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| 8-K - FORM 8-K - VIEWCAST COM INC | v240372_8k.htm |
ViewCast
Reports 2011 Third Quarter, Nine-Month Results
PLANO,
Texas, Nov. 14, 2011 /PRNewswire/ -- ViewCast Corporation (OTCBB: VCST), a
developer of industry-leading solutions for the transformation, management and
delivery of digital media over enterprise, broadband, and mobile networks, today
reported results for the 2011 third quarter and nine months ended September 30,
2011.
The
Company reported net sales of $3.6 million in the third quarter 2011 compared to
$4.5 million in the prior year period. While the pipeline for both
Osprey® cards
and Niagara®
systems remained strong and the order flow from the Company's principal OEM
customer returned to a more normal volume than in the second quarter, closing
rates across the board were affected by macroeconomic
uncertainty. Purchasing managers in all regions reported that
institutional delays in decisions and investments were seen during the period
due to the fear of recession in Europe and the general resulting uncertainty in
the global and domestic outlook.
New
ViewCast President and Chief Operating Officer John Hammock said, "We are
tackling the current and long term issues head on and in two principal
ways. First, although we do see some improvement in ordering
patterns, it is difficult to predict how trends will continue, so we are
aggressively restructuring our organizational costs to match our current rates
of revenue. Secondly, we are stepping up our focus and investment in several new
product innovations for launch in early 2012, which will open the door for us to
access additional large customers in the telecom industry and other
institutional customers that are gearing up to deliver content directly to
consumers and their mobile platforms."
Highlights of the Third
Quarter and Recent Weeks
Important
progress made in the third quarter and subsequent weeks included:
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Two
video industry veterans were appointed to the top sales and marketing
positions. Howard Barouxis was named Vice President of Sales,
and Mike Galli as Vice President of
Marketing.
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In
July, the new Niagara 7550 streaming media system for Web-based delivery
of HD video was introduced. The 7550 enables users to simultaneously
leverage multiple adaptive streaming formats, including Apple HTTP
adaptive streaming for iPad®
and iPhone®
mobile products and Adobe®
Flash®
dynamic streaming, and can meet the needs of the most demanding
professional broadcasting applications and other professional-level HD
video distribution requirements.
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In
September at the IBC in Amsterdam, the Niagara 7550 received TV Technology
Europe's prestigious Star Award as one of the preeminent technological
innovations in the broadcasting
industry.
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In
October, the Company launched the enhanced Niagara SCX®
6.4 streaming media management software which includes a number of
advanced features, including support for adaptive live encoding via
Microsoft®
Live IIS Smooth Streaming and PlayReady®
DRM support, updates to Akamai®
HD iPhone®
and iPad®
streaming, improved MPEG-4 streaming, and presentation and security
enhancements for the entire adaptive streaming portfolio. Full software
functionality will be available on ViewCast's professional-grade Niagara
Pro II, Niagara 7750 and Niagara 4100 streaming media systems, with
upgrades available to existing owners of ViewCast streaming
systems.
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Also
in October, PrepSpin, the Kentucky-based sports broadcasting company began
successfully using the Osprey video capture cards and Niagara 2100 and
4100 streaming media systems to broadcast youth, middle school, high
school and other sporting events throughout the state. The Company
believes the high school and prep markets for streaming media are going to
grow substantially during the next few years and that the Osprey and
Niagara products are ideal for these
applications.
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"Progress
with new products and inroads into new customer bases is our marketing
priority," continued Hammock. "I am looking forward to a series of
new product introductions that extend our proven core technologies and
competencies into new arenas, where we promote our technology
advantages. Within a year, we believe our business will be far more
balanced between our expanded target verticals, and will provide a return to
profitable growth."
Third Quarter Financial
Results
In the
2011 third quarter, revenues were $3.6 million compared to $4.5 million in the
prior year period. Operating expenses for the third quarter 2011 were
$3.0 million compared to $2.7 million for the prior year
period. Operating loss of $(854,000) for the third quarter 2011
declined from income of $51,000 for the year-earlier period.
Net loss
for the third quarter 2011 was $(916,000) compared to net income of $8,000 in
the third quarter 2010.
EBITDA
(earnings before interest, taxes, depreciation and amortization) for the 2011
third quarter was $(0.7) million, compared to $0.2 million in the 2010 third
quarter. EBITDA is a non-GAAP measure that ViewCast management believes can be
helpful in assessing the Company's overall performance and considered as an
indicator of operating efficiency and earnings quality. The Company suggests
that EBITDA be viewed in conjunction with the Company's reported financial
results or other financial information prepared in accordance with
GAAP.
Chief
Financial Officer Laurie Latham commented on the ongoing financial
restructuring, "Our principal goal on the operating and expense side of things
is to pare back expenses to match our Q3 run rate, with the idea that as we
return to growth, stronger bottom line results will be produced. We
have identified and executed on a majority of the changes already and we feel
confident that the organization will be in a more stable and beneficial position
going into the new year."
Nine-Month Financial
Results
Revenues
for the nine months ended September 30, 2011 were $11.5 million compared to
$12.4 million for the first nine months of 2010. Operating expenses
for the nine-months 2011 were $8.8 million, compared to $8.1 million for
nine-months 2010. The operating loss was $(1.9) million, compared to
an operating loss of $(0.6) million for nine-months 2010.
