ViewCast Announces Financial Results for Third Quarter 2001

DALLAS (November 1, 2001) - ViewCast Corporation (Nasdaq:VCST), a leading global provider of high quality video communications solutions for businesses and professional enterprises, today reported financial results for its third quarter ended September 30, 2001. 

Revenues for the third quarter were $1.8 million, remaining virtually flat compared to the $1.8 million reported in the prior quarter and down from the $3.5 million reported in the same quarter a year ago. Operating expenses for the quarter were $3.1 million, a decrease of 20% from $3.8 million in the prior September 2000 quarter and a sequential decrease from the $3.5 million reported for the June 2001 quarter reflecting expense reduction measures taken by the company. Net loss for the third quarter was $2.2 million, lower than the $2.5 million recorded in the second quarter 2001 and slightly higher than the $2.1 million reported for third quarter 2000. Basic and diluted net loss per share for the quarter was $0.14, a decrease from the $0.16 loss reported in second quarter 2001 and unchanged from the same period in 2000.

"Our results this quarter were adversely affected, both by the general economic slowdown and by the horrific occurrences of September 11," said George Platt, ViewCast's president and CEO. "However we are encouraged by the continuation of business activity from our customers, resellers and partners. Additionally this quarter, we have entered into numerous partnerships, such as MediaWave in the U.K., to assist us in marketing our products throughout the extended European Region. We have also continued enhancing our product lines, which includes software from Accordent Technologies providing professional presentation capabilities to the Niagara product family. We remain pleased with the strength in our Osprey division, specifically buoyed by the Osprey 500 conversion to a universal professional grade digital capture card supporting a broad range of software applications. Further, due to the events of September 11, all our products are receiving substantially greater interest as a communications alternative to travel and as a security enhancement," noted Platt.

Laurie Latham, ViewCast CFO added, "We remain proactive in our cost cutting measures and continue in our efforts to be a tighter, more efficiently run company and expect continued operating expense improvement. These efforts, in conjunction with the relationships we have established in the quarter, allowed us to maintain the same revenue and gross margin range as in the previous quarter despite losing three weeks of sales revenue as a result of September 11. "

The company's cash, cash equivalents and other financial investments as of September 30, 2001 were $2.2 million. Besides sales, the major source of cash during the second quarter of 2001 included proceeds of $1.2 million from the company's line of credit.

About Viewcast Corporation

ViewCast develops products and services that provide video networked solutions. ViewCast maximizes the value of video through its core businesses: Osprey® Video provides the streaming media industry's de facto standard capture cards; ViewCast Systems integrates turnkey streaming and video distribution systems; and ViewCast Online Solutions delivers complete B2B solutions and video delivery for online video communications. From streaming digital video on the Internet to distribution of broadcast-quality video throughout the corporate enterprise plus comprehensive "click, create and view" video software applications, ViewCast provides the complete range of video solutions. Visit the company's web sites (http://www.viewcast.com, http://www.ospreyvideo.com and http://www.viewcastonline.com) for more information.

Safe Harbor Statement
Certain statements, including those made by George Platt and Laurie Latham and those regarding business outlook, contain "forward-looking" information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which reflect the company's current judgment on certain issues. Because such statements apply to future events, they are subject to risks and uncertainties that could cause the actual results to differ materially. Important factors which could cause the actual results to differ materially include, without limitation, the following: the ability of the company to service its debt; continued significant losses by the company; the ability of the company to develop and market new products as technology evolves; the ability of the company to meet its capital requirements; increased competition in the video communications market; the ability of the company to maintain current and develop future relationships with third party resellers, manufacturers and suppliers; the ability of the company to meet governmental regulations; and the ability of the company to obtain and enforce its patents and avoid infringing upon third parties' patents. The company will not update the guidance or targets given in these statements during the quarter or comment on its progress in the quarter to analysts or investors until after it has closed its books on the quarter. Any statements by persons outside the company speculating on the progress of the quarter will not be based on internal company information and should be assessed accordingly by investors. For a detailed discussion of these and other cautionary statements and factors that could cause actual results to differ from the company's forward-looking statements, please refer to the company's Prospectus filed on July 14, 2000 and its reports on Form 10-K and 10-Q on file with the Securities and Exchange Commission.

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