Exhibit 99.1
Communications Systems Inc. Announces Increased Revenue and Earnings For
The Fourth Quarter 2004 and Year to Date Operating Results.
Hector, MN ---- March 9, 2005----- Communications Systems, Inc. (AMEX: JCS)
today reported increased net income of $1,511,000 or $0.18 per diluted share for
the fourth quarter ended December 31, 2004, an increase of 65% compared to net
income of $919,000 or $0.11 per diluted share for the fourth quarter of 2003.
Net income increased 75% for the twelve months ended December 31, 2004 to
$4,763,000 or $.57 per diluted share compared to a net income of $2,717,000 or
$.33 per diluted share through twelve months in 2003.
Fourth quarter 2004 consolidated revenues increased 11% to $29,135,000 compared
to revenues of $26,300,000 in the fourth quarter of 2003. Twelve-month
consolidated revenues through December 31, 2004 increased 8% to $110,779,000
compared to $102,411,000 in 2003. The 2004 twelve-month revenues include
$2,224,000 in revenues contributed from the Image Systems business unit, which
was acquired in March 2004.
The Company's Hector, MN based business unit (Suttle), which manufactures and
distributes telecommunications connection products and filtering devices for
voice, data and video applications continues to report increased revenues and
profits in the fourth quarter and twelve months of 2004. Fourth quarter 2004
revenues totaled $11,086,000 compared to $8,810,000 in the fourth quarter of
2003. Operating income was $1,505,000 in the fourth quarter of 2004 compared to
$987,000 in the fourth quarter of 2003. Twelve month 2004 revenues totaled
$40,114,000 compared to $32,901,000 in 2003. Twelve-month operating income in
2004 was $4,760,000 compared to $2,014,000 in 2003.
The Company's media conversion and network switch segment (Transition Networks
and MiLAN Technology) reports fourth quarter revenues of $13,810,000 compared to
$14,030,000 in the same period of 2003. Twelve-month revenues in 2004 for this
segment increased to $52,444,000 compared to $51,002,000 in 2003. Operating
income for the fourth quarter of 2004 was $1,042,000 compared to $1,499,000 in
the fourth quarter of 2003. Twelve-month operating income in 2004 for this
business segment was $4,534,000 compared to $4,324,000 in 2003.
The company's United Kingdom based business unit (Austin Taylor Communications
LTD) reported fourth quarter 2004 revenues of $1,595,000 compared to $1,820,000
in the fourth quarter in 2003. Twelve-month revenues in 2004 were $8,028,000
compared to $6,640,000 in 2003. This segment had an operating loss of $160,000
in the fourth quarter of 2004 compared to an operating loss of $662,000 in the
same period in 2003. The twelve-month operating loss in 2004 was $451,000
compared to an operating loss of $1,567,000 in 2003.
The company's education consulting segment (JDL Technologies, Inc.) reported
fourth quarter 2004 revenues of $2,013,000 compared to $1,826,000 in the fourth
quarter in 2003. Twelve month 2004 revenues were $7,969,000 compared to
$11,868,000 in 2003. Operating income in the fourth quarter of 2004 was $473,000
compared to $211,000 in the fourth quarter of 2003. Twelve-month operating
income in 2004 was $1,184,000 compared to $1,100,000 in 2003.
Jeffrey K. Berg, President and COO said, "2004 was a solid year for CSI as we
achieved annual revenue and profitability growth. We saw the focus on growth
opportunities and the benefit of our cost controls pay off. Our results and
achievements also reflect the dedication and execution by all our employees."
Curtis A Sampson, Chairman and CEO commented, "We are pleased to see the
positive trends CSI and our business units have accomplished in 2004. The
investments we have made in new products for new and existing customers in our
core business at Suttle contributed to our achievements. Our total cash and cash
equivalents increased by $10,900,000 to over $25,800,000 at December 31, 2004
compared to December 31, 2003. CSI's current ratio is over 6 to 1 and the
company has no debt."
About Communications Systems
Communications Systems, Inc. provides physical connectivity infrastructure and
services for cost-effective broadband solutions and is a leading supplier of
voice-grade connecting devices and wiring systems. CSI serves the broadband
network market as the world's leading supplier of media conversion technology,
which permits networks to deploy fiber optic technology, while retaining the
copper-based infrastructure already embedded in the network. In addition, CSI
supplies copper wire and fiber optic structured wiring systems for broadband
networks, as well as line filters for digital subscriber line service. CSI also
provides network design, training and management services.
Cautionary Statement: From time to time, in reports filed with the Securities
and Exchange Commission, in press releases, and in other communications to
shareholders or the investing public, the Company may make forward-looking
statements concerning possible or anticipated future financial performance,
business activities or plans which are typically preceded by the words
"believes," "expects," "anticipates," "intends" or similar expressions. For such
forward-looking statements, the Company claims the protection of the safe harbor
for forward-looking statements contained in federal securities laws.
Shareholders and the investing public should understand that such
forward-looking statements are subject to risks and uncertainties which could
cause actual performance, activities or plans to differ significantly from those
indicated in the forward-looking statements.
CSI CONSOLIDATED SUMMARY OF EARNINGS
Three Months Ended December 31
2004 2003
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Sales $ 29,134,747 $ 26,300,462
Gross Margin 9,499,435 8,089,850
Operating Income 2,139,546 1,527,928
Income Before Income Taxes 2,244,415 1,582,011
Income Taxes 733,000 663,000
Net Income 1,511,415 919,011
Basic Net Income Per Share $ .18 $ .11
Diluted Net Income Per Share $ .18 $ .11
Average Shares Outstanding:
Average Common Shares Outstanding 8,364,077 8,185,882
Dilutive Effect of Stock Options Outstanding 154,778 15,010
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8,518,855 8,200,892
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Twelve Months Ended December 31
2004 2003
------------- -------------
Sales $ 110,778,938 $ 102,410,501
Gross Margin 36,483,535 29,461,652
Operating Income 7,363,768 4,020,169
Income Before Income Taxes 7,530,733 4,335,481
Income Taxes 2,768,000 1,618,000
Net Income 4,762,733 2,717,481
Basic Net Income Per Share $ .58 $ .33
Diluted Net Income Per Share $ .57 $ .33
Average Shares Outstanding:
Average Common Shares Outstanding 8,263,041 8,169,078
Dilutive Effect of Stock Options Outstanding 56,054 16,601
------------- -------------
8,319,095 8,185,679
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