EX-99.1 2 a10-12684_2ex99d1.htm EX-99.1

Exhibit 99.1

 

FOR IMMEDIATE RELEASE

 

Contact: Tom McCann

Phone: 603-589-7603

Ezenia! Inc.

14 Celina Avenue, Suite 17-18

Nashua, NH 03063

investorrelations@ezenia.com

 

EZENIA! INC. Announces 2010 Second Quarter Financial Results

 

Nashua, N.H., August 16, 2010 — Ezenia! Inc. (OTCBB: EZEN.OB), a leading market provider of real-time situation awareness, command and control solutions for corporate and government networks, today reported its financial results for the second quarter ended June 30, 2010.

 

The Company generated revenue of approximately $718,000 for the second quarter and $1.4 million for the six months ended June 30, 2010, a decrease of 20.8% and 25.1% from the same periods ended June 30, 2009 respectively. Gross margin increased to approximately 63% for the first six months of 2010 from approximately 54% for the same six-month period in 2009.  Operating results yielded losses of approximately $753,000 for the second quarter and $1.5 million for the six months ended June 30, 2010, compared to losses of $1.0 million and $1.9 million for the same periods in 2009, respectively.  Loss from operations, excluding stock option expenses and depreciation, was approximately $561,000 for the second quarter and $1,155,000 for the six months ended June 30, 2010 as compared to losses of approximately $784,000, and $1,511,000 for the same periods in 2009, respectively. Net loss was approximately $769,000 or ($0.05) per share and $1,511,000 or ($0.10) per share for the six months ended June 30, 2010, as compared to a net loss of approximately $964,000, or ($0.07) per share, and $1,902,000 or ($0.13) per share for the same periods in 2009, respectively.

 

Operating expenses declined to approximately $1.2 million for the second quarter of 2010 and $2.4 million for the six months ended June 30, 2010 as compared to operating expenses of approximately $1.5 million and $3.0 million for the same periods in 2009, respectively.  Operating expenses, excluding stock option expenses and depreciation, declined to approximately $1.0 million for the second quarter of 2010 and $2.1 million for the six months ended June 30, 2010 as compared to operating expenses of approximately $1.3 million and $2.5 million for the same periods in 2009, respectively.

 

“The reduction in spending across the board has been the result of tight expense control and on-going cost cutting measures.  While we continue to keenly focus on keeping cost under control, the highest priority objectives are to develop and win new business in both licenses and service contracts and improve our cash position,” commented Mr. Khoa Nguyen, Chairman and Chief Executive Officer. “Compared to the first quarter of this year and year end of 2009, our cash balance increased by approximately $681,000 and $133,000, respectively, to $4.3 million.  Cash generation was approximately $133,000 for the six months ended June 30, 2010, compared to cash disbursed of $354,000 for the six months ended June 30, 2009. “

 

“Deferred revenue has continued to grow and is now at $2.3 million, an increase of approximately $500,000 and $1.4 million from the periods ended March 31, 2010 and December 31, 2009, respectively, thus continuing the momentum that has been built up since early this year,” remarked Mr. Nguyen.  “In addition, we continue to make further inroads in winning more service contracts from the Air Force, yielding a committed backlog pipeline of approximately $600,000, which is not included in deferred revenue.  In spite of the progress made thus far, the Company faces formidable challenges ahead in the second half of this year and must win significant new business to protect the momentum and return to profitability.”

 

-more-

 


 

About Ezenia! Inc.

 

Ezenia! Inc. (OTC Bulletin Board: EZEN.OB), founded in 1991, is a leading provider of real-time collaboration solutions, bringing new and valuable levels of interaction and collaboration to corporate networks and Internet.  By integrating voice, video and data collaboration, the Company’s award-winning products enable groups to interact through a natural meeting experience regardless of geographic distance.  Ezenia! products allow dispersed groups to work together in real-time using powerful capabilities such as instant audio and text chat, white boarding, screen sharing and secure file storage.  The ability to discuss projects, share information, and modify documents allows users to significantly improve team communication, enhance overall situational awareness and accelerate the decision-making process.  More information about Ezenia! Inc. and its product and service offerings can be found at the Company’s Web site, http://www.ezenia.com .

