ANDOVER, Mass., April 23 /PRNewswire/ -- PictureTel Corporation
(Nasdaq: PCTL) today reported revenue of $101.0 million for the first fiscal
quarter, which ended on March 29, 1998, compared with revenue of $121.9
million in the first quarter of 1997. The net loss for the first quarter was
$2.2 million, or $0.06 per diluted share, compared to net income of $2.0
million, or $0.05 per diluted share in the first quarter of last year.
The company said the decline in revenue and the operating loss were due
primarily to lower sales volume for its videoconferencing products in the
quarter. Revenue from services increased approximately 17 percent year over
year.
The company has undertaken significant expense reduction efforts since mid
1997 to get its expenses in line with the lower revenue expectations. Due to
these company-wide expense reductions, including the elimination of
approximately 200 positions, operating expenses for the first quarter were
down 13 percent compared to the first quarter of 1997.
Foremost among the company's recent achievements was the appointment of
Bruce Bond as president and CEO. Bond joined the company in late February and
is leading the ongoing effort to return PictureTel to profitability.
Earlier this month, a federal court jury in Dallas unanimously found that
PictureTel did not infringe on any patent claims of Datapoint Corporation, in
a suit filed by Datapoint against PictureTel. In addition, the jury
unanimously agreed that the patent claims filed against PictureTel were
invalid.
"All along, PictureTel believed that we were right. We knew that our
technology in no way infringed upon any Datapoint patents, and the jury's
verdict resoundingly supported our position," said Bond. "We are pleased that
this matter is behind us."
During the first quarter, PictureTel's LiveLAN(TM) H.323 IP-based
videoconferencing system received the Product of the Year award from Network
Magazine. The magazine stated that "PictureTel continues to lead the
videoconferencing market in delivering the clearest audio and video you can
find."
In March, PictureTel videoconferencing was at the center of an innovative
health-care application involving premature infants in Boston. Beth Israel
Deaconess Medical Center is using PictureTel compact and desktop systems for a
first-of-its kind program that enables parents to see their babies in the
hospital's neonatal intensive care unit. The parents also can hold
videoconferences with members of the medical team to discuss their children's
progress without having to travel to the hospital.
PictureTel Corporation is the world leader in developing, manufacturing
and marketing a full range of videoconferencing solutions. The company's
systems meet customers' collaboration needs from the desktop to the boardroom.
PictureTel also markets multi-location conferencing servers and a
comprehensive portfolio of enterprise-wide services. The company provides
complete business collaboration solutions to customers in distance learning,
health care and financial services. Additional PictureTel information is
available on the Internet at www.picturetel.com. PictureTel videoconferencing
eliminates the barrier of distance, enabling people to be Anywhere Now(TM).
This release includes projections and other forward-looking statements
about the company's revenues, earnings, and other measures of economic
performance. Actual results could differ materially from forecasts due to
many factors such as, for example, competitive pressures, changes in
technology and the difficulty of forecasting in overseas markets and indirect
channels. Additional information concerning risks that could cause actual
results to differ are contained in the company's annual report on Form 10K as
filed with the SEC. The company undertakes no obligation to update publicly
any forward-looking statements, whether as a result of new information, future
events or otherwise.
NOTE: PictureTel is a registered trademark and LiveLAN and Anywhere Now
are trademarks of PictureTel Corporation. Other brands or products are
trademarks or registered trademarks of their respective owners.
PICTURETEL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended
(Restated)
3/29/98 3/29/97
Revenues $101,045 $121,935
Cost of revenues 55,158 63,198
Gross margin 45,887 58,737
Operating expenses:
Research and development 16,899 20,934
Selling, general and
administrative 32,810 36,265
Total operating expenses 49,709 57,199
Income (loss) from operations (3,822) 1,538
Other income, net 773 1,295
Income (loss) before taxes (3,049) 2,833
Income tax expense (benefit) (884) 822
Net income (loss) $(2,165) $2,011
Net income (loss) per
common share - Basic $(0.06) $0.05
Net income (loss) per
common share - Diluted $(0.06) $0.05
Weighted average number of
common shares outstanding -
Basic 38,092 37,265
Weighted average number of
common shares outstanding -
Diluted 38,092 39,178
Note: The three month period ended March 29, 1997 includes the impact of
financial restatements announced in the third quarter of 1997.
PICTURETEL CORPORATION
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 1998 (IN THOUSANDS)
3/29/98 12/31/97
ASSETS
Current assets:
Cash and marketable securities $82,459 $82,011
Accounts receivable, net 101,545 108,729
Inventories 43,074 44,901
Deferred taxes, net 16,499 15,615
Other current assets 7,995 6,803
Total current assets 251,572 258,059
Deferred taxes, net 16,106 16,106
Property and equipment, net 68,421 69,103
Capitalized software costs, net 3,387 2,368
Other assets 9,514 9,415
Total assets $349,000 $355,051
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowing $934 $186
Accounts payable 27,750 30,169
Accrued expenses 47,443 47,758
Current portion of capital leases 3,665 3,426
Deferred revenue 22,106 23,547
Total current liabilities 101,898 105,086
Capital lease obligations 21,343 22,000
Total liabilities 123,241 127,086
Total stockholders' equity 225,759 227,965
Total liabilities and stockholders' equity $349,000 $355,051
SOURCE PictureTel Corporation
-0- 04/23/98
/CONTACT: Kevin Flanagan of PictureTel Corporation, 508-292-5178,
flanagank@pictel.com/
/Web site: picturetel.com
(PCTL)
CO: PictureTel Corporation
ST: Massachusetts
IN: CPR
SU: ERN
KR
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