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Websense Sales Grow, Stock Outperforms Dow Jones, S & P; 500

During the past 52 weeks, looking back from Oct. 28 when its third-quarter results were released, Websense stock has lost about 13 percent.

If that sounds bad, you’re likely not invested in this incredibly volatile market. During the same time, the Dow Jones industrial average took a 40 percent dive, and the Standard & Poor’s 500 is off 45 percent.

For the third quarter, the maker of Web security software reported a net loss of $3.5 million, compared with a net income of $6.4 million for the like period of 2007.

Revenue increased to $76.6 million, up from $50.4 million for the third quarter of last year. For the nine months, revenue was $216.6 million, compared with $150 million in the like period of 2007.

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CEO Gene Hodges says the results exceeded original expectations, and were mainly due to the firm’s acquisition of another software firm, SurfControl. Last year’s purchase of SurfControl, and the expenses that acquisition entailed, was cited as a key reason for the net loss in the third quarter.

And while the global economy has continued to gyrate wildly in recent months, Websense sales have actually grown, and its billings for core products were up 7 percent, Hodges says.

Websense fine-tuned its projections for 2008, raising the estimated revenue numbers to a range of $292 million to $294 million, from an earlier forecast of $290 million to $295 million.

The company says its operating earnings, which don’t follow generally accepted accounting principles, would be $1.33 to $1.36 per share, up from the prior guidance of $1.30 to $1.35 per share.

Traded on Nasdaq under WBSN, shares ended Oct. 28 at $17.85, up 11 percent from the prior day’s close. Its 52-week range was $15.43 to $24.60.


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Chips Are Down:
Cymer, which makes laser equipment used to manufacture chips, reported revenue of $111.4 million, down from $132.1 million, for its third quarter last month. Maybe more disappointing was the prospect for more of the same as the year winds down.

CEO Bob Akins says slowing consumer demand, coupled with memory overcapacity, and declining foundry utilization have reduced spending by chip makers this year. On the positive side, Cymer is benefiting from a trend of manufacturers buying the newest type of eximer laser machines, which it makes, Akins says.

Still, things won’t improve anytime soon. The firm forecast revenue reductions between 5 percent and 10 percent in the fourth quarter.

As of Oct. 28, shares of Cymer, traded on Nasdaq under CYMI, closed at $22.20, and ranged from $18.84 to $43.22 in the past 12 months.


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Cohu Sees Decline:
Cohu is another local company in the semiconductor industry that was hurt by a big decline in demand. The Poway company makes semiconductor testing equipment.

For the third quarter, it reported revenue of $48 million, down from $64.5 million in the like quarter of 2007.

For the nine months, Cohu’s sales were $158.2 million, compared with $184.3 million for the like period of 2007.

Cohu’s net profits for the nine months were $2.1 million, about a third of the $5.9 million it had for the same period last year.

CEO James Donahue says during the next few quarters, he expects conditions to remain difficult, but is optimistic about the firm’s long-term prospects.

Despite the cold shower, Cohu investors can at least take some solace in the fact that they are still receiving a quarterly dividend, 6 cents as of Jan. 2, 2009, something they’ve enjoyed since 1977.

Traded under COHU on Nasdaq, shares closed Oct. 28 at $12.51 and ranged from $11.22 to $20.52 in the past 52 weeks.


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Ticker Takes:
Overland Storage reported its first quarter ended Sept. 30 with a net loss of $6.9 million compared with a net loss of $4.5 million for the same quarter in 2007. Revenue was flat at $32.3 million. Overland said it has $5.4 million in cash and is evaluating several options for a financing package of about $10 million SAIC was awarded a five-year, $300 million contract from the U.S. Department of Education to provide software development services to help modernize Web-based student aid infrastructure Javo Beverage said it secured receivable-based financing to provide liquidity as it grows its beverage dispenser business. Richard Gartrell, chief financial officer of Javo Beverage, said in a news release: “Liquidity provided by this financing can expand to as much as $6 million as revenues grow behind the more than 9,000 recurring revenue dispensers at foodservice operations nationally. Each dispenser has historically generated between $3,000 and $6,000 in annual product sales.”


Send any news of locally based public companies to Mike Allen via e-mail at mallen@sdbj.com.

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