Ezenia! Inc. (OTCBB: EZEN), a leading market provider of real-time
collaboration solutions for corporate and government networks,
today reported its financial results for the second quarter ended
June 30, 2009.
Revenue was approximately $907,000 for the second quarter of
2009 and $1.9 million for the six months ended June 30, 2009, a
decrease of 47.8% and 46.6% from the same periods ended June 30,
2008, respectively. Loss of intelligence community (IC) and
Department of Defense (DOD) revenue, due primarily to redirections
in legacy collaborative solution selections, continues to impact
our annual subscription revenue.
Operating results yielded losses of approximately $1.0 million
for the second quarter and $1.9 million for the six months ended
June 30, 2009, compared to losses of $920,000 and $1.5 million for
the same periods in 2008, respectively. Operating costs declined to
approximately $1.5 million for the second quarter and $3.0 million
for the first half of the year ended June 30, 2009, compared to
$2.0 million and $3.7 million for the same periods ended June 30,
2008, respectively. The decline in spending, virtually across the
board, was attributed to reductions in employee related
compensation costs, consulting expenses, supplies, occupancy and
depreciation.
Net losses were approximately $964,000, or ($0.07) per share,
for the second quarter and $1.9 million, or ($0.13) per share, for
the first half of the year ended June 30, 2009, as compared to net
losses of approximately $883,000, or ($0.06) per share, and $1.4
million, or ($0.10) per share, for the same periods in 2008,
respectively.
"The disappointing shortfall in revenue this quarter and for the
first half of the year is directly attributed to the booking
shortfalls from key accounts and procurement difficulties that we
continue to face, due to the previously established DISA sponsored
selection programs," noted Mr. Khoa Nguyen, Chairman and Chief
Executive Officer of Ezenia!. "Even with this decline in revenue
and lack of income, we were able to preserve cash to approximately
$6.4 million for the six months ended June 30, 2009 from $6.7
million for the year ended December 31, 2008, a drop of less than
5%." Mr. Nguyen further noted, "The preservation of cash was mostly
due to the collection of receivable balances and continued efforts
to reduce expenses. The Company continues to focus on containing
operating expense control, seek new sales opportunities both in
traditional markets and adjacent markets, and foster new
relationships with strategic resellers and system integrators. More
recently, we have set up a Board of Advisors with distinguished
members to help the Company in this endeavor. We are striving to
preserve cash and return to profitability as expeditiously as
possible, while balancing prudent investments against tight expense
control."
About Ezenia! Inc.
Ezenia! Inc. (OTCBB: EZEN), 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 eGovernment. 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 messaging, white boarding, screen sharing and text chat.
The ability to discuss projects, share information, and modify
documents allows users to significantly improve team communication
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
preservation efforts, 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, 2008, 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 IWS and other new
products including the acceptance of IWS 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.
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
http://www.ezenia.com.
EZENIA! INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except for share and per share related data)
(Unaudited)
June 30, December 31,
2009 2008
------------ ------------
Assets
Current assets
Cash and cash equivalents $ 6,434 $ 6,774
Accounts receivable, less allowances of $28
at June 30, 2009 and at December 31, 2008 341 771
Prepaid software licenses 910 1,125
Prepaid expenses and other current assets 160 186
------------ ------------
Total current assets 7,845 8,856
------------ ------------
Deposits 15 15
Equipment and improvements, net 159 243
------------ ------------
Total assets $ 8,019 $ 9,114
============ ============
Liabilities and stockholders' equity
Current liabilities
Accounts payable $ 271 $ 257
Accrued expenses 1,669 1,674
Accrued restructuring 215 287
Accrued employee compensation and benefits 215 150
Deferred revenue 1,760 1,326
------------ ------------
Total current liabilities 4,130 3,694
------------ ------------
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, 15,417,754 issued and 14,658,217
outstanding at June 30, 2009 and at
December 31, 2008 154 154
Capital in excess of par value 65,957 65,586
Accumulated deficit (59,277) (57,375)
Treasury stock at cost, 759,537 shares at
June 30, 2009 and December 31, 2008 (2,945) (2,945)
------------ ------------
Total stockholders equity 3,889 5,420
------------ ------------
Total liabilities and stockholders equity $ 8,019 $ 9,114
============ ============
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,
---------------------- ----------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
Revenues
Product revenue $ 888 $ 1,739 $ 1,862 $ 3,532
Product development
revenue 19 - 34 16
---------- ---------- ---------- ----------
907 1,739 1,896 3,548
---------- ---------- ---------- ----------
Cost of revenues
Cost of product revenue 391 676 851 1,364
Cost of product
development revenue 8 - 14 -
---------- ---------- ---------- ----------
399 676 865 1,364
---------- ---------- ---------- ----------
Gross profit 508 1,063 1,031 2,184
---------- ---------- ---------- ----------
Operating expenses
Research and development 462 557 960 1,065
Sales and marketing 284 574 534 1,093
General and
administrative 654 712 1,266 1,251
Depreciation 43 61 85 120
Occupancy and other
facilities-related
expenses 67 79 132 162
---------- ---------- ---------- ----------
Total operating expenses 1,510 1,983 2,977 3,691
---------- ---------- ---------- ----------
Loss from operations (1,002) (920) (1,946) (1,507)
Interest income 14 40 30 91
Other expense 24 (3) 14 (21)
---------- ---------- ---------- ----------
38 37 44 70
---------- ---------- ---------- ----------
Net loss $ (964) $ (883) $ (1,902) $ (1,437)
========== ========== ========== ==========
Basic and diluted loss per
share:
Basic $ (0.07) $ (0.06) $ (0.13) $ (0.10)
Diluted $ (0.07) $ (0.06) $ (0.13) $ (0.10)
Weighted average common
shares:
Basic 14,658,217 14,608,696 14,658,217 14,553,189
Diluted 14,658,217 14,608,696 14,658,217 14,553,189
Contact: Kevin M. Hackett Ezenia! Inc. Investor Relations Email
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