CallWave, Inc. (NASDAQ: CALL), a leading provider of Internet and
mobile-based unified communications solutions, today reported financial
results for the fiscal 2008 fourth quarter and year ended June 30, 2008.
Recent Highlights
Completed two key acquisitions: WebMessenger for secure,
enterprise-class, device agnostic mobile messaging; Intelligent
Gadgets for high-definition audio and video/image browser syncing
capabilities
Integrated acquisitions and on schedule to launch FUZE in current
quarter
Reduced operating expenses for fiscal 2008 by 23% to $20.8 million,
compared with fiscal 2007
Reported $46.1 million in cash, cash equivalents and marketable
securities; no debt
Jeff Cavins, Chief Executive Officer of CallWave, stated, “During
fiscal 2008 we successfully transitioned CallWave from a telephony
solutions company to a software solutions innovator. We remain on track
with our planned FUZE launch in September. Most recently, we completed
two acquisitions that give us a broader and deeper product offering
within our unified communications focus. These acquisitions fortify our
unique offerings and competitive position within the growing global
collaboration and conferencing market.”
Fourth Quarter Results
Total revenue for the fourth quarter of fiscal 2008 were $4.6 million,
compared with $5.2 million in the third quarter of fiscal 2008, and $5.5
million for the fourth quarter of fiscal 2007. The decrease for the
fourth quarter of fiscal 2008 reflects the expected migration of the
Company’s legacy Internet Answering Machine
subscriber base.
Operating expenses totaled $3.9 million for the fourth quarter of fiscal
2008, compared with $5.3 million in the third quarter of fiscal 2008,
and $6.4 million for the fourth quarter of fiscal 2007. Operating
expenses for the third quarter of fiscal 2008 included $1.0 million in
charges associated with the Company’s
restructuring in January 2008.
Net loss for the fourth quarter of fiscal 2008 was $(710,000), or
$(0.03) per share. This compares with a net loss of $(1.2) million, or
$(0.06) per share, for the third quarter of fiscal 2008, which included
a restructuring charge of $1.0 million. Net loss for the fourth quarter
of fiscal 2008 also improved compared with the net loss for the fourth
quarter of fiscal 2007 of $(2.3) million, or $(0.11) per share.
Fiscal 2008 Results
Revenue for fiscal 2008 was $20.0 million, compared with $25.2 million
in fiscal 2007. The decrease primarily reflects a decline in the number
of paying subscribers.
Operating expenses decreased to $20.8 million for fiscal 2008, compared
with $27.0 million for fiscal 2007. Operating expenses for fiscal 2008
included $2.1 million in restructuring charges.
Net loss fiscal 2008 was $(5.7) million, or $(0.27) per share, compared
with a net loss of $(7.5) million, or $(0.36) per share, for fiscal
2007. Excluding restructuring charges of $2.1 million, the loss for
fiscal 2008 was $(3.6) million, or $(0.17) per share.
Balance Sheet Summary
As of June 30, 2008, the Company had $46.1 million in cash, cash
equivalents and marketable securities. In the second and third quarters
of fiscal 2008 the Company recorded temporary impairment charges of $2.5
million related to auction rate securities.
CallWave reported total assets of $56.6 million, working capital of
$43.8 million and total shareholders’ equity
of $51.9 million at June 30, 2008.
Outlook
Cavins said, “Work force virtualization has
grown over 800% in the last five years, and mobile messaging is one of
the world’s fastest growing communication
mediums. With our recent WebMessenger acquisition, we’ll
be extending FUZE to mobile phones with a robust, real-time,
enterprise-class, mobile messaging, collaboration capability that is
platform agnostic. We also acquired Intelligent Gadgets, which further
differentiates FUZE by enabling real-time, high-definition video,
documents and images to be shared in sync between browsers anywhere in
the world.
“We believe that FUZE and Web Messenger
products offer a sizable revenue opportunity based on the success of
currently marketed collaboration, conferencing and mobile communications
products that have comparatively limited functionality. We have a strong
IP position, solid technical and management expertise and ample cash to
fund our business plan. With this combination, our goal is to emerge as
a successful growth company and secure a leading global collaboration
and conferencing market position,” Cavins
concluded.
Conference Call Details
The CallWave fiscal fourth quarter 2008 teleconference and webcast is
scheduled to begin at 4:30 p.m. Eastern Time, on Thursday, August 21,
2008. To access the call, please dial 800-891-6020 in the U.S., or
660-422-4961 outside the U.S., at least five minutes before start time.
A live webcast and replay will also be available on the Investor
Relations section of the Company's website at http://investor.callwave.com.
A telephonic replay of the call will also be available to investors
through September 4, 2008 by dialing 800-642-1687 in the U.S., or
706-645-9291 outside the U.S., and entering the pass code 59162127.
About CallWave, Inc.
