Boundless Corporation Reports Fourth Quarter and Fiscal 1999 Results; Progress Continues in Merinta, Inc. and Boundless Manufacturing Services Subsidiaries.Business Editors HAUPPAUGE, N.Y.--(BUSINESS WIRE)--March 30, 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 fourth quarter and the year ended December 31, 1999. The Company had an extremely exciting year as it announced two new high technology subsidiaries that should help fuel the Company's future growth. The Merinta, Inc. subsidiary, which is a premier provider of enabling software and technologies for Internet Appliances 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. , was announced on January 12, 2000. Boundless Manufacturing Services debuted with a September 22, 1999 announcement stating that Boundless Manufacturing Services would pursue electronic manufacturing services (EMS) opportunities within this $90 billion+ marketplace. Boundless increased R&D 61% from 1998 to 1999 reflecting the increased resources that were needed to launch the Merinta subsidiary and quickly capture market share in the growing Internet appliance sector. Management feels that additional investments in this area, as well as the EMS sector, will be needed over the next 12-24 months to be competitive in these markets. The specific financial review is as follows: revenues for the fourth quarter ended December 31, 1999 were $19,254,000 compared with revenues of $21,853,000 for the quarter ended December 31, 1998. Net income available to common shareholders was $1,244,000 or $0.28 per basic share and $0.27 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 compared with net income available to common shareholders of $2,208,000, or $0.49 per basic and diluted share for the quarter ended December 31, 1998. For the fiscal year ended December 31, 1999, the Company reported revenues of $80,510,000 compared with revenues of $90,202,000 for the fiscal year ended December 31, 1998. Net income available to common shareholders was $3,189,000, or $0.72 per basic and $0.71 per diluted share compared with net income available to common shareholders of $4,411,000, or $0.90 per basic and diluted share for the fiscal year ended December 31, 1998. 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, stated, "1999 was an exciting year for Boundless. For the third straight year our gross margin as a percentage of revenue increased, to 29.6% in 1999 compared to 28.8% in 1998 and 25.2% in 1997. More importantly the text and 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. Terminal business continues to fuel the growth for our two new, exciting subsidiaries. Merinta has received its first order from Internet Appliance Group (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 ) for the iBrow(TM) solution. Boundless Manufacturing Services also came out of the box strongly by recently purchasing the manufacturing assets of Boca Research, Inc. (Nasdaq: BOCI BOCI Bank of China International BOCI Buckner Orphan Care International ) and executing its first contract manufacturing agreement with Boca Research". In November 1999, Merinta unveiled its partnership with IAN to market, brand and deliver the iBrow solution to the business market. IAN has made its first order for 10,000 iBrow solution units, branded the Webplayer for Virgin Entertainment Group. Jeff Moore Jeffery D. Moore (born August 20, 1956 in Kosciusko, Mississippi) is a former American football running back in the NFL for the Seattle Seahawks, San Francisco 49ers and the Washington Redskins. He played college football for Jackson State University. , President of Merinta, said, "Merinta will continue to be a leader in supplying cutting edge software solutions to potential Internet appliance customers. Our unique Internet Appliance software, which is OS and platform independent, should provide us a competitive edge in this rapidly growing marketplace. We are a unique provider in this technology niche." On March 6, 2000 Boundless Manufacturing Services purchased the manufacturing assets and executed its first contract manufacturing agreement with Boca Research. Joe Joy, President of Boundless Manufacturing Services, added, "Boundless has a proven track record for quality and just-in-time (JIT JIT - dynamic translation ) delivery in 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 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. Boundless Manufacturing Services will extend that capability in the explosive EMS market in the years to come. We have launched an aggressive campaign to add new customers and acquire more facilities and feel that 2000 will be a great year for us." 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 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 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 cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. . Core competencies A core competency is something that a firm can do well and that meets the following three conditions specified by Hamel and Prahalad (1990):
