Avistar Communications Reports Financial Results for the Quarter and Year Ended December 31, 2001.Business Editors/High-Tech Writers 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. 25, 2002 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: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 leading provider of enterprise video communication solutions, today announced financial results for its quarter and fiscal year ended December December: see month. 31, 2001. Revenues for the three months ended December 31, 2001 were $3.5 million, compared to revenues of $6.6 million for the three months ended December 31, 2000, and revenues of $3.0 million for the three months ended September September: see month. 30, 2001. These results were consistent with prior company guidance. For the three months ended December 31, 2001, gross margins were 50% compared to 57% for the three months ended December 31, 2000. Avistar reported a net loss of $1.7 million, or $0.07 per share on 25.2 million weighted average shares outstanding, for the three months ended December 31, 2001. For the three months ended December 31, 2000, Avistar reported a net loss of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $700,000, or $0.03 per share on 25.1 million weighted average shares outstanding. For the year ended December 31, 2001, revenues were $16.2 million, compared to revenues of $21.4 million for the year ended December 31, 2000. For the year ended December 31, 2001, gross margins were 53%, compared to 56% for the year ended December 31, 2000. Avistar reported a net loss of $7.9 million, or $0.31 per share on 25.2 million weighted average shares outstanding, for the year ended December 31, 2001. These results compare to a net loss of $42.5 million, or $4.46 per share on 9.5 million weighted average shares outstanding, for the year ended December 31, 2000. Excluding the one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charge of $37.8 million for the beneficial conversion related to 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". , the net loss was $4.7 million for the year ended December 31, 2000. No similar charges were taken in 2001. As of December 31, 2001, Avistar had cash and cash equivalents and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments of $13.3 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. . "Avistar achieved several significant accomplishments in 2001," stated 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, Avistar's chairman and chief executive officer. "Despite a difficult economic environment, we increased the number of Avistar users by approximately 40%, and we saw marked growth in usage. Importantly, we continued to improve our customers' cost of using Avistar by driving the total cost of ownership down, efficiently routing calls and maximizing max·i·mize tr.v. max·i·mized, max·i·miz·ing, max·i·miz·es 1. To increase or make as great as possible: the effectiveness of the Avistar VOS An operating system used in Stratus computers. FTX is Stratus' Unix operating system. (TM) 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. . In this way, we believe that our customers can achieve substantial cost savings using Avistar versus the time and expense associated with travel." "Revenues in the fourth quarter of 2001 reflected continued weakness in the global economy and, more specifically, in the financial sector," stated Robert Robert, Henry Martyn 1837-1923. American army engineer and parliamentary authority. He designed the defenses for Washington, D.C., during the Civil War and later wrote Robert's Rules of Order (1876). Noun 1. J. Habig, Avistar's chief financial officer. "In the fourth quarter of 2001, we continued to tightly manage our costs, with total 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. of $3.6 million, reflecting a decline of approximately $100,000 from the third quarter of 2001 and a reduction of 22% from the fourth quarter of 2000." "Our customers' decision making cycles remain lengthy. In addition, capital budgets, particularly at 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. firms, continue to be constrained con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. ," continued Habig. "While we saw some loosening loosening /loo·sen·ing/ (loo´sen-ing) freeing from restraint or strictness. loosening of associations of these restrictions at the end of the fourth quarter of 2001, it would be premature pre·ma·ture adj. 1. Occurring or developing before the usual or expected time. 2. Born after a gestation period of less than the normal time, especially, in human infants, after a period of less than 37 weeks. to expect an improvement in demand from our financial services customers for the first half of 2002. However, customer usage continues to increase. As usage increases, customers are making incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. purchases of seats and are adding to their network infrastructure. We expect first quarter 2002 revenues to be comparable to or somewhat less than fourth quarter of 2001 revenues, given the continued weakness in the financial services sector. For the first quarter of 2002, we anticipate that our gross margins will be greater than 50%. Operating expenses in the first quarter of 2002 are expected to be between $3.6 and $3.8 million. We expect to use approximately the same amount of cash in the first quarter of 2002 as we did in the fourth quarter of 2001. For the full year of 2002, we expect revenues to grow greater than 20%, assuming some improvement in the economy. We will continue to tightly manage our operating expenses commensurate com·men·su·rate adj. 1. Of the same size, extent, or duration as another. 