Cycon writes "Red Hat has just announced that they have finally achieved a positive cash flow! Today they announced that in the quarter ending May 31, 2001, they have seen $25.6 million in revenue, with an adjusted net income of $600,000. Congradulations to everyone at RHAT!"
Red Hat remains in red: Posts $27.6M net loss
by
Anonymous Coward
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· Score: 4
Red Hat remains in red: Linux software maker posts $27.6M quarterly net loss
RESEARCH TRIANGLE PARK, N.C., Jun 19, 2001 (The Canadian Press via COMTEX) -- Linux software packager Red Hat Inc. said Tuesday it broke even on an operating basis in the quarter ended May 31, meeting Wall Street estimates.
Red Hat reported adjusted net income of $600,000 US, or break even per share, in the first three months of its financial year. That compared with an adjusted net loss of $3.7 million, or two cents per share, a year earlier.
Before adjustments, the net loss was $27.6 million, or 16 cents a share, compared with a net loss of $17.4 million, or 11 cents a share, in the first quarter of the previous year.
Red Hat reported revenue of $25.6 million, down five per cent from the previous quarter but up 18 per cent from the year-earlier period.
Red Hat, which has yet to report a profit since it went public, markets a CD-ROM version of the open-source Linux operating system and provides customers with technical support.
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Copyright (C) 2001 The Canadian Press (CP), All rights reserved
Re:Red Hat remains in red: Posts $27.6M net loss
by
ProfDumb
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· Score: 5
Red Hat remains in red: Posts $27.6M net loss
If you go look at the actual figures, you will see that most of that loss is "depreciated goodwill" -- when Red Hat acquires a company they put "goodwill" on their books as an asset and then depreciate it according to very arbitrary accounting rules. In reality, Red Hat did not buy depreciating physical assets, but rather the skills and reputations, which are not depreciating.
On the other hand, the loss also contains several million in stock options, which really are an expense to the company. The "cash flow" number in headline ignores stock options. Therefore, Red Hat really is losing money, but nothing like $27 million.
Re:Red Hat remains in red: Posts $27.6M net loss
by
selectspec
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· Score: 5
Red hat is in the black actually. They had a posative cash flow this year. In otherwords more cash came in than went out. The net loss is attributable to the ammortization of aquistions from prior years. Ammoritzations are not attributable to cash flows only to balance sheets and income statements. When one asks whether a company is in the red or the black, it is implicit that they are refering to cash flows and/or the operating budget (which like cash flows doesn't include ammortizations).
--
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Re:Red Hat remains in red: Posts $27.6M net loss
by
TGK
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· Score: 5
Goodwill dosn't quite work like that but ok. Say company X buys company Y for $5.0x10^9. Now, if we sit down and count all of company Y's assets and they come up to be, say, $3.6x10^9 the remainder is something called "goodwill." These are intangable assets. Things like, perhaps, market share, location, reputation. In short, things that no company can go out and buy, and thus do not have a dollar value of their own. Now the thing is, goodwill, must, under GAAP (Generaly Accecpted Accounting Principles) be ammortized off over a period not to exceed 40 years. Because it's always nice to have assets sticking around most companies use 40 years as their ammortization period.
So yes, ammortization of old expenses, especialy those having to do with the depreciation of goodwill is going to play a huge roll in this.
When we say a company is "in the red" or "in the black" the meaning differs depending on the period we are talking about. If we're refering to a year in general, the statement usualy refers to the income statement and or the statement of cash flows. The key portion of this is to ballance Revenue against COGS (cost of good sold). For Red Hat, COGS will include R&D work and will thus be very high. Revenue from goods sold will of course be close to zero due to the nature of open source. This leaves Red Hat makign it's money from Tech support and subscription servies as was so aptly pointed out above. Here's the other key, R&D expenses can be ammortized as well by a sufficiently creative accountant. Afterall, if this R&D is going to benefit the company over the next 10 years, then the expensce of that research can be spread out over those 10 years.
What this amounts to is this. We rather need a good solid stock holders report from RHAT to pour over until we can get some answers. Never trust what a company claims to the media, trust what it is required by law to report to the IRS. (And not even that in some cases)
This has been another useless post from....
-- Killfile(TGK)
No trees were killed in the creation of this post. However, many electrons were inconvenienced.
I wonder how much come from the "old" Red Hat, and how much come from the always profitable Cygnus Solutions. Buying profitable companies is one way to become profitable.
Of the wins listed, about half would be typical Cygnus Solutions contracts (GNUPro), and half would be typical Red Hat contracts (Linux). A few could be either or neither, maybe made possible by the merger.
They reported a net profit, which is different from a positive cash flow. A company can have a positive cash flow (eg, just after a rights issue) but still be making a loss and it can have a negative cash flow (eg, large capital purchases which don't fully affect profit in the year of purchase) and still make a profit.
A full look at the finances would reveal if they do have a positive cash flow, but the two don't go hand-in-hand. --
Difference between "adjusted" and "reported"?
by
throx
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· Score: 5
With the SEC investigating the occurance of Tech companies not reporting employee stock options as part of the company's liabilities, how much faith can we put in this statement when you look at the full quote:
"Adjusted" net income of $600,000 (up from a loss of $3.7m last year).
"Reported" net loss of $27.6m (from a loss of $17.4m last year).
If I'm correct, doesn't this mean that at the end of the day they are actually worse off than they were last year and just putting PR spin on the figure?
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Fear: When you see B8 00 4C CD 21 and know what it means
Re:Difference between "adjusted" and "reported"?
by
A+Commentor
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· Score: 5
Purchases of companies have to be 'accounted for'. Since I don't know what RH paid for Cygnus, and I don't want to look it up, lets assume $30 Million. Also let's assume that the accounting 'books' for Cygnus says that their net worth is $2 Million.