CallWave develops unified communication applications, which allow today’s
professional to communicate, collaborate and conference from anywhere in
the world and from any device. CallWave’s
FUZE is a web-based collaboration and conferencing solution that enables
high-impact meetings with high-resolution visuals, high-definition audio
and a variety of other unique features. CallWave’s
WebMessenger solutions provide secure, mobile real-time messaging,
presence and collaboration, and are compatible with all leading instant
messaging networks and platforms.
Founded in 1998, CallWave is publicly traded on the Nasdaq under the
symbol “CALL,” and
is headquartered in San Francisco. Please visit: www.callwave.com.
This press release may contain certain statements of a
forward-looking nature. Such statements are made pursuant to the
"forward-looking statements" and "safe harbor" provisions within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange of 1934, as amended. The
statements contained herein which are not historical facts are
considered forward-looking statements under federal securities laws.
Such forward-looking statements are based on the beliefs of our
management as well as assumptions made by and information currently
available to them. The Company has no obligation to update such
forward-looking statements. Actual results may vary significantly from
these forward-looking statements.
CALLWAVE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
For the Three Months Ended
June 30,
For the Twelve Months Ended
June 30,
2008
2007
2008
2007
Revenue
$
4,627
$
5,528
$
20,008
$
25,201
Cost of sales
1,754
2,070
7,191
8,746
Gross profit
2,873
3,458
12,817
16,455
Operating expenses:
Sales and marketing
1,245
2,271
6,057
7,652
Research and development
1,057
1,911
5,125
7,178
General and administrative
1,603
2,112
7,480
12,021
Restructuring charges
--
--
2,138
--
Loss on disposal of property and equipment
8
114
8
114
Total operating expenses
3,913
6,418
20,808
26,965
Operating loss
(1,040
)
(2,960
)
(7,991
)
(10,510
)
Interest income
329
681
2,309
3,044
Loss before income taxes
(711
)
(2,279
)
(5,682
)
(7,466
)
Income tax expense
--
6
--
6
Net loss
$
(711
)
$
(2,285
)
$
(5,682
)
$
(7,472
)
Net loss per share:
Basic and diluted
$
(0.03
)
$
(0.11
)
$
(0.27
)
$
(0.36
)
Weighted average common shares outstanding:
Basic and diluted
21,151
20,862
21,010
20,827
CALLWAVE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
Years ended June 30,
2008
(unaudited)
2007
Cash flows from operating activities:
Net loss
$
(5,682
)
$
(7,472
)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities:
Depreciation and amortization
1,094
884
Loss on disposal of property and equipment
38
114
Stock-based compensation expense
1,106
1,075
Bad debt expense
668
1,408
Net realized loss (gain) on sale of marketable securities
7
(30
)
Changes in operating assets and liabilities:
Accounts receivable, net of bad debt expense
(46
)
(970
)
Prepaid income tax
--
88
Other assets
(64
)
341
Accounts payable
33
226
Accrued payroll and other liabilities
118
(21
)
Deferred revenues
(255
)
763
Income taxes payable
--
(10
)
Net cash provided by (used in) operating activities
(2,983
)
(3,604
)
Cash flows from investing activities:
Purchase of intangible assets
(597)
(4,000
)
Purchases of marketable securities
(18,000
)
(83,006
)
Sales of marketable securities
31,643
87,639
Purchases of property and equipment
(1,030
)
(939
)
Proceeds from the sale of property and equipment
11
6
Net cash provided by (used in) investing activities
12,027
(300
)
Cash flows from financing activities:
Exercises of stock options
496
163
Net cash provided by financing activities
496
163
Net increase (decrease) in cash and cash equivalents
9,540
(3,741
)
Cash and cash equivalents at beginning of the period
20,299
24,040
Cash and cash equivalents at end of the period
$
29,839
$
20,299
CALLWAVE, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except par value)
June 30,
2008
(Unaudited)
2007
Assets
Current assets:
Cash and cash equivalents
$
29,839
$
20,299
Marketable securities, available for sale, at fair value
16,260
32,411
Accounts receivable; net of allowance for doubtful accounts of $285
and $436 at June 30, 2008 and 2007, respectively
1,774
2,396
Other current assets
581
563
Total current assets
48,454
55,669
Property and equipment, net
2,355
2,118
Intangible assets, net
5,652
4,405
Other assets
129
83
Total assets
$
56,590
$
62,275
Liabilities And Stockholders’ Equity
Current liabilities:
Accounts payable
$
710
$
677
Accrued payroll
583
910
Deferred revenue
600
855
Other current liabilities
1,754
1,309
Short term debt
1,000
--
Total current liabilities
4,647
3,751
Commitments and contingencies
--
--
Stockholders’ equity:
Common stock, $0 par value; 100,000 shares authorized; 21,176 and
20,880 shares issued and outstanding at June 30, 2008 and 2007,
respectively
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