(BSNS WIRE) Boundless Corporation Reports Fourth Quarter and Fiscal 1998
Boundless Corporation Reports Fourth Quarter and Fiscal 1998 Results
Business Editors/High Tech Writers
HAUPPAUGE, N.Y.--(BUSINESS WIRE)--March 4, 1999--
- Yearly Gross Margins and Earnings Increase -
Boundless Corporation (NASDAQ: BDLS) today reported earnings for
its fourth quarter and fiscal year ended December 31, 1998.
Revenues for the quarter ended December 31, 1998 were
$21,853,000, compared with revenues of $26,898,000 for the quarter
ended December 31, 1997. Net income available to common shareholders
was $2,208,000, or $0.49 per basic and diluted share, compared with
net income available to common shareholders of $3,079,000, or $0.60
per basic share, or $0.58 per diluted share for the quarter ended
December 31, 1997.
For the fiscal year ended December 31, 1998, the Company reported
revenues of $90,202,000, compared with revenues of $98,271,000 for the
fiscal year ended December 31, 1997. Net income available to common
shareholders was $4,411,000, or $0.90 per basic and diluted share,
compared with net income available to common shareholders of
$4,386,000, or $0.89 per basic share or $0.86 per diluted share for
the fiscal year ended December 31, 1997.
Results for the quarter and year ended December 31, 1997 were
positively affected by utilization of net operating loss carry forward
tax benefits, totaling approximately $1,481,000, or $0.30 per basic
share. Results for fiscal 1998 include an approximate $372,000, or
$0.08 per basic share benefit due to the net release of certain income
tax reserves.
J. Gerald Combs, Chairman and Chief Executive Officer of
Boundless Corporation, stated, "1998 was another year of progress at
Boundless. Thin client revenue increased over 160% year-over-year in
our Viewpoint(tm) line of Windows-based terminals, confirming the
increased acceptance of server-based computing. Boundless also
continued its focus on improving its business model during the year by
maximizing the efficiency of its operations and decreasing costs.
Tangible results of our efforts include an increase in yearly gross
margin as a percentage of revenue from 25.2% to 28.8%, improved yearly
earnings, and a 28% reduction in outstanding debt.
"Boundless also achieved several important product milestones in
1998. With the introduction of Capio(tm), Boundless shattered the
price performance barrier of Windows-based terminals. At the end of
1998, we completed the development of our unique, next generation
software management tool, Viewpoint(R) Administrator 2.0. These
products greatly simplify and reduce the cost of remote management and
control of all Boundless thin-clients on the corporate network,"
continued Combs.
Other Boundless achievements this year included:
-- The Product Launch of Capio, the Price Performance Thin-Client
Leader - Boundless again set the industry pace, expanding its
Viewpoint family of thin-clients with the introduction of Capio,
the fast, easy, affordable Windows-based terminal. Capio has an
end-user list price starting at $399 and is powered by a powerful
Cyrix MediaGX(tm) CPU operating at 180MHz, making it the lowest
priced, highest performance Windows-based terminal in its class.
Boundless also offers the industry's first "non-obsolescence"
10-year warranty for just $99, reinforcing the recognition that
Boundless Windows-based terminals provide a much longer and
useful life than other thin-clients, Windows-based terminals and
PCs.
-- A Newly Organized Management Team - To better enable the company
to capitalize on the growth opportunities in its markets,
Boundless expanded its management team with the additions of a
new board member, Steve Maysonave, and a new vice president of
sales, Jim Tillinghast, formerly of Informix Corporation (NASDAQ:
INFX).
-- A Results-Driven Marketing Effort - To position itself for growth
in 1999, Boundless implemented an aggressive, results-oriented
marketing and sales campaign. To assist the company in its
efforts, Boundless retained one of the nation's top high-tech
marketing/advertising firms, Sicola Martin
(www.sicolamartin.com). Additionally, the company launched its
successful VARiety Access Program(SM) designed to expand the
efforts of Valued-Added Resellers ("VARs") to provide thin-client
solutions to their customers. To date, over 250 VARs have signed
on.
