Viewpoint Corporation (NASDAQ: VWPT), a leading internet marketing
technology company, today announced financial results for the first
quarter ended March 31, 2007. The Company also recently announced a
strategic partnership with DG FastChannel and concurrent $4.3
million private equity investment in Viewpoint, as well as an
additional private equity investment from Gruber & McBaine
Capital Management of $1.0 million. Viewpoint reported total
revenue of $3.3 million for the first quarter 2007, inline with our
expectations a 22 percent decrease as compared to $4.3 million in
the fourth quarter 2006 and a 17 percent decrease as compared to
$4.0 million in the first quarter 2006. Gross profit was $2.3
million for the first quarter of 2007, a decrease of 25 percent as
compared to the $3.1 million for the fourth quarter of 2006 and an
increase from $2.2 million for the first quarter of 2006. Patrick
Vogt, President and Chief Executive Officer, commented, �In the
first quarter, we achieved important milestones in developing our
business platform. Our strategic partnership with DG FastChannel,
combined with our recent acquisition of MAKOS, provide us with the
opportunity to capture more growth in our business. The inclusion
of our rich media and video technology into the vast DG FastChannel
system enables more integrated advertising services and reporting
for customers. Furthermore, through MAKOS, we are now able to
better serve clients that require cross platform advertising
support including broadcast video, creative and story boarding
capabilities. �The Viewpoint internet marketing technology platform
is now built and we are now entering the next phase in our business
strategy,� continued Mr. Vogt. �Our Q2 pipeline is strong and as
such we expect significant sequential improvement in revenue and
our bottom-line results. We expect growth in revenue for 2007
compared to 2006, in addition we expect significant improvement in
bottom-line performance in 2007 compared to 2006. We are confident
in the business going forward and believe that the momentum that
has been building in the first half of the year will continue
throughout the year.� Operating loss for the first quarter of 2007
was $2.0 million as compared to an operating loss of $1.1 million
in the fourth quarter of 2006 and an improvement of $1.1 million as
compared to an operating loss of $3.1 million for the first quarter
of 2006. Operating expenses for the first quarter decreased by
almost $1.0 million year over year, including a $0.3 million
decrease in non-cash stock-based compensation expense. Christopher
Duignan, Chief Financial Officer stated, �The year over year
decrease in operating expenses highlights our commitment to
effective cost management as we grow the business.� Net loss for
the first quarter was $2.0 million or $(0.03) per share compared to
a net loss of $0.6 million, or $(0.01) per share in the fourth
quarter 2006 and a net loss of $3.9 million or $(0.06) per share,
in the first quarter 2006. Viewpoint�s cash, cash equivalents, and
marketable securities as of March 31, 2007 were $2.8 million. As
noted above, the Company completed a private placement raising $5.3
million on May 7, 2007. 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. 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, 2007. At the present time, the
Company has no reason to believe that there will be changes to the
financial information contained herein. FINANCIAL MEASURES In
addition to the results presented above in accordance with
generally accepted accounting principles, or GAAP, the Company
presents financial measures that are non-GAAP measures,
specifically adjusted operating income. The Company believes that
this non-GAAP measure, viewed in addition to and not in lieu of the
Company�s reported GAAP results, provides useful information to
investors regarding its performance and overall results of
operations. These metrics are an integral part of the Company�s
internal reporting to measure the performance of the Company and
the overall effectiveness of senior management. Reconciliations to
comparable GAAP measures are available in the accompanying
schedules and on the Company�s website. The financial measures
presented are consistent with the Company�s historical financial
reporting practices. The non-GAAP measures presented herein may not
be comparable to similarly titled measures presented by other
companies, and are not identical to corresponding measures used in
our various agreements or public filings. CONFERENCE CALL The
Company will host a conference call on May 9, 2007 at 9:00 A.M.
(Eastern Time) to discuss first quarter 2007 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.earnings.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: 8050565 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 Wednesday, May 16, 2007.
Callers should enter the pass code above to access the recording.
ABOUT VIEWPOINT Viewpoint is a leading Internet marketing
technology company, offering Internet marketing and online
advertising solutions through the powerful combination of its
proprietary visualization technology and a full range of campaign
management services including TheStudio, Viewpoint's creative
services group, Unicast, Viewpoint's online advertising group, and
KeySearch, Viewpoint's search engine marketing consulting practice.
