8x8 1999 Annual Report Download - page 57

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8X8, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The following illustrates net revenues by groupings of similar products:
No customer represented greater than 10% of total revenues for the fiscal year ended March 31, 1999. Product sales and license and other
revenues derived from one customer represented approximately 20% of total revenues for the fiscal year ended March 31, 1998. Product sales
to one customer represented approximately 13% of total revenues for the fiscal year ended March 31, 1997.
NOTE 9 -- RESTRUCTURING COSTS AND INVENTORY CHARGES:
In the fourth quarter of fiscal 1999, the Company determined that due to a combination of factors including the high cost of maintaining a
consumer distribution channel, the slower than expected growth rate of the consumer videophone market, and the low gross margins typical of
a consumer electronics product made it unlikely that the consumer videophone business would be profitable in the foreseeable future.
Therefore, the Company announced in April 1999 that it would cease production of the ViaTV product line and withdraw from its distribution
channels over the subsequent several quarters. In conjunction with this decision the Company recorded a $5.7 million charge associated with
the write off of ViaTV videophone inventories.
During fiscal 1997, the Company recorded a charge for restructuring its operations by reducing its workforce by approximately 25%.
sold its remaining MPEG inventory. As of March 31, 1997, the Company's restructuring actions were fully completed.
NOTE 10 -- SUBSEQUENT EVENT:
On May 13, 1999, the Company and Odesei S.A. ("Odesei") announced an agreement for the Company to acquire Odesei in a transaction
where Odesei shareholders will receive approximately 3.603 shares of the Company's common stock for each share of Odesei common stock
is expected to be accounted for using the purchase method. The acquisition is subject to certain closing conditions. The Company anticipates
completing the acquisition during its first fiscal quarter ending June 30, 1999.
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)
52
YEAR ENDED MARCH 31,
---------------------------
1999 1998 1997
------- ------- -------
Videophone systems........................................ $15,887 $13,360 $ 531
Multimedia communication semiconductors................... 10,302 21,928 12,581
Other semiconductors...................................... -- -- 2,180
License, royalty and engineering services................. 5,493 14,488 3,854
------- ------- -------
$31,682 $49,776 $19,146
======= ======= =======
WRITE-OFFS/
ADDITIONS CHARGED RECOVERIES OF
BALANCE AT TO COSTS AND UNCOLLECTIBLE BALANCE AT
DESCRIPTION BEGINNING PERIOD EXPENSES ACCOUNTS END OF PERIOD
----------- ---------------- ----------------- ------------- -------------
Allowance for doubtful accounts:
March 31, 1997.......................... $520 $ -- $146 $374
March 31, 1998.......................... 374 255 19 610
March 31, 1999.......................... 610 86 10 686