EX-99.1 2 a4880957ex991.txt VIEWPOINT CORPORATION EXHIBIT 99.1 Exhibit 99.1 Viewpoint Corporation Announces First Quarter 2005 Financial Results; Total First Quarter Revenue Increased 17% Sequentially and 56% Year-over-Year NEW YORK--(BUSINESS WIRE)--May 5, 2005--Viewpoint Corporation (NASDAQ: VWPT), a leading provider of innovative visualization technologies for the web and the desktop, today announced financial results for the first quarter ended March 31, 2005. Viewpoint reported total revenue of $5.6 million for the first quarter 2005, an increase of 17 percent as compared to $4.8 million in the fourth quarter 2004 and 56 percent as compared to $3.6 million in the first quarter 2004. Gross profit was $4.2 million for the first quarter of 2005, an increase of 9 percent as compared to $3.9 million in the fourth quarter of 2004 and 50 percent as compared to $2.8 million for the first quarter of 2004. Jay Amato, President and Chief Executive Officer commented, "We are pleased with the progress we have made during the quarter with solid sequential and year-over-year revenue growth. The Unicast acquisition is demonstrating its true value by giving Viewpoint a solid footing in the expanding rich media ad serving market place. While the Unicast integration has taken a little longer than we originally anticipated, we now have in place key personnel, a complete technology offering and a strong pipeline going into the second quarter. Demand for online advertising remains healthy, and while several advertisers pushed their ad campaigns from the first to the second quarter, we expect these campaigns to help us ramp up in the second quarter, accelerating our growth for the year." Operating loss for the first quarter of 2005 was $0.8 million, a decrease of $1.0 million compared to operating income of $0.2 million in the fourth quarter 2004, and an improvement of $0.4 million as compared to a loss of $1.2 million in the first quarter of 2004. Net loss for the first quarter 2005 was $0.7 million, or $(0.01) per share, compared to net loss of $0.5 million, or $(0.01) per share, in the fourth quarter 2004 and a net loss of $8.6 million, or $(0.17) per share, in the first quarter of 2004. Viewpoint's cash, cash equivalents, and marketable securities as of March 31, 2005 were $4.9 million. This can be compared to cash, cash equivalents, and marketable securities of $8.7 million as of December 31, 2004. Jay Amato, President and Chief Executive Officer continued, "We are also pleased with the progress in our search business with sequential revenue increasing 22 percent from $1.8 million in the fourth quarter of 2004 to $2.2 million in the first quarter of 2005. Through March 31, 2005 more than 12.4 million users have installed the Viewpoint Toolbar with a net installed base of 7.4 million. Besides our consistent installation growth, the rate of uninstallation decreased during the quarter. We did, however experience some domestic seasonality in search activity per user during the quarter which slowed the overall revenue growth rate." "As we continue into 2005, we will focus on further building on the achievements we have made in our business to drive our long-term success. Our pipeline is solid and we believe that the key initiatives we put into place in 2004 will continue to progress during the year and, as such, we are comfortable reiterating our prior guidance that the year ending December 31, 2005 will be adjusted net income positive. This guidance excludes any non-cash stock-based compensation charges, and non-cash charges associated with our outstanding stock warrants." Adjusted net income is a non-GAAP measure. It is useful to investors as it measures net income excluding the two non-cash adjustments listed. The Company has minimal control over non-cash charges associated with outstanding stock warrants which increase as the Company stock price increases. FINANCIAL INFORMATION Management prepares and is responsible for the Company's consolidated financial statements, which are prepared in accordance with accounting principles generally accepted in the United States and audited by independent external auditors. The financial information contained in this press release, which is unaudited, is subject to revision and should not be considered final until the Company files its Quarterly Report on Form 10-Q, which is scheduled to occur on or before May 10, 2005. At the present time, the Company has no reason to believe that there will be changes to the financial information contained herein. CONFERENCE CALL The Company will host a conference call on May 5, 2005 at 9:00 A.M. (Eastern Time) to discuss first quarter 2005 financial results. The conference call will be available via the Internet in the Investor Relations section of Viewpoint's Web site at http://www.viewpoint.com, as well as through Thomson/CCBN at www.companyboardroom.com. If you are not able to access the live Web cast, dial in information is as follows: Toll-Free Telephone Number: (800) 603-7883 International Telephone Number: (706) 643-1946 Pass code: 5671721 Participants should call at least 10 minutes prior to the start of the call. A complete replay of the conference call will be available approximately one hour after the completion of the call by dialing (800) 642-1687 through Thursday, May 12, 2005. Callers should enter the pass code above to access the recording. ABOUT VIEWPOINT The Viewpoint Platform is the technology behind some of the most innovative, visual experiences on the Web and on the desktop with leading clients such as America Online, General Electric, General