VideoServer, Inc. Reports 1998 Third Quarter Financial
Results
PR Newswire - October 14, 1998 16:27
Increases Revenue 14% and Earnings Per Share 100%
BURLINGTON, Mass., Oct. 14 /PRNewswire/ -- VideoServer, Inc. (Nasdaq: VSVR) today
reported revenues of $14.7 million for the third quarter ended September 30, 1998, compared with
$12.9 million in revenues reported in the third quarter of 1997. Net income for the quarter was
$1,042,000 or eight cents per share, compared to net income of $485,000 or four cents per share for
the corresponding quarter in 1997.
Through the nine months ending September 30, 1998, revenues were $39.5 million, compared with
$39.7 million in the corresponding period in 1997. Including the after-tax impact of one-time charges
recorded in the first quarter of 1998, totaling $1,300,000, the Company reported net income for the
nine months of 1998 of $262,000 or two cents per share. The Company reported a net loss of
$5,297,000 or forty-one cents per share for the corresponding 1997 period, which included a pre-tax
acquisition related charge of $14,000,000.
"This was another good quarter for VideoServer, from both the standpoint of revenue momentum and
operating margins," said Khoa Nguyen, VideoServer president and CEO. "We experienced increased
demand for our traditional ISDN-based conferencing products as that market continues to rebound. In
addition, VideoServer's Encounter Family(TM) of IP (Internet Protocol) conferencing products have
been very well received by customers. These networked conferencing products are viewed as key
enablers in customers' plans to integrate voice, video, and data over a single data network; the number
of customers piloting our IP-based technologies continues to grow."
Nguyen added, "We continue to make strategic investments in technology, partnerships, and
distribution to extend our leadership position in the networked conferencing market. By today offering
our customers comprehensive conferencing solutions in voice, video, and data across all of the
important network platforms -- ISDN, ATM, and LANs/Intranets/ and the Internet -- we believe we
are well positioned for growth."
In September, the Company introduced the Encounter NetServer ADX 1000, the first integrated
audio and data conferencing server to accommodate both traditional phone/POTS users and IP
telephone/VOIP users for multiparty conferencing, with an easy upgrade path to video. With
Encounter NetServer ADX 1000, corporations can leverage their investment in existing network
infrastructure and H.323 endpoints to conduct multiparty audio and data conference calls.
Also in September, VideoServer announced a distribution agreement with Inacom Corporation, a
Fortune 500 global technology management services company, under which Inacom will distribute the
full range of VideoServer multimedia conferencing products.
In August, the Company announced that UUNET Technologies, a global leader in Internet
communications solutions and a subsidiary of WorldCom, Inc., selected VideoServer's Encounter
Family of IP products as a collaborative tool to enable virtual teamworking throughout its organization
over the Internet.
About VideoServer
VideoServer, Inc. (Nasdaq: VSVR) is leading global provider of networked conferencing solutions
that enable people in multiple locations to communicate together using any combination of audio, video
and data. VideoServer connects employees, customers, and partners reliably to each other by
providing seamless integration of networked conferencing over LANs, WANs, and any IP-based
network. The Company's Multimedia Conference Servers (MCSs) and other products provide
multipoint conferencing, gateway services, conference control, network management and bandwidth
management. VideoServer sells its products worldwide through leading resellers and integrators, as
well as remarketers of videoconferencing and networking equipment. VideoServer also sells directly to
providers of conferencing services, including Internet Service Providers, telecommunication carriers,
Regional Bell Operating Companies and global PTTs.
NOTE: Statements included herein that are not historical facts, including but not limited to, statements
concerning revenue momentum and future growth, may include forward-looking statements that involve
risks and uncertainties, including the evolution of VideoServer's market, dependence on major
customers, rapid technological change and competition, all as discussed further in the Management's
Discussion and Analysis section of VideoServer's 1997 Annual Report to Shareholders as
incorporated by reference into the Company's 10-K. Copies of this report, the 1997 Form 10-K filed
with the Securities and Exchange Commission, or other financial information may be received at no
charge by contacting Investor Relations at VideoServer.
Video Server, Inc.
Consolidated Statements of Operations
(In thousands, except per share amounts)
For the three months For the nine months
ended September 30, ended September 30,
1998 1997 1998 1997
Net Sales $14,717 $12,903 $39,477 $39,657
Cost of Sales 5,477 4,942 15,365 14,121
Gross Profit 9,240 7,961 24,112 25,536
Operating expenses:
Research and
development 3,743 3,594 11,104 9,313
Sales and marketing 3,315 3,220 9,189 8,829
General and
administrative 1,304 1,109 3,736 3,324
Purchased research and
development --- --- --- 14,000
Restructuring expenses --- --- 657 ---
Total operating expenses 8,362 7,923 24,686 35,466
Income (loss) from
operations 878 38 (574) (9,930)
Interest income, net 569 383 1,508 1,317
Income (loss) before
income taxes 1,447 421 934 (8,613)
Provision (benefit) for
income taxes 405 (64) 672 (3,316)
Net income (loss) $1,042 $485 $262 ($5,297)
Net income (loss)
per share $0.08 $0.04 $0.02 ($0.41)
Net income (loss) per
share -- diluted $0.08 $0.04 $0.02 ($0.41)
Weighted average common
shares 13,251 12,931 13,203 12,797
Weighted average common
shares and equivalents
-- assuming dilution 13,538 13,295 13,500 12,797
VideoServer, Inc.
Consolidated Balance Sheets
(In thousands)
September 30, December 31,
1998 1997
ASSETS
Current assets:
Cash and marketable securities $49,063 $46,531
Accounts receivable, net 7,106 7,244
Inventories 3,571 3,882
Deferred taxes 2,619 2,619
Other current assets 1,469 941
Total current assets $63,828 $61,217
Equipment and improvements, net 6,199 5,142
Deferred taxes 4,341 4,341
Other assets, net 2,129 2,199
Total Assets $76,497 $72,899
LIABILITIES AND STOCKHOLDERS' EQUITY
Total Current Liabilities $14,988 $12,808
Total Stockholders' Equity $61,509 $60,091
Total Liabilities &
Stockholders' Equity $76,497 $72,899
SOURCE VideoServer, Inc.
/CONTACT: Stephen J. Nill, Chief Financial Officer of VideoServer, Inc.,
781-505-2175/ |
