Comdial Reports Record Second Quarter Sales.CHARLOTTESVILLE Charlottesville (shär`lətsvĭl), city (1990 pop. 40,341), seat of Albemarle co., central Va., on the Rivanna River, in a Piedmont farm region known for its apples; founded 1762, chartered as a city 1888. , Va.--(BUSINESS WIRE)--July 15, 1999-- Comdial Comdial is a telecommunications company based in Sarasota, Florida. Comdial was a former manufacturer and current deisgner and developer of Telecommunications Systems, or telephone syestems. Corporation (Nasdaq: CMDL CMDL Climate Monitoring and Diagnostics Laboratory CMDL Common Mission Data Loader ) today announced results for the second quarter which ended July July: see month. 4, 1999. Sales Sales for the quarter were a record $35.7 million, up 14 percent over the $31.3 million reported for the second quarter of 1998. For the first six months, sales were $67.6 million, an increase of 12 percent over the $60.6 million achieved during the same period in 1998. Gross Margin Gross margin for the second quarter of 1999 was a record 44 percent, compared with 39 percent for the second quarter of 1998. For the first half of 1999, gross margin increased to 42 percent versus 40 percent for the first half of 1998. The continued growth in margin is the result of the strategic plan to transition to the sale of higher margin systems and software solutions. Earnings Before Interest, Taxes, Depreciation and Amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
The Company continues to generate the funds to support future growth. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become was $8.2 million for the first half of 1999. The Company expects EBITDA will continue to increase consistent with future sales growth. Sales Growth Sales of the award winning FX product and activation activation /ac·ti·va·tion/ (ak?ti-va´shun) 1. the act or process of rendering active. 2. the transformation of a proenzyme into an active enzyme by the action of a kinase or another enzyme. 3. of the related software increased 62% over the previous quarter. The FX is being implemented by a wide variety of end-users including mortgage companies, realtors, insurance companies, banks, credit unions and law offices. The positive reception this product has received proves it has tremendous sales potential across a wide range of businesses. National Accounts sales increased 252 percent compared with the second quarter of 1998. For the first half of 1999, National Accounts sales increased 160 percent compared with the same period a year ago. Six new Platinum platinum (plăt`ənəm), metallic chemical element; symbol Pt; at. no. 78; at. wt. 195.08; m.p. 1,772°C;; b.p. 3,827±100°C;; sp. gr. 21.45 at 20°C;; valence +2 or +4. Dealers were added during the quarter, bringing the total to fifty-nine Adj. 1. fifty-nine - being nine more than fifty 59, ilx cardinal - being or denoting a numerical quantity but not order; "cardinal numbers" . This included dealers in the major metropolitan areas of Dallas Dallas, city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S. , TX, Charlotte, NC and New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , NY. Comments of William William, crown prince of Germany William or Frederick William, 1882–1951, crown prince of Germany, son of William II. In World War I he commanded (1914) an army on the Western Front and was nominal commander in the German attack G. Mustain William G. Mustain, President and 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. of Comdial Corp. said, "We are continuing to make dramatic progress with our strategic initiative of top-line sales growth through adding additional CTI-focused Platinum Preferred Dealers and growth within the National Accounts Program." Mr. Mustain continued, "In addition, we will launch a very proactive corporate marketing campaign in the third quarter. The program focuses on increasing the visibility of the Company, creating sound brand architecture and building end-user (job) end-user - The person who uses a computer application, as opposed to those who developed or support it. The end-user may or may not know anything about computers, how they work, or what to do if something goes wrong. awareness of our products. It is the Company's belief that by growing these critical areas we will increase the visibility of the company and ultimately increase shareholder value." Operating & Other Expenses Second quarter expenses increased relative to the same period last year. The increases were planned for the year and include the 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. associated with Array Telecom, which was acquired in 1998, and the budget for the comprehensive marketing program. Interest expense increased to $377,000. That increase is attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to additional borrowing associated with the 1998 acquisition of Array Telecom and the timing of accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying . For the first half, interest expense increased to $759,000 compared with $548,000 for the same period in 1998. Income Tax Expense In the second quarter of 1999, income tax expense was $852,000 or 40 percent of pretax