SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 28, 1999
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VTEL CORPORATION
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(Exact name of registrant as specified in its charter)
DELAWARE 0-20008 74-2415696
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(State or other jurisdiction of (Commission File (IRS Employer
incorporation) Number) Identification No.)
108 WILD BASIN ROAD, AUSTIN, TEXAS 78746
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (512) 437-2700
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(NOT APPLICABLE)
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(Former name or former address, if changed since last report)
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1
ITEM 5. OTHER EVENTS
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The Registrant files herewith the exhibit listed in Item 7(c) below.
ITEM 7(C). EXHIBITS
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The following exhibit is furnished in accordance with Item 601 of
Regulation S-K:
99 Press Release
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
VTEL CORPORATION
(Registrant)
Date: September 30, 1999 By: /s/ Rodney S. Bond
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Rodney S. Bond
Vice President-Finance and Chief
Financial Officer
3
Exhibit 99
[GRAPHIC OMITTED]
FOR IMMEDIATE RELEASE
Contact: Michael Russell
Senior Director, Investor Relations
(512) 437-2354
mike_russell@vtel.com
VTEL Reports Fourth Quarter and Year-End Results
for Fiscal Year 1999
AUSTIN, Texas (Sept. 28, 1999) - VTEL(R) Corporation (NASDAQ: VTEL) today
reported financial results for its fiscal 1999 fourth quarter and year end for
the period ended July 31, 1999.
For the three-month period, VTEL reported net income of $392,000, or $.02
per share on 24.9 million fully diluted shares outstanding, compared to $1.4
million, or $.06 per share on 23.5 million shares, for the same three-month
period in fiscal year 1998. Revenue for the fourth quarter totaled $40.8 million
versus $47.7 million for the fourth quarter of 1998.
"Our top-line performance in the fourth quarter grew 13 percent over third
quarter, indicating that there is renewed strength in VTEL's core vertical
markets," said Stephen Von Rump, president of VTEL. "We continued to reduce
operating expenses, which were down $1.3 million, or seven percent, from the
third quarter."
For the one-year period ending July 31, 1999, revenues were $151.6 million
compared to $179.7 million for the one-year period in 1998. The company reported
a net loss for fiscal year
VTEL Reports Fourth Quarter and Year-End Results for Fiscal Year 1999//Page 2
1999 of $15.6 million, including $3.1 million in restructuring charges, or $0.66
per diluted share, versus net income of $2.8 million, or $0.12 per share, for
fiscal year 1998.
- more -
VTEL also reported that it has restated previously issued financial
statements for first, second and third quarters of fiscal year 1999. The
restatements are attributed to non-cash adjustments made to certain depreciation
and amortization accounts, inventory accounts, and to the reversal of previously
recorded final acceptance revenues for certain Chinese orders in which final
cash payment has not yet been received.
"We are pleased with the objectives we met in the fourth quarter that
will carry us into fiscal year 2000," said Von Rump. "That momentum, coupled
with the completion of several key initiatives during fiscal year 1999, better
positions VTEL for achieving its potential future performance."
Von Rump said those initiatives included the acquisition of the
streaming technology of Vosaic LLC and subsequent launch of VTEL's TurboCast
streaming suite; introduction of the Network Assured Program with Cisco as its
charter member; operating expense reductions of $7.1 million since first
quarter; realignment of all customer facing organizations; and the introduction
of Galaxy, a completely new product line. "We established 13 percent revenue
growth quarter-over-quarter, reduced operating expenses for the fourth straight
quarter and reduced days in inventory to a four-quarter low," said Von Rump.
Based in Austin, Texas with offices and resellers in 61 countries, VTEL
Corporation is a global leader in high technology visual communications products
and services. From Internet visual communications software and services to
videoconferencing systems and video-networking solutions, VTEL offers customers
the most complete range of products and implementation support. VTEL serves
customers in the commercial, education, healthcare, and government markets by
combining the power of traditional videoconferencing with the vast reach of the
Internet.
