Press Releases
Visual Networks Reports First Quarter Results
Sequential Improvements in Revenue, EPS and Cash
ROCKVILLE, Md., April 22 — Visual Networks® (Nasdaq: VNWK) today announced financial results for the first quarter ended
March 31, 2004.
The company reported revenue for the quarter ended March 31, 2004 of $11.8 million, compared to revenue of $10.8 million for the previous quarter, an increase of nearly 10% and ahead of published analyst consensus estimates. The company's operating expenses decreased to $8.6 million, a reduction of $0.4 million, from the prior quarter, demonstrating our continued focus on control of our operating expenses. Per share loss for the quarter was $0.01, ahead of published consensus analyst estimates. The company ended the quarter with a cash balance of $16.7 million.
"We are quite pleased with the results for the quarter and the continued strengthening of our top and bottom line performance," stated Larry Barker, president and CEO of Visual Networks. "Gross margins remained strong and our cash balance increased from the prior quarter. These results reflect an improvement in business conditions and increased interest in our market. Reception of the Visual UpTime® Select™ platform continues to strengthen as we made great strides in the transition process for our existing customer base. The completion of two strong sequential quarters speaks to the attractiveness of our products."
* Visual UpTime Select was showcased by Network World as one of the "Tops
in Innovation" for products that "step beyond the norm with interesting
solutions for today's enterprise network problems;"
* Closed deals with more than 50 new enterprise customers and
approximately 40 existing enterprise customers during the quarter;
* Announced the introduction of our new OC-3 ASEs for complex high-speed
networks;
* Announced the introduction of our new international E-1 ASE for
international IP networks;
* Announced the selection of Visual Networks by Kroger to help improve
application delivery across their new IP/MPLS network;
* Exceeded published consensus analyst estimates on revenue and EPS; and
* Maintained a strong balance sheet, including cash and accounts
receivable.
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 617-801-9712, confirmation code 84115687. A web cast of the live call will be available on the company's Investor Relations Web page: http://www.firstcallevents.com/service/ajwz403128220gf12.html. Windows Media Player is required to hear the event.
Visual Networks was recognized as a World Class Winner in Network World's
recent network management product review
(http://www.nwfusion.com/reviews/2003/1006rev.html) and has the broadest suite of proven 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. The world's leading service providers and enterprises are using Visual Networks' award-winning products. To find out more, call 1-800-240-4010 for sales information.
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
March 31,
2004 2003
Revenue $ 11,841 $ 9,204
Cost of revenue 3,323 2,254
Gross profit 8,518 6,950
Operating expenses:
Research and development 2,670 2,747
Sales and marketing 3,804 3,443
General and administrative 2,174 948
Total operating expenses 8,648 7,138
Loss from operations (130) (188)
Other income -- 452
Interest expense, net (360) (356)
Net loss $ (490) $ (92)
Basic and diluted loss per share $ (0.01) $ (0.00)
Visual Networks, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
March 31, December 31,
2004 2003
Assets
Current assets:
Cash and cash equivalents $ 16,747 $ 15,671
Restricted short-term investment 528 1,530
Accounts receivable, net 2,606 2,326
Inventory 2,823 3,346
Other current assets 1,141 788
Total current assets 23,845 23,661
Property and equipment, net 2,214 2,378
Total assets $ 26,059 $ 26,039
Liabilities and Stockholders' Equity
Liabilities:
Accounts payable and accrued expenses $ 7,367 $ 8,115
Convertible debentures, net of
unamortized debt discount 8,939 8,744
Customer deposits 250 250
Deferred revenue 6,700 6,083
Total liabilities 23,256 23,192
Stockholders' equity 2,803 2,847
Total liabilities and
stockholders' equity $ 26,059 $ 26,039
Visual Networks, Inc.
Condensed Consolidated Cash Flow Statement
(in thousands)
(unaudited)
For the
Three Months Ended
March 31,
2004 2003
Cash Flows From Operating Activities:
Net loss $ (490) $ (92)
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Depreciation and amortization 422 463
Non-cash interest expense 254 254
Bad debt expense 76 --
Non-cash compensation expense 88 2
Changes in assets and liabilities
Accounts receivable (356) 3,764
Inventory 523 434
Other assets (412) (416)
Accounts payable and accrued expenses (748) (2,601)
Deferred revenue 617 (669)
Customer deposits -- 250
Net cash provided by (used in)
operating activities (26) 1,389
Cash Flows From Investing Activities:
Sales of short-term investments 1,002 503
Expenditures for property and equipment (258) (343)
Net cash provided by investing activities 744 160
Cash Flows From Financing Activities:
Exercise of stock options and employee
stock purchase plan 358 81
Net cash provided by financing activities 358 81
Net Increase in Cash and Cash Equivalents 1,076 1,630
Cash and Cash Equivalents, Beginning of Period 15,671 12,708
Cash and Cash Equivalents, End of Period $ 16,747 $ 14,338
Visual Networks, Inc.
Additional Financial Information
The following presents additional financial information about Visual Networks for the three months ended June 30, 2003, September 30, 2003, December 31, 2003 and March 31, 2004, respectively.
6/30/03 9/30/03 12/31/03 3/31/04
Days Sales Outstanding
Calculation:
Days sales outstanding
("DSOs"') are
calculated as follows:
Accts Receivable $6,883 $6,083 $2,326 $2,606
Quarterly sales/Days
in quarter $9,773/91 $9,367/92 $10,835/92 $11,841/91
Day sales outstanding 64.1 59.7 19.8 20.0
Inventory Turns Calculation:
Inventory turns are calculated
as follows:
Days in year 365 365 365 365
Inventory/(Quarterly
cogs/Days in quarter) $3,497/ $2,744 $3,346 $2,823
($2,565/91) ($3,119/92) (42,409/92) ($3,323/91)
Inventory turns 2.9 4.5 2.9 4.7
Employees:
Research and development 53 54 55 54
Sales and marketing 60 61 62 62
Manufacturing and customer
service 11 11 11 11
General and administrative 31 31 28 30
Total Employees 155 157 156 157
Revenue
Current Products:
Uptime $ 8,523 $ 8,550 $ 6,440 $ 11,056
IP Insight 1,120 747 4,336 728
Total current products 9,643 9,297 10,776 11,784
Discontinued Products 23 -- -- --
Royalties 107 70 59 57
Total $ 9,773 $ 9,367 $ 10,835 $ 11,841
Visual Networks, Inc.
Additional Financial Information (continued)
The following presents additional financial information about Visual Networks for the three months ended June 30, 2003, September 30, 2003, December 31, 2003 and March 31, 2004, respectively.
6/30/03 9/30/03 12/31/03 3/31/04
Common stock outstanding 32,631 32,700 32,866 33,109
Weighted average share
calculations:
Basic and diluted weighted
average shares outstanding 32,569 32,648 32,790 33,011
Net loss $ (677) $ (2,515) $ (1,005) $ (490)
Basic and diluted loss per
share $ (0.02) $ (0.08) $ (0.03) $ (0.01)
Source: Visual Networks
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