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LINDON, Utah, May 28, 2003 /PRNewswire-FirstCall via COMTEX/ --
For the second quarter of fiscal 2003 ended April 30, The SCO Group, Inc. (Nasdaq: SCOX) reported net income of $4.5 million, or $0.33 per diluted share, on revenue of $21.4 million, compared to a net loss of $6.6 million, or $0.47 per diluted share, on revenue of $15.5 million for the comparable quarter of the prior year. The Company reported a net loss of $724,000, or $0.06 per diluted share, on revenue of $13.5 million for the first fiscal quarter of 2003. Revenue for the second quarter of fiscal 2003 from the Company's operating system platforms was $13.1 million, and revenue from its SCOsource licensing initiative was $8.3 million.
(Logo: http://www.newscom.com/cgi-bin/prnh/19990421/SCOLOGO )
For the first six months of fiscal 2003, the Company reported net income of $3.8 million, or $0.29 per diluted share, on revenue of $34.9 million, compared to a net loss of $17.6 million, or $1.23 per diluted share, on revenue of $33.4 million for the comparable six-month period of fiscal 2002. The Company's current fiscal year ends October 31, 2003.
"During the quarter ended April 30, 2003, the first two licensing agreements related to our SCOsource initiative, our division for licensing and protecting the Company's UNIX® intellectual property, provided the Company with $8.8 million in cash and added $6.1 million to gross margin. There are over 6,000 source code licensees of our UNIX operating system, and we believe the SCOsource initiative will continue to gain momentum as we pursue enforcement of the Company's intellectual property rights," said Darl McBride, president and CEO.
McBride continued, "These positive quarterly financial results, including net income for the first time in the Company's history, have strengthened our balance sheet and financial position. Our increased cash balance and working capital has positioned the Company for its launch of SCOx, our web services strategy, and will provide us with other opportunities to drive growth in future quarters."
"We expect that revenue for our third quarter, ending July 31, 2003, will be in the range of $19 million to $21 million. These projections anticipate revenue contributions of approximately two-thirds from our operating system platforms and one-third from our SCOsource initiative," said McBride.
Conference Call
As previously announced, the Company will host a conference call at 9 a.m. MDT today, May 28, 2003, to discuss second-quarter fiscal 2003 results. To participate in the teleconference, please call 800-946-0719 or at 719-457-2645, code: 728441 approximately five minutes prior to the time stated above. You may also join the call in listen only mode via web cast at http://ir.sco.com/conference.cfm or www.companyboardroom.com . There will be a subsequent replay of the teleconference available on the SCO IR website 48 hours after the conference call.
About The SCO Group
The SCO Group, Inc. (Nasdaq: SCOX), the owner of the UNIX operating system, helps millions of customers in more than 82 countries to grow their businesses. Headquartered in Lindon, Utah, SCO has a worldwide network of more than 11,000 resellers and 8,000 developers. SCO Global Services provides reliable, localized support and services to all partners and customers. For more information on SCO products and services, visit http://www.sco.com .
SCO and the associated SCO logo are trademarks or registered trademarks of The SCO Group, Inc. in the U.S. and other countries. UNIX is a registered trademark of The Open Group. All other brand or product names are or may be trademarks of, and are used to identify products or services of, their respective owners.
Forward Looking Statements
The statements set forth above include forward-looking statements that involve risks and uncertainties. The Company wishes to advise readers that a number of important factors could cause actual results to differ materially from those projected in the forward-looking statements. These factors include the ability of the Company to successfully protect its intellectual property rights surrounding UNIX and to enter into licensing agreements with respect to those rights; the effectiveness of the Company's new branding efforts; the ability of the Company to successfully roll out its new services and solutions to service providers in its existing channels; the acceptance of such offerings by existing service providers and others; the acceptance of new products and services by the ultimate customers; the ability of the Company to successfully meet its revenue projections, which are based in part, on the continued acceptance in the marketplace of historical products; the ability of the Company to continue to manage its cost reductions without adversely affecting customer service and employee productivity; the ability of recently introduced and new products to operate as designed, including compatibility with various platforms and the absence of other defects; the Company's ability to compete effectively with other solutions providers; new and changing technologies and customer acceptance of those technologies; failure of our brand to achieve the broad recognition necessary to succeed; our reliance on third party developers of components of our software offerings; and claims of infringement of third-party intellectual property rights. These and other factors, which could cause actual results to differ materially, are discussed in more detail in the Company's filings with the Securities and Exchange Commission.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
April 30, October 31,
2003 2002
Cash and cash equivalents $10,015 $6,589
Restricted cash 1,779 1,428
Accounts receivable, net 8,793 8,622
Other current assets 4,392 4,483
Total current assets 24,979 21,122
Property and equipment, net 1,331 2,021
Intangibles, net 9,689 11,258
Other assets 1,873 3,005
Total assets $37,872 $37,406
Accounts payable $1,978 $2,467
Accrued expenses 5,709 7,632
Deferred revenue 9,218 10,056
Other current liabilities 6,620 7,299
Total current liabilities 23,525 27,454
Long-term liabilities 618 1,625
Minority interest 150 150
Stockholders' equity 13,579 8,177
Total liabilities and
stockholders' equity $37,872 $37,406
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share data)
Three Months Ended Six Months Ended
April 30, April 30,
2003 2002 2003 2002
Revenue $21,369 $15,476 $34,909 $33,389
Cost of revenue 5,147 5,456 8,025 11,136
Gross margin 16,222 10,020 26,884 22,253
Sales and marketing 6,051 7,665 12,491 16,036
Research and
development 2,542 4,159 5,192 9,526
General and
administrative 1,462 2,523 3,112 5,247
Write-down of
investment -- 1,180 -- 1,180
Restructuring charges 136 -- (116) 4,336
Amortization of
intangibles 700 695 1,400 1,451
Stock-based compensation 406 239 618 504
Loss on disposition
of long-term assets -- -- -- 1,328
Total operating
expenses 11,297 16,461 22,697 39,608
Income (loss) from
operations 4,925 (6,441) 4,187 (17,355)
Equity in loss of
affiliate (75) -- (100) --
Other expense, net (48) (135) (4) (65)
Income (loss) before
income taxes 4,802 (6,576) 4,083 (17,420)
Provision for income
taxes (302) (55) (307) (217)
Net income (loss) $4,500 $(6,631) $3,776 $(17,637)
Basic net income
(loss) per share $0.39 $(0.47) $0.33 $(1.23)
Diluted net income
(loss) per share $0.33 $(0.47) $0.29 $(1.23)
Weighted average
basic shares
outstanding 11,561 14,235 11,402 14,286
Weighted average
diluted shares
outstanding 13,663 14,235 13,145 14,286
SOURCE The SCO Group, Inc.
Kathy Martens of The SCO Group, Inc., +1-801-932-5802, or fax, +1-801-765-1313, kmartens@sco.com ; or Philip Bourdillon or Gene Heller, both of Silverman Heller Associates, +1-310-208-2550, bourdillon@sha-ir.com , for The SCO Group, Inc. /Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/19990421/SCOLOGO AP Archive: http://photoarchive.ap.org PRN Photo Desk, +1-888-776-6555 or +1-212-782-2840http://www.companyboardroom.com
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