Here is today's report, for reference (narrative only):
Monday March 3 7:40 AM EDT 1997
Boca Research announces fourth quarter and full-year 1996 results
BOCA RATON, Fla.--(BUSINESS WIRE)--March 3, 1997-- Boca Research Inc Monday
reported financial results for the fourth quarter and year ended Dec. 31, 1996.
For the fourth quarter, sales were $29.0 million, a 36.0% decrease from sales
for the prior year period. Net income for the fourth quarter was $65,000 or
$0.01 per share, compared to $2.9 million, or $0.32 per share, in the fourth
quarter of 1995.
For the year ended Dec. 31, 1996, sales were $153.5 million, which represents a
7.3% increase over the previous year. Net income for the year was $6.5 million,
or $0.72 per share, compared to $9.5 million, or $1.06 per share, for the year
ended Dec. 31, 1995.
Tony Zalenski, Boca Research's President and Chief Executive Officer,
commented: "While 1996 was one of the best years in the history of the company,
we are clearly disappointed by our performance in the second half of the year.
Weakened industry conditions, largely due to the anticipation of shipments of
56K analog modem technology, have caused consumers to delay their purchasing
decisions, resulting in excess channel inventories. These industry-wide excess
inventory levels within the product distribution channels impacted Boca's sales
in both the third and fourth quarters, as well as the flow of new business for
the first quarter of 1997. Thus, the revenue in the first quarter of 1997 will
be lower than the revenue of the fourth quarter of 1996, and a net loss is
expected for the first quarter of 1997.
"The second half of 1996 was a challenging period for both Boca Research and
the industry because of the 56K upgrade cycle. I am pleased to report that we
shipped our first Boca 56K Internet Modems to a selected account on Feb. 27,
1997, and plan full production shipment of the 56K modem to commence in March
of 1997. Boca's 56K modem features Rockwell Semiconductor Systems' chipset,
K56PlusTM. We began testing both the end-user and ISP (Internet Service
Provider) sides of Rockwell's technology on Jan. 21, 1997. Boca's introduction
of one of the first 56K products to the market, coupled with Boca's
participation in the Open 56K Forum, an industry-wide coalition dedicated to
achieving widespread implementation of 56K analog modem technology, positions
Boca Research to be among the industry leaders in this technology."
Boca Research experienced transitional issues during the fourth quarter
associated with the ramp-up of new products as the company looks to further
diversify its product portfolio. In addition, the company incurred expenses due
to its new emphasis on the retail channel and the due diligence costs
associated with the acquisition of Creatix, a German-based manufacturer of
modems, ISDN equipment and other communications products which Boca Research is
in the process of acquiring. Fourth quarter profitability was also impacted by
an increase in reserves resulting from a February 1997 agreement with a large
OEM customer to settle an outstanding accounts receivable balance which
resulted in an after-tax charge of $240,000. At year-end 1996, there was a
significant increase in trade receivables relative to fourth quarter sales
which resulted from Boca extending payment terms to customers. It is projected
that the days sales outstanding (DSO) in trade receivables will decrease by the
end of first quarter 1997. However, despite this increase in receivables, we
continue to be debt-free and ended 1996 with $7.8 million in cash.
Mr. Zalenski further noted: "We have continued to implement our long-term
business growth plans with the confidence that once the 56K technology
transition is complete, we will emerge a stronger company. We are diversifying
and expanding our product portfolio with valued-added products, enhancing our
market penetration within all of the distribution channels and geographical
regions of the world, and with the acquisition of Creatix, have strengthened
Boca's R & D efforts to enable the company to both move into higher gross
margin businesses and be less dependent on outside technology partners. We are
focused on evolving Boca Research into a full complement data communications
company from our current position as a hardware provider."
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 Dec. 31, 1995 and its quarterly report on Form 10-Q for the quarter ended
Sept. 30, 1996. 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 and computer networks.
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, Fla. with international operations and
ventures worldwide. |
