Avistar Communications Corporation Reports Record Fourth Quarter and Year 2000 Revenues.Business Editors REDWOOD redwood: see sequoia; brazilwood. redwood or sequoia Coniferous evergreen timber tree (Sequoia sempervirens) of the family Taxodiaceae, found in the fog belt of west-coastal North America. SHORES, Calif.--(BUSINESS WIRE)--Jan. 31, 2001 Avistar Avistar Communications Corporation  This article or section is written like an .Please help [ rewrite this article] from a neutral point of view. Communications Corporation (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 :AVSR (Audio Visual Speech Recognition) Using lip reading software to enhance speech recognition. In noisy environments where a camera can be included, AVSR improves the computer's ability to recognize the speaker's words by visually tracking lip movement and ), the enterprise video company, today announced financial results for its quarter and year ended December December: see month. 31, 2000. Record fourth quarter 2000 revenues grew 154% to $6.6 million from revenues of $2.6 million for the fourth quarter of 1999 and increased 20% sequentially from revenues of $5.5 million for the third quarter of 2000. Revenues for the year ended December 31, 2000 grew 128% to $21.4 million from $9.4 million for 1999. The fourth quarter 2000 pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net loss, before amortization of stock compensation expense, was $(0.3) million, or $(0.01) per share on 25.1 million pro forma weighted average shares outstanding. These results compare to a pro forma net loss of $(1.4) million in the fourth quarter 1999. The non-cash stock compensation expense for the fourth quarter 2000 was $0.4 million versus $0.3 million for the fourth quarter 1999. The pro forma year 2000 net loss, before amortization of stock compensation expense and the one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. , non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. related to the beneficial conversion of convertible preferred stock Convertible Preferred Stock Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Also known as "convertible preferred shares". due to Avistar's initial public offering, was $(2.6) million compared to a pro forma net loss of $(5.7) million for 1999. "Our fourth quarter and full year 2000 revenue growth reflected our progress in our goal of making video collaboration Working together on a project. See collaborative software. a natural, every day part of business interactions," said Gerald Gerald - ["Gerald: An Exceptional Lazy Functional Programming Language", A.C. Reeves et al, in Functional Programming, Glasgow 1989, K. Davis et al eds, Springer 1990]. J. Burnett, Chairman and Chief Executive Officer of Avistar. "Our Video Operating System operating system (OS) Software that controls the operation of a computer, directs the input and output of data, keeps track of files, and controls the processing of computer programs. (TM) (VOS An operating system used in Stratus computers. FTX is Stratus' Unix operating system. ) manages and delivers high quality interactive video calling, desktop video content creation and broadcast origination Origination The process through which a mortgage lender creates a mortgage secured by some amount of the mortgagor's real property. Notes: Also known as loan origination, everyone must go through the origination process when securing a mortgage for a piece of real , video-on-demand The ability to deliver a movie, sports event or other video program to a TV set whenever the customer requests it. Video-on-demand (VOD) typically refers to free and paid programs from the cable TV companies or the telephone companies that offer video over DSL lines. , and integrated data sharing The ability to share the same data resource with multiple applications or users. It implies that the data are stored in one or more servers in the network and that there is some software locking mechanism that prevents the same set of data from being changed by two people at the same time. . With the fourth quarter 2000 release of Version 6.0 of our VOS, we provided our enterprise clients with increased flexibility to more broadly collaborate in 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. , to more effectively utilize live video broadcasts including streaming, and to more easily create content and originate o·rig·i·nate v. 1. To bring into being; create. 