EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Contact: Robert J. Habig
650.610.2900
ir@avistar.com
AVISTAR COMMUNICATIONS REPORTS FINANCIAL RESULTS
FOR THE FOURTH QUARTER OF 2003
REDWOOD SHORES, CALIF. - JANUARY 22, 2004 - Avistar Communications Corporation
(NASDAQ: AVSR), a leading provider of enterprise video communication solutions,
today announced financial results for the three months and year ended December
31, 2003.
Revenue for the three months ended December 31, 2003 was $1.4 million, compared
to revenue of $2.0 million for the three months ended September 30, 2003 and
$1.8 million for the three months ended December 31, 2002. For the three months
ended December 31, 2003, gross margin was 47% compared to 53% for the three
months ended September 30, 2003 and 48% for the three months ended December 31,
2002.
Avistar reported a net loss of $2.2 million, or $0.07 per basic and diluted
share, for the three months ended December 31, 2003. Avistar reported a net loss
of $1.3 million, or $0.05 per basic and diluted share, for the three months
ended September 30, 2003 and $2.1 million, or $0.08 per basic and diluted share,
for the three months ended December 31, 2002.
Revenue for 2003 was $6.6 million, compared to revenue of $8.8 million for 2002.
Avistar reported a net loss of $8.6 million, or $0.33 per basic and diluted
share, for 2003. For 2002, Avistar reported a net loss of $7.6 million, or $0.30
per basic and diluted share.
As of December 31, 2003, Avistar had cash and cash equivalents of $5.4 million
and no debt.
"As we stated in our press release of January 8, 2004, recovery in the financial
services vertical, where we generate most of our revenue, has not yet produced
the kind of projectable order flow that we hope to see return to our business,"
stated Gerald J. Burnett, chairman and CEO of Avistar.
"We intend to maintain the disciplines in our spending and capital outlays that
have served us during the recent downturn," said Robert J. Habig, chief
financial officer of Avistar. "Our operating expense of approximately $2.8
million for the fourth quarter of 2003 represented the tenth quarter of
operating expense reduction posted during the last eleven quarters. Our cash
balance at year-end 2003 reflects the lowest quarterly cash consumption from
operations over the last four quarters."
ABOUT AVISTAR COMMUNICATIONS CORPORATION
Avistar develops, markets and supports video collaboration solutions for the
enterprise, all powered by the AvistarVOS(TM) software. From the desktop,
Avistar delivers TV-quality video calling, recording, publishing to web and
emails, video-on-demand, broadcast, and document sharing. Avistar delivers on
vBusiness - video-enabling business - by integrating visual communications into
the daily workflow and connecting communities of users within and across
enterprises.
Founded in 1993, Avistar Communications Corporation is headquartered in Redwood
Shores, California, with sales offices in New York and London. Avistar's
technology is used in more than 35 countries. Collaboration Properties, Inc., a
wholly owned subsidiary of Avistar Communications Corporation, holds a broad
portfolio of patents covering the AvistarVOS platform as well as multiple
software and hardware video collaboration products. For more information, visit
www.avistar.com.
FORWARD LOOKING STATEMENTS
Statements made in this news release regarding the status of the financial
services vertical, future order flows, and future spending and capital outlays
are forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act. Such statements are subject to risks and uncertainties
that could cause actual results to differ materially, including such factors,
among others, as market acceptance of our new and existing products; general
economic conditions; conditions in the financial services sector; the length of
our sales cycle and our ability to successfully complete product sales; our
dependence on a few customers for a majority of our revenue; the impact of
competitive products and pricing; stock market fluctuations; and the adequacy of
Avistar's cash resources. As a result of these and other factors, Avistar
expects to experience significant fluctuations in revenue and operating results,
and there can be no assurance that Avistar will become or remain profitable in
the future, or that its future results will meet expectations. These and other
risk factors are discussed in Avistar's Annual Report on Form 10-K and Quarterly
Reports on Form 10-Q filed with the Securities and Exchange Commission from time
to time. Avistar disclaims any intent or obligation to update these
forward-looking statements.
Copyright (C) 2004 Avistar Communications Corporation. All rights reserved.
Avistar, AvistarVOS, and the Avistar logo are trademarks or registered
trademarks of Avistar Communications Corporation.