Mike Stebel, Executive Vice President of Marketing and Corporate
Strategy at Boundless, commented, "The market for server-based
computing continues to gather momentum, albeit at a slightly slower
than expected pace. We believe Microsoft's (NASDAQ: MSFT) new pricing
and licensing structure directly address and reaffirm its commitment
to reducing the costs of information access, the fundamental objective
of thin-client, access-based computing. This new level of
affordability combined with new thin-client products and technologies
supplied by leading strategic technology providers, including Citrix
Systems (NASDAQ: CTXS), will continue to drive increased end-user
interest and adoption. Boundless remains committed to furthering its
industry leading position through its existing Windows-based terminal
products, Viewpoint and Capio, as well as forthcoming products which
take the ease of information access to new levels, utilizing new
system platforms, new access technologies and the Internet."
Mr. Combs concluded, "I am pleased to report that the momentum in
thin-client sales has continued into 1999 as early first quarter sales
have been particularly strong. Currently, thin-client revenue has
exceeded fourth quarter 1998 results and is on track to surpass first
quarter 1998 levels.
"As Boundless enters 1999, we are excited about the potential to
build on the developments of the previous year with an improved
financial position and experienced management team. Despite an overall
decline in market demand for traditional General Display Terminals,
particularly for proprietary systems such as our VT(R) and Dorio(R)
product lines, the increasing acceptance of server-based computing in
a large number of markets including government, manufacturing,
healthcare, transportation and retail, both domestically and
internationally, provides many opportunities for growth. Boundless
expects to continue executing on its business plan and achieving many
new milestones. Foremost among these milestones are our commitment to
continuing profitability, the development of new marketing and sales
channels, growing thin-client market share, expanding the value of our
product offerings and, of course, revenue growth."
ABOUT BOUNDLESS
Boundless Corporation, through its wholly owned subsidiary,
Boundless Technologies, Inc., is the largest U.S. manufacturer and
marketer of Windows-based and text terminal solutions. With an
installed base of over five million terminals and thin-client devices,
the company's family of thin-clients provides server-based computing
solutions with PC-like capabilities, where applications reside on a
server and are accessed by users on demand. Boundless' solutions are
available through leading distributors, systems integrators and
certified resellers. In addition, products are marketed under original
equipment manufacturers' labels worldwide, including IBM, AT&T, NCR,
Lucent Technologies, Digital Equipment Corp. (now part of Compaq),
Tandem and Olivetti.
Boundless Technologies headquarters are located in Hauppauge, New
York, where it also has a manufacturing facility. In addition,
Boundless has business offices in Austin, Texas, European headquarters
in the Netherlands, and additional sales and distribution offices in
Europe, Asia, Australia and Latin America. For more information, visit
the Boundless web site at boundless.com, or call
1/800-231-5445.
All product names and brand names are trademarks or registered
trade names of their respective owners.
Except for the historical information herein, the matters
discussed in this news release include forward-looking statements that
may involve a number of risks and uncertainties. Actual results may
vary significantly based on a number of factors, including, but not
limited to, risks in product and technology development, market
acceptance of new products and continuing product demand, the impact
of competitive products and pricing, changing economic conditions an
other risk factors detailed in the Company's most recent annual report
and other filings with the Securities and Exchange Commission.
