Briefs: July 19, 2004

NORTEL RESTATEMENT TO SLASH EARNINGS FOR 2003

The restatement will wipe out all earnings from continuing operations in 2003, according to Nortel. It also will erase all earnings for the first half of that year.

But Nortel President and CEO Bill Owens said he expects the company's revenue to grow faster than the market in 2004.

VERITAS ACQUIRES INVIO IN BID TO INCREASE UTILITY COMPUTING
Veritas Software plans to beef up its utility computing strategy with its $35 million acquisition of Invio Software.

Technology from Invio, a privately held developer of IT process automation technology, is already a part of Veritas' utility computing offering and will play an increasingly important role going forward, said Jeff Hausman, director of product marketing for automation products at Veritas.

Invio's process automation engine has been embedded in Veritas' CommandCentral Service 4.0, which the company recently released, said Hausman.

STILLSECURE BEEFS UP VAM LINE
Network security software vendor StillSecure added patch management to its flagship VAM 4.0 vulnerability management package, providing customers with an application that manages the entire vulnerability life cycle from discovery through repair and audit.

In addition, VAM 4.0 now incorporates a new vulnerability-centric workflow that allows single-click remediation for all devices in the enterprise with a particular vulnerability.

SYNNEX ACQUIRES CANADIAN DISTRIBUTOR EMJ DATA SYSTEMS
Synnex executives said the distributor, through a subsidiary of Synnex Canada, plans to acquire EMJ Data Systems in an all-cash deal worth $42.3 million, or $56 million Canadian.

EMJ, based in Guelph, Ontario, specializes in products for Apple Computer, bar-coding, auto ID, POS, build-to-order, digital video, networking and security applications. It has offices in Vancouver, British Columbia; Calgary, Alberta; Winnipeg, Manitoba; Montreal; and Halifax, Nova Scotia, as well as one in the United States.

The deal is expected to close within 90 days.

TELLERMATE NOW OFFERS CASH SOLUTIONS TO THE CHANNEL
Tellermate, a provider of cash-handling solutions for the retail and financial markets, said last week that it will begin selling its products through solution providers. Tellermate's offerings include the Tellermate TD and TY product lines that handle cash counting for restaurants, grocery stores, retailers and financial institutions, as well as other POS-oriented businesses. A USB connection on the Tellermate devices allows users to transmit cash information to back-office software applications.

"Tellermate is extremely excited to be entering the reseller market. The key to our future success is leveraging our market leadership with the best reseller partners in the industry," said Rick Bellerjeau, Tellermate's vice president of channel sales, in a statement.

RED HAT TO RESTATE EARNINGS
Red Hat said it is restating its financial results for the last three years due to an error in its recognition of revenue.

In addition, the Linux distributor and software maker said it was responding to "prior comments and questions" from the Securities and Exchange Commission, which is reviewing the company's annual report. Red Hat said it did not expect the review to lead to any material changes to previously reported financial results.

The accounting change follows by less than a month the disclosure that CFO Kevin Thompson was resigning. Thompson, who has served as CFO since November 2000, said he was leaving to spend more time with his family.

Following discussions with its auditor, Price- waterhouseCoopers, Red Hat decided to stop recognizing revenue for subscription agreements on a monthly basisa method it has used for the past five yearsand start recognizing revenue on a daily basis over a contract term.

As a result, the company will restate its audited financial statements for the fiscal years ended February 2002, 2003 and 2004, and for its unaudited financial statements for the quarter ended May 31 of the current fiscal year.

The restatements are expected to result in "significant percentage differences" in certain items, such as quarterly operating profit and net income. They will not materially affect annual revenue, operating cash flow or the number of new subscriptions for any quarter, according to the company.

"The restatement is not expected to reflect any material difference in the meaningful historical trends of our business, nor will it adversely affect our business outlook, which remains strong," said Matthew Szulik, Red Hat chairman and CEO, in a statement. "We remain committed to meeting high standards in providing timely, accurate and transparent financial reporting, and our planned restatement reflects this commitment."