- Bookings increase 27% quarter over quarter
- Net cash outflow reduced 38% quarter over quarter
- Cash operating expenses reduced 9% quarter over quarter
SANTA CLARA, Calif., Aug. 1 /PRNewswire-FirstCall/ --
First Virtual Communications, Inc. (Nasdaq: FVCX), or the Company, a premier
provider of rich media Web conferencing and collaboration solutions, today
announced financial results for the quarter ended June 30, 2002. Revenue for
the quarter was $6.6 million, compared with revenue of $6.6 million for the
first quarter of 2002 and $8.1 million for the second quarter of 2001. The net
loss for the quarter was $4.5 million, or $0.12 per share, compared to a net
loss of $1.7 million, or $0.05 per share for the first quarter of 2002 and a
net loss of $6.1 million, or $0.33 per share for the second quarter of 2001.
The net loss for the current quarter on a pro forma basis was $3.5 million
or $0.09 per share, compared with a pro forma net loss of $1.3 million, or
$0.04 per share in the first quarter of 2002. Pro forma financial results for
this quarter exclude the effect of a $1 million provision for ATM legacy
excess or obsolete inventory.
Bookings gained momentum in the second quarter, as the Company increased
its bookings by 27% quarter over quarter. For accounting reasons, the Company
deferred the recognition of revenue associated with orders totaling
$1.8 million.
As part of its ongoing operating expense reduction efforts, the Company
continued to reduce its cash operating expenses to $5.9 million for the
quarter, down from $6.5 million in the first quarter.
Additionally, the Company was also able to reduce its net cash outflow,
before new financing, to $1.3 million in the quarter compared with
$2.1 million in the previous quarter. The Company achieved this result by
continuing to implement strict expense control measures.
Total operating expenses increased to $7.6 million in the quarter from
$7.0 million in the first quarter of 2002, or a 9% increase, primarily due to
an increase in provisions for doubtful accounts. Additionally, during the
quarter, the Company closed a private placement financing, with proceeds to
the Company of approximately $4.8 million. As a result, the Company ended the
quarter with cash and short-term investments of $10.8 million.
"While our revenue remained flat quarter over quarter, bookings were
strong, so I am encouraged by our progress this quarter," said Killko
Caballero, President and CEO. "We launched Click to Meet Express and expect to
release Click to Meet 3.0 in the third quarter of this year. We also saw
increasing sales from our newly established international alliances.
Additionally, we were able to reduce the net cash outflow for the quarter.
Based in part on new business booked and shipped in this quarter, we are
confident of growing sales, particularly of our strategic products, in the
future. Overall, I am pleased and encouraged by our efforts and believe that
this will lead to enhanced financial results in coming quarters."
Gross profit margin decreased to 45% in the quarter from 80% in the first
quarter of 2002 and 46% in the second quarter of 2001. Gross profit margin in
the quarter on a pro forma basis was 60%. During the first quarter of 2002,
software products made up most of the quarter's sales. However, during the
second quarter, the Company's sales had a greater proportion of hardware
products in the overall product mix, resulting in a lower gross profit margin.
It is anticipated that gross margin will increase in the third quarter, as
orders booked and billed in the second quarter are recognized for revenue
purposes.
During the quarter, the Company also announced the launch of its Click to
Meet Express product. This product is an advanced rich media Web conferencing
tool that represents the culmination of the combined technologies from
First Virtual and CUseeMe Networks, a company acquired by First Virtual in
June 2001. Further, the Company entered into an exclusive reseller agreement
with Net One Systems, the leading network integrator in Japan. The Company
also booked and shipped a major sale of Click to Meet in the Indian market.
"We are very encouraged by this quarter's performance. The release of
Click to Meet Express is the first step in our strategy to provide effective
Web collaboration tools," said Ralph Ungermann, Executive Chairman of the
Board. "We plan to release Click to Meet 3.0, a carrier class version of Click
to Meet, designed for large scale deployments, in the third quarter, and are
continuing to enhance Click to Meet Express, which is targeted at smaller
scale applications. We are confident in our strategy, our products and this
Company's prospects for future growth and financial success."
Conference Call Reminder
Management from First Virtual Communications will discuss the Company's
second quarter financial results during its quarterly conference call for
investors at 5:00 p.m., EDT 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 at http://www.fvc.com. If you are unable to participate on the
call, a replay will be available through August 8th by dialing 703-925-2435,
passcode #6077671.
