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Press Release Index


VA Software Reports Results for Second Fiscal Quarter, 2002

FREMONT, CA February 21, 2002 VA Software Corporation (Nasdaq: LNUX), provider of the SourceForge[tm] collaborative software development platform, today announced results for its second fiscal quarter of 2002, beating analyst expectations for revenue, net loss and cash usage.

The second quarter pro forma net loss, excluding amortization of goodwill and intangible assets and deferred stock compensation, improved to $6.9 million, or $0.13 per share, from the fiscal 2001 second quarter net loss of $13.4 million, or $0.28 per share. This compares to First Call reported consensus analyst estimates of a pro forma loss of $0.16 per share, and guidance offered in the company's November 20, 2001 press release of a pro forma net loss of $8.0 to $8.5 million.

On a total reported basis, the fiscal 2002 second quarter net loss was $9.7 million, or $0.18 per share, showing significant improvement compared to last year's second quarter total reported net loss of $74.1 million, or $1.57 per share. For the six months ended January 26, 2002, the company's total reported net loss was $64.5 mllion, or $1.22 per share, compared to the total reported net loss of $125.5 million, or $2.69 per share, for the six months ended January 26, 2001.

Second quarter revenue totaled $5.1 million, compared to the second quarter of fiscal 2001 total revenue of $42.5 million. Total revenue for the six months ended January 26, 2002 was $10.6 million, compared to $98.6 million for the first six months of fiscal 2001.

"VA Software made great progress this quarter," said Chairman and CEO, Larry Augustin. "We expanded our SourceForge 3.0 customer base, saw significant licensing and renewals and are entering the third quarter with a solid pipeline of prospects."

President and COO, Ali Jenab added, "Second quarter results reflect our focus on the SourceForge business. We have reduced our cash burn and decreased the size of our losses while investing in SourceForge product development, sales and marketing. Our cash burn declined by almost 50% from the first quarter to $6.3 million. With almost $65 million in cash and marketable securities, we believe that we have adequate liquidity to execute our business plan."

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.vasoftware.com or by dialing (800) 450-0785 (access code 622015).

Recent Highlights

  • Products. SourceForge Enteprise Edition 3.0, the latest version of VA's collaborative software development platform, began shipping in mid-November 2001. SourceForge 3.0 features enterprise search and enhanced monitoring and reporting capabilities, as well as improved performance through database integration with Oracle®.
  • OSDN. On November 13, 2001, Compaq announced its sponsorship of the SourceForge.net Clustering Foundry, a central place for the Open Source community to share ideas and collaborate on clustering projects. Additional OSDN sponsors and advertisers include leading technology companies such as IBM, EMC, Rackspace, Sharp and Verisign.
  • Management Team. On January 16, 2002, VA named Kathy McElwee Vice President and Chief Financial Officer, responsible for directing all facets of VA Software Finance, Administration, Investor Relations and Legal department functions. Ms. McElwee brings more than twenty years of experience in financial management, and previously served as the Chief Financial Officer at The 3DO Company, Lightspan Inc., Galoob Toys and Canteen Corp.
  • Board of Directors. In December 2001, David B. Wright, Chairman and CEO of Legato Systems, Inc. was named to the VA Software Board of Directors. Mr. Wright was chosen for the leadership he has shown at Legato, a worldwide leader in enterprise storage management software, as well as at Amdahl Corporation, where he previously served as President and CEO. In February 2002, Ram Gupta, Executive Vice President of PeopleSoft, Inc., was also named to the VA Software Board of Directors. Mr. Gupta brings more than 16 years of senior management in the software industry and previously served in senior capacities at firms including Healtheon/WebMD and Silicon Graphics.
  • Company Name. At the December 5, 2001 annual meeting, stockholders voted to change the Company's name to "VA Software Corporation." The name change was effective immediately. VA's Board of Directors believes that the new name better identifies the Company and its primary business: developing, marketing, selling and supporting the SourceForge CSD platform.

About VA Software

VA Software is the provider of SourceForge™, the collaborative software development (CSD) platform used by more than a quarter million developers worldwide. SourceForge Enterprise Edition helps IT and engineering organizations accelerate development by improving internal visibility and control through a centralized, integrated CSD platform. Information on VA Software's SourceForge enterprise software product, services and support is available at www.vasoftware.com.

