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SCO reports strong financials, lawyer bills notwithstanding

For 4Q03, SCO reported a net loss to common stockholders of $1.6 million, or $0.12 per diluted common share. But excluding the previously reported charge of approximately $9.0 million incurred in connection with its October 2003 private placement for compensation paid to law firms engaged to enforce its intellectual property rights, SCO would actually have reported net income for the fourth quarter of $7.4 million, or $0.44 per diluted common share. SCO reported a net loss to common stockholders of $2.7 million, or $0.26 per diluted common share, in the comparable quarter a year ago.

For the whole fiscal year 2003, SCO reported net income to common stockholders of $5.3 million, or $0.34 per diluted common share, reversing a net loss of $24.9 million, or $1.93 per diluted common share, in fiscal 2002. Excluding the charge of $9.0 million stated above, the Company would have reported net income for fiscal 2003 of $14.3 million, or $0.91 per diluted common share. Additionally, fiscal 2003 revenue rose 23 percent to $79.3 million from $64.2 million in the previous fiscal year.

“We generated record financial results, including our first full year of profitability,” said Darl McBride, president and CEO of SCO. “Full-year revenue grew over 23 per cent on the strength of both our core products and services business and our SCOsource licensing initiative.

“Our financial position was significantly strengthened by the $50 million private placement that closed in October 2003, and SCO closed the 2003 fiscal year with a strong balance sheet including $64.4 million in cash. This gives SCO the resources and flexibility to both enforce and protect its UNIX intellectual property and expand its core business.”

For its first fiscal quarter ending January 31, 2004, SCO said it expected total revenue to be in the range of $10 million to $15 million, which is in line with first quarter revenue in the previous year. UNIX products and services are expected to represent the majority of consolidated first quarter revenue. Revenue from SCOsource licenses is expected to be minimal in the first quarter as the company finalizes license agreements with vendors and continues to implement its intellectual property license initiative, officials said.

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