Boca Research Announces Second Quarter Results.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)--July 20, 1999-- 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, Inc.(R) (Nasdaq:BOCI BOCI Bank of China International BOCI Buckner Orphan Care International ) announced Tuesday Tuesday: see week. its results for the second quarter ended June 30, 1999. The Company reported net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of $8.7 million and a net loss of $4.8 million, or $0.51 per share, compared to net sales of $13.2 million and a net loss of $9.3 million, or $1.06 per share in the second quarter of 1998. As previously disclosed, revenue in the second quarter was negatively impacted by a recent Apple(R) promotion that offered purchasers of a 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 computer the option of receiving either a 56K 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. or an internal Zip(R) drive at no additional cost. Mac(R)-based modems have been a significant source of revenue for the Company since its mid- mid- pref. Middle: midbrain. 1998 acquisition of the modem business of Global Village Communication, Inc. The Apple promotion has resulted in pricing and inventory issues in the Global Village(R) modem business, which is expected to continue to impact the third quarter as well. Anthony F. Zalenski, Boca Research's president and chief executive officer, commented, "Given the status of the modem industry, we made strides to reposition the Company and 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. our business into products with significant growth potential, such as information appliances 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. and thin clients." Second Quarter Accomplishments Zalenski continued, "In May, we announced the licensing of our BocaVision(TM) ST2001 set-top box The cable TV box that sits on "top" of the TV "set," although it is often located several feet away in an equipment rack. The set-top box descrambles the premium channels and provides a tuner for the higher cable numbers that very old TVs did not support. reference design to Philips Business Electronics B.V. to be used as part of a Philips co-branded, single-purpose AOL TV AOL TV was the name of both a thin client which uses a television for display (rather than a monitor), and the online service that supports it, both of which were launched in June 2000 to compete with WebTV. The product and service were developed by America Online. (SM). Although timing is ultimately driven by the product's introduction by America Online See AOL. Inc., we expect to see initial royalty revenues by the end of 1999. We also entered into a strategic alliance with Philips to jointly develop DSL DSL in full Digital Subscriber Line Broadband digital communications connection that operates over standard copper telephone wires. It requires a DSL modem, which splits transmissions into two frequency bands: the lower frequencies for voice (ordinary (Digital Subscriber Line See DSL. (communications, protocol) Digital Subscriber Line - (DSL, or Digital Subscriber Loop, xDSL - see below) A family of digital telecommunications protocols designed to allow high speed data communication over the existing copper telephone lines between end-users and ) modem technology, which we intend to extend to our entire line-up of communications products in the future." Zalenski added, "During the quarter, we entered into a common stock purchase agreement with Infomatec Integrated Information Systems AG, an 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 software company focused on IT, retail and the Internet. Infomatec purchased 1,747,965 common shares of Boca Research, currently a 16.5% stake and, in return, we received approximately $8.0 million in cash. In addition to providing Boca Research with additional capital, Infomatec strengthens our position in the Internet and information appliance marketplaces and provides access to global sales channels. With the addition of several of Infomatec's executives to our Board of Directors, we look forward to the benefit of their counsel." "In addition to the funds received from Infomatec, during the second quarter we received a federal income tax refund Tax refund Money back from the government when too much tax has been paid or withheld from a salary. of approximately $2 million, which boosted cash and cash equivalents to $10.8 million as of June 30, 1999. This combined with our unused line of credit improves Boca Research's financial position and gives us the ability to continue to target the growing thin client and information appliance markets," said Zalenski. Outlook "Both the BocaVision ST2001 information appliance and the BocaVision WT120 thin client products are currently available for shipping and additional BocaVision products are targeted for introduction later in the year. Our plans are to market our thin client products through 