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FastTrack

View Tech Inc. Year Founded: 1992 Core Business: Providing video-conferencing systems to companies and governments Revenues in 1994: $4.1 million Revenues in 1998: $58 million Employees in 1994: 19 Employees in 1998: 150 Top Executive: William Shea, CEO Goal: To grow annual revenues to $200 million within the next two years Driving Force: Demand for an affordable way for workers to communicate face to face without having to travel By JENNIFER NETHERBY Staff Reporter With e-mail, faxes and the phone, you may have forgotten what face-to-face communication is like, but Camarillo-based View Tech Inc. hopes to make life a little more up close and personal through video conferencing. The company sells, installs and maintains video-conferencing systems for businesses and government agencies. And in an era when companies need a fast, reliable way to hook up with key people in other parts of the world, business is booming for View Tech. “Companies are looking for the ability to communicate quickly with the organization,” said Mike Redmond, vice president of marketing. “And they want the ability to not have to travel.” The company’s revenues have skyrocketed from $4.1 million in 1994 to $58 million in 1998, and in early August, View Tech signed a three-year, $24 million contract to provide video-conferencing equipment and maintenance services to the state of California. “It’s our largest deal ever done,” said Art Hobba, View Tech’s West Coast regional vice president, who noted that most of the company’s contracts are around $3 million. “It’ll put View Tech on the map.” George Hortin of the state’s Information Technology Department, who helped evaluate the companies that were bidding for the state contract, said the state plans to use the View Tech equipment to connect state agencies for everything from employee training to treating patients in state prison through teleconference hookups. Hortin explained that doctors and specialists will be able to use video conferencing to help prison medical staff make diagnoses on inmates, sparing the off-site doctors from having to visit the prison. “It’s a wide-ranging contract,” Hortin said. “Basically, they’ll install basic systems in schools, local agencies and provide significant follow-up on maintenance for the older system.” View Tech started in 1992, providing video-conferencing equipment and services to clients mostly on the West Coast. Three years later, the company went public on Nasdaq, where as of last week it was trading for about $2 a share. To expand its reach throughout the nation, the company in 1996 acquired USTeleCenters Inc., a teleconferencing company operating in the northeastern United States, and in 1997 it bought the assets of Vermont Telecommunications Network Services Inc. Following those transactions, View Tech restructured to cut costs and eliminate the duplication of services. Company officials say restructuring costs were partly to blame for View Tech’s disappointing performance in the second quarter ended June 30. For that period, View Tech reported a net loss of $294,000 (4 cents a diluted share). That’s a significant improvement over the like period a year ago, when it reported a net loss of $4.1 million (60 cents a diluted share). Hobba said the $24 million deal with the state should help put the company firmly in the black. The video-conferencing systems that the company sells can range from $3,000 to $100,000, depending on the size and sophistication of the system. The typical system includes a television, phone line and video camera. The company has signed some big clients, such as the U.S. Postal Service, Pfizer Inc. and the state of Oklahoma. Like many technological innovations, the equipment used in video conferencing has seen its market price drop as the technology has improved. A video-conferencing system that would have cost $50,000 three years ago now sells for $20,000, Redmond said. Meanwhile, the quality has improved dramatically from grainy pictures and constricted movements a few years ago to quality as good as television, said Redmond. The lower cost and improved quality have allowed View Tech to reach out to small and medium-sized companies, which were previously priced out of the market. “It’s become cost effective,” he said. “A few years ago, our market was comprised of large companies, specifically because of the pricing.” View Tech offers products from four video manufacturers PictureTel Corp., Polycom Inc., VCON Corp. and VTEL Corp. and sets the system up for companies. The conferencing is run through telephone lines and can be set up to run with other communication networks within a company. Companies can also set up conference calls involving several different locations, with the signals being routed through View Tech’s servers in Camarillo. The company provides some video-conferencing equipment for the desktop computer market, but that comprises only a small portion of its total sales because the applications thus far are limited. Within the next five years, desktop computer systems are expected to become a much bigger market, as Internet communication becomes more reliable and better able to handle pictures. Besides the desktop computer market, other future growth markets that View Tech is targeting for its video-conferencing tools include satellite transmissions and high-speed phone lines. “Our company is continuing to grow with technology,” Hobba said.

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