Artisoft, Inc. Releases Results for Fiscal Year 2001; Focus on TeleVantage Business Foundation for Future Growth.Business/Technology Editors CAMBRIDGE, Mass.--(BUSINESS WIRE)--Aug. 9, 2001 Artisoft, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : ASFT ASFT Airport Surface Friction Tester ), developer of the first software-based phone system, today reported its financial results for the fiscal year and fourth quarter ended June 30, 2001. Certain income and expense items from prior periods have been reclassified to conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?" fit, meet coordinate - be co-ordinated; "These activities coordinate well" the current period presentation. For the fourth quarter of fiscal year 2001, Artisoft reported net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of $1.5 million and a net loss of $2.5 million or $.16 per share. These results compare to net sales of $1.7 million and a net loss of $3.4 million or $.22 per share for the third quarter of fiscal year 2001. Reflected in the fourth quarter of fiscal 2001 is a reduction in sales of approximately $500,000 to reserve for channel inventory rotation. With the introduction of TeleVantage 4.0 distributors are expected to rotate the TeleVantage 3.5 inventory they will have on hand when this new release becomes available in the first quarter of fiscal year 2002. This $500,000 reserve for stock rotation Stock rotation is the practise, used in retail and especially in food stores such as supermarkets, of moving products with an earlier sell-by date to the front of a shelf (or in the cooler if the item is on repack so they get worked out before the new product), so they get picked up and is expected to be offset by a corresponding amount in revenue to be recorded in the first quarter of fiscal 2002 upon the delivery of TeleVantage 4.0. Also, in the fourth quarter of fiscal 2001, sales were increased $400,000 by the reversal of a previously established returns reserve relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the company's discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: product line, which the company concluded was no longer needed. Revenue from the company's TeleVantage product line was $1.5 million in the quarter compared to $1.6 million in the previous quarter. Gross margin percentage, after reclassifications of certain development expenses to cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold , increased to 61% for the fourth fiscal quarter of 2001 from 53% during the third fiscal quarter of 2001. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. were $3.6 million in the fourth fiscal quarter compared to $ 4.4 million in the third fiscal quarter. For the fiscal year ended June 30, 2001, Artisoft reported net sales of $7.5 million and a net loss of $12.8 million, or $.82 per share. This compares to net sales of $15.7 million in fiscal year 2000 and a net loss of $5.3 million, or $.35 per share, from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the . The decline in revenue for fiscal 2001 is attributable primarily to the discontinuation dis·con·tin·u·a·tion n. A cessation; a discontinuance. Noun 1. discontinuation - the act of discontinuing or breaking off; an interruption (temporary or permanent) discontinuance of sales of the company's Visual Voice software product line. Also, the previous year's results include one-time revenue of $2.7 million from the sale of Visual Voice source code and $1.5 million of related professional service fees from Intel Corporation (company) Intel Corporation - A US microelectronics manufacturer. They produced the Intel 4004, Intel 8080, Intel 8086, Intel 80186, Intel 80286, Intel 80386, Intel 486 and Pentium microprocessor families as well as many other integrated circuits and personal computer networking . At June 30, 2001, cash on hand was $5.8 million. As announced yesterday, Artisoft has entered into additional financing arrangements, and the company has no long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. . "Although our growth was hampered by the general slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in the telecom industry, we continued to make solid progress in meeting our strategic objectives," said Steve Manson, Artisoft's president and chief executive officer. "With the recent launch of two new product lines, the strengthening of our relationships with Toshiba and Intel, and increased financial resources, Artisoft is well positioned to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the tremendous opportunities in front of us." In FY2001, the company strengthened its position in the open systems communications market by developing, and recently announcing, two new major product releases -- TeleVantage 4.0, which is being re-branded and distributed by Toshiba, and TeleVantage CTM CTM Continuum (gaming) CTM Community Trade Mark (Europe) CTM Cisco Transport Manager CTM Confederacion de Trabajadores de Mexico (Spanish: Confederation of Mexican Workers) Suite, which is being pre-bundled on the Intel Converged Communications Platform. In addition, the company expanded its sales and marketing partnerships to over 20 companies, including CDW CDW - data warehouse , IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) , Compaq, HP, and Microsoft. Announced in July 2001, TeleVantage 4.0 includes the introduction of the new TeleVantage Call Center, an add-on module that addresses the needs of the mid-size call center market. TeleVantage Call Center offers a sophisticated feature set that was