SANTA CLARA, Calif., May 2 /PRNewswire-FirstCall/ -- First Virtual
Communications, Inc., or the Company, (Nasdaq: FVCX), a leading provider of
rich media Web conferencing and collaboration solutions for IP and other
networks, today announced financial results for the quarter ended March 31,
2002. Revenue for the quarter was $6.6 million, compared with revenue of
$4.4 million for the first quarter of 2001 and $7.4 million for the fourth
quarter of 2001. The net loss for the quarter was $1.7 million, or $0.05 per
share, compared to a net loss of $8.3 million, or $0.48 per share for the
first quarter of 2001 and a net loss of $6.6 million, or $0.20 per share for
the fourth quarter of 2001. The net loss for the current quarter on a pro
forma basis was $1.3 million, or $0.04 per share, compared with a pro forma
net loss of $8.2 million, or $0.47 per share for the first quarter of 2001 and
a pro forma net loss of $4.7 million, or $0.14 per share for the fourth
quarter of 2001. Pro forma financial results exclude the effect of
amortization of goodwill and intangibles and provisions for excess and
obsolete inventory of legacy products.
"Our business transition from ATM to IP-based products is largely behind
us and we are quickly ramping sales of our higher margin strategic products.
Our performance this quarter clearly shows that our strategy can lead us to
financial success," said Killko Caballero, President and CEO. "We knew that
the first quarter was going to be challenging, but we have a technology that
is being well received and a sales force that is able to effectively promote
our products' advantages and benefits. Accordingly, we achieved our revenue
objectives for the quarter with significantly increasing sales of our
strategic Click to Meet(TM) and MCU products."
This quarter's financial results reflect increasing sales of the Company's
strategic products, increasing gross profit margin and decreasing operating
expense. Traditionally, the first quarter has been the most challenging for
the Company, since government agencies, a significant portion of the Company's
customer base, are normally in the process of developing their annual budgets
and are less able to place orders. The Company is moving aggressively to
expand its customer base worldwide. Revenue generated from the Company's
products, Click to Meet(TM) and the conference server, known as our Multipoint
Control Unit ("MCU"), accounted for 62% of total revenue in the quarter,
compared with 21% of total revenue in the fourth quarter of 2001.
Gross margin increased to 79.6% in the quarter from 41.0% in the first
quarter of 2001 and 36.5% in the fourth quarter of 2001. On a pro forma basis
gross margin increased to 79.6% in the quarter from 41.0% in the first quarter
of 2001 and 51.3% in the fourth quarter of 2001. This increase was due to a
higher percentage of revenue from software-based strategic products in the
quarter.
As part of its ongoing operating expense reduction efforts, the Company
continued to reduce its cash burn rate, using $2.1 million in cash in the
quarter compared with $2.9 million in the previous quarter. The Company
achieved this result by increasing average gross margin and implementing
strict expense control measures. Total operating expenses decreased to $7.0
million in the quarter from $9.6 million in the fourth quarter of 2001, or a
28% decrease. As a result, the Company ended the quarter with cash and short-
term investments of $7.3 million. Subsequent to the end of the first quarter,
the Company also closed a private placement financing with proceeds to the
Company of approximately $4.8 million.
The Securities and Exchange Commission has advised the Company that the
staff intends to recommend that the Commission commence civil enforcement
proceedings against the Company, its Executive Chairman and two former
officers relating to the April 1999 revisions of the Company's reported
financial results for the year ended December 31, 1998. The Company believes
that any proposed action would be unwarranted, and that it and the individuals
have meritorious defenses.
In addition to delivering the above improved financial results, the
Company announced several significant accomplishments during the quarter and
the early part of the second quarter of 2002. The Company closed major sales
with Tomen Cyber Business Solutions, a Japanese distributor, and the U.S.
Department of Defense. Further, the Company entered into an exclusive reseller
agreement with Net One Systems, the leading network integrator in Japan. The
Company's products continued to gain recognition in the industry, with its
Click to Meet rich media conferencing solution being named "Best Innovative
Use of Technology" at Cisco Systems' Innovation Through Convergence
Exposition, held in Dallas, Texas in April of 2002.