Motors, Hewlett Packard, IBM, Lexus, Microsoft, Samsung, Scion, Sony and Toyota. The Unicast Online Advertising Suite -- the Company's next-generation ad deployment and management system -- and the Viewpoint Toolbar -- the Vision for the Future of Search -- are the latest breakthrough technologies using the full power of the Viewpoint Platform. More information on Viewpoint can be found at www.viewpoint.com. The company has 130 employees at its headquarters in New York City and in Chicago, San Francisco, and Los Angeles. FORWARD LOOKING STATEMENTS This press release contains "forward-looking" statements as that term is defined in the Private Securities Litigation Reform Act of 1995 and similar expressions that reflect Viewpoint's current expectations about its future performance. These statements and expressions are subject to risks, uncertainties and other factors that could cause Viewpoint's actual performance to differ materially from those expressed in, or implied by, these statements and expressions. Such risks, uncertainties and factors include those described in the Company's filings and reports on file with the Securities and Exchange Commission as well as the lack of assurances that: Viewpoint's advertising business will grow in 2005 or that if the advertising business does grow, it will grow at a faster rate than it has grown historically; that Viewpoint will continue to build on achievements in its business; that initiatives put in place in 2004 will continue to progress during 2005; that Viewpoint will be adjusted net income positive for the year ending December 31, 2005 excluding any non-cash stock-based compensation charges, and non-cash charges associated with outstanding stock warrants issued by Viewpoint. Viewpoint, Unicast, and Viewpoint Toolbar are trademarks of Viewpoint Corporation. Copyright 2005 Viewpoint Corporation. All rights reserved. VIEWPOINT CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (Unaudited) Three Months Ended March 31, December 31, ----------------- ------------ 2005 2004 2004 ------- ------- -------- Revenue: Search $ 2,180 $ 8 $ 1,785 Advertising systems 732 - 222 Services 1,243 1,523 1,345 Related party services 395 914 371 Licenses 155 240 162 Related party licenses 873 907 883 ------- ------- -------- Total revenue 5,578 3,592 4,768 Cost of revenue: Search 46 - 35 Advertising systems 518 - 83 Services 810 751 795 Licenses 2 1 2 ------- ------- -------- Total cost of revenue 1,376 752 915 ------- ------- -------- Gross profit 4,202 2,840 3,853 Operating expenses: Sales and marketing 1,275 1,032 807 Research and development 1,192 864 876 General and administrative 2,087 1,724 1,834 Non-cash stock-based compensation charges 14 226 28 Depreciation 233 219 224 Amortization of intangible assets 178 3 1 Restructuring charges related to office closure - (17) (89) ------- ------- -------- Total operating expenses 4,979 4,051 3,681 Income (loss) from operations (777) (1,211) 172 Other income (expense): Interest and other income, net 24 19 22 Interest expense (316) (250) (219) Gain/(Loss) on disposal of fixed assets - - (31) Loss on conversion of debt - (598) - Changes in fair values of warrants to purchase common stock and conversion feature of convertible notes 182 (6,603) (465) ------- ------- -------- Total other income (expense) (110) (7,432) (693) ------- ------- -------- Loss before provision for income taxes (887) (8,643) (521) Provision for income taxes 3 10 22 ------- ------- -------- Net income (loss) from continuing operations (890) (8,653) (543) Adjustment to net loss on disposal of discontinued operations 145 19 - ------- ------- -------- Net income (loss) $ (745) $(8,634) $ (543) ======= ======= ======== Basic and diluted net loss per common share: $ (0.01) $ (0.17) $ (0.01) Weighted average number of shares outstanding-basic and diluted 57,655 50,215 54,714 VIEWPOINT CORPORATION CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts) (Unaudited) March 31, December 2005 31, 2004 -------- --------- Assets Current assets: Cash and cash equivalents $ 2,313 $ 2,555 Marketable securities 2,597 6,107 Accounts receivable, net 4,415 2,583 Related party accounts receivable, net 26 26 Prepaid expenses and other current assets 669 421 -------- --------- Total current assets 10,020 11,692 Restricted cash 219 320 Property and equipment, net 1,540 1,485 Goodwill 33,377 31,276 Intangible assets, net 5,231 230 Other assets 230 270 -------- --------- Total assets $ 50,617 $ 45,273 ======== ========= Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 1,127 $ 1,218 Accrued expenses 2,674 244 Deferred revenue 531 431 Related party deferred revenue 3,381 4,607 Current portion of notes payable 2,613 - Accrued incentive compensation 545 545 Current liabilities related to discontinued operations 231 231 -------- -------- Total current liabilities 11,102 7,276 Accrued expenses - Deferred Rent 349 365 Related party deferred revenue - - Convertible notes - - Warrants to purchase common stock 1,104 1,286 Subordinate notes - 2,388 Unicast debt 1,729 - Stockholders' equity Preferred stock - - Common stock 58 57 Paid-in capital 293,386 290,260 Deferred compensation (4) (5) Treasury stock (1,015) (1,015) Accumulated other comprehensive loss (68) (60) Accumulated deficit (256,024)(255,279) -------- --------- Total stockholders' equity 36,333 33,958 -------- --------- Total liabilities and stockholders' equity $ 50,617 $ 45,273 ======== ========= CONTACT: Viewpoint: William H. Mitchell, 212-201-0800 whmitchell@viewpoint.com or Investor Relations: Financial Dynamics Julie Prozeller, 212-850-5600 jprozeller@fd-us.com