Scott Kauffman "SourceForge's (LNUX) Three Guiding Principles: Speak Openly, Take Risks, and Don't Look Back" #4 - Don't Provide Guidance
SourceForge Reports Q2 Ending June 30th Numbers, eCommerce Gross Margins Decrease from 23% to 17%.
A Recap of their Financial Results Conference Call held at 5:00 PM July 30, 2009.
Patty Morris (CFO): "...Adjusted EBITDA loss Q2 $1.2M, media revenue Q2 $4.3 M decrease of 13% same period last year, 56% decrease YoY with media advertising, YoY premium advertising revenue increased 300% to $1.6M...Media revenue increased 15% Q2 v Q1 2009. Premium revenue grew by 56%...eCommerce revenue for Q2 increased 10% YoY (7.4M v $6.8M). eCommerce gross margin for Q2 down to 17% from 23% YoY. Ad network revenue decreased 21% YoY. Q3 sales and marketing expense will increase by $1.5-$1.7M..."
[15:13] Scott Kauffman (CEO)..."[SourceForge's] three guiding principles...Speak Openly, Take Risks,
and don't look back..."
[21:00] - Eva Braun Morris "Let's get to conversations, Operators! Open the lines!".
[30:25] Doug Whitman*, Whitman Capital (Analyst) "...sensitive question...since you guys did a lot of buyback last quarter and you're keeping the window open can you give us some reasons why you're not giving any level of guidance and any indication of revenue direction? I assume you're going to reopen your [guidance] window again.
[A:] Scott Kauffman ala Porky Pig (as in fumbling for words):"...EBITDA EBITDA EBITDA..this may be my own naivete...I'm not saying we'll never get back...I think my newness in the job...I think we're sitting on a truly unique set of assets that defy a literal description..."
Comment: Given Scott Kauffman was carte blanche provided 2.5 million shares which were not tied to performance and declared that one of SourceForge's Guiding Principles is taking risk, one must question what exactly is Scott Kauffman risking? He seems to have transferred the risk from himself and Eva to all non-insider shareholders and the last few existing Securities Analysts still following SourceForge. This explains why Scott Kauffman and SourceForge's CFO have avoided attending Analyst Meetings and Technology Conferences, the most fundamental Shareholder Value strategy a responsible and non-naive CEO would implement, again, as a given.
[32:56] Whitman*: What's a reasonable timeframe if the company isn't humping along and doing greaat...that we start looking...at alternatives to increase shareholder value?
A: EBITDA EBITDA EBITDA ....THAT's ALL FOLKS...
Source:VCALL Q2 ending June 30 Conference Call
* Well done Doug.