In its yearly financial report for shareholders, issued today, MandrakeSoft SA (OTC: MDKFF) highlighted positive financial improvements. According to the publicly available document, revenue was down but losses also decreased as compared to 2001 and 2002.
MandrakeSoft, which entered a reorganization process in January, that the company has said is similar to U.S. Chapter 11 bankruptcy protection, appears to have used the process to escape some of the financial obligations the previous management team had placed the company in. According to the report, “the company has been cash flow positive since January 2003, and expects a positive operating result to be attained for the current quarter (October-December 2003).”
This is a remarkable turnaround for a company that many had prepared to eulogize when it announced it had entered bankruptcy protection at the beginning of the year. MandrakeSoft, which produces the entirely Free Software Mandrake Linux distribution, has had its business model questioned by many pundits within and outside the sector.
According to the report, the company suffered a 16% decrease in revenue, although much of the loss was chalked up to the weak economy over the last year. The company also cited the relative weakness of the U.S. dollar, since it noted that most of its business is transacted U.S. currency.
The newsletter also highlights another important transition within the company. According to the piece, 66%, or 2.57M€, of MandrakeSoft's revenue now derives from OEM, Mandrake Club and e-commerce initiatives, up from 42% last year. This appears to be a strong showing in some of the potentially most lucrative fronts for a Free Software producing organization.
MandrakeSoft says it is working on a plan to “to exit the redressement judiciaire [bankruptcy protection] and resume normal trading.” You can read the full report on MandrakeSoft's web site.