Boca Research Announces Profit for Fourth Quarter 1998.BOCA RATON Boca Raton (bō`kə rətōn`), city (1990 pop. 61,492), Palm Beach co., SE Fla., on the Atlantic; inc. 1925. Boca Raton is a popular resort and retirement community that experienced significant industrial development in the 1970s and 80s. , Fla.--(BUSINESS WIRE)--March 8, 1999--Boca Research, Inc. (Nasdaq:BOCI BOCI Bank of China International BOCI Buckner Orphan Care International ) today reported financial results for the fourth quarter and year ended December December: see month. 31, 1998. Sales for the fourth quarter of 1998 were $18.4 million, an 11.4% increase from sales of $16.5 million for the prior year period. For the fourth quarter, the Company reported a net income of $170,000 or $0.02 per share, compared to a net loss of $7,418,000 or ($0.85) per share in the fourth quarter of 1997. For the year ended December 31, 1998, sales were $70.0 million, compared to $70.2 million for the year ended December 31, 1997. The net loss for the year was $14.6 million, or ($1.67) per share, compared to a net loss of $14.9 million, or ($1.71) per share, for the prior year. Commenting on the results, Tony Zalenski, Boca BOCA Building Officials and Code Administrators International, Inc. BOCA Bird Observers Club of Australia BOCA Business Object Component Architecture BOCA Borland Object Component Architecture (Borland) Research's president and chief executive officer, stated, "Despite a net loss for the year, our fourth quarter was significant in that we have shown profitability after several quarters of losses. Unlike some modem manufacturers, Boca Research survived the turbulence turbulence, state of violent or agitated behavior in a fluid. Turbulent behavior is characteristic of systems of large numbers of particles, and its unpredictability and randomness has long thwarted attempts to fully understand it, even with such powerful tools as that affected the modem industry in 1997 and 1998. We are pleased that the measures taken in 1998 have begun to show results. There were significant decreases in expenses, which included reducing headcount, and we focused on doing fewer things better. We acquired Global Village's(tm) Macintosh(R) modem business, and the Mac(R) modem business continues to command greater margins than Windows(R)-based modems. Also, the Global Village TelePort Verb 1. teleport - transport by dematerializing at one point and assembling at another science fiction - literary fantasy involving the imagined impact of science on society transport - move something or somebody around; usually over long distances (tm) modems add volume to our factory and increase our presence in the retail market. As planned, we continued to reduce our inventory level and our number of SKUs, resulting in a net inventory decrease of approximately $5.6 million during 1998." Recent interpretive in·ter·pre·tive also in·ter·pre·ta·tive adj. Relating to or marked by interpretation; explanatory. in·ter  pre·tive·ly adv. guidance published by the Securities and
Exchange Commission regarding charges for in-process research and
development prompted the Company to re-evaluate its charge of $3,800,000
for in-process research and development in connection with the
acquisition of the modem business of Global Village Communication, Inc.
in the second quarter of 1998. Accordingly, the Company has reduced its
charge for in-process research and development by $1,000,000 and
increased goodwill by the same amount. While the change has no impact on
cash operating results as previously reported, the Company will adjust
its second quarter 1998 results by decreasing its charge for in-process
research and development by $1,000,000, increasing amortization expense
by approximately $8,000, and decreasing the net loss and net loss per
share by $992,000 and $0.11, respectively. This reallocation Noun 1. reallocation - a share that has been allocated againallocation, allotment - a share set aside for a specific purpose 2. reallocation of the purchase price resulted in an increase in amortization expense of $50,000 in both the third and fourth quarters of 1998. Outlook for Q1 and Beyond Commenting on first quarter 1999, Mr. Zalenski stated, "The introduction of Apple's(R) new line of Power Macintosh See Power Mac. (computer) Power Macintosh - Apple Computer's personal computer based on the PowerPC, introduced on 1994-03-14. Existing 680x0 code (both applications and device drivers) run on Power Macintosh systems without modification via a Motorola 68LC040 emulator. (R) G3 minitowers at MacWorld Expo in January 1999 is having a negative impact on sales of existing Global Village TelePort modems for older Macs in the first quarter. Also, first quarter revenues are traditionally weaker in the data communications data communications, application of telecommunications technology to the problem of transmitting data, especially to, from, or between computers. In popular usage, it is said that data communications make it possible for one computer to "talk" with another. channels. In light of these factors, we expect first quarter revenues to be significantly lower than fourth quarter revenues, consistent with the recent slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. being experienced by industry leaders such as 3Com, Hewlett-Packard, etc. We believe, however, that the cost-reduction measures and reduced inventory level discussed above should help lessen less·en v. less·ened, less·en·ing, less·ens v.tr. 1. To make less; reduce. 