EXHIBIT 99.1
INTER-TEL ANNOUNCES 2005 FOURTH QUARTER AND YEAR-END RESULTS
INCLUDING CERTAIN RESTATED COMPARATIVE FINANCIAL RESULTS
Company Reports EPS of $0.33 Per Diluted Share in Fourth Quarter
Tempe, Arizona . . . February 14, 2006 . . . Inter-Tel, Incorporated (NASDAQ: INTL)today announced operating results for the fourth quarter and year ended December 31, 2005. Net sales for the quarter ended December 31, 2005 decreased 0.1% to $110.7 million compared to restated net sales of $110.8 million for the corresponding period in 2004. Net sales for the quarter ended December 31, 2005 included $5.4 million in revenues attributable to our Lake acquisition in March 2005. Excluding the Lake acquisition, non-GAAP net sales would have been $105.3 million, a decrease of 5.0% for the fourth quarter of 2005 compared to the corresponding period in 2004. Net sales for the year ended December 31, 2005 increased 6.3% to $442.9 million compared to restated net sales of $416.8 million for 2004. Net sales for the year ended December 31, 2005 included $23.0 million in revenues attributable to our acquisition of Lake. Excluding the Lake acquisition, non-GAAP net sales would have been $419.9 million, an increase of 0.8% for the year ended December 31, 2005 compared to 2004.
For the quarter ended December 31, 2005, Inter-Tel reported GAAP net income of $8.8 million ($0.33 per diluted share) including $342,000 in net income from the Lake acquisition, compared to restated GAAP net income of $3.2 million ($0.12 per diluted share) for the quarter ended December 31, 2004. For the year ended December 31, 2005, Inter-Tel reported GAAP net income of $18.4 million ($0.68 per diluted share), including the impact of the Lake acquisition and the related in-process research and development (IPRD) write-off, and $6.8 million in accrued net losses associated with a legal judgment and settlement discussed in further detail below, compared to restated GAAP net income of $27.2 million ($1.00 per diluted share) for the year ended December 31, 2004. For the year ended December 31, 2005, Inter-Tel reported that non-GAAP pro forma net income, excluding the Lake acquisition and the related in-process research and development write-off and the net losses associated with a legal judgment and settlement was $26.3 million ($0.97 per diluted share). Please refer to “Legal judgment, legal settlement and related legal costs” and “Reconciliation of GAAP and Non-GAAP Disclosures” below for additional information.
Restatement.During the Company’s year-end close procedures, the Company determined that revenues during 2005 and in prior years that related to a portion of the resale of local and long distance and network services billings were inadvertently recorded in advance of the related service period due to an error in determining the proper time periods covered for certain advance billed products. As a result, the Company intends to restate its revenues and related income tax provision for all periods to be presented in the forthcoming Annual Report on Form 10-K, scheduled to be filed in March 2006. This adjustment grew in small increments over a number of years and the effect on each of the prior quarterly and annual results was not material. However, the cumulative amount of the differences was too large to record in the fourth quarter of 2005, so management elected to restate prior periods to correct this difference. The cumulative effect of the adjustments resulted in a current liability for
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(a) The amounts provided are estimates and subject to audit. The Company has not yet filed its Form 10-K report for the Year Ended December 31, 2005, and there can be no assurance that these amounts may not change.
Additional information regarding our operating results follows:
Sales. GAAP net sales decreased 0.1% to $110.7 million in the fourth quarter of 2005 compared to $110.8 million as restated for the fourth quarter of 2004. Non-GAAP net sales, which exclude the operations of Lake, decreased 5.0%, or $5.6 million, in the quarter ended December 31, 2005 compared to restated net sales in the fourth quarter of 2004. GAAP net sales increased 6.3%, or $26.1 million, to $442.9 million in the year ended December 31, 2005 compared to restated net sales of $416.8 million in 2004. Non-GAAP net sales, excluding the operations of Lake, increased 0.8%, or $3.1 million in the year ended December 31, 2005 compared to restated net sales in 2004.
