Boca Research Reports Third Quarter 1998 Financial Results
BOCA RATON, Fla.--(BUSINESS WIRE)--Nov. 4, 1998--Boca Research,
Inc. (NASDAQ:BOCI) today announced financial results for the third
quarter ended September 30, 1998. Boca reported sales of $22.8
million, compared to sales of $13.2 million for the second quarter of
1998 and sales of $18.5 million for the third quarter of 1997. Sales
for the nine months ended September 30, 1998 were $51.6 million,
compared to sales of $53.7 million for the first nine months of 1997.
For the third quarter of 1998, the Company reported a net loss of
$2.0 million, or ($0.22) per share, compared to a net loss of $10.3
million, or ($1.17) per share, in the second quarter of 1998 and a net
loss of $1.6 million, or ($0.18) per share, in the third quarter of
1997. In the first nine months of 1998, Boca reported a net loss of
$15.7 million, or ($1.80) per share, compared to a net loss of $7.5
million, or ($0.86) per share, during the nine month period ended
September 30, 1997.
During the third quarter, the Company further improved the
distribution of Boca Research branded products by leveraging the
strong retail position of its Global Village line of modems. As a
result, large retailers such as Fry's Electronics, J & R Computerworld
and Inca Computers are now carrying Boca Research products.
During the third quarter, sales to Apple (R) Computer, Inc. were
approximately 23% of net sales. Thus far in the fourth quarter there
are no sales to Apple, and Boca is uncertain as to the outlook for any
recurrent Apple sales. The decline in sales to Apple Computer may be
offset in part by increased sales through the retail channel in the
fourth quarter. In addition, Boca released a special iMac (tm) version
of its award-winning GlobalFax (tm) software which capitalizes on the
success of Apple's iMac product.
Commenting on the results, Tony Zalenski, Boca's President and
CEO, said: "This was the first full quarter of operations after our
acquisition of Global Village's modem business assets, and we were
able to significantly increase our revenue. The Macintosh modem market
has not experienced the same price erosion as the Windows-based
market, and our Global Village brand continues to command greater
margins. We were unable to return our Company to profitability during
the third quarter; however, we continue to make progress in reducing
our costs and increasing our presence in retail.
"In the third quarter, we were successful in driving down our
inventory and reducing our number of SKUs. Net inventory decreased by
approximately $4.5 million during the third quarter of 1998. We have
continued to work our product diversification plan, and I am pleased
to announce that we recently released news of our expanded business
partnership with NCI as well as the first in a series of products we
developed with them.
"We are aggressively pursuing large OEM opportunities with NCI in
the Internet/information appliance market. Building on our experienced
manufacturing expertise in this product market, we have a jump start
on other manufacturers who are entering this market. We are continuing
to work with several strategic partners who have expressed interest in
our products for this market.
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, 1997 and on its
quarterly report on Form 10-Q for the quarter ended June 30, 1998.
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 Internet access devices, data
communications and networking products to facilitate the transmission
of information on personal computers, computer networks and the
Internet.
The Company also markets its products under the Global Village
Communication brand name and 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.
*T
BOCA RESEARCH, INC.
Consolidated Balance Sheets
(In thousands)
(Unaudited)
September 30, Dec. 31,
1998 1997
----------- ------------
Assets
Current assets:
Cash and cash equivalents $5,328 $8,205
Trade receivables, net 20,151 11,723
Inventory, net 9,098 14,876
Prepaid expenses and
other current assets 820 470
Prepaid and deferred
income taxes 2,052 9,214
---------- -----------
Total current assets 37,449 44,488
Property and equipment, net 4,092 5,540
Goodwill and other
intangible assets 4,432 -
Other assets 627 191
----------- ------------
Total assets $46,600 $50,219
=========== ============
Liabilities and
Stockholders' Equity
Current liabilities:
Accounts payable $11,365 $6,546
Notes payable 5,955 -
Accrued expenses and other
current liabilities 4,280 3,092
----------- ------------
Total current liabilities 21,600 9,638
----------- ------------
Stockholders' Equity:
Common stock 87 87
Additional paid-in capital 26,055 25,915
Retained earnings (1,142) 14,579
----------- ------------
Total stockholders' equity 25,000 40,581
----------- ------------
Total liabilities and
stockholders' equity $46,600 $50,219
=========== ============
BOCA RESEARCH, INC.
Consolidated Statements of Income
(Unaudited)
(In thousands except per share data)
Three Months Nine Months
Ended September 30, Ended September 30,
1998 1997 1998 1997
--------- --------- --------- ---------
Net sales $22,789 $18,549 $51,615 $53,660
Cost of goods sold 19,221 17,138 51,227 51,320
--------- --------- --------- ---------
Gross profit 3,568 1,411 388 2,340
--------- --------- --------- ---------
Operating expenses:
Research and development 872 690 2,105 2,104
Selling, general and
administrative 4,830 3,431 10,745 12,384
In process research
and development - - 3,800 -
--------- --------- --------- ---------
Total operating
expenses 5,702 4,121 16,650 14,488
--------- --------- --------- ---------
Loss from operations (2,134) (2,710) (16,262) (12,148)
Non-operating income, net 169 241 541 603
--------- --------- --------- ---------
Loss before income
tax benefit (1,965) (2,469) (15,721) (11,545)
Income tax benefit - (864) - (4,041)
--------- --------- --------- ---------
Net loss ($1,965) ($1,605) ($15,721) ($7,504)
========= ========= ========= =========
Net loss per share ($0.22) ($0.18) ($1.80) ($0.86)
========= ========= ========= =========
Weighted average shares
outstanding 8,756 8,725 8,747 8,716
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