-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WQH5jBIlvpqhW1Ngpg6iQPRcF9mW4Ddo8GtQ0jyr6fnbHxgOkekJJNLsqcCJoLTm 0Rli2rxcQJdaGcivwNf/BA== 0000891618-01-501537.txt : 20010710 0000891618-01-501537.hdr.sgml : 20010710 ACCESSION NUMBER: 0000891618-01-501537 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010627 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010706 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VA LINUX SYSTEMS INC CENTRAL INDEX KEY: 0001096199 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 770399299 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-28369 FILM NUMBER: 1675719 BUSINESS ADDRESS: STREET 1: 47071 BAYSIDE PARKWAY CITY: FREMONT STATE: CA ZIP: 94538 BUSINESS PHONE: 5106877000 MAIL ADDRESS: STREET 1: 47071 BAYSIDE PARKWAY CITY: FREMONT STATE: CA ZIP: 94538 8-K 1 f73922e8-k.txt FORM 8-K 1 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JUNE 27, 2001 VA LINUX SYSTEMS, INC. - -------------------------------------------------------------------------------- (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 000-28369 77-0399299 - ----------------------------------------------------------------------------------------------------------------------- (STATE OR OTHER JURISDICTION OF (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER IDENTIFICATION NO.) INCORPORATION OR ORGANIZATION)
47071 BAYSIDE PARKWAY FREMONT, CALIFORNIA 94538 ----------------------------------------------------------------- (ADDRESS, INCLUDING ZIP CODE, OF PRINCIPAL EXECUTIVE OFFICES) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (510) 687-7000 - -------------------------------------------------------------------------------- (FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT) ================================================================================ 2 ITEM 5. OTHER EVENTS. Reference is made to the press release issued to the public by the Registrant on June 27, 2001, the text of which is attached hereto as an exhibit, for a description of the events reported pursuant to this Form 8-K. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (a) Not applicable. (b) Not applicable. (c) Exhibits. 99.1 Text of Press Release dated June 27, 2001. -2- 3 Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. VA LINUX SYSTEMS, INC. a Delaware corporation Dated: July 2, 2001 By: /s/ Todd B. Schull ---------------------------------- Todd B. Schull Vice President, Finance, and Chief Financial Officer 4 EXHIBIT INDEX Exhibit Number Description - -------------- ----------- 99.1 Text of Press Release dated June 27, 2001. EX-99.1 2 f73922ex99-1.txt EXHIBIT 99.1 1 EXHIBIT 99.1 VA LINUX OUTLINES NEW STRATEGIC FOCUS ON SOFTWARE COMPANY TO EXIT HARDWARE BUSINESS AT END OF FISCAL YEAR FREMONT, Calif.--(BUSINESS WIRE)--June 27, 2001--VA Linux Systems, Inc. (Nasdaq:LNUX - news) today outlined its new strategy focusing on application software, as well as significant restructuring steps designed to immediately improve cash flow and reduce operating losses. As part of this strategy, VA Linux will exit the systems hardware business. Hardware orders will be accepted until July 10, 2001, with the goal of completing all deliveries by the end of the fiscal year, July 28, 2001. Staffing levels will be reduced by approximately 35% from the fiscal third quarter level of 436 employees. The majority of layoffs will occur during the current fiscal quarter, with the remainder over the next several months, as VA completes certain obligations to its customers, primarily in the area of hardware service and support. Moving forward, VA Linux will focus on application software, providing customers with Linux, Open Source and collaborative development solutions. The company will focus on three areas: o SourceForge(TM)OnSite Collaborative Development System (CDS). VA's primary focus will be on SourceForge OnSite. Installed behind corporate firewalls, SourceForge OnSite enables large companies with distributed developers to increase efficiencies in software development. When deployed as an Internet portal, SourceForge OnSite enables companies to build external developer communities around their technologies. OSDN's SourceForge.net is the largest reference implementation of SourceForge CDS technology, supporting more than 22,000 software projects and nearly 200,000 registered users. Over time, VA expects that SourceForge OnSite will generate the majority of its revenue, and have financial and operational characteristics typical of a software application company. o OSDN(TM), the Open Source Development Network. VA Linux plans to continue to operate OSDN with no significant changes anticipated as the result of VA's restructuring. Featuring popular Internet sites such as SourceForge.net, Slashdot and ThinkGeek, OSDN is sponsored by leading technology companies, helping them to reach OSDN's more than 6 million unique visitors per month. 2 o Linux Software Development and Consulting Services. VA Linux will opportunistically pursue development contracts in areas such as network-attached storage (NAS), remote management and other Internet software. "Our differentiating strength has always been our software expertise," said VA Linux CEO, Dr. Larry M. Augustin. "With SourceForge OnSite as the core product in VA's new application software strategy, we will be better able to deliver our expertise in the areas where our customers have indicated that we add the most value." Financial Impact The financial impact of the new VA Linux strategy will be significant. Historically, VA Linux has generated a significant majority of its revenues from the sale of its hardware products. VA expects its revenue to significantly decline with the elimination of the hardware segment. As a result of this transition, VA expects large reductions in its operating expenses and use of cash ("cash burn") in future periods. VA expects the post-transition cash burn rate to be approximately $8 million per quarter and to decline in subsequent quarters. VA Linux will take a charge in the current quarter to recognize substantially all related expenses, primarily in the areas of labor, facilities and asset write-offs. It is expected that the cash portion of this charge will be approximately $10 million. About VA Linux VA Linux is a provider of application software, featuring the SourceForge OnSite collaborative development system; Linux software development and consulting services; and OSDN, the Open Source Development Network. Note Regarding Forward-Looking Statements: This press release contains forward-looking statements that involve risks and uncertainties, including statements regarding the Company's: anticipated cash burn rate; ability to improve cash flow and reduce operating losses; ability to complete delivery of system hardware orders by July 28, 2001; future financial performance and results of operations; sales strategy and anticipated benefits from such strategy; expectations of future growth and market acceptance of SourceForge OnSite and SourceForge.net; demand for the Company's consulting services and Open Source Development Network; and anticipated benefits from cost-cutting and other restructuring actions. Actual results may differ materially from those expressed or implied in such forward-looking statements due to various 3 factors, including: unforeseen expenses that VA Linux may incur in future quarters; the possibility that VA Linux will not identify sufficient sources of expense reduction; VA Linux's quarterly sales cycle and fluctuation in demand for our products and services; competition with, and pricing pressures from, more established competitors; VA Linux's success in introducing new products and services, and expanding its CDS, OSDN and Linux software development and consulting services businesses; the risk that VA Linux's ongoing restructuring efforts will not succeed; VA Linux's ability to successfully attract, retain and motivate employees; the possibility of further deterioration in the general economy; near-term manufacturing and sourcing risks; the rate of growth and acceptance of Linux and the Open Source software development model; VA Linux's dependence upon an Open Source development model and independent third-party Linux developers; VA Linux's reliance upon strategic relationships with other companies and its ability to negotiate, close and implement specific terms relating to them; the enforceability of the GNU General Public License; and rapid technological and market change. Investors should consult VA Linux's filings with the Securities and Exchange Commission, including its Quarterly Report on Form 10-Q for the quarter ended April 28, 2001, for further information regarding these and the other risks of the Company's business. These documents are available at the SEC Web site: www.sec.gov. VA Linux assumes no obligation to update the forward-looking information contained in this news release. Note to editors: VA Linux, SourceForge and OSDN are trademarks of VA Linux Systems, Inc. Linux is a trademark of Linus Torvalds. All other trademarks are property of their respective owners. -----END PRIVACY-ENHANCED MESSAGE-----