UNITED STATES
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): May 29, 2003
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FORGENT NETWORKS, INC.
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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 (Commission File Number) (IRS Employer
of incorporation) 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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Item 7. Financial Statements and Exhibits.
(c) Exhibits. The following exhibit to this Current Report on Form 8-K
is not being filed, but is being furnished pursuant to Item 9 below in
accordance with Item 601 of Regulation S-K:
99.1 Press Release dated May 29, 2003
Item 9. Regulation FD Disclosure.
In accordance with SEC Release No. 33-8216, the following information
(including the attached exhibit), intended to be furnished under "Item 12.
Results of Operations and Financial Condition," is instead furnished under "Item
9. Regulation FD Disclosure." As provided in General Instructions B.2 and B.6 of
Form 8-K, such information shall not be deemed to be "filed" for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be
deemed to be incorporated by reference in any filing under the Securities Act of
1933, as amended, except as shall be expressly set forth by specific reference
in such a filing.
On May 29, 2003, the registrant announced its financial results for the
quarter ended April 30, 2003 by issuing a press release. The full text of the
press release issued in connection with the announcement is attached hereto as
Exhibit No. 99.1. The press release contains and may implicate, forward-looking
statements regarding the registrant and includes cautionary statements
identifying important factors that could cause actual results to differ
materially from those anticipated.
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, thereunto duly authorized.
Dated: May 29, 2003.
FORGENT NETWORKS, INC.
By: /s/ Richard N. Snyder
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Richard N. Snyder
Chief Executive Officer
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INDEX TO EXHIBITS
Exhibit No. Exhibit
99.1 Press Release
Exhibit 99.1
For Immediate Release
[FORGENT LOGO]
Media contact: Jodi Brinegar Investor contact: Alexa Coy
512.437.2665 512.437.2678
jodi_brinegar@forgent.com alexa_coy@forgent.com
Forgent Announces Results for the 2003 Fiscal Third Quarter
Grew revenues by 37%
Increased earnings by over 30% to $0.07 per share
IP program added more than $12 million in revenue
AUSTIN, Texas, May 29, 2003-- Forgent(TM) Networks (Nasdaq: FORG), a leading
provider of enterprise meeting automation software and services, today announced
the results of the 2003 fiscal third quarter ending April 30, 2003, marking the
fifth consecutive quarter of profitability. During the 2003 fiscal third
quarter, Forgent grew overall revenues by approximately 37%, achieved a 67%
increase in intellectual property revenues and realized a 10% increase in
software revenues as compared to the 2003 fiscal second quarter. Highlights for
the fiscal third quarter include:
o Achieved profitability for the fifth consecutive quarter
o Realized more than $12 million in revenue from the intellectual property
licensing program
o Obtained IP licensing revenue for the fifth consecutive quarter
o Grew the software business by 10% to $1.1 million
"We are pleased with our third quarter performance. For the fifth consecutive
quarter, we achieved profitability as well as realized revenues from our
intellectual property licensing program," said Richard Snyder chairman and CEO
of Forgent. "We grew revenues, improved margins, increased earnings and our
software business continues to show progress with solid customer wins. "
Software
Software revenues increased by approximately 10% to $1.13 million for the fiscal
third quarter compared to the prior quarter. The sales pipeline for the software
business continues to grow.
Intellectual Property
Forgent realized patent license revenues totaling $12.2 million. The
intellectual property program continues to grow with the main effort on
licensing Forgent's still-image compression technology, embodied in U.S. Patent
No. 4,698,672 (`672 patent). The company continues to believe that this program
will produce additional licensing revenue in subsequent quarters.
Videoconferencing Hardware Services
Videoconferencing Hardware Service revenues were $3.8 million for the third
fiscal quarter of 2003. The business continues to focus on cost management
through the transition phase.
Fiscal Third Quarter Results
Revenue grew approximately 37% to $17.1 million for the 2003 fiscal third
quarter compared to $12.5 million for the 2003 fiscal second quarter reflecting
growth in the intellectual property and software businesses. Operating expenses
were $5.6 million for the third fiscal quarter of 2003. Net income increased by
approximately 31% to $1.7 million or $0.07 per share compared to $1.3 million or
$0.05 per share for the second fiscal quarter of 2003. Cash, cash equivalents
and short-term investments at the end of the fiscal third quarter were
approximately $14.3 million.
