Artisoft, Inc. Releases Results for Fiscal Year 2002; Fourth Quarter Reflects Strong Growth in TeleVantage Sales.Business/Technology Editors CAMBRIDGE Cambridge, city, Canada Cambridge (kām`brĭj), city (1991 pop. 92,772), S Ont., Canada, on the Grand River, NW of Hamilton. It was formed in 1973 with the amalgamation of Galt, Hespeler, and Preston, all founded in the early 19th cent. , Mass.--(BUSINESS WIRE)--Aug. 8, 2002 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, 2002. For the fourth quarter of fiscal year 2002, 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 $1.8 million or $.11 per share. These results compare to net sales of $500,000 (including the effect of a reserve for channel inventory rotations that reduced revenue by $800,000) and a net loss of $2.9 million or $.18 per share for the third quarter of fiscal year 2002. Gross profit for the fourth quarter of fiscal year 2002 was 94% compared to 75% (or 91% excluding the effect of the inventory rotation reserve) in the third quarter of fiscal year 2002. 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 $3.2 million in both the fourth and third quarters. For the fiscal year ended June 30, 2002, Artisoft reported net sales of $5.9 million and a net loss of $8.6 million, or $.72 per share. This compares to net sales of $7.5 million in fiscal year 2001 and a net loss of $12.8 million, or $.82 per share. The decline in annual revenue is attributable primarily to the company's 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 voice processing The computerized handling of voice, which includes voice store and forward, voice response, voice recognition and text to speech technologies. hardware, the completion of a product development contract with Intel in 2001, and a reserve for channel inventory rotations in 2002. "We are pleased by the strong growth we achieved in TeleVantage sell-through licenses, which increased over 45% from the previous quarter," said Steve Manson Man·son , Sir Patrick 1844-1922. Scottish parasitologist. One of the founders (1899) of the London School of Tropical Medicine, he introduced (1877) the hypothesis that the mosquito is host to the malaria parasite. , Artisoft's president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "We have seen a substantial increase in our sales pipeline over the past six months, including an increase in demand from large multi-site organizations who are looking to reduce the costs of managing their proprietary PBXs." During the year, Artisoft extended its leadership position in the open systems communications market by strengthening its relationships with 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 and Toshiba America Information Systems; introducing several new highly acclaimed ac·claim v. ac·claimed, ac·claim·ing, ac·claims v.tr. 1. To praise enthusiastically and often publicly; applaud. See Synonyms at praise. 2. products; winning four new awards for technical excellence; and expanding its list of Open Communications Alliance partners to over 25 members. The company also successfully completed the transition of its business to focus exclusively on its TeleVantage software-based phone system product lines. Artisoft enhanced its relationship with Intel by announcing a collaboration Working together on a project. See collaborative software. to integrate TeleVantage with a new generation of Intel telephony Meaning "sound over distance," it refers to electronically transmitting the human voice. In the beginning, telephony dealt only with analog signals in the circuit-switched networks of the telephone companies. hardware, extending the range of customers that TeleVantage can support and opening up new market opportunities for both companies. In addition, Artisoft began initial shipments of its 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 product, which is being preloaded on Intel's Converged Communications Platform. Artisoft's fourth quarter results do not include revenue that was anticipated from TeleVantage CTM Suite. Artisoft also strengthened its 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 relationship with Toshiba, which is selling and supporting a re-branded version of TeleVantage, called 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, through its extensive dealer channel. During the year, Artisoft completed integration between TeleVantage and Toshiba's popular Strata DK handsets, further enhancing the companies' ability to pursue this significant market opportunity. The companies recently extended their OEM agreement through the end of calendar year 2003. In September 2001, Artisoft began shipping TeleVantage 4.0 and introduced TeleVantage Call Center, an add-on A purchase of additional goods before payment is made for goods already purchased. An add-on may be covered by a clause in an installment payment contract that allows the seller to hold a security interest in the earlier goods until full payment is made on the later goods. module that addresses the needs of the mid-size call center market. During the year, Artisoft also introduced TeleVantage Small Office Edition, a turnkey See turnkey system. bundled solution that provides small businesses with a sophisticated phone system at an affordable price, and several add-on products, including TeleVantage Call Classifier 2.0, which provides advanced call routing and agent scripting based on customer data, and TeleVantage Call Center Scoreboard 1.0, a tool for call center managers who need to closely monitor call center queue Pronounced "Q." A temporary holding place for data. See queuing, message queue and print queue. (programming) queue - A first-in first-out data structure used to sequence objects. Objects are added to the tail of the queue ("enqueued") and taken off the head ("dequeued"). and agent performance. TeleVantage also continued to be honored hon·or n. 1. High respect, as that shown for special merit; esteem: the honor shown to a Nobel laureate. 