Bogen Reports Third Quarter and Nine-Month Financial Results; Domestic Segment Net Income Climbs 42%.Business Editors RAMSEY, N.J.--(BUSINESS WIRE)--Nov. 10, 2003 Bogen Communications International, 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 : BOGN) ("Bogen") today announced results for the third quarter and nine months ending September 30th, 2003. Sales Third 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 6.6% to $14,615,000 in 2003 from $15,653,000 in 2002. Separating the results into its Domestic (U.S.) and Foreign (European) segments, Bogen reported that: -- Domestic sales for the third quarter of 2003 were up 5.8% from the third quarter of 2002. The sales improvement was greatest in the Commercial Audio and Pro Audio lines of businesses, which improved 11.0% and 7.2%, respectively. Telco sales for the third quarter of 2003 increased 5.8% compared to the same period last year and Engineered Systems grew 1.6%. -- Foreign third quarter 2003 sales in U.S. dollars declined 34.4% from the third quarter of 2002. In Euros, third quarter sales were down 43.9%. Corporate Voice Processing The computerized handling of voice, which includes voice store and forward, voice response, voice recognition and text to speech technologies. ("CVP CVP central venous pressure. CVP abbr. central venous pressure CVP central venous pressure. CVP Central venous pressure, see there ") and 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. ("UMS (Unified Messaging System) See unified messaging. ") sales both declined from third quarter 2002 revenues. Year-to-date 2003 net sales of $40,336,000 decreased 9.8% from the same period in 2002. Domestic segment sales of $30,045,000 were down 6.1% from $32,003,000 in 2002. Foreign segment sales decreased 19.2% to $10,291,000 in 2003 versus $12,738,000 in 2002. In Euros, year-to-date sales declined 32.6% from 2002 to 2003. Gross Margin The Company's consolidated gross margin in the third quarter of 2003 was down $1,463,000 compared to the same period in 2002. The Company's overall gross margin as a percentage of net sales was 40.9% in the third quarter of 2003, down from 47.6% in the third quarter of 2002. The Domestic segment declined from 44.4% last year to 41.9% this year, reflecting fluctuations in product sales mix sales mix See product mix. and an increase in inventory reserves related to a shift in certain production operations. The Foreign segment dropped from 54.7% last year to 37.4% this year. The decline is primarily due to the absorption of fixed costs fixed costs, n.pl the costs that do not change to meet fluctuations in enrollment or in use of services (e.g., salaries, rent, business license fees, and depreciation). relative to changes in sales volume, as well as fluctuations in product sales mix between CVP and UMS. UMS products generally have higher gross profit margins Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. than CVP products. For the first nine months of 2003, consolidated gross margin as a percentage of net sales was 44.0%, down from last year's 47.3%. U.S. year-to-date margins were 43.0%, down from last year's 43.6%, a result of favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. changes in product line sales mix being offset by increases in inventory reserves. European margins decreased from 56.8% to 46.8%, due to changes in product line sales mix, increased depreciation on fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → included in cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold , and higher statutory inventory reserves. 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. Consolidated operating expenses totaled $5,972,000 for the third quarter of 2003, a 6.2% decrease from last year's $6,364,000 in operating expenses. As a percentage of sales, operating expenses increased to 40.9% from 40.7%, primarily due to the lower absorption of fixed costs relative to the decreased sales volume being mostly offset by lower depreciation and allowances for doubtful accounts. -- Operating expenses in the U.S. segment totaled $3,557,000, or 31.1% of net sales, in the third quarter this year, versus $3,857,000, or 35.7% of net sales, in the same quarter of 2002. -- In the European segment, operating expenses were $2,415,000, or 76.2% of sales, in the third quarter of 2003, down from $2,507,000, or 51.8% of sales, for the same period in 2002. In Euros, third quarter operating expenses were down 14.7%, to EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 2,138,000 in 2003 from EUR 2,507,000 in 2002. For the first nine months of 2003, operating expenses were $18,046,000, down slightly from $18,118,000 in the comparable period last year. U.S. segment operating expenses for the first half were $10,529,000, down 5.8% from last year's $11,174,000. For Europe, operating expenses totaled $7,517,000, an 8.2% increase from the $6,944,000 incurred in the first nine months of 2002. In Euros, operating expenses were EUR 6,766,000 for the first nine months of 2003, down almost 10% from the EUR 7,495,000 in the same period in 2002. Income The Company's consolidated net income for the third quarter of 2003 was $306,000, or $0.06 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. In the same period in 2002, the Company had net income of $665,000 or $0.10 per diluted share. -- The Domestic segment posted an operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. of $1,239,000 for 2003's third quarter, up 31.3% from $944,000 in the same period last year. Income before income taxes and net income for 2003's third quarter were $1,262,000 and $757,000, respectively. The comparable numbers for the third quarter of 2002 were $953,000 and $534,000, respectively. -- The Foreign segment had an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $1,228,000 for the third quarter of 2003 versus operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $138,000 for the third quarter of 2002. The segment posted a 2003 loss before income taxes of $1,230,000 and $451,000 net loss. The comparative numbers for the same period of 2002 are income before income taxes and net income of $130,000 and $131,000, respectively. In Euros, the segment had operating and pre-tax losses of EUR 1,095,000 and EUR 1,097,000, respectively, in the third quarter of 2003 compared to operating and pre-tax profits of EUR 145,000 and EUR 133,000, respectively, in the prior year's third quarter. The strengthening of the Euro versus the U.S. dollar from the third quarter of 2002 to the current quarter approximated 17% and has negatively impacted the European segment results on a U.S. dollar basis. The Company's consolidated results were net income of $42,000 for the first nine months of 2003 compared to net income of $2,008,000 for the same period in 2002. Comments by Michael P. Fleischer Bogen's Michael P. Fleischer observed, "Bogen's domestic operations turned in another strong performance this quarter, with every part of the business showing top line growth versus the third quarter of last year. This revenue growth, combined with continued close management of our cost structure, helped the U.S. business post a significant improvement in profits over the comparable period last year." Comments by Jonathan Guss Bogen's President and Chief Executive Officer, Jonathan Guss, added, "Performance during the quarter in Europe was disappointing, most critically driven by the lack of any significant orders in Speech Design's UMS business. As discussed before, the economics of Speech Design Carrier Systems are a function of few, large orders; in quarters where no such orders are shipped, little revenue is recognized to offset the fixed costs of operating the business. At this point we believe several large orders will be shipped by the end of December, making the UMS business significantly more profitable in the fourth quarter than in the third. The CVP business was also weak in the third quarter of this year, with continued depressed shipments of new switches reducing demand for Speech Design peripherals. In response to this economic environment, Speech Design plans to implement a 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). before the end of the year, resulting in annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. cost reductions in excess of EUR 500,000. "Two items cited in other news releases are worth mentioning here: effective today, Bogen is commencing the self-tender for two million shares, that was announced November 3, 2003. As with previous share repurchases Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. by the Company, we believe this step will offer liquidity to stockholders seeking an exit at a fair price, while creating value for those stockholders who elect to retain their shares in Bogen. At the same time, Bogen announced its intention to terminate the registration of the Company's stock under the Securities Exchange Act of 1934. This step reflects the hard fact that for many small companies, and certainly for Bogen, the advantages of such registration are now outweighed by the costs. "Finally, effective immediately Michael Fleischer Michael Fleischer is a United States businessman from the state of New Jersey and on March 13 2004 was appointed to the post of Director of Private Sector Development for the Coalition Provisional Authority in Iraq. will be taking a leave of absence from the Company, expected to last six to twelve months. I will assume the title of Bogen's President until he rejoins the Company. Michael will be working for the U.S. Department of Defense. All of us here at Bogen wish Michael well on his leave, and look forward to his return." 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 Germering, 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. Conference Call Bogen's management also plans to host a conference call at 12:00 P.M. Eastern Time on Monday, November 10th, 2003, to discuss third quarter results. This conference call will be distributed over www.vcall.