8X8, Inc. Announces Results for Quarter Ended June 26, 1997

Business Wire, July 25, 1997

SANTA CLARA, Calif.--(BUSINESS WIRE)--July 25, 1997--8x8, Inc. (NASDAQ:EGHT) today announced financial results for its first quarter of fiscal 1998, which ended June 26, 1997.

Total revenues for the quarter were $11.6 million, compared to $5.7 million from the same period of fiscal 1997. Of total revenues, $6.7 million were nonrecurring license fees. Net income for the quarter was $3.4 million or $.29 per share compared to a net loss of $7.6 million or $.66 per share for the same period of last year.

Of the nonrecurring license fees, $5.25 million was a one time payment by US Robotics, Inc. for a license of 8x8's technology. The Company fully recognized this revenue in the first quarters earnings. This license potentially offers the opportunity to generate ongoing semiconductor sales, system sales and royalties.

The Company shipped several thousand ViaTV units for revenue in the first quarter of fiscal 1998, compared with a few hundred units in the fourth quarter of fiscal 1997.

The Company announced its first software upgrade in the quarter. The upgrade is available for all ViaTV Phones shipped to date. The upgrade provides such features as auto-answer, electronic pan/tilt/zoom, still-image capture, and improved audio and video quality. The upgrade is free to all existing ViaTV phone owners by calling 888/VIEW-8X8.

The ViaTV Phone is now being rolled out at hundreds of stores in the USA, including Communication Expo, Frys Electronics, GTE Phone Marts, J&R Computer World and Staples. The ViaTV Phone is also featured in the Hello Direct, MicroWarehouse, and Sharper Image catalogs. GTE offers the GTE Video Phone Plan which provides up to 20 minutes of free long distance calls per month and charges of 15 cents per minute thereafter. This plan is valid for any ViaTV Phone owner, whether or not the unit was purchased from GTE.

8x8, Inc. is a manufacturer of video conferencing systems, semiconductors and software. 8x8 is headquartered in Santa Clara, California. To order a ViaTV Phone direct from the factory, please call toll free 888/VIEW-8X8. -0-

                              8X8, Inc.
               CONDENSED CONSOLIDATED BALANCE SHEETS
                     (In thousands, unaudited)

                                             June 26,     March 27,
                                               1997         1997
                                             --------     ---------
ASSETS
Current assets:
  Cash, cash equivalents and
   short-term investments                    $12,948       $ 8,724
  Accounts receivable, net                     1,925         1,012
  Inventory                                      918         1,178
  Prepaid expenses and other assets              649           354
                                             --------     ---------
     Total current assets                     16,440        11,268

Property and equipment, net                    1,314         1,344
Deposits and other assets                        192           115
                                             --------     ---------
                                             $17,946       $12,727

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                           $ 1,775       $ 1,379
  Accrued compensation                         2,088           926
  Accrued warranty                             1,563         1,603
  Deferred revenue                               770           363
  Other accrued liabilities                    1,387         2,343
                                             --------     ---------
     Total current liabilities                 7,583         6,614

Minority interest                                132            72

Stockholders' equity:
  Convertible noncumulative preferred
   stock                                           4             4
  Common stock                                     7             7
  Additional paid-in capital                  23,092        23,291
  Notes receivable from stockholders          (1,055)       (1,078)
  Deferred compensation                       (1,833)       (2,781)
  Accumulated deficit                         (9,984)      (13,402)
                                             --------     ---------
     Total stockholders' equity               10,231         6,041
                                             --------     ---------
                                             $17,946       $12,727


           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
              (In thousands, except per share amounts)
                             (unaudited)

                                                  Quarter ended
                                             June 26,      June 27,
                                               1997          1996
                                             --------      --------

Product revenues                             $ 4,953       $ 4,360
License revenues                               6,662         1,343

Total revenues                                11,615         5,703
Cost of product revenues                       2,544         7,503

Gross profit (loss)                            9,071        (1,800)

Operating expenses:
  Research and development                     3,213         2,405
  Selling, general and administrative          3,540         3,322
                                             --------      --------
     Total operating expenses                  6,753         5,727

Income (loss) from operations                  2,318        (7,527)
Other income, net                                100            53

Income (loss) before (benefit)
 provision for income taxes                    2,418        (7,474)
(Benefit) provision
 for income taxes                             (1,000)          100

Net income (loss)                            $ 3,418       $(7,574)

Pro forma net income (loss) per share        $  0.29       $ (0.66)

Pro forma weighted average number of
 common and common equivalent shares          11,983        11,544