Applied Voice Technology, Inc. Announces Record Financial Results for Its Quarter Ended June 30, 1998.KIRKLAND, Wash.--(BUSINESS WIRE)--July 23, 1998-- Changes Name to "AVT AVT avian arginine vasotocin. See vasotocin. Corporation" Reflecting Diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. in Its Business Applied Voice Technology, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :AVTC AVTC Antivirus Test Center (informatics, University of Hamburg) AVTC Automatic Vehicular Traffic Control ) today reported its financial results for the quarter ended June 30, 1998 and formally announced the change of its corporate name from Applied Voice Technology, Inc. to AVT Corporation. Sales and earnings were at record levels for the quarter, with sales of $19,439,000 and earnings of $2,710,000, a 42% increase in sales and 53% increase in earnings over the comparable prior-year quarter. Earnings per share (diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. ) were $0.20 as compared to $0.14 in the prior-year quarter. For the six months ended June 30, 1998 sales were $36,605,000, a 42% increase over the comparable prior-year period. Excluding non-recurring charges described below, earnings increased 57% and were $4,812,000 or $0.37 earnings per share (diluted), as compared with $3,072,000 or $0.25 earnings per share (diluted) in the prior-year period. "We are extremely pleased with the significant growth in sales and earnings for the quarter," stated Richard J. LaPorte, Chairman and Chief Executive Officer. "Our continued emphasis on high margin products for larger enterprise accounts helped us achieve record sales for the quarter and for the first six months of the year, while producing operating profit margins Operating profit margin The ratio of operating profit to net sales. of 20.1% and 19.0% respectively. With the exception of our basic voice messaging Using voice mail as an alternative to electronic mail, in which voice messages are intentionally recorded, not because the recipient was not available. business, which continues to decline, all of our business lines did well in the quarter. In particular, our fax server business was robust, representing 57% of total company sales, up from 39% in the second quarter of 1997." Commenting on the recent change in the company's name, LaPorte added: "Applied Voice Technology is a different company than it was when our founders originally established our name in the early 1980's. Through our R&D efforts and our strategic diversification initiatives the company has evolved to represent much more than just "voice" to the computer telephony See CTI, VoIP and IP telephony. Computer Telephony - Computer Telephone Integration marketplace. We believe the time is at hand to broaden our image beyond voice, recognizing that in addition to voice processing The computerized handling of voice, which includes voice store and forward, voice response, voice recognition and text to speech technologies. , we deliver robust solutions for network, enterprise and production faxing, call center management and unified messaging Having access to e-mail, voice mail and faxes via a common computer application or by telephone. For example, unified messaging may send faxes and digitized voice mail to a mail server that turns them into e-mail attachments. with products integrated with email systems from Microsoft, Lotus and Novell. By abbreviating our name to AVT Corporation we can take advantage of the excellent brand equity the "AVT" name has established in the marketplace, while we continue to diversify diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. and expand into new areas of opportunity." Non-recurring charges. The company filed for a follow-on offering Follow-On Offering An offering of additional shares after a company has had an initial public offering. Notes: This sometimes means the company is strapped for cash. So they need to issue more shares to pay bills or finance a new project. of its common stock in October 1997. In February 1998, this offering was withdrawn resulting in the $287,000 write-off of costs associated with the offering. In January 1997, the Company acquired selected assets of Telcom Technologies which resulted in the $3,898,000 write-off of acquired in-process research and development. Including these non-recurring charges, the company reported earnings of $4,628,000 for the six months ended June 30, 1998 and $577,000 for the comparable prior-year period. Earnings per share (diluted) including these non-recurring charges were $0.35 in the six months ended June 30, 1998 quarter and $0.05 per share in the comparable prior-year period. AVT Corporation develops, manufactures, markets and supports a broad line of open systems-based advanced computer telephony products, specializing in unified messaging, high-performance fax processing, call center productivity and customer service applications. AVT is headquartered in Kirkland, Washington Kirkland is a city in King County, Washington, United States. It is a suburb of Seattle located on the Eastside (of Lake Washington). As of April 1, 2005, the city had an estimated population of 45,740, making Kirkland the eighth largest city in King County and the eighteenth , USA, and does business through its Computer Telephony Products Group, based in Kirkland, Washington and through its wholly owned subsidiaries Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , RightFAX, Inc. based in Tucson, Arizona Tucson (pronounced /ˈtusɑn/, Spanish: Tucsón [tuk'son] and CommercePath, Inc. based in Portland, Oregon. In addition, AVT has sales and support offices in the United Kingdom, Germany, Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. and Dubai. Founded in 1982, AVT is publicly traded under the symbol "AVTC" on the Nasdaq National Market. AVT maintains a site on the World Wide Web at www.AVTC.com. RightFAX is a registered trademark of AVT Corporation. Windows NT (Windows New Technology) A 32-bit operating system from Microsoft for Intel x86 CPUs. NT is the core technology in Windows 2000 and Windows XP (see Windows). Available in separate client and server versions, it includes built-in networking and preemptive multitasking. is a registered trademark of Microsoft Corporation (company) Microsoft Corporation - The biggest supplier of operating systems and other software for IBM PC compatibles. Software products include MS-DOS, Microsoft Windows, Windows NT, Microsoft Access, LAN Manager, MS Client, SQL Server, Open Data Base Connectivity (ODBC), MS Mail, . Other products mentioned are trademarks of their respective owners. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These forward-looking statements involve risks and uncertainties, including technical and competitive factors, which could cause the Company's results and the timing of certain events to differ materially from those discussed in the forward-looking statements. Such risks are detailed in AVT's latest Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and Quarter Reports on Form 10-Q Form 10-Q See 10-Q. filed with the Securities and Exchange Commission. NOTE TO EDITORS: News releases are available from AVT's Newsroom fax server. Call 425/820-4089 and follow the prompts. This is document number 77096. News releases can also be found on AVT's World Wide Web site at www.AVTC.com. -0-
Applied Voice Technology, Inc.
