-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, P4SJ4kRTNyeynYrsRbuAb5eRvF9dgGRtAEAaTbVqTF1VfTW1dH65c6hKnaPllqvc e+p9nVZYFN5IWatLaunPOg== 0000909654-04-000880.txt : 20040318 0000909654-04-000880.hdr.sgml : 20040318 20040318171644 ACCESSION NUMBER: 0000909654-04-000880 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040316 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040318 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANDREA ELECTRONICS CORP CENTRAL INDEX KEY: 0000006494 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 110482020 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-04324 FILM NUMBER: 04678363 BUSINESS ADDRESS: STREET 1: 45 MELVILLE PARK ROAD CITY: MELVILLE STATE: NY ZIP: 11747 BUSINESS PHONE: 5167191800 MAIL ADDRESS: STREET 1: 45 MELVILLE PARK ROAD CITY: MELVILLE STATE: NY ZIP: 11747 FORMER COMPANY: FORMER CONFORMED NAME: ANDREA RADIO CORP DATE OF NAME CHANGE: 19911204 8-K 1 andreaform8k3-17.txt 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): March 16, 2004 ANDREA ELECTRONICS CORPORATION ------------------------------ (Exact name of registrant as specified in its charter) New York 1-4324 11-0482020 -------- -------- ---------- (State or other Jurisdiction of (Commission (IRS Employer incorporation or organization) File Number) Identification No.) 45 Melville Park Road, Melville, New York 11747 ----------------------------------------------- (Address of principal executive offices) (631) 719-1800 -------------- (Registrant's telephone number, including area code) Not Applicable (Former name or former address, if changed since last report) 2 ITEM 7. FINANCIAL STATEMENTS AND OTHER EXHIBITS --------------------------------------- Exhibit 99.1Press Release Dated March 16, 2004 ITEM 12. RESULTS OF OPERATION AND FINANCIAL CONDITION -------------------------------------------- On March 16, 2004, Andrea Electronics Corporation announced its financial results for the quarter and year ended December 31, 2003. The press release containing these announcements is filed as Exhibit 99.1 and incorporated herein by reference. 2 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ANDREA ELECTRONICS CORPORATION Dated: March 18, 2004 By: /s/ Corisa L. Guiffre ------------------------------------------ Corisa L. Guiffre Vice President and Chief Financial Officer EX-99 3 andreapressrelease3-17.txt 4 FOR IMMEDIATE RELEASE - --------------------- March 16, 2004 ANDREA ELECTRONICS ANNOUNCES FOURTH QUARTER AND YEAR END 2003 RESULTS --------------------------------------------------------------------- SEQUENTIAL AND COMPARATIVE REVENUES ARE IMPROVING, LOSSES ARE NARROWING MELVILLE, NEW YORK, MARCH 16, 2004 - Andrea Electronics Corporation (AMEX: AND) today reported that revenues for the quarter ended December 31, 2003 were approximately $1.4 million, versus revenues of $1.2 million, which were restated to exclude sales from discontinued operations, in the same quarter in 2002. The discontinued Aircraft Products division was sold by the Company on April 11, 2003. Net loss attributable to common shareholders for the quarter ended December 31, 2003 was approximately $3.7 million, or a basic and diluted loss per share of $0.14, compared to a net loss of approximately $1.5 million, or a basic and diluted loss per share of $0.07, for the quarter ended December 31, 2002. The loss attributable to common shareholders for the quarter ended December 31, 2003 included a non-cash impairment charge of approximately $2.7 million predominately relating to the determination that the carrying value of the Andrea DSP Microphone and Audio Software Core Technology exceeded its fair value. Excluding this impairment charge, the Company's net loss attributable to common shareholders for the quarter ended December 31, 2003 was approximately $0.9 million, or a basic and diluted loss per share of $0.03. Revenues were approximately $5.1 million for the year ended December 31, 2003, versus revenues of $3.9 million, which were restated to exclude sales from discontinued operations, in the same period in 2002. Net loss attributable to common shareholders for the year ended December 31, 2003 was approximately $4.7 million, or a basic and diluted loss per share of $0.20, compared to a net loss of approximately $21.1 million, or a basic and diluted loss per share of $1.12, for the year ended December 31, 2002. In the year ended December 31, 2003, the Company recorded a $2.7 million non-cash impairment charge, as