Video conferencing solutions developer Radvision Ltd. (Nasdaq: RVSN; TASE:RVSN) is still digesting the fact that it has lost its most important customer - Cisco Systems Inc. (Nasdaq: CSCO).
Radvision CEO Boaz Raviv said, "Last Thursday our contact at Cisco phoned and notified us that they are acquiring our competitor, Norwegian company Tandberg. This was a surprise and we are trying to understand the significance of the acquisition."
The immediate result was that Radvision's share fell 36% at the end of last week on the news that Cisco, which was responsible for 30-40% of Radvision's revenue in recent years, was no longer a customer.
Radvision had $118.1 million in cash at the end of June 2009, less than its current market cap of $113.6 million.
Had you drawn up a contingency plan for losing Cisco as a customer?
Raviv:"We had planned to carry on working with Cisco, but that doesn't help, and there are enough partners of such a large size who will be prepared to work with us. Over the past two years we have begun a process of broadening our customer base and diversifying our strategic partners. In November we will launch a new product with Samsung on its LCD screens that will use our capabilities in the video conferencing sector, and we also have very close relations with IBM."
He added, "It is important to remember that until today we were restricted in our work with other companies following our cooperation with Cisco, and now with that restriction removed there is an opening for us to work with other companies."
Can the company be profitable in 2011 without revenue from Cisco?
Raviv:"It's too early to say. At the moment we are in the process of returning to profitability, and we will try to maintain that in 2010. We have yet toi complete our work plan for 2011."
Are an additional round of cuts and layoffs expected?
Raviv:"At this stage the employees should not be hurt and there should be no changes before the end of the year."
Raviv added, "We do not see ourselves as candidates for an acquisition."
He said, "With other customers and continuing with investment in developing new product lines, I believe we will recover from this event."
Today Radvision unveiled its High Definition SCOPIA Desktop video conferencing client for Apple’s Mac OS X platform.
Radvision's share closed at $5.85 on Nasdaq on Friday and rose 0.5% today on the TASE to NIS 22.65.
Published by Globes [online], Israel business news - www.globes-online.com - on October 5, 2009
© Copyright of Globes Publisher Itonut (1983) Ltd. 2009