Consolidated Statements of Income (Unaudited)
(in thousands, except per share amounts)
Quarter ended Six Months ended
June 30 June 30
1998 1997 1998 1997
Net sales $ 19,439 $ 13,660 $ 36,605 $ 25,722
Cost of sales 6,969 4,958 13,313 9,548
Gross profit 12,470 8,702 23,292 16,174
Operating expenses:
Research and development 2,001 1,571 3,928 3,069
Sales, general
and administrative 6,555 4,640 12,401 8,823
Non-recurring charges (1) - - 287 3,898
Total operating expenses 8,556 6,211 16,616 15,790
Operating income 3,914 2,491 6,676 384
Other income, net 320 278 555 518
Income before
income tax expense 4,234 2,769 7,231 902
Income tax (benefit) expense 1,524 997 2,603 325
Net income $ 2,710 $ 1,772 $ 4,628 $ 577
Basic net income
per share $ 0.23 $ 0.16 $ 0.39 $ 0.05
Diluted net income
per share $ 0.20 $ 0.14 $ 0.35 $ 0.05
Weighted average
common shares outstanding 11,946 11,302 11,813 11,254
Diluted weighted average
common shares outstanding 13,401 12,255 13,172 12,227
Net income excluding
non-recurring items (1) $ 2,710 $ 1,772 $ 4,812 $ 3,072
Diluted net income
per common share
excluding non-recurring
items (1) $ 0.20 $ 0.14 $ 0.37 $ 0.25
Diluted weighted average
common shares outstanding (1) 13,401 12,255 13,172 12,227
(1) Non-recurring charges consist of write-off of costs related
to the withdrawal of the follow-on stock offering in February 1998
(originally filed in October 1997) and write-off of acquired
in-process research and development associated with the acquisition of
Telcom Technologies in January 1997.
Applied Voice Technology, Inc.
Consolidated Balance Sheets (Unaudited)
(in thousands)
June 30, Dec. 31,
1998 1997
ASSETS:
Current assets:
Cash, cash equivalents, and short-term
investments $ 28,706 $ 22,233
Accounts receivable, net 10,257 10,098
Inventories 5,134 4,908
Deferred income taxes 1,725 1,119
Prepaid expenses and other assets 1,255 968
Total current assets 47,077 39,326
Equipment and leasehold improvements, net 2,661 2,364
Intangibles, net 8,026 8,815
Deferred income taxes 3,739 3,905
Total assets $ 61,503 $ 54,410
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
Accounts payable $ 3,669 $ 2,352
Other current liabilities 7,063 6,427
Income taxes payable 1,040 2,621
Total current liabilities 11,772 11,400
Commitments
Shareholders' equity:
Preferred stock, par value $.01 per share,
2,000,000 Authorized, none outstanding - -
Common stock, par value $.01 per share,
60,000,000 Authorized, 11,963,273
and 11,522,558 outstanding, respectively 120 115
Additional paid-in capital 33,686 31,604
Retained earnings 15,925 11,291
Total shareholders' equity 49,731 43,010
Total liabilities and shareholders' equity $ 61,503 $ 54,410
CONTACT: AVT Corp.
Michele Reid, 425/820-6000, ext. 3479
mreid@avtc.com
or
Michelle Taylor, 425/820-6000, ext. 3399
mtaylor@avtc.com
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