"We are very encouraged by this quarter's performance. The financial
results not only show a large increase in demand of our IP-based products, but
solid execution by our Company's team," said Ralph Ungermann, Executive
Chairman of the Board. "We are increasingly confident in our strategy, our
products and this Company's prospects for future growth and financial success.
Especially because this quarter we will roll out a full line of new Click to
Meet products that are the result of the merger with CUseeMe."
Conference Call Reminder
Management from First Virtual Communications will discuss the Company's
first quarter financial results during its quarterly conference call for
investors at 5:00 p.m., EST today. To participate, please call (888) 413-4411
or (703) 871-3795 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 May 9th by
dialing (703) 925-2435, passcode #5967099.
About First Virtual Communications
First Virtual Communications is a world leader in providing Web
conferencing and collaboration solutions to enterprises, telecommunications
service providers and government agencies. By enabling interactive voice,
video, chat and data collaboration over IP, ISDN and ATM networks, First
Virtual Communications provides cost-effective, integrated end-to-end
solutions for large-scale deployments to enterprise desktops. 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(TM) can be integrated seamlessly into popular messaging and
collaboration environments such as MSN Messenger and Microsoft
Exchange/Outlook. First Virtual Communications 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/A for the year ended December 31,
2001.
NOTE: All trademarks are recognized.
First Virtual Communications, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data; unaudited)
Three months ended
March 31,
2002 2001
Revenue $6,601 $4,382
Cost of revenue 1,348 2,587
Gross profit 5,253 1,795
Operating expense:
Research and development 2,757 3,986
Sales and marketing 1,915 3,015
General and administrative 2,284 3,439
Total operating expense 6,956 10,440
Operating loss (1,703) (8,645)
Other income, net 44 316
Minority interest in consolidated
subsidiary (15) (2)
Net loss $(1,674) $(8,331)
Basic and diluted net loss per share $(0.05) $(0.48)
Shares used in computing basic and
diluted
net loss per share 33,380 17,414
First Virtual Communications, Inc.
Pro Forma Adjustments
(in thousands)
Three months ended
March 31,
2002 2001
Net Loss as reported on the Pro Forma
Consolidated Statements of Operations $(1,332) $(8,161)
Amortization of Goodwill and
intangible assets (342) (170)
Net Loss as reported on Condensed
Consolidated Statement of Operations $(1,674) $(8,331)
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 operating results.
First Virtual Communications, Inc.
Condensed Pro Forma Consolidated Statements of Operations
(in thousands, except per share data; unaudited)
Three months ended
March 31,
2002 2001
Revenue $6,601 $4,382
Cost of revenue 1,348 2,587
Gross profit 5,253 1,795
Operating expense:
Research and development 2,757 3,986
Sales and marketing 1,915 3,015
General and administrative 1,942 3,269
Total operating expense 6,614 10,270
Operating loss (1,361) (8,475)
Other income, net 44 316
Minority interest in consolidated
subsidiary (15) (2)
Net loss $(1,332) $(8,161)
Basic and diluted net loss per share $(0.04) $(0.47)
Shares used in computing basic and
diluted
net loss per share 33,380 17,414
First Virtual Communications, Inc.
Condensed Consolidated Balance Sheets
(in thousands; unaudited)
March 31, March 31,
2002 2001
ASSETS
Current assets:
Cash and cash equivalents $6,762 $6,946
Short-term investments 550 2,438
Accounts receivable 6,457 6,365
Inventory 2,741 3,188
Prepaids and other current
assets 957 1,227
Total current assets 17,467 20,164
Property and equipment, net 3,048 3,183
Other assets 373 322
Intangible assets, net 13,498 14,489
$34,386 $38,158
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term
debt $36 $36
Accounts payable 2,188 3,268
Accrued liabilities 4,531 5,561
Deferred revenue 3,028 2,936
Total current liabilities 9,783 11,801
Minority interest in consolidated
subsidiary 29 --
Stockholders' equity:
Common stock 33 33
Additional paid-in capital 113,353 113,437
Accumulated other comprehensive
income (loss) 128 153
Accumulated deficit (88,940) (87,266)
Total stockholders' equity 24,574 26,357
$34,386 $38,158
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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