MicroStrategy has been struggling since March 2000 when it restated 1998 and 1999 financial results due to accounting irregularities. Since then the company has laid off workers, closed ancillary businesses, and focused on its core business-intelligence products in a bid to return to profitability. The company closed its Strategy.com subsidiary at the end of 2001.
The company reported income of $7.4 million, or 6 cents per share, for the quarter, before $30.5 million in charges for restructuring, litigation, and amortization costs. Product license revenue in the quarter dropped to $18.7 million from $25.4 million a year ago. But operating costs in Q4 were down $10.5 million from the quarter immediately before, leading to higher profit margins.
"We've been working hard for two years to return the corporate ship to stability," says chief operating officer Sanju Bansal. He acknowledged that selling MicroStrategy's products has been tough, given the company's problems--a job made even more difficult by the recession. "Positive cash flow gives people comfort," he says. But he could not say when the charges that have kept the company's bottom line in the red will end.
For the year ended Dec. 31, MicroStrategy reported a loss of $16.9 million, or 20 cents per share, on sales of $180.4 million. That compares with a loss of $285.4 million, or $2.58 a share, on sales of $215.3 million in 2000.