Red Hat Shows a Profit for the First TimeJun 19, 2001, 20:46 (39 Talkback[s])
RESEARCH TRIANGLE PARK, N.C.--June 19, 2001-- Red Hat, Inc. the leader in developing, deploying and managing open source solutions, today reported revenue of $25.6 million for the first quarter ended May 31, 2001, an increase of 18% versus the $21.7 million reported for the first quarter of fiscal 2001 and a decrease of 5% over the fourth quarter of fiscal 2001.
The company reported an adjusted net income of $600,000, or break even per share, for the first quarter of fiscal 2002, compared to an adjusted net loss of $3.7 million, or $0.02 per share, for the first quarter of fiscal 2001. On a reported basis, the net loss was $27.6 million, or $0.16 per share, compared with a net loss of $17.4 million, or $0.11 per share in the first quarter of fiscal 2001.
``In an increasingly difficult IT environment, Red Hat delivered a profit and generated positive cash flows for the first time,'' commented Matthew Szulik, President and CEO of Red Hat. ``Companies continue to migrate their platforms to Red Hat Linux and to adopt Open Source solutions for mission critical applications.''
Highlights for the first quarter include:
CUSTOMER WINS / MAJOR DEALS
--BEA Systems --Thomson Financial --AT&T --Duke Energy --SAIC --Avery Dennison --Veritas Software --Columbia University --Cornell University --UCLA --George Washington University --Rutgers UniversityMANAGEMENT
Red Hat is the leader in developing, deploying and managing solutions built on the benefits of an open source platform. These solutions include an open source product platform that provides the only common, globally available and award-winning Linux operating system from mainframes to embedded devices, in addition to an e-Commerce platform, Database, Secure Web Server, High Availability Server, embedded Linux, eCos, and GNU-based developer toolkit for embedded devices. Red Hat backs up their open source offerings with end-to-end Red Hat Professional Services that include Professional Consulting, Engineering services, Enterprise Support services and Learning services. This is all brought together with Red Hat Network as the Internet-based backbone for deployment and management of products and services for Linux-based infrastructures.
Red Hat is headquartered in Research Triangle Park, N.C. and has offices worldwide. Please visit Red Hat on the Web at www.redhat.com. For investor inquiries, contact Gabriel Szulik at Red Hat, (919) 547-0012.
LINUX is a trademark of Linus Torvalds. RED HAT is a registered trademark of Red Hat, Inc. All other names and trademarks are the property of their respective owners.
Forward-looking statements in this press release are made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934. Investors are cautioned that statements in this press release that are not strictly historical statements, including, without limitation, management's plans and objectives for future operations, and management's assessment of market factors, constitute forward-looking statements which involve risks and uncertainties. These risks and uncertainties include, without limitation, reliance upon strategic relationships, management of growth, the possibility of undetected software errors, the risks of economic downturns generally, and in Red Hat's industry specifically, the risks associated with competition and competitive pricing pressures, the viability of the Internet, and other risks detailed in Red Hat's filings with the Securities and Exchange Commission, copies of which may be accessed through the SEC's Web site at http://www.sec.gov.
RED HAT, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Excludes amortization of goodwill and intangibles, stock based compensation, and merger and acquisition costs) Three Months Ended May 31, May 31, 2001 2000 Subscription and services revenue: Subscription $ 11,353,991 $ 9,768,364 Services: Network consulting 5,196,304 5,680,738 Embedded development services 4,697,325 4,241,916 Open source services 4,355,933 2,018,418 Total subscription and services revenue 25,603,553 21,709,436 Cost of subscription and services revenue: Subscription 3,125,563 3,749,793 Services 8,005,907 7,092,774 Total cost of subscription and services revenue 11,131,470 10,842,567 Gross profit on subscription and services revenue 14,472,083 10,866,869 Hardware resale, net -- 88,223 Operating expense: Sales and marketing 10,683,600 12,162,715 Research and development 4,296,781 3,271,184 General and administrative 3,370,706 4,666,427 Total operating expense 18,351,087 20,100,326 Loss from operations (3,879,004) (9,145,234) Other interest income (expense), net 4,480,183 5,481,691 Loss before income taxes 601,179 (3,663,543) Provision for income taxes 445 64,414 Net loss $ 600,734 $ (3,727,957) Net loss per common share: Basic $ 0.00 ($ 0.02) Diluted $ 0.00 ($ 0.02) Weighted average shares outstanding: Basic 169,002,929 159,463,590 Diluted 169,002,929 159,463,590 RED HAT, INC. CONSOLIDATED BALANCE SHEETS ASSETS May 31, February 28, 2001 2001 Current assets: Cash and cash equivalents $ 72,459,166 $ 85,212,830 Investments in debt and equity securities 47,076,615 62,911,634 Accounts receivable, net 20,800,035 25,203,635 Subcontractor receivable 74,408 3,441,394 Inventory 1,357,792 739,960 Prepaid expenses and other current assets 2,287,071 2,171,721 Total current assets 144,055,087 179,681,174 Property and equipment, net 15,776,131 14,591,510 Goodwill and intangibles, net 130,871,143 147,396,649 Investments in debt and equity securities 175,051,633 154,556,684 Other assets, net 5,364,746 9,025,138 Total assets $ 471,118,740 $ 505,251,155 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 3,909,384 $ 9,681,174 Royalties payable 30,232 -- Accrued expenses 13,273,445 15,915,682 Deferred revenue 12,638,837 12,150,549 Short term payable -- 2,750,000 Current portion of capital lease obligations 265,388 193,895 Total current liabilities 30,117,286 40,691,300 Capital lease obligations 227,488 277,338 Commitments and contingencies -- -- Stockholders' equity: Noncontrolling interest in subsidiary 37,810 -- Preferred stock -- -- Common stock 16,983 16,849 Additional paid-in capital 627,414,567 643,712,385 Deferred compensation (15,438,815) (36,051,412) Accumulated deficit (171,148,542) (143,588,767) Accumulated other comprehensive income (loss) (108,037) 193,462 Total stockholders' equity 440,773,966 464,282,517 Total liabilities and stockholders' equity $ 471,118,740 $ 505,251,155
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