They're out all right, and the lead is buried, as usual.
VSI Enterprises Reports Second Quarter Results
Revenue of $7.3 Million Highest in Company History
NORCROSS, Ga., Aug. 7 /PRNewswire (http://www.prnewswire.com)/ -- VSI Enterprises, Inc. (Nasdaq: VSIN)
today reported its financial results for the second quarter ended
June 30, 1998. The company generated revenues of $7,266,990 for the second
quarter of 1998, the highest quarterly revenue in VSI history and an increase
of approximately 16% over revenues of $6,251,505 for the second quarter of
1997. The net loss for the quarter ended June 30, 1998 was $1,329,879, or
$0.03 per share, compared to a net loss of $547,785, or $0.01 per share, for
the quarter ended June 30, 1997. [I added the boldface -- Brooke]
Excluding non-cash expenses (fixed assets depreciation, amortization of
goodwill, amortization of capitalized development costs and amortization of
debt discount and debt issuance costs) of approximately $869,000, the
company's net loss for the second quarter of 1998 would have been
approximately $461,000, or $0.01 per share, compared to net income excluding
non-cash expenses for the second quarter of 1997 of approximately
$155,000. That loss for the second quarter of 1998 can be attributed to lower
than normal gross margins associated with a $2.6 million order delivered to a
customer in China during the second quarter.
Approximately $485,500 of the non-cash expenses for the second quarter of
1998 were attributed to the amortization of debt discount and debt issuance
costs, primarily a result of the vesting of the conversion feature of VSI's
convertible debt issued during the first quarter of 1998. This amortization
is expensed in accordance with Securities and Exchange Commission
requirements.
Year-to-date revenues for the six months ended June 30, 1998 were
$10,125,912, a decrease of approximately 14% over revenues of $11,757,921 for
the six months ended June 30, 1997. The net loss for the six months ended
June 30, 1998 was $4,234,292, or $0.09 per share, compared to a net loss of
$1,791,025, or $0.04 per share, for the six months ended June 30, 1997.
The backlog of purchase orders as of June 30, 1998 was approximately
$5.1 million, compared to a backlog of approximately $3.3 million on
June 30, 1997.
Judi North, President and CEO of VSI, said, "The record-setting revenue
for the quarter is a significant accomplishment for VSI. Much of the revenue,
however, was based on two large orders delivered during the quarter. Our new
sales and marketing initiatives have the goal of enabling our pipeline of
potential orders to grow and our customer base to broaden, a vital step toward
generating and sustaining strong revenue and earnings performances in the
future."
North added, "The net profit margin on our order to China was lower than
normal, due to costs associated with establishing VSI's presence in the China
market, as well as the expense of working capital financing, shipping,
customer training and other items not expected to recur to that level on any
subsequent orders to China. Now that we have a toehold in the China market,
we anticipate that profit margins in China will improve going forward.
Nevertheless, we will not as a matter of course chase revenue at the expense
of profitability - in China or elsewhere."
Second Quarter Highlights
Among second quarter highlights were the completion in May of a
$2.6 million order to a customer in China, and the receipt of the bulk of
payment from the customer just a month later; the delivery of about 20 systems
to MCI and the Roche Group; and ongoing growth in such niche markets as video
arraignment and distance education.
The company also repaid its $1.65 million working capital loan to AmTrade
International Bank, introduced a Year 2000 analysis software package through
wholly owned subsidiary Integrated Network Services; and began development on
its initial print advertising campaign, which is being launched in selected
business and trade journal publications in July and August. Among customers
granting approval for their names to be used in the ad campaign are Boeing,
Duracell, NationsBank and Atlanta Gas Light Company.
VSI Enterprises, Inc. designs, manufactures, markets and supports a full
range of videoconferencing products, along with telecommunications software
and services. Customers in more than 30 countries include Fortune 500
corporations, governmental agencies, health care providers and educational
institutions. VSI has 18 sales offices in the United States, Europe and the
Far East. For more information, access the VSI Enterprises Inc. World Wide
Web home page at www.vsin.com
Certain statements contained herein are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995,
such as statements relating to financial results and plans for future business
development activities, and are thus prospective. Such forward-looking
statements are subject to risks, uncertainties and other factors which could
cause actual results to differ materially from future results expressed or
implied by such forward-looking statements. Potential risks and uncertainties
include, but are not limited to, economic conditions, competition and other
uncertainties detailed from time to time in the Company's Securities and
Exchange Commission filings.
VSI ENTERPRISES, INC.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Three Months Ended Six Months Ended
June 30, June 30,
1998 1997 1998 1997
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
STATEMENTS OF OPERATIONS
Revenue $ 7,266,990 $ 6,251,505 $10,125,912 $11,757,921
Cost of revenue 4,213,027 2,889,275 6,266,236 5,623,599
SG&A and research &
development 3,685,575 3,846,584 7,257,556 7,738,461
Total costs and
expenses 7,898,602 6,735,859 13,523,792 13,362,060
Loss from operations (631,612) (484,354) (3,397,880) (1,604,139)
Amortization of debt
discount (448,000) 0 (448,000) 0
Debt issuance costs (37,500) 0 (37,500) 0
Other expenses (212,767) (25,330) (350,912) (127,001)
Loss from continuing
operations before
income taxes (1,329,879) (509,684) (4,234,292) (1,731,140)
Income tax provision 0 (38,101) 0 (59,885)
Net loss $(1,329,879) $ (547,785) $(4,234,292) $(1,791,025)
Net loss attributable
to common
stockholders $(1,329,879) $ (547,785) $(4,234,292) $(1,791,025)
Net loss per
common share $ (0.03) $ (0.01) $ (0.09) $ (0.04)
Weighted average
shares outstanding 47,207,112 43,260,163 46,855,974 41,955,001
6/30/98 12/31/97
(Unaudited)
BALANCE SHEETS
CURRENT ASSETS:
Cash and cash equivalents $2,141,262 $ 866,009
Accounts receivable, net 5,931,960 6,142,936
Inventories, net 3,272,930 2,541,754
Rental and demonstration
inventory, net 642,576 990,054
Prepaid expenses and other current
assets 232,681 438,665
12,221,409 10,979,418
Property and equipment, net 1,315,349 1,194,908
Software development costs, net 439,865 658,052
Goodwill, net 8,774,346 9,020,715
Other assets, net 1,250,979 1,027,366
TOTAL ASSETS $24,001,948 $22,880,459
CURRENT LIABILITIES:
Notes payable $ 1,814,518 $ 1,422,367
Bank credit facilities 63,524 154,938
Accounts payable 3,873,486 3,401,547
Accrued expenses 1,719,535 1,803,506
Deferred revenue 1,094,549 507,177
8,565,612 7,289,535
Convertible debentures 2,918,588 0
Stockholders' equity 12,517,748 15,590,924
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $24,001,948 $22,880,459
SOURCE VSI Enterprises, Inc.
CO: VSI Enterprises, Inc.
ST: Georgia
IN: CPR MLM
SU: ERN
08/07/98 14:20 EDT prnewswire.com |
