VA Linux Reports Results for First Fiscal Quarter, 2002
FREMONT, Calif. November 20, 2001 VA Linux Systems, Inc. (Nasdaq: LNUX), the provider of the SourceForge[tm] collaborative software development (CSD) platform, today announced results for its first fiscal quarter of 2002, ended October 27, 2001.
First quarter revenue totaled $5.6 million. Excluding residual revenue from the Company's exited Linux hardware and related businesses, quarterly revenue was $3.9 million. Net loss from operations was $8.7 million, or ($0.16) per share, excluding non-cash, restructuring and special items. At the end of the first quarter, the Company had approximately $71 million of cash and marketable securities. Revenue was within guidance, and net loss and cash usage were better than forecasts provided in VA's August 23, 2001 release.
VA now focuses primarily on its SourceForge enterprise software business. The Company expects revenue in the second quarter of fiscal 2002 to fall in the range of $4.0 to $4.5 million, with a net loss from operations in the range of $8.0 to $8.5 million. Quarterly cash usage is expected to approximate the operating loss.
"We were able to exit our Linux hardware and related businesses more quickly and with lower costs than we originally expected. Our expense levels and cash usage are down significantly," said VA Chairman and CEO Larry M. Augustin. "We have put a seasoned team in place around our SourceForge product and are pleased with the favorable response SourceForge Enterprise Edition 3.0 is receiving in the market. We see business conditions for us stabilizing, and expect to see continued declines in our cash usage combined with modest bottom line improvements over the remainder of this fiscal year."
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) 700-7860 (access code 607990).
On November 6, VA announced SourceForge Enterprise Edition 3.0--the latest version of its CSD platform. SourceForge 3.0 introduces key features such as enterprise search, enhanced monitoring and reporting capabilities, as well as improved performance through database integration with OracleŽ. SourceForge Enterprise Edition helps engineering, R&D and IT organizations accelerate development by improving internal visibility and control through a centralized, integrated CSD platform.
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About VA Linux
VA Linux Systems is the provider of SourceForge[tm], the collaborative software development (CSD) platform used by more than a quarter million developers worldwide. SourceForge Enterprise Edition helps engineering, R&D and IT organizations accelerate development by improving internal visibility and control through a centralized, integrated CSD platform. Information on VA's SourceForge enterprise software product, services and support is available at www.valinux.com and at 1-877-VALINUX.
Note Regarding Forward-Looking Statements: This press release contains forward-looking statements that involve risks and uncertainties, including statements regarding VA's: future financial performance and results of operations, including anticipated revenue, cash usage and net loss from operations; technological trends in and emergence of collaborative software development; the future functionality, market acceptance and adoption of, business potential and demand for, and efficiencies created by SourceForge enterprise software; management's strategy, plans and objectives for future operations; the impact of our restructuring, reductions in force and new business model on our operating expenses and the amount of cash utilized by operations each quarter; our intentions and strategies regarding customers and customer relationships; our intent to continue to invest significant resources in software development; our intent to develop long-term relationships and strategic alliances; competition, competitors, the bases of competition and our ability to compete; liquidity and capital resources; and sales strategy and anticipated benefits from such strategy. Actual results may differ materially from those expressed or implied in such forward-looking statements due to various factors, including: unforeseen expenses that VA may incur in future quarters; the possibility that VA will not identify sufficient sources of expense reduction; VA's quarterly sales cycle and fluctuation in demand for VA's products and services; competition with, and pricing pressures from, more established competitors; VA's success in expanding its SourceForge enterprise software business; the risk that VA's restructuring efforts will not succeed; VA's ability to successfully attract, retain and motivate employees; the possibility of further deterioration in the general economy and its impact on VA and its current and potential customers; VA's reliance upon strategic relationships with other companies and its ability to negotiate, close and implement specific terms relating to them; rapid technological and market change; future guidelines and interpretations regarding software revenue recognition; and VA's ability to protect and defend its intellectual property rights. Investors should consult VA's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended July 28, 2001, for further information regarding these and the other risks of the Company's business. These documents are available at the SEC Web site: www.sec.gov. VA assumes no obligation to update the forward-looking information contained in this news release.
Note to editors: SourceForge and OSDN are trademarks of VA Linux Systems, Inc. Linux is a trademark of Linus Torvalds. All other trademarks are property of their respective owners.
Eureka Endo, Media Relations
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