Boundless Corporation Reports Third Quarter Results; Quarterly Net Income Increases 30%.HAUPPAUGE Hauppauge can refer to:
A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of Boundless Corporation (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 : BDLS BDLS Basic Disaster Life Support BDLS Brachmann-De Lange Syndrome BDLS Battery Data Link System BDLS Bidirectional Loop Switching ) today reported results for its third quarter and nine month period ended September September: see month. 30, 1998. Revenues for the quarter ended September 30, 1998 were $23,555,000, compared with revenues of $24,262,000 for the quarter ended September 30, 1997. The slight decline in the 1998 quarterly revenue reflects the continued and expected decline in the company's VT(R) and Dorio(R) terminal product lines. Net income available to common shareholders increased 30% to $701,000, or $0.15 per basic and 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 quarter ended September 30, 1998, compared with net income available to common shareholders of $540,000, or $0.11 per basic and diluted share, for the quarter ended September 30, 1997. Revenues for the nine months ended September 30, 1998 were $68,349,000, compared with revenues of $71,373,000 for the nine months ended September 30, 1997. Net income available to common shareholders was $2,203,000, or $0.45 per basic share, or $0.44 per diluted share, for the nine months ended September 30, 1998, compared with net income available to common shareholders of $1,308,000, or $0.27 per basic and diluted share, for the nine months ended September 30, 1997. 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, "Boundless Corporation has continued to achieve its financial goal of improving its operating results, having completed its seventh quarter of consecutive profitability in what remains a rapidly evolving and highly competitive environment. Since the availability of Microsoft Corporations' Windows NT (Windows New Technology) A 32-bit operating system from Microsoft for Intel x86 CPUs. NT is the core technology in Windows 2000 and Windows XP (see Windows). Available in separate client and server versions, it includes built-in networking and preemptive multitasking. (R) Server 4.0, Terminal Server Edition, and Citrix Systems' MetaFrame(tm) software in June, thin client computing See thin client. has been propelled into the forefront of the corporate IT computing computing - computer landscape as more industry analysts and corporate users begin to evaluate, first hand, the benefits of this new software and the concept of access-based computing. In these evaluations, Boundless' Viewpoint(R) TC Windows(R)-based terminal ("WBT See Windows-based terminal. ") continues to be ranked among the `best-in-class' in terms of reliability, flexibility and price/performance. In fact, a recent review of our pre-beta Windows(R) CE-based WBT in Network Computing Storing and/or running applications in servers in a network. See cloud computing and network computer. magazine concluded that Boundless' WBT had `the best overall system design' and was `a solid offering from a vendor that has considerable experience in the Windows terminal An input/output terminal for a Windows NT or Windows 2000 server running multiuser software such as Windows Terminal Server, WinFrame or Citrix Presentation Server (formerly MetaFrame). market.' Capitalizing on this increased industry focus, our strong product offerings, strength in the text terminal market, extensive manufacturing capability and strong 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 partnerships, position Boundless as one of the beneficiaries of this new IT environment." Kenneth East, Boundless Technologies' Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. , commented, "I am pleased that we are able to report a marked increase in our operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: and earnings. Over the past few quarters we have devoted considerable effort and made significant investments in new technologies, products, and on strengthening and establishing new partnerships. Boundless' results to date indicate that we are now beginning to see the initial returns from those investments and confirm that we are well positioned to aggressively move forward during the coming months." Michael Stebel, Senior Vice President of Sales and Marketing for Boundless Technologies, stated, "The success of recent industry events, such as the Citrix's Thinergy'98 Conference, and the growing corporate interest in server-based computing Refers to applications that run in a server. Also known as "thin client computing," it may refer to a browser-based environment that uses a Web browser as the client with all applications running on a Web server on the Internet or in an intranet on the LAN. and Windows-based terminals A specialized terminal or slimmed-down PC used as a client to Windows Terminal Server. See Windows terminal. , further legitimizes the potential for thin-clients. We are truly excited by the overwhelming interest in our unique VARiety AccessSM program, which in its first 75 days, has attracted over 140 Value-Added Resellers A value-added reseller (VAR) is a company that adds some feature(s) to an existing product(s), then resells it (usually to end-users) as an integrated product or complete "turn-key" solution. (VARs) to sign up with Boundless. VARiety Access is tailored to the needs of Value Added Resellers See VAR. (company) value added reseller - (VAR, or "value added retailer") A company which sells something (e.g. computers) made by another company (an