2. a. Good name; reputation. b. for technical excellence throughout the year with awards from industry leading publications, events and associations. In 2002, TeleVantage received "Product of the Year" from Communications Solutions Magazine, "Editors Choice" from Customer Inter@ction Solutions Magazine, "Best of Show" for Communications Solutions Expo, and the CompTIA "Technology Award for Convergence." Since its introduction in 1998, TeleVantage has been bestowed with over 30 industry awards. Artisoft expanded its Open Communications Alliance by forging relationships with leading technology vendors in the 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, business automation and speech recognition fields. Digisoft Computers, iVoice, OnContact Software, Open Solutions, Polycom, SBS Technologies SBS Technologies, Inc., (Nasdaq: SBSE) founded in 1986, designed and built open architecture embedded computer products that enable original equipment manufacturers to serve the commercial, communication and government markets. SBS was headquartered in Albuquerque, New Mexico. , Sitara Networks, Spectrum Corp., and ThinkDirectMarketing are each collaborating with Artisoft to deliver standards-based communications solutions with TeleVantage as the focal point focal point n. See focus. . "2002 was an important year in Artisoft's history, as we completed our transition to an open systems communications software (communications, software) communications software - Application programs, operating system components, and probably firmware, forming part of a communication system. These different software components might be classified according to the functions within the Open Systems company; strengthened our relationships with key partners; and enhanced our products, making them more attractive to large organizations and expanding our market opportunity," said Manson. "In the coming year, we expect the shift from proprietary PBXs to open systems to accelerate, driving strong growth in Artisoft's revenues." Artisoft will hold 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 2002 results. A live Webcast will be available at www.artisoft.com. About Artisoft Artisoft, Inc. is a leading developer of open, software-based telephone systems that bring together voice and data for more powerful and productive communications. Designed specifically for small to midsize businesses, corporate branch offices, and call centers, Artisoft's TeleVantage delivers greater functionality, flexibility and value than proprietary PBXs. Artisoft's innovative software products have received more than 30 industry awards including "Product of the Year," "Best of Show," and "Editors' Choice" by Network Magazine, Communications Solutions Expo and Customer Inter@ction Solutions Magazine. The company distributes its products and services worldwide through a dedicated and growing channel of authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: resellers. For more information, please call 800-914-9985 or visit our website, http://www.artisoft.com. Artisoft and TeleVantage are registered trademarks of Artisoft, Inc. All other company and product names mentioned may be trademarks or registered trademarks of the respective companies with which they are associated. 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 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 its recent filings on Forms 10-K.
Artisoft, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
Three Twelve
Months Ended Months Ended
June 30, June 30,
2002 2001 2002 2001
Net revenue: Unaudited Unaudited Audited Audited
Product $ 1,474 $ 916 5,832 $ 5,041
Services -- 616 20 2,423
Total net revenue 1,474 1,532 5,852 7,464
Cost of sales:
Product 83 255 870 1,558
Services -- 340 12 1,695
Total cost of sales 83 595 882 3,253
Gross profit:
Product 1,391 661 4,962 3,483
Services -- 276 8 728
Total gross profit 1,391 937 4,970 4,211
Operating expenses:
Sales and marketing 1,483 1,587 5,893 8,884
Product development 755 891 3,486 3,691
General and administrative 957 1,082 4,414 4,922
Total operating expenses 3,195 3,560 13,793 17,497
Loss from operations (1,804) (2,623) (8,823) (13,286)
Other income, net 29 76 188 530
Net loss (1,775) (2,547) (8,635) (12,756)
Dividend to Series B preferred
stock -- (2,766) --
Loss applicable to common stock $(1,775) $(2,547) (11,401) $(12,756)
Income (loss) from discontinued
Net loss per common stock-
Basic and Diluted $ (0.11) $(0.16) (0.72) $ (0.82)
Weighted average common shares
outstanding-Basic and Diluted 15,782 15,728 15,760 15,476
Artisoft, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
June 30, June 30,
2002 2001
Audited Audited
ASSETS
Current Assets:
Cash and cash equivalents $ 6,020 $ 5,801
Receivables:
Trade accounts, net of allowances of $118
and $249 at June, 2002 and June 2001,
respectively 1,199 972
Other receivables -- 27
Inventories 14 674
Prepaid expenses 274 500
Total current assets 7,507 7,974
Property and equipment 3,480 3,331
Less accumulated depreciation and amortization (2,682) (1,943)
Net property and equipment 798 1,388
Other assets 257 187
$ 8,562 $ 9,549
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 376 $ 682
Accrued liabilities 1,569 1,424
Deferred revenue 578 168
Reserve for Stock Rotation 940 484
Total current liabilities 3,463 2,758
Commitments and contingencies -- --
Shareholders' equity:
Preferred stock, $1.00 par value. Authorized
11,433,600 shares; issued 2,800,000
Series B shares at June 30, 2002 2,800 --
Common stock, $.01 par value. Authorized
50,000,000 shares; issued 29,166,613
shares at June 30, 2002 and
29,051,168 at June 30, 2001 292 291
Additional paid-in capital 106,459 102,318
Accumulated deficit (34,668) (26,034)
Less treasury stock, at cost,
13,320,500 shares at June 30, 2002
and June 30, 2001 (69,784) (69,784)
Net shareholders' equity 5,099 6,791
$ 8,562 $ 9,549
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