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): September 17, 2003
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 of (Commission File Number) (IRS Employer
incorporation or organization) 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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(Former name or former address, if changed since last report)
Item 7. Financial Statements and Exhibits.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits.
The following exhibit to this Current Report on Form 8-K is not being
filed but is being furnished pursuant to Item 12 below:
99.1 Press Release dated September 17, 2003
Item 12. Results of Operations and Financial Condition.
On September 17, 2003, the registrant announced its financial results
for the fiscal year ended July 31, 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. This information is being furnished under Item 12
(Results of Operations and Financial Condition) of Form 8-K. This information
shall not be deemed "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by
reference in any filing under the Securities Act of 1933, as amended, or the
Exchange Act, except as shall be expressly set forth by specific reference in
such a filing. 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
SIGNATURE
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.
Date: September 17, 2003 FORGENT NETWORKS, INC.
By: /s/ Richard N. Snyder
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Name: Richard N. Snyder
Title: Chief Executive Officer
EXHIBIT INDEX
Exhibit No. Description
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99.1 Press Release dated September 17, 2003
Exhibit 99.1
For Immediate Release FORGENT NETWORKS
Press contact: Caroline Langley Investor contact: Michael Noonan
512.437.2731 512.437.2476
caroline_langley@forgent.com michael_noonan@forgent.com
Forgent Announces Record Revenue Growth for Fiscal 2003
61% increase in revenue for the 2003 fiscal year
AUSTIN, Texas, Sep. 17, 2003-- Forgent(TM) Networks (Nasdaq: FORG), a leading
provider of enterprise meeting automation software and services, today announced
the results of the fiscal 2003 fourth quarter and year ending July 31, 2003,
marking the sixth consecutive quarter of profitability. Highlights for the
fiscal year include:
o Launched Forgent ALLIANCE(TM), a leading enterprise meeting automation
software and services product that enables organizations to optimize their
meeting environment
o Realized intellectual property licensing revenues totaling $48.9 million
for the fiscal year
o Succeeded in nearly doubling software revenues
o Attained $0.37 earnings per share for continuing operations for the 2003
fiscal year
o Achieved profitability for the sixth consecutive quarter
o Grew cash reserves by over 25% since last fiscal year to approximately $25
million
o Finalized the sale for the videoconferencing hardware services business
"We are very pleased with the performance of the company over the past year as
we were able to increase software revenues, grow cash, reduce liabilities, and
remain profitable. This was accomplished while we were releasing a new product
during a time of continuing weakness in the enterprise software market," said
Richard Snyder, chairman and CEO of Forgent. "The ongoing intellectual property
program continues to provide positive contributions to our financial
performance."
Fiscal Year Results
Revenue for the 2003 fiscal year increased by 61% to $53.9 million compared to
$33.4 million for the 2002 fiscal year end, primarily due to intellectual
property and software revenues. Gross margins increased by 74% to $25.6 million
for the year ended July 31, 2003 compared to $14.7 million reported for the year
ended July 31, 2002. Overall expenses declined by 19% to $16.0 million for
fiscal 2003 compared to $19.8 million for fiscal 2002. Net income from
continuing operations totaled $9.4 million or $0.37 per share for fiscal 2003
compared to a net loss from continuing operations of $3.2 million or $0.13 per
share for fiscal 2002.
Fiscal Fourth Quarter Results
Revenue increased by 82% to $24.3 million for the fiscal fourth quarter compared
to $13.4 million for the 2003 fiscal third quarter, reflecting strong
intellectual property licensing. Gross margins improved to $11.7 million for the
fiscal fourth quarter compared to $6.3 million for the 2003 fiscal third
quarter. Overall expenses remained relatively flat at approximately $4.5
million. Net income from continuing operations increased by 327% to $7.1 million
or $0.28 per share for the fourth fiscal quarter of 2003 compared to $1.7
million or $0.07 per share for the third fiscal quarter of 2003. Cash, cash
equivalents and short-term investments increased by 75% at the end of the fourth
quarter compared to the third fiscal quarter of 2003 to approximately $25
million.
