Boundless Corporation Reports First Quarter 2000 Results.Business Editors HAUPPAUGE, N.Y.--(BUSINESS WIRE)--May 15, 2000 Boundless Corporation (AMEX AMEX See: American Stock Exchange : BND BND In currencies, this is the abbreviation for the Brunei Dollar. 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. ) today announced highlights and financial results for the first quarter ended March 31, 2000. The Company reported a substantial decrease in both revenue and earnings compared to the first quarter ended March 31, 1999 due to residual Y2K See Y2K problem and Y2K compliant. Y2K - Year 2000 effects and a general market decline in text terminal sales. J. Gerald Combs Gerald Combs, a computer science graduate of the University of Missouri-Kansas City, is the creator and lead developer of Ethereal, now Wireshark, which was first released in 1998. , Chairman and Chief Executive Officer of Boundless Corporation said, "While we were disappointed in the revenue decline, the operating results for the quarter exceeded our expectations. We believe the decline in the first quarter was primarily due to the residual effects of Y2K on server sales and other computing devices which drive demand for our display products; however, the industry trend for General Display Terminals continues to decline. Increased 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. of approximately $1,500,000.00 are mainly attributed to start up costs for two new subsidiaries. The Company's 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. software and services provider Merinta debuted in January 2000 and Boundless Manufacturing Services, a contract manufacturing company, was announced in September 1999. Mr. Combs added, "We continue to execute our business plan. Our Merinta subsidiary's announcement regarding our pilot program with BRE (Business Rules Engine) Software that automates policies and procedures within an organization, whether legal, internal or operational. The use of a rules engine (BRE) requires placing the company rules in an external repository that can be easily reviewed rather than Properties, Inc. (NYSE NYSE See: New York Stock Exchange : BRE) and our contract with IAN IAN Interactive Affiliate Network IAN i am nothing IAN Instrumentation & Automation News IAN Ianuarius (Latin: January) IAN Instituto Agronomico Nacional (Paraguay) IAN Incident Area Network are evidence of our progression and the marketplace acceptance of Merinta's iBrow software and services for media rich Internet Appliances. In addition, during March 2000, Boundless Manufacturing completed the acquisition of the manufacturing assets of Boca Research, Inc. which added Printed Circuit Board Assembly (PCBA PCBA Printed Circuit Board Assembly PCBA Physically Challenged Bowhunters of America PCBA Polk County Builders Association (Florida) PCBA Punjab College of Business Administration (Pakistan) ), to our suite of manufacturing offerings. Although the decisions to expand into both of these arenas contributed to increasing our operating expenses by 32% compared to the same period of 1999, we believe they also represent important investments which will allow Boundless to take advantage of the explosive growth projected for both of these market segments." The company is cautious but anticipates revenue growth over the next few quarters. Windows Based (1) (Windows-based; upper case "W") Refers to Microsoft Windows. (2) (windows-based; lower case "w") Having resizable windows. Same as "graphics based" or "GUI based." Graphical user interfaces are all windows based. Contrast with text based. Terminals (WBT See Windows-based terminal. ) shipments have more than doubled year on year consecutively, for the past two years. The release of the Company's new Capio II thin-client product, scheduled for release in Q2, will facilitate the continuation of that growth trend. During April, Boundless began delivery of Merinta's iBrow, fulfilling existing customer orders. The Company continues to aggressively pursue new business opportunities for both Merinta and Boundless Manufacturing Services. ABOUT BOUNDLESS Boundless is a global technology company with over $80 million in annual revenue focused on developing, manufacturing and distributing hardware and software products that make accessing information on the Internet and centralized cen·tral·ize v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es v.tr. 1. To draw into or toward a center; consolidate. 