Red Hat, Inc. : Stmt Operations

Sheet 1: Stmt Operations

RED HAT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Excludes amortization of goodwill and intangibles, stock based compensation, and merger and acquisition costs)


				Three Months Ended
				May 31, 2001	May 31, 2000

Subscription and services revenue:
	Subscription			$11,353,991	$9,768,364
	Services:
		Network consulting		5,196,304	5,680,738
		Embedded development services		4,697,325	4,241,916
		Open source services		4,355,933	2,018,418

		Total subscription and services revenue		25,603,553	21,709,436

Cost of subscription and services revenue:
	Subscription			3,125,563	3,749,793
	Services			8,005,907	7,092,774

		Total cost of subscription and services revenue		11,131,470	10,842,567

Gross profit on subscription and services revenue				14,472,083	10,866,869

Hardware resale, net				-	88,223

Operating expense:
	Sales and marketing			10,683,600	12,162,715
	Research and development			4,296,781	3,271,184
	General and administrative			3,370,706	4,666,427

		Total operating expense		18,351,087	20,100,326

Loss from operations				(3,879,004)	(9,145,234)

Other interest income (expense), net				4,480,183	5,481,691

Loss before income taxes				601,179	(3,663,543)
Provision for income taxes				445	64,414

Net loss				$600,734	$(3,727,957)

Net loss per common share:
			Basic	$0.00	($0.02)
			Diluted	$0.00	($0.02)
Weighted average shares outstanding:
			Basic	169,002,929	159,463,590
			Diluted	169,002,929	159,463,590

RED HAT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS



				Three Months Ended
				May 31, 2001	May 31, 2000

Subscription and services revenue:
	Subscription			$11,353,991	$9,768,364
	Services:
		Network consulting		5,196,304	5,680,738
		Embedded development services		4,697,325	4,241,916
		Open source services		4,355,933	2,018,418

		Total subscription and services revenue		25,603,553	21,709,436

Cost of subscription and services revenue:
	Subscription			3,125,563	3,749,793
	Services			8,005,907	7,092,774

		Total cost of subscription and services revenue		11,131,470	10,842,567

Gross profit on subscription and services revenue				14,472,083	10,866,869

Hardware resale, net				-	88,223

Operating expense:
	Sales and marketing			10,683,600	12,162,715
	Research and development			4,296,781	3,271,184
	General and administrative			3,370,706	4,666,427
	Amortization of goodwill and intangibles			20,766,614	6,709,392
	Stock-based compensation			3,675,854	3,625,808
	Merger, acquisitions and other			3,718,041	3,359,026

		Total operating expense		46,511,596	33,794,552

Loss from operations				(32,039,513)	(22,839,460)

Other interest income (expense), net				4,480,183	5,481,691

Loss before income taxes				(27,559,330)	(17,357,769)
Provision for income taxes				445	64,414

Net loss				$(27,559,775)	$(17,422,183)

Net loss per common share:
			Basic	($0.16)	($0.11)
			Diluted	($0.16)	($0.11)
Weighted average shares outstanding:
			Basic	169,002,929	159,463,590
			Diluted	169,002,929	159,463,590

RED HAT, INC.
CONSOLIDATED BALANCE SHEETS


ASSETS
			May 31, 2001	February 28, 2001

Current assets:
	Cash and cash equivalents		$72,459,166	$85,212,830
	Investments in debt and equity securities		47,076,615	62,911,634
	Accounts receivable, net		20,800,035	25,203,635
	Subcontractor receivable		74,408	3,441,394
	Inventory		1,357,792	739,960
	Prepaid expenses and other current assets		2,287,071	2,171,721

		Total current assets	144,055,087	179,681,174
Property and equipment, net			15,776,131	14,591,510
Goodwill and intangibles, net			130,871,143	147,396,649
Investments in debt and equity securities			175,051,633	154,556,684
Other assets, net			5,364,746	9,025,138

		Total assets	$471,118,740	$505,251,155

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accounts payable		$3,909,384	$9,681,174
	Royalties payable		30,232	-
	Accrued expenses		13,273,445	15,915,682
	Deferred revenue		12,638,837	12,150,549
	Short term payable		-	2,750,000
	Current portion of capital lease obligations		265,388	193,895

		Total current liabilities	30,117,286	40,691,300
Capital lease obligations			227,488	277,338
Commitments and contingencies			-	-
Stockholders' equity:
	Noncontrolling interest in subsidiary		37,810	-
	Preferred stock		-	-
	Common stock		16,983	16,849
	Additional paid-in capital		627,414,567	643,712,385
	Deferred compensation		(15,438,815)	(36,051,412)
	Accumulated deficit		(171,148,542)	(143,588,767)
	Accumulated other comprehensive income (loss)		(108,037)	193,462

		Total stockholders' equity	440,773,966	464,282,517

		Total liabilities and stockholders' equity	$471,118,740	$505,251,155