Monday, October 17, 2005
BakBone Software (BKBO) yet another open letter
Fuzzy undisclosed metrics show positive trends!
Customer base of 12,000 customers expands by 2,300, including NTT, Bank of Taiwan, Oil and Gas Corp of India, Korean Navy (presumably South Korea), etc.
60% of new bookings are from new customers, down from 75% reported Jan 05. (lower is better)
Most US transactions are Veritas (market leader... for now) replacements.
Maintenance attach rate is 100% in North Am, retention 90%, admittedly worse elsewhere with no details.
Slight increase in Linux.
NetVault 7.4 will cure all the world's problems. Not really. But it seems to be in beta testing.
R&D increased, with new cheap offshore work being done.
They're taking a big hit from SOX requirements.
[Semi-Sarcastic] Minor Bad News: they hired a Sr VP of Corporate Development and Strategy in Sept. The guy worked in all the same places as all the other guys (Sterling, Seagate, etc.)
Bookings (total dollar contracts signed during the time period) for the 6 months ended Sept 30 increased by 27% over prior year. Revenue is spread out differently from bookings.
Mac OS X is an opportunity with NetVault 7.3.1 with native Mac GUI released Sept 20. First enterprise-class (isn't that a Star Trek thing?) backup and recovery solution modeled after Apple's Server Manager UI. "This was, by far, one of the most successful announcement in BakBone's history." Should be on the shelves shortly. Early wins at University of Utah, Hollings University, Rush Henrietta Schools (education market is big).
OEM stuff is vaguely good. Teradata will offer a Linux version in fiscal Q3. Network Appliance is in Yahoo, Shell Oil (nothing new).
Not all news is good news. BKBO announced last week some new strategy, Integrated Data Protection (IDP) which sounds like distracting BS.
So, where do we stand today with the publishing of the Company's financial reports? The good news is that we are confident there is an end in sight. We are working through the iterative audit process with our former auditors. We have made available all supporting documentation for revenue transactions from fiscal years 2003 and 2004 in order that they can complete their audits for these periods. Let me again state that revenues previously recognized in prior years will all be recognized, but we must ensure the appropriate accounting treatment of revenues to assure that they are recognized in the proper period.
We are making progress, but it is slower than anticipated. We are working diligently to get the Company through this stage of its financial audits. When a public company changes its revenue recognition policy, it is an exhaustive process which requires the detailed review of transactions which have transpired over many years.
At such time as our financial reports are finalized, we will be in a position to file the delayed financials with the U.S. Securities and Exchange Commission and the Canadian Securities Commissioners. Simultaneously, we will file the appropriate applications to resume trading on the Toronto Stock Exchange, as well as the Over-the-Counter Bulletin Board.
As much as we would like to predict the date when this work will be completed, there are important parts of the process we do not control. When it becomes possible for us to determine a completion date for the audit work and filing of our financial statements, we will immediately make the appropriate disclosures. [i.e. no idea when it will be done]
Yes! And the stock price drops. And I'll probably get a chance to make money off BKBO again.
UPDATE: They issued two different open letters, the second one has MCoaHN (Minor Changes of a Humorous Nature):
SOURCE BAKBONE SOFTWARE
SOURCE: BAKBONE SOFTWARE
BakBone: Perpetual Screwups
UPDATE: Never mind, the bid is up to $1.55. I missed the selloff on Monday.