SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 18, 2004
INTERNET PICTURES CORPORATION
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(Exact name of registrant as specified in its charter)
DELAWARE 000-26363 52-2213841
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(State or other (Commission (IRS Employer
jurisdiction of incorporation) File Number) Identification Number)
3160 Crow canyon road, san ramon, california 94583
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (925) 242-4002
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N/A
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(Former name or former address, if changed since last report)
ITEM 7: FINANCIAL STATEMENTS, PRO FORMA FINANCIAL
INFORMATION AND EXHIBITS.
(c) Exhibits
Exhibit
Number Description
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99.1 Press Release dated February 18, 2004
ITEM 12: RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The following information is furnished pursuant to Item 12, "Disclosure of
Results of Operations and Financial Condition" and shall not be deemed "filed"
for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it
be deemed incorporated by reference in any filing under the Securities Act of
1933.
On February 18, 2004, Internet Pictures Corporation issued a press release
announcing its financial results for the fiscal year ended December 31, 2003. A
copy of the press release is attached hereto as Exhibit 99.1 and is incorporated
herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
INTERNET PICTURES CORPORATION
Dated: March 9, 2004
/s/ Paul Farmer
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Paul Farmer
Chief Financial Officer
Exhibit Index
Exhibit
Number Description
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99.1 Press Release dated February 18, 2004
Exhibit 99.1
IR Contact:
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Paul Farmer, CFO
(925) 242- 4002
paul.farmer@ipix.com
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IPIX REPORTS RESULTS FOR FOURTH QUARTER 2003 AND FULL YEAR
OAK RIDGE, TN/SAN RAMON, CA - February 18, 2004 - Internet Pictures Corporation
(NASDAQ: IPIX), a leader in mission-critical imaging solutions, today announced
financial results for the quarter and year ended December 31, 2003. IPIX(R)
reported for the quarter ended December 31, 2003 and the comparable year-ago
quarter:
- Revenue was $9.3 million compared to $5.9 million;
- Net income available for common shareholders was $96 thousand compared
to $36 thousand;
- Fully diluted earnings per common share were one cent compared to
zero.
Revenues in the quarter ended December 31, 2003 include a one-time $8.0 million
license fee for IPIX Rimfire(R) technology and other services. As announced in
June 2003, IPIX and eBay amended their then current commercial agreement (see
IPIX's Quarterly Report on Form 10Q for the quarter ended June 30, 2003), which
was subsequently extended by eBay to October 31, 2003 for a final $0.45 million
additional fee. IPIX no longer provides any products or services to eBay as of
November 1, 2003. Also included in the results of operations for the quarter
ended December 31, 2003, were expenses for the following:
- Impairment of goodwill associated with the Rimfire technology ($3.0
million; non-cash);
- Professional fees associated with the eBay license fee ($0.7 million);
and
- The recognition of cumulative currency translations from dissolved
foreign subsidiaries ($0.5 million; non-cash).
"At December 31, 2003, the Company had $12.3 million in cash, restricted and
unrestricted investments and long term restricted cash and $11.5 million in
shareholders' equity," said Don Strickland, IPIX president and CEO. "We enter
2004 focused on launching our new platform for our 360-degree panoramic
photography and movies business; investing in our government and commercial
video security business; and identifying new customers for and growing our
non-eBay self service on-line and off-line advertising business."
For the year ended December 31, 2003, revenue was $28.8 million compared to
$22.4 million for the year ended December 31, 2002. Net loss available to common
shareholders for the year ended December 31, 2003 was $0.4 million compared to
$2.9 million in 2002. For the year ended December 31, 2003, fully diluted loss
per common share was $0.05, compared to $0.43 in 2002.
About IPIX
Internet Pictures Corporation is a leader in mission-critical imaging solutions
for three core markets: 360-degree panoramic photography and movies; government
and commercial video security; and self service on-line and off-line
advertising. IPIX's extensive intellectual property covers patents for immersive
imaging, video and surveillance applications. IPIX is headquartered in Oak
Ridge, Tennessee, with co-headquarters in San Ramon, California. www.ipix.com
# # #
IPIX and Rimfire are trademarks and service marks of Internet Pictures
Corporation.
This press release may contain forward-looking information within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, and is subject to the safe harbors under those sections.
In some cases, you can identify forward-looking statements by terminology such
as "expect," "believe," "may," "will," "plans" and "anticipate," or the negative
of such terms or comparable terminology. Forward-looking statements appearing
herein include statements concerning operating and profitability plans and goals
and restructuring efforts, and are based on current expectations.
Actual results may differ materially from those projected in the forward-looking
statements based upon a number of factors including:
(i) our loss of existing, or an inability to attract new customers,
(ii) changes in the demand for our products and services,
(iii) our rate of revenue growth,
(iv) our ability to control or affect reductions in costs,
(v) our ability to design, manufacture and deliver high quality products
in a timely fashion,
(vi) uncertainty regarding our ability to continue as a going concern,
(vii) our third-party supplier's ability to deliver high quality components
to us in a timely fashion,
(viii) technological changes,
(ix) general economic, financial or market changes or developments and
(x) the conversion of our Series B Preferred Stock into common stock.
