ROHDIAMANT - 500 Beiträge pro Seite

[Carlito78]

Form 10QSB for VOXWARE INC


--------------------------------------------------------------------------------

10-May-2005

Quarterly Report



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
This report contains forward-looking statements. Such statements are subject to certain factors that may cause our plans to differ or results to vary from those expected, including the risks associated with: our need to raise additional capital in order to meet the Companys cash requirements over the next twelve months and continue as a going concern; our need to introduce new and enhanced products and services in order to increase market penetration, and the risk of obsolescence of its products and services due to technological change; our need to attract and retain key management and other personnel with experience in providing integrated voice-based solutions for e-logistics, specializing in the supply chain sector; the potential for substantial fluctuations in our results of operations; competition from others; our evolving distribution strategy and dependence on its distribution channels; the potential that voice-based products will not be widely accepted; and a variety of risks set forth from time to time in our filings with the Securities and Exchange Commission (SEC). We undertake no obligation to publicly release results of any of these forward-looking statements that may be made to reflect events or circumstances after the date hereof, or to reflect the occurrences of unexpected results.

Critical Accounting Policies:

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, assumptions and estimates that affect the amounts reported in our consolidated financial statements and accompanying notes. We base our estimates and judgments on historical experience and on various other assumptions that we believe are reasonable under the circumstances. However, future events are subject to change and the best estimates and judgments routinely require adjustment. The amounts of assets and liabilities reported in our balance sheets and the amounts of revenues and expenses reported for each of our fiscal periods are affected by estimates and assumptions which are used for, but not limited to, the accounting for allowance for doubtful accounts, warranty costs, goodwill and intangible asset impairments, restructurings, inventory and income taxes. Actual results could differ from these estimates. The following critical accounting policies are significantly affected by judgments, assumptions and estimates used in the preparation of our consolidated financial statements.

Revenue is recognized when earned in accordance with applicable accounting standards, including AICPA Statement of Position (SOP) No. 97-2, Software Revenue Recognition, as amended by SOP 98-9. SOP No. 81-1, Accounting for Performance of Construction-Type and Certain Production-Type Contracts, does not currently apply since arrangements with our customers do not require significant production, modification, or customization to our software. Revenues from product sales and license fees generally are recognized upon shipment of hardware and applicable software, or completion of the implementation, if applicable, provided collection is determined to be probable and there are no significant post-delivery obligations. Vendor-specific objective evidence of the fair value of the hardware and software components is based on the price determined by management when the element is not yet sold separately, but is expected to be sold in the marketplace within six months of the initial determination of the price by management. Service revenues for professional services fees are generally recognized upon completion of implementation, or over the period in which such services are rendered, provided there are no significant post-delivery obligations connected with such services. Extended warranty and maintenance revenues, including the amounts bundled with initial or recurring revenues, are recognized over the term of the warranty or support period, which is typically one year. If an acceptance period is required, revenues are recognized upon customer acceptance.

We continue to generate revenues from our speech coding technologies in the form of royalties, periodic license renewal fees, and maintenance fees. Royalty revenues are recognized at the time of the customers shipment of products incorporating our technology. Periodic license fees generally are recognized at the inception of the renewal period, provided that persuasive evidence of an arrangement exists, pricing is fixed or determinable, the payment is due within one year, and collection of the resulting receivable is deemed probable. Maintenance revenue, including the amounts bundled with initial or recurring revenues, are recognized over the term of the maintenance support period, which is typically one year.

The allowance for doubtful accounts is based on our assessment of the collectibility of specific customer accounts and an assessment of international and economic risk, as well as the aging of the accounts receivable. If there is a change in a major customers credit worthiness or actual defaults differ from our historical experience, our estimates of recoverability of amounts due us could be affected.

We accrue for warranty costs based on the average remaining warranty period, in months, multiplied by average monthly warranty expense amount. If we experience claims or significant changes in costs of services, such as third party vendor charges, materials or freight, which could be higher or lower than our historical experience, our cost of revenues could be affected.

