NASHUA, N.H., Nov. 12 NH-Ezenia!-Q3-earns
NASHUA, N.H., Nov. 12 /PRNewswire-FirstCall/ -- Ezenia! Inc.
(OTC Bulletin Board: EZEN), a leading market provider of real-time
collaboration solutions for corporate and government networks, today reported
financial results for its third quarter ended September 30, 2008.
Revenue was approximately $1.7 million for the third quarter of 2008 and
$5.3 million for the nine months ended September 30, 2008, a decrease of 13.7%
and 26.2% from the same periods ended September 30, 2007, respectively. The
Company believes that the decline in revenue was primarily attributable to
redirections of IT budget imposed by the Defense Information System Agency
(DISA) to promote competing solutions selected for the Net-Centric Enterprise
Services (NCES) programs, which has resulted in very few new purchases of
InfoWorkSpace (IWS) and reductions in renewals from affected customers.
Operating results yielded losses of approximately $747,000 and $2.3
million for the third quarter and nine months ended September 30, 2008,
compared to losses of $2.3 and $2.8 million for the same periods in 2007,
respectively. Operating costs declined to approximately $1.8 million and $5.5
million for the corresponding periods ended September 30, 2008, compared to
$2.1 million and $5.5 million for the same periods ended September 30, 2007,
respectively.
Net losses were approximately $748,000, or ($0.05) per share, and $2.2
million, or ($0.15) per share, for the third quarter and nine months ended
September 30, 2008, as compared to net losses of approximately $2.2 million,
or ($0.15) per share, and $2.3 million, or ($0.16) per share, for the same
periods in 2007, respectively. In the quarter ended September 30, 2007 a $1.4
million reserve against a contractual commitment to purchase software licenses
from Microsoft was recorded.
The Company believes that, while there are potential opportunities for
limited recovery and new sales in the existing Department of Defense (DOD)
customer base, the redirection of budget funds and the promotion of competing
solutions by DISA will continue to result in the reduction of renewals and
elimination of new purchases of IWS by our customers, thereby creating losses
within our core business. Coupled with the currently difficult economic
conditions which lengthen the business development and sales activities on the
commercial segment, the Company anticipates continued downward pressure on
revenue and profitability for the foreseeable future. With the cash balance
at $8.1M at the end of the third quarter, the Company has been taking
significant actions to streamline its expense profile while endeavoring to
preserve its continued investments in critical areas, including the continued
enhancements of IWS and the development of new products.
About Ezenia! Inc.
Ezenia! Inc. (OTC Bulletin Board: EZEN), founded in 1991, is a leading
provider of real-time collaboration solutions, bringing new and valuable
levels of interaction and collaboration to corporate networks and eGovernment.
By integrating voice, video and data collaboration, the Company's
award-winning products enable groups to interact through a natural meeting
experience regardless of geographic distance. Ezenia! products allow dispersed
groups to work together in real-time using powerful capabilities such as
instant messaging, white boarding, screen sharing and text chat. The ability
to discuss projects, share information, and modify documents allows users to
significantly improve team communication and accelerate the decision-making
process. More information about Ezenia! Inc. and its product and service
offerings can be found at the Company's website, http://www.ezenia.com.
Note to Investors Regarding Forward-Looking Statements
Statements included in this release that are not historical facts may be
considered forward-looking statements. You can identify these forward-looking
statements by use of the words "expects," "anticipates," "estimates,"
"believes," "projects," "intends," "plans," "will," "may," and similar words.
Such forward-looking statements, including statements regarding the Company's
financial outlook and strategy, changes in its DOD customer base, proposed
investments in its product development efforts, and its recovery and growth
opportunities, involve risks and uncertainties that could cause actual results
to differ materially from those indicated by such forward-looking statements.