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 either of these websites at least 15 minutes ahead of time 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 at that time, the conference call will be archived and can be accessed for approximately 30 days at the websites. Cautionary Factors that Could Affect 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. Except for historical information contained herein, the statements made in this release constitute forward-looking statements that involve certain risks and uncertainties. Actual results may differ materially from these forward-looking statements. Among the factors that could cause actual results to differ materially are the following: competitive factors, including the fact that the Company's competitors are highly focused and may have greater resources and/or name recognition than the Company; continued stagnation Stagnation A period of little or no growth in the economy. Economic growth of less than 2-3% is considered stagnation. Sometimes used to describe low trading volume or inactive trading in securities. Notes: A good example of stagnation was the U.S. economy in the 1970s. in the U.S. and European economies; changes in technology and the Company's ability to develop or acquire new or improved products and/or modify and upgrade its existing products; changes in labor, equipment and capital costs; changes in access to suppliers and sub-contractors; currency fluctuations in the U.S. dollar and Euro; changes in United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and foreign regulations affecting the Company's business; future acquisitions or strategic partnerships; implementation or termination of strategic initiatives or transactions; availability of sufficient capital to finance potential acquisitions on terms satisfactory to the Company; general business and economic conditions; political instability in certain regions; employee turnover; issues relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the Company's information technology infrastructure, stability, and performance; the Company's ability to effectively implement its planned restructuring at Speech Design by the end of the year and to recognize cost savings in ensuing en·sue intr.v. en·sued, en·su·ing, en·sues 1. To follow as a consequence or result. See Synonyms at follow. 2. To take place subsequently. years thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. ; the ability of the Company to recognize profits from anticipated UMS shipments in the fourth quarter; and other factors set forth in the Company'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 fiscal year ended December 31, 2002, (the "Annual Report") and Form 10-Q Form 10-Q See 10-Q. for the quarter ended September 30, 2003, (the "Third Quarter Form 10-Q") including, without limitations, under the heading entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: "Risk Factors" contained in Item 7 of the Annual Report and Item 2 of the Third Quarter Form 10-Q, potential withdrawal liability under an employee benefit plan described in Item 2 of the Third Quarter Form 10-Q, and as otherwise described from time to time in the Company's reports filed with the Securities and Exchange Commission. The Company wishes to caution readers not to place undue reliance on any such forward-looking statements, which are made pursuant to the Private Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. Reform Act of 1995 and, as such, speak only as of the date made. 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. Shareholders and investors should read carefully the Offer to Purchase and related materials when they are available because they contain important information. Shareholders and investors may obtain a free copy (when available) of the Offer to Purchase and other documents that will be filed by Bogen with the SEC at the SEC's web site at www.sec.gov or from the Information Agent, MacKenzie Partners, Inc. at (212) 929-5500. Shareholders are urged to carefully read these materials prior to making any decision with respect to the offer.
BOGEN COMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands of Dollars, Except Per Share Amounts)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2003 2002 2003 2002
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net sales $ 14,615 $ 15,653 $ 40,336 $ 44,741
Gross profit 5,983 7,446 17,729 21,182
Income (loss) from
operations 11 1,082 (317) 3,064
Income (loss) before
income taxes 32 1,083 (270) 3,263
Net income 306 665 42 2,008
Net income per common
share - Diluted $ 0.06 $ 0.10 $ 0.01 $ 0.24
BOGEN COMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands of Dollars)
Sept. 30, Dec. 31,
2003 2002
----------- -----------
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash
equivalents $ 4,717 $ 5,379
Trade receivables, net 5,936 5,787
Inventories 9,134 10,712
Other current assets 4,969 4,255
----------- -----------
TOTAL CURRENT ASSETS 24,756 26,133
Equipment and leasehold
improvements, net 2,871 3,152
Goodwill and intangible
assets, net 15,896 16,178
Other assets 1,377 470
----------- -----------
TOTAL ASSETS $ 44,900 $ 45,933
=========== ===========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities $ 8,736 $ 10,980
Long-term liabilities 367 379
Stockholder's equity 35,797 34,574
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 44,900 $ 45,933
=========== ===========
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion