Network security company, Secure Computing Corp has reported first-quarter results that edged out Wall Street estimates and announced a restructuring plan to keep it on track. The San Jose- based company – which last quarter returned to profit after a seven-quarter string of losses – saw a net loss of $7.4m but would have turned in net income of about $475,000, or $0.03 per share, before restructuring charges of $7.8m. Wall Street was looking for earnings of $0.02 per share. The charges are being taken in connection with the consolidation of the company’s six North American locations down to three and a reduction of the total workforce by 10% to 15%. That means 40-50 people will go, mostly in now redundant R&D and G&A positions. The actions are expected to save roughly $1.5m quarterly. Overall revenue for the quarter jumped 20.4% to $12.8m, with product and services revenue up 60.1% at $10.3m. Those gains were offset by a decline in government contracts revenue, which slipped 40.2% to $2.5m. The company says the lower government revenue comes as part of a strategy to focus on higher-margin products revenue. Part of the strategy involves being more picky with government contracts and only taking on those which provide a quantifiable value-add. Its previous run rate on government business was $4.0m per quarter, but the company figures it’s at a more comfortable level with around $2.0m going forward.