well as income from discontinued operations of the Aircraft Products division of approximately $2.5 million. Excluding the non-cash impairment charge, the Company's net loss attributable to common shareholders for the year ended December 31, 2003 was approximately $2.0 million, or a basic and diluted loss per share of $0.08. In the year ended December 31, 2002, the Company recorded a $1.8 million non-cash charge to provision for income taxes and an impairment charge of approximately $12.5 million relating to the determination that the carrying value of the Andrea DSP Microphone and Audio Software business unit exceeded its fair value. Excluding these non-cash charges, the Company's net loss attributable to common shareholders for the year ended December 31, 2002 was approximately $6.9 million, or a basic and diluted loss per share of $0.36. "Revenues in the fourth quarter of 2003 increased 22% from both the fourth quarter of last year and the third quarter of this year while full year revenues increased 30%," stated Corisa L. Guiffre, Vice President and Chief Financial Officer. "In addition, combined research and development costs and general, administrative and selling expenses declined 21% for the full year and decreased 25% this quarter as compared to the same quarter last year. As a result, our losses are narrowing which is certainly an encouraging sign," Ms. Guiffre concluded. "In November 2003, I outlined a number of strategic initiatives for Andrea which revolved around balance sheet restructurings, asset and technology rationalizations, further expense reductions and broader and deeper sales channel penetrations," stated Paul. E. Donofrio, President and Chief Executive Officer. "As previously reported in February 2004, a group of new investors were brought into the Company which resulted in a successful balance sheet conversion of a restrictive mezzanine position into permanent equity and which provided for $2.5 million of critical new equity financing for Andrea. In addition, our Lamar Signal Processing operation in Israel has been transformed and streamlined into an engineering and customer support center. The Company needed to place less emphasis on research and development, since most of the core technology is already embedded in our portfolio of products, and focus more heavily on sales and marketing since expansion of our top line remains a key strategic goal for Andrea Electronics," Mr. Donofrio concluded. 5 ANDREA ELECTRONICS ANNOUNCES FOURTH QUARTER AND YEAR END 2003 RESULTS PAGE 2 During the fourth quarter ended December 31, 2003, total revenues increased 22% over the same period in 2002. For the fourth quarter of 2003, Andrea Anti-Noise Products revenues were approximately $0.8 million compared to $0.5 million for the fourth quarter of 2002. For the fourth quarter of 2003, Andrea DSP Microphone and Audio Software Products revenues were approximately $0.6 million compared to $0.7 for the fourth quarter of 2002. During the year ended December 31, 2003, total revenues increased approximately 30% over the same period in 2002. For the year ended December 31, 2003, Andrea Anti-Noise Products revenues were approximately $2.8 million compared to $2.3 million for the same period in 2002. For year ended December 31, 2003, Andrea DSP Microphone and Audio Software Products revenues were approximately $2.3 million compared to $1.6 million for the same period in 2002. The increases in the Andrea Anti-Noise Products revenues are predominately related to an increasing number of businesses utilizing distance learning and on-line collaboration software which uses our noise canceling headset products as well as higher sales to OEM customers. The annual increase in the Andrea DSP Microphone and Audio Software Products revenues is primarily attributable to the recognition of deferred revenue relating to our licensing agreements with Analog Devices Inc. At December 31, 2003, we had total cash and cash equivalents of approximately $1.7 million. Total assets were approximately $9.5 million with total current assets of approximately $4.2 million. Total liabilities were approximately $5.3 million with total current liabilities of approximately $4.4 million. Total shareholder's deficit at December 31, 2003 was approximately $2.5 million. ABOUT ANDREA ELECTRONICS Andrea Electronics Corporation designs, develops and manufactures audio technologies and equipment for enhancing applications that require high performance