Bogen Communications International Reports Second Quarter Results; A Return to Profitability; Unified Messaging Growth Continues.Business Editors RAMSEY Ramsey, residential borough (1990 pop. 13,228), Bergen co., NE N.J.; settled 1846, inc. 1908. Dairy and truck farms are in the area. , N.J.--(BUSINESS WIRE)--Aug. 9, 2001 Bogen Bogen may refer to the following locations:
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 : BOGN) ("Bogen") today announced results for the second quarter and six months ended June June: see month. 30, 2001. The improvement in sales over the first quarter and continued tight rein on operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. produced a resumption RESUMPTION. To reassume; to promise again; as, the resumption of payment of specie by the banks is general. It also signifies to take things back; as the government has resumed the possession of all the lands which have not been paid for according to the requisitions of the law, and the of profitable operations which more than offset the modest loss of the first quarter; as a result, the Company entered the second half of 2001 in the black. Sales Compared to last year, second quarter 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 declined 7.5% to $15,792,000 from $17,072,000, but increased 14% as compared to the first quarter of this year. U.S. sales for the second quarter declined 10.8% compared to last year's second quarter, but rose 26.7% compared to the first quarter of this year. -- Telco product (PBX peripherals) sales were down by 20.3% versus last year's second quarter, due to a continued slowdown in phone system and PBX-peripheral sales. Second quarter Telco sales were, however, 6.5% ahead of this year's first quarter. -- Commercial Audio product sales were up 0.5% over last year's second quarter, and were nearly 24% ahead of sales in the first quarter of this year. -- Engineered Systems sales declined by 12.8% as compared to last year's second quarter. About half the decline related to unique market conditions affecting one dealer in a specific geographic territory. The remainder of the decrease is thought to result from delays in releasing jobs that have been bid, possibly because of changes in the timing of funding by government agencies. As compared to this year's first quarter, Engineered Systems sales were ahead by 43%. -- Pro Audio product sales rose 1.3% versus last year's second quarter and were up 62% versus the current year's first quarter. Compared to last year, European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. second quarter revenues rose by 8.4% in deutsche marks (1.3% in U.S. dollars). The revenue growth is entirely attributable to continued strong performance of 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. services; voicemail See voice mail. shipments experienced a sharp decline, driven primarily by the European 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. in new phone switch installations. As compared to this year's first quarter, revenues were down 2.8% in deutsche marks (7.4% in U.S. dollars). -- Unified Messaging revenues were up over 600% from the second quarter of 2000, reflecting continued expansion of the relationship with Deutsche Telekom Deutsche Telekom AG (ISIN: DE0005557508, FWB: DTE, NYSE: DT, LSE: DEU, TYO: 9496 ) (abbreviated DTAG) is a telecommunications company headquartered in Bonn, Germany. It is the largest telecommunications company in Germany and in the EU. . -- Voicemail revenues were off 22.2% year-over-year, as both domestic (within Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). ) and export (outside of Germany) sales declined sharply. Gross Margin The gross margin for the second quarter of 2001 was 46.9%, up slightly from last year's second quarter gross margin of 46.8%. The gross margin in Bogen's domestic business increased to 43.6% of sales from 43.2% in the second quarter of last year. In Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , Speech
Design's gross margins decreased from 56.3% in the second quarter
of 2000 to 54.5% in the second quarter of 2001. The decline was largely
a function of the recognition as "cost of goods sold Cost of goods soldThe total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold " of R&D expenses incurred for the continuing development of a software enhancement to a Speech Design voicemail product for a 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 customer. Operating and Other Expenses Consistent with the Company's previously announced and on-going Adj. 1. on-going - currently happening; "an ongoing economic crisis" ongoing current - occurring in or belonging to the present time; "current events"; "the current topic"; "current negotiations"; "current psychoanalytic theories"; "the ship's current position" cost-reduction measures, second quarter operating expenses decreased 13.9%, or $1,032,000, from the immediately preceding quarter. Because of both this reduction and the general improvement in sales, operating expenses declined from 53.8% of sales in the year's first quarter to 40.6% of sales in the second quarter. R&D expense totaled $832,000 or 5.3% of sales in the second quarter versus $1,303,000 or 9.4% of sales in the first quarter, primarily due to the above-mentioned A`bove´-men`tioned a. 1. Mentioned or named before; aforesaid; mentioned or named earlier in the same text (in written documents). Adj. 1. recognition of certain development expenses as cost of goods sold. Selling, general and administrative expenses ("SG&A") approximated those of last year's second quarter. As sales were 7.5% lower, SG&A expense in the current second quarter was 33.6% of sales versus 30.8% in the comparable period last year. Operating expenses in Bogen's domestic businesses were reduced $307,000 versus the second quarter of last year, and $491,000 versus the first quarter of this year. Operating expenses at Speech Design were up $322,000 versus the second quarter