CLI Announces Third Quarter Results and $20 Million Financing Commitment.SAN JOSE San Jose, city, United States San Jose (sănəzā`, săn hōzā`), city (1990 pop. 782,248), seat of Santa Clara co., W central Calif.; founded 1777, inc. 1850. , Calif.--(BUSINESS WIRE)--Oct. 24, 1996--Compression Labs Inc. (CLI (1) (Call Level Interface) A database programming interface from the SQL Access Group (SAG), an SQL membership organization. SAG's CLI is an attempt to standardize the SQL language for database access. ) (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 :CLIX (language) CLIX - ["Overview of a Parallel Object-Oriented Language CLIX", J. Hur et al, in ECOOP '87, LNCS 276, Springer 1987, pp. 265-273]. ) announced today that it has entered into an agreement with an institutional investor Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. to privately issue up to $20 million 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". . The company also announced third quarter results. Financing Commitment The direct investment was completed with investment funds Noun 1. investment funds - money that is invested with an expectation of profit investment assets - anything of material value or usefulness that is owned by a person or company advised by Brown Simpson Simp·son , Sir James Young 1811-1870. British obstetrician and a founder of gynecology. He is also known for introducing the use of chloroform as an anesthetic. LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , a New York-based fund advisory firm engaged by CLI. Under the financing terms, the company will complete an initial placement of $7 million and has the option to fund the remaining amount in two separate installments. The shares are convertible into CLI common stock commencing in the first quarter of 1997. Gary Gary, city (1990 pop. 116,646), Lake co., NW Ind., a port of entry on Lake Michigan; inc. 1909. Gary was founded by the U.S. Steel Corporation, which purchased the land in 1905 and landscaped it for a city. Trimm, president and chief executive officer of CLI, said: "The funding will strengthen our balance sheet and allow us to confidently continue our turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. strategy. This long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. relationship with Brown Simpson and the investor gives us the flexibility to pursue the optimum course of action to further CLI shareholders' interests." "We are extremely excited to enter into a financial relationship with Compression Labs. The company's technology and management team create tremendous long-term growth potential, making this a particularly appealing investment opportunity," said Michael Fein, an associate with Brown Simpson, LLC. Third Quarter Results CLI reported revenues 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 of $20.6 million and a net loss of $1.6 million, or $0.10 per share, for the third quarter ended Sept. 30, 1996, compared to revenues from continuing operations of $28.4 million and a net loss from continuing operations of $109,000, or $0.01 per share for the same quarter last year. For the nine months ended Sept. 30, 1996, revenues from continuing operations were $65.6 million, and the net loss was $7.5 million, compared to revenues from continuing operations of $86.2 million and a net loss from continuing operations of $3.6 million for the same period last year. "Our bookings rate was comparable with last quarter's approximately $25 million; however, timing and terms of key orders late in the quarter contributed to a revenue shortfall Shortfall The amount by which the capital required to fulfill a financial obligation exceeds available capital. Notes: Shortfall risk is often combated with an efficient hedging strategy created by a fund, group, institution, or individual. . We only shipped $1.2 million of the $4.7 million order from the Gansu Province of the People's Republic People's Republic n. A political organization founded and controlled by a national Communist party. of China. In addition, our quarter ended a few days ahead of the Federal government's year-end cutoff," continued Trimm. "While the timing issue in the third quarter caused disappointing results, I am still pleased by the overall progress in the turnaround of the company. Gross margin percentages improved significantly, increasing to 47% in the third quarter of this year compared to 43% for the same period a year ago. This improvement was driven by favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. product mix and manufacturing efficiencies. "The increase in selling, general and administrative expenses from the prior quarter was impacted by activities associated with consolidating two divisions into one, including relocating all CLI employees into a single corporate headquarters building. However, 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. decreased to $11.0 million in the third quarter of 1996 from $12.0 million for the same period in 1995, reflecting progress in our turnaround efforts. "We continue to focus on manufacturing productivity and our newly obtained financing gives us the flexibility to design products with more market appeal and stronger margins. Our investment in research and development is steady and is key to returning top line sales growth," concluded Trimm. CLI strengthened its high performance videoconferencing A real time video session between two or more users or between two or more locations. Although the first videoconferencing was done with traditional analog TV and satellites, inhouse room systems became popular in the early 1980s after Compression Labs pioneered digitized video systems position by adding increased functionality and audio and video quality improvements to its product lines. Earlier in the quarter CLI announced the first of a new suite of audio products to enhance the overall audio experience in videoconferencing for eclipse and Radiance. The eclipse gold, with increased bandwidth to 768 kbps and new A+ audio, raised the bar on mid-range videoconferencing quality at a more competitive price. CLI is currently