and high quality voice input. The Company's patented Digital Super Directional Array (DSDA(R)), patent-pending Directional Finding and Tracking Array (DFTA(R)), patented PureAudio(R), and patented EchoStop(TM) far-field microphone technologies enhance a wide range of audio products to eliminate background noise and ensure the optimum performance of voice applications. Visit Andrea Electronics' website at www.AndreaElectronics.com or call 1-800-442-7787. This press release may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The words "anticipates," "believes," "estimates," "expects," "intends," "plans," "seeks," variations of such words, and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and involve matters that are subject to certain risks, uncertainties and assumptions that are difficult to predict, including economic, competitive, governmental, technological and other factors, that may affect the business and prospects of Andrea Electronics Corporation (the "Company"). The Company cautions investors about the following significant factors, which, among others, have in some cases affected the Company's actual results and are in the future likely to affect the Company's actual results and could cause them to differ materially from those expressed in any forward-looking statements: the rate at which Andrea Anti-Noise, DSDA, DFTA and other Andrea technologies are accepted in the marketplace; the competitiveness of Andrea Anti-Noise, DSDA, DFTA and other Andrea products in terms of technical specifications, quality, price, reliability and service; the sufficiency of the Company's funds for research and development, marketing and general and administrative expenses; infringement and other disputes relating to patents and other intellectual property rights held or licensed by the Company or third parties; the Company's continuing ability to enter and maintain collaborative relationships with other manufacturers, software authoring and publishing companies, and distributors; the emergence of new competitors in the marketplace; the Company's ability to compete successfully against established competitors with greater resources; the uncertainty of future governmental regulation; the Company's ability to obtain additional funds; and general economic conditions. No assurance can be given that the Company will achieve any material sales or profits from the products introduced in this release. These and other similar factors are discussed under the heading "Cautionary Statement Regarding Forward-looking statements" included in the Management's Discussion and Analysis of Financial Condition and Results of Operations in the Company's Annual Report on Form 10-K and in the Company's Annual Report to shareholders, and in documents subsequently filed by the Company with the Securities and Exchange Commission. 6 Andrea Electronics Announces Fourth Quarter and Year End 2003 Results Page 3 ANDREA ELECTRONICS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
For the Quarter Ended For the Years Ended --------------------- ------------------- December 31, December 31, ------------ ------------ 2003 2002 2003 2002 ---- ---- ---- ---- (restated)* (restated)* Revenues Net Product Revenues $ 1,011,942 $ 749,751 $ 3,452,744 $ 2,981,294 License Revenues 416,670 416,670 1,666,680 953,356 -------------- -------------- -------------- -------------- Revenues 1,428,612 1,166,421 5,119,424 3,934,650 Cost of revenues 792,098 861,983 2,734,077 2,564,528 -------------- -------------- -------------- -------------- Gross margin 636,514 304,438 2,385,347 1,370,122 Research and development expenses 585,988 869,349 2,763,966 3,239,627 General, administrative and selling expenses 951,551 1,189,497 3,911,174 5,241,966 Impairment of intangible assets 2,733,230 - 2,733,230 - -------------- -------------- -------------- -------------- Loss from operations (3,634,255) (1,754,408) (7,023,023) (7,111,471) --------------- -------------- --------------- -------------- Other income Interest income (expense) 1,248 6,019 42,287 (7,519) Rent and miscellaneous income (expense) 65,734 (3,115) 174,245 31,257 -------------- --------------- -------------- -------------- Other Income 66,982 2,904 216,532 23,738 -------------- -------------- -------------- -------------- Loss from continuing operations before provision for income taxes and cumulative effect of change in accounting principle for goodwill (3,567,273) (1,751,504) (6,806,491) (7,087,733) Provision for