AUSTIN, Texas--(BUSINESS WIRE)--May 20, 1998)--VTEL Corporation
(NASDAQ:VTEL.O) today reported financial results for the recently
completed third quarter ending April 30, 1998. Fiscal 1998 third
quarter revenues totaled $45.0 million, an increase of 5% compared to
revenues of $42.8 million in the second quarter of fiscal year 1998.
The company reported net income of $980,000 or $0.04 per share on
both a basic and diluted basis, compared to net income, of $268,000 or
$0.01 per share in the previous quarter. VTEL continued its
consecutive string of profitable quarters following the recent merger
with Compression Labs Inc.
"Our quarterly revenue increase was driven by substantial growth
in international sales, led by a strong performance in China and solid
European sales," commented Dick Moeller, chairman and chief executive
officer. "In addition, our service operations increased their business
volumes in excess of 13% over last quarter's record level as we
continue to develop our professional services and provide our
customers with greater levels of technical expertise.
"Through the launch of our new advertising campaign, VTEL is
making a significant investment today in an effort to enhance both
VTEL's brand name recognition and our sales growth potential in the
near future. We expect that the combination of the global branding
programs and the continued building of relationships with major
partners will only serve to strengthen VTEL's marketplace position and
our ability to grow our customer and revenue base."
"As we grow in revenue and unit sales, we continue to expand our
customer base -- new customers added in the third quarter include such
prominent companies as Rockwell Automation, Petronas in Malaysia,
Cabletel and Peoples Bank of China," stated Jerry S. Benson Jr.,
president and chief operating officer.
"In addition, we launched our global branding campaign, while
simultaneously strengthening our sales force, as we position VTEL for
substantial growth. Beginning in mid-April, we rolled out television
commercials on major networks and later initiated our print
advertising campaign in the Wall Street Journal (U.S.) and Financial
Times (U.K.). On the product side, we began delivery of a new
international version of our acclaimed WG500(TM) work-group
conferencing system. In early May, we introduced several key product
enhancements including Fast T.120 collaborative capability and a
significant new release of our industry leading ESA architecture. Our
global reseller network continued to grow with the addition of View
Tech, a nationwide provider of integrated communications and
technology solutions.
"In addition, our new relationship with Williams Communications
Solutions adds yet another key reseller to our growing base of
companies selling and supporting VTEL Digital Visual CommunicationsSM
technology. The activities taking place at VTEL are designed to
deliver on our primary objective of growing market share and
profitability and ultimately increasing shareholder value."
In discussing the financial results, Rod Bond, VTEL's chief
financial officer stated, "We delivered sequential sales growth within
the 5 to 10% guidance range provided last quarter, with strong
international sales offsetting seasonally slower domestic business
activity. We also posted another strong quarter of gross margin
contribution and increased cash balances by over 13% to the $22.7
million level. A one-time real estate transaction gain, involving the
former CLI headquarters in San Jose, Calif., contributed $1.2 million
in non-operating profit and helped offset some of the up-front demand
generation investments we are making.
"The branding initiatives and our research and development
activities shall remain priorities over the next several quarters in
an effort to create much greater demand for VTEL's products in the
future. Based upon current market expectations in our industry, VTEL
believes it can fund these critical activities, which are essential
for the future, and yet maintain modest earnings growth. We believe
this is the correct strategy to drive VTEL sales and profitability for
our shareholders and position our company to dominate this emerging
technology and marketplace."
This release may include projections and other forward-looking
statements that involve a number of risks and uncertainties and as
such, actual results in future periods may differ materially from
those currently expected or desired. Some of the factors that could
cause actual results to differ materially include rapid changes in
technology impacting our future product development programs, changes
in customer order patterns or order mix, the intensity of competition,
the cost and availability of certain key components, the company's
ability to manage product transitions and inventory levels, product
pricing pressures, unexpected soft results from the Company's
substantial branding campaigns, sudden or unexpected changes in demand
for VTEL's digital visual communications systems, litigation involving
intellectual property and other issues, and the success of our CLI
merger efforts. Additional discussion of these and other risk factors
affecting the company's business and prospects is contained in the
company's periodic filings with the SEC.
VTEL Corporation is the world's largest developer and
manufacturer of Digital Visual Communications systems. VTEL's
innovative products provide superior video, data and voice quality,
are simple-to-use, IP addressable, and because they are
microcomputer-based, highly scaleable and easily upgradeable.
Headquartered in Austin, Texas, the company distributes products
through value-added resellers and partners in 55 countries. VTEL is
committed to expanding its leadership position by providing the
world's most innovative video networking, custom room solutions, and
project/facility management. VTEL's Digital VisualCommunications
systems are deployed in the most advanced corporations, healthcare
facilities, educational institutions and government operations around
the globe. |