Net loss
for the nine-months 2011 was $(2.1) million, compared to a net loss of $(0.7)
million for nine-months 2010. Due to the accounting treatment for the preferred
stock redemption during the period, the net income applicable to common
shareholders benefitted by $5.6 million, which together with an adjustment of
$282,000 for stated preferred stock dividends resulted in net income applicable
to common shareholders of $3.2 million or $0.07 per share on a fully diluted
basis for the nine months ended September 30, 2011. This compares,
after the stated preferred stock dividends adjustment of $615,000, to a net loss
applicable to common shareholders of $(1.3) million or $(0.04) per share on a
fully diluted basis for the prior year period.
EBITDA
for nine-months 2011 was $(1.4) million, compared to $46,000 for nine-months
2010.
About ViewCast
Corporation
ViewCast
develops industry-leading hardware and software for the transformation,
management and delivery of professional quality video over broadband, enterprise
and mobile networks. ViewCast's award-winning solutions simplify the complex
workflows required for the Web-based streaming of news, sports, music, and other
video content to computers and mobile devices, empowering broadcasters,
businesses, and governments to easily and effectively reach and expand their
audiences. With more than 400,000 video capture cards deployed globally,
ViewCast sets the standard in the streaming media industry. ViewCast
Niagara®
streaming appliances, Osprey® video
capture cards and VMp™ video
and digital asset management software provide the highly reliable technology
required to deliver the multi-platform experiences driving today's digital media
market.
ViewCast
(www.viewcast.com) is headquartered in Plano, Texas, USA, with sales and
distribution channels located globally.
ViewCast,
VMp, Osprey, Niagara and Niagara SCX are trademarks or registered trademarks of
ViewCast Corporation or its subsidiaries.
Safe Harbor
Statement
Certain
statements in this release are forward-looking within the meaning of the Private
Securities Litigation Reform Act of 1995 and reflect the Company's current
outlook. Such statements apply to future events and are therefore subject to
risks and uncertainties that could cause actual results to differ materially.
Important factors that could cause actual results to differ materially from
forward-looking statements include, but are not limited to, changes in market
and business conditions, demand for the Company's products and services,
technological change, the ability of the Company to develop and market new
products, increased competition, the ability of the Company to obtain and
enforce its patent and avoid infringing other parties' patents, and changes in
government regulations. All written and verbal forward-looking
statements attributable to ViewCast and any person acting on its behalf are
expressly qualified in their entirety by the cautionary statements set forth
herein. ViewCast does not undertake any obligation to update any forward-looking
statement to reflect circumstances or events that occur after the date on which
the forward-looking statements are made. For a detailed discussion of these and
other cautionary statements and factors that could cause actual results to
differ from the Company's forward-looking statements, please refer to the
company's reports on Form 10-K and 10-Q on file with the U.S. Securities and
Exchange Commission.
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ViewCast Contact:
Laurie
L. Latham
Chief
Financial Officer
Tel:
+1 (972) 488-7200
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Investor Contact:
Matt
Clawson
Allen
& Caron
Tel:
+1 (949) 474-4300
E-mail:
matt@allencaron.com
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VIEWCAST
CORPORATION
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OPERATING
HIGHLIGHTS
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(Unaudited)
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(In
thousands – except per share amounts)
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Three
Months Ended
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Nine
Months Ended
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September
30,
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September
30,
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2011
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2010
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2011
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2010
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Net
sales
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$ | 3,558 | $ | 4,547 | $ | 11,521 | $ | 12,365 | ||||||||
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Cost
of sales
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1,457 | 1,814 | 4,662 | 4,793 | ||||||||||||
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Gross
profit
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2,101 | 2,733 | 6,859 | 7,572 | ||||||||||||
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Total
operating expenses
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2,955 | 2,682 | 8,778 | 8,145 | ||||||||||||
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Operating
income (loss)
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(854 | ) | 51 | (1,919 | ) | (573 | ) | |||||||||
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Total
other expense
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(62 | ) | (43 | ) | (166 | ) | (120 | ) | ||||||||
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Provision
for income taxes
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0 | 0 | 0 | 0 | ||||||||||||
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Net
income (loss)
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$ | (916 | ) | $ | 8 | $ | (2,085 | ) | $ | (693 | ) | |||||
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Preferred
stock dividends
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- | (205 | ) | (282 | ) | (615 | ) | |||||||||
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Preferred
stock redemption
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- | - | 5,586 | - | ||||||||||||
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Net
income (loss) applicable to
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common
stockholders
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$ | (916 | ) | $ | (197 | ) | $ | 3,219 | $ | (1,308 | ) | |||||
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Net
income (loss) per common share:
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Basic
& Diluted
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$ | (0.02 | ) | $ | (0.01 | ) | $ | 0.07 | $ | (0.04 | ) | |||||
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Weighted
Average number of
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common
shares outstanding:
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Basic
& Diluted
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55,699 | 36,048 | 48,121 | 36,029 | ||||||||||||
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RECONCILIATION
OF NET INCOME TO EBITDA
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(Unaudited)
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(In
thousands)
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Three
Months Ended
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Nine
Months Ended
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September
30,
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September
30,
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| 2011 | 2010 | 2011 | 2010 | |||||||||||||
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Net
income (loss)
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$ | (916 | ) | $ | 8 | $ | (2,085 | ) | $ | (693 | ) | |||||
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Depreciation
and amortization
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164 | 190 | 509 | 619 | ||||||||||||
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Total
other and income tax expense
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62 | 43 | 166 | 120 | ||||||||||||
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EBITDA
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$ | (690 | ) | $ | 241 | $ | (1,410 | ) | $ | 46 | ||||||