SCO Refiles Financial Paperwork With SEC - InformationWeek

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4/4/2005
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SCO Refiles Financial Paperwork With SEC

Litigious Unix vendor SCO Group Inc. has filed paperwork with the Securities and Exchange Commission in a bid to get its stock back in the good graces of the financial markets.

Litigious Unix vendor SCO Group Inc. has filed paperwork with the Securities and Exchange Commission in a bid to get its stock back in the good graces of the financial markets.

Late Friday, SCO said it had resubmitted to the SEC its 10-K financial forms for the quarters ending Jan. 31, 2004, April 30, 2004 and July 31, 2004. The 10-K's contain results that had to be restated as a result of errors stemming from the way SCO accounted for stock it had issued as part of its compensation plans.

However, the new forms didn't alter SCO's results, which showed a loss of $28.57 million on revenues of $42.81 million for its fiscal year ended Oct. 31, 2004. "There's really no net impact to the 10-K on what we would have reported anyway," SCO spokesman Blake Stowell said.

More significant for SCO's future will be whether the filings will put it on the road to regaining its full trading status on the NASDAQ exchange. "We're trading on the NASDAQ exchange as SCOXE; the "E" is intended to indicate that we're not 100 percent in compliance [with SEC rules]," Stowell said. "We're well on our way to being in compliance now that we've filed our 10-K. The last step we need to take is to report our first quarter earnings and file the 10-Q's that are reflective of that."

Stowell said SCO expects to report those first quarter earnings sometime in the next several weeks.

As to just how robust SCO's business will be going forward, that isn't entirely clear. According to language in the 10-K document: "Sales of our UNIX-based products and services have been declining over the last several years. This decline in revenue has been primarily attributable to significant competition from alternative operating systems, particularly Linux."

SCO is hoping an upcoming revision of OpenServer, its Unix offering aimed at the SMB market, will give it a boost. "The company has been hard at work preparing for the launch of OpenServer 6.0, in the June timeframe," Stowell said. "I think that'll cause people to have renewed interest in the company."

SCO remains embroiled in high-profile litigation over Linux intellectual property with IBM, Novell and Red Hat. Most recently, IBM and SCO have been sparring in U.S. District Court in Utah over code IBM has been ordered to turn over to SCO so that the latter can examine it for possible copyright violations. The two companies are also working with the judge in the case to set a trial date. Though the case had previously been slated to start this November, it currently isn't expected to begin until sometime in 2006.

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