Gross Profit and Gross Margin. GAAP gross profit decreased 6.0%, or $3.6 million, to $56.0 million in the fourth quarter of 2005 compared to restated gross profit of $59.6 million in the fourth quarter of 2004. The gross margin percentage decreased to 50.6% in the fourth quarter of 2005, compared to 53.8% for the fourth quarter of 2004, as restated. The decrease in gross profit dollars was primarily attributable to the mix of products and services sold, and sales promotions and discounts on product and service revenues. The decrease in gross margin percentage was due primarily to sales promotions and discounts on product and service revenues. The gross margin percentage was also affected by the mix of products and services sold, with a higher percentage of net sales recognized in our local, long distance and network services divisions, government and national accounts division, and DataNet operations, which generate lower gross margins than other divisions within our principal operating segment. In the year ended December 31, 2005, GAAP gross profit dollars increased 2.2%, or $4.9 million, to $226.3 million, compared to restated gross profit of $221.5 million in the year ended December 31, 2004. The gross margin percentage decreased to 51.1% in the year ended December 31, 2005, compared to 53.1% for the corresponding period in 2004, as restated, primarily due to promotions and price discounting, as well as the mix of the products and services sold as described in greater detail above.
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Research and Development (R&D). GAAP R&D expenses decreased 2.5%, or $197,000, in the fourth quarter of 2005 compared to the fourth quarter of 2004. Non-GAAP R&D costs, which exclude the operations of Lake, decreased 11.2%, or $0.9 million, in the quarter ended December 31, 2005 compared to R&D costs in the fourth quarter of 2004. R&D expenses decreased in the fourth quarter of 2005 compared to the corresponding period in 2004 following the product test and launch expenses associated with the release of new products in the first half of 2005, including the Inter-Tel 5000, Enterprise Messaging, and Unified Communicator v3.0 products. In the year ended December 31, 2005, GAAP R&D expenses increased 15.4%, or $4.4 million, compared to the year ended December 31, 2004. Non-GAAP R&D expenses, which exclude the operations of Lake, increased 3.8%, or $1.1 million, in the year ended December 31, 2005 compared to the year ended December 31, 2004.
In-Process Research and Development (IPRD) Write-Off. In the first quarter of 2005, the Company reported a write-off of IPRD costs of $2.6 million associated with the acquisition of Lake. This write-off reduced GAAP net income by $0.10 per diluted share for the year ended December 31, 2005. Refer to “Reconciliation of GAAP and Non-GAAP Disclosures” below for additional information.
Selling, General and Administrative (SG&A). GAAP SG&A increased slightly by 0.9%, or $329,000, in the fourth quarter of 2005 compared to the fourth quarter of 2004. The slight dollar increase was primarily attributable to higher costs and higher net sales associated with our Lake acquisition in March 2005. SG&A increased to 32.9% of net sales in the fourth quarter of 2005 compared to 32.5% of restated net sales in the fourth quarter of 2004. Non-GAAP SG&A costs, which exclude the operations of Lake, decreased 2.4%, or $0.9 million, in the quarter ended December 31, 2005 compared to SG&A costs in the fourth quarter of 2004. In the year ended December 31, 2005, GAAP SG&A expenses increased 8.9%, or $12.4 million, compared to the year ended December 31, 2004. SG&A increased to 34.4% of net sales in the year ended December 31, 2005, compared to 33.6% of net sales in 2004, as restated. Non-GAAP SG&A expenses, which exclude the operations of Lake, increased 5.6%, or $7.9 million, in the year ended December 31, 2005 compared to SG&A in the year ended December 31, 2004.