Forgent was required to perform an impairment analysis of its software segment
due to the tough economic environment and the associated negative impact on the
company's software business. As a result of this analysis, the company recorded
an asset impairment charge reflected in operating expenses for the write-down of
goodwill totaling $1.3 million or $0.05 per share.
Other Items
The company anticipates filing its definitive proxy for the 2002 fiscal year
with the Securities and Exchange Commission in the next few days. In addition,
in the second fiscal quarter of 2003 the company had reported the operation of
its videoconferencing hardware services business as a discontinued operation.
The company has determined that it will report these operations as a continuing
operation until receiving a successful shareholder vote to divest the
videoconferencing hardware services business at the company's annual meeting,
after which time, the company will then report the business as a discontinued
operation. Current and prior results of the company in this press release report
the videoconferencing hardware services business as a continuing operation.
Outlook
"We continue to work on our sales execution and rolling out new products on time
and on budget to support that sales effort," added Snyder. "We will focus on
revenue, profitability, and managing our expenses."
Forgent expects to generate IP license revenue for the fourth fiscal quarter of
2003 marking the sixth consecutive quarter of results. Forgent believes that
given current market conditions software revenue will remain flat on a
sequential basis for the fourth fiscal quarter of 2003. Forgent expects
videoconferencing hardware services revenue to be flat to declining for the
remainder of fiscal 2003.
Conference Call and Webcast
Forgent will release actual results of its 2003 fiscal third quarter at 8 a.m.
CT (9 a.m. ET) on May 29, 2003. Forgent has scheduled a conference call with the
investment community at 10:00 a.m. CT (11:00 a.m. ET) on May 29, 2003, to
discuss the quarter and outlook. Participating in the call will be Richard
Snyder, chairman and chief executive officer; Jay Peterson, vice president
finance and chief financial officer; Russ Caccamisi, senior vice president,
sales and Ken Kalinoski, vice president development and chief technology
officer.
To participate, dial 800-299-0148 ten minutes before the conference call begins,
ask for the Forgent event, and use a pass code of 59120091. International
callers should dial 617-801-9711 and use a pass code of 59120091. Investors,
analysts, media and the general public will also have the opportunity to listen
to the conference call over the Internet by visiting the investor relations page
of Forgent's web site at www.forgent.com. To listen to the live call, please
visit the web site at least fifteen minutes early to register, download and
install any necessary audio software. For those who cannot listen to the live
broadcast, a replay will be available shortly after the call on the investor
relations page of our web site at www.forgent.com.
About Forgent
Forgent Networks is a leading provider of enterprise meeting automation software
and services that enable organizations to schedule and automate their meeting
environment. By streamlining the planning, scheduling and execution of meetings,
organizations recognize increased productivity and reduced administrative
overhead associated with their meeting environment. Our software provides
one-stop scheduling of all resources necessary for complex conferences and
automatically launches the communications media used for any meeting. For
additional information, visit www.forgent.com.
Safe Harbor
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
changes in the general economy and the technology industry, rapid changes in
technology, sales cycle and product implementations, risks associated with
transitioning to a new business model and the subsequent limited operating
history, the possibility of new entrants into the enterprise meeting automation
market, the possibility that the market for the sale of certain software and
services may not develop as expected, that development of these software and
services may not proceed as planned, risks associated with the company's license
program, including risks of litigation involving intellectual property, patents
and trademarks, acquisition integration, and the ability to consummate certain
divestiture transactions. 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.
