SANTA CLARA, Calif., Nov. 7 /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 September 30, 2002. Revenue
for the quarter was $6.1 million, compared with $6.6 million for the second
quarter of 2002 and $7.8 million for the third quarter of 2001. The decline in
revenue quarter over quarter was primarily due to deferral of sales to a major
reseller that the Company currently expects to recognize in the fourth
quarter. The net loss for the quarter was $3.6 million, or $0.09 per share,
compared to a net loss of $4.5 million, or $0.12 per share for the second
quarter of 2002 and a net loss of $10.5 million, or $0.34 per share for the
third quarter of 2001.
The net loss for the third quarter on a pro forma basis was $3.6 million,
or $0.09 per share, compared with a pro forma net loss of $3.5 million, or
$0.09 per share in the second quarter of 2002, and a pro forma net loss of
$4.2 million, or $0.14 per share in the third quarter of 2001.
The Company's net change in cash and investments increased in the third
quarter to $1.7 million, compared with a $1.3 million net change, before
equity financing, in the second quarter. This increase was primarily due to a
one-time expenditure of $437,000 to acquire the remaining 48% interest in the
Company's UK affiliate. Net cash used in operating activities declined to $1.2
million, consisting of $3.6 million from net loss adjusted for non-cash items
of $629,000 and changes in assets and liabilities of $1.8 million, compared to
$1.3 million in the previous quarter, consisting of $4.5 million from net loss
adjusted for non-cash items of $2.6 million and charges on assets and
liabilities of $558,000. Operating expenses increased slightly to $7.7 million
from $7.6 million quarter over quarter. As a result, the Company ended the
quarter with cash and short-term investments of $9.1 million.
Gross profit margin increased to 67% in the quarter, from 45% in the
second quarter of 2002 and negative 15% in the third quarter of 2001. Gross
profit margin on a pro forma basis increased to 67% in the quarter from 60% in
the second quarter of 2002 and 57% in the third quarter of 2001. As in the
second quarter, third quarter sales included a significant proportion of the
Company's strategic software products and a somewhat lower proportion of
strategic software product sales that include bundled industry standard
servers, which helped to increase the overall gross profit margin.
"Although I am disappointed to announce a revenue decline, quarter over
quarter, I am very encouraged by our product development successes and the
increases in our gross profit margin and deferred revenue," said Jonathan
Morgan, Acting Chief Executive Officer. "Sales of Click to Meet Express are
gaining momentum and we released Click to Meet 3.0 to some of our key
customers in the third quarter. We are also continuing to see greater activity
in international markets, and we are steadily developing opportunities into
real business. Overall, I am encouraged by our efforts and believe that this
will lead to enhanced financial results in the near term."
Since the Company's launch of its Click to Meet Express product in the
second quarter, sales of Click to Meet Express have increased and constitute a
significant portion of the overall product mix. This product is an advanced
rich media web conferencing solution, designed to meet the needs of enterprise
and service provider end users. The Company also released Click to Meet 3.0,
a product designed for very large scale service provider and enterprise
deployments, to some of its key customers in Asia and Europe.
"We are very encouraged by this quarter's performance. The release of
Click to Meet Express is a major step in our strategy to provide state-of-the-
art web conferencing solutions," said Ralph Ungermann, Executive Chairman of
the Board. "We are confident in our strategy, our products and our prospects
for near term growth and financial success."
Conference Call Reminder
Management from First Virtual Communications will discuss the Company's
third 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 at http://www.fvc.com. If you are unable to participate on the
call, a replay will be available through November 14th by dialing
(888) 266-2086 or (703) 925-2435, passcode #6253965.
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 a potentially greater 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, such as email and
web browsing, while extending the advantages of instant messaging and
collaboration environments, such as MSN Messenger and Microsoft Exchange. The
Company's innovative solutions are deployed in over 1,200 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 fourth quarter and beyond, the
success of and timely release of Click to Meet 3.0, the continued increase in
sales of the Company's Click to Meet(TM) and MCU products, First Virtual
Communications' 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-
Q for the quarter ended June 30, 2002.
