Boston Acoustics Announces Fourth Quarter and Fiscal Year 2003 Results
PEABODY, Mass.--(BUSINESS WIRE)--June 11, 2003--Boston Acoustics,
Inc. (NASDAQ:BOSA) today announced its financial results for the
fourth quarter and the fiscal year ended March 29, 2003.
Net sales for the quarter were $13.4 million compared to $20.6
million for the same period a year ago, a decrease of $7.2 million or
35%. The Company reported net income for the quarter of $419,000
compared to $1.5 million for the corresponding period last year.
Diluted earnings per share were $.10 compared to $.32 per share for
the corresponding period last year. Although the Company had net
income for the fourth quarter, it incurred an operating loss during
the quarter of approximately $2.6 million. The operating loss during
the quarter is attributed in part to expenses of approximately
$600,000 related to headcount reductions and the transfer of
manufacturing operations of Snell Acoustics, a wholly owned
subsidiary, to the Company's Peabody, Massachusetts facility. During
the quarter, the Company also recorded a tax benefit to recognize a
deferred tax asset related to the current year's operating loss and
identified certain research tax credits for prior fiscal years.
Net sales for the fiscal year decreased to $70.6 million compared
to $85.3 million for the same period a year ago. Net income for the
year was $1.8 million compared to $3.9 million a year ago, while
diluted earnings per share decreased to $.41 per share compared to
$.82 per share last year.
Of the $14.7 million decrease in sales for fiscal year 2003, $6.9
million was attributable to the OEM/Multimedia segment of the
Company's business and $7.8 million resulted from a decline in its
Core sales.
CEO Moses Gabbay stated, "Principally, in response to the
continued weak economy, the Company implemented a corporate
reorganization and rationalization plan at the end of March 2003. The
program was designed to increase corporate efficiency, reduce the
length of time required to develop new products and to allow increased
emphasis on new product development. We anticipate these operational
changes and headcount reductions will result in annual savings of
approximately $5.2 million in fiscal 2004. It should be noted that
significant product development expenditures were incurred throughout
fiscal 2003 on the OEM automotive program; and on the "integrated"
development program which combines our high performance speakers with
electronics of comparable quality. These programs should lead to
enhanced levels of profitability when the economy returns to more
normal levels; when the Company begins shipping product in fiscal 2005
under the OEM automotive contract announced in June 2002; and when new
"integrated" product introductions contribute more fully to Company
sales. We will continue to assess our needs in order to respond to the
fluctuations in market demand, but remain focused on developing
products that will position the Company to grow revenue at increasing
margins as the market improves."
Mr. Gabbay added "Despite the current state of the economy, the
Company's cash flow remains positive; inventories have been reduced in
line with sales; cash and cash equivalents have increased from
approximately $5.1 million at the end of fiscal 2002 to approximately
$6.9 million at the end of fiscal 2003; and that the Company has no
indebtedness. Furthermore, the Company recently reported that its
Board of Directors has declared and authorized the payment of the
regular quarterly dividend of $.085 per common share. The Directors
dividend action demonstrates their continuing confidence in the
fundamental strength of the Company and its future prospects."
Boston Acoustics, Inc. provides audio solutions for home
entertainment, automobiles and personal computers. Founded in 1979,
Boston Acoustics is located in Peabody, Massachusetts.
Three Months Ended
March 29, 2003 March 30, 2002
Net Sales $13,380,438 $20,620,631
Cost of Goods Sold 9,723,987 14,212,939
Gross Profit 3,656,451 6,407,692
Selling and Marketing Expenses 2,676,557 2,504,787
General and Administrative Expenses 1,385,939 1,168,852
Engineering and Development Expenses 2,209,294 1,401,643
Total Operating Expenses 6,271,790 5,075,282
Income (Loss) from Operations (2,615,339) 1,332,410
Interest Income (Expense), net 118,309 (2,890)
Other Income 42,066 73,159
Income (Loss) before provision for
income taxes (2,454,964) 1,402,679
Benefit for Income Taxes (2,874,000) (85,000)
Net Income $ 419,036 $ 1,487,679
Basic Earnings per Share $ .10 $ .32
Diluted Earnings per Share $ .10 $ .32
Weighted Average Shares Outstanding
Basic 4,401,595 4,595,595
Diluted 4,419,308 4,615,767
Twelve Months Ended
March 29, 2003 March 30, 2002
Net Sales $70,629,162 $85,335,768
Cost of Goods Sold 48,867,166 59,135,678
Gross Profit 21,761,996 26,200,090
Selling and Marketing Expenses 10,690,311 10,446,858
General and Administrative Expenses 5,174,316 4,806,545
Engineering and Development Expenses 6,772,875 5,252,466
Total Operating Expenses 22,637,502 20,505,869
Income (Loss) from Operations (875,506) 5,694,221
Interest Income (Expense), net 163,098 (154,863)
Other Income (Expense) 309,292 (68,959)
Income (Loss) before provision for
income taxes (403,116) 5,470,399
Provision (Benefit) for Income Taxes (2,246,000) 1,560,000
Net Income $ 1,842,884 $ 3,910,399
Basic Earnings per Share $ .41 $ .82
Diluted Earnings per Share $ .41 $ .82
Weighted Average Shares Outstanding
Basic 4,487,908 4,774,746
Diluted 4,552,100 4,784,926
Consolidated Balance Sheets
March 29, 2003 March 30, 2002
Assets
Current Assets
Cash and cash equivalents $ 6,941,222 $ 5,134,558
Accounts receivable, net 6,582,033 10,830,538
Inventories 11,919,039 14,370,308
Deferred income taxes 3,577,376 1,724,000
Prepaid income taxes 1,449,580 441,860
Prepaid expenses and other
current assets 1,009,369 568,932
Total current assets 31,478,619 33,070,196
Property and Equipment, net 12,190,549 13,919,964
Other Assets 995,216 1,428,286
Total assets $44,664,384 $48,418,446
Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable $ 5,630,246 $ 5,230,684
Accrued payroll & related expenses 602,589 1,185,529
Current maturity of line of credit --- 2,500,000
Other current liabilities 2,453,231 1,485,995
Total current liabilities 8,686,066 10,402,208
Minority Interest in Joint Venture 37,344 18,265
Shareholders' Equity 35,940,974 37,997,973
Total liabilities and shareholders'
equity $44,664,384 $48,418,446
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 30, 2002. 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.
CONTACT: Boston Acoustics, Inc.
978/538-5000
Moses Gabbay
Moses@bostona.com
or
Debby Ricker-Rosato
DRicker@bostona.com