Long-lived assets such as property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not ultimately be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its ultimate disposition.


- 11 -

--------------------------------------------------------------------------------

Inventory purchases and purchase commitments are based upon forecasts of future demand. We value our inventory at the lower of average cost or market. If we believe that demand no longer allows us to sell our inventory above cost or at all, then we write down that inventory to market or write-off excess inventory levels. If customer demand subsequently differs from our forecasts, requirements for inventory write-offs could differ from our estimates.

Our deferred tax assets represent net operating loss carry-forwards and temporary differences that will result in deductible amounts in future years if we have taxable income. We have established a 100% valuation allowance against our net deferred tax assets based on estimates and certain tax planning strategies. The carrying value of our net deferred tax assets assumes that it is more likely than not that we will not be able to generate sufficient future taxable income in certain tax jurisdictions to realize the net carrying value. If these estimates and related assumptions change in the future, we may be required to adjust the valuation allowance in future years.

Our key accounting estimates and policies are reviewed with the Audit Committee of the Board of Directors.

Off-Balance Sheet Arrangements:

We do not have any off-balance sheet arrangements.


- 12 -

--------------------------------------------------------------------------------


Results of Operations

Three Months ended March 31, 2005 versus March 31, 2004 (dollars in table are
presented in thousands).


Three Three Months
Months ended March
ended 31, 2004
March
31, % of Total % of Total
2005 Revenue Revenue $ Change % Change


Product revenues $ 4,470 89.7% $ 2,956 90.2% $ 1,514 51.2%
Services 512 10.3% 322 9.8% 190 59.0%
revenues

Total revenues 4,982 100.0% 3,278 100.0% 1,704 52.0%

Cost of product 1,502 30.2% 1,101 33.6% 401 36.4%
revenues
Cost of service 689 13.8% 397 12.1% 292 73.6%
revenues
Total cost of 2,191 44.0% 1,498 45.7% 693 46.3%
revenues

Gross profit 2,791 56.0% 1,780 54.3% 1,011 56.8%

Research and 623 12.5% 825 25.2% (202) (24.5%)
development
Sales and 856 17.2% 575 17.5% 281 48.9%
marketing
General and 714 14.3% 1,919 58.5% (1,205) (62.8%)
administrative
Amortization of
deferred employee 512 10.3% 653 19.9% (141) (21.6%)
compensation
Total operating 2,705 54.3% 3,972 121.2% (1,267) (31.9%)
expenses

Interest expense (62) (1.2%) (60) (1.8%) (2) 3.3%
Other expenses, (13) (0.3%) (67) (2.0%) 54 (80.6%)
net

Net income $ 11 0.2% $ (2,319) (70.7%) $ 2,330 (100.5%)
(loss)




Revenues

We recorded revenues of $4,982,000 for the quarter ended March 31, 2005 compared to revenues of $3,278,000 for the quarter ended March 31, 2004, an increase of $1,704,000 (52%) in total revenues. During the quarter ended March 31, 2005, we recognized $4,894,000 (98% of total revenues) from the sale of voice-based solution products and related services compared to $3,158,000 (96% of total revenues) during the quarter ended March 31, 2004. We expect that sales of voice-based solutions will comprise the most significant portion of our revenue in the foreseeable future. Revenues from speech compression technologies and related services for the quarter ended March 31, 2005 was approximately $87,000 (2% of total revenues) compared to $120,000 (4% of total revenues) for the quarter ended March 31, 2004. Three customers accounted for 34%, 21% and 10% of our total revenues in the quarter ended March 31, 2005.

Total product revenues increased $1,514,000 (51%) to $4,470,000 during the quarter ended March 31, 2005 from $2,956,000 in the quarter ended March 31, 2004. The increase in product revenues for fiscal year 2005 reflects our primary business focus as the development, marketing and sale of our VoiceLogistics product line. We have focused our efforts on developing the market for this product and have not aggressively pursued opportunities with our speech compression business. We anticipate that revenues from the speech compression business will continue to be marginal, both in absolute dollars and as a percentage of revenues.