All trademarks are recognized.
- Financial Tables Follow -
First Virtual Communications, Inc.
Condensed Consolidated Balance Sheets
(in thousands; unaudited)
September 30, December 31,
2002 2001
ASSETS
Current assets:
Cash and cash equivalents $8,666 $6,946
Short-term investments 483 2,438
Accounts receivable 6,109 6,365
Inventory 1,374 3,188
Prepaids and other current assets 898 1,227
Total current assets 17,530 20,164
Property and equipment, net 2,522 3,183
Other assets 374 322
Intangible assets, net 13,971 14,489
$34,397 $38,158
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $261 $36
Accounts payable 2,182 3,268
Accrued liabilities 4,468 5,561
Deferred revenue 5,987 2,936
Total current liabilities 12,898 11,801
Long-term debt, net of current portion 225 --
Minority interest in consolidated subsidiary -- --
Stockholders' equity:
Common stock 40 33
Additional paid-in capital 118,434 113,437
Accumulated other comprehensive income (loss) (121) 153
Accumulated deficit (97,079) (87,266)
Total stockholders' equity 21,274 26,357
$34,397 $38,158
First Virtual Communications, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data; unaudited)
Three months ended Nine months ended
September 30, September 30,
2002 2001 2002 2001
Revenue $6,137 $7,767 $19,382 $20,284
Cost of revenue 2,039 8,893 7,040 15,869
Gross profit 4,098 (1,126) 12,342 4,415
Operating expense:
Research and development 2,346 3,128 7,534 9,956
Sales and marketing 2,618 3,004 6,908 8,372
General and administrative 2,784 3,430 7,845 9,939
Acquisition and other non-
recurring charges -- -- -- 1,781
Total operating expense 7,748 9,562 22,287 30,048
Operating loss (3,650) (10,688) (9,945) (25,633)
Other income, net 40 122 132 608
Minority interest in consolidated
subsidiary (17) 44 -- 30
Net loss $(3,627) $(10,522) $(9,813) $(24,995)
Basic and diluted net loss per
share $(0.09) $(0.34) $(0.26) $(1.10)
Shares used in computing basic
and diluted net loss per share 40,275 30,707 37,485 22,735
First Virtual Communications, Inc.
Pro Forma Adjustments
(in thousands)
Three months ended Nine months ended
September 30, September 30,
2002 2001 2002 2001
Net Loss as reported on the
Pro Forma Consolidated
Statements of Operations $(3,627) $(4,214) $(8,813) $(16,198)
Amortization of Goodwill -- (793) -- (1,101)
Impairment of ICAST Goodwill -- -- (1,083)
IPR&D Write-off -- -- -- --
Acquired in-process R&D from ICAST -- (276)
Reduction in Workforce -- (422)
Inventory Adjustments -- (5,515) (1,000) (5,915)
Net Loss as reported on Condensed
Consolidated Statement of
Operations $(3,627) $(10,522) $(9,813) $(24,995)
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 Nine months ended
September 30, September 30,
2002 2001 2002 2001
Revenue $6,137 $7,767 $19,382 $20,284
Cost of revenue 2,039 3,378 6,040 9,954
Gross profit 4,098 4,389 13,342 10,330
Operating expense:
Research and development 2,346 3,128 7,534 9,956
Sales and marketing 2,618 3,004 6,908 8,372
General and administrative 2,784 2,637 7,845 8,838
Acquisition and other non-
recurring charges -- -- -- --
Total operating expense 7,748 8,769 22,287 27,166
Operating loss (3,650) (4,380) (8,945) (16,836)
Other income, net 40 122 132 608
Minority interest in consolidated
subsidiary (17) 44 -- 30
Net loss $(3,627) $(4,214) $(8,813) $(16,198)
Basic and diluted net loss per
share $(0.09) $(0.14) $(0.24) $(0.71)
Shares used in computing basic and
diluted net loss per share 40,275 30,707 37,485 22,735
SOURCE First Virtual Communications, Inc.
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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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