Red Brick Systems Inc, the Los Gatos, California data warehouser turned in results that impressed the technology-laden Nasdaq in a week in which fickle investors turned on their heels and fled out the sector, only to return sheepishly later on. It t urned in second quarter net profit of $192,000, up from just $54,000 a year before. But this year’s figure included an exceptional $500,000 hit for an unlimited license of communications software from a firm it cannot name to replace by November next year the technology the firm currently gets OEM from Sybase Inc. Red Brick says this will pay for itself well before the OEM deal is up. Revenue for the quarter was up a healthy 61% at $8.0m, beating Morgan Stanley’s estimate by $800,000. It actua lly made an operating loss in the quarter of $147,000, after the charge, against $132,000 profits last time, and it was the hefty interest received from what remains of the $34m it netted from its initial public offering in January that pushed it in to the black. Red Brick says top line growth is the focus, and with gross margins of some 90%, few would argue at present. Cash at the halfway stage stood at $35.2m. New accounts represented half the revenue in the quarter, but the average selling price halved in the same period. But Morgan Stanley put this down to rapid expansion of the sales force, with new employees tending to bring in smaller deals at first. Red Brick has channels in 11 other countries at present and international expansion should start to contribute significantly in next year’s figures. Its share price was at one point the most advanced on Nasdaq the day after the results came out, before profit-taking ate away the advance the next day. For the half year, profits rose to $626,000, from $97,000, on revenue up 58% at $14.5m. Net per share was static at $0.01 in the quarter, up to $0.05 in the half, from $0.01 last time. Morgan Stanley upped estimates to $0.17 per share for 1996, $0.32 for 1997.