Service revenues were primarily attributable to professional service fees relating to the delivery and deployment of voice-based solutions. For the quarter ended March 31, 2005, service revenues totaled $512,000, reflecting an increase of $190,000 (59%) from service revenues of $322,000 for the quarter ended March 31, 2004. The increase in service revenues is attributable to professional service fees related to our VoiceLogistics product line.

Cost of Revenues

Overall cost of revenues increased $693,000 (46%) to $2,191,000 in the quarter ended March 31, 2005 from $1,498,000 for the quarter ended March 31, 2004.


- 13 -

--------------------------------------------------------------------------------

Cost of product revenues increased $401,000 (36%) to $1,502,000 in the quarter ended March 31, 2005 from $1,101,000 in the quarter ended March 31, 2004. Such costs reflect materials, labor and overhead associated with the sale of our voice-based products. Our manufacturing staff, comprised of 5 individuals as of March 31, 2005 and 2004, is included in cost of product revenues. The increase in cost of product revenues is primarily attributable to material costs associated with the increase in sales of the VoiceLogistics product line partially offset by economies of scale in reducing product costs.

Cost of services revenues consists primarily of the expenses associated with customer maintenance support and professional services, including employee compensation and travel expenditures. Cost of service revenues increased $292,000 (74%) to $689,000 in the quarter ended March 31, 2005 from $397,000 in the quarter ended March 31, 2004. As of March 31, 2005 and 2004, customer support and professional services staff, comprised of 33 and 25 individuals, respectively, is included in the cost of service revenues. The increase in cost of service revenues reflects an increased number of employees and third party consultants supporting a larger volume of customer implementations at sites equipped with the VoiceLogistics product line during the quarter ended March 31, 2005 along with the reassignment of seven members of the research and development staff to professional service in March 2004.

Operating Expenses

Total operating expenses decreased by $1,267,000 (32%) to $2,705,000 in the quarter ended March 31, 2005 from $3,972,000 in the quarter ended March 31, 2004. As of March 31, 2005, headcount of operating personnel totaled 39 compared to 37 at March 31, 2004.

Research and development expenses primarily consist of employee compensation, consulting fees and equipment depreciation related to product research and development. Our research and development expenses decreased $202,000 (25%) to $623,000 in the quarter ended March 31, 2005 from $825,000 in the quarter ended March 31, 2004. The decrease in research and development expenses is due primarily to decreased personnel costs and consulting fees paid during the quarter ended March 31, 2005. Our research and development team was comprised of 18 and 23 employees, respectively, throughout most of the quarters ended March 31, 2005 and 2004. In March 2004, seven members of the research and development staff were reassigned to the professional services team. As of March 31, 2005, our research and development team was comprised of 18 employees compared to 17 at March 31, 2004.

Sales and marketing expenses primarily consist of employee compensation (including direct sales commissions), travel expenses, third party finders fees and marketing programs, including trade shows, advertisements and printed materials. Sales and marketing expenses increased $281,000 (49%) to $856,000 in the quarter ended March 31, 2005 from $575,000 in the quarter ended March 31, 2004. The increase in sales and marketing expenses is due primarily to sales commissions and third party finders fees associated with the increase volume of VoiceLogistics revenue in fiscal 2005. Our sales and marketing staff was comprised of 12 employees at March 31, 2005 compared to 11 at March 31, 2004.

General and administrative expenses consist primarily of employee compensation and fees for insurance, rent, office expenses and professional services. General and administrative expenses decreased $1,205,000 (63%) to $714,000 in the quarter ended March 31, 2005 from $1,919,000 in the quarter ended March 31, 2004. As of March 31, 2005, the general and administrative staff was comprised of 10 compared to 9 employees at March 31, 2004. Costs were lower during the quarter ended March 31, 2005 primarily due to the closing of Voxware, n.v.; which reduced costs during the quarter ended March 31, 2004 by $669,000, a reduction of bad debt expense of $382,000 and a decrease of $209,000 for outside consulting and professional service fees due to support required in 2004 to review prior period financial reports.

