SANTA CLARA, Calif., Feb. 7 /PRNewswire-FirstCall/ --
First Virtual Communications (Nasdaq: FVCX), a leading provider of integrated
rich media communications solutions for IP and other networks, today announced
financial results for the fourth quarter ended December 31, 2001. Revenue for
the quarter was $7.4 million, compared with revenue of $7.8 million for the
third quarter of 2001 and $10.0 million for the fourth quarter of 2000. The
net loss for the fourth quarter was $6.6 million, or $0.20 per share, compared
to a loss of $10.5 million, or $0.34 per share for the third quarter of 2001
and a loss of $6.3 million, or $0.36 per share for the fourth quarter of 2000.
The net loss for the current quarter on a pro forma basis was $4.7 million, or
$0.14 per share, compared with a pro forma loss of $4.2 million, or $0.14 per
share for the third quarter of 2001 and a pro forma loss of $5.3 million or
$0.30 per share for the fourth quarter of 2000. Pro forma financial results
for the fourth quarter 2001 and 2000 exclude the effects of amortization of
goodwill and intangibles and provisions for excess and obsolete inventory.
Although the Company experienced a slight reduction in overall revenue
during the fourth quarter, it generated revenue growth in several key product
areas. As the Company has continued to transition its focus from ATM-based
hardware products to higher performance and higher margin software-based
Internet Protocol ("IP") products, sales of these newer strategic products
accounted for a larger proportion of revenue in the quarter. Revenue generated
from these strategic products, which include First Virtual's end-to-end rich
media web conferencing solution, Click to Meet(TM), and group conference
server, known as our Multipoint Control Unit ("MCU"), grew 17% quarter over
quarter, to 20% of total revenue, compared with 16% of total revenue in the
previous quarter.
As part of its ongoing operating expense reduction efforts, the Company
continued to reduce its cash burn rate, using $2.9 million in cash in the
quarter compared with $3.5 million in the previous quarter. The Company
achieved this result by reducing personnel and other discretionary spending.
The Company conducted a reduction in force of 38 employees, or 18%, in October
of 2001. This resulted in personnel-related cost savings of $0.6 million in
the quarter after the severance expense of approximately $0.3 million. Non-
personnel related cash operating expenses were reduced by $0.5 million, or
17%, quarter over quarter. In the fourth quarter, the Company's operating
expenses included $1.0 million of non-cash charges, including approximately
$0.8 million of provision for doubtful accounts and approximately $0.2 million
of expensed demonstration equipment. As a result of its reduced operating
expense levels, the Company ended the quarter with cash and short-term
investments of $9.3 million.
"We are still working on transitioning the Company and ramping sales of
our higher margin strategic products," said Killko Caballero, President and
CEO. "Accordingly, while we are seeing healthy revenue growth in our strategic
Click to Meet(TM) and MCU products, the decline of ATM product sales continues
to detract from our total revenue growth in the short term. While maximizing
top line growth continues to be our major focus, we are encouraged that our
operating expense reduction efforts are paying off, resulting in a lower
quarterly cash burn rate."
The Company recorded a $1.1 million valuation adjustment to inventories in
the fourth quarter, to further reflect lower expected demand for some of its
ATM products. Excluding this non-cash charge to cost of revenue, gross profit
on a pro forma basis was $3.8 million, or 51.3%, compared with $4.4 million,
or 56.5%, in the third quarter of 2001. The decline in margin was due to a
low margin large systems integration project that was recognized in the
quarter.
"Although we did not achieve an increase in overall revenue, we are seeing
stronger interest in our non-ATM products and are continuing to experience
active interest in rich media communications as a truly viable alternative to
travel and as a powerful tool for increased productivity," said Ralph
Ungermann, Executive Chairman of the Board. "We remain confident in our
strategy and about prospects for future growth."
Conference Call Reminder
Management from First Virtual Communications will discuss the Company's
fourth quarter financial results during its quarterly conference call for
investors at 5:00 p.m., EST today. To participate, please call 877-817-7175 or
703-871-3599 at least five minutes prior to the start of the call. A live
simulcast and replay of the conference call will be available through First
Virtual Communications' website, at http://www.fvc.com. If you are unable to
participate on the call, a replay will also be available through February 14th
by dialing 703-925-2435, passcode #5802062.
About First Virtual Communications
First Virtual Communications is a world leader in providing easy-to-use,
integrated rich media communications solutions to enterprises, service
providers and portals. By enabling interactive voice, video and data
collaboration over IP-based networks, First Virtual provides cost-effective,
integrated end-to-end solutions for large-scale deployments to enterprise
desktops. It also enables best of breed videoconferencing solutions to be
extended through ISDN and ATM networks. The Company's flagship product, Click
to Meet(TM), provides a complete framework for delivering a new generation of
video-enabled web collaboration applications that address the real-time
communications needs of companies worldwide. Click to Meet can be integrated
seamlessly into popular enterprise messaging and collaboration environments
such as Microsoft Exchange/Outlook and instant messaging. First Virtual serves
its customers through a worldwide network of resellers and partners.