So now they just paid $30 Million (could be in stock or cash), yet they can only add $2 in net worth to their books. In order to balance the books they must right off the $28 Million difference.
They can do it all at once, or spread it out over many quarters(i.e. get a tax benefit from it). They call this good will write-off. Even though RHat believes the company is worth $30 Million to buy, the difference between this purchase price and the accuired company's net worth have to be written off.
It doesn't impact the cash flow, which is critical. For cash flow they were generated postive $1.5 M, i.e. they now have $1.5 M more in the bank...
--
Looking for any old 8-bit Heathkit/Zenith software/hardware - http://heathkit.garlanger.com
Red Hat can't make a profit. That would make them a commercial company. Bill Gates himself said that it isn't possible for commercial companies to use GPL code. I think those Red Hat GPL hippies really ought to start reading Slashdot before making such ludicrous claims about profitability.
Re:Not to piss on this circle-jerk...
by
ocbwilg
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· Score: 5
...but as long as we're pooh-poohing M$ (how clever!) and rooting for GPL and Linux and whatever... what do Microsoft's financials look like this quarter? Not that facts should mean anything around here.
Don't be ridiculous. You're actually suggesting that that we compare numbers from a smallish, niche-market company that has been in business for 5 years with those of a vicious, multinational, multi-billion dollar, anticompetitive monopolist that has been in business for 20 years? I've never heard such lunacy.
If you think that this is about money then you are very sadly mistaken. It is about ideology. It is about the fact that you don't have to be an extortionist or a monopolist or a tyrant in order to be a successful company. It is a testament to the power of open source that such a small (dare I say nearly insignificant) company can actually survive to operational profitability while competing against a company the size of Microsoft.
Do you remember what has happened to the rest of Microsoft's competitors over the past 20 years? They've been either acquired by The Beast, run out of business by The Beast, or beaten so badly into submission by The Beast that they've had to seek government protection. The only real exceptions to this are companies who were already multinational multibillion dollar companies before they began competing with Microsoft. RedHat (and open source in general) hasn't had any of those things happen to them. This is a great day for open source. Free speech for everyone!
Slashdot Mirror
Red Hat remains in red: Linux software maker posts $27.6M quarterly net loss
RESEARCH TRIANGLE PARK, N.C., Jun 19, 2001 (The Canadian Press via COMTEX) -- Linux software packager Red Hat Inc. said Tuesday it broke even on an operating basis in the quarter ended May 31, meeting Wall Street estimates.
Red Hat reported adjusted net income of $600,000 US, or break even per share, in the first three months of its financial year. That compared with an adjusted net loss of $3.7 million, or two cents per share, a year earlier.
Before adjustments, the net loss was $27.6 million, or 16 cents a share, compared with a net loss of $17.4 million, or 11 cents a share, in the first quarter of the previous year.
Red Hat reported revenue of $25.6 million, down five per cent from the previous quarter but up 18 per cent from the year-earlier period.
Red Hat, which has yet to report a profit since it went public, markets a CD-ROM version of the open-source Linux operating system and provides customers with technical support.
The online source for news sports entertainment finance and business news in Canada
Copyright (C) 2001 The Canadian Press (CP), All rights reserved
--
Forget Napster. Why not really break the law?
"Remember when the U.S. had a drug problem, and then we declared a War On Drugs, and now you can't buy drugs anymore?"
I wonder how much come from the "old" Red Hat, and how much come from the always profitable Cygnus Solutions. Buying profitable companies is one way to become profitable.
Of the wins listed, about half would be typical Cygnus Solutions contracts (GNUPro), and half would be typical Red Hat contracts (Linux). A few could be either or neither, maybe made possible by the merger.
A full look at the finances would reveal if they do have a positive cash flow, but the two don't go hand-in-hand.
--
With the SEC investigating the occurance of Tech companies not reporting employee stock options as part of the company's liabilities, how much faith can we put in this statement when you look at the full quote:
"Adjusted" net income of $600,000 (up from a loss of $3.7m last year).
"Reported" net loss of $27.6m (from a loss of $17.4m last year).
If I'm correct, doesn't this mean that at the end of the day they are actually worse off than they were last year and just putting PR spin on the figure?
Fear: When you see B8 00 4C CD 21 and know what it means
to change the Company Name?
And you were doing so well.
Red Hat can't make a profit. That would make them a commercial company. Bill Gates himself said that it isn't possible for commercial companies to use GPL code. I think those Red Hat GPL hippies really ought to start reading Slashdot before making such ludicrous claims about profitability.
...but as long as we're pooh-poohing M$ (how clever!) and rooting for GPL and Linux and whatever... what do Microsoft's financials look like this quarter? Not that facts should mean anything around here.
Don't be ridiculous. You're actually suggesting that that we compare numbers from a smallish, niche-market company that has been in business for 5 years with those of a vicious, multinational, multi-billion dollar, anticompetitive monopolist that has been in business for 20 years? I've never heard such lunacy.
If you think that this is about money then you are very sadly mistaken. It is about ideology. It is about the fact that you don't have to be an extortionist or a monopolist or a tyrant in order to be a successful company. It is a testament to the power of open source that such a small (dare I say nearly insignificant) company can actually survive to operational profitability while competing against a company the size of Microsoft.
Do you remember what has happened to the rest of Microsoft's competitors over the past 20 years? They've been either acquired by The Beast, run out of business by The Beast, or beaten so badly into submission by The Beast that they've had to seek government protection. The only real exceptions to this are companies who were already multinational multibillion dollar companies before they began competing with Microsoft. RedHat (and open source in general) hasn't had any of those things happen to them. This is a great day for open source. Free speech for everyone!