TII Industries Announces the Award of a Multi-Year, Multi-Million
Dollar Contract With a Regional Bell Operating Company
COPIAGUE, N.Y.--
Reports Annual and Fourth Quarter Results
TII Industries Inc. (NASDAQ NMS: TIII) announced today the award of a
major, multi-year contract with a Regional Bell Operating Co.
("RBOC"). The first year's revenues are estimated at $20,000,000,
which approximately doubles the current contract with this customer.
TII has already received volume orders under this contract with
shipments of its new broadband network interface device ("NIDs")
scheduled to begin in the first week in October.
"We are pleased to announce this award as it represents another major
endorsement of our newly developed, patented family of broadband NIDs.
This contract, together with the recently announced award from the
Puerto Rico Telephone Co. alone should increase our revenues over
$20,000,000 a year, or 40% over our current base of $50,000,000,"
stated Timothy J. Roach, president and chief executive officer.
"TII's investments in new products and new cost-effective, higher
volume production processes were essential to successfully implement
our new aggressive growth strategy.
These investments, accelerating our new broadband NID product line to
market, has enabled us to compete for and win these two recent major
contracts. We believe that these products, with their unique
proprietary features, should be highly successful in other RBOCs,
several of which have major bids next year."
Year End Results
TII reported record revenues in fiscal 1997 rising 14 percent to $50.7
million, up from $44.5 million reported in fiscal 1996. Revenues rose
to a record $13.1 million for the fourth fiscal quarter ended June 30,
1997, an increase of 13.9 percent from the fourth fiscal quarter 1996
revenues of $11.5 million. Fourth quarter net income was effected by
investments in the acceleration of the broadband NID product line into
production, and heightened expenses associated with the company's
previously announced cost reduction program. Fiscal 1997 net income
was effected also by a non-recurring $3,000,000 charge announced in
the third quarter.
TII reported a net loss for the year ended fiscal 1997 of $856,000 or
$0.12 per share, compared to net income of $3,737,000 or $0.47 per
share for the fiscal year ended 1996. The net loss for the fourth
quarter was approximately $188,000 or $0.03 per share, compared with
net income of $622,000 or $0.08 per share during the fourth quarter
last year. These start-up costs are expected to continue through the
first half of the current fiscal year with earning improvements
occurring during the second half.
Roach further stated, "As a result of our investments in accelerating
the broadband NID products to production, we believe that TII
Industries is now positioned to increase its growth dramatically."
To meet increasing demand for voice, data and video, telephone
companies in the United States and abroad are expanding and upgrading
their network infrastructure to facilitate provision of broadband
services. TII's broadband NIDs will be used by telephone companies to
provide multiple access lines, advanced overvoltage protection and
remote electronics to its business and residential customers.
Designed with future technologies in mind, TII's broadband NIDs can
also accommodate TII's patented COAX overvoltage protector as well as
high performance fiber optic connectors, produced by the company's
subsidiary TII-Ditel.
TII Industries Inc., with facilities in Copiague, New York, Hickory,
North Carolina, Toa Alta, Puerto Rico and San Pedro De Macoris,
Dominican Republic, specializes in the design, manufacture and sale of
overvoltage protectors, fiber optic components and enclosures, network
interface devices and station electronic products principally for use
in the communications industry. TII markets its products to the
Regional Bell and independent telephone operating companies and CATV
providers, as well as original equipment suppliers who sell to the
global communications marketplace. Overvoltage protectors are
required by the National Electric Code to be installed on the user's
home or office telephone lines to prevent injury or damage caused by
lightning and other electrical occurrences. TII's customers service
over 165 million subscriber lines in the United States.
Statements in this release that are not strictly historical are
"forward-looking" statements within the meaning of the Private
Securities Litigation Reform Act of 1995, and which should be
considered as subject to the many risks and uncertainties that exist
in the company's operations and business environment. These risks and
uncertainties include economic conditions, market demand and pricing,
competitive and cost factors as well as other factors from time to
time discussed in TII's SEC reports, including but not limited to
TII's Annual Report on Form 10K for the fiscal year ended June 28,
1996, its Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 1997, and its Annual Report on Form 10-K for the fiscal year
ended June 27, 1997.
Visit our world wide web site located at
tii-industries.com
TII Industries, Inc. and Subsidiaries
Consolidated Statements of Operations
(Dollars in Thousands, except per share data)
(unaudited)
Three Months Ended Year Ended
June June
27, 1997 28, 1996 27, 1997 28, 1996
Net sales $13,143 $ 11,536 $ 50,675 $44,513
Cost of sales 10,783 8,846 41,421 31,956
Gross profit 2,360 2,690 9,254 12,557
Operating expenses
Selling, general and
administrative 1,800 1,426 7,061 5,881
Research and development 723 663 3,085 2,820
Total operating expenses 2,523 2,089 10,146 8,701
Operating (loss) income (163) 601 (892) 3,856
Interest expense (58) (123) (287) (416)
Interest income (10) 39 314 191
Other income (expense) 31 105 72 106
(Loss) income before provision
for income taxes (200) 622 (793) 3,737
Provision for income taxes (12) -- 63 --
Net (loss) income $(188) $ 622 $ (856) $ 3,737
Net (loss) income per share -
primary $(.03) $ .08 $ (.12) $ .48
Weighted average number of
common and common equivalent
shares outstanding 7,431 7,827 7,430 7,853
Net (loss) income per share --
fully diluted $ (.03) $ .08 $ (.12) $ .47
Weighted average number of
common and common equivalent
shares outstanding 7,431 8,127 7,430 8,179
TII INDUSTRIES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 27, 1997 AND JUNE 28, 1996
(Dollars in Thousands)
June 27, June 28,
1997 1996
ASSETS
Current Assets
Cash and cash equivalents $ 247 $ 2,883
Marketable securities available for
sale 3,552 5,999
Receivables 7,388 7,084
Inventories 15,574 14,032
Prepaid expenses 402 388
Total current assets 27,163 30,386
Fixed Assets
Property, plant and equipment 37,812 33,018
Less: Accumulated depreciation and
amortization (23,768) (22,029)
Net fixed assets 14,044 10,989
Other Assets 1,616 1,448
TOTAL ASSETS $ 42,823 $ 42,823
LIABILITIES AND STOCKHOLDERS'
INVESTMENT
Current Liabilities
Current portion of long-term debt
and obligations under capital
leases $ 537 $ 363
Accounts payable 5,833 5,185
Accrued liabilities 1,138 1,037
Total current liabilities 7,508 6,585
Long-Term Debt 839 853
Long-Term Obligations Under
Capital Leases 1,465 1,523
2,304 2,376
Commitments and Contingencies (Note 13)
Stockholders' Investment
Preferred Stock, par value $1.00 per
share; 1,000,000 authorized and
issuable in series (Note 10);
Common Stock, par value $.01 per share;
30,000,000 shares authorized;
7,448,473 and 7,446,975 shares issued
at June 27, 1997 and June 28, 1996,
respectively (Note 9) 75 75
Warrants outstanding 159 120
Capital in excess of par value 29,052 29,046
Retained earnings 3,999 4,855
Valuation adjustment to record marketable
securities available for sale at fair
value 7 47
33,292 34,143
Less-Treasury stock, at cost; 17,637 (281) (281)
common shares
Total stockholders' investment 33,011 33,862
TOTAL LIABILITIES AND STOCKHOLDERS'
INVESTMENT $ 42,823 $ 42,823
CONTACT: TII Industries, Inc., Copiague
Paul Sebetic/Jack Tarulli, 516/789-5000 |