Amortization. Amortization increased 110.6% to $1.1 million in the fourth quarter of 2005, compared to $540,000 in the fourth quarter of 2004. The increase was primarily due to increased purchased intangible assets from acquisitions and assets acquired during 2004 and the Lake acquisition in 2005. Amortization increased 124.6% to $4.2 million in the year ended December 31, 2005, compared to $1.9 million in 2004.
Legal judgment, legal settlement and related legal costs. GAAP pre-tax costs associated with this line item in the consolidated statements of income totaled $10.4 million ($0.26 per diluted share after taxes) during the quarter ended September 30, 2005. As disclosed in August 2005, a jury rendered a verdict against Inter-Tel in the net amount of approximately $7.4 million in a trial in Florida. Although the Company is appealing the verdict, the Company has accrued the net verdict amount, plus legal costs incurred in the third quarter. Should the Company be successful or unsuccessful in the appeals process, these costs may be adjusted in the future. The Company also reached a separate settlement in another legal matter during the third quarter in connection with a longstanding dispute with a third-party vendor and customer. The net settlement plus legal fees incurred during the third quarter are included in the pre-tax total costs of $10.4 million identified above.
Reconciliation of GAAP and Non-GAAP Disclosures. 2005 first quarter operating income included a write-off of IPRD costs of $2.6 million, which reduced net income by $2.6
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million, or $0.10 per diluted share. This write-off reflected the in-process research and development costs associated with the Company’s Lake acquisition in March 2005. The IPRD write-off is not deductible for income tax purposes. Provided in the tables below are the preliminary operating results of our acquired Lake operations, including the IPRD write-off, as well as the impact of costs associated with a legal judgment against the Company in the third quarter, a legal settlement in the third quarter, and legal costs associated with these two events as identified in more detail above. The non-GAAP condensed consolidated statements of operations are provided below to enhance overall understanding of our current financial performance and how we view our operating results. The presentation of this non-GAAP information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP and is not necessarily comparable to non-GAAP results published by other companies. The following tables reconcile the financial statements on a GAAP basis for the quarter and year ended December 31, 2005 to the non-GAAP pro forma financial statements, which exclude the effects of (1) the in-process research and development (IPRD) write-off and the impact of operating results from the acquired Lake operations and (2) costs associated with a legal judgment against the Company in the third quarter, a legal settlement in the third quarter, and legal costs associated with each of these two events, as discussed above:
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Quarter ended December 31, 2005
| | | | | | | | | | | | | |
| | | | | | | | | | | Non-GAAP/ |
| (in thousands, except per | | | | | | Lake | | Pro forma excluding |
| share amounts) | | GAAP | Acquisition | Lake |
| |
| Sales | | $ | 110,675 | | | $ | 5,423 | | | $ | 105,252 | |
| Gross profit | | | 56,038 | | | | 2,761 | | | | 53,277 | |
| Selling, general and administrative | | | 36,362 | | | | 1,182 | | | | 35,180 | |
