PRESS RELEASE
Contact:
Ezenia! Inc.
Laura M. Alessio
(781) 505-2192
lalessio@ezenia.com
Burlington, Mass., March 31, 2003 — Ezenia! Inc. (NASDAQ: EZEN), a leading provider of real-time collaboration solutions for corporate and government networks and eBusiness, today reported revenues of $2.9 million for the fourth quarter of 2002 compared to $2.7 million reported for the preceding quarter and $3.5 million for the corresponding period of the previous year. Net income for the quarter was $3.4 million ($.25 per share) compared to a loss of $1.0 million ($.07 per share) reported for the third quarter of 2002 and $10.3 million ($.75 per share) reported for the fourth quarter of 2001. Operating results for the fourth quarter of 2002 include a gain of $3.7 million ($.27 per share) related to the sale of patents.
Net loss for the year was $18.6 million ($1.36 per share) compared to $31.3 million ($2.29 per share) reported for the year ended December 31, 2001. The loss in 2002 included a write-off of goodwill of $10.8 million related to the adoption of a new accounting standard.
About Ezenia! Inc.
Ezenia! Inc. (NASDAQ: EZEN), founded in 1991, is a leading provider of real-time collaboration solutions, bringing new and valuable levels of interaction and collaboration to corporate networks and the Internet. By integrating voice, video and data collaboration, the Company’s award-winning products enable groups to interact through a natural meeting experience regardless of geographic distance. Ezenia! products allow dispersed groups to work together in real-time using powerful capabilities such as instant messaging, whiteboarding, screen sharing and text chat. The ability to discuss projects, share information and modify documents allows users to significantly improve team communication and accelerate the decision-making process. More information about Ezenia! Inc. and its product offerings can be found at the Company’s Web site, www.ezenia.com.
Statements included herein that are not historical facts include forward-looking statements. Such forward-looking statements involve risks and uncertainties that could cause actual operating results to differ from those indicated by such forward-looking statements. These risks and uncertainties include the considerations that are discussed in the Management’s Discussion and Analysis section of the Company’s 2002 Annual Report on Form 10-K for the year ended December 31, 2002, such as the evolution of Ezenia!’s market, dependence on major customers, rapid technological change and competition, the ability to successfully implement the Company’s restructuring and cost reduction plan, risks associated with the acquisition of InfoWorkSpace (including the Company’s ability to integrate the InfoWorkSpace product line and workforce) and other considerations that are discussed further in the Management’s Discussion and Analysis section of the Company’s 2002 Annual Report on Form 10-K for the year ended December 31, 2002 such as the Company’s ability to implement the proposed refocusing of its business and to sustain viable operations. Copies of the Company’s 2002 Annual Report on Form 10-K for the year ended December 31, 2002, or other publicly available financial information may be received at no charge by contacting Investor Relations at Ezenia!.
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Note: Ezenia! is a registered trademark of Ezenia! Inc., and the Ezenia! Logo and InfoWorkSpace are trademarks of Ezenia! Inc. Additional information on Ezenia! and its products is available at http:// www.ezenia.com.
Ezenia! Inc.
Condensed Consolidated Balance Sheets
(In thousands)
|
| December 31, |
| December 31, | ||
|
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| ||
ASSETS |
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|
|
| ||
Current assets |
|
|
|
| ||
Cash and marketable securities |
| $ | 2,403 |
| $ | 5,531 |
Accounts receivable, net |
| 1,780 |
| 2,313 | ||
Inventories |
| 112 |
| 3,882 | ||
Prepaid software licenses |
| 1,008 |
| 774 | ||
Other current assets |
| 261 |
| 691 | ||
Total current assets |
| 5,564 |
| 13,191 | ||
|
|
|
|
| ||
Equipment and improvements, net |
|
|
| 3,470 | ||
Goodwill and other intangible assets, net |
|
|
| 11,673 | ||
Other assets, net |
|
|
| 24 | ||
|
|
|
|
| ||
|
| $ | 5,564 |
| $ | 28,358 |
|
|
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LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |
|
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Current liabilities |
|
|
|
| ||
Notes payable |
|
|
| $ | 2,000 | |
Accounts payable |
| $ | 681 |
| 1,830 | |
Accrued expenses |
| 584 |
| 1,445 | ||
Income taxes |
| 285 |
| 492 | ||
Accrued restructuring costs |
|
|
| 101 | ||
Deferred revenue |
| 2,643 |
| 2,065 | ||
Current portion of common stock subject to put |
|
|
| 1,100 | ||
Total current liabilities |
| 4,193 |
| 9,033 | ||
Common stock subject to put, less current portion |
| 2,875 |
| 2,875 | ||
Total stockholders’ equity (deficit) |
| (1,504 | ) | 16,450 | ||
|
|
|
|
| ||
|
| $ | 5,564 |
| $ | 28,358 |
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Ezenia! Inc.
