The Lindon software company, which has sued IBM and others claiming its proprietary Unix code has been pilfered by the freely distributed Linux operating system, posted a net loss of just under $3 million, or 17 cents per share, on revenue of less than $8.9 million.
Quarterly losses increased 76 percent, while revenues retreated 28 percent, compared to the same period a year ago when SCO lost $1.7 million, or 18 cents per share, on revenue of $11.4 million.
Much of that red ink was due to first quarter legal costs of $3.5 million, chief financial officer Bert Young said in a conference call. SCO was left with $7.4 million in available cash, enough to "see the litigation through to its conclusion."
In addition to its $5 billion claim against IBM, SCO has active federal court suits against AutoZone and Novell, and is being sued over its Linux claims by RedHat, a leading distributor of the popular operating system that competes with Microsoft's dominant Windows program.
With Friday's filing of its form 10-Q for the first quarter, Young also said SCO expected to be restored fully to the Nasdaq stock exchange. Nasdaq has threatened to delist SCO for delaying its fiscal 2004 and first quarter reports to the Securities and Exchange Commission, and added an "E" of noncompliance to its ticker symbol pending the outcome of the company's appeal.
"With the filing of the 10-K for 2004, and once our form 10-Q is filed for the first quarter, we will have satisfied the requirements for listing by Nasdaq," Young said.
Darl McBride, SCO president and chief executive, said news of Nasdaq's delisting procedure, a management coup at parent Canopy Group and continued attention to the company's courtroom battles made for a "bumpy" first quarter in the media.
He specifically targeted www.Groklaw.net and its operator, self-described paralegal Pamela Jones, for criticism.
The Web site meticulously follows SCO's activities, accompanied by visitors' comments - overwhelmingly pro-Linux and anti-SCO, which is considered a villain by the "open source" community opposed to efforts to restrict Linux and other free software development.
"[Groklaw] is not what it is purported to be," he said. "All is not all it appears in Groklawland. . . . Who is Pam Jones? It's about credibility."
McBride said the site is less an open forum than one dedicated to "how we destroy SCO," and that Jones and her site visitors do "a lot of spinning . . . a lot of hype [to the] negative" about the Utah company and its intentions.
Asked for specifics to support his statements, McBride declined, saying they would be provided once SCO completes an ongoing background check on Jones and her site.
Jones replied quickly, telling The Salt Lake Tribune: "My name really is Pamela Jones. I am really a paralegal. I am not a shill for IBM."
She also posted a response on Groklaw.net that read in part:
"Don't bother asking me what Darl is talking about. I have no idea. I know who I am, and I know I've never misrepresented anything. I've never said anything personal about myself, actually. I don't have to. I'm not a public company."
One SCO action that enraged Groklaw.net denizens and other open-source sites was a campaign, launched with a letter to more than 1,000 corporate Linux users, seeking licensing fees as insurance against possible lawsuits.
On Wednesday, McBride acknowledged the "SCOSource" licensing effort was now largely on hold, pending the outcome of its litigation. For the quarter, SCOSource generated just $70,000.
SCO, blaming tough operating system competition, also noted that revenue from its core Unix products and services - the bulk of its income - shrank in the first quarter. However, the company hopes for better news after release of its new Legend OpenServer 6 this summer.
bmims@sltrib.com