-0-
*T
Boundless Corporation and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended Year Ended
December 31, December 31,
1998 1997 1998 1997
---- ---- ---- ----
(unaudited)
Revenue $ 21,853 $ 26,898 $ 90,202 $ 98,271
Cost of revenue 15,019 19,209 64,203 73,505
-------- -------- --------- ---------
Gross margin 6,834 7,689 25,999 24,766
Operating expenses:
Sales and marketing 2,295 1,842 8,308 7,417
General and administrative 1,211 1,582 5,845 6,213
Research and development 1,069 908 3,666 2,912
Other nonrecurring charges
(credits) 95 (95) (16) (255)
--------- -------------------------------
Total operating expenses 4,670 4,237 17,803 16,287
------- ------- -------- --------
Operating income 2,164 3,452 8,196 8,479
Interest expense 494 825 2,539 3,730
--------- -------- --------- ---------
Income before income taxes 1,670 2,627 5,657 4,749
Income tax expense (benefit) (662) (573) 749 (134)
----------------------------- -----------
Income from continuing
operations 2,332 3,202 4,908 4,883
-------- ------- --------- ---------
Net income 2,332 3,202 4,908 4,883
Dividend on preferred stock
of subsidiary 124 123 497 497
--------- -------- ---------- ----------
Earnings available for
common shareholders $ 2,208 $ 3,079 $ 4,411 $ 4,386
======= ======= ======== ========
Weighted average common
shares outstanding 4,519 5,101 4,893 4,925
======== ======== ========= =========
Basic earnings per
common share $ 0.49 $ 0.60 $ 0.90 $ 0.89
-------- -------- ========= =========
Earnings available for common
shareholders adjusted for
income impact of assumed
conversions $ 2,208 $ 3,079 $ 4,411 $ 4,426
======= ======= ======== ========
Weighted average dilutive
shares outstanding 4,531 5,308 4,926 5,103
======== ======== ========= =========
Diluted earnings per
common share $ 0.49 $ 0.58 $ 0.90 $ 0.86
======== ======== ========= =========
Boundless Corporation and Subsidiaries
Consolidated Statements of Financial Condition
(In Thousands)
December 31, December 31,
1998 1997
ASSETS
Current Assets:
Cash and cash equivalents $ 732 $ 2,929
Trade accounts receivable, net 13,274 14,395
Income tax refund receivable 1,905 800
Inventories 12,565 13,682
Deferred income taxes, net 2,470 1,561
Prepaid expenses and other
current assets 462 711
----------- -----------
Total current assets 31,408 34,078
Property, Plant & Equipment, Net 10,251 10,614
Goodwill, net 7,350 8,428
Other assets 339 1,428
----------- ----------
Total assets $ 49,348 $ 54,548
======== ========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current Liabilities:
Notes payable $ 5,500 $ 7,650
Current portion of long-term debt 8,000 3,250
Accounts payable 6,817 8,840
Accrued expenses 7,074 5,378
Deferred revenue 116 180
---------- ----------
Total current liabilities 27,507 25,298
Long-Term Liabilities
Long-term debt, less current
maturities - 8,000
Deferred income taxes 1,002 1,561
Other 627 727
----------- -----------
Total long-term liabilities 1,629 10,288
---------- ---------
Total liabilities 29,136 35,586
--------- ---------
Commitments and contingencies
Mandatorily redeemable preferred stock
of subsidiary 3,555 3,555
Shareholders' Equity:
Preferred stock - -
Common stock 44 51
Additional paid-in capital 30,940 34,094
Accumulated deficit (14,327) (18,738)
---------- ----------
Total shareholders' equity 16,657 15,407
--------- ---------
Total Liabilities and
Shareholders' Equity $ 49,348 $ 54,548
======== ========
*T
--30--sw/ny*
CONTACT: Financial Communications Contact:
CPR FINANCIAL COMMUNICATIONS
Michael W. Glickman, 201/641-2408, ext. 51
E-MAIL: mglickman@cpronline.com
or
Company Contact:
Boundless Corporation
Jeffrey K. Moore, Vice President, Corporate Development
512/349-5872
E-MAIL: jeff.moore@boundless.com
KEYWORD: NEW YORK
INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS COMED
INTERACTIVE/MULTIMEDIA/INTERNET EARNINGS
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