Condensed Consolidated Statements of Operations
(In thousands except for share and per share related data)
|
| For the three months |
| For the twelve months |
| ||||||||
|
| 2002 |
| 2001 |
| 2002 |
| 2001 |
| ||||
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| ||||
Net revenue |
| $ | 2,858 |
| $ | 3,503 |
| $ | 11,373 |
| $ | 15,107 |
|
Cost of revenue |
| 1,340 |
| 2,119 |
| 8,221 |
| 9,453 |
| ||||
|
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|
|
|
|
|
|
|
| ||||
Gross profit |
| 1,518 |
| 1,384 |
| 3,152 |
| 5,654 |
| ||||
|
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Operating expenses |
|
|
|
|
|
|
|
|
| ||||
Research and development |
| 648 |
| 1,786 |
| 4,641 |
| 8,171 |
| ||||
Sales and marketing |
| 319 |
| 1,288 |
| 3,959 |
| 8,556 |
| ||||
General and administrative |
| 674 |
| 679 |
| 2,438 |
| 3,099 |
| ||||
Amortization of goodwill and other intangible assets |
|
|
| 1,317 |
| 1,005 |
| 4,047 |
| ||||
Depreciation |
| 9 |
| 784 |
| 1,187 |
| 2,831 |
| ||||
Occupancy and other facilities related expenses |
| 120 |
| 984 |
| 2,671 |
| 3,488 |
| ||||
Impairment of long term assets |
| 245 |
| 7,070 |
| 2,345 |
| 7,070 |
| ||||
Restructuring charges |
|
|
|
|
|
|
| 2,013 |
| ||||
|
| 2,015 |
| 13,908 |
| 18,246 |
| 39,275 |
| ||||
|
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|
|
|
|
|
|
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| ||||
Loss from operations |
| (497 | ) | (12,524 | ) | (15,094 | ) | (33,621 | ) | ||||
|
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|
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Other income (expense) |
|
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|
|
|
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|
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| ||||
Interest income, net |
| 18 |
| 169 |
| 14 |
| 888 |
| ||||
Gain on sale patents |
| 3,650 |
|
|
| 4,900 |
|
|
| ||||
Loss on liquidation of foreign subsidiaries |
|
|
|
|
| (619 | ) |
|
| ||||
Other |
|
|
| (189 | ) |
|
| (757 | ) | ||||
|
| 3,668 |
| (20 | ) | 4,295 |
| 131 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income (loss) before income taxes and cumulative effect of change in accounting principle |
| 3,171 |
| (12,544 | ) | (10,799 | ) | (33,490 | ) | ||||
|
|
|
|
|
|
|
|
|
| ||||
Income tax benefit |
| (250 | ) | (2,212 | ) | (2,901 | ) | (2,150 | ) | ||||
|
|
|
|
|
|
|
|
|
| ||||
Income (loss) before cumulative effect of change in accounting principle |
| 3,421 |
| (10,332 | ) | (7,898 | ) | (31,340 | ) | ||||
|
|
|
|
|
|
|
|
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Cumulative effect of change in accounting principle |
|
|
|
|
| (10,667 | ) |
|
| ||||
|
|
|
|
|
|
|
|
|
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Net income (loss) |
| $ | 3,421 |
| $ | (10,332 | ) | $ | (18,565 | ) | $ | (31,340 | ) |
|
|
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Basic and diluted earnings per share |
|
|
|
|
|
|
|
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| ||||
Before cumulative effect of change in accounting principle |
| $ | 0.25 |
| $ | (0.75 | ) | $ | (0.58 | ) | $ | (2.29 | ) |
Cumulative effect of change in accounting |
|
|
|
|
| $ | (0.78 | ) |
|
| |||
|
|
|
|
|
|
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|
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Net income (loss) per share |
| $ | 0.25 |
| $ | (0.75 | ) | $ | (1.36 | ) | $ | (2.29 | ) |
|
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|
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|
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Weighted average common shares |
|
|
|
|
|
|
|
|
| ||||
Basic and diluted |
| 13,632,546 |
| 13,741,880 |
| 13,633,630 |
| 13,663,863 |
| ||||
