Still tracking INTL? It's popping on EPS . . .
>>TEMPE, Ariz., Oct. 21 /PRNewswire-FirstCall/ -- Inter-Tel, Incorporated (Nasdaq: INTL - News) today announced operating results for the third quarter and nine months ended September 30, 2002. Net sales for the third quarter of 2002 were $96.7 million, compared to net sales of $93.5 million for the third quarter of 2001, which included the operations of Inter-Tel.NET through July 23, 2001. Excluding $1.6 million in sales from Inter-Tel.NET in 2001, net sales in the quarter ended September 30, 2002 increased 5.2%, compared to net sales of $91.8 million in the quarter ended September 30, 2001. Net sales for the nine months ended September 30, 2002 were $282.7 million, compared to net sales of $291.0 million for the same period in 2001 including the operations of Inter-Tel.NET. Excluding $14.0 million in sales from Inter-Tel.NET in the nine months ended September 30, 2001, net sales in 2002 increased 2.0% compared to net sales of $277.0 million in 2001.
For the quarter ended September 30, 2002, the Company reported net income of $7.5 million ($0.29 per diluted share), an increase of 72.3% compared to net income of $4.4 million ($0.18 per diluted share) for the same period in 2001, including the operations of Inter-Tel.NET(1). Excluding the 2001 operations of Inter-Tel.NET, net income for the quarter ended September 30, 2002 increased 52.2% compared to net income of $4.96 million ($0.20 per diluted share) for the quarter ended September 30, 2001.
Net income for the nine months ended September 30, 2002 was $30.0 million ($1.17 per diluted common share), including an arbitration settlement(2), compared to net income of $6.5 million ($0.26 per diluted common share) for the same period in 2001, including the operations of Inter-Tel.NET and a nonrecurring charge relating to the Company's sale of 83% of its Inter-Tel.NET operations for the second quarter of 2001(3). Excluding the arbitration settlement in 2002, net income for the nine months ended September 30, 2002 was $20.5 million ($0.80 per diluted share), an increase of 37.6% compared to net income of $14.9 million ($0.59 per diluted share) in 2001, excluding the operations of Inter-Tel.NET and the nonrecurring charge in 2001.
"We are pleased with Inter-Tel's performance and continued balance sheet improvements during the third quarter and first nine months of 2002, especially during this period of continued difficult economic conditions," noted Steven G. Mihaylo, Inter-Tel's Chairman and CEO. "Inter-Tel 's third quarter gross margin increased to 50.7% compared to 47.6% in the third quarter of 2001, excluding results from Inter-Tel.NET in 2001. This increase reflected the strength of recurring revenues from our existing customer base, cost reductions we achieved through process improvements and sales of software applications and solutions."
Mr. Mihaylo added, "Inter-Tel's cash balances at September 30, 2002 exceeded $108 million. This reflected continued cash generated from operations and balance sheet improvements. Since December 31, 2001, inventory and accounts receivable decreased in total by approximately $6.7 million. For the quarter ended September 30, 2002, days sales outstanding were approximately 41 days and inventory turns were approximately 9.7 times, reflecting our continued efforts to improve our business processes."
You may access our quarterly earnings results conference call, which is scheduled for October 21, 2002 at 4:30 p.m. (EDT) via the Internet at inter-tel.com. Select "News & Events" from the top navigation bar. A link to the webcast will be displayed within the "News & Events" section. A replay of the conference call will be available on the Internet until October 23, 2002 at 11:59 p.m. (EDT).
About Inter-Tel, Incorporated
Inter-Tel (Nasdaq: INTL - News) is a leading provider of business enterprise telephone systems in the United States and related software applications, including call processing, voice processing, unified messaging, Internet Protocol (IP) telephony, networking, efficiency and productivity-enhancing CRM and IVR, voice recognition and related Computer Telephone (CT) integration software and applications. Inter-Tel is also in the managed services and voice and data convergence market, with a line of voice and data routers, IP phones and e-commerce Web software, which allow Inter-Tel to handle networked applications as large as 40,000 ports. More information about Inter-Tel is available at inter-tel.com.
(1) Included in 2001 third quarter results are net after
tax losses of approximately $578,000 (net loss of $0.02 per diluted
share) relating to Inter-Tel.NET operations before the sale of
Inter-Tel.NET in July 2001. Excluding these losses (the 2001 charge,
write-down and operational losses related to Inter-Tel.NET),
Inter-Tel's net income for the third quarter of 2001 would have been
$4.96 million ($0.20 per diluted share).