These risks and uncertainties include the considerations that are discussed in
the Company's 2007 Annual Report on Form 10-K for the year ended December 31,
2007, such as the evolution of the Company's market, its dependence on major
customers, its dependence on the United States government as its largest
customer, rapid technological change and competition within the collaborative
software market, its reliance on third-party technology, protection of its
propriety technology, acceptance of InfoWorkSpace (IWS) in the commercial
market, retention of key employees, stock price volatility, customer
acceptance of version 3.0 of IWS, its history of liquidity concerns and
operating losses, and other considerations that are discussed further in such
report. You should not place undue reliance upon any such forward-looking
statements, which speak only as of the date made. The Company disclaims any
obligation to update forward-looking statements after the date of such
statements.
Note: Ezenia! is a registered trademark of Ezenia! Inc. and the Ezenia!
Logo and InfoWorkSpace are trademarks of Ezenia! Inc. Additional information
on Ezenia! and its products is available at http:// www.ezenia.com.
Ezenia! Inc.
Condensed Consolidated Balance Sheets
(In thousands, except for share and per share related data)
(Unaudited)
September 30, December 31,
2008 2007
Assets
Current assets
Cash and cash equivalents$ 8,100$9,395
Accounts receivable, less allowances of $28 at
September 30, 2008 and $413 at December 31,
2007503 2,479
Prepaid software licenses 1,540 1,417
Prepaid expenses and other current assets218 292
Total current assets 10,36113,583
Deposits 1515
Prepaid licenses, net of current portion- 169
Capitalized software, net -18
Equipment and improvements, net 260 380
Total assets $10,636 $14,165
Liabilities and stockholders' equity
Current liabilities
Accounts payable$352 $497
Accrued expenses 1,775 1,885
Accrued restructuring210 215
Employee compensation and benefits 251 266
Deferred revenue 1,960 3,512
Total current liabilities 4,548 6,375
Deferred revenue, net of current portion-17
Stockholders' equity
Preferred stock, $.01 par value, 2,000,000 shares
authorized, none issued and outstanding - -
Common stock, $.01 par value, 40,000 shares
authorized, 15,417,754 issued and 14,658,217
outstanding at September 30, 2008; 15,360,629
issued and 14,601,092 outstanding at December 31,
2007154 154
Capital in excess of par value65,37064,870
Accumulated deficit (56,491) (54,306)
Treasury stock at cost, 759,537 shares at
September 30, 2008 and December 31, 2007 (2,945) (2,945)
Total stockholders' equity 6,088 7,773
Total liabilities and stockholders' equity$10,636 $14,165
Ezenia! Inc.
Condensed Consolidated Statements Of Operations
(In thousands, except for share and per share related data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2008200720082007
Revenues
Product revenue $1,680 $2,003 $5,211 $6,417
Product development revenue 65 19 82 751
Service revenue- - - 2
1,745 2,022 5,293 7,170
Cost of revenues
Cost of product revenue 663 2,160 2,027 3,921
Cost of product development
revenue 6 17 6 568
Cost of service revenue- - - 2
669 2,177 2,033 4,491
Gross profit (loss) 1,076(155) 3,260 2,679
Operating expenses
Research and development 533 603 1,598 1,695
Sales and marketing 565 568 1,658 1,425
General and administrative 497 761 1,748 1,928
Depreciation 45 40 165 108
Occupancy and other facilities
related expenses 82 125 244 354
Restructuring charge 101 - 101 -
Total operating expenses1,823 2,097 5,514 5,510
Loss from operations (747) (2,252) (2,254) (2,831)
Interest income, net 37 146 129 453
Other income (expense)(38) 10 (60) 32
(1)156 69 485
Net loss $ (748)$(2,096)$(2,185)$(2,346)
Basic and diluted loss per
share:
Basic $(0.05) $(0.14) $(0.15) $(0.16)
Diluted $(0.05) $(0.14) $(0.15) $(0.16)
Weighted average common
shares:
Basic 14,608,696 14,686,234 14,641,891 14,680,141
Diluted 14,608,696 14,686,234 14,641,891 14,680,141
Contact: Kevin Hackett
Ezenia! Inc.
Investor Relations
investorrelations@ezenia.com
SOURCE Ezenia! Inc.
