Boca Research Announces Third 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)--Oct. 21, 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 ) today announced results for the third quarter ended September 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 $7.7 million and a net loss of $4.8 million, or $0.45 per share, compared to net sales of $22.8 million and a net loss of $2.0 million, or $0.23 per share, in the third quarter of 1998. For the nine months ended September 30, 1999, the Company reported net sales of $27.2 million and a net loss of $13.5 million, or $1.39 per share, compared to net sales of $51.6 million and a net loss of $14.8 million, or $1.69 per share, in the year ago period. The transition of the business to a software/systems solutions-based enterprise continues. However, revenue in the third quarter continued to be negatively impacted by the decline in sales of Mac(R)-based modems, which have been a significant source of revenue for the Company since its mid-1998 acquisition of the modem business of Global Village Communication, Inc. While the Company continues to develop new Mac-based products, such as an ADSL See DSL. ADSL - Asymmetric Digital Subscriber Line modem, recent Apple(R) marketing decisions, such as the bundling of internal modems 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. , are expected to continue to negatively impact sales in the quarters ahead. Anthony F. Zalenski, Boca Research's president and chief executive officer, commented, "We continue to make strides to reposition the Company and diversify 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. Until these markets become further developed, however, we continue to focus on cost cutting in our data communication operations, which includes our modem business. Recent initiatives include selling two manufacturing lines, reducing the number of SKUs, consolidating our Global Village technical support into our Boca Raton-based technical support, and redirecting our manpower to products that show the most promise. These inventory and cost-cutting efforts helped reduce the net cash outflow in the quarter to well below the reported loss. The Company continues to maintain an adequate cash balance and no debt." Third Quarter Accomplishments Mr. Zalenski continued, "In August we unveiled the latest phase of Boca Research's business transformation that will launch the Company into the Application Service Provider (ASP) marketplace. Our new enterprise, AppsCom(TM), Inc., will leverage the Company's communications expertise, its brands, and its state-of-the-art Internet appliance Also called "information appliance," "smart appliance," and "Web appliance," it is a device specialized for accessing the Web and/or e-mail. Designed for ease of use, it plugs into a telephone jack or LAN connection for Internet hookup. business to help it become a leading provider of packaged applications delivered via 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. . Through licensing agreements with key technology partners, AppsCom's long-term goal is to function as a clearinghouse for the rental of software applications. This is a logical progression of our efforts to reposition Boca Research in high-growth markets primarily serving the small and medium enterprise and education markets." Mr. Zalenski added, "During the quarter, we entered into an agreement with NetWolves Corporation, an Internet systems provider known for its FoxBox technology that solves security issues for commercial Internet users Internet user n → internauta m/f Internet user Internet n → internaute m/f . The agreement specifies that Boca Research will design, manufacturer and distribute Internet communications gateways and thin clients for NetWolves; an initial order was placed for 2000 thin client devices. "In September we formed a strategic alliance with The LearningStation.com(TM), which selected our BocaVision(TM) thin client device, based on Infomatec AG's Java(TM) Network Technology(TM) (JNT JNT Jewish New Testament (Bible translation) JNT Joint Network Team JNT Java Network Technology (National Semiconductor and Infomatec) JNT John Nathan-Turner ) operating system operating system (OS) Software that controls the operation of a computer, directs the input and output of data, keeps track of files, and controls the processing of computer programs. , as the `device of choice' for their Smart Classroom online educational service. As a result, over 5,000 of these devices are being included in proposals at various school districts around the Americas and the Caribbean," said Mr. Zalenski. "Boca Research's financial position continued to improve in the quarter due to the $5 million investment by National Semiconductor Corporation. Based on National Semiconductor's desire to expand its relationship with Boca Research, they purchased 691,085 newly issued shares at a price of $7.235 per share. Both companies have similar strategies regarding the information appliance marketplace and are working together to supply Philips and America Online See AOL. Inc. with a 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. solution for the forthcoming 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) service. We will continue to invest our capital wisely, primarily targeting the growing thin client and information appliance markets," said Mr. Zalenski. Outlook "To best capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the emerging thin client, information appliance, and related software development markets and to remain a significant player 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. market, Boca Research recently realigned the Company's management team along product lines. We continue to manage our data communications business for growth, emphasizing our 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 and I/O (Input/Output) The transfer of data between the CPU and a peripheral device. Every transfer is an output from one device and an input to another. See PC input/output. I/O - Input/Output product lines while rightsizing Selecting a computer system, whether micro, mini or mainframe, that best meets the needs of the application. our modem operations, which show less potential over the long term. In the thin client area, we are developing solutions for the small and medium enterprise, education, and applications rental markets. Key to our strategy is our strong technology partners, which include Infomatec AG, Citrix(R), National Semiconductor(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. (TM) Technologies, and Philips. We look forward to working with them in the quarters ahead as we look to take advantage of the many opportunities in these growing markets," 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. 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 software and hardware 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 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. . 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 AppsCom and BocaVision are trademarks of Boca Research, Inc. All other products and brand names are trademarks of their respective owners. (Financial Tables Follow) -0-
BOCA RESEARCH, INC.
Consolidated Balance Sheet (in thousands)
(Unaudited)
Sept. 30, Dec. 31,
1999 1998
----------- -----------
Assets
Current assets:
Cash and cash equivalents $14,698 $6,959
Trade receivables, net 5,863 11,549
Inventory, net 5,215 9,246
Prepaid expenses and
other current assets 1,174 637
Prepaid and deferred
income taxes --- 2,051
----------- -----------
Total current assets 26,950 30,442
Property and equipment, net 3,013 3,874
Goodwill and other intangible assets 3,728 4,804
Other assets 731 622
----------- -----------
Total assets $34,422 $39,742
=========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $4,152 $6,804
Notes payable --- 2,800
Deferred revenue 586 ---
Accrued expenses and
other current liabilities 3,613 4,037
----------- -----------
Total current liabilities 8,351 13,641
----------- -----------
Deferred revenue 42 ---
----------- -----------
Stockholders' Equity:
Common stock 115 87
Additional paid-in capital 39,419 26,045
Accumulated deficit (13,505) (31)
----------- -----------
Total stockholders' equity 26,029 26,101
----------- -----------
Total liabilities and
stockholders' equity $34,422 $39,742
=========== ===========
BOCA RESEARCH, INC.
Consolidated Statements of Income
(Unaudited)
(In thousands except per share data)
Three Months Nine Months
Ended September 30, Ended September 30,
1999 1998 1999 1998
------ ------ ------ ------
Net sales $7,719 $22,789 $27,167 $51,615
Cost of
goods sold 7,496 19,221 24,404 51,227
------- -------- ------ ------
Gross profit 223 3,568 2,763 388
------- -------- ------- ------
Operating expenses:
Research and
development 849 872 2,823 2,105
Selling, general
and
administrative 4,429 4,880 13,733 10,803
In process
research
and development --- --- --- 2,800
--------- -------- ------- --------
Total operating
expenses 5,278 5,752 16,556 15,708
--------- --------- -------- --------
Loss from
operations (5,055) (2,184) (13,793) (15,320)
Non-operating
income 223 169 326 541
--------- -------- -------- ---------
Loss before
income taxes (4,832) (2,015) (13,467) (14,779)
Income taxes 1 --- 7 ---
--------- -------- -------- ---------
Net loss ($4,833) ($2,015) ($13,474) ($14,779)
======== ========= ======== =========
Basic and diluted
loss per share ($0.45) ($0.23) ($1.39) ($1.69)
======== ========= ======== =========
Shares used in per
share calculation 10,764 8,756 9,671 8,747
======== ========= ======== =========
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