of last year, but down $541,000 versus the first quarter of this year. The increases at Speech Design are almost entirely attributable to continued investment in the development and marketing of Unified Messaging products sold by Speech Design Carrier Systems. Net Income The Company reported net income of $676,000 or $.07 per 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. share for the current second quarter as compared to $872,000 or $.09 per diluted share in the comparable period of the prior year. Summary Results for the First Half Sales year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. were $29,638,000, a decline of 11.1% as compared to mid-year 2000. Second quarter net income more than offset the first quarter net loss, bringing year-to-date net income to $460,000 or $.05 per diluted share for the first half of 2001. One year earlier, net income was $1,174,000 or $.13 per diluted share. Comments by Jonathan Guss and Michael P. Fleischer Jonathan Guss, Bogen's 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. , reviewed the European business, noting, "The economic slowdown which has been so severely felt here in the U.S. since the end of last year really started to hit Europe a bit later, with increasing pressure being felt by many if not most European telecommunications companies See telecom company. over the last three to six months. New switch sales are down significantly all across the Continent, and since Speech Design's voicemail sales are traditionally dependent on new PBX (Private Branch eXchange) An inhouse telephone switching system that interconnects telephone extensions to each other as well as to the outside telephone network (PSTN). sales, volume has suffered accordingly. We expect the impact on the voicemail business to continue throughout the remainder of the year. Our response has been to increase our focus on penetrating penetrating breaching the tissues of the body. the aftermarket Aftermarket See: Secondary market. aftermarket See secondary market. by selling directly to small to mid-size businesses that bought a switch, without voicemail capability, sometime in the last few years." Mr. Guss continued, "On a more satisfying note, we are pleased with the rapid growth of our European Unified Messaging business. Speech Design Carrier Systems continues to expand its role as the preferred Unified Messaging partner of Deutsche Telekom's fixed-line business, most recently providing the infrastructure to support the retrieval of mobile-initiated SMS messages SMS message SMS n → (message m) SMS m by Deutsche Telekom fixed-line subscribers." Michael P. Fleischer, Bogen's President, commented, "As expected, the second quarter showed a good seasonal rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective from the first. And, revenues in the second quarter were closer to the same period last year than the first quarter was to the first quarter last year. This modest recovery is good news, but must be considered tentative tentative, adj not final or definite, such as an experimental or clinical finding that has not been validated. . Uncertainty about the general economy leads us to maintain our focus on cost control and reducing trade receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed and inventory. In the event that the economy weakens further, cash and a very lean cost structure will be sources of strength. Meantime, line extensions and new products will help us try to blunt blunt (blunt) having a thick or dull edge or point; not sharp. the revenue effect of any increased weakness in macro-economic demand. "We are pleased to note that our pro audio subsidiary, Apogee apogee (ăp`əjē), point farthest from the earth in the orbit of a body about the earth. See apsis. The farthest point. Sound International, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , was profitable in the second quarter. It now has a highly effective cost structure, and the planned introduction of advanced new products later this year offers fair prospects for continued good revenue and profit performance." Mr. Guss concluded by stating, "Bogen's performance will continue to be sensitive to the overall economy, and we cannot be certain when the current slump Slump A temporary fall in performance, often describing consistently falling security prices for several weeks or months. will be over. On the other hand, there are reasons for optimism: as noted, the year-over-year gap in U.S. sales was narrower in the second quarter than in the first; the restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). steps previously announced have had a positive impact and the second quarter was profitable. Furthermore, the Company has nearly $12 million in the bank and an unutilized acquisition line. We think all this strongly positions Bogen to both ride out the current storm, and benefit from an eventual recovery of the overall economy, whenever that occurs. Finally, Bogen is also well-placed to take advantage of the investment opportunities that often accompany a slowing economy." Conference Call Bogen's management also plans to host a conference call at 12 noon Eastern Time on Thursday, August 9, 2001 to discuss second quarter results. This conference call will be distributed live over CCBN's Investor Distribution Network to both institutional and individual investors. Individual investors may listen to the call via www.companyboardroom.com. Institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. may access the call via www.streetevents.com. Listeners may also visit the Company's website: www.bogen.com at the Company Info section, to access the conference call. To listen to the live call please go to one of the websites at least 15 minutes early to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software. If you are unable to listen live, the conference call will be archived and can be accessed for approximately 30 days at the websites. About Bogen Bogen Communications