Ezenia! Inc. Proudly Announces Gerald P. Carmen, Former U.S. Ambassador To The United Nations, To Join Board of Directors
Nashua, N.H., March 25, 2008 - Ezenia! Inc. (OTCBB:EZEN.OB), a leading market provider of real-time collaboration solutions for corporate and government networks, today reported its financial results for the fourth quarter and fiscal year ended December 31, 2007.
For the fourth quarter of 2007, the Company generated revenue of approximately $1.8 million, a 39.4% decrease from approximately $3.0 million for the fourth quarter of 2006. The quarterly loss from operations, which included a restructuring charge of $0.2 million for the Colorado facility transition and $0.4 million for increased legal and professional fees, was approximately ($1.6) million, or ($0.11) per share, as compared to approximately $444 thousand in quarterly income from operations, or $0.03 per share, a year ago. Net quarterly loss, which included an income tax expense of $711 thousand related to an increase in the valuation allowance for deferred tax assets recorded in prior years, was approximately ($2.2) million, or ($0.15) per share, as compared to net quarterly income of approximately $1. million, or $0.07 per share, a year ago, which included an income tax benefit of approximately $402 thousand relating to a release of the valuation allowance associated with deferred tax assets.
For the year ended December 31, 2007, revenue was approximately $9.0 million, a 31.8% decrease from approximately $13.2 million for the year ended December 31, 2006. For the same period, annual loss from operations, which included a $1.4 million charge to reserve for an excess third party license purchase commitment, was approximately ($4.4) million, or ($0.30) per share, as compared to annual income from operations in 2006 of approximately $2.9 million, or $0.20 per share. Net annual loss was approximately ($4.5) million, or ($0.31) per share, compared to net annual income in 2006 of approximately $3.9 million, or $0.27 per share. Cash and cash equivalents at year end 2007 were approximately $9.4 million, a $2.7 million decrease from year end 2006. Operating expenses increased to approximately $8.1 million from approximately $5.9 million for 2006, due to continuing investments in product enhancements, the sales and marketing organizations, the transition of the Colorado facility, and increased legal and professional charges.
"Consolidation activities made during the course of 2007 will benefit Ezenia this year in terms of expense control and allow quarterly losses from operations to be significantly reduced when compared to the fourth quarter of 2007," noted Khoa Nguyen, Ezenia's Chairman and Chief Executive Officer. "Prudent investments in future product development will enable the Company to sustain steady improvements to the InfoWorkSpace product line and start introducing new software products targeted for the commercial sector in the second half of the year. Management expects that the Company will continue to be under pressure for at least the first half of 2008 as market conditions remain uncertain. However, continuing investments and recent executive additions in the sales and marketing organizations will increase the Company's focus on the commercial sector while it continues to diversify its federal business. Our primary objective is to return to profitability by growing the top line and continuing vigilance on expense control," concluded Mr. Nguyen.
ezenia! Inc.
CONDENSED Consolidated Balance Sheets
(In thousands)
(Unaudited)
December 31,
December 31,
2007
2006
Assets
Current assets
Cash and cash equivalents
$ 9,395
$ 12,059
Accounts receivable, less allowances of $413 at December 31, 2007 and $413 at December 31, 2006.
2,479
3,580
Prepaid software licenses
1,417
2,270
Prepaid expenses and other current assets
307
356
Deferred tax assets
-
717
Total current assets
13,598
19,482
Prepaid licenses, net of current portion
169
576
Capitalized software, net
18
87
Equipment and improvements, net of accumulated depreciation
380
304
Total assets
$ 14,165
$ 20,449
Liabilities and stockholders' equity
Current liabilities
Accounts payable
497
1,917
Accrued expenses
1,885
535
Employee compensation and benefits
Accrued restructuring charges
266
215
229
-
Deferred revenue
3,512
5,675
Total current liabilities
6,375
8,356
Deferred revenue, net of current portion
17
192
Stockholders' equity
Preferred stock, $.01 par value; 2,000,000 shares authorized, none
issued and none outstanding
-
-
Common stock, $.01 par value, 40,000,000 shares authorized,
15,360,629 issued and 14,601,092 outstanding in 2007;
15,311,174 issued and 14,650,737 outstanding in 2006