Operating Results in Line with Pre-Announcement; Charge Taken to Reflect New
Internet Video Services Market Focus
SANTA CLARA, Calif., Jan. 25 /PRNewswire/ -- FVC.COM (Nasdaq: FVCX), the
world leader in broadband video networking, today announced financial results
for the fourth quarter and twelve months ended December 31, 1999. In
addition, the Company also announced that, in conjunction with its
increasingly successful strategic shift to focusing on the Internet video
services market, the Company will take a one-time, non-cash charge in the
amount of $6.3 million to reflect this major new market focus.
Revenues for the quarter were $13.0 million, compared with revenues of
$13.7 million reported in the third quarter of 1999 and $5.2 million reported
in the fourth quarter of 1998. The net loss for the current quarter was
$7.9 million or $0.47 per share. Excluding the one-time adjustment, the net
loss was $1.6 million or $0.09 per share. The Company reported a net loss of
$3.2 million or $0.20 per share in the fourth quarter of 1998.
For the year revenues were $45.7 million, compared with $37.3 reported in
1998. The net loss for the year was $14.3 million, or $0.87 per share,
compared with a net loss of $8.0 million, or $0.69 per share the previous
year. Excluding the one-time charge, the net loss in 1999 was $8.0 million or
$0.49 per share.
"1999 was a successful transition year for FVC.COM," comments Rich Beyer,
President and CEO of FVC.COM. "At the beginning of the year our focus was on
selling broadband video networking systems to enterprise customers, primarily
in the government, educational and medical markets. Today we are the dominant
supplier to this market and will continue to pursue it. However, it is now
clear that a much larger opportunity exists in enabling service providers to
deliver video services over the quickly emerging broadband Internet. Thus,
throughout the year we have redirected significant resources in order to
address this market opportunity. Recent successes indicate that now is the
time to focus on also dominating this much larger service provider
opportunity."
FVC.COM revenues from this new market have grown from less than $500,000
in 1998 to over $8 million in 1999. The Company strongly believes that
two-way and related streaming video services over the broadband Internet are
poised to become as important as text and graphics are today, and that service
providers, ISPs and CLECs will be the vehicle for widespread adoption of
video. FVC.COM plans to provide the enabling technology and services to these
companies for broadband video Internet applications.
The one-time, non-cash charge is associated with items related to previous
market and product plans. Included in the charge are adjustments to accounts
receivable from some international customers ($1.7 million) and adjustments to
inventories of selected products that are less critical to the Company's video
services strategy ($4.2 million).
"We feel strongly that our thrust into the service provider market is the
future of FVC.COM. The one-time adjustment strengthens our balance sheet, and
will permit the management team to focus its energies on the exciting
activities and opportunities that will make us a leader in the video services
arena."
During the fourth quarter, the Company announced a strategic relationship
with British Telecommunications plc (BT) to provide a new class of managed
video services. BT Conferencing will provide their customers with
videoconferencing, video broadcast, video on demand and the recording and
storage of video content using FVC.COM equipment. The Company also announced
in the quarter a joint customer win with Bell Atlantic and FORE Systems to
provide Internet and broadband video services throughout the state of
Pennsylvania.
About FVC.COM
FVC.COM, the world leader in broadband video networking, designs,
manufactures and supports a wide range of high quality two-way and streaming
video systems and service offerings that enable applications such as broadband
Internet based video calls, conferences, mail, and events. These services are
designed to video-enable a broad range of Internet commerce portals.
FVC.COM's strategic partners include Accord, Alcatel, Ameritech, Bell
Atlantic, British Telecommunications plc, Cisco Systems, Inc., EDS, France
Telecom, Nortel Networks, Polycom, Shanghai Telecom, Telstra, White Pine
Software, and other leading companies worldwide. Further information about the
Company is available at http://www.fvc.com .
Cautionary Statement
Except for the historical information contained herein, this news release
contains forward-looking statements, including, without limitation, statements
containing the words, "believes," "anticipates," "expects" and words of
similar import. Such forward-looking statements have known and unknown risks,
uncertainties and other factors that may cause the actual results, performance
or achievements of FVC.COM, or industry results, to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Such factors include, among others:
FVC.COM's limited operating history and variability of operating results,
market acceptance of video technology, dependence on ATM backbone technology,
potential inability to maintain business relationships with distributors,
suppliers, telecommunications carriers, rapid technological changes,
competition in the video networking industry, the importance of attracting and
retaining personnel, management of FVC.COM's growth, consolidation and cost
pressures in the video networking industry, and other risk factors referenced
in FVC.COM's public filings with the Securities and Exchange Commission,
including the company's report on Form-10 K for the fiscal year ended
December 31, 1998.
FVC. COM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data; unaudited)
Three months ended Twelve months ended
December 31 December 31
1999 1998 1999 1998
Revenues $13,046 $5,196 $45,700 $37,251
Cost of revenues 11,529 2,374 28,851 19,220
Gross profit 1,517 2,822 16,849 18,031
Operating expenses:
Research and development 2,578 2,797 10,170 9,463
Selling, general
and administrative 6,916 3,326 21,633 11,878
Acquired in-process
research and development -- -- -- 4,664
Total operating expenses 9,494 6,123 31,803 26,005
Operating loss (7,977) (3,301) (14,954) (7,974)
Other income (expense), net 182 139 646 (42)
Minority interest in
consolidated subsidiary (90) -- (20) --
Net loss $(7,885) $(3,162) $(14,328) $(8,016)
Proforma net loss
excluding non-recurring
charge $(1,555) $(7,998)
Net loss per share:
Basic and diluted $(0.47) $(0.20) $(0.87) $(0.69)
Proforma net loss per share:
Basic and diluted $(0.09) $(0.49)
Shares used to compute
net loss per share:
Basic and diluted 16,792 15,767 16,433 11,541
FVC.COM, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands; unaudited)
December 31, December 31,
1999 1998
ASSETS
Current assets:
Cash and cash equivalents $997 $10,315
Short-term investments 7,824 16,433
Accounts receivable 14,066 11,221
Inventory 8,104 6,053
Prepaids and other current assets 2,866 1,241
Total current assets 33,857 45,263
Property and equipment, net 2,880 2,400
Other assets 3,462 3,502
$40,199 $51,165
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $-- $1,300
Current portion of long-term debt 143 137
Accounts payable 6,968 5,045
Accrued expenses 3,123 1,937
Deferred revenue 1,745 3,905
Total current liabilities 11,979 12,324
Long-term debt, net of current portion 85 228
Minority interest in
consolidated subsidiary company 323 --
Stockholders' equity:
Common stock 17 16
Additional paid-in capital 65,015 61,649
Notes receivable from stockholders (321) (502)
Accumulated other comprehensive loss (21) --
Accumulated deficit (36,878) (22,550)
Total stockholders' equity 27,812 38,613
$40,199 $51,165
SOURCE FVC.COM
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Related links:
http://www.fvc.com
CONTACT:
Truman Cole, Chief Financial Officer of
FVC.COM, 408-567-7229
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