income taxes - - - (1,806,615) -------------- -------------- -------------- -------------- Loss from continuing operations before cumulative effect of change in accounting principle for goodwill (3,567,273) (1,751,504) (6,806,491) (8,894,348) Income from discontinued operations - 367,194 2,534,824 687,892 Cumulative effect of change in accounting principle for goodwill, net of $0 Tax - - - (12,458,872) -------------- -------------- -------------- -------------- Net loss (3,567,273) (1,384,310) (4,271,667) (20,665,328) Preferred stock dividends 83,504 108,841 417,686 466,695 -------------- -------------- -------------- -------------- Net loss attributable to common shareholders $ (3,650,777) $ (1,493,151) $ (4,689,353) $ (21,132,023) =============== ============== =============== ============== Basic and diluted (loss) income per share: Loss from continuing operations attributable to common shareholders before cumulative effect of change in accounting principle for goodwill $ (0.14) $ (0.09) $ (0.31) $ (0.50) Income from discontinued operations - 0.02 0.11 0.04 Cumulative effect of change in accounting principle for goodwill, net - - - (0.66) -------------- -------------- -------------- -------------- Net loss attributable to common shareholders $ (0.14) $ (0.07) $ (0.20) $ (1.12) ============== ============= ============== ============= Shares used in computing net loss per share - Basic and Diluted 26,524,994 20,320,427 23,727,767 18,851,317 ============== ============== ============== ============== *Restated to reflect discontinued operations relating to the Aircraft Communications Products Division
7
ANDREA ELECTRONICS ANNOUNCES FOURTH QUARTER AND YEAR END 2003 RESULTS PAGE 4 ANDREA ELECTRONICS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, ------------ 2003 2002 ------ ------ ASSETS ------ Current assets: Cash and cash equivalents $ 1,725,041 $ 3,307,437 Accounts receivable, net of allowance for doubtful accounts of $56,697 and $70,831, respectively 611,422 412,849 Note receivable 354,986 - Inventories, net 1,301,791 2,222,450 Prepaid expenses and other current assets 181,018 309,705 Assets from discontinued operations - 1,487,482 -------------- ------------- Total current assets 4,174,258 7,739,923 Property and equipment, net 219,182 543,572 Intangible assets, net 4,805,630 8,208,638 Other assets, net 268,090 282,582 -------------- -------------- Total assets $ 9,467,160 $ 16,774,715 ============== ============== LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY ---------------------------------------------- Current liabilities: Trade accounts payable $ 731,092 $ 1,023,353 Current portion of long-term debt 16,527 21,056 Accrued restructuring charges 238,391 364,577 Deferred revenue 1,666,680 1,666,680 Other current liabilities 1,714,439 2,409,526 Liabilities from discontinued operations - 122,903 -------------- -------------- Total current liabilities 4,367,129 5,608,095 Long-term debt - 16,572 Deferred revenue 713,284 2,379,964 Other liabilities 238,671 249,677 -------------- -------------- Total liabilities 5,319,084 8,254,308 -------------- -------------- Series B Redeemable Convertible Preferred Stock, net, $.01 par value; authorized: 1,000 shares; issued and outstanding: 0 and 66 shares, respectively; liquidation value: $0 and $660,000, respectively - 645,091 -------------- -------------- Series C Redeemable Convertible Preferred Stock, net, $.01 par value; authorized: 1,500 shares; issued and outstanding: 677 and 749 shares, respectively; liquidation value: $6,771,876 and $7,491,876, respectively 6,692,603 7,381,508 -------------- -------------- Commitments and contingencies Shareholders' (deficit) equity: Preferred stock, $.01 par value; authorized: 4,997,500 shares; none issued and outstanding - - Common stock, $.01 and $0.50 par value, respectively; authorized: 200,000,000 shares; issued and outstanding: 27,245,932 and 21,127,918 shares, respectively 272,459 10,563,959 Additional paid-in capital 65,578,653 54,074,247 Deferred stock compensation (2,673) (23,099) Accumulated deficit (68,392,966) (64,121,299) ------------ -------------- Total shareholders' (deficit) equity (2,544,527) 493,808 --------------- -------------- Total liabilities and shareholders' (deficit) equity $ 9,467,160 $ 16,774,715 ============== ==============
AT ANDREA ELECTRONICS - --------------------- Corisa L. Guiffre, Chief Financial Officer (631) 719-1800 (800) 707-5779 -----END PRIVACY-ENHANCED MESSAGE-----