SCO Loses Revenue and Employees

Internet News ^ | 17 January 2007 | Sean Michael Kerner

[ShadowAce]

SCO CEO Darl McBride adamantly stated on the company's fourth quarter conference call that the company is not going bankrupt. He did admit, however, that SCO's recent earnings are not very impressive, though he is encouraged by his company's prospects for 2007.

SCO (Quote) reported results for its fourth quarter and fiscal year ended October 31, 2006 on Wednesday, and the numbers are none too pretty.

SCO reported a net loss for the fourth quarter of 2006 of $3.7 million, or $0.18 per diluted common share. The quarterly loss is nine percent greater that the comparable quarter for the prior year at $3.4 million or $0.19 per share. SCO cited continued competitive pressures on its UNIX business as the reason for the increased loss.

The fourth quarter loss helped fuel a dramatic year-end loss for the beleaguered SCO. For fiscal 2006, SCO's total revenue declined by 19 percent over the prior year, to $29.2 million down from $36.0 million for 2005. The net loss for the year was $16.6 million, or $0.80 per share, down by 55 percent from the $10.8 million or $0.60 per share loss in 2005.

On the bright side, the one bright side to SCO's dismal financial performance is the fact that its ongoing legal expenses related to lawsuits with IBM (Quote), Novell and other firms over UNIX intellectual property and copyrights is now costing less than before.

SCO reported that its fourth quarter expenses related to the company's ongoing litigation costs were $2.2 million, down 52 percent over the comparable quarter of the prior year, which came in at $3.4 million.

In an effort to reduce expenses, SCO also revealed on the call that it had laid of 24 employees at the end of the quarter. SCO currently has 144 employees, down from 166.

McBride admitted on the call that the negativity that some people have about SCO is actually valid.

"With respect to the negativity, some of it is warranted. Let's face it, it's not are a real pretty picture," McBride said in reference to SCO dismal financial performance.

McBride reiterated that the goal is to get to the courtroom so that SCO's alleged intellectual property rights can be heard and respected. Until that time, however, McBride said that his goal was to "put points on the scoreboard."

Last week McBride sent a letter to SCO customers advising them that legal costs would be down and that they were still very much in business. McBride's letter countered a legal filing by Novell the same week that alleged that SCO was in fact going bankrupt.

[ShadowAce]

[ShadowAce]

...its ongoing legal expenses related to lawsuits with IBM (Quote), Novell and other firms over UNIX intellectual property and copyrights is now costing less than before.

Not really. Their whole problem is due to its legal actions. While the actual tangible costs may be down, it's the intangible PR of those costs that is costing SCO it's business.

[zeugma]

Not really. Their whole problem is due to its legal actions. While the actual tangible costs may be down, it's the intangible PR of those costs that is costing SCO it's business.

Only an idiot would do a new deployment of SCO software at this point.

Anyone using legacy SCO stuff would not be protecting shareholder value if they weren't looking at a migration path away from it. 

[driftdiver]

"While the actual tangible costs may be down, it's the intangible PR of those costs that is costing SCO it's business."

Stupid is as Stupid does.

[isthisnickcool]

Who owns SCO now? David Boise?

[tubebender]

Thanks...

[antiRepublicrat]

Maybe they'd be in a better position if they'd concentrated on improving their UNIX instead of becoming a lawsuit mill. Unfortunately it's too late for them to turn back now, as they'll get killed by the counter complaints.

[Still Thinking]

Fewer employees? Hmmm. Do they have any "employees" except the receptionist without a law license?

[Señor Zorro]

Unfortunately it's too late for them to turn back now, as they'll get killed by the counter complaints.Probably. It's amazing how long they've been able to keep this going without providing any real evidence.