(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 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 (Tandem Computers Inc., Cupertino, CA) A former major manufacturer of fault-tolerant computers founded in 1974 by James Treybig and provider of the early 21st century technology for HP's enterprise computing strategy. and Digital Divisions of Compaq Computer, Hewlett-Packard and Stratus stratus: see cloud. (Stratus Technologies, Maynard, MA, www.stratus.com) A manufacturer of fault-tolerant computers founded in 1980. It supports both the VOS and FTX Unix operating systems on its XA/R line of i860-based systems. Computer. Merinta, Inc. (www.merinta.com) which is headquartered in Austin, TX, is a premier provider of enabling software and technologies for Internet Appliances. The iBrow Solution of software and services is positioned to offer end-users an easy, enjoyable and visually rich Internet browsing See browse. experience while providing companies with a revolutionary way to market and grow online business. The iBrow Solution is hardware and O/S independent and is the most flexible IA platform on the market. The iBrow Solution also features remote management software that allows for the end-user interface and content to be upgraded as needed as needed prn. See prn order. . Boundless Manufacturing Services is an emerging EMS company providing build-to-order (BTO) manufacturing as well as a complete end-to-end solutions (jargon) end-to-end solution - (E2ES) A term that suggests that the supplier of an application program or system will provide all the hardware and/or software components and resouces to meet the customer's requirement and no other supplier need be involved. Compare: turn-key solution. 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 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 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 Balance Sheets
(In Thousands)
December 31, December 31,
1999 1998
(audited) (audited)
ASSETS
Current Assets
Cash and cash equivalents 1,285 732
Trade accounts receivable, net 12,378 13,274
Income tax refund 833 1,905
Inventories 13,751 12,565
Deferred income taxes 2,576 2,470
Prepaid expenses and other current assets 1,039 462
-------- --------
Total current assets 31,862 31,408
Property and equipment, net 10,987 10,251
Goodwill, net 6,272 7,350
Other Assets 1,339 339
-------- --------
Total assets 50,460 $ 49,348
======== ========
LIABILITIES, REDEEMABLE STOCK AND SHAREHOLDERS EQUITY
Current Liabilities:
Current portion of long-term debt 1,650 8,000
Accounts payable 6,148 6,817
Accrued expenses 5,565 7,074
Deferred revenue 557 116
-------- --------
Total current liabilities 13,920 22,007
-------- --------
Long-Term Liabilities
Long-term debt, less current maturities 14,206 5,500
Deferred income taxes 281 1,002
Other 638 627
-------- --------
Total long-term liabilities 15,125 7,129
-------- --------
Total liabilities 29,045 29,136
Mandatorily redeemable preferred stock
of subsidiary -- 3,555
-------- --------
Shareholders' Equity
Preferred Stock -- --
Common Stock 45 44
Additional paid-in capital 32,508 30,940
Accumulated deficit (11,138) (14,327)
-------- --------
Total shareholders' equity 21,415 16,657
-------- --------
Total Liabilities and Shareholders' Equity 50,460 $ 49,348
======== ========
-0-
Boundless Corporation and Subsidiaries
Consolidated Statements of Operations
(In Thousands)
Twelve Months Ended Three Months Ended
December 31, December 31,
1999 1998 1999 1998
(audited) (unaudited)
Revenue $80,510 $90,202 $19,254 $21,853
Cost of revenue 56,698 64,203 13,088 15,019
------------------------------------
Gross margin 23,812 25,999 6,166 6,834
------------------------------------
Operating expenses:
Sales and marketing 10,292 8,308 2,989 2,295
General and administrative 6,979 5,845 2,120 1,211
Research and development 5,908 3,666 2,024 1,069
Other charges (credits) (3,711) (16) (980) 95
------------------------------------
Total operating expenses 19,468 17,803 6,153 4,670
------------------------------------
Operating income 4,344 8,196 13 2,164
Interest expense, net 1,438 2,539 328 494
------------------------------------
Income before income taxes 2,906 5,657 (315) 1,670
Income tax expense (credit) (333) 749 (1559) (662)
------------------------------------
Net income 3,239 4,908 1,244 2,332
Dividend on preferred stock of
subsidiary 50 497 -- 124
------------------------------------
Earnings available for common
stockholders 3,189 4,411 1,244 2,208
====================================
Weighted average common shares
outstanding 4,438 4,893 4,444 4,519
====================================
Basic earnings per common share 0.72 0.90 0.28 0.49
====================================
Weighted average dilutive
shares outstanding 4,490 4,926 4,628 4,540
====================================
Diluted earnings per common share 0.71 0.90 0.27 0.49
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