 

Note Regarding ForwardLooking Statements: This press release contains forwardlooking statements that involve risks and uncertainties, including statements regarding VA's sales prospects for the fiscal third quarter and the adequacy of VA's liquidity to execute the Company's business plan. Actual results may differ materially from those expressed or implied in such forwardlooking statements due to various factors, including: VA's success in expanding its SourceForge enterprise software business; VA's ability to complete its sales cycle with prospective customers; unforeseen expenses that VA may incur in future quarters; the possibility that VA will not identify sufficient sources of expense reduction; competition with, and pricing pressures from, more established competitors; VA's ability to successfully attract, retain and motivate employees; the possibility of further deterioration in the general economy; VA's ability to achieve and sustain higher levels of revenue; 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 fiscal 2001 Annual Report on Form 10K and its fiscal 2002 Quarterly Reports on Form 10Q, 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 forwardlooking information contained in this news release.

Note to editors: VA Software, SourceForge and OSDN are trademarks or registered trademarks of VA Software Corporation. All other trademarks are property of their respective owners.

Contact:
Patrick Fossenier, Investor Relations
VA Software Corporation
510-687-6854

Marla Kramer, Media Relations
VA Software Corporation
510-687-7018


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)

  Three Months Ended Six Months Ended
  January 26, 2002 January 27, 2001 January 26, 2002 January 27, 2001
 
(unaudited)
(unaudited)
Net Revenues $ 5,052 $ 42,513 $ 10,630 $ 98,575
Cost of Revenues 3,810 49,660 6,253 93,110
Gross Margin 1,242 (7,147) 4,377 5,465
 
Operating Expenses
Sales and Marketing 3,199 11,478 7,492 23,025
Research and Development 1,940 4,842 4,843 9,572
General and Administrative 4,027 7,910 6,902 13,464
Restructuring Costs and other Special Charges - - 44,956 -
Amortization of Deferred Stock Compensation (440) 20,296 1,544 41,179
Amortization of Goodwill and Intangible Assets 3,217 23,989 5,304 47,413
Total Operating Expenses 11,943 68,515 71,041 134,653
Loss from Operations (10,701) (75,662) (66,664) (129,188)
Interest and other income, net 1,045 1,514 2,127 3,693
Net Loss $ (9,656) $ (74,148) $ (64,537) $ (125,495)
     
Basic and diluted net loss per share $ (0.18) $ (1.57) $ (1.22) $ (2.69)
 
Weighted-average shares outstanding: basic and diluted 53,005 47,362 52,789 46,723
 

Reconciliation of Net loss as reported to pro forma net loss

  Three Months Ended Six Months Ended
  January 26, 2002 January 27, 2001 January 26, 2002 January 27, 2001
 
(unaudited)
(unaudited)
Net Loss as Reported $ (9,656) $ (74,148) $ (64,537) $ (125,495)
Non Cash Charges:        
Restructuring Costs and other special charges - 16,500 42,157 16,500
Amortization of Deferred Stock Compensation (440) 20,296 1,544 41,179
Amortization of Goodwill and Intangible Assets 3,217 23,989 5,304 47,413
Net loss before non cash charges $ (6,897) $ (13,363) $ (15,532) $ (20,403)
Basic and diluted net loss per share pro forma $ (0.13) $ (0.28) $ (0.29) $ (0.44)
 

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

  January 26, 2002
(unaudited)
July 28, 2001
Assets
Current Assets
Cash and cash equivalents $ 49,992 $ 60,347
Marketable securities 14,608 22,595
Accounts receivable, net 440 10,107
Inventories 393 343
Prepaid expenses and other current assets 1,634 3,895
Total current assets 67,067 97,287
Property and equipment, net 9,518 17,703
Goodwill and intangible assets, net 20,745 56,730
Other assets 1,629 1,313
   
  $ 98,959 $ 173,033
   
 
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of loans and notes payable $ 125 $ 756
Accounts payable $ 2,474 $ 14,319
Accrued restructuring liabilities 1,563 3,135
Accrued liabilities and other 14,459 15,283
Total current liabilities 18,621 33,493
Notes payable, net of current portion - 42
Accrued restructuring liabilities, net of current portion 13,605 6,378
Other long-term liabilities 1,020 1,366
Minority interest - 5,392
 
Total Liabilities 33,246 46,671
 
Stockholders' equity:
Common stock 54 54
Additional paid-in capital 765,671 768,793
Deferred stock compensation (533) (6,108)
Accumulated other comprehensive loss (35) (1,490)
Accumulated deficit (699,424) (634,887)
Total stockholders' equity 65,713 126,362
   
Total Liabilities and Stockholders' Equity $ 98,959 $ 173,033
   

 

 



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