 

Note to Investors Regarding Forward-Looking Statements

 

Statements included herein that are not historical facts may be considered forward-looking statements. You can identify these forward-looking statements by use of the words “expects,” “anticipates,” “estimates,” “believes,” “projects,” “intends,” “plans,” “will,” “may,” and similar words.  Such forward-looking statements, which include statements regarding the Company’s business and financial outlook, expense control and cash balance, ability to obtain new bookings and the impact thereof, launch of new products, pursuit of sales opportunities and resulting effects, and long-term strategy, involve risks and uncertainties that could cause actual results to differ materially from those indicated by such forward-looking statements.  These risks and uncertainties include the considerations that are discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, such as the evolution of Ezenia!’s market, dependence on the United States government as its largest customer and on other major customers, continued funding of defense programs by the United States government and the timing of such funding, uncertainties associated with procurement processes and on-going bidding activities for government programs, rapid technological change and competition within the collaborative software market, the Company’s reliance on third-party technology, protection of its propriety technology, customer acceptance of InfoWorkSpace, MxM Secure and other new products including the acceptance of the Company’s products in the commercial market, retention of key employees, stock price volatility, the Company’s history of liquidity concerns and operating losses, and other considerations that are discussed further in such report.  You should not place undue reliance upon any such forward-looking statements, which speak only as of the date made.  The Company disclaims any obligation to update forward-looking statements after the date of such statements.

 


 

Notice Regarding Non-GAAP Financial Information

 

Ezenia! provides non-GAAP loss from operations and operating expenses as additional information for investors. These measures are not in accordance with, or an alternative to, generally accepted accounting principles in the United States (GAAP). Such measures are intended to supplement GAAP and may be different from non-GAAP measures used by other companies. Ezenia! believes that the non-GAAP results described in this release are useful for an understanding of its ongoing operations and provide additional detail and an alternative method of assessing its operating results. Management uses these non-GAAP results to compare the company’s performance to that of prior periods for analysis of trends and for budget and planning purposes. A reconciliation of non-GAAP adjustments to the Company’s GAAP financial results is included in the tables below.

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

(In Thousands)

 

(In Thousands)

 

 

 

2010

 

2009

 

2010

 

2009

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

$

1,194

 

$

1,510

 

$

2,403

 

$

2,977

 

Less: stock based compensation

 

 

 

 

 

 

 

 

 

Research and development

 

(28

)

(8

)

(39

)

(24

)

Sales and marketing

 

(21

)

(29

)

(39

)

(54

)

General and administrative

 

(109

)

(138

)

(201

)

(272

)

Less: depreciation

 

(34

)

(43

)

(68

)

(85

)

 

 

 

 

 

 

 

 

 

 

Adjusted operating expenses

 

$

1,002

 

$

1,292

 

$

2,056

 

$

2,542

 

 

The table below presents a reconciliation of loss from operations to adjusted loss from operations;

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

(In Thousands)

 

(In Thousands)

 

 

 

2010

 

2009

 

2010

 

2009

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

$

(753

)

$

(1,002

)

$

(1,502

)

$

(1,946

)

Add: stock based compensation

 

158

 

175

 

279

 

350

 

Add: depreciation

 

34

 

43

 

68

 

85

 

 

 

 

 

 

 

 

 

 

 

Adjusted loss from operations

 

$

(561

)

$

(784

)

$

(1,155

)

$

(1,511

)

 

###

 

Note: Ezenia! is a registered trademark of Ezenia! Inc., and the Ezenia! Logo and InfoWorkSpace are trademarks of Ezenia! Inc.  Additional information on Ezenia! and its products is available at www.ezenia.com .