-FINANCIAL STATEMENTS FOLLOW-
AVISTAR COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2003 AND 2002
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended Twelve Months Ended
--------------------------- -----------------------------
December 31, December 31, December 31, December 31,
2003 2002 2003 2002
-------- -------- -------- --------
(unaudited) (unaudited)
Revenue:
Product ......................................... $ 610 $ 801 $ 2,817 $ 4,430
Services, maintenance and support ............... 799 953 3,775 4,369
-------- -------- -------- --------
Total revenue ............................... 1,409 1,754 6,592 8,799
-------- -------- -------- --------
Cost of revenue:
Product ......................................... 319 379 1,410 2,129
Services, maintenance and support ............... 421 538 2,119 2,348
-------- -------- -------- --------
Total cost of revenue ....................... 740 917 3,529 4,477
-------- -------- -------- --------
Gross margin ................................ 669 837 3,063 4,322
-------- -------- -------- --------
Operating Expenses:
Research and development ........................ 560 714 2,420 3,699
Sales and marketing ............................. 744 946 3,598 3,728
General and administrative ...................... 1,455 1,217 6,034 4,593
Amortization of deferred stock compensation * ... 22 65 135 358
-------- -------- -------- --------
Total operating expenses .................... 2,781 2,942 12,187 12,378
-------- -------- -------- --------
Loss from operations ........................ (2,112) (2,105) (9,124) (8,056)
-------- -------- -------- --------
Other income (expense):
Interest income ................................. 11 47 44 269
Other income (expense), net ..................... (50) (5) 461 209
-------- -------- -------- --------
Total other income, net ..................... (39) 42 505 478
-------- -------- -------- --------
Net loss ............................................ $ (2,151) $ (2,063) $ (8,619) $ (7,578)
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Net loss per share - basic and diluted .............. $ (0.07) $ (0.08) $ (0.33) $ (0.30)
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Weighted average shares used in calculating
basic and diluted net loss per share ............ 29,400 25,285 26,368 25,260
======== ======== ======== ========
*Amortization of deferred stock compensation
excluded from the following expenses:
Cost of revenue ................................. $ 2 $ 6 $ 15 $ 41
Research and development ........................ 2 6 12 32
Sales and marketing ............................. 17 52 104 278
General and administrative ...................... 1 1 4 7
-------- -------- -------- --------
$ 22 $ 65 $ 135 $ 358
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AVISTAR COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2003 AND 2002
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
December 31, December 31,
2003 2002
-------- --------
(unaudited)
ASSETS:
Current assets:
Cash and cash equivalents ..................................................... $ 5,438 $ 4,783
Short-term investments ........................................................ -- 2,402
Accounts receivable, net of allowance for doubtful accounts of $44 and $69 at
December 31, 2003 and 2002, respectively .................................... 695 740
Inventories, including inventory shipped to customers' sites, not yet installed
of $41 and $71 at December 31, 2003 and 2002, respectively .................. 937 1,148
Prepaid expenses and other current assets ..................................... 515 629
-------- --------
Total current assets ....................................................... 7,585 9,702
Property and equipment, net ................................................... 352 378
Other assets .................................................................. 291 320
-------- --------
Total assets ............................................................... $ 8,228 $ 10,400
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable .............................................................. $ 941 $ 558
Deferred revenue and customer deposits ........................................ 671 996
Accrued liabilities and other ................................................. 1,125 898
-------- --------
Total current liabilities .................................................. 2,737 2,452
-------- --------
Stockholders' equity:
Common stock, $0.001 par value; 250,000,000 shares authorized at
December 31, 2003 and 2002; 31,390,383 and 26,465,058 shares issued
at December 31, 2003 and 2002, respectively ................................ 31 26
Less: treasury common stock, 1,179,625 shares at December 31, 2003 and
2002, at cost .............................................................. (51) (51)
Additional paid-in-capital .................................................... 86,278 80,254
Deferred stock compensation ................................................... -- (135)
Other comprehensive income .................................................... -- 2
Accumulated deficit ........................................................... (80,767) (72,148)
-------- --------
Total stockholders' equity ................................................. 5,491 7,948
-------- --------
Total liabilities and stockholders' equity ................................. $ 8,228 $ 10,400
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AVISTAR COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2003 AND 2002
(IN THOUSANDS)
Year Ended December 31,
----------------------
2003 2002
------- -------
(unaudited)
Cash Flows from Operating Activities:
Net loss .................................................................. $(8,619) $(7,578)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation ............................................................ 209 326
Stock-based compensation ................................................ 135 358
Compensation on options issued to consultants ........................... 43 102.00
Provision for doubtful accounts ......................................... 125 56
Changes in current assets and liabilities:
Accounts receivable .................................................. (80) 1,964
Inventories .......................................................... 211 (52)
Prepaid expenses and other current assets ............................ 114 492
Other assets ......................................................... 29 83
Accounts payable ..................................................... 383 (75)
Deferred revenue and customer deposits ............................... (325) (209)
Accrued liabilities and other ........................................ 227 (1,339)
------- -------
Net cash used in operating activities ..................................... (7,548) (5,872)
------- -------
Cash Flows from Investing Activities:
Sale of short-term investments ............................................ 2,400 3,352
Purchase of property and equipment ........................................ (183) (105)
------- -------
Net cash provided by investing activities ................................. 2,217 3,247
------- -------
Cash Flows from Financing Activities:
Increase (decrease) in bank overdraft ..................................... -- (149)
Proceeds from issuance of common stock .................................... 5,986 113
Repurchases of common stock ............................................... -- (11)
------- -------
Net cash provided by (used in) financing activities ....................... 5,986 (47)
------- -------
Net increase (decrease) in cash and cash equivalents ...................... 655 (2,672)
Cash and cash equivalents, beginning of period ............................ 4,783 7,455
------- -------
Cash and cash equivalents, end of period .................................. $ 5,438 $ 4,783
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