The non-cash charge of deferred employee compensation expense for the quarter ending March 31, 2005 and 2004 was $512,000 and $653,000, respectively.

The Belgium office was closed as of June 30, 2004, so it had no full-time employees and consultants at March 31, 2005. As of March 31, 2004, the Belgium office maintained a staff of 12, comprised of 7 in cost of revenues (which includes professional services and customer support), 2 in sales and marketing, 3 in general and administrative.

Interest Expense

Interest expense for the quarter ended March 31, 2005 was $62,000 compared to $60,000 for the quarter ended March 31, 2004, a decrease of $2,000 (3%). Interest expense relates primarily to the Silicon Valley Bank credit facility issued December 30, 2003. The interest rate on the Silicon Valley Bank credit facility was 6 ¼% as of March 31, 2005 as compared to 4 ½% as of March 31, 2004. The increased interest rate was offset by the Companys lower outstanding debt, which was $1,167,000 as of March 31, 2005 as compared to $1,468,000 as of March 31, 2004.


- 14 -

--------------------------------------------------------------------------------

Nine Months ended March 31, 2005 versus March 31, 2004 (dollars in table are presented in thousands).


Nine Months Nine Months
ended March % of Total ended March % of Total
31, 2005 Revenue 31, 2004 Revenue $ Change % Change

Product revenues $ 10,745 88.3% $ 7,153 90.8% $ 3,592 50.2%
Services 1,417 11.7% 728 9.2% 689 94.6%
revenues

Total revenues 12,162 100.0% 7,881 100.0% 4,281 54.3%

Cost of product 3,401 28.0% 3,125 39.7% 276 8.8%
revenues
Cost of service 2,326 19.1% 1,053 13.3% 1,273 120.9%
revenues
Total Cost of 5,727 47.1% 4,178 53.0% 1,549 37.1%
Revenues

Gross profit 6,435 52.9% 3,703 47.0% 2,732 73.8%

Research and 1,582 13.0% 2,209 28.0% (627) (28.4%)
development
Sales and 2,020 16.6% 2,552 32.4% (532) (20.8%)
marketing
General and 2,195 18.0% 3,489 44.3% (1,294) (37.1%)
administrative
Amortization of 1,232 10.2% 1,058 13.4% 174 16.4%
deferred
employee
compensation
Total operating 7,029 57.8% 9,308 118.1% (2,279) (24.5%)
expenses

Interest expense (185) (1.5%) (65) (0.8%) (120) 184.6%
Other expenses, (8) (0.1%) (88) (1.1%) 80 (90.9%)
net

Net loss $ (787) (6.5%) $ (5,758) (73.1%) $ 4,971 (86.3%)




Revenues

We recorded revenues of $12,162,000 for the nine months ended March 31, 2005 compared to revenues of $7,881,000 for the nine months ended March 31, 2004; an increase of $4,281,000 (54%) in total revenues. During the nine months ended March 31, 2005, we recognized $11,867,000 (98% of total revenues) from the sale of voice-based solution products and related services compared to $7,507,000 (95% of total revenues) during the nine months ended March 31, 2004. We expect that sales of voice-based solutions will comprise the most significant portion of our revenue in the foreseeable future. Revenues from speech compression technologies and related services for the nine months ended March 31, 2005 approximated $295,000 (2% of total revenues) versus $374,000 (5% of total revenues) for the nine months ended March 31, 2004. One customer accounted for 38% of our total revenues in the nine months ended March 31, 2005.

