EXHIBIT 99.4
[LOGO OF TII NETWORK TECHNOLOGIES, INC.]
CONTACTS:
Kenneth A. Paladino, COO/CFO Van Negris/Lexi Terrero
TII Network Technologies, Inc. Van Negris & Company, Inc.
(631) 789-5000 (212) 396-0606
FOR IMMEDIATE RELEASE:
TII NETWORK TECHNOLOGIES REPORTS
FISCAL 2005 FULL YEAR AND FOURTH QUARTER RESULTS;
ALFRED J.ROACH, FORMER CHAIRMAN OF THE BOARD AND FOUNDER OF THE COMPANY,
ELECTED CHAIRMAN EMERITUS;
CHARLES H. HOUSE ELECTED CHAIRMAN OF THE BOARD
COPIAGUE, NY -September 19, 2005 -TII Network Technologies, Inc. (Nasdaq: TIII),
a leading provider of telecommunications network protection and management
products, today announced its results for the fiscal 2005 fourth quarter and
twelve months ended June 24, 2005.
Net sales for the fourth quarter of fiscal 2005 were $7.6 million compared to
$6.2 million for the comparative prior year, an increase of approximately $1.3
million or 21.3%. The increase in sales over the prior year comparative period
was primarily due to an increase in installations of the Company's products upon
the conclusion of the extreme winter weather conditions in the Northeast U.S.
that hampered these installations during the Company's fiscal 2005 third
quarter. Net sales for fiscal 2005 decreased $1.7 million or 5.9% to $26.8
million from $28.5 million in fiscal 2004. The decrease in sales for fiscal 2005
compared to fiscal 2004 was the result of a sharp increase in the need for the
Company's products in the first quarter of fiscal 2004, primarily due to the
hurricanes that occurred during the summer of calendar 2003.
Gross profit for the fourth quarter of fiscal 2005 was $2.3 million compared to
$1.8 million for the comparative prior period, an increase of approximately
$482,000 or 26.5%, while gross profit margin for those quarters were 30.4% and
29.1%, respectively. Gross profit in fiscal 2005 was $7.9 million compared to
$8.6 million in fiscal 2004, a decrease of approximately $713,000, or 8.3%.
Gross profit margins for those periods were 29.5% and 30.2% respectively. The
lower gross profit levels and margin were due to the effect of fixed overhead
costs on lower sales levels.
Net earnings for the fourth quarter of fiscal 2005 were $594,000 or $0.05 per
diluted share, compared to $113,000 or $0.01 per diluted share, in the year ago
quarter. Net earnings for fiscal 2005 were $1.4 million or $0.11 per diluted
share, compared to net earnings of $1.6 million or $0.12 per diluted share in
fiscal 2004.
Timothy J. Roach, President and Chief Executive Officer, stated: "I am pleased
to report that the solid performance we achieved in fiscal 2004 has continued
into fiscal 2005, as we delivered profitable results for our shareholders. Our
success in fiscal 2005, which is continuing into a strong fiscal 2006 first
quarter, includes our focus on our core markets and the execution of our
strategic plan to further strengthen our technology while expanding into new
markets. This plan has been designed to recognize and address the rapid changes
in technology in the telecommunications industry and the needs of alternate
service providers.
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TII Network Technologies, Inc.
September 19, 2005 -Page Two
"We believe that our accomplishments in fiscal 2005 have positioned us to
capitalize on profitable growth opportunities with current and new customers in
existing and new market segments. Looking ahead to fiscal 2006, we will continue
to leverage our primary competitive advantage of providing the highest-quality
products, with cost-effective performance and innovative features that meet
changing market needs."
The Company also announced that Charles H. House, an independent Director of the
Company since 2003, has been elected Chairman of the Board of Directors,
succeeding Alfred J. Roach, who has retired as Chairman but who will remain a
member of the Board as Chairman Emeritus and advisor to the Company.
Timothy J. Roach, President and Chief Executive Officer, stated: "We wish to
acknowledge Alfred J. Roach's exceptional contributions to our company which he
founded in 1964, serving as Chairman of the Board of Directors and a director,
since its founding, and as Chief Executive Officer of the Company until January
1995. His contributions over the years have been invaluable in building the
Company into one of the premier suppliers of protection products to the
telecommunications industry."
Charles H. House, 65, has served as a director of the Company since September
2003. Mr. House presently serves as Director of Societal Impact of Technology at
Intel Corporation, a semiconductor chip maker ("Intel"). He previously served as
Executive Vice President of Communications Research of Dialogic Corp., a
manufacturer of hardware and software enabling technologies for computer
telephony systems ("Dialogic"), which was acquired by Intel in 1999. He joined
Dialogic in December 1995 as President of its wholly owned subsidiary, Spectron
MicroSystems, Inc., which developed software for digital signal processing
operating systems. He served as a director from July 1998 until July 2003, and
Chairman from January 2001 until June 2003, of Applied Microsystems Corporation,
when that company was dissolved following the sale of certain operations to
Motorola, Inc.
He has received many acknowledgements for his leadership including the
Electronics Award of Achievement, 1977; selection to the Computer Design Hall of
Fame, 1984; IEEE Fellow, 1990; EE Times Historic Contribution Award, 1997; IEEE
3rd Millennium Achievement Award, 2000. He was named in the Computer Museum and
National Academy of Science exhibit and book in 1997 as one of 200 National
"Wizards of Computing" for America. In addition, he has been named to the
Electronic Design Hall of Fame for his work on Logic Analysis - judged one of
the 20th century's top 50 inventions in electronics.
Mr. House holds a Bachelor of Science degree in Solid-State Physics from
California Institute of Technology, a Master of Science degree in Electronics
Engineering from Stanford University, a Master of Arts degree in the History of
Science and Technology from the University of Colorado and a Master of Business
Administration degree in Strategic Studies from the University of California at
San Diego.