2. Corresponding in size or degree; proportionate: a salary commensurate with my performance. 3. with our revenue performance." Conference Call Details Avistar is hosting a conference call at 8:30 a.m. Eastern/5:30 a.m. Pacific, today, Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant January January: see month. 25, 2002 to discuss year end 2001 results and review the company's progress and outlook. PLEASE NOTE THE CHANGE IN TELEPHONE AND PASS-CODE NUMBERS. Interested parties may participate in the conference call by dialing 888-400-7917 and giving the following pass-code: pass-code 1484418. The conference call also can be accessed 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 by going to the Investor Relations Investor relations The process by which the corporation communicates with its investors. page at www.avistar.com. For those unable to participate on the live call, a 24-hour replay will be available for seven days after the call at www.avistar.com or by calling 866-219-1444 and giving the following pass-code: pass-code 1484418. Avistar Communications Corporation Avistar develops, markets and supports a comprehensive suite of networked video communication services for the enterprise. From the desktop, Avistar delivers TV-quality interactive video calling, content creation and publishing, 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 and distribution, 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. . The Avistar video and data collaboration See data conferencing. applications are all managed by Avistar's VOS(TM) video operating system. Founded in 1993, Avistar Communications Corporation (Nasdaq:AVSR) 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 sales 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 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. . 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, ., a wholly owned subsidiary 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, holds a broad portfolio of patents covering Avistar's VOS open platform as well as multiple software and hardware video collaboration products See collaborative software. . 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 2002 fiscal year, in particular the economic environment and its resulting impact on capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. budgets, customer spending patterns and Avistar revenues, gross margins, and operating expenditures, as well as statements regarding "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 of 1934, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. . 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 economic weakness and purchasing patterns in the financial services industries, the impact of the September 11, 2001 events on capital spending, particularly by financial services companies, the impact of competitive products and pricing, the timely development and market acceptance of new products, the ability to raise capital, the concentration of sales amongst a limited number of customers, the mix between domestic and international sales, manufacturing and cost of Avistar's products, dependence on partners, the enforceability of intellectual property rights, the ability to achieve sales and revenue objectives, the ability to manage expenses, the ability to enter into new distribution agreements, 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, alternative technological approaches and adoption of alternative technological standards. 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 "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" set forth in Avistar'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. for the year ended December 31, 2000 filed on March 9, 2001 and on Form 10-Q Form 10-Q See 10-Q. for the quarter ended September 30, 2001 filed on October October: see month. 31, 2001 with the Securities and Exchange Commission. Avistar disclaims any intent or obligation to update these forward-looking statements. Avistar, VOS, and the Avistar logo 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
CONDENSED CONSOLIDATED BALANCE SHEETS
as of December 31, 2001 and December 31, 2000
(in thousands, except share and per share data)
Dec. 31, Dec. 31,
2001 2000
-------- --------
Assets:
Current assets:
Cash and cash equivalents $ 7,455 $ 21,660
Short-term investments 5,831 --
Accounts receivable, net of allowance
for doubtful accounts of $232 and
$312, respectively 2,760 3,712
Inventories, including inventory shipped
to customers' sites, not yet installed
of $262 and $854, respectively 1,096 2,156
Prepaid expenses and other current assets 1,121 434
-------- --------
Total current assets 18,263 27,962
Property and equipment, net 599 83
Other assets 403 258
-------- --------
Total assets $ 19,265 $ 28,303
======== ========
Liabilities and Stockholders' Equity:
Current liabilities:
Bank overdraft $ 149 $ --
Accounts payable 633 2,006
Deferred revenue and deposits 1,205 2,126
Accrued liabilities and other 2,237 2,407
-------- --------
