Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact: Boston Acoustics, Inc.
978-538-5000
Moses Gabbay
Moses@bostona.com
Debby Ricker-Rosato
DRicker@bostona.com
Boston Acoustics Announces Fourth Quarter Results
Peabody, Massachusetts, June 15, 2004 — Boston Acoustics, Inc. (NASDAQ-BOSA) today announced its financial results for the fourth quarter of the 2004 fiscal year, which ended March 27, 2004.
Net sales for the quarter decreased approximately 14%, to $11.5 million from $13.4 million for the same period a year ago. Net income increased to approximately $.5 million from approximately $.4 million, and diluted earnings per share increased to $.12 compared to $.10 per share for the same period a year ago.
The Company’s OEM/Multimedia segment sales decreased approximately 70%, while the Core segment sales increased approximately 8%, resulting in an overall net sales decrease of approximately 14% for the quarter. The significant decrease in the OEM/Multimedia segment was anticipated for the three-months ended March 27, 2004 and was incorporated in the 2004 fiscal year business plan.
For the twelve months ended March 27, 2004, net sales decreased approximately 26%, to $52.6 million from $70.6 million in the same period a year ago. Net income increased to approximately $1.9 million from approximately $1.8 million, while diluted earnings per share were $.43 per share compared to $.41 per share for the twelve months ended March 29, 2003.
During January 2004, the Company, in partnership with Visteon Corporation, began initial shipments of its premium audio systems for the Chrysler Group for upcoming vehicles. Net sales of approximately $0.9 million to Visteon Corporation during the three-months ended March 27, 2004 were included in the OEM/Multimedia segment of sales. The Company anticipates a continued ramping up of these shipments during the first quarter of fiscal 2005. There is not at this time, however, sufficient historical information to predict with any certainty the volume of revenue the Company will experience during this initial stage.
President and CEO Moses Gabbay stated, “Although our sales declined during the quarter as compared to the corresponding quarter a year ago, it was primarily due to the OEM/Multimedia segment. Despite the decrease in sales, the Company has been successful in controlling costs and maximizing business efficiencies resulting in gross margin improvement during both the three-month and twelve-month periods ended March 27, 2004. Operating expenses for the twelve-month period as compared to a year ago have increased as a percentage of sales but have decreased in absolute dollars, while decreasing both as a percentage of sales and in absolute dollars for the three-month period ended March 27, 2004. The balance sheet continues to remain strong and, except for a small working capital line of credit utilized by one of the Company’s foreign subsidiaries, we have no debt, reflecting our commitment to use resources effectively.”
Gabbay added, “As a result of sales efforts to diversify our traditional distribution base and address new channel opportunities, combined with our continued focus on realizing operational efficiencies, the Company does not expect to incur a net operating loss in the first quarter of fiscal year 2005 as previously announced.”
