The financials that videoconferencing solutions company Radvision Ltd. (Nasdaq: RVSN; TASE: RVSN) released today bring home the problem darkening the company's skies since Cisco reduced its purchases from it following its acquisition of Norwegian rival Tandberg. In response to Cisco's move, Radvision bought Italian company Aethra and entered the end-user equipment business, which compensated for the fall in revenue from Cisco, but profits in that area are lower, which is why the company is finding it hard to return to profitability.
Revenue for the first quarter of 2011 was $20.8 million, matching the first quarter of 2010 and in line with the company’s revised forecast. The net loss for the first quarter of 2011 was $3.3 million, or $0.18 per diluted share, on a GAAP basis, and $2.4 million, or $0.13 per diluted share, on a non-GAAP basis. This compares with a net loss of $4.4 million, or $0.22 per diluted share, on a GAAP basis, and $0.6 million, or $0.03 per diluted share, on non-GAAP basis, in the first quarter of 2010. In other words, the non-GAAP net loss quadrupled from the first quarter a year ago.
Although revenue was the same as in the first quarter of 2010, revenue from Cisco in that quarter was $8 million, whereas in the first quarter of 2011 it was down to $2 million.
Radvision expects revenue to drop in the second quarter of 2011 to approximately $22.0 million, and sees a net loss of approximately $3.2 million, or $0.17 per diluted share, on a GAAP basis, and $2.3 million, or $0.12 per diluted share, on a non-GAAP basis.
Radvision's cash flow also worsened. In the first quarter last year it had positive cash flow of $4.3 million, whereas in the current quarter cash flow was $6.2 million negative. The company ended the first quarter of 2011 with approximately $110.2 million in cash and liquid investments. The decrease reflects $4.4 million used in operating activities, the use of $2.2 million to repurchase 199,098 shares, and $0.8 million for capital expenditures offset by $1.2 million received from the exercise of options.
Radvision prefers to see the cup as half full, and CEO Boaz Raviv said today, "Excluding Cisco, our VBU revenues increased 59% from the first quarter of 2010, with substantial growth in all regions. Our successful introduction of endpoints, the proven advantages of our infrastructure solution, and our progress in expanding our channel network remained the drivers of our core VBU business. A fourth driver is the success of our VBU and TBU working together to develop advanced solutions for applications ranging from mobile devices to Cloud services.
“We have made important strides and achieved tangible results in the transformation of Radvision into an end-to-end video solution provider with leading technology, a broadly recognized brand and a strong global reseller network. We are fully focused on and committed to getting back on track with our growth plan quickly.”
Radvision's share is down very slightly in early trading on Wall Street at $8.95, giving a market cap of $166 million.
Published by Globes [online], Israel business news - www.globes-online.com - on May 5, 2011
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