Inter-Tel Announces First Quarter 2003 Results
TEMPE, Ariz., April 21 /PRNewswire-FirstCall/ -- Inter-Tel, Incorporated (Nasdaq:INTL) today announced operating results for the first quarter ended March 31, 2003. Net sales for the first quarter of 2003 were $84.2 million, compared to net sales of $90.1 million for the first quarter of 2002.
Net income for the first quarter ended March 31, 2003 was $4.7 million ($0.18 per diluted common share), compared to net income of $15.4 million ($0.60 per diluted common share), for the first quarter of 2002, including an arbitration settlement(1). Excluding the arbitration settlement in 2002, Non-GAAP net income in 2002 was $6.0 million ($0.24 per diluted share).
"We have continued to effectively manage our balance sheet and generate cash from operations, especially during this period of prolonged difficult economic conditions," noted Steven G. Mihaylo, Inter-Tel's Chairman and CEO. "Inter-Tel's cash and short-term investment balances at March 31, 2003 were $131.6 million. For the quarter ended March 31, 2003, Inter-Tel's days sales outstanding were approximately 40 days (based on 90 days sales) and inventory turns were approximately 10 times. In addition, Inter-Tel's 2003 gross margin increased to 52.4% compared to 50.0% in the first quarter of 2002. This increase reflected the strength of recurring revenues from our customer base, cost reductions achieved through process improvements and higher software sales as a percentage of total sales. The first quarter is historically our weakest quarter of any fiscal year and we currently expect our second quarter 2003 operating results to be an improvement over the first quarter of 2003."
You may access our quarterly earnings results webcast, which is scheduled for April 21st at 6:00 p.m. (ET) 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 webcast will be available on the Internet until April 21, 2004 at 11:59 p.m. (ET).
About Inter-Tel, Incorporated
Inter-Tel (Nasdaq:INTL) is a leading provider in the United States of Managed Communications Services and business telephone systems and related call processing software, voice processing and unified messaging software, Internet Protocol (IP) telephony software, productivity enhancing software, computer telephone (CT) applications and call accounting software. Inter-Tel is also in the voice and data convergence market, with a line of voice and data routers, IP phones, e-commerce Web software, client software and related networking software, which allow Inter-Tel to handle networked applications as large as 40,000 ports. More information is available at inter-tel.com .
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding the operating results Inter-Tel expects for the second quarter of 2003. Such statements are based on current assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially from our current expectations. These risks and uncertainties include, but are not necessarily limited to the risk that Inter-Tel's actual results may be different from the projected results depending on a number of factors, including macroeconomic, industry, competitive and technological changes; risks relating to the war in Iraq and terrorist hostilities; retention of employees, existing dealers and customers; the composition, timing and size of orders from and shipments to customers; price and product competition; dependence on new product development; availability of inventory from suppliers; market acceptance of new and existing products; protection of our proprietary technology; and product defects. For a further list and description of such risks and uncertainties, please see the Company's previously filed SEC reports, including the Company's Form 10-K, dated March 21, 2003. Inter-Tel disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
(1) 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, including $1.3 million in bonus
payments to employees who assisted in the litigation and arbitration,
totaled approximately $10.6 million in 2002. Accordingly, net income
from this arbitration totaled approximately $9.4 million ($0.37 per
diluted share).
INTER-TEL, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands, Pro Forma
except per share Three Months 2002
amounts) Ended March 31, Excluding 2002
2003 2002 Litigation Litigation
NET SALES $84,169 $90,069 $90,069 $--
Cost of sales 40,095 45,016 45,016 --
GROSS PROFIT 44,074 45,053 45,053 --
Research &
development 5,234 4,317 4,317 --
Selling,
general and
administrative 31,246 30,657 30,657 --
Amortization of
purchased intangible
assets 428 257 257 --
36,908 35,231 35,231 --
OPERATING INCOME 7,166 9,822 9,822 --
Litigation settlement
(net of costs
except for taxes) -- 15,302 -- 15,302
Write-down of
investment in
Inter-Tel.NET/Vianet -- (600) (600) --
Interest and
other income 443 440 440 --
Foreign currency
transaction
losses (40) (84) (84) --
Interest expense (32) (34) (34) --
INCOME BEFORE
INCOME TAXES 7,537 24,846 9,544 15,302
INCOME TAXES 2,865 9,451 3,512 5,937
NET INCOME $4,672 $15,395 $6,032 $9,365
NET INCOME PER
SHARE -- BASIC $0.19 $0.64 $0.25 $0.39
NET INCOME PER
SHARE -- DILUTED $0.18 $0.60 $0.24 $0.37
Average number of
common shares
outstanding
-- Basic 24,920 24,179 24,179 24,179
Average number
of common shares
outstanding
-- Diluted 26,039 25,550 25,550 25,550
OTHER SELECTED
FINANCIAL DATA
(in thousands, except
DSO and Inventory March 31, December 31,
turn amounts) 2003 2002
Cash and
short-term
investments $131,598 $125,839
Accounts receivable
- net 37,681 42,566
Inventories 11,405 11,329
DSO (based on 90
days sales) 40.3 38.8
DSO (based on
trailing 12
mo. sales) 36.1 40.2
Inventory Turns 10.2 10.6
SOURCE Inter-Tel, Incorporated
CO: Inter-Tel, Incorporated
ST: Arizona
SU: ERN CCA
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04/21/2003 17:30 EDT |