| Amortization | | | 1,137 | | | | 522 | | | | 615 | |
| Operating income | | | 10,737 | | | | 355 | | | | 10,382 | |
| Income before income taxes | | | 12,088 | | | | 394 | | | | 11,694 | |
| Income tax provision | | | 3,328 | | | | 52 | | | | 3,276 | |
| Net income | | | 8,760 | | | | 342 | | | | 8,418 | |
| Net income per share — basic | | $ | 0.33 | | | $ | 0.01 | | | $ | 0.32 | |
| Net income per share — diluted | | $ | 0.33 | | | $ | 0.01 | | | $ | 0.31 | |
Year ended December 31, 2005
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | Legal judgment, | | Non-GAAP/ |
| | | | | | | | | | | legal settlement | | Pro forma excluding |
| (in thousands, except | | | | | | Lake | | and related | | Lake and legal |
| per share amounts) | | GAAP | | Acquisition | | litigation costs | | issues |
| |
| Sales | | $ | 442,894 | | | $ | 22,996 | | | $ | — | | | $ | 419,898 | |
| Gross profit | | | 226,310 | | | | 11,228 | | | | — | | | | 215,082 | |
| Selling, general and administrative | | | 152,314 | | | | 4,507 | | | | — | | | | 147,807 | |
| In process R&D write-off | | | 2,600 | | | | 2,600 | | | | — | | | — |
| Amortization | | | 4,194 | | | | 1,740 | | | | — | | | | 2,454 | |
| Legal judgment and settlement | | | 10,378 | | | | — | | | | 10,378 | | | — |
| Operating income (loss) | | | 23,566 | | | | (981 | ) | | | (10,378 | ) | | | 34,925 | |
| Income (loss) before income taxes | | | 27,769 | | | | (911 | ) | | | (10,378 | ) | | | 39,058 | |
| Income taxes | | | 9,375 | | | | 223 | | | | (3,580 | ) | | | 12,732 | |
| Net income (loss) | | | 18,394 | | | | (1,134 | ) | | | (6,798 | ) | | | 26,326 | |
| Net income (loss) per share — basic | | $ | 0.70 | | | $ | (0.04 | ) | | $ | (0.26 | ) | | $ | 1.00 | |
| Net income (loss) per share — diluted | | $ | 0.68 | | | $ | (0.04 | ) | | $ | (0.26 | ) | | $ | 0.97 | |
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Conference call.You may access our quarterly earnings results conference call, which is scheduled for February 14, 2006 at 5:30 p.m. (ET) via the Internet at http://www.inter-tel.com. Select “News & Events” from the top navigation bar. A link to the webcast will be displayed within the “News & Events” section. A replay of the conference call will be available on the Internet until February 14, 2007 at 11:59 p.m. (ET).
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding the Company’s estimates of restatement adjustments on net sales, operating income, corporate executive incentive plans, tax provision and net income for all periods presented, the materiality of such adjustments, and the Company’s intent to restate its revenues and related income tax provision for all periods to be presented in the forthcoming Annual Report on Form 10-K, scheduled to be filed in March 2006. Such statements are based on current assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially from our current expectations. These risks and uncertainties include, but are not necessarily limited to, the risks that Inter-Tel’s management has not properly estimated and accounted for proposed restatement amounts for all applicable periods. For a further list and description of such risks and uncertainties, please see the Company’s previously filed SEC reports, including the Company’s Annual Report on Form 10-K filed March 16, 2005, Form 10-Q filed on November 9, 2005 and Current Reports on Form 8-K. Inter-Tel disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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About Inter-Tel, IncorporatedInter-Tel (Nasdaq: INTL — news) offers value-driven communications products; applications