Announces Focus on Broadband Service Provider Market
SANTA CLARA, Calif., April 13 /PRNewswire/ -- FVC.COM (Nasdaq: FVCX) today
announced financial results for the first quarter ended March 31, 1999.
Revenues for the quarter were $8.4 million, a decline of 7 percent from
revenues of $9.0 million in the first quarter of the prior year. The net loss
for the quarter was $3.2 million, or $0.20 per diluted share (on 16,047,000
shares outstanding), compared with a net loss of $492,000, or $0.04 per
diluted share (on 11,758,000 shares outstanding) in the same quarter of the
previous year. FVC.COM also reported that as of March 31, 1999, cash and
short-term investments totaled $20.5 million, and that working capital was
$31.2 million.
As stated in the April 6, 1999 release, the Company is reducing its
previously announced revenues for the quarter ended December 31, 1998 by
$7.1 million to defer the revenue on inventory of FVC.COM products held by
Nortel and its channel partners on December 31, 1998. Sales for the fourth
quarter of 1998 are being revised to $5.2 million; earnings per share will be
revised accordingly to a net loss per share of $0.20.
Also stated in its April 6, 1999 release, in accordance with new SEC
guidelines, the Company has revised the amount allocated to in-process
research and development (IPR&D) in the ICAST acquisition by $1.5 million,
from $6.2 million to $4.7 million. The incremental impact will be $87,000 per
quarter, bringing the total charge for goodwill and other purchased
intangibles to approximately $130,000 per quarter beginning the fourth quarter
of 1998 and each quarter going forward for five years.
Rich Beyer, FVC.COM's Chief Executive Officer, commented, "As we indicated
last week, we are disappointed in the shortfall of revenues in the first
quarter. The primary cause of this miss was a disruption in our business with
Nortel Networks. Nevertheless, we believe that the fundamentals of our
business are strong and that we will continue to grow revenues for the
remainder of 1999. We have an excellent base of business in the government
and education sectors and a very solid balance sheet. The combination of
these two factors will provide the resources we need to expand video
networking into the mainstream business sector."
"During the first quarter of this year, we continued to sell into the
government and education sectors. This included continued orders from the
Army National Guard and several city- and state-wide networks, as well as a
large school district order through one of our newer channel partners."
"To accelerate growth, FVC.COM is committed to expanding beyond our
current vertical markets and popularizing networked video within the
mainstream business market. In order to achieve this, we are working with
broadband service providers to provide video over their IP networks, allowing
these companies to tariff and sell video services to their enterprise
customers. We see very strong interest from these service providers and
expect to announce several wins in the near future."
"As the telephone networks, data networks and the Internet converge,
virtually all service providers are looking for ways to offer premium services
over their broadband fiber networks," explains Beyer. "One-way streaming
media has become mainstream with companies such as Real Networks and
Broadcast.com. We see enormous opportunity to provide the next wave in video
-- two-way interactive video -- over the fast-growing broadband Internet."
About FVC.COM
FVC.COM, founded in 1993 by technology pioneer Ralph Ungermann, is the
world leader in enterprise video networking. FVC.COM manufactures and
supports a broad family of interactive video, streaming video and
multi-service access products designed for high-quality video delivery.
Integrated with voice and data, these products enable applications such as
distance learning, corporate communications, virtual meetings and telemedicine
to be delivered over broadband IP and legacy networks.
FVC.COM's OEM, distribution, and system integration partners include Bell
Atlantic Network Integration, British Telecommunications plc, EDS, France
Telecom, IBM, Lucent Technologies, NEC, Nortel Networks, 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 involve known and unknown
risks, uncertainties and other factors which may cause the actual results,
performance or achievements of the Company, 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 Company's limited operating history and variability of
operating results, market acceptance of video technology, dependence on ATM
backbone technology and the Next Generation Internet, potential inability to
maintain business relationships with distributors and suppliers, rapid
technological changes, competition in the video networking industry, the
importance of attracting and retaining personnel, management of the Company's
growth, consolidation and cost pressures in the video networking industry,
dependence on key employees and other risk factors referenced in the Company's
Registration Statement on Form S-1, File No. 333-38755, declared effective on
April 29, 1998.
FVC.COM
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per shate data; unaudited)
Three months ended
March 31, December 31,
1999 1998 1998
Revenues $ 8,380 $9,042 $5,196
Cost of revenues 4,726 4,832 2,374
Gross profit 3,654 4,210 2,822
Operating expenses:
Research and development, 2,405 1,888 2,507
Selling, general and
administrative 4,713 2,613 3,615
Total operating expenses 7,118 4,501 6,122
Loss from operations (3,464) (291) (3,300)
Other income (expense), net 226 (201) 138
Net loss $(3,238) $ (492) $(3,162)
Net loss per share (A):
Basic $ (0.20) $(0.04) $(0.20)
Diluted $ (0.20) $(0.04) $(0.20)
Shares used to compute
net loss per share (A):
Basic 16,047 11,758 15,767
Diluted 16,047 11,758 15,767
(A) Shares used to compute the net loss per share (basic and diluted) for
the three months ended March 31, 1998 includes 8,040 shares of
preferred stock. Excluding the preferred stock, shares used to
compute the net loss per share (basic and diluted) for this period
were 3,718 and the net loss per share (basic and diluted) was $0.13.
FVC.COM
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands; unaudited)
March 31, December 31,
1999 1998
ASSETS
Current assets:
Cash and cash equivalents $ 4,966 $10,315
Short-term investments 15,503 16,433
Accounts receivable 10,411 11,221
Inventory 9,258 6,053
Prepaids and other current assets 1,423 1,241
Total current assets 41,561 45,263
Property and equipment, net 2,514 2,400
Other assets 3,336 3,502
$47,411 $51,165
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ -- $ 1,300
Current portion of long-term debt 136 137
Accounts payable 4,927 5,045
Accrued expenses 1,788 1,937
Deferred revenue 3,542 3,905
Total current liabilities 10,393 12,324
Long-term debt, net of current portion 188 228
Stockholders' equity:
Common stock 17 16
Additional paid-in capital 63,028 61,649
Notes receivable from stockholders (427) (502)
Accumulated deficit (25,788) (22,550)
Total stockholders' equity 36,830 38,613
$47,411 $51,165
SOURCE FVC.COM
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CONTACT:
James Mitchell, Chief Financial Officer of
FVC.com, 408-567-7204, or general information, Don Markley, or
analysts, Kristi Larson, both of the Financial Relations Board,
415-986-1591
NOTE TO EDITORS: For more info on FVC.COM via fax at no
additional cost, please dial 1-800-PRO-INFO, ticker symbol FVCX
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