2. Archaic To make little of; belittle. v.intr. To become less; decrease. the financial impact of reduced first quarter revenues. Furthermore, Boca Research was first to announce and ship an internal modem A modem that plugs into an expansion slot within the computer. Unlike an external modem, an internal modem does not provide a series of display lights that inform the user of the changing modem states. The user must rely entirely on the communications program. Contrast with external modem. for the new Power Mac G3s. The business potential for this modem is expected to be significant since most of the new Power Mac G3s are shipping without modems. In comparison, the majority of prior G3s had shipped with modems. Given that the Global Village TelePort modems are the No. 1 selling modems for Mac computers, we believe that this is a major opportunity for Boca Research. However, the full impact of this opportunity will not be realized until the second quarter of 1999 and beyond since, despite being first to ship, we did not begin shipping until mid-February. The demand for modems will be met with the Global Village TelePort Internal 56K Fax/Modem, as well as the new Global Village TelePort USB USB in full Universal Serial Bus Type of serial bus that allows peripheral devices (disks, modems, printers, digitizers, data gloves, etc.) to be easily connected to a computer. 56K Fax/Modem that was announced last week." Strategic Focus for 1999 Regarding Boca Research's strategic focus for 1999, Mr. Zalenski stated, "While we made progress in 1998, we expect our position to strengthen further in 1999. We will continue to build relationships with industry leaders such as those previously announced with Network Computer, Inc. (NCI See Liberate. (tm)), an affiliate of Oracle(R) Corporation and Netscape(R) Communications Corporation, and Citrix(R) Systems, Inc. These relationships will position Boca Research to enter new markets including information appliance/entertainment and thin client/corporate enterprise. Although modems will continue to be an important element in our business, we believe that these new markets are key to enhancing our strategic direction and transition to a technology/marketing company. In 1999, we intend to intensify in·ten·si·fy v. in·ten·si·fied, in·ten·si·fy·ing, in·ten·si·fies v.tr. 1. To make intense or more intense: our focus on the thin client and information appliance See Internet appliance. (hardware) Information Appliance - (IA) A consumer device that performs only a few targeted tasks and is controlled by a simple touch-screen interface or push buttons on the device's enclosure. markets. In support of this effort, we recently shipped the first BocaVision(tm) thin client products. The BocaVision family of products builds on our manufacturing expertise and excellence in providing cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. , quality products with high margins. Several additional BocaVision products are currently planned for this year. But, the trend towards server-based computing Refers to applications that run in a server. Also known as "thin client computing," it may refer to a browser-based environment that uses a Web browser as the client with all applications running on a Web server on the Internet or in an intranet on the LAN. is still emerging and the market is in its infancy infancy, stage of human development lasting from birth to approximately two years of age. The hallmarks of infancy are physical growth, motor development, vocal development, and cognitive and social development. . Therefore, we don't expect any material revenue contribution from this business until the second half of the year. Longer-term, however, we believe that the business potential for the thin client market is tremendous. For example, Forrester Research Forrester Research is an independent technology and market research company that provides its clients with advice about technology's impact on business and consumers. Corporate facts