utilizing networks and server-based communications software; and a wide range of managed services that include voice and data network design and traffic provisioning, custom application development, and financial solutions packages. An industry-leading provider focused on the communication needs of business enterprises, Inter-Tel employs approximately 2,000 communications professionals, and services business customers through a network of 59 company-owned direct sales offices and over 350 authorized providers in North America, the United Kingdom, Ireland, Australia and South Africa. More information is available at
www.inter-tel.com.-8-
INTER-TEL, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months | | | | | | | Pro Forma | | | Pro Forma 2005 | | | Q4 2005 | | | | | |
| (in thousands, except per share amounts) | | Ended December 31, | | | | | | | 2005 | | | legal judgment | | | Excluding | | | | | |
| | | 2005 | | | 2004 | | | 2004 | | | Lake Acq | | | & settlement | | | Lake & legal | | | | | |
| | | GAAP | | GAAP | | | | | | Non-GAAP | | Non-GAAP | | Non-GAAP | | | | |
NET SALES | | | | | | As Reported | | As Restated | | | | | | | | | | | | | | | | |
| Telecommunications systems, software and related | | $ | 96,285 | | | $ | 98,240 | | | $ | 98,240 | | | $ | 5,423 | | | | | | | $ | 90,862 | | | | | |
| Resale of local and long distance | | | 14,390 | | | | 12,208 | | | | 12,600 | | | | — | | | | — | | | | 14,390 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Total net sales | | | 110,675 | | | | 110,448 | | | | 110,840 | | | | 5,423 | | | | — | | | | 105,252 | | | | | |
Cost of sales | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Telecommunications systems, software and related | | | 46,194 | | | | 43,060 | | | | 43,060 | | | | 2,662 | | | | | | | | 43,532 | | | | | |
| Resale of local and long distance | | | 8,443 | | | | 8,144 | | | | 8,144 | | | | — | | | | — | | | | 8,443 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Total cost of sales | | | 54,637 | | | | 51,204 | | | | 51,204 | | | | 2,662 | | | | — | | | | 51,975 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
GROSS PROFIT | | | 56,038 | | | | 59,244 | | | | 59,636 | | | | 2,761 | | | | — | | | | 53,277 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Research & development | | | 7,802 | | | | 7,999 | | | | 7,999 | | | | 702 | | | | | | | | 7,100 | | | | | |
| Selling, general and administrative | | | 36,362 | | | | 36,033 | | | | 36,033 | | | | 1,182 | | | | | | | | 35,180 | | | | | |
| Amortization of purchased intangible assets | | | 1,137 | | | | 540 | | | | 540 | | | | 522 | | | | | | | | 615 | | | | | |
| Write-off of in-process research and development costs | | | — | | | | — | | | | — | | | | — | | | | | | | | — | | | | | |
| Legal judgment and settlement / E-Rate | | | — | | | | 9,261 | | | | 9,261 | | | | | | | | — | | | | — | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | 45,301 | | | | 53,833 | | | | 53,833 | | | | 2,406 | | | | — | | | | 42,895 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
OPERATING INCOME | | | 10,737 | | | | 5,411 | | | | 5,803 | | | | 355 | | | | — | | | | 10,382 | | | | | |
| Interest and other income | | | 1,260 | | | | 846 | | | | 846 | | | | 22 | | | | — | | | | 1,238 | | | | | |
| Foreign currency transaction gains (losses) | | | 111 | | | | (118 | ) | | | (118 | ) | | | 17 | | | | — | | | | 94 | | | | | |
| Interest expense | | | (20 | ) | | | (10 | ) | | | (10 | ) | | | | | | | — | | | | (20 | ) | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
