For the full year ended October 31, Lindon, Utah-based SCO recorded net income of $5.3m on revenue up 23% to $79.3m, compared to a net loss of $24.9m on revenue of $64.2m in 2002. This was the company’s first ever full-year net income, and was helped by its Unix intellectual property initiative, which added $25.8m to SCO’s revenue throughout the year. Without it the company’s revenue from products and services dropped 16.8% to $53.4m.
For the fourth quarter, the company reported a net loss of $1.6m on revenue up 57% to $24.3m, compared to a net loss of $2.8m on revenue of $15.5m in the same quarter last year. Without a charge of $9.0m related to payment to company lawyers, SCO reported that it would have made net income of $7.4m.
While the company’s figures appear to be a vast improvement on the same quarter last year, revenue from products was down to $14.0m, compared to the $15.5m sold in the fourth quarter of 2002, while revenue from the SCOsource licensing business was $10.3m.
This may have been the highest quarterly revenue from SCOsource since it was launched in January 2003, but the company also admitted that the $10.3m was derived from licensing agreements reached with Microsoft Corp and Sun Microsystems Inc earlier in fiscal 2003.
The suggestion that there is little interest from the market in licensing its Unix intellectual property is confirmed by SCO’s outlook, which predicts revenue of between just $10m and $15m in the first quarter of 2004, with revenue from SCOsource licenses expected to be minimal… as the company finalizes license agreements with vendors and continues to implement its intellectual property license initiative, according to chief financial officer, Robert Bench.
The company maintained that it anticipated significant revenue in subsequent quarters from both vendor license and intellectual property (Linux user) license programs, however. Chairman and CEO Darl McBride stated that the fourth quarter could be described as a modeling and testing time, during which the company discussed its position with potential licensees.
SCO also noted that it expects expenses related to its SCOsource initiative to increase in fiscal 2004 as the company expands the scope of its legal strategy to enforce and protect its Unix intellectual property.
The company does at least now have substantial cash reserves with which to continue its legal challenges based on the $50m investment in the company by BayStar Capital II LP and Royal Bank of Canada. The company finished fiscal 2003 with cash and equivalents of $64.4m, compared to just $6.6m at the end of fiscal 2002.
This article is based on material originally produced by ComputerWire.
