Opsware posts profit on asset sale to EDS
SUNNYVALE, Calif., Dec 10 (Reuters) - Software maker Opsware Inc. <OPSW.O>, formerly Loudcloud, on Tuesday posted a large fiscal third-quarter profit on the $63.5 million sale of its managed services business to Electronic Data Systems Corp. <EDS.N>
For the quarter ended Oct. 31, Sunnyvale, California-based Opsware booked a sale-related gain of $49.2 million and net income of $49.1 million, or 67 cents per share. A year earlier, Loudcloud had a net loss of $40.7 million, or 62 cents a share.
Net revenue was $2.6 million -- including about two weeks of operations from the managed services business. That number was down 82 percent from $14.3 million a year earlier.
Opsware booked a restructuring charge of $12.7 million in its fiscal third quarter as it became a much smaller software shop. Excluding restructuring costs and the amortization of deferred stock compensation, its expenses dropped 76 percent to $10.7 million.
The company, which recently cleared its balance sheet of long-term debt, had cash of $84.2 million as of Oct. 31. It plans to pay down remaining liabilities related to the EDS sale over the coming quarters and reach cash flow break even at $50 million to $55 million during the quarter ended July 2003.
As part of its acquisition deal, EDS signed a three-year, $52 million deal to use Opsware software.
Loudcloud's founders include Marc Andreessen, who helped launch NetScape and spark the Internet boom.
12/10/02 16:26 ET
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