Viewpoint's technology and services are behind the online presence
of some of the world's most esteemed brands, including AOL, GE,
Sony, and Toyota. More information on Viewpoint can be found at
www.viewpoint.com. The company has approximately 100 employees
principally at its headquarters in New York City and in 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 Viewpoint's
filings and reports on file with the Securities and Exchange
Commission. Copyright � 2007 Viewpoint Corporation. All Rights
Reserved. Viewpoint, Unicast, TheStudio by Viewpoint and KeySearch
are trademarks or registered trademarks of Viewpoint Corporation.
VIEWPOINT CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (in
thousands, except per share amounts) (Unaudited) � Three Months
Ended March 31, December 31, 2007� 2006� 2006� Revenue: Advertising
systems $ 1,110� $ 1,595� $ 1,683� Search 1,485� 1,789� 1,485�
Services 719� 553� 1,040� Licenses � 6� � 46� � 66� Total revenue
3,320� 3,983� 4,274� � Cost of revenue: Advertising systems 452�
1,040� 538� Search 43� 36� 41� Services 481� 663� 571� Licenses �
-� � 6� � -� Total cost of revenue � 976� � 1,745� � 1,150� Gross
profit 2,344� 2,238� 3,124� � Operating expenses: � Sales and
marketing 1,195� 1,578� 1,411� Research and development 810� 1,088�
781� General and administrative 2,078� 2,359� 1,779� Depreciation
115� 117� 129� Amortization of intangible assets 128� 110� 127�
Restructuring charges � -� � 92� � -� Total operating expenses
4,326� 5,344� 4,227� � Loss from operations (1,982) (3,106) (1,103)
� Other income (expense) Interest and other income, net 51� 79� 68�
Interest expense (204) (287) (217) Changes in fair values of
warrants to purchase common stock � 157� � (628) � 666� Total other
income (expense) � 4� � (836) � 517� Loss before provision for
income taxes (1,978) (3,942) (586) Provision for income taxes � 12�
� 7� � 22� Net loss $ (1,990) $ (3,949) $ (608) Basic and diluted
net loss per common share: Net loss per common share $ (0.03) $
(0.06) $ (0.01) � Weighted average number of shares
outstanding-basic and diluted 67,670� 64,864� 67,670� VIEWPOINT
CORPORATION CONSOLIDATED BALANCE SHEETS (in thousands, except per
share amounts) (Unaudited) � March 31, 2007 December 31, 2006
Assets Current assets: Cash and cash equivalents $ 1,749� $ 4,154�
Marketable securities 1,034� 113� Accounts receivable, net 2,520�
3,037� Prepaid expenses and other current assets � 547� � 543�
Total current assets 5,850� 7,847� � Restricted cash 192� 190�
Property and equipment, net 919� 1,023� Goodwill 14,882� 14,882�
Intangible assets, net 3,534� 3,689� Other assets � 43� � 56� Total
assets $ 25,420� $ 27,687� � Liabilities and Stockholders� Equity
Current liabilities: Accounts payable $ 1,390� $ 1,660� Accrued
expenses 387� 401� Deferred revenue 61� 70� Current portion of
notes payable 389� 389� Accrued incentive compensation 545� 545�
Current liabilities related to discontinued operations � 231� �
231� Total current liabilities 3,003� 3,296� � Accrued expenses -
Deferred Rent 206� 232� � Warrants to purchase common stock 310�
467� Subordinate notes 2,368� 2,456� Unicast notes 1,500� 1,541� �
Stockholders� equity Preferred stock -� -� Common stock 68� 68�
Paid-in capital 306,552� 306,214� Treasury stock (1,015) (1,015)
Accumulated other comprehensive loss 4� 14� Accumulated deficit �
(287,576) � (285,586) Total stockholders� equity � 18,033� �
19,695� Total liabilities and stockholders� equity $ 25,420� $
27,687� VIEWPOINT CORPORATION RECONCILIATION OF INCOME (LOSS) FROM
OPERATIONS TO ADJUSTED OPERATING INCOME (LOSS) (in thousands,
except per share amounts) (Unaudited) � Three Months Ended March
31, December 31, 2007� 2006� 2006� � Loss from Operations $ (1,982)
$ (3,106) $ (1,103) Plus (Less): Non-cash stock based Compensation:
COS-Ad Systems 4� 3� 10� COS � Services 7� 55� 21� Sales and
marketing 86� 172� 101� Research and development 28� 109� 60�
General and administrative 213� 329� 236� Depreciation 141� 145�
145� Amortization 156� 138� 155� Restructuring charges � -� � 92� �
-� � Adjusted Operating Income $ (1,347) $ (2,063) $ (375)
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