Here it is.
SANTA CLARA, Calif., April 6 /PRNewswire/ -- FVC.COM (NASDAQ:FVCX) today announced
that revenues for the first quarter of 1999 are expected to be significantly below
analyst expectations with a significant loss for the quarter. The Company
anticipates that revenues will be between $8.0 and $8.5 million, and the net loss
per share will be between $0.20 and $0.22.
The Company attributed the drop in revenues to a combination of factors, including
a significant decline in business through its major OEM partner, Bay Networks, now
a part of Nortel Networks. Bay Networks has been FVC.COM's largest customer for
the last several years. Negotiations during the quarter to restructure the
companies' relationship resulted in a significant reduction in joint sales activity.
Sales to Bay/Nortel fell to approximately 25 percent in the first quarter, compared
with approximately 43 percent as previously reported for the fourth quarter of 1998.
In addition, the Company stated that Nortel has indicated its intention to move
from stocking inventory to having FVC.COM drop-ship to Nortel's customers.
In order to reflect this change, CEO Rich Beyer, who joined the Company in January
of this year, stated that the Company will now record its sales to Nortel on a
sell-through basis and has implemented this change effective December 31, 1998.
Therefore, FVC.COM is reducing its previously announced revenues for the quarter
ended December 31, 1998 by approximately $7.0 to $7.5 million to defer the revenue
on inventory of FVC.COM products held by Nortel on December 31, 1998. Such revenues
under the revised policy are now being recognized as and when such products are
sold by Nortel. Sales for the fourth quarter 1998 are being revised to
approximately $4.7 to $5.2 million; earnings per share will be revised
accordingly to a net loss per share of approximately $0.20 and $0.22.
Commenting on the announcement, Beyer said, "We are confident in the future prospects
for the Company. In the first quarter, our business with non-Nortel partners grew
approximately 25 percent year-on-year, we broadened the base of our distribution
channel, we enhanced our product offerings, and we have continued to strengthen
our leadership position in the enterprise video networking market. I believe that
we have taken prudent financial steps to make FVC.COM a much healthier
organization over the long-term, and to place the Company in a much better position
to scale for future growth."
Separately, as previously announced, the Company has recomputed the in-process research
and development charge (IPR&D) for its acquisition of ICAST. In accordance with
new SEC guidelines, the Company has reduced its estimate of the amount allocated
to IPR&D in the ICAST acquisition by $1.5 million, from $6.2 million to $4.7 million.
The incremental impact will be $87,000 per quarter, bringing the total charge for
goodwill and other purchased intangibles to approximately $130,000 per quarter beginning
the fourth quarter of 1998 and each quarter going forward for five years.
In view of the slower than expected growth of first quarter revenues and the
uncertainty of timing in some major projects, FVC.COM is taking a more cautious
view of its near-term growth and will be lowering its internal forecast for the
year. Revenues are expected to continue to grow throughout the remainder of the
year, although at a slower pace than anticipated earlier.
Actual results for the quarter are expected to be released on Tuesday, April 13th.
About FVC.COM
FVC.COM is the world leader in enterprise video networking. Founded in 1993 by
technology pioneer Ralph Ungermann, FVC.COM manufactures and supports a broad family
of interactive video, streaming video and multi-service access products. Designed
for high-quality video delivery, integrated with voice and data, these products
enable applications such as distance learning, corporate communications, virtual
meetings and telemedicine. With unique expertise in video over broadband, IP, and
legacy networks, FVC.COM delivers all types of video across enterprise Intranets
and the Next Generation Internet (NGI). The NGI is the new multi-service broadband
Internet, being deployed today by service providers and enterprises.
FVC.COM's OEM, distribution, and system integration partners include Bell Atlantic
Network Integration, British Telecommunications plc, EDS, France Telecom, IBM, Lucent
Technologies, NEC, Nortel Networks, PictureTel, and other leading companies
worldwide. Further information about the Company is available at fvc.com.
Cautionary Statement
Except for the historical information contained herein, this news release contains
forward-looking statements, including, without limitation, statements
containing the words, "believes," "anticipates," "expects" and words of similar
import. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of the Company, or industry results, to be materially different
from any future results, performance or achievements expressed or implied by such
forward-looking statements. Such factors include, among others: the Company's limited
operating history and variability of operating results, market acceptance of video
technology, dependence on ATM backbone technology and the Next Generation Internet,
potential inability to maintain business relationships with distributors and
suppliers, rapid technological changes, competition in the video networking industry,
the importance of attracting and retaining personnel, management of the Company's
growth, consolidation and cost pressures in the video networking industry,
dependence on key employees and other risk factors referenced in the Company's
Registration Statement on Form S-1, File No. 333- 38755, declared effective on April
29, 1998. SOURCE FVC.COM
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04/06/99
/NOTE TO EDITORS: For more info on FVC.COM via fax at no additional cost, please
dial 1-800-PRO-INFO, ticker symbol FVCX/
/CONTACT: Elyse Phillips, Director, Corporate Communications of FVC.COM,
408-567-7230, General Information, Don Markley, or Analyst, Kristi Larson,
415-986-1591, both of The Financial Relations Board/
/Web site: fvc.com |
