| Update on Lineo recapitalization |
Apr. 23, 2002
Lineo CEO Matt Harris issued the following update today regarding Lineo's ongoing recapitalization process and new funding status . . .
Lineo Update -- April 23, 2002
Summary
Lineo will complete its recapitalization this week. As a result of the recapitalization, the company will be in a better position than ever to succeed. The legal mechanism used by our venture capitalists to accomplish the recapitalization is foreclosure on certain secured demand notes held by the venture capitalists. The result: the same people, doing the same work, using the same IP, for the same customers, with a new injection of capital, a strong balance sheet and the very real prospect of profitability by mid-year and cash flow positive operations within the next six months -- and perhaps as soon as Q2.
What does this mean for customers? A stronger Lineo, a better financed Lineo, with a greater capacity to execute on contracted work. We are tenacious at Lineo, we believe in the embedded Linux market, we helped to create the market and now we plan to make sure the market thrives. Our Embedix solutions are helping drive that market and we will work day and night to make sure that continues.
What does this mean for former employees? Ordinarily, this sort of legal proceeding will leave former employees in a difficult position, but the new legal entity has put a plan in place to ensure that former employees receive all of their paid vacation accruals. Lineo's CEO has made this a condition of his employment with "Lineo v2," and has set his salary at $1/year until all of these obligations are satisfied.
What does this mean for Lineo partners? Again, a stronger, better financed Lineo, with a greater capacity to support our partners. That work is ongoing today.
Is there any chance the process won't be over this week? No. The legal process is underway, the new money has already been coming in, the employee payments are starting, and the customer work and partner work will not miss a beat.
Some Additional Background Information . . . . . . - Financial health: Lineo is on track to reach profitability in mid-2002, to be cash flow positive as early as June 2002, and to exceed our competitors' reported embedded Linux revenues as early as Q3 2002. Consistent with these targets, our historical performance has shown strong, continuing growth: our year-over-year revenue growth for each of the years 2000 and 2001 exceeded 100%. Combined with aggressive management of costs, especially in the past five months, this growth has put us in a position to be financially sound for years to come. In the long run, we believe this is one of the most important ways we can assure our customers and partners unflagging support - financial operating success ensures long-term viability, which, in turn, ensures continued world class products and support. A company that must continually seek outside financing cannot provide that same level of support or assurance.
- Customer focus / product leadership: We believe the best way to meet our customers' needs starts with a few simple precepts: we must listen carefully to our customers' requests, we must work together with our customers to ensure our product roadmaps match theirs, and we must be nimble enough to keep up with a rapidly changing market. Applying those precepts, we have, unlike any other embedded Linux company, undertaken development of complete solution stacks for our key target markets, including the handset market and the DTV market. And we've created market leading tools that integrate with Code Warrior (new release with tighter integration due out next week) to support these stacks (see, for example, this review). Embedded Linux is important, embedded Linux tools are crucial, but most important -- and central to Lineo's strategy -- are complete, integrated embedded Linux based solutions designed to meet the specific needs of our customers. We will pursue this strategy with vigor going forward.
- Customer commitment: Our commitment to customers rests on three important premises. First, although we reduced our employee count to approximately 70 people, we've retained the most important people for delivering on the partnership, i.e., the engineers in the U.S. and Japan. We've built and retained the strongest embedded Linux engineering team in the world, with engineers in Japan, the U.S. and Europe. Second, we've teamed with the best partners in the business. Third, we've committed resources to work closely with our customers. Our large engineering team in Japan, dedicated to product development and support for our Asian customers, is but one example of this commitment. We intend to continue on that path -- and produce more successes like the Sharp Zaurus (an example of an integrated solution) for our customers.
Related stories:
(Click here for further information)
|
|
|
7 Advantages of D2D Backup
For decades, tape has been the backup medium of choice. But, now, disk-to-disk (D2D) backup is gaining in favor. Learn why you should make the move in this whitepaper.
4 Legal Reasons to Control Internet Access
The Internet is obviously a valuable resource for many organizations. However, many are exposed to legal liability concerns because they fail to control Internet access. Learn if you're safe in this white paper.
Rapidly Resolve J2EE Application Problems
Whether you are in the process of building J2EE applications or have J2EE applications already running in production, you must ensure that they deliver the expected ROI. Learn how in this white paper.
Load Testing 2.0 for Web 2.0
There are many unknowns in stress testing Web 2.0 applications. Find out how to test the performance of Web 2.0 in this white paper.
Build Better Games Online
For the game infrastructure providers, life is complex. Making money from games has become more complicated. Why? Find out in this white paper.
Building a Virtual Infrastructure from Servers to Storage
This white paper discusses the virtual storage solutions that reduce cost, increase storage utilization, and address the challenges of backing up and restoring Server environments.
Gaining Faster Wireless Connections with WiMAX
Welcome to what is quickly becoming the hyperconnected world where anything that would benefit from being connected to the network will be connected. Learn more in this white paper.
Is Your Desktop a Security Threat?
The new wave of sophisticated crimeware not only targets specific companies, but also targets desktops and laptops as backdoor entryways into those business’ operations and resources. Learn how to stay safe in this white paper.
Increasing SAN Reliability by 100 Percent
Storage area networks (SAN) are a strong part of storage plans. Learn how to increase your reliability and uptime by 100 percent in this case study.
|
|
|
|
|
Use of this site is governed by our Terms of
Service and Privacy Policy.
Except where otherwise specified, the contents of this site are copyright © 1999-2008
Ziff Davis Enterprise Holdings Inc. All Rights Reserved.
Reproduction in whole or in part in any form or medium without express written permission of Ziff Davis Enterprise is
prohibited. Linux is a registered trademark of Linus Torvalds. All other marks are the property of their respective owners.
news feed