2. To come into being; start. broadcasts from their desktops. Version 6.0, coupled with our recent release of Call Reporting 2.0, helped to demonstrate the power and flexibility of our VOS enterprise software and helped us move toward our goal of firmly establishing our VOS as the standard for high quality video communications. Due to our VOS architecture and implementation, we are able to extend our functionality and capability lead in the marketplace." The fourth quarter 2000 net loss, including amortization of stock compensation expense, was $(0.7) million, or a loss of $(0.03) per share on pro forma weighted average and basic shares outstanding of 25.1 million. This compares to a net loss of $(1.7) million for the fourth quarter 1999. The net loss attributable to common stockholders for the year 2000, including amortization of stock compensation and the one-time non-cash charge of $37.8 million related to the beneficial conversion of convertible preferred stock due to the initial public offering, was $(42.5) million compared to a net loss of $(6.3) million for 1999. For the fourth quarter of 2000, gross margins were 57.1% compared to 58.7% for the third quarter of 2000. As previously discussed, gross margins in the third quarter of 2000 were somewhat higher than expected. Gross margins fluctuate due to product mix and revenue volumes, and other factors. As of December 31, 2000, Avistar had cash and cash equivalents of $21.7 million and 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. . During the fourth quarter 2000, the company elected to pay off its line of credit with a financial institution, which was $2.8 million at September September: see month. 30, 2000. Cash used by operating activities was $0.4 million for the fourth quarter 2000. 2001 Outlook "We were pleased with shipments during the quarter. As we disclose annually, product backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. (exclusive of services, maintenance and support) was $6.9 million at December 31, 2000," commented R. Stephen Stephen, 1097?–1154, king of England (1135–54). The son of Stephen, count of Blois and Chartres, and Adela, daughter of William I of England, he was brought up by his uncle, Henry I of England, who presented him with estates in England and France and Heinrichs Heinrichs is a form of Henry and may refer to
"We are aware of and seeing signs of economic weakness and slowing information technology purchasing generally and in our primary vertical market of financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. specifically; therefore we believe it is prudent to moderate our guidance for the full year of 2001, particularly in the second half. While, as we previously indicated, we may still be able to double revenues for the full year of 2001 and believe we have in place the infrastructure and pipeline to do so, we believe that given the current environment, revenue growth of between 70% and 80% is a more appropriate goal. We still expect to breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations in the fourth quarter of 2001." Avistar will be hosting a conference call at 2:00 p.m. PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT , today Wednesday Wednesday: see week. January January: see month. 31, 2001 to discuss fourth quarter results and review the company's progress and outlook. Interested parties can access this call by going to the Avistar Investor Relations Investor relations The process by which the corporation communicates with its investors. page at www.avistar.com and to the "Conference Calls" button at the bottom of that page. A 24-hour replay will be available for seven days after this call at www.avistar.com or by calling 630-652-3000 and giving the following passcode: 3392817. Avistar Communications Corporation Avistar develops, markets and supports video-enabled communications networks The transmission channels interconnecting all client and server stations as well as all supporting hardware and software. , which are helping transform how people collaborate. The Avistar product line includes a seamless, integrated suite of video and data collaboration See data conferencing. applications, all managed by Avistar's VOS(TM) video operating system. From a desktop, the system delivers high quality interactive video calling, content creation and publishing, broadcast video, video-on-demand, and integrated data sharing. Based on an open software platform and leveraging video, 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. and 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 networking standards, the Avistar network is scalable, reliable, cost effective, easy to use and designed to evolve with changing technologies. Avistar Communications Corporation is headquartered in Redwood Shores, California Redwood Shores is an upscale and desirable [1] waterfront neighborhood on the San Francisco Peninsula in California. It is located on the eastern edge of Belmont, but is actually part of incorporated Redwood City. , with offices in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , Dallas Dallas, city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S. and London London, city, Canada London, city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826. . Avistar Systems Corporation and Collaboration Properties, Inc Collaboration