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): December 3, 2003
FORGENT NETWORKS, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-20008 74-2415696
- --------------------------------------------------------------------------------
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation or organization) Identification No.)
108 Wild Basin Road
Austin, Texas 78746
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (512) 437-2700
- --------------------------------------------------------------------------------
(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 December 3, 2003
Item 12. Results of Operations and Financial Condition.
On December 3, 2003, the registrant announced its financial results for
the fiscal 2004 first quarter ending October 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.
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: December 3, 2003 FORGENT NETWORKS, INC.
By: /s/ Richard N. Snyder
-----------------------------------
Name: Richard N. Snyder
Title: Chief Executive Officer
EXHIBIT INDEX
Exhibit No. Description
99.1 Press Release dated December 3, 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 Results for the Fiscal 2004 First Quarter
AUSTIN, Texas, Dec. 3, 2003--Forgent(TM)Networks (Nasdaq: FORG), a leading
provider of enterprise meeting automation software, today announced the results
of the fiscal 2004 first quarter ending October 31, 2003. Highlights for the
quarter include:
o Forgent acquiring Network Simplicity Software Inc. ("Network Simplicity"),
a privately held provider of web-based scheduling solutions for the
small-medium business market segment
o Realizing intellectual property revenue for the seventh consecutive quarter
o Reducing operating expenses by approximately 8% compared to the fourth
fiscal quarter of 2003
o Growing cash reserves by approximately 6% since the prior fiscal quarter to
approximately $26 million, and maintained a healthy working capital
position
"We believe we turned in a solid performance in the software business in the
first quarter as we were able to meet revenue targets, reduce expenses, and make
a solid acquisition for the future," said Richard Snyder, chairman and CEO of
Forgent. "While it is challenging to forecast intellectual property revenues
given the inherent unpredictability of the timing and amounts of the program we
continue to be confident in its ability to provide positive contributions to our
overall financial performance."
Fiscal First Quarter Results
Revenues were $3.9 million for the fiscal first quarter compared to $24.3
million for the 2003 fiscal fourth quarter, primarily due to lower intellectual
property revenues. Gross margins were $1.6 million for the fiscal first quarter
compared to $11.7 million for the 2003 fiscal fourth quarter. Overall expenses
declined to approximately $4.1 million. Net loss from continuing operations was
$2.5 million or $0.10 per share for the first fiscal quarter of 2004 compared to
net income of $7.1 million or $0.28 per share for the fourth fiscal quarter of
2003. Cash, cash equivalents and short-term investments increased by 6% at the
end of the first quarter compared to the fourth fiscal quarter of 2003 to
approximately $26 million.
Software
Software revenues improved slightly to approximately $1.0 million for the first
quarter of fiscal 2004 compared to $0.985 million for the fourth quarter of
fiscal 2003. The company recently launched Forgent 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,
video, and web conferencing. Initial feedback and results from new and repeat
enterprise level customers are positive, even though Forgent ALLIANCE(TM) has
only been available for approximately four months.
During the first quarter of fiscal 2004 Forgent finalized the acquisition of
certain assets of Network Simplicity, a privately held provider of web-based
scheduling solutions for the small-medium business market segment. Network
Simplicity markets two products--its flagship Meeting Room Manager(TM) and
Visual Asset Manager. By adding these offerings to Forgent's Meeting Automation
solutions, Forgent is the only vendor that can offer a full spectrum of
scheduling capabilities up and down market with products for the small-medium
business up to the largest of global enterprises.
Intellectual Property
The intellectual property program revenues were approximately $2.9 million for
the fiscal first quarter of 2004 compared to $23.3 million for the fourth
quarter of fiscal 2003, primarily due to the unpredictability of the timing and
amounts of license revenues. Since the intellectual property program was
initiated Forgent has garnered over $82 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.
Outlook
Forgent believes that software revenue for the second fiscal quarter of 2004
will grow by 10% to 20% over the first fiscal quarter of 2004 and will range
between $6 and 7 million for the full 2004 fiscal year. Forgent expects to
generate IP license revenue for the second fiscal quarter of 2004 marking the
eighth consecutive quarter of results and anticipates additional IP licensing
revenues throughout fiscal 2004 and fiscal 2005, although predicting the timing
and amounts is difficult. Additionally, the company expects to be profitable for
the full 2004 fiscal year.
Conference Call and Webcast
Forgent has scheduled a conference call with the investment community for Wed.