 


 

EZENIA! INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except for share and per share related data)

(Unaudited)

 

 

 

June 30,

 

December 31,

 

 

 

2010

 

2009

 

Assets

 

 

 

 

 

Current assets

 

 

 

 

 

Cash and cash equivalents

 

$

4,336

 

$

4,203

 

Marketable securities

 

164

 

180

 

 

 

 

 

 

 

Accounts receivable, less allowances of $9 at June 30, 2010 and $28 at December 31, 2009

 

156

 

129

 

Prepaid software licenses

 

1,605

 

1,239

 

Prepaid expenses and other current assets

 

112

 

169

 

Total current assets

 

6,373

 

5,920

 

 

 

 

 

 

 

Deposits

 

29

 

15

 

Capitalized software, net

 

130

 

—

 

Equipment and improvements, net

 

73

 

133

 

Total assets

 

$

6,605

 

$

6,068

 

 

 

 

 

 

 

Liabilities and stockholders’ equity

 

 

 

 

 

Current liabilities

 

 

 

 

 

Accounts payable

 

$

354

 

$

273

 

Accrued expenses

 

1,837

 

1,627

 

Accrued restructuring

 

119

 

228

 

Accrued employee compensation and benefits

 

225

 

195

 

Deferred revenue

 

1,665

 

876

 

Total current liabilities

 

4,200

 

3,199

 

 

 

 

 

 

 

Deferred revenue, net of current portion

 

665

 

3

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

Preferred stock, $.01 par value, 2,000,000 shares authorized, none issued and outstanding

 

—

 

—

 

Common stock, $.01 par value, 40,000,000 shares authorized, 15,558,070 issued and 14,658,217 outstanding at June 30, 2010 and December 31, 2009

 

163

 

154

 

Capital in excess of par value

 

66,835

 

66,459

 

Accumulated deficit

 

(62,313

)

(60,802

)

Treasury stock at cost, 759,537 shares at June 30, 2010 and December 31, 2009

 

(2,945

)

(2,945

)

Total stockholders’ equity

 

1,740

 

2,866

 

Total liabilities and stockholders’ equity

 

$

6,605

 

$

6,068

 

 


 

EZENIA! INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except for share and per share related data)

(Unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2010

 

2009

 

2010

 

2009

 

Revenues

 

 

 

 

 

 

 

 

 

Product revenue

 

$

718

 

$

888

 

$

1,421

 

$

1,862

 

Product development revenue

 

—

 

19

 

—

 

34

 

 

 

718

 

907

 

1,421

 

1,896

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

 

 

 

 

 

 

 

 

Cost of product revenue

 

277

 

391

 

520

 

851

 

Cost of product development revenue

 

—

 

8

 

—

 

14

 

 

 

277

 

399

 

520

 

865

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

441

 

508

 

901

 

1,031

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

Research and development

 

252

 

462

 

467

 

960

 

Sales and marketing

 

307

 

284

 

572

 

534

 

General and administrative

 

545

 

654

 

1,142

 

1,266

 

Depreciation

 

34

 

43

 

68

 

85

 

Occupancy and other facilities-related expenses

 

56

 

67

 

154

 

132

 

Total operating expenses

 

1,194

 

1,510

 

2,403

 

2,977

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

(753

)

(1,002

)

(1,502

)

(1,946

)

 

 

 

 

 

 

 

 

 

 

Interest income

 

4

 

14

 

7

 

30

 

Other income (expense)

 

(20

)

24

 

(16

)

14

 

 

 

(16

)

38

 

(9

)

44

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(769

)

$

(964

)

$

(1,511

)

$

(1,902

)

 

 

 

 

 

 

 

 

 

 

Basic and diluted loss per share:

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.05

)

$

(0.07

)

$

(0.10

)

$

(0.13

)

Diluted

 

$

(0.05

)

$

(0.07

)

$

(0.10

)

$

(0.13

)

Weighted average common shares:

 

 

 

 

 

 

 

 

 

Basic

 

15,214,674

 

14,658,217

 

14,937,983

 

14,658,217

 

Diluted

 

15,214,674

 

14,658,217

 

14,937,983

 

14,658,217