Properties, Inc. (CPI) is a wholly owned subsidiary of Avistar Communications Corporation. It holds US and foreign patents in the primary areas of presence-based interactions, desktop video, recorded and live media at the desktop, multimedia documents, data sharing, . are wholly owned subsidiaries Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of Avistar Communications Corporation. Collaboration Properties develops and holds patents on a wide range of networked video software and hardware. For more information on Avistar, visit www.avistar.com. Forward Looking Statements Statements made in this news release regarding Avistar's financial outlook for the 2001 fiscal year, in particular revenues, gross margins, and expenditures for research and development, sales and marketing and general and administrative expense, as well as statements regarding "lead in the marketplace", "strategies", "intentions", "expectations", "beliefs", "goals", or the like, are 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. within the meaning of Section 21E of the Securities Exchange Act. Such statements are subject to risks and uncertainties that could cause actual results to differ materially, including such factors, among others, as the impact of competitive products and pricing, the timely development and market acceptance of new products, the ability to raise capital, the mix between domestic and international sales, manufacturing and cost of Avistar's products, dependence on collaborative partners, the enforcement of intellectual property rights, the ability to achieve sales and revenue objectives, the ability to enter into new distribution agreements, potential economic weakness and purchasing patterns in the financial services industries, uncertainties relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc sole source suppliers, fluctuations in the stock market, and technological approaches. As a result of these and other factors, Avistar expects to experience significant fluctuations in operating results, and there can be no assurance that Avistar will become or remain consistently profitable in the future, or that its future results will meet expectations. These and other risk factors are discussed in Avistar's Registration Statement on Form S-1 as declared effective by the Securities and Exchange Commission on August 17, 2000 (see, in particular, Risk Factors and Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Financial Condition and Results of Operations) and Form 10-Q Form 10-Q See 10-Q. filed on November 1, 2000 with the Securities and Exchange Commission. Avistar disclaims any intent or obligation to update these forward-looking statements. Copyright (c) 2001 Avistar Communications Corporation. All right reserved. Avistar, VOS, the Avistar logo, and Avistar Systems are trademarks or registered trademarks of Avistar Communications Corporation. All other names used are the trademarks of their respective owners. ~financial statements to follow~
AVISTAR COMMUNICATIONS CORPORATION AND SUBSIDIARIES
COMBINED BALANCE SHEETS
as of December 31, 1999
and Consolidated Balance Sheet as of December 31, 2000
(in thousands, except share and per share data)
December 31, December 31,
1999 2000
-------------- -------------
Assets:
Current assets:
Cash and cash equivalents $ 6,232 $ 21,660
Accounts receivable, net
of allowance for doubtful
accounts of $240 and $312,
respectively 2,041 3,712
Inventories, including
inventory shipped to customers
sites, not yet installed of $818,
and $854, respectively 1,589 2,156
Prepaid expenses and other
current assets 124 434
Total current assets 9,986 27,962
Property and equipment, net 219 83
Other assets 318 258
Total assets $ 10,523 $ 28,303
Liabilities and Stockholders' Equity:
Current liabilities:
Line of credit $ 1,998 $ ----
Notes payable and accrued
interest due to related parties 2,533 ----
Accounts payable 1,157 2,006
Deferred revenue and deposits 1,313 2,126
Accrued liabilities and other 1,329 2,407
Total current liabilities 8,330 6,539
Notes payable and accrued interest
due to related parties, net 9,190 ----
Total liabilities 17,520 6,539
Stockholders' equity:
Convertible preferred stock,
$0.001 per share par value;
aggregate liquidation preference
of $40,945 at December 31, 1999:
Authorized at December 31, 1999
--- 86,000,000 - Issued and
outstanding --- 17,067,369 shares,
no shares at December 31, 1999 and
December 31, 2000, respectively 17 ----
Common stock, $0.001 par value;
25,000,000 and 250,000,000
shares authorized at December 31, 1999
and December 31, 2000, respectively,
2,818,950 and 26,266,990 shares issued at
December 31, 1999 and December 31, 2000,
respectively 3 26
Treasury common stock, 1,139,625 and
1,143,625 Shares at December 31, 1999
and December 31, 2000 respectively (1) (1)
Additional paid-in-capital 9,265 80,145
Deferred stock compensation (2,084) (1,755)