Dec. 3, 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 71463745. International
callers should dial 617-786-2960 and use a pass code of 71463745. 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 proven provider of meeting automation software and
services that enable organizations to optimize their meeting environment.
Forgent's enterprise software suite, Forgent ALLIANCE(TM), helps organizations
increase productivity and reduce costs by streamlining the planning and
execution of meetings. For additional information visit www.forgent.com.
In October 2003, Forgent acquired Network Simplicity, a provider of scheduling
and asset management solutions for the small and medium business market. For
additional information on Network Simplicity products, visit
www.netsimplicity.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.
2
FORGENT NETWORKS, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except per share data)
OCTOBER 31, JULY 31,
2003 2003
------------------- ----------------
(UNAUDITED)
ASSETS
Current Assets:
Cash and equivalents, including restricted cash of $650 and $730
at October 31, 2003 and July 31, 2003, respectively $ 19,439 $ 21,201
Short-term investments 7,032 3,845
Accounts receivable, net of allowance for doubtful accounts of $11
and $0 at October 31, 2003 and July 31, 2003 1,245 9,457
Notes receivable, net of reserve of $710 and $639 at October 31,
2003 and July 31, 2003 75 74
Prepaid expenses and other current assets 640 415
------------------- ----------------
Total Current Assets 28,431 34,992
Property and equipment, net 4,481 2,158
Intangible assets, net 5,451 5,042
Capitalized software, net 4,779 4,827
Other assets 433 230
------------------- ----------------
$ 43,575 $ 47,249
=================== ================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 2,245 $ 3,178
Accrued compensation and benefits 635 683
Other accrued liabilities 1,732 1,661
Notes payable, current position 352 323
Deferred revenue 434 281
------------------- ----------------
Total Current Liabilities 5,398 6,126
Long-Term Liabilities:
Deferred revenue 82 59
Other long-term obligations 1,523 1,810
------------------- ----------------
Total Long-Term Liabilities 1,605 1,869
Stockholders' equity:
Preferred stock, $.01 par value; 10,000 Authorized;
none issued or outstanding -- --
Common stock, $.01 par value; 40,000 authorized; 24,617 and
26,172 shares issued; 22,896 and 24,588 shares outstanding at
October 31, 2003 and July 31, 2003, respectively 263 261
Treasury stock, 1,721 and 1,584 issued at October 31, 2003 and
July 31, 2003, respectively (4,685) (4,231)
Additional paid-in capital 264,151 263,875
Accumulated deficit (222,514) (219,991)
Unearned compensation (13) (28)
Accumulated other comprehensive income (630) (632)
------------------- ----------------
Total Stockholders' Equity $ 36,572 $ 39,254
------------------- ----------------
$ 43,575 $ 47,249
=================== ================
3
FORGENT NETWORKS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
FOR THE THREE MONTHS
ENDED OCTOBER 31,
2003 2002
------------- ---------------
(UNAUDITED)
REVENUES:
Software & professional services $ 999 $ 1,214
Intellectual property licensing 2,850 6,213
Other 22 382
-------------- --------------
Total Revenues 3,871 7,809
COST OF SALES:
Software & professional services 851 733
Intellectual property licensing 1,425 3,106
Other 24 384
-------------- --------------
Total Cost of Sales 2,300 4,223
GROSS MARGIN 1,571 3,586
OPERATING EXPENSES:
Selling, general and administrative 3,033 3,043
Research and development 1,084 1,172
Amortization of intangible assets 4 --
Impairment of assets -- (499)
-------------- --------------
Total Operating Expenses 4,121 3,716
LOSS FROM OPERATIONS (2,550) (130)
OTHER INCOME AND EXPENSES:
Interest Income 62 57
Other (45) --
-------------- --------------
Total Other Income and Expenses 17 57
LOSS FROM CONTINUING OPERATIONS,
BEFORE INCOME TAXES (2,533) (73)
Provision for income taxes -- 1
LOSS FROM CONTINUING OPERATIONS (2,533) (72)
Income from discontinued operations, net of income taxes 10 997
-------------- --------------
NET (LOSS) INCOME $ (2,523) $ 925
============== ==============
(Loss) income per share from continuing operations - basic and diluted $ (0.10) $ 0.00
============== ==============
(Loss) income per share from discontinued operations - basic and diluted $ 0.00 $ 0.04
============== ==============
Net (loss) income per share - basic and diluted $ (0.10) $ 0.04
============== ==============
WEIGHTED AVERAGE SHARE OUTSTANDING: 24,600 24,771
Basic
============== ==============
Diluted 24,600 25,286
============== ==============
4
