Davox Announces Second Quarter Financial Results
WESTFORD, Mass.--(BUSINESS WIRE)--July 21, 1998--Davox Corporation (NASDAQ:DAVX - news) today reported
financial results for the second quarter ended June 30, 1998.
The Company reported total revenue of $24.2 million for the quarter ended June 30, 1998, a 21 percent increase over the
$20.0 million reported for the comparable period last year. Operating profit of $2.8 million for the second quarter of 1998,
including one-time charges in the quarter of $1.9 million, associated with the acquisition of AnswerSoft, Inc., was down 23
percent compared to the operating profit of $3.7 million for the second quarter of last year. Net income for the second quarter
of 1998 was $2.3 million, including the $1.9 million of one-time charges or $.16 per diluted share, compared to net income of
$3.6 million or $.26 per diluted share for the same period in 1997.
Pro forma operating profit of $4.7 million for the second quarter of 1998, excluding one-time charges, was up 29 percent
compared to the operating profit of $3.7 million for the second quarter of last year. Pro forma net income for the second
quarter of 1998 was $3.6 million, excluding one-time charges, or $.24 per diluted share, compared to net income of $3.6
million or $.26 per diluted share for the same period in 1997.
Net income and earnings per share did not increase proportionately with operating income primarily because the Company's
effective income tax rate increased to 34 percent in 1998, as compared to 12 percent (Davox's 1997 stand-alone effective tax
rate) in 1997, primarily due to the Company's full utilization of net operating loss carry forwards in 1997. Pro forma earnings
per share for the second quarter of 1998 on an estimated fully taxed basis of 38 percent, excluding one-time charges, was
$.23, compared to estimated fully taxed earnings per share of $.18 for the same period in 1997.
Total revenue for the first six months of 1998 was $48.6 million with net income of $5.6 million including one-time charges or
$.37 per diluted share, compared to revenue of $39.0 million with net income of $7.1 million or $.51 per diluted share for the
same period in 1997. Excluding one-time charges, pro forma net income for the first six months of 1998 was $6.9 million or
$.46 per diluted share, compared to net income of $7.1 million or $.51 per diluted share for the same period in 1997. Pro
forma earnings per share for the first six months of 1998 on an estimated fully taxed basis of 38 percent, excluding one-time
charges, was $.43, compared to estimated fully taxed earnings per share of $.36 for the same period in 1997.
''We are pleased with our EPS performance for the quarter,'' said Alphonse M. Lucchese, Chairman and Chief Executive
Officer. ''The Company's revenue performance in the quarter was influenced by several factors: lower than expected sales
through our wholly owned subsidiary, AnswerSoft, Inc.; weaker than expected performance from our international business
segment; and a slowdown in the buying pattern of the telemarketing service industry.''
Mr. Lucchese continued: ''We believe that the Company is well positioned for long term success. Our acquisition of
AnswerSoft gives us a critical entry point into the more expansive worldwide inbound market. We believe that the combination
of both companies' products will provide the single vendor, inbound, outbound, and blended solution demanded by today's call
centers.''
Commenting on the Company's international sales and marketing activities, Mr. Lucchese added: ''In Europe we further
strengthened our United Kingdom-based sales and support presence by the execution of our recent distribution agreement
with Lucent Technologies UK Limited under which Lucent will offer our Unison and LYRICall solutions to its customers in the
United Kingdom and Ireland.''
Mr. Lucchese noted that of the 49 call center management systems shipped during the second quarter, 43 represented
domestic accounts and 6 represented international accounts. In addition, of the 49 systems shipped, 27 represented new
accounts. Fourteen of the systems shipped during the second quarter were generated under Davox's North American
distribution agreement with Lucent Technologies Inc. (NYSE:LU - news). During the quarter, Lucent and Davox expanded
this distribution agreement by adding Davox's LYRICall browser-based application and scripting design software to the suite
of call center solutions Lucent will offer its customers in North America.
Mr. Lucchese added that as a result of the new business, the total number of systems shipped was 575 worldwide as of the
end of the second quarter.
The new accounts for the second quarter include: American Family Mutual Insurance Company, Amresco Residential
Mortgage Corporation, Line One Teleservices, Transcom AB, a customer of Datapoint in Sweden, and Wehkamp B.V., a
customer of Davox's Netherlands distributor PTT.
About Davox
Davox Corporation is a leading supplier of inbound, outbound, and call-blending solutions for businesses involved in
collections, telemarketing, customer service, fund raising and other mission critical customer contact activities. Its Unison family
of call center management solutions combines open system, client/server, and relational database technology with sophisticated
applications and superior customer support.
In May 1998, Davox acquired AnswerSoft, Inc., a Richardson, Texas based developer of inbound call center software
solutions. The merger resulted in AnswerSoft becoming a wholly owned subsidiary of Davox. The acquisition of AnswerSoft is
key to Davox's strategy of providing software solutions to the growing inbound call center market. For further information,
please visit the Davox web site at www.davox.com and the AnswerSoft web site at www.answersoft.com.
Note: Davox and Unison are registered trademarks and LYRICall is a trademark of Davox Corporation. AnswerSoft is a
registered trademark of AnswerSoft, Inc. Lucent is a registered trademark of Lucent Technologies, Inc. All other marks are
the property of their respective owners.
In addition to historical information contained herein, this release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, and are subject to the safe harbors created thereby. Davox's and its subsidiaries' (''the Company'') future actual
results could differ materially from the forward-looking statements discussed or implied herein because of risks or uncertainties
including, but not limited to, the difficulty of integrating the two companies, the potential failure to achieve the beneficial
synergies expected to result from the merger of Davox and AnswerSoft, risks associated with competition and competitive
pricing pressures, technological change, new product introduction and market acceptance, weakness in international markets,
the ability of the Company to attract and retain key personnel, general economic conditions in the United States and worldwide
markets served by the Company, and those other factors discussed from time to time in the Company's public reports filed
with the Securities and Exchange Commission, such as those discussed under ''Certain Factors That May Affect Future
Results'' in the Company's quarterly reports on Form 10-Q and annual report on Form 10-K, and the section entitled ''Risk
Factors'' in the Company's recently filed Form S-4. |