FORGENT NETWORKS, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except per share data)
APRIL 30, JULY 31,
2003 2002
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(Unaudited)
ASSETS
Current assets:
Cash and equivalents $ 13,647 $ 17,237
Short-term investments 701 2,715
Accounts receivable, net of allowance for doubtful accounts
of $1,269 and $815 at April 30, 2003 and July 31, 2002 7,842 5,390
Notes receivable, net of reserve of $643 and $967 at
April 30, 2003 and July 31, 2002 31 189
Inventories 635 563
Prepaid expenses and other current assets 1,004 609
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Total current assets 23,860 26,703
Property and equipment, net 5,097 5,734
Goodwill, net 13,972 15,833
Capitalized software, net 4,616 3,537
Other assets 341 415
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$ 47,886 $ 52,222
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,888 $ 5,687
Accrued compensation and benefits 351 1,264
Other accrued liabilities 1,508 2,049
Notes payable, current portion 254 899
Deferred revenue 5,730 7,047
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Total current liabilities 10,731 16,946
Long-term liabilities:
Deferred revenue 658 1,015
Other long-term obligations 1,140 1,983
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Total long-term liabilities 1,798 2,998
Stockholders' equity:
Preferred stock, $.01 par value; 10,000
Authorized; none issued or outstanding -- --
Common stock, $.01 par value; 40,000 authorized; 25,962
and 25,755 shares issued; 24,579 and 24,880 shares
outstanding at April 30, 2003 and July 31, 2002, respectively 259 257
Treasury stock, 1,383 and 875 issued at April 30, 2003
and July 31, 2002, respectively (3,707) (2,857)
Additional paid-in capital 263,557 263,334
Accumulated deficit (224,048) (228,011)
Unearned compensation (47) (227)
Accumulated other comprehensive income (657) (218)
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Total stockholders' equity 35,357 32,278
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$ 47,886 $ 52,222
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FORGENT NETWORKS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
FOR THE FOR THE
THREE MONTHS ENDED NINE MONTHS ENDED
APRIL 30, APRIL 30,
2003 2002 2003 2002
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(UNAUDITED) (UNAUDITED)
REVENUES:
Software and professional services $ 1,134 $ 852 $ 3,379 $ 1,309
Intellectual property licensing 12,150 15,000 25,618 15,000
Services and other 3,823 13,141 20,694
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6,465
Total revenues 17,107 22,317 42,138 37,003
COST OF SALES:
Software and professional services 945 411 2,418 3,406
Intellectual property licensing 6,075 6,600 12,809 6,600
Services and other 2,790 3,598 9,008 12,195
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Total cost of sales 9,810 10,609 24,235 22,201
GROSS MARGIN 7,297 11,708 17,903 14,802
OPERATING EXPENSE:
Selling, general and administrative 3,524 2,926 10,878 8,539
Research and development 901 567 2,784 2,026
Impairment of assets 1,211 5,967 712 5,967
Restructuring expense -- -- -- 818
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Total operating expenses 5,636 9,460 14,374 17,350
INCOME (LOSS) FROM OPERATIONS 1,661 2,248 3,529 (2,548)
OTHER INCOME (EXPENSE):
Interest income 48 53 187 237
Gain on investment -- -- -- 1,670
Interest expense and other 75 169 351 106
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Total other income (expense) 123 222 538 2,013
INCOME (LOSS) FROM CONTINUING
OPERATIONS, BEFORE INCOME TAXES 1,784 2,470 4,067 (535)
Provision for income taxes (61) 177 (104) 177
INCOME (LOSS) FROM CONTINUING OPERATIONS 1,723 2,647 3,963 (358)
Loss from discontinued operations, net of income taxes -- (166) -- (8,028)
Loss on disposal, net of income taxes -- -- -- (255)
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LOSS FROM DISCONTINUED
OPERATIONS, NET OF INCOME TAXES -- (166) -- (8,283)
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NET INCOME (LOSS) $ 1,723 $ 2,481 $ 3,963 $(8,641)
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BASIC AND DILUTED INCOME (LOSS) PER SHARE:
Income (loss) from continuing operations $ 0.07 $ 0.11 $ 0.16 $ (0.02)
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Income (loss) from discontinued operations $ 0.00 $(0.01) $ 0.00 $ (0.33)
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Net income (loss) $ 0.07 $ 0.10 $ 0.16 $ (0.35)
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WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic 24,629 24,761 24,693 24,807
Diluted 24,715 25,373 25,144 24,807