Exhibit 99.1
Boston Acoustics Announces Second Quarter Results
PEABODY, Mass.--(BUSINESS WIRE)--Nov. 4, 2003--Boston Acoustics,
Inc. (NASDAQ:BOSA) today announced its financial results for the
second quarter of the 2004 fiscal year which ended September 27, 2003.
Net sales for the quarter decreased approximately 29%, to $13.1
million from $18.5 million for the same period a year ago. Net income
decreased to approximately $137,000 from approximately $358,000, and
diluted earnings per share decreased to $.03 per share compared to
$.08 per share for the same period a year ago.
Compared to the corresponding quarter a year ago, the Company's
Core Segment sales were down 12% and OEM/Multimedia Segment sales were
down 66%, resulting in an overall net sales decrease of 29% for the
quarter. As previously announced, the significant decrease in the
OEM/Multimedia segment was anticipated and incorporated in the 2004
fiscal year business plan. Within the Company's core segment, results
included gross sales increases in the custom and integrated product
categories, which were offset by decreases in the home and car product
categories during the quarter.
Other expenses during the quarter reflect foreign currency
translation expenses attributed to the Company's foreign subsidiaries'
results during the three-month period ended September 27, 2003 as
compared to the same period a year ago. These currency translation
expenses offset currency translation income reflected during the first
three months of fiscal 2004.
For the six months ended September 27, 2003, net sales decreased
approximately 30% to $25.7 million from $36.8 million in the same
period a year ago. Net income was approximately $0.4 million compared
to $0.6 million and diluted earnings per share were $.08 per share
compared to $.14 per share for the six months ended September 28,
2002.
CEO Moses Gabbay stated, "Although our sales declined during the
quarter as compared to the corresponding quarter a year ago, the
Company's constant focus on controlling costs and maximizing
manufacturing efficiencies resulted in continual improvement in the
overall gross margin, specifically in the core business segment.
Operating expenses, although increased as a percentage of sales,
actually decreased in absolute dollars. The Company's sales, marketing
and engineering teams are concentrating efforts on well-timed new
product introductions, and additional market awareness of the 'Boston'
brand name by seeking new specialized market opportunities."
Mr. Gabbay continued, "During the quarter, the Company repurchased
approximately 275,000 shares of common stock for approximately $3.3
million. The balance sheet remains solid. Cash and cash equivalents
have been used effectively, inventories have decreased since the end
of our fiscal year at March 29, 2003, and the Company has no debt. The
Company will be prepared to capitalize on the opportunities presented
to us as overall market conditions improve."
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
Sept. 27, 2003 Sept. 28, 2002
-------------- --------------
Net Sales $13,110,912 $18,527,616
Cost of Goods Sold 8,269,544 12,826,264
----------- -----------
Gross Profit 4,841,368 5,701,352
----------- -----------
Selling and Marketing Expenses 2,300,302 2,629,624
General and Administrative
Expenses 1,090,687 1,259,081
Engineering and Development
Expenses 1,094,608 1,362,867
----------- -----------
Total Operating Expenses 4,485,597 5,251,572
----------- -----------
Income from Operations 355,771 449,780
Interest Income, net 32,898 15,125
Other Income (Expense) (93,937) 134,156
----------- -----------
Income before provision for
income taxes 294,732 599,061
Provision for Income Taxes 158,000 241,000
----------- -----------
Net Income $ 136,732 $ 358,061
=========== ===========
Basic Earnings per Share $.03 $.08
Diluted Earnings per Share $.03 $.08
Weighted Average Shares
Outstanding
Basic 4,330,476 4,552,848
Diluted 4,375,892 4,641,021
Six Months Ended
Sept. 27, 2003 Sept. 28, 2002
-------------- --------------
Net Sales $25,708,109 $36,784,893
Cost of Goods Sold 16,287,002 25,274,708
---------- -----------
Gross Profit 9,421,107 11,510,185
----------- -----------
Selling and Marketing Expenses 4,441,692 5,256,548
General and Administrative
Expenses 2,201,994 2,490,601
Engineering and Development
Expenses 2,214,169 2,917,450
----------- -----------
Total Operating Expenses 8,857,855 10,664,599
----------- -----------
Income from Operations 563,252 845,586
Interest Income, net 48,004 27,097
Other Income (Expense) (1,737) 152,987
----------- -----------
Income before provision for
income taxes 609,519 1,025,670
Provision for Income Taxes 257,000 391,000
----------- -----------
Net Income $ 352,519 $ 634,670
=========== ===========
Basic Earnings per Share $.08 $.14
Diluted Earnings per Share $.08 $.14
Weighted Average Shares
Outstanding
Basic 4,366,915 4,574,221
Diluted 4,383,710 4,657,390
Consolidated Balance Sheets
Sept. 27, 2003 March 29, 2003
-------------- --------------
Assets
Current Assets
Cash and cash equivalents $ 6,407,434 $ 6,941,222
Accounts receivable, net 7,089,548 6,582,033
Inventories 10,053,699 11,919,039
Deferred income taxes 3,284,000 3,577,000
Prepaid income taxes 882,604 1,449,000
Prepaid expenses and other
current assets 1,044,868 1,009,369
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Total current assets 28,762,153 31,477,663
Property and Equipment, net 11,667,972 12,190,549
Other Assets, net 1,001,451 996,172
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Total assets $ 41,431,576 $ 44,664,384
============= ============
Liabilities and Shareholders'
Equity
Current Liabilities
Accounts payable $ 5,991,246 $ 5,630,246
Accrued payroll & related
expenses 562,305 602,589
Dividends payable 349,936 374,136
Other accrued expenses 2,178,215 2,079,095
------------- ------------
Total current liabilities 9,081,702 8,686,066
Minority Interest in Joint
Venture 21,947 37,344
Shareholders' Equity 32,327,927 35,940,974
------------- ------------
Total liabilities and
shareholders' equity $ 41,431,576 $ 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.
CONTACT: Boston Acoustics, Inc.
Moses Gabbay, 978-538-5000
Moses@bostona.com
or
Debby Ricker-Rosato, 978-538-5000
DRicker@bostona.com