Boston Acoustics Announces Fourth Quarter Results – Page 2
Three Months Ended | |||||||
March 27, 2004 | March 29, 2003 | ||||||
Net Sales | $ | 11,542,522 | $ | 13,380,438 | |||
Cost of Goods Sold | 6,321,540 | 9,723,987 | |||||
Gross Profit | 5,220,982 | 3,656,451 | |||||
Selling and Marketing Expenses | 2,811,392 | 2,676,557 | |||||
General and Administrative Expenses | 962,919 | 1,385,939 | |||||
Engineering and Development Expenses | 1,060,029 | 2,209,294 | |||||
Total Operating Expenses | 4,834,340 | 6,271,790 | |||||
Income (Loss) from Operations | 386,642 | (2,615,339 | ) | ||||
Interest Income, net | 9,004 | 118,309 | |||||
Other Income (Expense) | 275,797 | 42,066 | |||||
Income (Loss) before provision (benefit) for income taxes | 671,443 | (2,454,964 | ) | ||||
Provision (Benefit) for Income Taxes | 183,000 | (2,874,000 | ) | ||||
Net Income | $ | 488,443 | $ | 419,036 | |||
Basic Earnings per Share | $ | .12 | $ | .10 | |||
Diluted Earnings per Share | $ | .12 | $ | .10 | |||
Weighted Average Shares Outstanding | |||||||
Basic | 4,121,047 | 4,401,595 | |||||
Diluted | 4,215,602 | 4,419,308 | |||||
Twelve Months Ended | |||||||
March 27, 2004 | March 29, 2003 | ||||||
Net Sales | $ | 52,627,938 | $ | 70,629,162 | |||
Cost of Goods Sold | 31,437,264 | 48,867,166 | |||||
Gross Profit | 21,190,674 | 21,761,996 | |||||
Selling and Marketing Expenses | 10,057,112 | 10,690,311 | |||||
General and Administrative Expenses | 4,557,078 | 5,174,316 | |||||
Engineering and Development Expenses | 4,460,341 | 6,772,875 | |||||
Total Operating Expenses | 19,074,531 | 22,637,502 | |||||
Income (Loss) from Operations | 2,116,143 | (875,506 | ) | ||||
Interest Income, net | 101,655 | 163,098 | |||||
Other Income (Expense) | 483,335 | 309,292 | |||||
Income (Loss) before provision (benefit) for income taxes | 2,701,133 | (403,116 | ) | ||||
Provision (Benefit) for Income Taxes | 844,000 | (2,246,000 | ) | ||||
Net Income | $ | 1,857,133 | $ | 1,842,884 | |||
Basic Earnings per Share | $ | .44 | $ | .41 | |||
Diluted Earnings per Share | $ | .43 | $ | .41 | |||
Weighted Average Shares Outstanding | |||||||
Basic | 4,238,796 | 4,487,908 | |||||
Diluted | 4,277,397 | 4,552,100 |
Boston Acoustics Announces Fourth Quarter Results – Page 3
Consolidated Balance Sheets
March 27, 2004 | March 29, 2003 | |||||
Assets | ||||||
Current Assets | ||||||
Cash and cash equivalents | $ | 7,552,054 | $ | 6,941,222 | ||
Accounts receivable, net | 8,202,044 | 6,582,033 | ||||
Inventories | 12,240,838 | 11,919,039 | ||||
Deferred income taxes | 2,492,000 | 3,577,000 | ||||
Prepaid income taxes | 480,000 | 1,449,000 | ||||
Prepaid expenses and other current assets | 956,142 | 1,009,369 | ||||
Total current assets | 31,923,078 | 31,477,663 | ||||
Property and Equipment, net | 10,874,343 | 12,190,549 | ||||
Other Assets, net | 1,160,710 | 996,172 | ||||
Total assets | $ | 43,958,131 | $ | 44,664,384 | ||
Liabilities and Shareholders’ Equity | ||||||
Current Liabilities | ||||||
Accounts payable | $ | 7,322,535 | $ | 5,630,246 | ||
Accrued payroll & related expenses | 523,234 | 602,589 | ||||
Dividends payable | 354,182 | 374,136 | ||||
Current maturity of line of credit | 309,394 | — | ||||
Other accrued expenses | 1,730,873 | 2,079,095 | ||||
Total current liabilities | 10,240,218 | 8,686,066 | ||||
Minority Interest in Joint Venture | — | 37,344 | ||||
Shareholders’ Equity | 33,717,913 | 35,940,974 | ||||
Total liabilities and shareholders’ equity | $ | 43,958,131 | $ | 44,664,384 | ||
Certain statements in this press release contain certain forward-looking statements concerning Boston Acoustics’ operations, economic performance and financial condition. Such forward-looking statements are based on a number of assumptions and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Boston Acoustics to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Factors that could cause such differences include, but are not limited to, those discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended March 29, 2003. The words “believe,” “expect,” “anticipate,” “intend,” and “plan” and similar expressions identify forward-looking statements, which speak only as of the date the statement was made.
# # # #