Artisoft Announces Financial Results for First Quarter of Fiscal Year 2003.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)--Oct. 24, 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 first quarter of fiscal year 2003, ended September September: see month. 30, 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 $1.4 million and a net loss of $2.5 million. These results compare to net sales of $1.5 million and a net loss of $1.8 million for the fourth quarter of fiscal year 2002. The gross profit for the first quarter of fiscal year 2003 was 97% compared to 94% in the fourth quarter of fiscal year 2002. A highlight of the first quarter was a 75% increase in TeleVantage sales to end-users over the first 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 $3.8 million in the first quarter compared with $3.2 million in the fourth quarter of fiscal year 2002. In the course of a review of the company's stock plans, it was determined that due to a technical compliance issue, the company may have a tax liability with respect to past option exercises. Although the company is still analyzing this issue, it has established a reserve of approximately $.7 million with respect to this potential liability. In the first quarter of fiscal year 2003 the company recorded a non-cash dividend of $2.0 million relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc a change in value of its Common Stock purchase warrants issued in 2001 and the beneficial conversion feature on its Series B Preferred Stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. . The adjustment results from the dilutive impact of the Common Stock financing completed on September 27, 2002. The applicable loss per common share in the first quarter of fiscal year 2003 was $.28. Excluding the non-cash dividend, the loss per common share was $.16 in the first quarter. The comparable loss in the fourth quarter of fiscal year 2002 was $.11. Artisoft has applied to have its Common Stock listing transferred to the NASDAQ SmallCap Market. NASDAQ has advised the company that trading on this market will commence on October October: see month. 25, 2002. "We are pleased by the results of the first quarter, especially the 75% increase in TeleVantage sales to end users versus a year ago," said Steve v. t. 1. To pack or stow, as cargo in a ship's hold. See Steeve. 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. . "The industry's shift away from proprietary hardware-based phone systems to open software-based systems is gaining momentum and Artisoft is well-positioned to be a leader in this emerging high-growth market." "During the next quarter we expect to complete two transitions that should make the success we are having more visible," continued Manson. "As reported earlier, we should begin recognizing revenue from our 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 agreement with Toshiba Toshiba Corporation (株式会社東芝 Kabushiki-gaisha Tōshiba upon the release of TeleVantage 5.0. In addition, we expect to begin distributing our software to our channel via a real-time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. on-line licensing mechanism, which will eliminate the need for channel inventories. Upon completing these transitions, Artisoft's financial results will effectively mirror the sell-through sell-through Adjective of the sale of prerecorded video cassettes, without their first being for hire only of our end user TeleVantage licenses, eliminating the fluctuations caused by OEM contracts, changing inventories and rotation Rotation An active asset management strategy that tactically overweighted and underweighted certain sectors, depending on expected performance. Sometimes called sector rotation. reserves." Artisoft will hold a conference call at 4:45 p.m. (ET) today to discuss the first quarter of fiscal year 2003 financial results. The conference call will be broadcast live via the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at http://www.artisoft.com/corpcalls.html. About Artisoft Artisoft, Inc. is a leading developer of open, standards-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 To cross over boundaries; for example, internetwork means from one network to another. Contrast with intra. @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. 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, risks associated with the Company's strategic alliances, 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 filing 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. .
Artisoft, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
(Unaudited)
Three Months Ended
September 30,
2002 2001
Net revenue:
Product $ 1,357 $ 1,398
Services - 20
Total net revenue 1,357 1,418
Cost of sales:
Product 36 221
Services - 12
Total cost of sales 36 233
Gross profit:
Product 1,321 1,177
Services - 8
Total gross profit 1,321 1,185
Operating expenses:
Sales and marketing 1,392 1,570
Product development 800 1,141
General and
administrative 1,653 1,244
Total operating
expenses 3,845 3,955
Loss from operations (2,524) (2,770)
Other income, net 22 58
Net loss (2,502) (2,712)
Dividend to Series B
preferred stock (2,006) (2,379)
Loss applicable to common stock $ (4,508) $ (5,091)
Net loss applicable to common
stock-Basic and Diluted $ (0.28) $ (0.32)
Weighted average common shares
outstanding-Basic and Diluted 15,929 15,731
Artisoft, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
September 30, June 30,
2002 2002
Unudited Audited
ASSETS
Current Assets:
Cash and cash equivalents $ 6,749 $ 6,020
Receivables:
Trade accounts, net of
allowances of $121 and $118
at September, 2002 and June
2002, respectively 1,217 1,199
Other receivables 1 -
Inventories 2 14
Prepaid expenses 169 274
Total current assets 8,138 7,507
Property and equipment 3,510 3,480
Less accumulated depreciation
and amortization (2,842) (2,682)
Net property and equipment 668 798
Other assets 203 257
$ 9,009 $ 8,562
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 362 $ 376
Accrued liabilities 2,313 1,569
Deferred revenue 929 578
Reserve for Stock Rotation 954 940
Total current liabilities 4,558 3,463
Commitments and contingencies - -
Shareholders' equity:
Preferred stock, $1.00 par value.
Authorized 11,433,600 shares;
issued 2,800,000 Series B shares
at September 30, 2002 2,800 2,800
Common stock, $.01 par value.
Authorized 50,000,000 shares;
issued 31,071,413 shares at
September 30, 2002
and 29,166,613 at June 30, 2002 311 292
Additional paid-in capital 108,295 106,460
Accumulated deficit (37,171) (34,669)
Less treasury stock, at cost,
13,320,500 shares at
September 30, 2002 and
June 30, 2002 (69,784) (69,784)
Net shareholders' equity 4,451 5,099
$ 9,009 $ 8,562
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