(2) Inter-Tel received a gross cash award of $20 million in February 2002
in settlement of a binding arbitration claim. Income taxes,
attorney's fees, expert witness costs, arbitration costs and
additional costs and expenses, were estimated at $10.5 million during
2002. Accordingly, after-tax net income from this arbitration totaled
approximately $9.5 million ($0.37 per diluted share) in the first nine
months of 2002.
(3) The 2001 nonrecurring pre-tax charge totaled $5.4 million
($3.4 million after-tax), associated with the sale of 83% of its
interest in Inter-Tel.NET and the write-down of the Company's
investment in Inter-Tel.NET to anticipated net realizable value as of
June 30, 2001. Included in results for the nine months ended
September 30, 2001 are net after tax losses of approximately $8.4
million (net loss of $0.34 per diluted share) relating to Inter-
Tel.NET operations. Excluding these losses, Inter-Tel's net income
for the nine months ended September 30, 2001 would have been $14.9
million ($0.59 per diluted share).
INTER-TEL, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands, except Three Months Q3 2002 Q3 2001
per share amounts) Ended September 30, Excluding Excluding
2002 2001 Litigation .NET
NET SALES $96,665 $93,487 $96,665 $91,848
Cost of sales 47,615 50,211 47,615 48,090
GROSS PROFIT 49,050 43,276 49,050 43,758
Research &
development 4,871 4,445 4,871 4,445
Selling, general and
administrative 32,194 31,626 32,194 31,185
Amortization of
goowill -- 431 -- 431
Amortization of
purchased intangible
assets 269 212 269 212
37,334 36,714 37,334 36,273
OPERATING INCOME 11,716 6,562 11,716 7,485
Interest and other
income 411 294 411 294
Gain/(loss) on
foreign translation
adjustments 73 140 73 140
Interest expense (34) (51) (34) (57)
INCOME BEFORE INCOME
TAXES 12,166 6,945 12,166 7,862
INCOME TAXES 4,623 2,568 4,623 2,907
NET INCOME $7,543 $4,377 $7,543 $4,955
NET INCOME PER SHARE--
BASIC $0.31 $0.18 $0.31 $0.21
NET INCOME PER SHARE--
DILUTED $0.29 $0.18 $0.29 $0.20
Average number of common
shares outstanding --
Basic 24,544 23,949 24,544 23,949
Average number of common
shares outstanding --
Diluted 26,033 24,804 26,033 24,804
INTER-TEL, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands, except per Nine Months 2002 2001
share amounts) Ended September 30, Excluding Excluding
2002 2001 Litigation .NET
NET SALES $282,682 $291,025 $282,682 $277,039
Cost of sales 140,104 163,181 140,104 143,603
GROSS PROFIT 142,578 127,844 142,578 133,436
Research & development 13,726 12,996 13,726 12,996
Selling, general and
administrative 95,717 97,082 95,717 95,033
Amortization of goowill -- 1,243 -- 1,123
Amortization of purchased
intangible assets 795 636 795 636
Nonrecurring charge -- 5,357 -- --
110,238 117,314 110,238 109,788
OPERATING INCOME 32,340 10,530 32,340 23,648
Litigation settlement (net
of costs except for taxes) 15,516 -- -- --
Interest and other, net 1,364 508 1,364 509
Write-down of investment in
Inter-Tel.NET/Vianet (1,200) -- (1,200) --
Gain/(loss) on foreign
translation adjustments 273 (255) 273 (255)
Interest expense (114) (453) (114) (280)
INCOME BEFORE INCOME TAXES 48,179 10,330 32,663 23,622
INCOME TAXES 18,206 3,820 12,186 8,738
NET INCOME $29,973 $6,510 $20,477 $14,884
NET INCOME PER SHARE--BASIC $1.23 $0.26 $0.84 $0.60
NET INCOME PER SHARE--DILUTED $1.17 $0.26 $0.80 $0.59
Average number of common
shares outstanding -- Basic 24,331 24,612 24,331 24,612
Average number of common
shares outstanding --
Diluted 25,715 25,185 25,715 25,185
OTHER SELECTED FINANCIAL DATA
(in thousands, except DSO and September 30, December 31,
Inventory turn amounts) 2002 2001
Cash and equivalents $108,200 $61,795
Accounts receivable - net $43,959 $45,962
Inventories $16,140 $20,848
DSO (based on 90 days
sales) 40.9 43.7
DSO (based on trailing 12
mo. sales) 41.9 42.9
Inventory Turns 9.7 7.1<<
Cheers, Tuck |
