Press Releases
Visual Networks Reports Fourth Quarter Results
Sequential Improvements in Revenue, Gross Margin, EPS and Cash
ROCKVILLE, Md., Jan. 15 — Visual Networks® (Nasdaq: VNWK) today announced financial results for the fourth quarter ended December 31, 2003.
The company reported revenue for the quarter ended December 31, 2003 of $10.8 million, compared to revenue of $9.4 million for the previous quarter, an increase of nearly 16%. The company's operating expenses increased to $8.7 million for the quarter from $8.4 million for the previous quarter, due in part to increased commissions reflecting the increased revenue. Per share loss for the quarter was $0.02. The company ended the quarter with a cash balance of $15.7 million.
"We are quite pleased with the results of the quarter, which, as we previously reported, exceeded our prior guidance. After a challenging year, we are very excited to end 2003 with a strong finish," stated Larry Barker, president and CEO of Visual Networks. "We saw an increase in sales of our IP InSight product which helped drive our gross margin to 77.8% for the fourth quarter. Prompt payments by customers allowed us to increase our cash balance substantially during the quarter. Looking forward, the introduction of Visual UpTime Select has been well received by new and existing customers and promises to be a critical component of growth for 2004."
The company also announced that it has received a $6.0 million commitment from Silicon Valley Bank, the primary banking subsidiary of Silicon Valley Bancshares (Nasdaq: SIVB) and is currently working through the legal documentation phase. Borrowings under the line of credit will be used for working capital purposes.
* Launched Visual UpTime Select, a flexible suite of offerings built upon
the company's award winning IP performance management technology;
* Visual UpTime Select received the "Product of the Year Award" from
Technology Marketing Corporation's Internet Telephony magazine, the
premier publication in the burgeoning IP telephony industry;
* Announced availability of an integrated network management solution
combining Visual Networks' Visual UpTime Select solution with Aprisma
Management Technologies' Aprisma SPECTRUM platform;
* J.M. Huber Corporation selected the Visual UpTime performance management
solution to optimize bandwidth for its migration to an IP-based Multi
Protocol Label Switching (MPLS) network, which will support its global
enterprise resource planning (ERP) initiative;
* Visual UpTime Named Best Performing WAN Management System by Network
World.
In conjunction with the announcement, Visual Networks' management will host a teleconference and Web cast beginning at 4:45 p.m. (EDT) this afternoon. To participate in the teleconference, please call 617-786-2962, confirmation code 55242548. A live Web broadcast of the conference call will be available at http://www.firstcallevents.com/service/ajwz395335625gf12.html. Windows Media Player is required to hear the event.
Visual Networks provides the broadest suite of proven IP performance management solutions that help enterprise customers manage the delivery of mission-critical applications across their underlying infrastructure. Visual Networks' products increase application and network availability, optimize the use of bandwidth, and reduce operating costs across traditional and new IP- based infrastructures. Recognized as a World Class Winner in Network World's network management product review (http://www.nwfusion.com/reviews/2003/1006rev.html), Visual Networks has helped over 2500 enterprises worldwide to enable their networks for application delivery.
Since 1995, the world's leading service providers and enterprises have been using Visual Networks' award-winning products. To find out more, call 1-800-240-4010 or visit www.visualnetworks.com for sales information.
This press release contains forward-looking information within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and is subject to the safe harbor created by those sections. The forward-looking information is based upon current information and expectations regarding Visual Networks and its subsidiaries. These estimates and statements speak only as of the date on which they are made, are not guarantees of future performance, and involve certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results could materially differ from what is expressed, implied, or forecasted in such forward-looking statements.
Visual Networks assumes no obligation to update the information contained in this press release. Visual Networks' future results may be impacted by risks associated with rapid technological change and the emerging services market, potential fluctuations in quarterly operating results, its dependence upon sole and limited source suppliers and fluctuations in component pricing, its dependence upon key employees, and its ability to retain employees. Visual Networks' future results may also be impacted by other risk factors listed from time to time in its SEC filings, including, but not limited to, the Company's Form 10-Qs and its Annual Report on Form 10-K.