Total current liabilities 4,224 6,539
-------- --------
Stockholders' equity:
Common stock, $0.001 par value;
250,000,000 and 250,000,000
shares authorized at December
31, 2001 and December 31,
2000, respectively, 26,362,603 and
26,266,990 shares issued at December 31,
2001 and December 31, 2000 respectively 26 26
Treasury common stock, 1,166,125 and
1,143,625 shares at December 31, 2001
and December 31, 2000 respectively (1) (1)
Additional paid-in-capital 80,000 80,145
Deferred stock compensation (493) (1,755)
Other comprehensive income 79 --
Accumulated deficit (64,570) (56,651)
-------- --------
Total stockholders' equity 15,041 21,764
-------- --------
Total liabilities and stockholders'
equity $ 19,265 $ 28,303
======== ========
AVISTAR COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
for the three months and year ended December 31, 2001 and Combined
Statement of Operations for the three months and year ended
December 31, 2000
(in thousands, except per share data)
Three Months Ended Year Ended
-------------------- --------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2001 2000 2001 2000
-------- -------- -------- --------
(unaudited)
Revenues:
Products $ 2,512 $ 5,352 $ 11,366 $ 16,925
Services,
maintenance
and support 1,030 1,279 4,830 4,489
-------- -------- -------- --------
Total revenue 3,542 6,631 16,196 21,414
-------- -------- -------- --------
Cost of revenue:
Products 1,215 2,199 4,961 7,287
Services,
maintenance
and support 570 647 2,683 2,167
-------- -------- -------- --------
Total cost
of revenue 1,785 2,846 7,644 9,454
-------- -------- -------- --------
Gross margin 1,757 3,785 8,552 11,960
-------- -------- -------- --------
Operating Expenses:
Research and
development 1,207 1,203 5,280 4,123
Sales and
marketing 1,275 1,618 6,066 5,627
General and
administrative 933 1,350 5,002 4,283
Amortization of
deferred stock
compensation 192 434 898 2,049
-------- -------- -------- --------
Total operating
expenses 3,607 4,605 17,246 16,082
-------- -------- -------- --------
Loss from
operations (1,850) (820) (8,694) (4,122)
-------- -------- -------- --------
Other income (expenses)
Interest expense -- (207) (2) (1,184)
Interest income 115 339 758 650
Other, net (5) (5) 19 (15)
-------- -------- -------- --------
Total other
income
(expense), net 110 127 775 (549)
-------- -------- -------- --------
Net loss $ (1,740) $ (693) $ (7,919) $ (4,671)
======== ======== ======== ========
Beneficial conversion
related to
convertible
preferred stock $ -- $ -- $ -- $(37,783)
-------- -------- -------- --------
Net loss attributable
to common
stockholders $ (1,740) $ (693) $ (7,919) $(42,454)
======== ======== ======== ========
Net loss per share
- basic and diluted $ (0.07) $ (0.03) $ (0.31) $ (4.46)
======== ======== ======== ========
Weighted Average
shares used in
calculating
basic and diluted
net loss per share 25,196 25,107 25,168 9,510
======== ======== ======== ========
Pro forma net
loss per share
- basic & diluted $ (1.70)
========
Pro forma weighted
average shares used
in calculating
basic and diluted
net loss per share 25,035
========
* Amortization
of deferred
stock compensation
excluded from
the following
expenses:
Cost of revenue $ 22 $ 49 $ 120 $ 263
Research and
development 18 39 101 223
Sales and
marketing 149 338 657 1,516
General and
administrative 3 8 20 47
-------- -------- -------- --------
$ 192 $ 434 $ 898 $ 2,049
======== ======== ======== ========
AVISTAR COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended December 31, 2001 and Combined Statement of
Cash Flows for the year ended December 31, 2000
(in thousands)
Year Ended
------------------------
Dec. 31, Dec. 31,
2001 2000
-------- --------
Cash Flows from Operating Activities:
Net loss $ (7,919) $ (4,671)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation 220 136
Stock compensation expense, net 898 2,049
Provision for doubtful accounts 52 72
Changes in current assets and
liabilities:
Accounts receivable 900 (1,743)
Inventories 1,060 (567)
Prepaid expenses and other
current assets (687) (310)
Other assets (145) 60
Accounts payable (1,373) 849
Deferred revenue and deposits (921) 813
Accrued liabilities and other (170) 1,078
-------- --------
Net cash used in operating activities (8,085) (2,234)
-------- --------
Cash Flows from Investing Activities:
Purchase of short-term investments (5,852) --
Sale of short-term investments 100 --
Purchase of property and equipment (736) --
-------- --------
Net cash used in investing activities (6,488) --
-------- --------
Cash Flows from Financing Activities:
Net payments under line of credit -- (1,998)
Increase in bank overdraft 149 --
Payments on notes payable to related
parties -- (12,623)
Borrowings from related parties -- 900
Proceeds from issuance of common stock 253 31,383
Repurchases of common stock (34) --
-------- --------
Net cash provided by financing activities 368 17,662
-------- --------
Net decrease in cash and cash equivalents (14,205) 15,428
Cash and cash equivalents, beginning
of period 21,660 6,232
-------- --------
Cash and cash equivalents, end of period $ 7,455 $ 21,660
======== ========
Supplemental Cash Flow Information:
Cash paid for income taxes $ -- $ 5
Cash paid for interest $ -- $ 1,530
Beneficial conversion related to
convertible preferred stock $ -- $ 37,783
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