8x8 2000 Annual Report Download - page 29

ITEM 6. SELECTED FINANCIAL DATA
The Company's fiscal year 2000 was a 53 week fiscal year, while fiscal 1999, 1998, 1997 and 1996 were 52 week fiscal years. The net loss for
fiscal 2000 included a $6.4 million charge for a discount on common stock issued to STMicroelectronics NV (see Note 4 of the Notes to
Consolidated Financial Statements or "Notes") and in-process research and development costs of $10.1 million related to the acquisition of
Odisei on May 24, 1999 (see Note 2 of the Notes). In fiscal 1999, the Company recorded a $5.7 million charge associated with the write off of
ViaTV videophone inventories associated with the Company's decision to cease production of the ViaTV product line and withdraw from its
distribution channels (see Note 12 of the Notes).
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
We began developing multimedia communication technology in the form of programmable multimedia semiconductors and accompanying
software in 1990, and have subsequently become a leading manufacturer of semiconductors for the embedded videoconferencing and
videophone markets. We maintain sales and marketing operations to support our multimedia semiconductor business, but we have focused
virtually all of our ongoing research and development efforts on IP telephony products and technologies.
In an effort to expand the available market for our multimedia communication products, and to capitalize on our vertically integrated
technology, we began developing low cost consumer videophones and marketing these products to consumers under the ViaTV brand name in
1997. Over the next two years, we became a leading manufacturer of consumer videophones. However, in 1999 we determined that 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, we announced in April 1999 that we would cease production of
the ViaTV product line and withdraw from our ViaTV distribution channels over the subsequent several quarters, resulting in a charge of $5.7
million related to the write off of ViaTV inventories. By March 2000 we had completed the exit from the consumer videophone business and
we expect no further revenues from ViaTV products.
In June 1998, using technology designed for our consumer videophone business, we entered the video monitoring market, focusing on security
applications for small businesses. Our first product was the RSM-
1500 Remote Surveillance Module, which was subsequently replaced with an
improved RSM-1600 model. The RSM-1600 module enables real-
time remote video monitoring over POTS lines. Its target market is primarily
owners of small businesses such as convenience stores and restaurants who need the ability to view their premises from any remote location in
the world at any time. Other products in our video monitoring line include the RSM-3000 Remote Surveillance Module, which enables real-
time video monitoring over ISDN lines; the RSM-700 Expander Module, which expands the number of monitoring devices that can attach to
the RSM-1600 or RSM-3000, and the RSM-PC software application, which allows a PC to view the video feed from the RSM-1600. Until
recently, we sold our RSM products to security distributors and dealers in North America and Europe. However, in an effort to align our
strategic focus on the IP telephony market, we announced the sale of our entire video monitoring business to Interlogix, a leading manufacturer
of security
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YEAR ENDED MARCH 31,
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2000 1999 1998 1997 1996
-------- -------- ------- -------- -------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Total revenues........................ $ 25,384 $ 31,682 $49,776 $ 19,146 $28,774
Net income (loss)..................... (24,848) (19,224) 3,727 (13,613) (3,217)
Net income (loss) per share:
Basic............................... $ (1.38) $ (1.28) $ 0.31 $ (2.56) $ (0.70)
Diluted............................. $ (1.38) $ (1.28) $ 0.25 $ (2.56) $ (0.70)
Total assets.......................... $ 59,983 $ 28,709 $46,429 $ 12,727 $23,067
Total long-term debt.................. $ 5,498 $ -- $ -- $ -- $ --