SAN MATEO, Calif., Jan. 14 /PRNewswire-FirstCall/ -- Avistar Communications Corporation (Nasdaq: AVSR), a leader in desktop video communications, today announced the company's initial financial guidance for the fiscal year ending December 31, 2009. The company currently expects revenue to increase by more than 75% as compared to the full year 2008. Total costs and expenses, excluding income from settlement and licensing activities and stock compensation expense, are anticipated to decline by an additional 15%, as the company continues to migrate from hardware component sales to a software-only product offering, and a full year of cost savings from initiatives implemented during 2008 are realized.

"Combining the revenue expansion that we project with a targeted margin improvement of approximately 25 points, and reduced operating expenses, provides a basis for adjusted EBITDA guidance, as described below, of $5 to $6 million, as well as net income of approximately $2 to $3 million in 2009. Additionally, cash generated from operations is expected to be approximately $2 million by year-end, although we are not planning to generate positive cash from operations in the first quarter," said Simon Moss, CEO of Avistar.

"These performance goals build on the momentum that Avistar has recorded during 2008, where the company has posted sequential progress, consistently, since the first quarter. And while many companies view the recessionary economic environment of 2009 as foreboding and with austerity plans, we believe that the challenging market will create a compelling 'call to action' for the implementation of the type of collaborative technologies that we provide and excel at. In the past, companies could afford to be hesitant in adopting forms of unified visual communications solutions, but we expect necessary reductions in travel and entertainment expense now will require alternative approaches to maintain and enhance relationships within and across organizations and supply chains."

Moss continued, "Avistar is also fortunate that our diversified go-to- market strategy of developing a robust indirect reseller and distribution network has dramatically reduced our historical 'top line' dependence on a few large, global financial institutions -- operating in a vertical market that has taken the brunt of the recent economic downturn. Our multiyear arrangements with both our indirect channel partners and our technology/OEM partners (IBM amongst them), provide us the additional advantage of increased visibility on our quarterly and annual revenue objectives. With the execution of existing contractual commitments, we believe we have visibility on greater than one half of our 2009 revenue target. These contractual commitments may result in some lumpy cash flow based on contractual terms, which we have factored into our forecasting. We consider this to be a decent place to be, and we look forward to updating the market on our continuing progress as we perform throughout 2009."

Moss concluded, "We believe our turnaround is more or less complete. It was difficult but we have made great progress and our employees have done a great job during a hugely challenging market and economic environment. In 2009, we now focus on increasing value. The key to this design is simple -- increase shareholder value with an operational model that pays for itself and grows organically through positioning world class product into our growing distribution channels. Then prudently manage a very significant upside in our technology and IP licensing business without any of the capital requirement- driven urgency of the past. Given our new organizational and productivity structure, our technology and IP licensing efforts are now designed to generate significant profit and bottom line value rather than any funding of operations. It's an interesting model in that it leverages not only our heritage but also our thoroughbred of great technology design that is the foundation of our products and IP in the first place."

About Avistar Communications Corporation

Avistar (Nasdaq: AVSR) is a leader in desktop video communications, providing proven business-class technology. Avistar's desktop videoconferencing installations include more than 100,000 committed desktop seats worldwide, bringing together business users any time and any place. Companies such as IBM Corp., Sony Corp., LifeSize Communications, Inc., and Polycom Inc. use Avistar technology to power their unified communications solutions. Avistar works with leading-edge technology partners and resellers including CityIS, Beyondis, and Fontel in more than 40 countries. For more information, go to http://www.avistar.com.

For more information, visit http://www.avistar.com or visit the Avistar blog at avistarblog.blogspot.com.

Cautionary Note Regarding Forward-Looking Statements

The statements made in this press release that are not historical facts are "forward-looking statements." These forward-looking statements, include, but are not necessarily limited to, statements regarding the company's business and financial prospects for 2009, projections for revenue, net income, cash from operations, gross margins, adjusted EBITDA, revenue from IP and licensing activities, cash flows and expenses, demand for Avistar's products and current visibility on revenue targets. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties. The company cautions readers of this press release that a number of important factors could cause actual future events and results to differ materially from those expressed in any such forward-looking statements. Such factors include, without limitation Avistar's lengthy sales cycle, volatility associated with Avistar's sales and licensing activities, market acceptance of Avistar's products, increased competition in the market for unified communications, technical challenges associated with product development and completion of our deliverables to IBM and others, ongoing technological developments and changing industry standards, the ability of Avistar's distributors to sell our products to end users, the capital markets for both debt and equity, and challenges associated with protecting and licensing Avistar's intellectual property. These important factors and other factors that potentially could cause actual future results to differ materially from current expectations are described in our filings with the SEC, including the company's most recent annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. Readers of this press release are referred to such filings. The forward-looking statements in this press release are based upon information available to the company as of the date of the release, and the company assumes no obligations to update any such forward-looking statements.

Non-GAAP Financial Measures

This press release includes a reference to adjusted EBITDA, which is a non-GAAP financial measure used as a complement to results provided in accordance with accounting principles generally accepted in the ("GAAP"). The term "adjusted EBITDA" refers to a financial measure that we define as earnings before net interest, income taxes, depreciation, and amortization, as further adjusted for stock-based compensation. This non-GAAP measure should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. In addition, our definition of adjusted EBITDA may not be comparable to the definitions as reported by other companies. We believe adjusted EBITDA is relevant and useful information to our investors as this measure is an integral part of our internal management reporting and planning process and is a primary measure used by our management to evaluate the operating performance of our business.

SOURCE Avistar Communications Corporation