Intellectual Property
The intellectual property program revenues improved by 57% to approximately
$48.9 million for fiscal 2003 compared to $31.2 million for fiscal 2002, as a
result of licensing Forgent's still-image compression technology, embodied in
U.S. Patent No. 4,698,672 (`672 patent). Since the intellectual property program
was initiated Forgent has garnered over $80 million in license revenue. The `672
patent program has a wide field of use including licensing opportunities with
any digital still image device used to compress, store, manipulate, print or
transmit digital still images. Forgent has noticed companies in such diverse
geographies as Asia, Europe and North America. The company believes that through
these efforts it will have additional licensing revenue in subsequent quarters,
although predicting the timing and amounts is difficult.
Software
Software revenues improved by approximately 95% to $4.4 million for fiscal 2003
compared to $2.2 million for fiscal 2002. At the end of the 2003 fiscal year
Forgent launched ALLIANCE(TM), the first enterprise meeting automation software
that extends familiar, easy-to-use applications, Microsoft Outlook and Lotus
Notes, with the ability to schedule and manage all aspects of a meeting,
including scheduling attendees and facilities, requesting special services and
launching rich media such as audio and video conferencing. The new software
suite streamlines the existing scheduling process and can cut costs associated
with meetings by as much as 50%.
Other Items
During the fourth quarter Forgent finalized the sale of its videoconferencing
hardware services business, based in King of Prussia, PA, to GTG Holdings Corp.,
an affiliate of Gores Technology Group. As a result of this sale, Forgent
reported its videoconferencing hardware services business as a discontinued
operation and recorded a loss from discontinued operations of $3.0 million for
the 2003 fiscal fourth quarter. The company reported total net income of $4.1
million or $0.16 per share, for the fourth fiscal quarter of 2003, compared to
$1.7 million or $0.07 per share for the third fiscal quarter of 2003.
Conference Call and Webcast
Forgent will release actual results of the fiscal 2003 fourth quarter and year
on Wed. Sep. 17, 2003, at 8 a.m. CT (9 a.m. ET). Forgent has scheduled a
conference call with the investment community for Wed. Sep. 17, 2003, at 10:00
a.m. CT (11:00 a.m. ET) to discuss the quarter and outlook.
To participate, dial 800-884-5695 ten minutes before the conference call begins,
ask for the Forgent event, and use a pass code of 40412945. International
callers should dial 617-786-2960 and use a pass code of 40412945. 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(TM) Networks is a leading provider of enterprise meeting automation
software and services that enable organizations to optimize their conferencing
environment. Forgent's key software suite, FORGENT ALLIANCE, streamlines the
planning and execution of meetings by providing one-stop scheduling of all
resources needed for any meeting and automatically launches the communications
media at the outset of the session. As a result, organizations recognize
increased productivity and reduced administrative overhead associated with their
current environment. 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 collaboration management
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.