International, Inc., based in Ramsey, New Jersey Ramsey is a borough in Bergen County, New Jersey, United States. As of the United States 2000 Census, the borough population was 14,351. Ramsey was incorporated as a borough by an Act of the New Jersey Legislature on March 10, 1908, from portions of Hohokus Township (now and Munich, Germany, develops, manufactures, and markets telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. peripherals, sound processing equipment, and Unified Messaging products and services. Bogen's products are sold to commercial, industrial, professional and institutional customers worldwide. Except for historical information contained herein, the statements made in this release constitute 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 involve certain risks and uncertainties. Certain factors may cause actual results to differ materially from those contained in the forward-looking statements, including general market conditions, new technological developments, competition, potential acquisitions and divestitures, implementation or termination of strategic initiatives or transactions, the availability of financing alternatives and other risks. Certain of these risks, factors and other considerations are detailed from time to time in Bogen's reports on file at the Securities and Exchange Commission, including Bogen's 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 fiscal year ended December 31, 2000 and 10-Q for the quarter ended March 31, 2001. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
BOGEN COMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands of Dollars, Except Share and Per Share Amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2001 2000 2001 2000
----------- ---------- ----------- ----------
Net sales $ 15,792 $ 17,072 $ 29,638 $ 33,335
Cost of goods sold 8,393 9,081 15,434 17,754
---------- ----------- ---------- ----------
Gross profit 7,399 7,991 14,204 15,581
Operating expenses:
Research and
development 832 900 2,135 1,766
Selling, general
and
administrative 5,309 5,264 11,179 11,091
Amortization of
goodwill and
intangible assets 275 237 550 479
---------- ----------- ---------- ----------
Income from operations 983 1,590 340 2,245
Other (income) expenses:
Interest income (119) (132) (267) (141)
Interest expense 28 7 59 65
Other (income)
expense, net (18) 21 (37) 21
---------- ----------- ---------- ----------
Income before income
taxes 1,092 1,694 585 2,300
Provision for income
taxes 416 822 125 1,126
---------- ----------- ---------- ----------
Net income $ 676 $ 872 $ 460 $ 1,174
========== =========== ========== ==========
Basic net income per
common share $ 0.07 $ 0.09 $ 0.05 $ 0.14
========== =========== ========== ==========
Diluted net income per
common share $ 0.07 $ 0.09 $ 0.05 $ 0.13
========== ========== ========== ==========
Weighted average number
of common shares
outstanding-Basic 10,112,956 9,455,436 10,112,956 8,273,418
============ =========== ============ ===========
Weighted average number
of common shares
outstanding-Diluted 10,112,956 9,885,679 10,112,956 9,241,281
============ =========== ============ ===========
Note: Sales, Cost of goods sold, and Selling, general and
administrative expenses reflect the adoption of FASB's Emerging Issues
Task Force (EITF) Issue No. 00-10, "Accounting for Shipping and
Handling Fees and Costs", which requires all companies to report all
amounts billed to a customer related to shipping and handling costs as
sales and report all costs incurred for shipping and handling as cost
of goods sold; Issue No. 00-22, "Accounting for 'Point' and Other
Loyalty Programs", which classifies customer rebates as a reduction of
sales; and Issue No. 00-25, "Accounting for Consideration from a
Vendor to a Retailer in Connection with the Purchase or Promotion of
the Vendor's Products", which classifies such consideration as a
reduction of sales.
BOGEN COMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands of Dollars, Except Share and Per Share Amounts)
June 30, December 31,
2001 2000
--------- -------------
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 11,566 $ 12,158
Trade receivables (less allowance for
doubtful accounts of $509 and $557 at
June 30, 2001, and December 31, 2000,
respectively) 7,632 7,433
Other receivables 888 847
Inventories, net 14,443 14,608
Prepaid expenses and other current
assets 1,037 1,063
Deferred income taxes 1,646 1,591
----------- -----------
TOTAL CURRENT ASSETS 37,212 37,700
Equipment and leasehold improvements,
net 4,084 4,299
Goodwill and intangible assets, net 18,102 18,840
Other assets 337 273
----------- -----------
TOTAL ASSETS $ 59,735 $ 61,112
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Amounts outstanding under revolving
credit agreements $ 256 $ 1,201
Advances and notes payable to related
parties 112 124
Current maturities of capital lease
obligations 256 245
Accounts payable 2,423 2,684
Accrued expenses 3,741 3,428
Income taxes payable 444 392
----------- -----------
TOTAL CURRENT LIABILITIES 7,232 8,074
Deferred income taxes 963 1,123
Capital lease obligations 147 288
Minority interest 72 80
Other liabilities 26 -
----------- -----------
TOTAL LIABILITIES 8,440 9,565
----------- -----------
STOCKHOLDERS' EQUITY
Preferred stock - $.001 par value;
1,000,000 shares authorized; none
issued and outstanding at
June 30, 2001 or December 31, 2000 - -
Common stock - $.001par value;
50,000,000 shares authorized;
10,112,956 shares issued and
outstanding at June 30, 2001, and
December 31, 2000 10 10
Additional paid-in-capital 48,283 48,283
Retained earnings (accumulated
deficit) 4,778 4,318
Accumulated other comprehensive loss (1,744) (1,032)
Treasury stock at cost- 3,572 shares
at June 30, 2001, and December 31, 2000 (32) (32)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 51,295 51,547
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 59,735 $ 61,112
=========== ===========
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