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), which we are in the process of recruiting. The BocaVision family of products builds on our superior hardware and software design expertise as well as our relationships with strong technology partners including Citrix(R), Liberate (Liberate Technologies, San Mateo, CA) A software company that specialized in the information appliance field. Formerly Network Computer, Inc. (NCI), a spin-off from Oracle in 1996, it changed its name in 1999. Technologies, National Semiconductor(R) and Philips to provide products that have a cost, performance and time-to-market advantage," 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. that 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 is 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, 1998, as well as in the Company's periodic filings with the Securities and Exchange Commission (SEC). Such risks and uncertainties could cause actual results to differ materially from those in the forward-looking statements included in this release. Boca Research Corporate Information Founded in 1985, Boca Research is a leading provider of hardware and software technology. Boca Research provides communications solutions that enable data transmission, connectivity of devices, and access to applications and information via the Internet, personal computers, and/or server-based environments. The Company designs, manufactures, markets, and supports quality, innovative products that have a cost, performance, and time-to-market advantage. Boca Research markets modems, I/O cards See expansion board and PC card. , and multiport mul·ti·port adj. Having, relating to, or being a system of multiple ports for injecting fuel separately into each cylinder of an engine. products under the Boca Research brand name. The Company also markets Macintosh(R) peripherals under the Global Village(R) brand name, as well as thin client/server computing computing - computer devices and information appliances under the BocaVision brand name. Products are sold worldwide through original equipment manufacturers (OEMs), wholesale distributors, and retailers. The thin client products are sold only through value-added resellers. 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, http://www.globalvillage.com, and http://www.bocavision.com. Boca Research Inc., Boca, and Global Village are registered trademarks and BocaVision is a trademark of Boca Research, Inc. All other products and brand names are trademarks of their respective owners. -0-
BOCA RESEARCH, INC.
Consolidated Balance Sheets
(In thousands)
(Unaudited)
June 30, Dec. 31,
1999 1998
-------- --------
Assets
Current assets:
Cash and cash equivalents $ 10,787 $ 6,959
Trade receivables, net 6,986 11,549
Inventory, net 6,982 9,246
Prepaid expenses and other current assets 911 637
Prepaid and deferred income taxes -- 2,051
-------- --------
Total current assets 25,666 30,442
Property and equipment, net 3,325 3,874
Goodwill and other intangible assets 4,087 4,804
Other assets 670 622
-------- --------
Total assets $ 33,748 $ 39,742
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 3,928 $ 6,804
Notes payable -- 2,800
Deferred revenue 511 --
Accrued expenses and other current
liabilities 3,752 4,037
-------- --------
Total current liabilities 8,191 13,641
-------- --------
Deferred revenue 67 --
-------- --------
Stockholders' Equity:
Common stock 106 87
Additional paid-in capital 34,056 26,045
Retained deficit (8,672) (31)
-------- --------
Total stockholders' equity 25,490 26,101
-------- --------
Total liabilities and stockholders'
equity $ 33,748 $ 39,742
======== ========
BOCA RESEARCH, INC.
Consolidated Statements of Income
(Unaudited)
(In thousands except per share data)
Three Months Six Months
Ended June 30, Ended June 30,
1999 1998 1999 1998
-------- -------- -------- --------
Net sales $ 8,747 $ 13,210 $ 19,448 $ 28,826
Cost of goods sold 8,305 16,239 16,908 32,006
-------- -------- -------- --------
Gross profit (loss) 442 (3,029) 2,540 (3,180)
-------- -------- -------- --------
Operating expenses:
Research and
development 891 656 1,974 1,233
Selling, general and
administrative 4,342 2,943 9,304 5,923
In-process research
and development -- 2,800 -- 2,800
-------- -------- -------- --------
Total operating
expenses 5,233 6,399 11,278 9,956
-------- -------- -------- --------
Loss from operations (4,791) (9,428) (8,738) (13,136)
Non-operating
income/(expense), net (38) 168 103 372
-------- -------- -------- --------
Loss before income taxes (4,829) (9,260) (8,635) (12,764)
Income taxes 6 -- 6 --
-------- -------- -------- --------
Net loss ($ 4,835) ($ 9,260) ($ 8,641) ($12,764)
======== ======== ======== ========
Basic and diluted loss
per share ($ 0.51) ($ 1.06) ($ 0.95) ($ 1.46)
======== ======== ======== ========
Shares used in per
share calculation 9,449 8,742 9,115 8,742
======== ======== ======== ========
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