Visual Networks, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
For the
Three Months Ended
December 31,
2003 2002
Revenue $10,835 $14,807
Cost of revenue 2,409 4,164
Gross profit 8,426 10,643
Operating expenses:
Research and development 2,533 2,775
Sales and marketing 4,522 4,806
General and administrative 1,631 1,464
Total operating expenses 8,686 9,045
Income (loss) from operations (260) 1,598
Interest expense, net (365) (353)
Net income (loss) $ (625) $ 1,245
Basic and diluted earnings (loss) per share $ (0.02) $ 0.04
Visual Networks, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
December 31, December 31,
2003 2002
Assets
Current assets:
Cash and cash equivalents $15,671 $12,708
Restricted short-term investment 1,530 2,503
Accounts receivable, net 2,326 7,185
Inventory 3,346 3,393
Other current assets 256 259
Total current assets 23,129 26,048
Property and equipment, net 2,378 3,481
Deferred debt issuance costs 532 768
Total assets $26,039 $30,297
Liabilities and Stockholders' Equity
Liabilities:
Accounts payable and accrued expenses $ 7,735 $ 9,733
Customer deposits 250 --
Deferred revenue 6,083 5,974
Total current liabilities 14,068 15,707
Convertible debentures, net of
unamortized debt discount 8,744 7,963
Total liabilities 22,812 23,670
Stockholders' equity 3,227 6,627
Total liabilities and
stockholders' equity $26,039 $30,297
Visual Networks, Inc.
Condensed Consolidated Cash Flow Statement
(in thousands)
(unaudited)
For the
Three Months Ended
December 31,
2003 2002
Cash Flows From Operating Activities:
Net income (loss) $ (625) $ 1,245
Adjustments to reconcile net income
(loss) to net cash used in
operating activities:
Depreciation and amortization 425 885
Non-cash interest expense 254 254
Changes in assets and liabilities
Accounts receivable 3,757 (1,266)
Inventory (572) 124
Other assets 144 351
Accounts payable and accrued expenses 1,820 1,232
Deferred revenue 405 (2,354)
Net cash provided by operating activities 5,608 471
Cash Flows From Investing Activities:
Sales of short-term investments -- --
Expenditures for property and equipment (201) (99)
Net cash used in investing activities (201) (99)
Cash Flows From Financing Activities:
Exercise of stock options and employee stock
purchase 193 159
plan, net of stock repurchases
Net cash provided by financing activities 193 159
Net Increase in Cash and Cash Equivalents 5,600 531
Cash and Cash Equivalents, Beginning of Period 10,071 12,177
Cash and Cash Equivalents, End of Period $15,671 $12,708
Visual Networks, Inc.
Additional Financial Information
The following presents additional financial information about Visual Networks for the three months ended March 31, 2003, June 30, 2003, September 30, 2003 and December 31, 2003, respectively.
3/31/03 6/30/03 9/30/03 12/31/03
Days Sales Outstanding
Calculation:
Days sales outstanding
("DSOs"') are calculated as
follows:
Accts Receivable $3,883 $6,883 $6,083 $2,326
Quarterly sales/
Days in quarter $9,204/90 $9,773/91 $9,367/92 $10,835/92
Day sales outstanding 38.0 64.1 59.7 19.8
Inventory Turns Calculation:
Inventory turns are calculated
as follows:
Days in year 365 365 365 365
Inventory/(Quarterly
cogs/Days in quarter) $2,959/ $3,497/ $2,774/ $3,346/
($2,254/90) ($2,565/91) ($3,119/92) ($2,409/92)
Inventory turns 3.1 2.9 4.5 2.9
Employees:
Research and development 52 53 54 55
Sales and marketing 64 60 61 62
Manufacturing and
customer service 12 11 11 11
General and administrative 29 31 31 28
Total Employees 157 155 157 156
Revenue
Current Products:
Uptime $8,227 $8,523 $8,550 $6,440
IP Insight 861 1,120 747 4,336
Royalties 82 107 70 59
Total current products 9,170 9,750 9,367 10,835
Discontinued Products 34 23 -- --
Total $9,204 $9,773 $9,367 $10,835
The following presents additional financial information about Visual Networks for the three months ended March 31, 2003, June 30, 2003, September 30, 2003 and December 31, 2003, respectively.
3/31/03 6/30/03 9/30/03 12/31/03
Common stock outstanding 32,448 32,631 32,700 32,866
Weighted average share
calculations:
Basic weighted average shares
outstanding 32,429 32,569 32,648 32,790
Common stock equivalents
(treasury stock method) -- -- -- --
Diluted weighted average
shares outstanding 32,429 32,569 32,648 32,790
Net income (loss) $(92) $(677) $(2,515) $(625)
Basic and diluted earnings
(loss) per share $(0.00) $(0.02) $(0.08) $(0.02)
Source: Visual Networks
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