Financial: 8X8, Inc. Results for Quarter Ended December 31, 1998 - Company Financial Information

Edge: Work-Group Computing Report, Feb 1, 1999

8x8, Inc. (Nasdaq: EGHT) -- a leading supplier of visual communication technology and systems -- Wednesday announced financial results for its third quarter of fiscal 1999, which ended December 31, 1998. Net loss for the quarter was $3.2 million or $0.21 per diluted share, compared to net income of $132,000 or $0.01 per diluted share for the same period of fiscal 1998.

Total revenues for the third quarter were $10.1 million, compared to $15.1 million for the same period of fiscal 1998. In the third quarter of fiscal 1999 product revenues, consisting of sales of visual communication semiconductors and videophone systems, were $7.6 million compared to $12.3 million for the same period of fiscal 1998. License and other revenues for the quarter were $2.5 million compared to $2.8 million for the same period of fiscal 1998. Total revenue for the quarter was divided among visual communication semiconductors (20%), videophone systems (56%) and nonrecurring license, royalty and other revenue (24%). In the third quarter of fiscal 1998 total revenues were divided among visual communication semiconductors (40%), videophone systems (41%) and nonrecurring license, royalty and other revenue (19%). "As expected, 8x8 achieved strong ViaTV videophone sales in our retail distribution channel during the holiday season," said Paul Voois, chairman and CEO. "Retail videophone revenues for the third quarter of fiscal 1999 increased by over 40% versus the second quarter of fiscal 1999, and over 150% compared to the third quarter of fiscal 1998. While overall videophone system sales declined slightly versus the year-ago quarter, in which half of all system sales consisted of a one-time sale to a single OEM customer, I am pleased to see strong growth in 8x8's own distribution channels. "The decrease in sales of visual communication semiconductors accounted for most of the decrease in total revenue compared to the year-ago quarter. The decrease in semiconductor sales is due mainly to softness in demand from OEM customers, particularly in Asia and Europe, that manufacture personal videoconferencing systems. "8x8 continues to invest in the development of new technologies and products that build upon our strength as a world leader in multimedia communication technology, and that we believe will ultimately lead to strong revenue growth," Voois continued. "As a participant in CableLabs' CableNET technology showcase in December, 8x8 announced its Packet Gateway adapter, which integrates IP telephony and IP videoconferencing into an MCNS/DOCSIS cable modem, and which is built around our new Audacity Internet Telephony Processor chip. The Audacity processor runs both network protocols and audio compression algorithms and can support up to eight simultaneous IP phone calls on a single integrated circuit. These products position us to participate in the voice over IP market, which is emerging as a driving force in the telecommunications industry. "Also, at the Consumer Electronics Show this month, we introduced a new line of consumer videophone products with improved video quality and enhanced graphics functions: the VC110 Set-top Videophone, the VC160 Desktop Videophone, and the SP12 Personal Speakerphone. These products reaffirm 8x8's position as the world's number one supplier of consumer videophones." About 8x8 8x8, Inc. is a manufacturer of multimedia communication systems, semiconductors and software. The company is headquartered in Santa Clara, California. FMI: Call toll free 1-888-VIEW-8X8, or in London for European sales, 8x8, Ltd., Harleyford Estate, Marlow, Bucks, SL7 2DX England, 011-44-1628-402800, fax 011-44-1628-402829.