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 PHOENIX, Oct. 6 /PRNewswire/ -- Syntellect Inc. (NASDAQ: SYNL) reported today third quarter and nine-month results for the period ended Sept. 30, 1993. The company also announced its intent to acquire TALX Corp., a St. Louis-based provider of application software solutions using voice processing technology.
 Net revenues for the third quarter were $9.5 million, down 12 percent from revenues of $10.8 million for the same quarter last year. The net loss for the third quarter was $1.5 million, or $.18 per share, compared to net income of $569,000, or $.07 per share, for the comparable quarter in 1992.
 For the nine-month period ended Sept. 30, 1993, net revenues were $33.2 million, up 20 percent from revenues of $27.6 million for the same period last year. The net loss for the nine-month period was $556,000, or $.07 per share, compared to a net loss of $652,000, or $.08 per share, for the comparable period in 1992.
 In commenting on these results, Thomas R. Mayer, president and chief executive officer of Syntellect, said, "We are disappointed with the results for this quarter although excellent demand has been experienced in the VocalPoint and Premier 030 products, it was not sufficient to offset the decline in Domestic core product sales, which began earlier in the year."
 International revenues which have consistently grown for the past several quarters were down 50 percent from the prior year as several large orders from the Pacific Rim were postponed, and a continuing weakness in Europe from the slower economy.
 Gross margins during the quarter suffered from the absorption of fixed period manufacturing costs into a lower overall revenue base while manufacturing and marketing costs accelerated with the introduction of the company's new line of voice processing products.
 Mayer commented that "The decline in our Domestic core sales is of continuing concern. We are pursuing aggressive plans to accelerate sales of Premier 030 and VocalPoint products to fill that gap. The department voice processing market is continuing to grow at 30 percent per year. We will participate in this growth next year as a result of our new line of products and technology, and application consolidation growth strategy."
 Under the terms of the letter agreement, Syntellect announces today it will issue 2 million shares of its common stock for all the outstanding shares of TALX. The transaction is subject to due diligence and the final execution of a definitive agreement and approval by the boards of directors and shareholders of both companies. The issuance of the Syntellect shares is subject to the registration requirements of the Securities and Exchange Commission. The merger is anticipated to close on or about Dec. 31, 1993.
 Mayer added that, "TALX is one of the most successful application companies and has been a consistent leader in the employee benefits market since 1987. TALX has an excellent customer base, a high-quality reputation and a strong sales growth record within the industry. TALX products are used by the employee benefits departments of major corporations to provide applications such as name of beneficiary, defined contribution changes and 401(k) balances. The addition of TALX is part of Syntellect's strategy to be application driven and to enter a key new strategic market -- employee benefits in Fortune 500 and other major industries. As a result of the acquisition, Syntellect intends to leverage TALX' innovative application expertise to enhance its long-term strategic direction."
 During the fiscal year ended March 31, 1993, TALX reported revenue of $8.5 million and income from operations of $760,000. TALX revenue growth in fiscal 1994 is running at approximately 25 percent.
 Syntellect Inc., founded in 1984, is a worldwide company that develops, markets and supports a family of network voice processing systems. Network voice processing includes call processing, the technology that provides a high degree of automation and control of inbound telephone calls. Syntellect develops, markets and supports the VocalPoint PC-based voice processing systems, the Premier 030 family of interactive voice response systems and the Dytel Call Center Gateway call processor. The company has shipped more than 8,600 systems to more than 850 customers in major corporations worldwide.
 Condensed Consolidated Statements of Operations
 Three and Nine Months Ended Sept. 30, 1993 and 1992
 (In thousands, except per share amounts)
 Three Months Ended Nine Months Ended
 Sept. 30, Sept. 30,
 1993 1992 1993 1992
 Net revenues:
 Product $7,847 $9,423 $28,576 $23,744
 Maintenance 1,616 1,379 4,651 3,896
 Total net revenues 9,463 10,802 33,227 27,640
 Cost of revenues:
 Product 4,184 3,940 13,302 10,481
 Maintenance 412 484 1,270 1,454
 Total cost of revenues 4,596 4,424 14,572 11,935
 Gross margin 4,867 6,378 18,655 15,705
 Operating expenses:
 Selling, marketing and
 administrative 4,163 3,959 12,944 11,718
 Research and development 1,626 1,451 4,679 3,788
 Depreciation and amortization 700 643 1,996 1,686
 Total operating expenses 6,489 6,053 19,619 17,192
 Operating income (loss) (1,622) 325 (964) (1,487)
 Interest income, net 113 244 438 835
 Income (loss) before
 income taxes (1,509) 569 (526) (652)
 Income taxes, net of
 tax benefit --- --- 30 ---
 Net income (loss) ($1,509) $569 ($556) ($652)
 Net income (loss) per common
 and equivalent share ($.18) $.07 ($.07) ($.08)
 Shares used in per share
 calculations 8,362 8,307 8,331 8,202
 Condensed Consolidated Balance Sheets
 Sept. 30, 1993, and Dec. 31, 1992
 (In thousands)
 1993 1992
 Current assets:
 Cash and short-term investments $12,931 $20,619
 Receivables, net 16,532 14,978
 Inventories 12,771 8,323
 Prepaid expenses 682 401
 Total current assets 42,916 44,321
 Property and equipment, net 5,307 4,991
 Patents, purchased technology and
 other assets, net 3,811 4,108
 Total $52,034 $53,420
 Liabilities and Shareholders' Equity
 Current liabilities:
 Accounts payable and accrued
 liabilities $4,340 $5,658
 Customer deposits 691 709
 Deferred revenue 2,559 2,246
 Current portion of capital lease
 obligations 4 16
 Total current liabilities 7,594 8,629
 Shareholders' equity 44,440 44,791
 Total $52,034 $53,420
 -0- 10/6/93
 /CONTACT: Daniel J. Predovic or E. Evon Theis, investor relations, 602-789-2803 or 602-789-2802/

CO: Syntellect Inc.; TALX Corp. ST: Arizona, Missouri IN: TLS CPR SU: ERN TNM

LS-JL -- LA022 -- 9487 10/06/93 16:57 EDT
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Publication:PR Newswire
Date:Oct 6, 1993

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