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Forgent Networks Consolidated Balance Sheets
(Amounts in thousands, except per share-data)
JULY 31,
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2002 2003
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(Unaudited)
ASSETS
Current assets:
Cash and equivalents $ 17,237 $ 21,201
Short-term investments 2,715 3,845
Accounts receivable, net of allowance for doubtful
accounts of $163 and $0 at July 31, 2002 and July
31, 2003, respectively 1,026 9,457
Notes receivable, net of reserve of $967 and $639 at
July 31, 2002 and July 31, 2003, respectively 189 74
Inventories 26 -
Prepaid expenses and other current assets 410 415
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Total current assets 21,603 34,992
Property and equipment, net 3,011 2,158
Intangible assets, net 6,894 5,042
Capitalized software 3,537 4,827
Other assets 415 230
Net assets from discontinued operations 7,118 --
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$ 42,578 $ 47,249
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,734 $ 3,178
Accrued compensation and benefits 1,264 683
Other accrued liabilities 1,980 1,661
Notes payable, current portion 899 323
Deferred revenue 440 281
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Total current liabilities 8,317 6,126
Long-term liabilities:
Deferred revenue -- 59
Other long-term obligations 1,983 1,810
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Total long-term liabilities 1,983 1,869
Stockholders' equity:
Preferred stock, $.01 par value; 10,000 authorized; none
issued or outstanding -- --
Common stock, $.01 par value; 40,000 authorized; 25,755
and 26,172 shares issued, 24,880 and 24,588 shares
outstanding at July 31, 2002 and July 31, 2003,
respectively 257 261
Treasury stock, 875 and 1,584 issued at July 31, 2002 and
July 31, 2003 (2,857) (4,231)
Additional paid-in capital 263,334 263,875
Accumulated deficit (228,011) (219,991)
Unearned compensation (227) (28)
Accumulated other comprehensive income (218) (632)
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Total stockholders' equity 32,278 39,254
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$ 42,578 $ 47,249
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Forgent Networks Consolidated Statements of Operations
(Amounts in thousands, except per-share data)
For the For the
Three Months Ended Twelve Months Ended
July 31, April 30, July 31,
2003 2003 2003 2002
(Unaudited) (Unaudited) (Unaudited)
Revenues:
Network software and services $ 985 $ 1,134 $ 4,363 $ 2,236
Technology licensing 23,317 12,150 48,935 31,150
Other - 97 566 -
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Total revenues 24,302 13,381 53,864 33,386
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Cost of sales:
Network software and services 920 945 3,338 4,057
Technology licensing 11,662 6,075 24,471 14,675
Other - 77 497 -
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Total cost of sales 12,582 7,097 28,306 18,732
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Gross margin 11,720 6,284 25,558 14,654
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Operating expense:
Selling, general and administrative 2,988 2,458 11,013 8,517
Research and development 1,085 901 3,869 3,210
Asset impairment 428 1,211 1,140 8,030
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Total operating expenses 4,501 4,570 16,022 19,757
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Income (loss) from operations 7,219 1,714 9,536 (5,103)
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Other income (expense):
Interest income 38 37 160 123
Gain on investment - - - 1,670
Interest expense and other (121) (36) (195) (114)
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Total other income (expense) (83) 1 (35) 1,679
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Income (loss) from continuing operations,
before income taxes 7,136 1,715 9,501 (3,424)
(Provision) benefit for income taxes (58) (59) (126) 177
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Income (loss) from continuing operations 7,078 1,656 9,375 (3,247)
(Loss) income from discontinued operations,
net of income tax (provision) benefit of $15 and
($2) for the three months ended July 31, 2003
and April 30, 2003, respectively and ($21) and
$0 for the year ended July 31, 2003 and July 31,
2002, respectively (1,067) 67 599 (2,601)
Loss on disposal, net of income tax (provision)
benefit of ($42) and $0 for the three months ended
July 31, 2003 and April 30, 2003, respectively and
($42) and $0 for the year ended July 31, 2003 and
July 31, 2002, respectively (1,954) - (1,954) (255)
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(Loss) income from discontinued operations,
net of income taxes (3,021) 67 (1,355) (2,856)
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Net income (loss) $ 4,057 $ 1,723 $ 8,020 $ (6,103)
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Basic income (loss) per share:
Income (loss) from continuing operations $ 0.29 $ 0.07 $ 0.38 $ (0.13)
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Loss from discontinued operations $ (0.12) $ - $ (0.05) $ (0.12)
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Net income (loss) $ 0.17 $ 0.07 $ 0.33 $ (0.25)
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Diluted income (loss) per share:
Income (loss) from continuing operations $ 0.28 $ 0.07 $ 0.37 $ (0.13)
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Loss from discontinued operations $ (0.12) $ - $ (0.05) $ (0.12)
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Net income (loss) $ 0.16 $ 0.07 $ 0.32 $ (0.25)
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Weighted average shares outstanding:
Basic 24,560 24,629 24,660 24,814
Diluted 25,335 24,715 25,201 24,814