Total product revenues increased $3,592,000 (50%) to $10,745,000 during the nine months ended March 31, 2005 from $7,153,000 in the nine months ended March 31, 2004. The increase in product revenues for fiscal year 2005 reflects our primary business focus being the development, marketing and sale of our VoiceLogistics product line. We have focused our efforts on developing the market for this product and have not aggressively pursued opportunities with our speech compression business. We anticipate that revenues from the speech compression business will continue to decline, both in absolute dollars and as a percentage of revenues.

For the nine months ended March 31, 2005, service revenues totaled $1,417,000, reflecting an increase of $689,000 (95%) from service revenues of $728,000 for the nine months ended March 31, 2004. The increase in service revenues is primarily attributable to additional professional service fees related to our VoiceLogistics product line.

Cost of Revenues

Overall cost of revenues increased $1,549,000 (37%) from $4,178,000 for the nine months ended March 31, 2004 to $5,727,000 for the nine months ended March 31, 2005.

Cost of product revenues increased $276,000 (9%) from $3,125,000 in the nine months ended March 31, 2004 to $3,401,000 in the nine months ended March 31, 2005. Our manufacturing staff, comprised of 5 individuals as of March 31, 2005 and 2004, is included in cost of product revenues. The increase in cost of product revenues is primarily attributable to the increase in revenues from the VoiceLogistics product line partially offset by economies of scale in reducing product costs.


- 15 -

--------------------------------------------------------------------------------

Cost of service revenues increased $1,273,000 (121%) from $1,053,000 in the nine months ended March 31, 2004 to $2,326,000 in the nine months ended March 31, 2005. As of March 31, 2005 and 2004, our customer support and professional services staff, comprised of 33 and 25 individuals, respectively, is included in the cost of service revenues. The increase in cost of service revenues reflects an increased number of employees and third party consultants supporting a larger volume of customer implementations at sites equipped with the VoiceLogistics product line during the nine months ended March 31, 2005 along with the reassignment of seven members of the research and development staff to professional services in March 2004.

Operating Expenses

Total operating expenses decreased by $2,279,000 (25%) to $7,029,000 in the nine months ended March 31, 2005 from $9,308,000 in the nine months ended March 31, 2004. As of March 31, 2005, headcount of operating personnel totaled 39 compared to 37 at March 31, 2004.

Our research and development expenses decreased $627,000 (28%) to $1,582,000 in the nine months ended March 31, 2005 from $2,209,000 in the nine months ended March 31, 2004. The decrease in research and development expenses is due primarily to decreased personnel costs and consulting fees paid during the nine months ended March 31, 2005. Our research and development team was comprised of 15 and 22 employees, respectively throughout most of the nine month periods ended March 31, 2005 and 2004. In March 2004, seven members of the research and development staff were reassigned to the professional services team. As of March 31, 2005, our research and development team was comprised of 18 employees compared to 17 at March 31, 2004.

Sales and marketing expenses decreased $532,000 (21%) to $2,020,000 in the nine months ended March 31, 2005 from $2,552,000 in the nine months ended March 31, 2004. The decrease in sales and marketing expenses is due primarily to $813,000 related to Voxware n.v. operations no longer operating in fiscal 2005, partially offset by additional sales and marketing staff in the United States and higher sales commissions associated with higher revenues in fiscal 2005. Our sales and marketing staff was comprised of 12 employees at March 31, 2005 compared to 11 employees at March 31, 2004.

General and administrative expenses decreased $1,294,000 (45%) to $2,195,000 in the nine months ended March 31, 2005 from $3,489,000 in the nine months ended March 31, 2004. As of March 31, 2005, the general and administrative staff was comprised of 10 compared to 9 employees at March 31, 2004. The decrease in general and administrative expenses is primarily due to $1,081,000 of Voxware,
n.v. operations no longer operating in fiscal 2005 and $290,000 payroll taxes and late filing penalties recorded in the nine months ended March 31, 2004, offset by increases during the nine months ended March 31, 2005 in professional service, consulting and legal costs of negotiating new customer contracts and SEC related filings.

