Exhibit 99.1
[FIRST VIRTUAL COMMUNICATIONS LOGO] PRESS RELEASE
CONTACT:
Truman Cole
Chief Financial Officer
650-801-6500
tcole@fvc.com
FIRST VIRTUAL COMMUNICATIONS ANNOUNCES
FOURTH QUARTER RESULTS
REDWOOD CITY, CALIFORNIA - February 3, 2004 - First Virtual Communications, Inc.
(Nasdaq: FVCX), a premier provider of rich media web conferencing and
collaboration solutions, today announced that revenue for the quarter ended
December 31, 2003 was $4.7 million and the net loss for the quarter was $3.0
million or $0.27 per share.
Compared to the fourth quarter of 2002, revenue declined by $354,000, primarily
the result of lower sales of the Company's discontinued legacy ATM products,
offset in part by increased revenue from the Company's family of Click to Meet
software and service products. The loss was substantially lower than the $14.5
million, or $1.80 per share, loss reported in the same quarter of last year,
primarily due to the $9.9 million charge to earnings in the fourth quarter of
2002 as a result of a write-down of intangibles and goodwill pursuant to SFAS
144 and 142. No such adjustments were required in the fourth quarter of 2003. In
the quarter ended December 31, 2003 the Company also had higher gross margins
and lower operating expenses than in the comparable quarter of 2002.
For the year ended December 31, 2003, the Company reported revenue of $21.3
million compared to $24.4 million in 2002. The revenue decline resulted from
reduced sales of legacy ATM products offset in part by growth in revenue from
the Company's software products and services. The loss for 2003 was $10.0
million or $1.11 per share, compared to $24.3 million, or $3.19 per share in
2002. In 2003 the Company did not record any write-down of intangibles and
goodwill and also benefited from higher gross margins and lower operating
expenses. These improvements were offset in part by the decline in revenue.
"I was disappointed in our revenue performance this past quarter," said Jonathan
Morgan, President and Chief Executive Officer, "but I am pleased with our
overall progress during the past year. Not only did we complete the transition
to an enterprise software company, we also substantially strengthened our
balance sheet with a
Communications Announces Fourth Quarter Results
February 3, 2004
Page 2 of 4
financing in Q4 that allowed us to end the year with $12.2 million in cash, cash
equivalents and short-term investments."
During the quarter ending March 31, 2004, the Company plans to reduce it's
workforce by approximately 20% or 30 employees, primarily in the Company's US
operations. The reductions are expected to be completed by the end of March and
will result in a charge to earnings during the first quarter estimated to be in
the range of $600,000 to $700,000.
Management will discuss the Company's fourth quarter financial results during
its quarterly conference call for investors at 5:00pm EST today. To participate,
call (800) 299-8538 for domestic callers or (617) 786-2902 for international
callers, pass-code 25210742, at least five minutes before the start of the call.
A live simulcast and replay will be available through First Virtual
Communications web site at www.fvc.com. If you are unable to participate today,
a replay will be available through February 10, 2004 by dialing (888) 286-8010
for domestic callers or (617) 801-6888 for international callers, pass-code
55207124.
About First Virtual Communications
First Virtual Communications is a premier provider of rich media web
conferencing and communications solutions. The Company's award-winning Click to
Meet(TM) product line is enterprise-class software that enables corporate,
education, healthcare and government customers worldwide to present, share,
sell, train and collaborate. Click to Meet integrates the user's choice of data,
audio and multipoint interactive video into existing work environments and into
everyday communication tools such as instant messaging, web browsing and e-mail.
Click to Meet software solutions are widely deployed in over 1,500 customer
locations and excel in challenging environments such as military intelligence,
emergency response, disaster recovery, corporate training and geographically
dispersed tele-working locations, among others. Headquartered in Redwood City,
California, First Virtual Communications has operations in France, United
Kingdom, Japan and China. More information about First Virtual Communications
can be found at www.fvc.com or by calling 1-800-728-6337 or +1-650-801-6500
outside North America.
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," "designed" and words
of similar import. Such forward-looking statements have known and unknown risks,
uncertainties and other factors that may cause the actual results, performance
or achievements of First Virtual Communications, 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 success of and timely release of Click to Meet(TM) products,
the increase in sales of the Company's Click to Meet(TM) and Conference Server
products, First Virtual Communications' variability of operating results, market
acceptance of real-time rich media communications technology, potential
inability to maintain business relationships with integrators, distributors and
suppliers, rapid technological changes, competition and consolidation in the web
conferencing and real-time rich media communications industries, the importance
of attracting and retaining personnel, and other risk factors referenced in
First Virtual Communications' public filings with the Securities and Exchange
Commission, including the Company's report on Form 10-Q for the three month
period ended September 30, 2003.
All trademarks are recognized.
- Financial Tables Follow -
Communications Announces Fourth Quarter Results
February 3, 2004
Page 3 of 4
FIRST VIRTUAL COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS; UNAUDITED)
DECEMBER 31, DECEMBER 31,
2003 2002
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 12,070 $ 8,352
Short-term investments 89 83
Accounts receivable 2,381 4,080
Inventory -- 613
Prepaids and other current assets 608 406
--------- ---------
Total current assets 15,148 13,534
Property and equipment, net 977 2,197
Other assets 751 293
Intangible assets, net 3,233 3,736
--------- ---------
$ 20,109 $ 19,760
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable 900 1,192
Current portion of long-term debt 1,000 --
Accrued liabilities 4,268 5,139
Deferred revenue 3,940 6,656
--------- ---------
Total current liabilities 10,108 12,987
Long-term debt, net of current portion 1,500 --
Stockholders' equity:
Common stock 47 40
Additional paid-in capital 130,280 118,531
Accumulated other comprehensive income (loss) (263) (210)
Accumulated deficit (121,563) (111,588)
--------- ---------
Total stockholders' equity 8,501 6,773
--------- ---------
$ 20,109 $ 19,760
========= =========
Communications Announces Fourth Quarter Results
February 3, 2004
Page 4 of 4
FIRST VIRTUAL COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA; UNAUDITED)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
----------------------- -----------------------
2003 2002 2003 2002
-------- -------- -------- --------
Revenue $ 4,678 $ 5,032 $ 21,323 $ 24,414
Cost of revenue 822 1,339 3,580 8,379
-------- -------- -------- --------
Gross profit 3,856 3,693 17,743 16,035
-------- -------- -------- --------
Operating expense:
Research and development 1,997 2,410 8,922 9,945
Sales and marketing 2,944 2,680 11,178 9,588
General and administrative 1,845 3,200 6,687 11,045
Other non-recurring charges -- 9,894 838 9,894
-------- -------- -------- --------
Total operating expense 6,786 18,184 27,625 40,472
-------- -------- -------- --------
Operating loss (2,930) (14,491) (9,882) (24,437)
Other income (expense), net (33) (18) (92) 115
Minority interest in consolidated subsidiary -- -- -- --
-------- -------- -------- --------
Net loss $ (2,963) $(14,509) $ (9,974) $(24,322)
======== ======== ======== ========
Basic and diluted net loss per share $ (0.27) $ (1.80) $ (1.11) $ (3.19)
Shares used in computing basic and diluted
net loss per share 10,959 8,073 8,986 7,631