2. servers easy, fast and cost-effective. Core competencies include state-of-the-art ISO (1) See ISO speed. (2) (International Organization for Standardization, Geneva, Switzerland, www.iso.ch) An organization that sets international standards, founded in 1946. The U.S. member body is ANSI. 9002 manufacturing facilities, build-to-order, same day shipping and customer specific customizations. Boundless offers in-house engineering expertise and an extensive design library to significantly decrease time-to-market for 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 customers, which include Lucent Technologies, IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) , Wang Global, NCR (NCR Corporation, Dayton, OH, www.ncr.com) A technology company specializing in financial terminal transactions, retail systems and data warehousing. Until the late 1990s, NCR was heavily invested in the hardware side of the industry, known worldwide as a major manufacturer of computers , the Tandem and Digital Divisions of Compaq Computer, Hewlett-Packard and Stratus Computer. Merinta, Inc. (www.merinta.com), headquartered in Austin, TX, provides the software that powers and manages Internet Appliances. The iBrow(TM) Solution is an end-to-end software platform positioned to offer end-users and easy, enjoyable and visually rich internet browsing experience while providing companies with a revolutionary way to market and grow online business. The iBrow Solution software is hardware-and O/S-independent and is the most flexible IA platform on the market. The iBrow also features remote management software that allows the end-user interface and content to be upgraded as needed as needed prn. See prn order. . Merinta is a subsidiary of Boundless Corporation (AMEX: BND). Boundless Manufacturing Services is an emerging EMS company providing build-to-order (BTO BTO British Trust for Ornithology BTO Business Technology Optimization BTO Bachman Turner Overdrive (band) BTO Business Transformation Outsourcing BTO Build-Transfer-Operate BTO Brutto (German: Gross [quantity]) ) manufacturing as well as a complete end-to-end solutions from design through product end-of-life to its customers. Headquartered in Hauppauge, New York Hauppauge (pronounced /hɔpɔg/) is a hamlet in the Town of Islip and the Town of Smithtown in Suffolk County, New York, United States. engineering capabilities are found there and in Austin, Texas. Additional sales and distribution offices can be found throughout North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. , Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. , Europe, Asia and Australia. For more information, visit the Boundless web site at http://www.boundless.com, or call 1/800-231-5445. Editors: All company/product names and service marks may be trademarks or registered trademarks of their respective companies. Except of the historical information herein, the matters discussed in this news release include forward-looking statements that may involve a number of risks and uncertainties. Actual results may vary significantly based on a number of factors, including, but not limited to, risks in product and technology development, market acceptance of new products and continuing product demand, the impact of competitive products and pricing, changing economic conditions and other risk factors detailed in the Company's most recent annual report and other filings with the Securities and Exchange Commission.
Boundless Corporation and Subsidiaries
Consolidated Statements of Operations
(In Thousands)
Three Months Ended
March 31,
2000 1999
(unaudited)
Revenue $ 16,735 $ 21,056
Cost of revenue 13,049 14,890
Gross margin 3,686 6,166
Operating expenses:
Sales and marketing 2,707 1,933
General and administrative 2,166 1,660
Research and development 1,372 1,074
Other charges (credits) 6 59
Total operating expenses 6,251 4,726
Operating income (2,565) 1,440
Interest expense, net 155 329
Income before income taxes (2,720) 1,111
Income tax expense (credit) -- 422
Net income (2,720) 689
Dividend on preferred stock of subsidiary -- 51
Earnings available for common stockholders (2,720) 638
Weighted average common shares outstanding 4,491 4,429
Basic earnings per common share (0.61) 0.14
Weighted average dilutive shares outstanding 4,491 4,447
Diluted earnings per common share (0.61) 0.14
Boundless Corporation and Subsidiaries
Consolidated Balance Sheets
(In Thousands)
March 31, December 31,
2000 1999
(unaudited)
ASSETS
Current Assets
Cash and cash equivalents 513 $ 1,285
Trade accounts receivable, net 12,290 12,378
Income tax refund -- 833
Inventories 15,743 13,751
Deferred income taxes 2,576 2,576
Prepaid expenses and other current assets 1,808 1,039
Total current assets 32,930 31,862
Property and equipment, net 12,612 10,987
Goodwill, net 5,996 6,272
Other Assets 1,477 1,339
Total assets 53,015 $ 50,460
LIABILITIES, REDEEMABLE STOCK AND SHAREHOLDERS EQUITY
Current Liabilities:
Current portion of long-term debt 2,153 1,650
Accounts payable 8,969 6,148
Accrued expenses 5,317 5,565
Deferred revenue 576 557
Total current liabilities 17,015 13,920
Long-Term Liabilities
Long-term debt, less current maturities 15,098 14,206
Deferred income taxes 281 281
Other 668 638
Total long-term liabilities 16,047 15,125
Total liabilities 33,062 29,045
Shareholders' Equity
Preferred Stock -- --
Common Stock 46 45
Additional paid-in capital 33,765 32,508
Accumulated deficit (13,858) (11,138)
Total shareholders' equity 19,953 21,415
Total Liabilities and Shareholders'
Equity 53,015 50,460
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