INCOME BEFORE INCOME TAXES | | | 12,088 | | | | 6,129 | | | | 6,521 | | | | 394 | | | | — | | | | 11,694 | | | | | |
INCOME TAX PROVISION | | | 3,328 | | | | 3,218 | | | | 3,308 | | | | 52 | | | | — | | | | 3,276 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
NET INCOME | | $ | 8,760 | | | $ | 2,911 | | | $ | 3,213 | | | $ | 342 | | | $ | — | | | $ | 8,418 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
NET INCOME PER SHARE—BASIC | | $ | 0.33 | | | $ | 0.11 | | | $ | 0.12 | | | | 0.01 | | | | — | | | $ | 0.32 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
NET INCOME PER SHARE—DILUTED | | $ | 0.33 | | | $ | 0.11 | | | $ | 0.12 | | | | 0.01 | | | | — | | | $ | 0.31 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
DIVIDENDS PER SHARE | | $ | 0.08 | | | $ | 0.07 | | | $ | 0.07 | | | $ | — | | | $ | — | | | $ | 0.08 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Average number of common | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| shares outstanding — Basic | | | 26,222 | | | | 25,994 | | | | 25,994 | | | | 26,222 | | | | 26,222 | | | | 26,222 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Average number of common shares outstanding — Diluted | | | 26,914 | | | | 27,509 | | | | 27,509 | | | | 26,914 | | | | 26,222 | | | | 26,914 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Effective tax rate | | | 27.5 | % | | | 52.5 | % | | | 50.7 | % | | | 13.2 | % | | | n/a | | | | 28.0 | % | | | | |
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INTER-TEL, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Year | | | | | | | Pro Forma | | | Pro Forma 2005 | | | Pro Forma | |
| (in thousands, except per share amounts) | | Ended December 31, | | | | | | | 2005 | | | legal judgment | | | Excluding | |
| | | 2005 | | | 2004 | | | 2004 | | | Lake Acq | | | & settlement | | | Lake & Charge | |
| | | GAAP | | GAAP | | | | | | Non-GAAP | | Non-GAAP | | Non-GAAP |
NET SALES | | | | | | As Reported | | As Restated | | | | | | | | | | | | |
| Telecommunications systems, software and related | | $ | 387,605 | | | $ | 367,969 | | | $ | 367,969 | | | $ | 22,996 | | | | | | | $ | 364,609 | |
| Resale of local and long distance | | | 55,289 | | | | 48,924 | | | | 48,799 | | | | — | | | | | | | | 55,289 | |
| | | | | | | | | | | | | | | | | | | | |
| Total net sales | | | 442,894 | | | | 416,893 | | | | 416,768 | | | | 22,996 | | | | — | | | | 419,898 | |
Cost of sales | | | | | | | | | | | | | | | | | | | | | | | | |
| Telecommunications systems, software and related | | | 182,789 | | | | 165,345 | | | | 165,345 | | | | 11,768 | | | | | | | | 171,021 | |
| Resale of local and long distance | | | 33,795 | | | | 29,973 | | | | 29,973 | | | | — | | | | | | | | 33,795 | |
| | | | | | | | | | | | | | | | | | | | |
| Total cost of sales | | | 216,584 | | | | 195,318 | | | | 195,318 | | | | 11,768 | | | | — | | | | 204,816 | |
| | | | | | | | | | | | | | | | | | | |
GROSS PROFIT | | | 226,310 | | | | 221,575 | | | | 221,450 | | | | 11,228 | | | | — | | | | 215,082 | |
| | | | | | | | | | | | | | | | | | | |
| Research & development | | | 33,258 | | | | 28,815 | | | | 28,815 | | | | 3,362 | | | | | | | | 29,896 | |
| Selling, general and administrative | | | 152,314 | | | | 139,917 | | | | 139,917 | | | | 4,507 | | | | | | | | 147,807 | |
| Amortization of purchased intangible assets | | | 4,194 | | | | 1,867 | | | | 1,867 | | | | 1,740 | | | | | | | | 2,454 | |
| Write-off of in-process research and development costs | | | 2,600 | | | | — | | | | — | | | | 2,600 | | | | | | | | — | |
| Legal judgment and settlement / E-Rate | | | 10,378 | | | | 9,261 | | | | 9,261 | | | | — | | | | 10,378 | | | | — | |
