VIZRT announces 2001 first half results

Bergen (Norway) (ots/PROTEXT) - vizrt (Neuer Markt: VIZ)announced the 2001 first half results:

Financial highlights for the six month ended 30th of June,2001:

* Consolidated revenue for the first half of 2001 reached US$9 million, an increase of 41% compared to the first half of 2000.

* Gross margin increased to 49% (not including inventorycharges of $ 1.2 million) from 39 % in the first half of 2000.

* Operating costs increased 51% to US$10.7 million comparedwith US$7.1 million in the first half of 2000.

* Net loss for the first half increased to US$13.3 millioncompared with US$4.5 million for the first half of 2000.

* Proforma net loss, not including restructuring charges,amortization of intellectual property and good will, and nonrecurring income, was US$7.3 million compared with US$4.9 millionfor the first half 2000.

* Loss per share was US$ 1.0 compared with US$0.47 in thefirst half of 2000. Proforma net loss per share was US$0.55compared with US$ 0.51 in the first half of 2000.

Financial Highlights for the second quarter of 2001

* Revenues for second quarter 2001 amounted US$2.9 millioncompared with US$3 million in second quarter of 2000.

* Gross margin for second quarter (not including one-timeinventory charge) was 54% compared with 40% in second quarter of2000.

* Net loss for second quarter 2001 amounted US$ 9.2 millioncompared with 2.6 million in second quarter of 2000

* Proforma net loss for second quarter 2001 amounted US$ 5.8million compared with 2.4 million in second quarter of 2000

* Loss per share for second quarter 2001 was US$ 0.69compared with US$0.27 in the second quarter of 2000. Proforma netloss per share for second quarter 2001 was US$0.44 compared withUS$ 0.25 in the second quarter of 2000.

Operating Highlights

* During the second quarter the company had unexpected lowrevenues, resulting mainly from the substantial slowdown inadvertising industry which affected broadcasters and mediacompanies around the world. Several stations decided to postponepurchasing of equipment until having a better overview of theirown revenues.

* The company also went through a major restructuring thisquarter and has reduced staff by 20 people, which will lead tosignificantly lower operating costs over the next quarters.

* The company further expanded its relationship with Wige MICin this quarter. VIZ and Wige MIC will present their jointproducts at the International Broadcast Conference (IBC) nextmonth in Amsterdam, Netherlands. VIZRT also increased sales inScandinavia along with Denmark and Finland.

* The solid order backlog for Q3 is approximately $2.5millions as of the end of July.

Financial details:

Revenue highlights

* 28% of H1 2001 revenue was from new markets, primarily fromsales to the New York Stock Exchange and to one of the largestinvestment banks in US

* Geographic breakdown of revenue was:

Territories

H1/01

H1/00

Q2/01

Q2/00Q1/01

(In $ thousands)

North America

$3,651

$2,318

$741

$1,333$2,910

Europe

$4,129

$3,040

$1,735

$1,137$2,394

Asia Pacific

$1,182

$667

$384

$367$798

Other

$39

$361

$18

$190$21

$9,001

$6,386

$2,878

$3,027$6,123

Gross Margin

The gross margin, not including one-time inventory chargeswas 49% as compared with 39% in the first half of 2000. Theincreased margin represents an increase in the portion ofsoftware in sales. Gross margin for second quarter (not includingone-time inventory charge) was 54% compared with 40% in secondquarter of 2000.

The company has evaluated the inventory and has recordedinventory charge in the amount of $1.2M. The gross margin for H12001 therefore decreased to 36% (14% in second quarter).

Operating Expenses

Total operating expenses (including sales and marketingexpenses (S&M), research and development (R&D) and general andadministrative expenses (G&A); excluding restructuring charges)in the first half of 2001 amounted to $10.7 million including onetime write offs.

The following table represents the total expenses:

Expenses

H1/01

H1/00

Q2/01

Q2/00Q1/01

(In $ thousands)

S&M Expenses

$4,596

$3,951

$2,503

$2,143$2,093

G&A Expenses

4,165

1,677

2,718

9251,447

R&D Expenses

1,984

1,505

973

7231,011

Operating Expenses $10,745 $7,133

$6,194

$3,791$4,551

* S&M increase is mainly attributable to increased travel andentertainment expenses (T&E), and trade shows expenses, primarilyin second quarter. In addition the company recorded in secondquarter of 2001 a $170 thousands write off of prepaid marketingexpenses, which are not expected to be utilize.

* R&D increase was mainly due to the expansion of R&Dactivities and the integration of subsidiaries operationscommencing July 2000.

* G&A has significantly increased due to write off of baddebts of $1 million and write off of fixed assets, which we donot expect to utilize ($0.4 million). G&A expensses alsoincreased due to the integration of subsidiaries operationscommencing July 2000.

* Total operating expenses in the second quarter, comparedwith the first quarter of 2001 increased by $1.6 million or 36%.The expenses, not including write offs applied in second quarterincreased by $ 64 thousands.

Financial income

Consists primarily of interest income earned on short-termdeposits offset by bank charges. Financial income for first halfof 2001 was $291 thousands compared to expenses of $271 thousandsin first half of 2000. Financial expenses in 2000 includederosion of Euro dominated deposit.

Restructuring expenses

Restructuring expenses amounted to $763 thousands andconsisted primarily of termination of employment payments and thetermination of office lease agreements.

Selected Balance Sheet Items

The following is a summary of selected balance sheet items:

* Cash - as of June 30, 2001 the Company had a balance of$8.3 million in cash compared with $12.3 million as of December31, 2000. $3.5 million of the decrease in cash is related to theoperating loss. Additional $400 thousands were invested in fixedassets.

* Accounts receivables, net - as of June 30, 2001 the Companyhad a total of $4 million in accounts receivables compared with$8.2 million as of December 31, 2001. The decrease in receivableswas due to significant provision for bad debt that was recordedin the second quarter as well as decreased revenue in secondquarter..

* Inventory - As of June 30, 2001 the Companys inventorytotaled $1.7 million compared with $3.9 million as of December31, 2000. The decrease includes devaluation of inventory tomarket value in the amount of $1.2 million and reclassificationof inventory items used by the company, to fixed assets ($.5million).

* Other assets (Goodwill) - amounted to $ 21.3 millioncompared with $26.5 million as of December 31, 2000 and resultedfrom the goodwill and intellectual property associated withacquisition of Peak, offset by amortization.

* Accounts payables - As of June 30, 2001 the Company had atotal of $6 million in accounts payables and accrued liabilitiescompared with $8.5 million on December 31, 2000. Decrease isprimarily due to reduction of vendor and accruals related toinventory and cost of goods.

ots Original Text Service: VIZRT Internet:http://www.presseportal.de For further information contact:VIZRT: Bjarne Berg, CEO, Tel: +4955 908080 Bberg@vizrt.comGermany Investor Relations: Elise Vanier, Kirchhoff Consult AG,Tel: +49-69-74748615 Elise.vanier@kirchhoff.de InvestorRelations: Marc Lakmaaker, Thomson Financial / Carson, Tel:+44-20-74225156 Marc.lakmaaker@tfeurope.com

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