Monday October 20 4:17 PM EDT
Company Press Release
Telxon Reports Second Quarter FY1998 Results
AKRON, Ohio, Oct. 20 /PRNewswire/ -- Telxon Corporation (Nasdaq:TLXN) today reported results for its fiscal 1998 second quarter ended September 30, 1997.
For the quarter ended September 30, 1997, the company reported revenues of $110.3 million and net income of $2.4 million, or $.15 per share. This represents a 50% sequential increase in earnings per share over Q1 and a $.40 improvement over Q2 results from continuing operations a year ago.
As compared to results from continuing operations during the same period a year ago, second quarter revenues were up $23.2 million, or 26.7%. Gross margins were 39.6%, an improvement of over 7 percentage points from the prior year and a 0.3% improvement sequentially from Q1. Operating expenses were $38.0 million, or 34.5% of revenues, as compared to $36.6 million, or 42.1% of revenues from the prior year. Income from operations was $5.7 million, a $14.0 million improvement over Q2 results from continuing operations a year ago.
For the first six months of fiscal 1998, Telxon recorded revenues of $215.2 million and net income of $4.0 million, or $.25 per share.
Frank Brick, Telxon's President and CEO, stated, ''I am pleased with our results for the quarter, as they reflect the on-going progress of our strategic initiatives and our management team's continued focus and execution. I am confident that our operating results will continue to improve as we experience the benefits of our on-going initiatives to reduce costs, improve operating efficiencies and drive sales growth through new product innovation.''
Brick continued, ''Our recently announced orders for over $60 million of the company's latest pen-based products is both a realization of customer acceptance, and an indication of real market demand, for our industry standard, modularly designed PenClient(TM) architectures for the mobile information systems industry. This level of order activity increases our confidence in achieving our 15% annual revenue growth objectives for the foreseeable future. Our book-to-bill ratio during the quarter was over 170%, based on pent up demand for these new units. Excluding pent up demand, we are back on track with a
book-to-bill ratio of over 115% through the first half of the year.''
Telxon Corporation is a leading global designer and manufacturer of wireless and mobile information systems for vertical markets. The company integrates advanced mobile computing and wireless data communication technology with a wide array of peripherals, application-specific software and global customer services for its customers in more than 60 countries around the world. Telxon's World Wide Web site address is: www.telxon.com.
Other than the historical financial information reported above, this news release constitutes forward-looking statements that are
inherently subject to risks and uncertainties which could cause Telxon's actual results to differ materially from the
forward-looking statements. The important factors affecting the realization of those results include, without limitation, the
company's ability to timely develop, introduce, gain and maintain market acceptance of new and enhanced products, and implement appropriate cost reduction, efficiency and other operating improvement strategies, as well as general and industry-specific economic conditions, competitive pressures and rapid technological change. Reference should be made to the discussion of these and other factors affecting Telxon's business and results as included from time to time in the company's filings with the Securities and Exchange Commission.
Telxon Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEET
(In thousands, except per share data)
September 30, March 31,
1997 1997
(Unaudited)
ASSETS
Current assets:
Cash and short-term investments $ 28,635 $ 45,386
Accounts receivable, net 104,934 111,959
Notes and other accounts receivable 14,874 16,312
Inventories 87,454 84,499
Prepaid expenses and other 14,207 11,956
Total current assets 250,104 270,112
Property and equipment, net 50,232 45,578
Intangible and other assets, net 44,895 46,094
Total $345,231 $361,784
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ -- $ 50
Current portion of long-term debt 383 383
Capital lease obligations due
within one year 642 627
Accounts payable 36,050 47,917
Income taxes payable 1,708 3,077
Accrued liabilities 41,159 49,000
Total current liabilities 79,942 101,054
Capital lease obligations 635 968
Convertible subordinated debentures 107,224 107,224
Other long-term liabilities 5,620 5,837
Total 193,421 215,083
Stockholders' equity:
Preferred Stock, $1.00 par value
per share; 500 shares authorized
none issued -- --
Common Stock, $.01 par value per
share; 50,000 shares authorized,
16,203 and 16,186 issued 162 162
Additional paid-in capital 86,479 87,105
Retained earnings 74,533 70,821
Equity adjustment for
foreign currency translation (3,633) (2,643)
Unearned restricted stock awards (114) (210)
Treasury stock; 357 and 557 shares
of common stock at cost (5,617) (8,534)
Total stockholders' equity 151,810 146,701
Total $345,231 $361,784
Telxon Corporation and Subsidiaries
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share data)
Three Months
ended September 30,
1997 1996
(Unaudited)
Revenues:
Product $ 91,138 $ 89,439
Customer service 19,182 18,875
Total revenues 110,320 108,314
Cost of revenues:
Product 54,276 62,445
Customer service 12,336 11,534
Total cost of revenues 66,612 73,979
Gross profit:
Product 36,862 26,994
Customer service 6,846 7,341
Total gross profit 43,708 34,335
Operating expenses:
Selling expenses 18,677 21,037
Product development and
engineering expenses 9,525 10,096
General and administrative
expenses 9,843 10,548
Total operating expenses 38,045 41,681
Income (loss) from operations 5,663 (7,346)
Interest income 420 136
Interest expense (1,811) (2,162)
Income (loss) before other non-
operating (expense) income and
income taxes 4,272 (9,372)
Other non-operating (expense) income (7) (32)
Income (loss) before income taxes 4,265 (9,404)
Provision (benefit) for income taxes 1,877 (4,702)
Net income (loss) $ 2,388 $ (4,702)
Earnings per common and common
equivalent share:
Net income (loss) per share $ .15 $ (.29)
Average number of common and common
equivalent shares outstanding 16,273 16,182
Six Months
ended September 30,
1997 1996
(Unaudited)
Revenues:
Product $177,829 $183,464
Customer service 37,404 37,233
Total revenues 215,233 220,697
Cost of revenues:
Product 106,836 128,270
Customer service 23,462 22,582
Total cost of revenues 130,298 150,852
Gross profit:
Product 70,993 55,194
Customer service 13,942 14,651
Total gross profit 84,935 69,845
Operating expenses:
Selling expenses 36,776 42,220
Product development and
engineering expenses 18,651 21,204
General and administrative
expenses 19,547 21,711
Total operating expenses 74,974 85,135
Income (loss) from operations 9,961 (15,290)
Interest income 917 351
Interest expense (3,602) (4,132)
Income (loss) before other non-
operating (expense) income and
income taxes 7,276 (19,071)
Other non-operating (expense) income (165) 73
Income (loss) before income taxes 7,111 (18,998)
Provision (benefit) for income taxes 3,129 (9,499)
Net income (loss) $ 3,982 $ (9,499)
Earnings per common and common
equivalent share:
Net income (loss) per share $ .25 $ (.58)
Average number of common and common
equivalent shares outstanding 16,027 16,265
SOURCE Telxon Corporation |