| | | | | | | | | | | | | | | | | | | | |
| | | | 202,744 | | | | 179,860 | | | | 179,860 | | | | 12,209 | | | | 10,378 | | | | 180,157 | |
| | | | | | | | | | | | | | | | | | | |
OPERATING INCOME | | | 23,566 | | | | 41,715 | | | | 41,590 | | | | (981 | ) | | | (10,378 | ) | | | 34,925 | |
| Interest and other income | | | 4,073 | | | | 2,654 | | | | 2,654 | | | | 38 | | | | — | | | | 4,035 | |
| Foreign currency transaction gains (losses) | | | 215 | | | | (399 | ) | | | (399 | ) | | | 32 | | | | — | | | | 183 | |
| Interest expense | | | (85 | ) | | | (118 | ) | | | (118 | ) | | | — | | | | — | | | | (85 | ) |
| | | | | | | | | | | | | | | | | | | |
INCOME BEFORE INCOME TAXES | | | 27,769 | | | | 43,852 | | | | 43,727 | | | | (911 | ) | | | (10,378 | ) | | | 39,058 | |
INCOME TAXES | | | 9,375 | | | | 16,798 | | | | 16,514 | | | | 223 | | | | (3,580 | ) | | | 12,732 | |
| | | | | | | | | | | | | | | | | | | |
NET INCOME | | $ | 18,394 | | | $ | 27,054 | | | $ | 27,213 | | | $ | (1,134 | ) | | $ | (6,798 | ) | | $ | 26,326 | |
| | | | | | | | | | | | | | | | | | | |
NET INCOME PER SHARE—BASIC | | $ | 0.70 | | | $ | 1.05 | | | $ | 1.06 | | | | (0.04 | ) | | | (0.26 | ) | | $ | 1.00 | |
| | | | | | | | | | | | | | | | | | | |
NET INCOME PER SHARE—DILUTED | | $ | 0.68 | | | $ | 0.99 | | | $ | 1.00 | | | | (0.04 | ) | | | (0.26 | ) | | $ | 0.97 | |
| | | | | | | | | | | | | | | | | | | |
DIVIDENDS PER SHARE | | $ | 1.24 | | | $ | 0.19 | | | $ | 0.19 | | | $ | — | | | $ | — | | | $ | 1.24 | |
| | | | | | | | | | | | | | | | | | | |
| Average number of common shares outstanding — Basic | | | 26,261 | | | | 25,767 | | | | 25,767 | | | | 26,261 | | | | 26,261 | | | | 26,261 | |
| | | | | | | | | | | | | | | | | | | |
| Average number of common shares outstanding — Diluted | | | 27,207 | | | | 27,266 | | | | 27,266 | | | | 26,261 | | | | 26,261 | | | | 27,207 | |
| | | | | | | | | | | | | | | | | | | |
| Effective tax rate | | | 33.8 | % | | | 38.3 | % | | | 37.8 | % | | | (24.5 | %) | | | 34.5 | % | | | 32.6 | % |
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OTHER SELECTED FINANCIAL DATA
| | | | | | | | | |
| (in millions, except DSO and | | December 31, | | | December 31, | |
| Inventory turn amounts) | | 2005 | | | 2004 | |
| | | | | | | | | |
| Cash and short-term investments | | $ | 167.5 | | | $ | 205.0 | |
| Long-term investments | | | — | | | | 9.9 | |
| Accounts receivable — net | | | 44.1 | | | | 44.2 | |
| Inventory | | | 19.6 | | | | 16.1 | |
| Net investment in sales-leases (current) | | | 19.7 | | | | 17.2 | |
| Net investment in sales-leases (long-term) | | | 34.8 | | | | 33.9 | |
| DSO (based on 90 days sales) | | | 35.8 | | | | 36.0 | |
| DSO (based on trailing 12 mo. sales) | | | 35.8 | | | | 38.1 | |
| Inventory turns | | | 11.5 | | | | 11.7 | |
| | | | | | | | | | | | | | | | | |
| | | Quarter ended | | | Quarter ended | | | Year ended | | | Year ended | |
| | | December 31, | | | December 31, | | | December 31, | | | December 31, | |
| | | 2005 | | | 2004 | | | 2005 | | | 2004 | |
| Depreciation and amortization | | $ | 3.4 | | | $ | 2.7 | | | $ | 13.7 | | | $ | 10.0 | |
| Capital Expenditures | | | 2.5 | | | | 3.3 | | | | 8.7 | | | | 10.7 | |
| Cash used for acquisitions | | | 0.2 | | | | 4.7 | | | | 28.2 | | | | 6.2 | |
| Cash dividends paid | | | 2.1 | | | | 1.8 | | | | 34.9 | | | | 6.4 | |
| Treasury stock repurchases (a) | | | — | | | | — | | | | 13.8 | | | | — | |
| | |
| (a) | | 716,500 shares at an average price of $19.23 per share. |
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