the only videoconferencing vendor with T.120 gateways across its entire product line with the recent introduction of T.120 on the high-performance Radiance system. CLI added a number of new customers in the third quarter, including the State of Ohio, which has developed a significant distance education network and the Province of Gansu in China which ordered 85 Radiance systems. CLI continued to strengthen its presence in the federal government and added the U.S. Army Medical Command, Office of Naval Intelligence Noun 1. Office of Naval Intelligence - the military intelligence agency that provides for the intelligence and counterintelligence and investigative and security requirements of the United States Navy ONI , the Los Angeles Air Force Base Los Angeles Air Force Base is a United States Air Force Base located in El Segundo, California. Los Angeles Air Force Base houses and supports the headquarters of the Air Force Space Command's Space and Missile Systems Center (SMC). , and the Army National Guard to its installed base. In addition, Boeing supplemented their installed network with additional Rembrandt II/VP codecs The following is a list of codecs. Audio codecs Non-compression formats
Statements in this press release which are not historical facts may be considered "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. " regarding CLI's business. CLI's operating results are subject to a variety of risks and actual results may differ significantly. For a discussion of such risks as well as further information about CLI's operating results, please see CLI'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 Dec. 31, 1995 and on the Form 10-Q Form 10-Q See 10-Q. for the quarters ended March 31, 1996 and June 30, 1996, filed with the Securities and Exchange Commission. CLI, based in San Jose, Calif., is a leading provider of high performance videoconferencing solutions for business, government, education and healthcare organizations. Founded in 1976, CLI has sales offices across the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , with international offices in Asia and Europe, and distributors serving more than 50 countries worldwide. -0-
COMPRESSION LABS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
Sept. 30, Sept. 30, June 30,
1996 1995 1996
Revenues $ 20,577 $ 28,444 $ 25,014
Cost of Revenues 10,954 16,295 14,171
Gross Margin 9,623 12,149 10,843
Operating Expenses:
Selling, general and
administrative 7,933 9,665 7,396
Research and development 3,040 2,377 2,982
------ ------ ------
10,973 12,042 10,378
Income (loss) from
operations: (1,350) 107 465
Interest, net (260) (216) (190)
Net Income (loss) from
continuing operations (1,610) (109) 275
Net loss from discontinued
operations -- (82) --
Net income (loss) $ (1,610) $(191) $ 275
Net income (loss) per share:
Net income (loss) from
continuing operations $ (0.10) $ (0.01) $0.02
Net loss from
discontinued operations -- -- --
Net income (loss) per share $ (0.10) $ (0.01) $0.02
Weighted average common shares
outstanding 15,774 15,265 15,806
COMPRESSION LABS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Nine months ended
Sept. 30,
1996 1995
Revenues $ 65,612 $ 86,224
Cost of Revenues 36,232 51,987
Gross Margin 29,380 34,237
Operating Expenses:
Selling, general and
administrative 26,786 29,199
Research and development 9,472 6,934
Settlement of litigation -- 897
------ ------
36,258 37,030
Net Loss from operations: $ (6,878) $ (2,793)
Interest, net (662) (762)
Net Loss from continuing
operations $ (7,540) $ (3,555)
Net Income from discontinued
operations -- 1,374
Net loss $ (7,540) $ (2,181)
Net income (loss) per share:
Net loss from continuing
operations $ ( 0.48) $ ( 0.23)
Net income from
discontinued operations -- 0.09
Net loss per share $ ( 0.48) $ ( 0.14)
Weighted average common shares
outstanding 15,616 15,191
COMPRESSION LABS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
Sept. 30, June 30, Dec. 31,
1996 1996 1995
(Unaudited) (Unaudited) (Audited)
ASSETS
Current Assets
Cash and cash equivalents $ 5,761 $ 5,177 $ 12,638
Accounts receivable, less
allowance for doubtful
accounts of $6,848 in
September 1996, $7,703 in
June 1996, and $10,028 in
1995 31,565 38,863 46,798
Inventories 12,640 11,393 22,821
Other current assets 749 743 1,096
Total Current Assets 50,715 56,176 83,353
Property and Equipment
Furniture and fixtures 8,242 9,256 9,551
Machinery and equipment 22,835 20,888 25,802
Equipment under capital leases -- -- 2,090
31,077 30,144 37,443
Accumulated depreciation
and amortization (19,911) (18,262) (20,171)
11,166 11,882 17,272
Capitalized software, net 3,560 3,561 3,828
Other Assets 285 290 300
Total Assets $ 65,726 $ 71,909 104,753
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Short-term debt $ 12,408 $ 12,482 $ 13,452
Current portion of capital
lease obligations -- -- 506
Accounts payable 11,394 14,381 26,169
Accrued liabilities 7,951 8,311 21,689
Deferred revenue 4,748 6,460 6,278
Total current liabilities 36,501 41,634 68,094
Long-term debt and capital
lease obligations -- -- 985
Stockholders' Equity
Preferred Stock -
Undesignated Preferred
Stock, $.001 par value;
4,000,000 shares authorized,
none issued and outstanding -- -- --
Common Stock -
$.001 par value; 25,153,658
shares authorized; shares
issued and outstanding:
15,863,788 in September 1996,
15,631,048 in June 1996, and
15,491,475 in 1995 16 16 15
Additional paid-in capital 121,786 121,226 120,696
Accumulated deficit (92,577) (90,967) (85,037)
Total stockholders' equity 29,225 30,275 35,674
Total Liabilities and
Stockholders' Equity $ 65,726 $ 71,909 $ 104,753
CONTACT: Compression Labs Inc. Joyce Strand Strand, street in London, England, roughly parallel with the Thames River, running from the Temple to Trafalgar Square. It is a street of law courts, hotels, theaters, and office buildings and is the main artery between the City and the West End. 1. , 408/922-4610 (Press Relations) Patrizia Owen, 408/922-4745 (Investor Relations Investor relations The process by which the corporation communicates with its investors. ) |
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