Virage Announces Fiscal Year 2002 and Fourth Quarter Operating Results
SAN MATEO, Calif. - April 25, 2002 - Virage, Inc. [Nasdaq: VRGE], a leading provider of video and rich media communication software, today reported operating results for its fiscal year and fiscal fourth quarter ended March 31, 2002.
For the year ended March 31, 2002, pro forma total revenues were a record $17.4 million, a 53 percent increase over total revenues of $11.4 million reported for the prior fiscal year. Pro forma gross profit increased to 46 percent of total revenues, compared to 28 percent of total revenues in the prior year. Pro forma net loss was $20.4 million, or $1.00 per share, versus $24.1 million, or $1.33 per share, for the year ended March 31, 2001.
Including non-cash, stock-based charges in accordance with generally accepted accounting principles (GAAP), total revenues were $16.7 million and net loss was $27.8 million, or $1.37 per share, for the year ended March 31, 2002. This compares to total revenues of $11.4 million and a net loss of $28.9 million, or $1.88 per share, for the year ended March 31, 2001.
Total revenues (both pro forma and GAAP) for the quarter ended March 31, 2002 were $3.2 million, a decrease of 36 percent and 33 percent from the prior quarter's $5.0 million in pro forma total revenues and $4.8 million in GAAP total revenues, respectively. Pro forma net loss for the fiscal fourth quarter was $5.1 million, or $0.25 per share, compared to a prior quarter pro forma net loss of $4.1 million, or $0.20 per share. Including non-cash, stock-based charges in accordance with GAAP, net loss for the quarter was $9.0 million, or $0.44 per share compared to a net loss of $5.2 million, or $0.26 per share, in the prior quarter.
"We experienced a depressed IT spending environment that resulted in disappointing fourth quarter revenue," said Paul G. Lego, chairman and CEO of Virage. "It's clear that limited IT spending has lengthened sales cycles and resulted in smaller initial projects. We expect this tough selling environment will continue through the current quarter. On a positive note, we're pleased that we signed up more new customers in Q4 than in any other quarter of the fiscal year. We also saw initial customer wins for each of our three recently announced applications. Given the growing interest in our new products, we believe that we're among those enterprise software companies that will benefit as capital spending improves."
Cash and short-term investments totaled $30.7 million as of March 31, 2002 versus $35.1 million as of December 31, 2001. Accounts receivable totaled $2.4 million, representing 67 days sales outstanding. The company had no debt as of March 31, 2002.
"During this challenging quarter, we carefully controlled our costs while investing significantly in our new products," said Al Castino, CFO of Virage. "We will continue to invest in these products and solutions, which we believe are critical to our future growth."
Other Fourth Quarter Highlights
New Virage Customers in the U.S. and Abroad
During the fourth quarter, Virage added 26 new customers worldwide. In the U.S., first-time media & entertainment customers included Georgia Public Broadcasting, HBO, Scripps, and Sony Music. New corporate customers included Juniper Networks, Northrop Grumman Newport News, Procter & Gamble, and Curtis. Additionally, several universities made first-time purchases in Q4 including Cal State Fullerton, University Center Rochester, University of Georgia, and University of Massachusetts.
New international customers in Q4 included TV Azteca in Mexico, Globovision in Venezuela, Oxford University in the United Kingdom, Jiji Press in Japan, and the Technology Media Group in India.
Additionally, in the fourth quarter, Virage received several new and follow-on orders from government customers in the U.S and abroad.
Training and E-Learning Solution Launched
In February, Virage announced VS Learning™, a new enterprise software application for rich media training and e-learning. The new software enables companies to create, manage, publish and view on-demand training courses and presentations containing video and other rich media information. The solution is available from Virage both as a licensed software product and as a hosted service.
VS Learning was the third software solution shipped by Virage, following on the launch of VS Webcasting™ and VS Publishing™ in December. The company subsequently launched VS Production™, an integrated solution for professional video production, at the National Association of Broadcasters conference in Las Vegas on April 8th. All four solutions are built upon the company's award-winning rich media application platform.
Fourth Generation Server Launched
In February, the company also introduced Virage Solution Server™ 4.0. The latest server version strengthens Virage's powerful rich media application software platform, which also includes the company's SmartEncode™ family of products. The new server includes market leading search technology from Verity and now supports a wide range of media formats including audio, video, images and documents. Virage Solution Server 4.0 gives customers greater efficiency and scalability in managing large repositories of multimedia and text content. The new software from Virage also comes with improved security capabilities, allowing customers to better integrate with their existing network security infrastructure and protect their valuable corporate assets.
Virage Fourth Quarter Webcast
Virage management will host a webcast to discuss fourth quarter financial performance, operating and strategic developments and forward-looking guidance at 3:00 pm Pacific Standard Time (6:00 pm Eastern Standard Time) today, Thursday, April 25th, 2002. The webcast will be available live at http://investor.virage.com and will be available for replay at the same URL through May 31, 2002.
Forward-Looking Statements
This press release contains forward-looking statements, including statements about our future sales growth. Our forward-looking statements are based on currently available information, which management has assessed, but which is subject to rapid change due to risks and uncertainties that affect our business, including the unpredictability of future revenues due to limited visibility into future demand; the current uncertainty in our marketplace, which may impact expected demand, customer selection criteria and sales cycle; our ability to execute on service and software deliverables; slower economic growth and other factors beyond our control. Our forward-looking statements should be considered in the context of these and other risk factors disclosed from time to time in the company's filings with the Securities and Exchange Commission, including our annual report on Form 10-K and Form 10-Q filings.
Pro Forma Operating Results
Our pro forma operating results included in this press release represent our operating results for the respective periods presented excluding the impact of certain non-cash, stock-based charges. Such presentation is not in accordance with generally accepted accounting principles. Pro forma service revenues, total revenues and gross profit exclude $648,000 of non-cash, contra-revenue charges for the fiscal year ended March 31, 2002. In addition, pro forma net loss for the three months and year ended March 31, 2002 excludes non-cash, stock-based charges of $3.9 million and $7.3 million, respectively, and pro forma net loss for the three months and year ended March 31, 2001 excludes non-cash, stock-based charges of $1.0 million and $4.8 million, respectively.
About Virage
Established in 1995, Virage is a leading provider of video and rich media communication software. Virage builds integrated rich media business solutions for corporations, media & entertainment companies, universities and government agencies worldwide. Headquartered in San Mateo, California, Virage has offices throughout the United States and Europe.
Virage is a registered trademark and the Virage logo, SmartEncode, Virage Solution Server, VS Learning, VS Production, VS Publishing, and VS Webcasting are trademarks of Virage, Inc. Other company product and service names may be trademarks or service marks of others, and are hereby acknowledged.
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