A spectacular 99 per cent drop in Unix licensing revenue for the second quarter of 2004 led overall revenue for Unix vendor, The SCO Group, to plunge to $US10.1 million for the quarter, which ended April 30. This represented a drop of 53 per cent from $21.4 million, a year ago.
In an announcement yesterday, the company, which is embroiled in lawsuits with IBM and Novell over the rights to the Unix operating system and related issues, said the revenue drop was "primarily the result of a lack of SCOsource licensing revenue" from its SCOsource division.
The division was created in late January 2003 to protect the company's intellectual property and bring in new revenue from companies that would pay to license SCO's Unix intellectual property.
For the second quarter, SCOsource revenue was $US11,000, a spectacular drop of 99 per cent from its $US8.25 million in revenue for the same quarter one year ago.
Total revenue for the first two quarters of 2004 was $US21.5 million, compared with $US34.9 million for the same period a year ago.
SCO's net loss for the quarter was $US9.4 million, compared with a net income of $US4.9 million for the same period one year ago. Basic and diluted shares lost $US1.06 each in the quarter, compared with a $US0.39 gain per basic share and a $US0.33 gain per diluted share one year ago.
SCO president and CEO, Darl McBride, said that second-quarter revenue was consistent with company expectations, while SCO also incurred significant expenses for the impairment of goodwill and intangibles and for the recent exchange of its Series A-1 Convertible Preferred Stock.
"Both of these charges negatively impacted our second-quarter results," McBride said. “As the company looks forward to the last two quarters of fiscal year 2004, we are committed to increasing shareholder value through profitable operations and increasing cash flow from our Unix division as well as remaining focused on our intellectual property lawsuits and licensing strategies.”
SCO said its outlook for the third quarter, which ends July 31, calls for total revenue between $US10 million and $US12 million.
In May, SCO worked to cut expenses by laying off less than 10 per cent of what had been about 275 workers.
The cuts were made in every area of the company, including marketing, sales, administration and engineering.