Boca Research Reports Third Quarter 1998 Financial 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)--Nov. 4, 1998--Boca Research, 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 : BOCI BOCI Bank of China International BOCI Buckner Orphan Care International ) today announced financial results for the third quarter ended September September: see month. 30, 1998. 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) reported sales of $22.8 million, compared to sales of $13.2 million for the second quarter of 1998 and sales of $18.5 million for the third quarter of 1997. Sales for the nine months ended September 30, 1998 were $51.6 million, compared to sales of $53.7 million for the first nine months of 1997. For the third quarter of 1998, the Company reported a net loss of $2.0 million, or ($0.22) per share, compared to a net loss of $10.3 million, or ($1.17) per share, in the second quarter of 1998 and a net loss of $1.6 million, or ($0.18) per share, in the third quarter of 1997. In the first nine months of 1998, Boca reported a net loss of $15.7 million, or ($1.80) per share, compared to a net loss of $7.5 million, or ($0.86) per share, during the nine month period ended September 30, 1997. During the third quarter, the Company further improved the distribution of Boca Research branded products by leveraging the strong retail position of its Global Village line of modems. As a result, large retailers such as Fry's Electronics Fry's Electronics is a specialty retailer of software, consumer electronics, computer hardware and household appliances with a chain of superstores headquartered in Silicon Valley. Starting with one store located in Sunnyvale, California, USA, the chain now boasts sales of $2. , J & R Computerworld and Inca Computers are now carrying Boca Research products. During the third quarter, sales to Apple (R) Computer, Inc. were approximately 23% of 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 . Thus far in the fourth quarter there are no sales to Apple, and Boca is uncertain as to the outlook for any recurrent recurrent /re·cur·rent/ (re-kur´ent) [L. recurrens returning] 1. running back, or toward the source. 2. returning after remissions. re·cur·rent adj. 1. Apple sales. The decline in sales to Apple Computer may be offset in part by increased sales through the retail channel in the fourth quarter. In addition, Boca released a special iMac (tm) version of its award-winning GlobalFax (tm) software which capitalizes on the success of Apple's iMac product. Commenting on the results, Tony Zalenski, Boca's President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , said: "This was the first full quarter of operations after our acquisition of Global Village's modem business assets, and we were able to significantly increase our revenue. The Macintosh modem market has not experienced the same price erosion as the Windows-based market, and our Global Village brand continues to command greater margins. We were unable to return our Company to profitability during the third quarter; however, we continue to make progress in reducing our costs and increasing our presence in retail. "In the third quarter, we were successful in driving down our inventory and reducing our number of SKUs. Net inventory decreased by approximately $4.5 million during the third quarter of 1998. We have continued to work our product 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. plan, and I am pleased to announce that we recently released news of our expanded business partnership with NCI See Liberate. as well as the first in a series of products we developed with them. "We are aggressively pursuing large OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and opportunities with NCI in the Internet/information appliance A stand-alone hardware device or software environment dedicated to a specific task. See hardware appliance and software appliance. market. Building on our experienced manufacturing expertise in this product market, we have a jump start on other manufacturers who are entering this market. We are continuing to work with several strategic partners who have expressed interest in our products for this market. 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 judgment based on factors currently known. However, these statements involve risks and uncertainties including 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. 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 on its quarterly report on Form 10-Q Form 10-Q See 10-Q. for the quarter ended June 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 cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. Internet access See how to access the Internet. devices, 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. 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 . The Company also markets its products under the Global Village Communication brand name and sells its products worldwide through distributors, original equipment manufacturers (OEMs) 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. -0-
BOCA RESEARCH, INC.
Consolidated Balance Sheets
(In thousands)
(Unaudited)
September 30, Dec. 31,
1998 1997
----------- ------------
Assets
Current assets:
Cash and cash equivalents $5,328 $8,205
Trade receivables, net 20,151 11,723
Inventory, net 9,098 14,876
Prepaid expenses and
other current assets 820 470
Prepaid and deferred
income taxes 2,052 9,214
---------- -----------
Total current assets 37,449 44,488
Property and equipment, net 4,092 5,540
Goodwill and other
intangible assets 4,432 -
Other assets 627 191
----------- ------------
Total assets $46,600 $50,219
=========== ============
Liabilities and
Stockholders' Equity
Current liabilities:
Accounts payable $11,365 $6,546
Notes payable 5,955 -
Accrued expenses and other
current liabilities 4,280 3,092
----------- ------------
Total current liabilities 21,600 9,638
----------- ------------
Stockholders' Equity:
Common stock 87 87
Additional paid-in capital 26,055 25,915
Retained earnings (1,142) 14,579
----------- ------------
Total stockholders' equity 25,000 40,581
----------- ------------
Total liabilities and
stockholders' equity $46,600 $50,219
=========== ============
BOCA RESEARCH, INC.
Consolidated Statements of Income
(Unaudited)
(In thousands except per share data)
Three Months Nine Months
Ended September 30, Ended September 30,
1998 1997 1998 1997
--------- --------- --------- ---------
Net sales $22,789 $18,549 $51,615 $53,660
Cost of goods sold 19,221 17,138 51,227 51,320
--------- --------- --------- ---------
Gross profit 3,568 1,411 388 2,340
--------- --------- --------- ---------
Operating expenses:
Research and development 872 690 2,105 2,104
Selling, general and
administrative 4,830 3,431 10,745 12,384
In process research
and development - - 3,800 -
--------- --------- --------- ---------
Total operating
expenses 5,702 4,121 16,650 14,488
--------- --------- --------- ---------
Loss from operations (2,134) (2,710) (16,262) (12,148)
Non-operating income, net 169 241 541 603
--------- --------- --------- ---------
Loss before income
tax benefit (1,965) (2,469) (15,721) (11,545)
Income tax benefit - (864) - (4,041)
--------- --------- --------- ---------
Net loss ($1,965) ($1,605) ($15,721) ($7,504)
========= ========= ========= =========
Net loss per share ($0.22) ($0.18) ($1.80) ($0.86)
========= ========= ========= =========
Weighted average shares
outstanding 8,756 8,725 8,747 8,716
========= ========= ========= =========
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