previously out of reach for most mid-sized businesses, including advanced queue routing, comprehensive trend reports, real-time statistics tracking, remote IP agent support, and agent monitoring, coaching and recording. TeleVantage 4.0 also represents the results of an 18-month joint-engineering project with Toshiba to integrate TeleVantage with the popular Toshiba digital handsets. Through an OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and arrangement with Artisoft, Toshiba is marketing TeleVantage 4.0 under the Strata stra·ta n. A plural of stratum. strata Noun the plural of stratum USAGE: Strata is sometimes wrongly used as a singular noun: this stratum (not strata) CS brand, which is being distributed and supported through Toshiba's established dealer channel. In May, Artisoft announced the first release of TeleVantage CTM Suite, which delivers on the company's joint engineering relationship with Intel. TeleVantage CTM Suite is being pre-bundled on the Intel(R) Converged Communications Platform, an open, standards-based, application-ready platform that supports a broad range of compatible telephony and business applications, peripherals, and services from multiple vendors on a single system. During the course of the year, Artisoft also forged numerous marketing and distribution alliances with other leading industry vendors, including Microsoft, Compaq, IBM, HP, and CDW. Membership in Artisoft's Open Communications Alliance, launched in December 2000, grew to over 20 best-of-breed technology vendors offering complementary solutions, including CRM (Customer Relationship Management) An integrated information system that is used to plan, schedule and control the presales and postsales activities in an organization. , call center, voice-over-IP, unified messaging Having access to e-mail, voice mail and faxes via a common computer application or by telephone. For example, unified messaging may send faxes and digitized voice mail to a mail server that turns them into e-mail attachments. , and speech recognition. "Our ability to partner with other companies provides Artisoft with an important strategic advantage over proprietary hardware vendors," according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Manson. "By locking up partnerships with other leading open systems vendors, Artisoft is creating competitive barriers that will help solidify so·lid·i·fy v. so·lid·i·fied, so·lid·i·fy·ing, so·lid·i·fies v.tr. 1. To make solid, compact, or hard. 2. To make strong or united. v.intr. TeleVantage's position as the industry-leading software-PBX." Artisoft will be holding a conference call at 4:45 EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT today to discuss the fourth quarter and fiscal year 2001 results. A live Webcast will be available at www.artisoft.com. About Artisoft: Artisoft, Inc. (NASDAQ: ASFT) of Cambridge, Mass., is a leading developer of software-based phone systems for midsized businesses, corporate branch offices, and call centers. Artisoft TeleVantage is a feature-rich phone system that combines the power of desktop computer with the most advanced communications technology Noun 1. communications technology - the activity of designing and constructing and maintaining communication systems engineering, technology - the practical application of science to commerce or industry available today. Built on open-systems architecture, TeleVantage provides greater value while safeguarding a business' investment for the future. Artisoft's innovative software products have received 30 industry awards including "Product of the Year," "Best of Show," and "Editors' Choice" by PC Magazine, Network Magazine, Communications Solutions Magazine and Customer Inter@actions Solutions, among others. The company distributes its products worldwide. For more information, please call Artisoft at 800-914-9985 or visit http://www.artisoft.com. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. : This release contains forward-looking statements based on current expectations or beliefs, as well as a number of assumptions about future events, and these statements are subject to important facts and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The forward-looking statements in this release address a variety of subjects including, for example, Artisoft's financial results, management's strategies and Artisoft's products and strategic alliances. The following factors, among others, could cause actual results to differ materially from those described in these forward-looking statements: the approval of the Company's shareholders of the financing announced on August 8, 2001, the availability of additional financing on terms acceptable to the Company or at all, the impact of competitive products and pricing, product demand and market acceptance risks, the presence of competitors with greater financial resources, product development and commercialization risks, costs associated with integration and administration of acquired operations, capacity and supply constraints CONSTRAINTS - A language for solving constraints using value inference. ["CONSTRAINTS: A Language for Expressing Almost-Hierarchical Descriptions", G.J. Sussman et al, Artif Intell 14(1):1-39 (Aug 1980)]. or difficulties and other factors detailed in the Company's filings with the Securities and Exchange Commission including the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , as filed on September 22, 2000, and the Company's Quarterly Report on Form 10-Q Form 10-Q See 10-Q. , as filed on May 15, 2001.
