EX-99 3 a4453877_ex991.txt BOSTON ACCOUSTICS EXHIBIT 99.1 Exhibit 99.1 Boston Acoustics Announces First Quarter Results PEABODY, Mass.--(BUSINESS WIRE)--Aug. 5, 2003--Boston Acoustics, Inc. (NASDAQ:BOSA) today announced its financial results for the first quarter of the 2004 fiscal year which ended on June 28, 2003. Net sales for the quarter decreased approximately 31%, to $12.6 million from $18.3 million for the same period a year ago. Net income decreased to approximately $216,000 from approximately $277,000, and diluted earnings per share decreased to $.05 per share compared to $.06 per share for the same period a year ago. The reduction in net sales is the result of the prolonged difficult economic environment and its significant impact on both of the Company's business segments. While net sales of the Company's Core products decreased approximately 17% compared to a year ago, net sales of the OEM/ Multimedia segment were down 64%. The significant decrease in the OEM/Multimedia segment was anticipated and, as a result, incorporated in the Company's fiscal 2004 business plan. President and CEO Moses Gabbay stated, "Despite the decrease in sales, the Company realized a profit and continues to focus on improving margins by maintaining higher efficiencies through streamlining processes and monitoring operating expenses closely. Operating expenses, although higher as a percentage of sales, did in fact decrease in absolute dollars. This cost reduction will allow the Company to continue its investment in new market opportunities while increasing margins when worldwide economies and resulting consumer confidence improve to higher levels." Mr. Gabbay continued, "As the first step in a strategic initiative to assess and refine our sales and marketing organizations and to ensure the future growth in the car audio unit of our business, the Company announced the appointment of Dominick Aquilini, National Sales Manager, Aftermarket Car Audio. This addition enables our Home/Custom business unit to maximize the sales of Boston Home products while Mr. Aquilini focuses on Aftermarket Car Audio. Our balance sheet is strong, and we are prepared to capture the next upsurge in the market." Three Months Ended June 28, 2003 June 29, 2002 Net Sales $ 12,597,197 $ 18,257,277 Cost of Goods Sold 8,017,458 12,448,444 Gross Profit 4,579,739 5,808,833 Selling and Marketing Expenses 2,141,390 2,626,924 General and Administrative Expenses 1,111,307 1,231,520 Engineering and Development Expenses 1,119,561 1,554,583 Total Operating Expenses 4,372,258 5,413,027 Income from Operations 207,481 395,806 Interest Income, net 15,106 11,972 Other Income 92,200 18,831 Income before Provision for Income Taxes 314,787 426,609 Provision for Income Taxes 99,000 150,000 Net Income $ 215,787 $ 276,609 Basic Earnings per Share $ .05 $ .06 Diluted Earnings per Share $ .05 $ .06 Weighted Average Shares Outstanding Basic 4,400,276 4,595,595 Diluted 4,400,372 4,673,688 Consolidated Balance Sheets June 28, 2003 March 29, 2003 Assets Current Assets Cash and cash equivalents $ 6,575,370 $ 6,941,222 Accounts receivable, net 8,030,270 6,582,033 Inventories 10,087,821 11,919,039 Deferred income taxes 3,577,000 3,577,000 Prepaid income taxes 1,449,000 1,449,000 Prepaid expenses and other current assets 984,020 1,009,369 Total current assets 30,703,481 31,477,663 Property and Equipment, net 11,955,916 12,190,549 Other Assets, net 995,594 996,172 Total assets $ 43,654,991 $ 44,664,384 Liabilities and Shareholders' Equity Current Liabilities Accounts payable $ 4,923,524 $ 5,630,246 Accrued payroll & related expenses 596,486 602,589 Dividends payable 373,286 374,136 Other accrued expenses 1,925,163 2,079,095 Total current liabilities 7,818,459 8,686,066 Minority Interest in Joint Venture 24,015 37,344 Shareholders' Equity 35,812,517 35,940,974 Total liabilities and shareholders' equity $ 43,654,991 $ 44,664,384 Boston Acoustics, Inc. provides audio solutions for home entertainment, automobiles and personal computers. Founded in 1979, Boston Acoustics is located in Peabody, Massachusetts. 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 Boston Acoustics, Inc. Debby Ricker-Rosato, 978-538-5000 DRicker@bostona.com