The non-cash charge of deferred employee compensation expense for the nine months ending March 31, 2005 and 2004 was $1,232,000 and $1,058,000, respectively.

The Belgium office was closed as of June 30, 2004, so it had no full-time employees and consultants at March 31, 2005. As of March 31, 2004, the Belgium office maintained a staff of 12, comprised of 7 in cost of revenues (which includes professional services and customer support), 2 in sales and marketing, 3 in general and administrative.

Interest Expense

Interest expense for the nine months ended March 31, 2005 was $185,000 compared to $65,000 for the nine months ended March 31, 2004, an increase of $120,000 (185%). Interest expense relates to the new Silicon Valley Bank credit facility issued December 30, 2003. As such, interest was only charged on the Silicon Valley Bank credit facility for the last three of the nine months ended March 31, 2004

Liquidity and Capital Resources

As of March 31, 2005, we had $1,505,000 in cash and cash equivalents compared to $1,124,000 in cash and cash equivalents as of June 30, 2004, an increase of $381,000. Our working capital as of March 31, 2005 was $301,000 compared to a working capital deficit of $1,942,000 as of June 30, 2004, an increase of $2,243,000. $2,051,000 of the increase in working capital is due to the reclassification of the preferred stock rescission liability to equity.

Net cash provided by operating activities totaled $544,000 for the nine months ended March 31, 2005, primarily consisting of a net loss of $787,000, an increase of $579,000 in accounts receivable, a decrease of $318,000 in accounts payable and accrued expenses, an increase in inventory of $168,000, offset by amortization of deferred employee compensation of $1,232,000, an increase in deferred revenues of $631,000, a decrease in prepaid assets and other current assets of $324,000, and amortization of financing costs of $131,000.


- 16 -

--------------------------------------------------------------------------------

In the nine months ended March 31, 2005, cash used in investing activities totaled $39,000, primarily consisting of the purchase of property plant and equipment of $92,000 offset by the proceeds of $53,000 from the disposal of fixed assets.

For the nine months ended March 31, 2005, cash used in financing activities totaled $186,000, consisting primarily of a $209,000 repayment of our long term debt. During the nine months ended March 31, 2005, $300,000 was borrowed and subsequently repaid against the Silicon Valley Bank line of credit. As of the date of this filing, there are no amounts outstanding under the line of credit.

Pursuant to the transaction documents relating to our Series D Private Placements consummated in June 2003 and April 2004, we agreed to provide certain registration rights to the purchasers. On September 9, 2004, the Securities and Exchange Commission asserted, among other things, a violation of Section 5 of the Securities Act in connection with these transactions. As such, the purchasers of the Series D Preferred Stock related to the April 2004 offering obtained the right to require us to repurchase the shares sold to the purchasers in the Series D Private Placement at the original purchase price, plus statutory . . .

[Wheelspin]

WAS SOLL DIE SCHEISSSEEEE??????

[Aufstieg2005]

#1

...meinst du nicht, dass du es ein wenig übertreibst mit deinem Voxware-Push-Generve

Merkst du nicht, dass du im Prinzip ein Alleinunterhalter bei diesem Wert bistund sich niemand wirklich noch interssiert? Besonders ärgerlich finde ich die Tatsache, dass du uralte "Neuigkeiten" immer wieder aufwärmst, da es anscheinend nichts wirklich Neues gibt!

Wenn du willst, dass sich jemand für deinen Lieblingswert interessiert, solltest du im übrigen auch mal versuchen, eine übersetzte Version der "News" mitzuliefern, da nicht jeder gleich Lust hat, einen mehrseitigen Text im schönsten "Wirtschaftsenglisch" durchzulesen (aber auch in der dieser Hinsicht belehrst du die anderen User ja lieber dahingehend, dass Deutsch nun mal keine Weltsprache sei. (siehe deinen Nachbarthread).

Im Übrigen: Voxware ist kein "Weltunternehmen" also braucht es auch keine News in Weltsprache