This release may include projections and other forward-looking
statements that involve a number of risks and uncertainties and as such, actual
results in future periods may differ materially from those currently expected or
desired. Some of the factors that could cause actual results to differ
materially include rapid changes in technology, changes in customer order
patterns or order mix, the ability to collect certain foreign receivables,
foreign exchange rate
VTEL Reports Fourth Quarter and Year-End Results for Fiscal Year 1999//Page 3
fluctuations, the intensity of competition, the cost and availability of certain
key components, the
- more -
company's ability to manage product transitions and inventory levels, product
pricing pressures, sudden or unexpected changes in demand for VTEL's
videoconferencing systems, and litigation involving intellectual property and
other issues. In addition, notwithstanding the internal control procedures
instituted by VTEL, there can be no guarantee that accounting errors will not
occur. Additional discussion of these and other risk factors affecting the
company's business and prospects is contained in the company's periodic filings
with the SEC.
- more -
(financials follow)
VTEL is a registered trademark of VTEL Corporation.
VTEL Corporation, 108 Wild Basin Road, Austin, Texas, 78746.
Phone: 512-437-2700, Fax: 512-437-2792.
VTEL Website: http://www.vtel.com
VTEL Reports Fourth Quarter and Year-End Results for Fiscal Year 1999//Page 4
VTEL Corporation
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
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(Amounts in thousands, except per share amounts)
For the For the
Three Months Ended Twelve Months Ended
July 31, July 31,
1999 1998 1999 1998
Unaudited Unaudited Unaudited
Revenues:
Products $ 28,113 $ 35,485 $ 105,520 $ 134,775
Services and other 12,678 12,218 46,082 44,909
-------- -------- --------- ---------
Total revenues 40,791 47,703 151,602 179,684
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Cost of sales:
Products 15,367 16,635 55,167 65,811
Services and other 8,002 7,600 29,197 28,916
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Total cost of sales 23,369 24,235 84,364 94,727
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Gross margin 17,422 23,468 67,238 84,957
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Operating expenses:
Selling, general and administrative 13,182 18,571 60,855 64,802
Research and development 3,650 5,137 17,951 19,892
Merger and other (235) (1,536) (235) (1,536)
Amortization of intangible assets 381 240 1,271 960
Restructuring expense (38) - 3,080 -
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Total operating expenses 16,940 22,412 82,922 84,118
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Income (loss) from operations 482 1,056 (15,684) 839
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Other income (expense):
Interest income 91 526 792 1,242
Interest expense and other (231) (171) (723) 735
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(140) 355 69 1,977
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Net income (loss) before provision
for income taxes 342 1,411 (15,615) 2,816
Benefit (provision) for income taxes 50 - 50 (37)
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Net income (loss) $ 392 $ 1,411 $ (15,565) $ 2,779
======== ======== ========= ========
Basic and diluted income (loss) per share: $ 0.02 $ 0.06 $ (0.66) $ 0.12
======== ======== ========= ========
Weighted average shares outstanding:
Basic 24,235 23,057 23,509 23,057
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Diluted 24,919 23,458 23,509 23,458
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VTEL Reports Fourth Quarter and Year-End Results for Fiscal Year 1999//Page 5
VTEL Corporation
CONDENSED CONSOLIDATED BALANCE SHEET
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(Amounts in thousands, except share)
July 31, July 31,
1999 1998
Unaudited
ASSETS
Current assets:
Cash and equivalents $ 7,805 $ 15,191
Short-term investments
4,308 14,484
Accounts receivable, net of allowance for doubtful
accounts of $1,223 and $9,447 at
July 31, 1999 and July 31, 1998
38,291 40,527
