CLI Reports Fourth Quarter and 1996 Results; VTEL Merger on Schedule.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)--March 13, 1997--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]. ) today reported its fourth quarter and 1996 year end results. The fourth quarter results reflect a number of one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charges. CLI reported revenue 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 $22.3 million, resulting in a net loss from continuing operations of $6.1 million for the fourth quarter ending Dec. 31, 1996. Results from continuing operations compare to fourth quarter 1995 revenue and net loss of $26.8 million and $17.5 million, respectively. The company reported revenue of $87.9 million and a net loss of $13.7 million from continuing operations for 1996, compared to 1995 revenue and net loss from continuing operations of $113 million and $21 million, respectively. 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, CLI'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. , said: "We began 1996 by stating our intent to pursue strategic alternatives to position CLI for the future. By June we completed the sale of the Broadcast Division's Magnitude product family to General Instrument. We then focused our attention on the best way to leverage the technological leadership of the 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 Division. In January 1997, we announced our plans to merge with VTEL VTEL Video Teleconferencing . "It was clear at the outset of 1996 that CLI needed to accelerate spending in two key areas. First, heavy investment in R&D to generate more competitive products with better margins. Second, a major thrust to improve quality and customer service. Without this fundamental reset in the direction of our products, CLI could not be successfully positioned for the future. "Further, we needed to realign re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. our sales mix sales mix See product mix. more toward indirect channels. The design of the lunar product, released in February 1997, was accelerated in the fourth quarter to provide an economical, easy-to-use system specifically to satisfy the increasingly complex collaborative meeting requirements. The standards-based, Internet-ready, LAN/WAN LAN/WAN Local Area Network/Wide Area Network networked lunar system, starting at $13,950, is aimed at boosting CLI's sales through our reseller An organization that sells hardware and software to the general public. Resellers purchase products from software publishers and hardware manufacturers. partners. "The majority of our R&D expenses were applied to a series of new high performance products that should fundamentally alter CLI's financial model for the future. These products are planned to be introduced in 1997. We also introduced, in 1996, a number of upgrades to current products to make them more competitive." Trimm summarized, "It was also our goal to conclude certain long-standing litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. and address some performance risks in anticipation of a strategic alliance. Throughout the year, including the fourth quarter, we resolved a number of issues and made key investments designed to better position CLI." During the fourth quarter, the company incurred a number of one time expenses. These included severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when and restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). costs, merger-related expenses, and litigation and contract settlements. In addition, higher engineering costs were sustained to launch lunar and accelerate the development of the next generation product. The $6.7 million loss on disposal of Discontinued Operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. represents additional reserves against Accounts Receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying and other adjustments, concluding the divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of the Broadcast Division. Although the company continues to actively pursue collection of outstanding Broadcast receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed , payment activity has been less than originally expected and additional allowances were deemed prudent. Excluding the one-time items described above, the fourth quarter operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. level is similar to prior quarters' spending and continues to decline to decline in conjunction with the company's consolidation efforts. There is no change in the company's strategy, initiated early in 1996, of addressing each aspect of operations to improve efficiency and responsiveness to customer needs, and to reduce costs. Revenue from continuing operations grew from $20.6 million in the third quarter to $22.3 million in the fourth quarter. Orders from China continued to be strong with the first of three provincial electric power company orders shipping during the fourth quarter. Domestically, additional shipments went to 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. customers such as Boeing, the State of Georgia's Department of Corrections, and GSAMS GSAMS Georgia Statewide Academic and Medical System (a distance learning and health care network) Learning Network. Sales were adversely affected in the 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. by the realignment re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. of distribution channels, and by a shift