Additional information about First Virtual Communications can be found on the
web 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 First Virtual Communications, 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: the continued increase in sales of the Company's Click to
Meet(TM) and MCU products, First Virtual Communications' limited operating
history as a combined company with CUseeMe Networks, its variability of
operating results, First Virtual Communications' broadband video services
offering, market acceptance of video technology, potential inability to
maintain business relationships with telecommunications carriers,
distributors and suppliers, rapid technological changes, competition and
consolidation in the video networking industry, the importance of attracting
and retaining personnel, and other risk factors referenced in First Virtual
Communications' public filings with the Securities and Exchange Commission,
including the Company's report on Form 10-K for the year ended December 31,
2000 and registration statement on Form S-4, filed with the Securities and
Exchange Commission on April 25, 2001, as amended.
NOTE: All trademarks are recognized.
First Virtual Communications, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data; unaudited)
Three months ended Twelve months ended
December 31, December 31,
2001 2000 2001 2000
Revenue $7,377 $9,998 $27,661 $40,011
Cost of revenue 4,681 6,455 20,550 22,831
Gross profit 2,696 3,543 7,111 17,180
Operating expenses:
Research and development 2,785 3,500 12,741 12,517
Sales and marketing 3,502 3,740 11,874 12,533
General and administrative 3,316 2,993 13,255 11,974
Acquisition and other non-
recurring charges -- -- 1,781 --
Total operating expenses 9,603 10,233 39,651 37,024
Operating loss (6,907) (6,690) (32,540) (19,844)
Other income, net 57 411 665 1,187
Minority interest in consolidated
subsidiary 244 (18) 274 (130)
Net loss $(6,606) $(6,297) $(31,601)$(18,787)
Basic and diluted net loss per share $(0.20) $(0.36) $(1.26) $(1.09)
Shares used in computing basic and
diluted net loss per share 33,328 17,337 25,156 17,205
First Virtual Communications, Inc.
Pro Forma Adjustments
(in thousands)
Three months ended Twelve months ended
December 31, December 31,
2001 2000 2001 2000
Net Loss as reported on the Pro
Forma Consolidated Statements of
Operations $(4,655) $(5,277) $(21,677) $(17,258)
Amortization of Goodwill (860) (170) (1,960) (679)
Impairment of ICAST Goodwill -- -- (1,083) --
IPR&D Write-off -- -- (276) --
Inventory Adjustments (1,091) (850) (6,605) (850)
Net loss as reported on Condensed
Consolidated Statement of
Operations $(6,606) $(6,297) $(31,601) $(18,787)
NOTE: Pro forma net loss is not a measure of operating results or cash
flows from operating activities as defined by generally accepted
accounting principles and may not be comparable with the pro forma
measures reported by other companies. Further, pro forma net loss is not
necessarily indicative of cash available to fund cash needs and should not
be considered as an alternative to cash flows as a measure of liquidity.
We believe the presentation of pro forma net loss provides relevant
information about our operations and is useful, along with net income for
an understanding of our operation results.
First Virtual Communications, Inc.
Condensed Pro Forma Consolidated Statements of Operations
(in thousands, except per share data; unaudited)
Three months ended Twelve months ended
December 31, December 31,
2001 2000 2001 2000
Revenue $7,377 $9,998 $27,661 $40,011
Cost of revenue 3,590 5,605 13,945 21,981
Gross profit 3,787 4,393 13,716 18,030
Operating expenses:
Research and development 2,785 3,500 12,741 12,517
Sales and marketing 3,502 3,740 11,874 12,533
General and administrative 2,456 2,823 9,936 11,295
Acquisition and other non-
recurring charges -- -- 1,781 --
Total operating
expenses 8,743 10,063 36,332 36,345
Operating loss (4,956) (5,670) (22,616) (18,315)
Other income, net 57 411 665 1,187
Minority interest in consolidated
subsidiary 244 (18) 274 (130)
Net loss $(4,655) $(5,277) $(21,677) $(17,258)
Basic and diluted net loss per
share $(0.14) $(0.30) $(0.86) $(1.00)
Shares used in computing basic
and diluted
net loss per share 33,328 17,337 25,156 17,205
First Virtual Communications, Inc.
Condensed Consolidated Balance Sheets
(in thousands; unaudited)
December 31, December 31,
2001 2000
ASSETS
Current assets:
Cash and cash
equivalents $6,946 $7,077
Short-term
investments 2,321 16,851
Accounts receivable 6,365 9,937
Inventory 3,188 6,912
Prepaids and other
current assets 1,227 871
Total current
assets 20,047 41,648
Property and equipment, net 3,183 2,815
Other assets 417 584
Intangible assets, net 14,507 1,894
$38,154 $46,941
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of
long-term debt $36 $80
Accounts payable 3,268 5,122
Accrued liabilities 5,561 3,574
Deferred revenue 2,936 1,143
Total current
liabilities 11,801 9,919
Long-term debt, net of current portion -- 39
Minority interest in consolidated
subsidiary -- 253
Stockholders' equity:
Common stock 33 17
Additional paid-in
capital 113,437 92,168
Accumulated other
comprehensive
income (loss) 149 210
Accumulated deficit (87,266) (55,665)
Total
stockholders'
equity 26,353 36,730
$38,154 $46,941
SOURCE First Virtual Communications
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Related links:
http://www.fvc.com
CONTACT:
Timothy A. Rogers, Chief Financial Officer of
First Virtual Communications, +1-408-567-7200, or trogers@fvc.com
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