The Company reported a cash earnings loss (loss before depreciation, amortization and non-cash stock-based compensation charges) of $5.8 million or $0.15 per share for the first quarter of 2001, compared to a loss of $9.3 million or $0.29 per share for the fourth quarter of 2000. The fourth quarter of 2000 results exclude $4.5 million of non-recurring charges related to write-downs of notes receivable.
In addition, the Company reported a net loss of $12.0 million or $0.32 per share for the quarter, as compared to a net loss of $16.5 million or $0.51 per share in the fourth quarter of 2000.
Cash and marketable securities on March 31, 2001 totaled $28.4 million compared to $29.0 million on December 31, 2000. The Company continues to carry no long-term debt. The cash used in continuing operations was $6.4 million during this first quarter.
We are continuing to experience an increase in the demand for our technology; and we are pleased with our solid performance in the first quarter. Our objective is to continue to fuel the revenue momentum and at the same time maintain a tight and efficient operation in order to achieve operating cash flow breakeven by this calendar year-end, commented Bob Rice, Viewpoint Corporation’s Chairman, President and CEO.
Recent Highlights:
The Company’s gross margin improved to 67.5% of sales during the 1st quarter, a substantial improvement over the 4th quarter of 2000 which was 48.5% of sales. This improvement results from an increase in license revenue.
The Company’s operating costs during the first quarter were $8.1 million compared to the fourth quarter level of $10.9 million, excluding the $4.5 million of non-recurring charges related to notes receivable write-downs. Tighter control of operating expenses, primarily marketing and advertising, led to a sequential 26 percent reduction in operating costs.
During the quarter, six customers accounted for revenues in excess of $100,000 each.
In order to preserve its liquidity, the Company entered into agreements enabling Computer Associates to sell Viewpoint shares in private transactions to institutional investors that were otherwise restricted until August 2001 and, in exchange, Computer Associates agreed to accept either newly-issued Viewpoint shares or cash at the Company’s option, in repayment of contingent promissory notes issued by Viewpoint to Computer Associates in the acquisition of Viewpoint Digital. The contingent notes are due June 8, 2001 and April 30, 2002. This agreement provides flexibility for the Company to preserve its cash position in a challenging financing environment, stated Jeffrey J. Kaplan, the Company’s Executive Vice President and Chief Financial Officer.