n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op for 1999 overall," Mr. Zalenski concluded. This 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. which reflect management's best judgement, based on factors currently known. However, these statements involve risks and uncertainties, including the rate of development of the thin client and information appliance markets generally, 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. Therefore, 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 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. for the year ended December 31, 1997 and its quarterly report on Form 10-Q Form 10-Q See 10-Q. for the quarter ended September 30, 1998. 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 thin client/server computing computing - computer devices, information appliances, data communications, and networking products to facilitate the transmission of information on personal computers, computer networks, and the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the . Boca Research also markets its products under the Global Village Communication brand name and sells its products worldwide through distributors, original equipment manufacturers (OEMs), value-added resellers A value-added reseller (VAR) is a company that adds some feature(s) to an existing product(s), then resells it (usually to end-users) as an integrated product or complete "turn-key" solution. (VARs), and retailers. Boca Research is a U.S. corporation headquartered in Boca Raton, Florida Boca Raton ("bōkə rə-tōn") is a city in Palm Beach County, Florida incorporated in May 1925. As of the 2000 census, the city had a total population of 74,764; the 2006 population recorded by the U.S. Census Bureau was 86,396. with international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. and ventures worldwide. Notes to Editors: For copies of recent press releases from Boca Research via fax, call 800/331-1323. For product or company information via the Internet, visit our Web sites at http://www.bocaresearch.com and http://www.globalvillage.com. Boca Research Inc. and Global Village are registered trademarks, and TelePort and BocaVision are trademarks of Boca Research, Inc. Apple, Macintosh, Mac, and Power Macintosh are registered trademarks of Apple Computer, Inc. NCI is a trademark of Network Computer, Inc. Citrix is a registered trademark of Citrix Systems Citrix Systems' (NASDAQ: CTXS) is an American technology company, based in Fort Lauderdale, Florida, with subsidiary operations in California and Massachusetts, with additional development centers in Australia, India and the UK. , Inc. All other products and brand names are trademarks of their respective owners. -0-
BOCA RESEARCH, INC.
Consolidated Balance Sheets
(In thousands)
Dec. 31, Dec. 31,
1998 1997
-------- --------
-------- --------
Assets
Current assets:
Cash and cash equivalents $ 6,959 $ 8,205
Trade receivables, net 11,549 11,723
Inventory, net 9,246 14,876
Prepaid expenses and other
current assets 637 470
Prepaid and deferred income
taxes 2,051 9,214
-------- --------
Total current assets 30,442 44,488
Property and equipment, net 3,874 5,540
Goodwill and other intangible
assets 4,804 --
Other assets 622 191
-------- --------
Total assets $ 39,742 $ 50,219
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 6,804 $ 6,546
Notes payable 2,800 --
Accrued expenses and other
current liabilities 4,037 3,092
-------- --------
Total current liabilities 13,641 9,638
-------- --------
Stockholders' Equity:
Common stock 87 87
Additional paid-in capital 26,045 25,915
Retained earnings (deficit) (31) 14,579
-------- --------
Total stockholders' equity 26,101 40,581
-------- --------
Total liabilities and
stockholders' equity $ 39,742 $ 50,219
======== ========
BOCA RESEARCH, INC.
Consolidated Statements of Income
(In thousands, except per share data)
Three Months Year
Ended December 31, Ended December 31,
1998 1997 1998 1997
-------- -------- -------- --------
-------- -------- -------- --------
Net sales $ 18,428 $ 16,547 $ 70,042 $ 70,207
Cost of
goods sold 12,938 19,844 64,165 71,164
-------- -------- -------- --------
Gross profit
(loss) 5,490 (3,297) 5,877 (957)
-------- -------- -------- --------
Operating expenses:
Research and
development 888 704 2,992 2,808
Selling, general
and administrative 4,585 5,981 15,389 18,366
In-process research
and development -- -- 2,800 --
-------- -------- -------- --------
Total operating
expenses 5,473 6,685 21,181 21,174
-------- -------- -------- --------
Income (loss)
from operations 17 (9,982) (15,304) (22,131)
Non-operating
income, net 153 234 694 837
-------- -------- -------- --------
Income (loss) before
income tax benefit 170 (9,748) (14,610) (21,294)
Income tax benefit -- (2,330) -- (6,371)
-------- -------- -------- --------
Net income
(loss) $ 170 ($ 7,418) ($14,610) ($14,923)
======== ======== ======== ========
Basic earnings
(loss) per share $ 0.02 ($ 0.85) ($ 1.67) ($ 1.71)
======== ======== ======== ========
Weighted average basic
shares outstanding 8,756 8,725 8,749 8,718
======== ======== ======== ========
Diluted earnings
(loss) per share $ 0.02 ($ 0.85) ($ 1.67) ($ 1.71)
======== ======== ======== ========
Weighted average
diluted shares
outstanding 8,824 8,725 8,766 8,718
======== ======== ======== ========
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