April 8, 2010 / 1:52 PM / in 8 years

UPDATE 1-Absolute Software warns of lower Q3 sales contracts

* Sees Q3 sales contracts to fall 5-10 pct from yr-ago

* Lowers FY sales contract outlook

* Buys anti-theft assets from Phoenix for $6.9 mln

* Says COO McCrary leaves company, not to fill post

* Shares fall 6 pct in early trade

April 8 (Reuters) - Canada’s Absolute Software Corp (ABT.TO), a provider of computer security software, said it expects lower sales contracts for the third quarter, hurt by a delay in purchase decisions by commercial customers and a weak dollar.

Separately, the company said it agreed to buy FailSafe and Freeze anti-theft assets from Phoenix Technologies Ltd PTEC.O for $6.9 million in cash, to enhance its product portfolio.

For the third quarter ended March 31, the company expects a 5 percent to 10 percent fall in sales contracts at C$15.5 million to C$16 million. Cash from operating activities is expected to be C$100,000 to C$200,000.

“A number of sales we forecasted to close in Q3 have now moved into our future quarter pipelines,” Chief Executive John Livingstone said in a statement.

Absolute also lowered its sales contract outlook for the year to between C$68 million and C$72 million. It earlier expected sales contracts of C$76 million to C$82 million for the year.

Cash from operating activities, a profitability measure, for the year is expected to be C$5 million to C$7 million, down from previous estimate of C$8 million to C$11 million.

Absolute also said its Chief Operating Officer Carter McCrary left the company and it has no plans to find a replacement.

Shares of the Vancouver-based company were down 6 percent at C$5.30 in morning trade Thursday on the Toronto Stock Exchange. (Reporting by Arnika Thakur in Bangalore; Editing by Gopakumar Warrier)

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