Accumulated deficit (14,197) (56,651)
Total stockholders' equity (6,997) 21,764
Total liabilities and
stockholders' equity $ 10,523 $ 28,303
AVISTAR COMMUNICATIONS CORPORATION AND SUBSIDIARIES
COMBINED STATEMENTS OF OPERATIONS
for the three and twelve months ended December 31, 1999 and
Consolidated Statement of Operations for the three and twelve
months ended December 31, 2000
(in thousands, except per share data)
Three Months Ended Twelve Months Ended
----------------------------------------
December 31, December 31,
1999 2000 1999 2000
----------------------------------------
(unaudited)
Revenues:
Products $ 1,653 $ 5,352 $ 6,146 $ 16,925
Services, maintenance
and support 953 1,279 3,227 4,489
-------- -------- -------- --------
Total revenue 2,606 6,631 9,373 21,414
-------- -------- -------- --------
Cost of revenue:
Products 710 2,199 3,190 7,287
Services, maintenance
and support 387 647 1,697 2,167
-------- -------- -------- --------
Total cost of revenue 1,097 2,846 4,887 9,454
-------- -------- -------- --------
Gross margin 1,509 3,785 4,486 11,960
-------- -------- -------- --------
Operating Expenses:
Research and development 730 1,203 2,718 4,123
Sales and Marketing 1,027 1,618 3,649 5,627
General and administrative 808 1,350 2,872 4,283
Amortization of deferred
stock compensation 323 434 618 2,049
-------- -------- -------- --------
Total operating
expenses 2,888 4,605 9,857 16,082
-------- -------- ------- --------
Loss from operations (1,379) (820) (5,371) (4,122)
-------- -------- ------- --------
Other income (expenses)
Interest expense (348) (207) (1,012) (1,184)
Interest income 19 339 54 650
Other, net (6) (5) (21) (15)
-------- -------- ------- --------
Total other
expense, net (335) 127 (979) (549)
-------- -------- ------- --------
Net loss $ (1,714) $ (693) $ (6,350) $ (4,671)
======== ======== ======== ========
Beneficial conversion related
to convertible preferred
stock $(37,783)
Net loss attributable to
common stockholders $ (1,714) $ (693) $ (6,350) $(42,454)
======== ======== ======== ========
Net loss per share -
basic and diluted $ (13.71) $ (0.03) $ (54.27) $ (4.46)
Weighted Average shares
used in calculating
basic and diluted net
loss per share 125 25,107 117 9,510
-------- -------- -------- -------
Pro forma net loss
per share - basic & diluted $ (0.03) $ (1.70)
Pro forma weighted average
shares used in calculating
basic and diluted net loss
per share 25,103 25,035
-------- --------
AVISTAR COMMUNICATIONS CORPORATION AND SUBSIDIARIES
COMBINED STATEMENT OF CASH FLOWS
for the three and twelve months ended December 31, 1999
and
CONSOLIDATED STATEMENT OF CASH FLOWS
For the three and twelve months ended December 31, 2000
(in thousands)
Three Months Twelve Months
ended December 31, ended December 31,
1999 2000 1999 2000
------- ------- ------- -------
(unaudited)
Cash Flows from
Operating Activities:
Net loss $ (1,714) $ (693) $ (6,350) $ (4,671)
Adjustments to reconcile
net loss to net cash
used in operating activities:
Depreciation 51 26 248 136
Loss on disposal
of fixed assets 24 0 24 0
Amortization of stock
compensation expense 323 434 618 2,049
Allowance for doubtful accounts 0 83 (32) 72
Changes in current assets
and liabilities:
Accounts receivable 283 (1,185) (718) (1,743)
Inventories (331) 417 (693) (567)
Prepaid expenses and other
current assets 57 119 (106) (310)
Other assets (18) 0 (279) 60
Accounts payable (544) 501 127 849
Deferred revenue (602) (506) (197) 813
Accrued liabilities and other (278) 442 49 1,078
------- ------- ------- -------
Net cash used in operating
activities (2,749) (362) (7,309) (2,234)
------- ------- ------- -------
Cash Flows from Investing
Activities:
Property and equipment (net) 5 0 (106) 0
------- ------- ------- -------
Cash Flows from Financing
Activities:
Net borrowings (payments)
under line of credit 1,801 (2,815) 1,998 (1,998)
Payments on notes payable to
related parties (269) 0 (269) (12,623)
Borrowings from related parties 384 0 5,435 900
Proceeds from issuance of
common stock (net) 5 (30) 5 31,383
Proceeds from issuance of
Series B preferred stock (net) 6,339 0 6,339 0
------- ------- ------- -------
Net cash provided by financing
activities 8,260 (2,845) 13,508 17,662
------- ------- ------- -------
Net increase (decrease) in cash
and cash equivalents 5,516 (3,207) 6,093 15,428
Cash and cash equivalents,
beginning of period 716 24,867 139 6,232
------- ------- ------- -------
Cash and cash equivalents,
end of period $ 6,232 $ 21,660 $ 6,232 $ 21,660
======= ======== ======= ========
Supplemental Cash
Flow Information:
Cash paid for income taxes $ 21 $ -- $ 21 $ 5
======= ======== ======= ========
Cash paid for interest $ 84 $ 329 $ 84 $ 1,530
======= ======== ======= ========
Beneficial conversion related
to convertible preferred stock $ -- $ -- $ -- $ 37,783
======= ======== ======= ========
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