Inventories
15,803 12,951
Prepaid expenses and other current assets
2,320 2,533
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Total current assets 68,527 85,686
Property and equipment, net
29,454 28,106
Intangible assets, net
15,841 11,812
Other assets
10,270 3,685
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$ 124,092 $ 129,289
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 18,387 $ 22,600
Accrued merger and other expenses - 1,741
Accrued compensation and benefits 4,906 5,258
Other accrued liabilities 6,221 2,791
Deferred revenue 10,756 11,793
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Total current liabilities 40,270 44,183
Long-term liabilities:
Borrowings under revolving line of credit 11,200 -
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Other long-term obligations 4,698 3,848
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Total long-term liabilities 15,898 3,848
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Commitments and contingencies - -
Stockholders' equity:
Common stock, $.01 par value; 40,000,000 authorized;
24,423,000 and 23,227,000 issued at July 31, 1999
and July 31, 1998 244 232
Additional paid-in capital 259,740 256,594
Treasury stock, at cost: 200 shares outstanding - -
Accumulated deficit (191,645) (175,455)
Accumulated other comprehensive loss (415) (113)
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Total stockholders' equity 67,924 81,258
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$ 124,092 $ 129,289
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VTEL Reports Fourth Quarter and Year-End Results for Fiscal Year 1999//Page 6
VTEL Corporation
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
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Unaudited
(Amounts in thousands, except per share amounts)
As Reported For the Restated For the
Three Months Ended Three Months Ended
Oct. 31, Jan 31, April 30, Oct. 31, Jan 31, April 30,
1998 1999 1999 1998 1999 1999
Revenues:
Products $ 24,528 $ 24,550 $ 22,658 $ 25,888 $ 26,386 $ 25,133
Services and other 12,407 13,085 13,999 11,052 11,369 10,983
-------- -------- -------- -------- -------- --------
Total revenues 36,935 37,635 36,657 36,940 37,755 36,116
-------- -------- -------- -------- -------- --------
Cost of sales:
Products 12,227 13,206 9,882 13,280 14,483 12,037
Services and other 8,188 8,549 8,232 7,348 7,485 6,362
-------- -------- -------- -------- -------- --------
Total cost of sales 20,415 21,755 18,114 20,628 21,968 18,399
-------- -------- -------- -------- -------- --------
Gross margin 16,520 15,880 18,543 16,312 15,787 17,717
-------- -------- -------- -------- -------- --------
Operating expenses:
Selling, general and administrative 18,240 15,704 13,141 18,503 15,916 13,254
Research and development 5,236 4,638 4,427 5,236 4,638 4,427
Amortization of intangible assets 252 259 379 252 259 379
Restructuring expense - 2,915 203 - 2,915 203
-------- -------- -------- -------- -------- --------
Total operating expenses 23,728 23,516 18,150 23,991 23,728 18,263
-------- -------- -------- -------- -------- --------
Income (loss) from operations (7,208) (7,636) 393 (7,679) (7,941) (546)
-------- -------- -------- -------- -------- --------
Other income (expense):
Interest income 288 248 165 288 248 165
Interest expense and other (48) (251) (193) (48) (251) (193)
-------- -------- -------- -------- -------- --------
240 (3) (28) 240 (3) (28)
-------- -------- -------- -------- -------- --------
Net income (loss) before provision
for income taxes (6,968) (7,639) 365 (7,439) (7,944) (574)
Provision for income taxes - - - - - -
-------- -------- -------- -------- -------- --------
Net income (loss) $ (6,968) $ (7,639) $ 365 $ (7,439) $ (7,944) $ (574)
======== ======== ======== ======== ======== ========
Basic and diluted income (loss) per share: $ (0.30) $ (0.33) $ 0.02 $ (0.32) $ (0.35) $ (0.02)
======== ======== ======== ======== ======== ========
Weighted average shares outstanding:
Basic 23,085 22,987 23,734 23,085 22,987 23,734
======== ======== ======== ======== ======== ========
Diluted 23,085 22,987 24,065 23,085 22,987 23,734
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