income pretax income Reported income before the deduction of income taxes. Pretax income is sometimes considered a better measure of a firm's performance than aftertax income because taxes in one period may be influenced by activities in earlier periods. . This is an increase of $502,000 over the second quarter of 1998 when Comdial's rate was 16 percent of pretax income. In the third quarter of 1998, the Company recognized all of its allowable tax benefits associated with net operating losses Net operating losses Losses that a firm can take advantage of to reduce taxes. and carryforward carryforward 1. A business operating loss that, for tax purposes, may be claimed a certain number of years in the future, often up to 15 years. tax credits. It is now recognizing the tax expense associated with the deferred tax assets that were recorded in prior periods. Currently, the Company only pays at the Alternative Minimum Tax (AMT See vPro. ) rate. Net Income Income before income taxes was $2.1 million or $0.24 per share compared with $2.2 million or $0.25 per share in the second quarter of 1998. For the first half, income before taxes was $2.9 million or $0.32 per share compared with $3.8 million or $0.43 per share reported in 1998. As a result of changing the Company's status to a fully taxed reporting basis, net income for the six month period ended July 4, 1999, was $1.3 million or $0.14 per share, compared with $1.9 million and $0.21 per share reported for the same period a year ago. For the same reason, net income for the first half of 1999, was $1.7 million and $0.19 per share, compared with $3.7 million and $0.42 per share reported in 1998. Comdial Corporation Comdial is a provider of integrated communications solutions for small and mid-size organizations. The Company's broad product line includes business communications, hospitality, assisted living as·sist·ed living n. A living arrangement in which people with special needs, especially older people with disabilities, reside in a facility that provides help with everyday tasks such as bathing, dressing, and taking medication. , and call center solutions. For more information about Comdial and its products, please visit our web site at http://www.comdial.com. This release contains 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 are subject to risks and uncertainties, including, but not limited to, the impact of competitive products, product demand and market acceptance risks, reliance on key strategic alliances, fluctuations in operating results, delays in development of highly complex products, and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission. These risks could cause the Company's actual results for 1999 and beyond to differ materially from those expressed in any forward looking statement made by, or on behalf of, the Company.
Consolidated Condensed Statements of Operations Unaudited
Three Months Ended: Six Months Ended:
July 4, June 28, July 4, June 28,
(In thousands 1999 1998 1999 1998
except per share amounts)
Net sales $35,743 $31,317 $67,607 $60,598
Cost of goods sold 20,088 19,101 39,251 36,495
Gross profit 15,655 12,216 28,356 24,103
Operating expenses
Selling, general
and administrative 10,026 7,545 18,637 15,160
Engineering,
research and
development 2,338 1,493 4,424 3,044
Goodwill
amortization 799 683 1,583 1,346
Operating income 2,492 2,495 3,712 4,553
Interest expense 377 273 759 548
Miscellaneous
expense
(income) net (28) 14 101 194
Income before
income taxes 2,143 2,208 2,852 3,811
Income tax
expense 235 350 416 444
Net income applicable to
common stock before
tax benefit 1,908 1,858 2,436 3,367
Income tax benefit
(expense) (617) - (757) 330
Net income applicable
to common stock $1,291 $1,858 $1,679 $3,697
Earnings per common share
and common equivalent share:
Income before
tax benefit (expense) $0.21 $0.21 $0.27 $0.38
Income tax
benefit (expense) (0.07) - (0.08) 0.04
Net income per common share:
Basic $0.14 $0.21 $0.19 $0.42
Diluted $0.14 $0.20 $0.19 $0.41
Weighted average common
shares outstanding:
Basic 8,948 8,810 8,944 8,762
Diluted 8,986 9,125 8,985 9,037
Consolidated Condensed Balance Sheets
July 4, Dec. 31,
(In thousands) 1999 1998
Assets
Cash and cash equivalents $2,513 $1,599
Accounts receivable - net 26,757 23,006
Inventory 18,439 21,434
Other current assets 5,003 4,815
Total current assets 52,712 50,854
Property - net 18,130 18,023
Goodwill 12,801 14,079
Deferred tax asset - net 16,368 17,257
Other assets 11,445 8,777
Total assets $111,456 $108,990
Liabilities and Stockholders' Equity
Accounts payable $9,715 $11,034
Other accrued liabilities 6,467 8,165
Current maturities on debt 4 6
Total current liabilities 16,186 19,205
Longterm debt 25,441 22,140
Deferred tax liability 2,968 3,123
Other longterm liabilities 1,445 1,361
Total liabilities 46,040 45,829
Stockholders' equity 65,416 63,161
Total liabilities and
stockholders' equity $111,456 $108,990
EBITDA
Six Months Ended:
July 4, June 28,
1999 1998
Net Income $1,679 $3,697
Tax Expense 1,173 114
Interest Expense 759 548
Depreciation Expense 1,730 1,402
Goodwill 1,583 1,346
Amortization 1,244 991
Total $8,168 $8,098
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