Excellent interview with Larry
Augustin(LNUX)....http://www.radiowallstreet.com/NASApp/RWS/EventPage?ID=21487...
Points of interest...1)31% of servers on Internet run Linux...2)Professional Services,via
SourceForge,has grown to 4% revenues,over 4500 projects, since inception in
january....3)competes very successfully against SUNW targeting low-end servers....4)Primary
target companies are Akamai(largest customer in
3Q),Doubleclick,Deja.com,USInternetworking,and NetLedger..as #of clicks
increases,LNUX provides systems to handle increased traffic....5)Server market of Internet is
a "significant" market wit no real threat from the white-box companies...6)gross margins
increasing with more leverage.
VA Linux Has 3rd-Qtr Loss; Sales Jump on Server Sales (Update1)
5/23/00 3:51:00 PM
Source: Bloomberg News
Sunnyvale, California, May 23 (Bloomberg) -- VA Linux Systems Inc., a maker of software
and
computers that run the Linux operating system, had a wider fiscal third-quarter loss. Revenue
shot up
more than eightfold, boosted by sales of servers.
The loss was $20.6 million, or 58 cents, in the quarter ended April 28. That compares with a
loss of
$3.4 million, or 58 cents, in the year-earlier period.
Excluding acquisition expenses, VA Linux said it would have lost $4.5
million, or 13 cents, compared with $2.9 million, or 17 cents. On that
basis, analysts expected a loss of 23 cents, the average estimate
from First Call/Thomson Financial.
Revenue surged to $34.6 million from $4.3 million as the company
benefited from Internet startups using Linux to run their Web sites. VA
Linux attracted customers by selling computers designed to run Linux
faster than rivals' machines, analysts said.
''VA Linux puts together the whole package,'' said Walter Winnitzki,
an analyst at Chase H&Q, who rates VA Linux a ''buy.''
The company said it plans to keep tapping into the Internet market,
undeterred by recent drops in Web companies' stock prices.
''We don't have to bet which ones will succeed,'' said VA Linux Chief
Executive Larry Augustin. ''We sell to all of them.''
VA Linux shares, which fell 5 3/4 to 38 1/2 in Nasdaq trading before
the report, rose to 41 1/2 after the release.
The shares have lost 83 percent of their value since their first day of trading. VA Linux's
eightfold rise
to a close of 239 1/4 on Dec. 9 made the Sunnyvale, California, company the best-
performing IPO in
10 years.
The company had expenses of $4 million for in-process research and development, $1.9
million for
amortization related to acquisitions of TruSolutions Inc. and NetAttach Inc., and $10.2 million
for
employee stock compensation. It had six times more shares outstanding in the recent period.
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