About First Virtual Communications
Headquartered in Santa Clara, California, First Virtual Communications is
a premier provider of next generation Web conferencing and collaboration
solutions. It delivers award winning integrated communications solutions that
address the needs of business people who need to work together remotely to
collaborate, train, demonstrate or sell. The Company has helped to define
IP-based communications by pushing the boundaries of conferencing for a better
user experience, easier enterprise deployment and potential return on
investment. The Company's products provide business quality communication by
supporting a wide range of industry standards. The Company's solutions
integrate seamlessly with existing tools and methodologies, extending the
advantages of instant messaging and collaboration environments such as
Microsoft Exchange, Outlook and MSN Messenger. The Company's innovative
solutions are deployed in over 1200 customer sites worldwide, including
Fortune 500 companies, government agencies and service providers. 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: an increase in revenue in the third quarter and beyond, the
timely release of Click to Meet 3.0, the continued increase in sales of the
Company's Click to MeetTM and MCU products, First Virtual Communications'
limited operating history as a combined company with CUseeMe Networks, its
variability of operating results, market acceptance of video and web
conferencing technology, potential inability to maintain business
relationships with integrators, 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 Six months ended
June 30, June 30,
2002 2001 2002 2001
Revenue $6,644 $8,135 $13,245 $12,517
Cost of revenue 3,653 4,389 5,001 6,976
Gross profit 2,991 3,746 8,244 5,541
Operating expense:
Research and development 2,431 2,842 5,188 6,828
Sales and marketing 2,375 2,353 4,290 5,368
General and administrative 2,777 3,070 5,061 6,509
Acquisition and other
non-recurring charges -- 1,781 -- 1,781
Total operating expense 7,583 10,046 14,539 20,486
Operating loss (4,592) (6,300) (6,295) (14,945)
Other income, net 48 170 92 486
Minority interest in
consolidated subsidiary 32 (12) 17 (14)
Net loss $(4,512) $(6,142) $(6,186) $(14,473)
Basic and diluted net loss
per share $(0.12) $(0.33) $(0.17) $(0.79)
Shares used in computing
basic and diluted net
loss per share 38,445 18,859 36,267 18,238
First Virtual Communications, Inc.
Pro Forma Adjustments
(in thousands)
Three months ended Six months ended
June 30, June 30,
2002 2001 2002 2001
Net Loss as reported
on the Pro Forma
Consolidated Statements
of Operations $(3,512) $(4,207) $(5,186) $(11,984)
Amortization of Goodwill -- (154) -- (308)
Impairment of ICAST Goodwill
and Intangible Assets -- (1,083) (1,083)
Acquired in-process R&D
from CUseeMe (276) (276)
Reduction in Workforce (422) (422)
Inventory Adjustments (1,000) -- (1,000) (400)
Net Loss as reported
on Condensed
Consolidated Statement
of Operations $(4,512) $(6,142) $(6,186) $(14,473)
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 Six months ended
June 30, June 30,
2002 2001 2002 2001
Revenue $6,644 $8,135 $13,245 $12,517
Cost of revenue 2,653 4,389 4,001 6,576
Gross profit 3,991 3,746 9,244 5,941
Operating expense:
Research and development 2,431 2,842 5,188 6,828
Sales and marketing 2,375 2,353 4,290 5,368
General and administrative 2,777 2,916 5,061 6,201
Acquisition and other
non-recurring charges -- -- -- --
Total operating expense 7,583 8,111 14,539 18,397
Operating loss (3,592) (4,365) (5,295) (12,456)
Other income, net 48 170 92 486
Minority interest in consolidated
subsidiary 32 (12) 17 (14)
Net loss $(3,512) $(4,207) $(5,186) $(11,984)
Basic and diluted net loss per
share $(0.09) $(0.22) $(0.14) $(0.66)
Shares used in computing basic
and diluted net loss per share 38,445 18,859 36,267 18,238
First Virtual Communications, Inc.
Condensed Consolidated Balance Sheets
(in thousands; unaudited)
June 30, December 31,
2002 2001
ASSETS
Current assets:
Cash and cash equivalents $10,305 $6,946
Short-term investments 495 2,438
Accounts receivable 6,524 6,365
Inventory 1,639 3,188
Prepaids and other current assets 1,056 1,227
Total current assets 20,019 20,164
Property and equipment, net 2,847 3,183
Other assets 398 322
Intangible assets, net 13,507 14,489
$36,771 $38,158
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $261 $36
Accounts payable 3,372 3,268
Accrued liabilities 3,776 5,561
Deferred revenue 4,137 2,936
Total current liabilities 11,546 11,801
Long-term debt, net of current portion 225 --
Minority interest in consolidated subsidiary 5 --
Stockholders' equity:
Common stock 40 33
Additional paid-in capital 118,333 113,437
Accumulated other comprehensive income (loss) 74 153
Accumulated deficit (93,452) (87,266)
Total stockholders' equity 24,995 26,357
$36,771 $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, Inc., +1-408-567-7200, or
trogers@fvc.com
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