in schedule of some later stages of major projects in China, whose early shipments were recorded in prior quarters. Margins fell from prior quarters due to higher costs of sales for certain mature products and a shift in product mix. "In conclusion, 1996 was a difficult transition year for CLI. We made some tough decisions, given our cash 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)]. , to fundamentally change the way CLI does business. We believe the investments, while severely impacting short-term results, were necessary and will help achieve future growth and profitability," said Gary Trimm. The merger plans with VTEL are on schedule with the closing anticipated during VTEL's fourth fiscal quarter ending July 31, 1997. CLI and VTEL recently concluded a ten-city Executive Briefing tour during which customers and resellers saw the opportunities the merger offers to deliver leadership technology. As previously reported, early termination of the Hart-Scott-Rodino anti-trust waiting period occurred on Feb. 24, 1997. CLI anticipates mailing a definitive proxy regarding the merger during the month of April. Except for historical information contained herein, the matters discussed in this news release 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. that involve risks and uncertainties, including the timely availability and acceptance of new products, the impact of competitive products and pricing, the management of growth, the expected benefits of the merger and the business and operations of the new VTEL following the merger, and other risks detailed from time to time in the SEC reports of the company. 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- Note to Editors: lunar is a trademark of CLI. -0-
COMPRESSION LABS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Quarter ended Dec. 31,
1996 1995
Revenues $ 22,270 $ 26,755
Cost of revenues 13,655 27,372
Gross margin 8,615 (617)
Operating expenses
Selling, general and
administrative 10,423 13,562
Research and development 3,478 3,040
Settlements of litigation 554 --
------ ------
14,455 16,602
Net loss from operations: (5,840) (17,219)
Interest, net (291) (266)
Net loss from continuing
operations (6,131) (17,485)
Discontinued operations
Loss from operations -- (3,315)
Loss on disposal (6,689) (34,601)
Net loss from
discontinued
operations (6,689) (37,916)
Net loss $ (12,820) $(55,401)
Net loss per share
Net loss from continuing
operations $ (0.39) $ (1.13)
Net loss from
discontinued operations (0.42) (2.45)
Net loss per share $ (0.81) $ (3.58)
Weighted average common shares
outstanding 15,865 15,463
COMPRESSION LABS, INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Year ended Dec. 31,
1996 1995
(Unaudited) (Audited)
============ ===========
Revenues $ 87,882 $112,979
Cost of revenues 49,888 79,359
------ -------
Gross margin 37,994 33,620
Operating Expenses
Selling, general and
administrative 37,210 42,761
Research and development 12,949 9,974
Settlements of litigation 554 897
------ ------
50,713 53,632
------- -------
Net loss from operations: (12,719) (20,012)
Interest, net (952) (1,028)
Net loss from continuing -------- --------
operations (13,671) (21,040)
Discontinued operations
Loss from operations -- (1,941)
Loss on disposal (6,689) (34,601)
-------- --------
Net loss from
discontinued operations (6,689) (36,542)
-------- --------
Net loss $ (20,360) $ (57,582)
Net loss per share
Net loss from continuing
operations $ (0.87) $ (1.37)
Net loss from discontinued
operations (0.43) (2.39)
-------- --------
Net loss per share $ (1.30) $ (3.76)
Weighted average common shares
outstanding 15,680 15,304
COMPRESSION LABS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
Dec. 31, Dec. 31,
1996 1995
(Unaudited) (Audited)
ASSETS
Current assets
Cash and cash equivalents $ 4,803 $ 12,638
Accounts receivable, less
allowance for doubtful
accounts of $9,268 in
1996 and $10,028 in 1995 29,218 46,798
Inventories 10,157 22,821
Other current assets 1,516 1,096
Total current assets 45,694 83,353
Property and equipment
Furniture and fixtures 8,429 9,551
Machinery and equipment 24,000 25,802
Equipment under capital leases -- 2,090
-------- ---------
32,429 37,443
Accumulated depreciation
and amortization (21,324) (20,171)
-------- ---------
11,105 17,272
Capitalized software, net 3,541 3,828
Other assets 310 300
Total assets $ 60,650 $104,753
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Short-term debt $ 10,804 $ 13,452
Current portion of capital
lease obligations -- 506
Accounts payable 11,301 26,169
Accrued liabilities 8,983 21,689
Deferred revenue 5,926 6,278
Total current liabilities 37,014 68,094
Long-term debt and capital
lease obligations -- 985
Redeemable convertible preferred stock
Series C, $.001 par value; 350,000
shares authorized, issued and
outstanding 6,852 --
Stockholders' equity
Preferred stock -
Undesignated preferred
stock, $.001 par value;
3,650,000 shares authorized;
none issued and outstanding -- --
Common stock -
$.001 par value; 25,153,658
shares authorized; shares
issued and outstanding:
15,863,788 in 1996, and
15,491,475 in 1995 16 15
Additional paid-in capital 122,165 120,696
Accumulated deficit (105,397) (85,037)
Total stockholders' equity 16,784 35,674
Total liabilities and
stockholders' equity $ 60,650 $ 104,753
CONTACT: Compression Labs Inc. Patrizia Owen, 408/922-4745 (Investor Relations Investor relations The process by which the corporation communicates with its investors. ) |
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