Mr. Roach continued: "We are very pleased that Mr. House has been unanimously
selected by the Board as the Company's next Chairman of our Board of Directors.
Since joining our Board, he has brought an exceptional blend of technology,
marketing and business acumen to our Company as we develop and bring new
products to market. We welcome his understanding of the strategic and business
challenges faced by TII and are grateful for his continued commitment to our
Company."
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TII Network Technologies, Inc.
September 19, 2005 -Page Three
About TII Network Technologies, Inc.
TII is a proven technology leader specializing in providing the
telecommunications industry with innovative network protection and management
products, including station protectors, network interface devices, DSL
protectors, filters and splitters, power and data-line protectors and a
multi-service residential gateway, as well as creative, custom design solutions
to meet customers' individual requirements.
Statements in this release that are not strictly historical are
"forward-looking" statements and should be considered as subject to the risks
and uncertainties that exist in the Company's operations and business
environment. These factors include, but are not limited to: exposure to
increases in the cost of the Company's products, including increases in the cost
of the Company's petroleum-based plastic products; the Company's dependence for
products and product components on Pacific Rim contract manufacturers, including
on-time delivery, quality and exposure to changes in cost in the event of
changes in the valuation of the Chinese Yuan; dependence on, and ability to
retain, its "as-ordered" general supply agreements with its largest three
customers and win new contracts; continued dependence on the traditional
copper-based Telco market which has been declining over the last several years
due principally to the impact of alternate technologies and competition from
multi-system operators; the ability of the Company to market and sell products
to new markets beyond its principal market - the copper-based Telco market; the
Company's ability to timely develop products and adapt its existing products to
address technological changes, including changes in its principal market; the
potential for the disruption of shipments as a result of, among other things,
third party labor disputes and political unrest in or shipping disruptions from
countries in which the Company's contract manufacturers produce the Company's
products; weather and similar conditions, particularly the effect of
hurricanes/typhoons on the Company's manufacturing, assembly and warehouse
facilities in Puerto Rico or the Pacific Rim; competition in the Company's
traditional telecommunications market and new markets the Company is seeking to
penetrate; potential changes in customers' spending and purchasing policies and
practices; general economic and business conditions, especially as they pertain
to the telecommunications industry; dependence on third parties for product
development; risks inherent in new product development and sales, such as
start-up delays and uncertainty of customer acceptance; the Company's ability to
attract and retain technologically qualified personnel; the Company's ability to
fulfill its growth strategies; the level of inventories maintained by the
Company's customers; the Company's ability to maintain listing of its Common
Stock on the NASDAQ SmallCap market; the availability of financing on
satisfactory terms and other factors from time to time discussed in the
Company's SEC reports.
--more -
-Statistical Tables Follow
TII Network Technologies, Inc.
September 19, 2005 -Page Four
TII NETWORK TECHNOLOGIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except earnings per share data)
Three months ended Fiscal Year ended
June 24, June 25, June 24, June 25,
2005 2004 2005 2004
-------- -------- -------- --------
(Unaudited)
Net sales $ 7,560 $ 6,234 $ 26,796 $ 28,485
Cost of sales 5,262 4,418 18,901 19,877
-------- -------- -------- --------
Gross profit 2,298 1,816 7,895 8,608
-------- -------- -------- --------
Operating expenses
Selling, general and administrative 1,381 1,357 5,480 5,669
Research and development 331 320 1,318 1,357
-------- -------- -------- --------
Total operating expenses 1,712 1,677 6,798 7,026
-------- -------- -------- --------
Operating earnings 586 139 1,097 1,582
Interest expense (4) (2) (7) (14)
Interest income 24 7 86 32
Other income 2 2 259 23
-------- -------- -------- --------
Earnings before income taxes 608 146 1,435 1,623
Provision for income taxes 14 33 43 60
-------- -------- -------- --------
Net earnings $ 594 $ 113 $ 1,392 $ 1,563
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Net earnings per common share:
Basic $ 0.05 $ 0.01 $ 0.12 $ 0.13
Diluted $ 0.05 $ 0.01 $ 0.11 $ 0.12
Weighted average common shares outstanding:
Basic 12,161 11,908 11,971 11,820
Diluted 12,825 12,836 12,687 12,715
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TII Network Technologies, Inc.
September 19, 2005 -Page Five
TII NETWORK TECHNOLOGIES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
June 24, June 25,
2005 2004
-------- --------
ASSETS
Current Assets:
Cash and cash equivalents $ 4,529 $ 4,164
Accounts receivable, net 3,906 3,435
Inventories 8,899 5,405
Other current assets 404 374
-------- --------
Total current assets 17,738 13,378
Property, plant and equipment, net 4,229 3,947
Other assets 182 477
-------- --------
Total Assets$ 22,149 $ 17,802
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 3,733 $ 643
Accrued liabilities 1,563 1,698
-------- --------
Total current liabilities 5,296 2,341
-------- --------
Commitments and contingencies
Stockholders' Equity:
Preferred stock, par value $1.00 per share; 1,000,000 shares authorized;
Series D Junior Participating, no shares outstanding - -
Common stock, par value $.01 per share; 30,000,000 shares authorized;
12,178,733 shares issued and 12,161,096 shares outstanding as of June 24, 2005
and 11,925,421 shares issued and 11,907,784 shares outstanding as of June 25, 2004 122 119
Additional paid-in capital 37,989 37,992
Accumulated deficit (20,977) (22,369)
-------- --------
17,134 15,742
Less: Treasury shares, at cost (281) (281)
-------- --------
Total stockholders' equity 16,853 15,461
Total Liabilities and Stockholders' Equity $ 22,149 $ 17,802
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