OEM) with extra components added (e.g. specialist software). (VARs) wishing to participate in the tremendous growth of thin client computing by offering them the ability to customize and differentiate their server-based solutions across a broad spectrum of industries. Our success with programs such as VARiety Access demonstrates the increased market acceptance of thin clients and the virtues inherent in providing flexible, market-leading technologies, both of which form the basis of our Viewpoint TC thin-client products." Mr. Combs concluded, "Looking forward over the next few quarters, our milestones remain clear: continue improving our financial performance; continue announcing major key technology and product alliances, and introducing new and unique ground-breaking products." About Boundless Boundless Corporation, through its wholly owned subsidiary, Boundless Technologies, Inc., is the largest U.S. manufacturer and marketer of Windows-based and text terminal solutions. With an installed base of over five million terminals and thin-client devices, the company's family of thin clients provides server-based computing solutions with PC-like capabilities, where applications reside on a server and are accessed by users on demand. Boundless' solutions are available through leading distributors, systems integrators An individual or organization that builds systems from a variety of diverse components. With increasing complexity of technology, more customers want complete solutions to information problems, requiring hardware, software and networking expertise in a multivendor environment. and certified See certification. resellers. In addition, their products are marketed under original equipment manufacturers' labels worldwide, including 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) , AT&T, 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 , Lucent Technologies, Digital Equipment Corp., 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 Olivetti. Boundless Technologies headquarters are located in Hauppauge, NY, where they also have a manufacturing facility. In addition, they have business offices in Austin, Texas, European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. headquarters in the Netherlands, and additional sales and distribution offices in Europe, Asia, Australia and 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. . For more information, visit the Boundless website at http://www.boundless.com or call 1-800-231-5445. All product names and brand names are trademarks or registered trade names of their respective owners. Except for 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. -0-
Boundless Technologies and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
---- ---- ---- ----
Revenue $ 23,555 $ 24,262 $ 68,349 $ 71,373
Cost of revenue: 16,754 18,009 49,184 54,297
-------- -------- --------- ---------
Gross margin 6,801 6,253 19,165 17,076
Operating expenses:
Sales and marketing 1,728 2,009 6,013 5,575
General and
administrative 1,612 1,499 4,634 4,631
Research and
development 959 610 2,597 2,004
Other charges 350 180 (111) 71
-------- -------- ----------- ---------
Total operating
expenses 4,649 4,298 13,133 12,281
------- ------- --------- --------
Operating income 2,152 1,955 6,032 4,795
Interest expense 698 978 2,045 2,675
-------- -------- ---------- ---------
Income before income taxes 1,454 977 3,987 2,120
Income tax expense 629 313 1,411 439
-------- --------- --------- ---------
Net income 825 664 2,576 1,681
Dividend on preferred stock
of subsidiary 124 124 373 373
-------- --------- ---------- ---------
Earnings available for
common shareholders $ 701 $ 540 $ 2,203 $ 1,308
======== ========= ======= =======
Weighted average common
shares outstanding 4,539 4,980 4,941 4,893
======== ========= ======== ========
Basic earnings per common
share $ 0.15 $ 0.11 $ 0.45 $ 0.27
Weighted average dilutive
common shares outstanding 4,539 5,197 4,986 5,057
======== ========== ======== ========
Diluted earnings per
common share $ 0.15 $ 0.11 $ 0.44 $ 0.27
Boundless Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(In Thousands)
September 30, December 31,
1998 1997
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 2,092 $ 2,929
Trade accounts receivable, net 13,974 14,395
Income tax refund receivable 800 800
Inventories 12,656 13,682
Deferred income taxes 1,561 1,561
Prepaid expenses and
other current assets 601 711
----------- ------------
Total current assets 31,684 34,078
Property & equipment, net 10,402 10,614
Goodwill, net 7,619 8,428
Other assets 655 1,428
----------- -----------
Total assets $ 50,360 $ 54,548
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Notes payable $ 8,500 $ 7,650
Current portion of long-term debt 8,000 3,250
Accounts payable 6,157 8,840
Accrued expenses 6,917 5,378
Deferred revenue 234 180
----------- -----------
Total current liabilities 29,808 25,298
========= =========
Long-Term Liabilities:
Long-term debt, less
current maturities -- 8,000
Deferred income taxes 1,561 1,561
Other 526 727
----------- ------------
Total long-term liabilities 2,087 10,288
---------- ----------
Total liabilities 31,895 35,586
--------- ----------
Commitments and contingencies
Mandatorily redeemable preferred
stock of subsidiary 3,555 3,555
Shareholders' Equity:
Preferred stock - -
Common stock 45 51
Additional paid-in capital 31,400 34,094
Accumulated deficit (16,535) (18,738)
----------- -----------
Total shareholders' equity 14,910 15,407
---------- ----------
Total Liabilities and
Shareholders' Equity $ 50,360 $ 54,548
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