VA Software Reports Second Quarter Fiscal Year 2005 Results
Second quarter software revenue grows 29% year-over-year
FREMONT, CA February 22, 2005 VA Software Corporation (Nasdaq: LNUX), a leading provider of software, information and community support for IT and development professionals, today announced financial results for its second quarter fiscal year 2005, ended January 31, 2005.
Total second quarter fiscal 2005 revenue grew 12% to $9.9 million, compared to second quarter fiscal 2004 total revenue of $8.9 million. Revenue from the software business increased 29% to $1.5 million in second quarter fiscal 2005 from $1.2 million in second quarter fiscal 2004. For the six months ending January 31, 2005, total revenue grew 16% to $16.9 million, compared to $14.7 million for the six months ending January 31, 2004, while software revenue grew 73% to $3.5 million for the six months ending January 31, 2005 compared to $2.0 million for the six months ending January 31, 2004.
On a GAAP basis, the second quarter fiscal 2005 net loss was $0.7 million, or $0.01 per share, compared to last year's second quarter fiscal 2004 GAAP net loss of $1.4 million, or $0.02 per share. For the six months ended January 31, 2005, the company's GAAP net loss was $2.3 million, or $0.04 per share, compared to $2.7 million, or $0.05 per share, for the six months ended January 31, 2004.
As specified in the attached reconciliation of net loss as reported to pro forma net loss, the second quarter fiscal 2005 net loss before non-recurring charges was $0.8 million, or $0.01 per share, compared to last year's second quarter fiscal 2004 net loss before non-recurring charges of $2.1 million, or $0.03 per share. Cash and investments remain strong at $42.7 million as of January 31, 2005.
"We are pleased with our financial performance this quarter. We reduced the net loss by 50% and our cash usage during the quarter was only $0.9 million. Our E-commerce business had record sales in its traditionally strong second quarter. We added eight new customers for our software business," said Ali Jenab, president and CEO. "We continue to position our Online Media business for accelerating growth later in the year by investing in sales and marketing initititives as well as improving our editorial content."
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 (800) 862-9098 or (785) 424-1051. A replay of the call will be available for 30 days by dialing (888) 566-0191 or (402) 351-0790.
Use of NonGAAP Financial Information
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, VA Software uses non-GAAP financial results. Non-GAAP 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 non-GAAP adjustments are provided to enhance the user's overall understanding of current financial performance and prospects for the future. Specifically, VA believes the non-GAAP results provide useful information to both management and investors by excluding certain non-recurring expenses that VA believes are not indicative of core operating results. In addition, because VA has historically reported non-GAAP results to the investment community, VA believes the inclusion of non-GAAP numbers provides consistency in financial reporting. Further, these non-GAAP results are one of the primary indicators management uses for planning and forecasting in future periods. The method VA uses to produce non-GAAP 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) is at the center of today's technology revolution and incites innovation by empowering the IT and developer communities with information, community support and software. VA Software is the parent company of OSTG (Open Source Technology Group), and the creator of SourceForge. SourceForge.net is the global nexus for the Open Source community with 95,000+ Open Source projects and over 1 million registered users. SourceForge Enterprise Edition optimizes distributed development for Fortune 500 companies.
OSTG, the cornerstone of the Open Source movement, is the leading online network for IT managers and development professionals. OSTG technology-focused sites include Slashdot.org, SourceForge.net, ITManagersJournal.com, NewsForge.com, Linux.com and freshmeat.net. OSTG also runs ThinkGeek.com, an online retailer of technology products, and the MediaBuilder network, featuring AnimationFactory.com. OSTG receives more than 288 million page views and nearly 18 million unique visitors monthly.
For more information about VA Software, visit www.vasoftware.com. For more information about OSTG, visit www.ostg.com.
Note Regarding Forward-Looking Statements: This press release contains forward-looking statements that involve risks and uncertainties, including statements regarding our Online Media business' anticipated online advertising growth and the expected April 2005 release of SourceForge Enterprise Edition Version 4.2. Actual results may differ materially from those expressed or implied in such forward-looking statements due to various factors, including: VA's success in expanding its SourceForge enterprise software business; 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; decreases or delays in online advertising spending; 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 10-K for the fiscal year ended July 31, 2004 and Form 10-Q for the fiscal quarter ended October 31, 2004, 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: VA Software, SourceForge and OSTG are trademarks or registered trademarks of VA Software Corporation in the United States and other countries. SourceForge.net, Slashdot and freshmeat are registered trademarks of OSTG, Inc., in the United States and other countries. ThinkGeek is a registered trademark of ThinkGeek, 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 pro forma net loss:
CONDENSED CONSOLIDATED BALANCE SHEETS
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