The matters discussed in this press release also involve risks and uncertainties
described from time to time in documents filed with the Securities and Exchange
Commission, including but not limited to Form 10-Ks, Form 10-K/As, Form 10-Qs
and Form 8-Ks (www.sec.gov).
INTERNET PICTURES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended Twelve months ended
December 31, December 31,
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2002 2003 2002 2003
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(unaudited) (unaudited)
(In thousands, except per share data) (restated) (restated)
Revenue:
Transaction services.................................................. $ 4,623 $ 8,774 $ 16,242 $ 26,245
Immersive still solutions............................................. 1,240 463 6,171 2,321
Immersive video solutions............................................. -- 36 -- 273
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Total revenue...................................................... 5,863 9,273 22,413 28,839
Cost of revenue:
Transaction services.................................................. 1,590 1,114 6,828 6,540
Immersive still solutions............................................. 529 377 1,900 1,402
Immersive video solutions............................................. -- 17 -- 178
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Total cost of revenue.............................................. 2,119 1,508 8,728 8,120
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Gross profit....................................................... 3,744 7,765 13,685 20,719
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Operating expenses:
Sales and marketing................................................... 1,532 1,901 7,607 7,605
Research and development.............................................. 1,176 927 4,862 4,553
General and administrative............................................ 515 788 2,933 3,452
Impairment of goodwill .............................................. -- 3,042 -- 3,042
Restructuring ........................................................ -- 89 687 89
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Total operating expenses........................................... 3,223 6,747 16,089 18,741
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Income (loss) from operations......................................... 521 1,018 (2,404) 1,978
Patent infringement award ............................................ -- -- 1,000 --
Loss on foreign currency ............................................. -- (491) -- (491)
Interest income (expense) and other................................... (35) 2 261 (101)
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Net income (loss)..................................................... 486 529 (1,143) 1,386
Preferred stock dividends (restated for 2002)......................... (450) (433) (1,784) (1,778)
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Net income (loss) available to common stockholders (restated for 2002) $ 36 $ 96 $ (2,927) $ (392)
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Income (loss) per common share, basic and diluted (restated for 2002). $ 0.00 $ 0.01 $ (0.43) $ (0.05)
Weighted average common shares, basic and diluted..................... 17,075 8,014 6,794 7,365
INTERNET PICTURES CORPORATION
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2002 2003
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(1) (unaudited)
(In thousands, except share and per share data)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents...................................................... $3,020 $10,241
Restricted cash and short term investments..................................... 2,972 1,100
Short term investments......................................................... -- 331
Accounts receivable, net of allowance for doubtful accounts of
$208 in 2002 and $0 in 2003............................................. 3,535 261
Inventory, net of reserve for obsolescence of $160 in 2002 and
$148 in 2003............................................................ 181 398
Prepaid expenses and other current assets...................................... 984 1,523
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Total current assets..................................................... 10,692 13,854
Computer hardware, software and other, net..................................... 4,631 1,578
Restricted cash and other long term assets..................................... 70 852
Goodwill....................................................................... 3,042 --
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Total assets.......................................................... $18,435 $16,284
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable............................................................... $360 $612
Accrued liabilities............................................................ 5,426 3,342
Deferred revenue............................................................... 85 76
Current portion of obligations under capital leases............................ 2,403 608
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Total current liabilities............................................ 8,274 4,638
Obligations under capital leases, net of current portion....................... 1,459 --
Other long term liabilities.................................................... 310 181
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Total liabilities..................................................... 10,043 4,819
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STOCKHOLDERS' EQUITY:
Preferred Stock, $0.001 par value: ............................................ 1 1
Authorized: 5,001,100 shares in 2002 and 2003
Issued and outstanding: 1,115,080 in 2002 and 1,003,830 in 2003
(Aggregate liquidation value: $24,560 in 2002 and $23,716 in 2003)
Common stock, $0.001 par value: ............................................... 7 9
Authorized: 50,000,000 in 2002 and 2003
Issued and outstanding: 6,795,007 in 2002 and 8,678,730 in 2003
Class B common stock, $0.0001 par value: ...................................... -- --
Authorized: 7,421,536 shares in 2002 and 2003
Issued and outstanding: 17,948 shares in 2002 and 14,000 shares in 2003
Additional paid-in capital..................................................... 513,995 515,186
Accumulated deficit............................................................ (505,117) (503,731)
Accumulated other comprehensive loss........................................... (494) --
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Total stockholders' equity............................................. 8,392 11,465
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Total liabilities and stockholders' equity............................. $18,435 $ 16,284
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(1) The December 31, 2002 balances were derived from the audited financial
statements.