BOCA RATON, Fla.--(BUSINESS WIRE)--March 12, 1998--Boca Research,
Inc. (NASDAQ:BOCI) today reported financial results for the fourth
quarter and year ended December 31, 1997. For the fourth quarter,
sales were $16.5 million, a 43.0% decrease from sales for the prior
year period.
During the quarter, the Company incurred a loss of ($0.28) per
share before certain, unusual charges as noted below in this release
of ($0.45) per share and the establishment of a valuation allowance
relating to deferred income taxes of ($0.12) per share. Therefore, net
loss for the fourth quarter was $7.4 million or ($0.85) per share,
compared to net income of $65,000 or $0.01 per share, in the fourth
quarter of 1996.
For the year ended December 31, 1997, sales were $70.2 million,
which represents a 54.3% decrease over the previous year. Net loss for
the year was $14.9 million, or ($1.71) per share, compared to net
income of $6.5 million, or $0.72 per share, for the year ended
December 31, 1996.
At year-end 1997, the Company had $8.2 million in cash and cash
equivalents and no outstanding debt.
Tony Zalenski, Boca Research's President and Chief Executive
Officer, commented, "As everyone who follows our industry knows, 1997
was a very turbulent year in the modem market. The transition to the
next level of analog technology, 56K, was problematic for the industry
in general. While we had hoped our business would improve by the
second half of the year, the competing 56K technologies and the lack
of an ITU standard compromised our business in the second half as it
had in the first. Obviously, we are dissatisfied with our financial
performance.
"With an ITU V.90 protocol established, our Company has just
announced its V.90 modem launch plan. According to many industry
analysts, there may be a resurgence of data communications business as
consumers satisfy the need for high speed with 56K modems. We also
plan to further diversify our products, including marketing our
Internet/TV appliance which enables consumers to use a regular phone
line and a television to surf the Internet for information such as the
latest news, weather updates, and sport scores as well as send and
receive e-mail -- all from the comfort of their family room couch,"
Mr. Zalenski continued.
"During this year of change and uncertainty within our industry,
in order to be more competitive, we took specific actions to reshape
our Company and respond to our current market environment. This
included reducing headcount within the organization to reduce expenses
and realizing that we need to accomplish more by doing fewer things
better. During this time of more intense competition, we have moved to
make Boca more focused, flexible and as lean an organization as
possible," he concluded.
For the fourth quarter 1997 reporting period, unusual, pre-tax
charges included a significant uncollectable receivable, an increase
in inventory reserves related to older generation products and
technology such as videoconferencing, losses related to Boca's joint
venture in Asia, and lawsuit settlements related to software royalty
payments. The currency devaluation in Asia was a major
contributing factor to MBf/Boca Asia Pacific's weakened financial
performance. This currency devaluation caused Boca's products to be
more expensive which further weakened product demand.
As previously noted, weakened industry conditions, largely due to
the anticipation of shipments of 56K analog modem technology and the
competing technologies, caused consumers to delay their data
communications purchasing decisions. This issue impacted Boca's sales
in 1997, as well as the flow of new business for the first quarter of
1998. Thus, the revenue in the first quarter of 1998 will be
approximately the same as the revenue of the fourth quarter of 1997,
and a net loss is expected for the first quarter of 1998.
This release contains forward-looking statements which reflect
management's best judgment based on factors currently known. However,
these statements involve risks and uncertainties including the
successful development and market acceptance of new products, the
degree of competition in the market for such products, competitive
pricing practices, the product and channel mix, component costs, and
manufacturing efficiencies. Further, a significant portion of the
Company's sales are derived from a limited number of customers. The
loss of one or more customers could adversely impact operating
results. These and other risks are detailed in Boca Research's annual
report on Form 10-K for the year ended December 31, 1996 and its
quarterly report on Form 10-Q for the quarter ended September 30,
1997. Such risks and uncertainties could cause actual results to
differ materially from those in the forward-looking statements
included in this release.
CORPORATE INFORMATION
Founded in 1985, Boca Research designs, manufactures, markets and
supports quality, cost-effective data communications,
videoconferencing, multimedia and networking products to facilitate
the transmission of information on personal computers, computer
networks and the Internet. The Company sells its products worldwide
through distributors, original equipment manufacturers (OEMs), and
retailers. Boca Research is a U.S. corporation headquartered in Boca
Raton, Florida with international operations and ventures worldwide.
Note to Editors: For copies of recent press releases from Boca
Research via fax, call 800/331-1323; for company information via the
Internet, visit bocaresearch.com
*T
BOCA RESEARCH, INC.
Consolidated Balance Sheets
(In thousands)
Dec. 31 Dec. 31
------- -------
1997 1996
Assets
Current assets:
Cash and cash equivalents $ 8,205 $ 7,826
Trade receivables, net 11,723 27,167
Inventory, net 14,876 18,381
Prepaid expenses and other
current assets 470 890
Prepaid and deferred income
taxes 9,214 3,888
Total current assets 44,488 58,152
Property and equipment, net 5,540 7,052
Deferred income taxes, noncurrent --- 275
Goodwill, net --- ---
Other assets 191 587
Total assets $50,219 $66,066
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 6,546 $ 7,314
Accrued expenses and other
current liabilities 3,092 3,590
Income taxes payable --- ---
Total current
liabilities 9,638 10,904
Stockholders' Equity
Common stock 87 87
Additional paid-in capital 25,915 25,573
Retained earnings 14,579 29,502
Total stockholders'
equity 40,581 55,162
Total liabilities and
stockholders' equity $50,219 $66,066
BOCA RESEARCH, INC.
Consolidated Income Statement
(In thousands except per share data)
Three Months Year
Ended Dec. 31 Ended Dec. 31
1997 1996 1997 1996
--------- --------- --------- --------
Net sales $16,547 $28,961 $70,207 $153,524
Cost of goods sold 19,844 23,685 71,164 122,855
Gross profit
(loss) ( 3,297) 5,276 957) 30,669
Operating expenses:
Research and
development 704 851 2,808 3,073
Selling, general
and
administrative 5,981 4,917 18,366 18,551
Total operating
expenses 6,685 5,768 21,174 21,624
Income (loss) from
operations ( 9,982) (492) (22,131) 9,045
Non-operating income 234 156 837 596
Income (loss) before
income taxes ( 9,748) (336) (21,294) 9,641
Income tax provision
(benefit) (2,330) (401) (6,371) 3,191
Net income (loss) ($ 7,418) $ 65 ($14,923) $6,450
Diluted earnings
(loss) per share ($0.85) $0.01 ($1.71) $0.72
Shares used in per
share calculation 8,725 8,761 8,718 8,941
Hey, Moonray - I won't mention to "impotent" word, okay? |
