Boston Acoustics Announces Second Quarter Results
PEABODY, Mass.--Nov. 5, 2004--Boston Acoustics, Inc. today announced its financial results for the second quarter of the 2005 fiscal year, which ended September 25, 2004.Net sales for the quarter decreased approximately 7%, to $12.3 million from $13.1 million for the same period a year ago. However, net income increased to approximately $240,000 from approximately $137,000, and diluted earnings per share increased to $.06 per share compared to $.03 per share for the same period a year ago.
During the quarter, the Company, in partnership with Visteon Corporation, ramped up its shipments of premium audio systems to the Chrysler Group for the Dodge Magnum and Chrysler 300 vehicles, in addition, the initial shipment of audio systems for Chrysler's 2005 Jeep Grand Cherokee family of vehicles commenced in the second quarter.
For the six months ended September 25, 2004, net sales decreased approximately 3% to $24.9 million from $25.7 million in the same period a year ago. Net income was approximately $0.7 million compared to $0.4 million and diluted earnings per share were $.17 per share compared to $.08 per share for the six months ended September 27, 2003.
President and CEO Moses Gabbay stated, "The overall sales decrease of approximately 7% is attributed to the reduction of business in two previously announced areas: the strategic phase out of our OEM/Multimedia business and the reduced purchases of a major customer. On a positive note, the impact of these specific losses of revenue for the second quarter was significantly minimized through continued double digit growth from our international sales and our ramping OEM automotive business."
Gabbay added, "Our commitment to address new channel opportunities, and to continue focus on operational efficiencies produced overall gross margin and net income improvements as compared to the corresponding periods a year ago. Our balance sheet remains strong, reflecting our efficient use of resources. In short, the continued employment of this coordinated business approach across all facets of our organization will enable Boston to achieve future sales growth."
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. 25, 2004 Sept. 27, 2003
Net Sales $ 12,250,511 $ 13,110,912
Cost of Goods Sold 7,170,807 8,269,544
Gross Profit 5,079,704 4,841,368
Selling and Marketing Expenses 2,512,979 2,300,302
General and Administrative Expenses 1,083,468 1,090,687
Engineering and Development Expenses 1,080,046 1,094,608
Total Operating Expenses 4,676,493 4,485,597
Income from Operations 403,211 355,771
Interest Income, net 9,296 32,898
Other Income (Expense) (24,298) (93,937)
Income before provision for income
taxes 388,209 294,732
Provision for Income Taxes 148,000 158,000
Net Income $ 240,209 $ 136,732
Basic Earnings per Share $ .06 $ .03
Diluted Earnings per Share $ .06 $ .03
Weighted Average Shares Outstanding
Basic 4,166,845 4,330,476
Diluted 4,208,339 4,375,892
Six Months Ended
Sept. 25, 2004 Sept. 27, 2003
Net Sales $ 24,870,462 $ 25,708,109
Cost of Goods Sold 14,302,765 16,287,002
Gross Profit 10,567,697 9,421,107
Selling and Marketing Expenses 5,132,617 4,441,692
General and Administrative Expenses 2,113,640 2,201,994
Engineering and Development Expenses 2,286,700 2,214,169
Total Operating Expenses 9,532,957 8,857,855
Income from Operations 1,034,740 563,252
Interest Income, net 15,197 48,004
Other Income (Expense) 21,999 (1,737)
Income before provision for income
taxes 1,071,936 609,519
Provision for Income Taxes 371,000 257,000
Net Income $ 700,936 $ 352,519
Basic Earnings per Share $ .17 $ .08
Diluted Earnings per Share $ .17 $ .08
Weighted Average Shares Outstanding
Basic 4,166,845 4,366,915
Diluted 4,199,574 4,383,710
Consolidated Balance Sheets
Sept. 25, 2004 March 27, 2004
Assets
Current Assets
Cash and cash equivalents $ 7,845,192 $ 7,552,054
Accounts receivable, net 8,411,901 8,202,044
Inventories 12,305,735 12,240,838
Deferred income taxes 2,492,000 2,492,000
Prepaid income taxes 471,000 480,000
Prepaid expenses and other current
assets 978,683 956,142
Total current assets 32,504,511 31,923,078
Property and Equipment, net 10,412,089 10,874,343
Other Assets, net 1,189,828 1,160,710
Total assets $ 44,106,428 $ 43,958,131
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable $ 7,839,069 $ 7,322,535
Accrued payroll & related expenses 671,297 523,234
Dividends payable 354,182 354,182
Current maturity of line of credit 82,367 309,394
Other accrued expenses 1,449,028 1,730,873
Total current liabilities 10,395,943 10,240,218
Stockholders' Equity 33,710,485 33,717,913
Total liabilities and stockholders'
equity $ 44,106,428 $ 43,958,131
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 27, 2004. 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.