarding future financial performance and results of our operations; the Company's sales strategy and anticipated benefits from such strategy; future functionality, ease of use and market acceptance of VACM; future benefits of OSDN and the OSDN Developer Services Program; and future international acceptance of VA Linux products and acceleration of sales penetration into large global accounts. 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 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 substantial losses; VA Linux's reliance on sales of server products and its success in expanding its services business; manufacturing and sourcing risks; the effectiveness of VA Linux's ongoing business strategy; 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 markets, particularly in Japan; 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; VA Linux's ability to attract and retain 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 Annual Report on Form 10-K for its fiscal year ended July 28, 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.
Note: VA Linux Systems, VACM, OSDN and SourceForge are trademarks of VA Linux Systems, Inc. Linux is a registered trademark of Linus Torvalds. All other trademarks are property of their respective owners.
Pro forma Consolidated Statements of Operations
Condensed Consolidated Statements of Operations
Condensed Consolidated Balance Sheets