Artisoft, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, June 30,
2001 2000
ASSETS
Current Assets:
Cash and Cash Equivalents $ 5,801 $ 5,120
Short Term Investments -- 2,490
Receivables:
Trade accounts, net of
allowances of $674 and $1,084
in 2001 and 2000, respectively 488 1,511
Other receivables 27 146
Inventories 674 808
Prepaid Expenses 500 366
Total current assets 7,490 10,441
Long Term Investments -- 7,797
Property and Equipment 3,331 2,353
Less accumulated depreciation
and amortization (1,943) (1,140)
Net property and equipment 1,388 1,213
Other Assets 187 179
Net assets from discontinued operations -- 1,864
$ 9,065 $ 21,494
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts Payable $ 682 $ 928
Accrued Liabilities 1,424 1,937
Deferred Revenue 168 41
Total current liabilities 2,274 2,906
Commitments and contingencies -- --
Shareholders' equity:
Preferred stock, $1.00 par value
Authorized 11,433,600 shares;
none issued -- --
Common stock, $.01 par value
Authorized 50,000,000 shares;
issued 29,051,168 shares
at June 30, 2001 and
28,742,744 shares at
June 30, 2000 291 287
Additional paid-in capital 102,318 101,363
Accumulated deficit (26,034) (13,278)
Less treasury stock, at cost,
13,320,500 shares at June 30,
2001 and June 30, 2000 (69,784) (69,784)
Net shareholders' equity 6,791 18,588
9,065 21,494
Artisoft, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended Twelve Months Ended
June 30, June 30,
2001 2000 2001 2000
Revenue:
Product $916 $3,049 $5,041 $10,583
Services 616 1,957 2,423 5,106
Total Revenue 1,532 5,006 7,464 15,689
Cost of sales
Gross prProduct 254 1,269 1,558 5,242
Services 342 351 1,695 665
Total Cost of Sales 596 1,620 3,253 5,907
Gross Profit:
Product 662 1,780 3,483 5,341
Services 274 1,606 728 4,441
Total Gross Profit 936 3,386 4,211 9,782
Operating Expenses:
Sales and marketing 1,587 2,222 8,884 10,014
Product development 889 728 3,691 3,078
General and
administrative 1,082 696 4,922 2,870
Total operating
expenses 3,558 3,646 17,497 15,962
Loss from operations (2,622) (260) (13,286) (6,180)
Other income, net 76 282 530 915
Net income (loss)
from continuing
operations ($2,546) $22 ($12,756) ($5,265)
Income (loss) from
discontinued operations,
net of tax - (568) - 880
Loss on sale of
discontinued operations - (101) - (101)
Net loss ($2,546) ($647) ($12,756) ($4,486)
Net loss per common
share from continuing
operations-Basic and
Diluted ($0.16) $0.00 ($0.82) ($0.35)
Net loss per common
share-Basic and
Diluted ($0.16) ($0.04) ($0.82) ($0.30)
Weighted average
common shares
outstanding:
Basic 15,728 15,339 15,476 15,171
Diluted 15,728 16,293 15,476 15,171
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