VA Software Reports Third Quarter Fiscal Year 2003 Results
Third Quarter Fiscal 2003 Revenue Increases 17% Compared To Third Quarter Fiscal 2002
FREMONT, CA May 22, 2003 VA Software Corporation (Nasdaq: LNUX), provider of SourceForge™, the leading Development Intelligence application, and parent company of OSDN™, a network of media and commerce sites that serve the IT and software development communities, today announced financial results for its third quarter of fiscal year 2003, ended April 26, 2003.
Total third quarter fiscal 2003 revenue grew 17% to $6.0 million, compared to third quarter fiscal 2002 total revenue of $5.1 million. Total revenue for the nine months ended April 26, 2003 was $17.7 million, compared to $15.8 million in the nine months ended April 27, 2002. Revenue associated with the exited hardware business was $0.2 million in the third quarter of fiscal 2003, compared to $0.7 million in the third quarter of fiscal 2002; hardware revenue declined to $0.6 million for the nine months ended April 26, 2003 compared to $3.1 million for the nine months ended April 27, 2002. Revenue from the ongoing software and online businesses increased 32% to $5.8 million in the third quarter of fiscal 2003 from $4.4 million in the third quarter of fiscal 2002. The ongoing software and online businesses grew 34% to $17.1 million for the nine months ended April 26, 2003 from $12.7 million for the nine months ended April 27, 2002.
On a GAAP basis, the third quarter fiscal 2003 net loss was $3.6 million, or $0.07 per share, compared to last year's third quarter fiscal 2002 GAAP net loss of $7.7 million, or $0.15 per share. The third quarter fiscal 2003 GAAP net loss includes $0.1 million in restructuring charges and a $0.7 million charge for amortization of intangible assets and deferred stock compensation. For the nine months ended April 26, 2003, the company's GAAP net loss was $11.4 million, or $0.21 per share, compared to $72.3 million, or $1.37 per share, for the nine months ended April 27, 2002.
The third quarter fiscal 2003 net loss before non-recurring charges, which excludes restructuring and other special charges and amortization of intangible assets and deferred stock compensation, improved to $2.8 million, or $0.05 per share, as compared to last year's third quarter fiscal 2002 net loss, before non-recurring charges, of $4.7 million, or $0.09 per share. Cash and investments remain strong at $42.8 million.
"I am very pleased with the financial results for our third quarter. Our software revenue more than tripled and online revenue grew a strong 22% compared to last year's third quarter. Our financial results exceeded our expectations," said Ali Jenab, President and CEO. "More importantly, we added ten new SourceForge accounts to our installed base during the quarter and OSDN reached a milestone by reaching 10 million unique visitors per month."
A conference call to review results will be held at 5:00 pm (Eastern) today. The call may be accessed via webcast at http://www.vasoftware.com or by dialing (888) 273-9885 or (612) 332-0345. A replay of the call will be available for 30 days by dialing (800) 475-6701 or (320) 365-3844; passcode 683044.
Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, VA Software uses nonGAAP financial results. NonGAAP net income and earnings per share exclude amortization of intangible assets and deferred stock compensation, as well as restructuring costs and other special charges. These nonGAAP adjustments are provided to enhance the user's overall understanding of current financial performance and prospects for the future. Specifically, VA believes the nonGAAP results provide useful information to both management and investors by excluding certain expenses that VA believes are not indicative of core operating results. In addition, because VA has historically reported nonGAAP results to the investment community, VA believes the inclusion of nonGAAP numbers provides consistency in financial reporting. Further, these nonGAAP results are one of the primary indicators management uses for planning and forecasting in future periods. The method VA uses to produce nonGAAP results is not computed according to GAAP, is likely to differ from the methods used by other companies and should not be regarded as a substitute for results prepared in accordance with accounting principles generally accepted in the United States.
About VA Software
VA Software (Nasdaq: LNUX), provider of SourceForge Enterprise Edition, is the leader in Development Intelligence. SourceForge is an integrated web-based application that combines software development tools with the ability to track, measure and report on software project activity in realtime. IT and software engineering organizations use SourceForge to manage application development more effectively, improve operational efficiency and build better quality software. Development Intelligence with SourceForge provides the information and infrastructure required to make software development a key driver of competitive advantage. VA Software customers currently using SourceForge include major organizations in financial services, defense and aerospace, manufacturing, communications and government. Information on how SourceForge aligns IT and business is available at www.vasoftware.com.
OSDN, the Open Source Development Network, Inc., a subsidiary of VA Software, is the most dynamic community-driven IT media network on the web. The cornerstone of the Open Source community, OSDN attracts every level of IT decision maker and buyer, from CTOs to project managers. Technologists, developers and system administrators turn to OSDN sites to create, debate, and make or break IT news, tools, technologies and techniques. OSDN is the home of several popular web sites, including the award winning news discussion site, Slashdot.org, and the world's largest collaborative software development site, SourceForge.net.
Note Regarding ForwardLooking Statements: This press release contains forward-looking statements that involve risks and uncertainties, including statements regarding the anticipated customer benefits from SourceForge Enterprise Edition 3.3. 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 success in meeting scheduled product availability dates; 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; VA's ability to protect and defend its intellectual property rights; the size and timing of execution of enterprise-level licenses; rapid technological and market change; future guidelines and interpretations regarding software revenue recognition; unforeseen expenses that VA may incur in future quarters; and competition with, and pricing pressures from more established competitors. Investors should consult VA's filings with the Securities and Exchange Commission, including its Annual Report on Form 10K for the fiscal year ended July 27, 2002 and Form 10Q for the fiscal quarter ended January 25, 2003, 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 in the United States and other countries. Slashdot is a registered trademark of the Open Source Development Network, Inc., in the United States and other countries. All other trademarks are property of their respective owners.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Reconciliation of Net loss as reported to net loss before nonrecurring charges:
CONDENSED CONSOLIDATED BALANCE SHEETS
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