EX-99.1 2 a4759887ex99.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Boston Acoustics Announces Second Quarter Results PEABODY, Mass.--(BUSINESS WIRE)--Nov. 5, 2004--Boston Acoustics, Inc. (NASDAQ:BOSA) 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. CONTACT: Boston Acoustics, Inc. Moses Gabbay, 978-538-5000 Moses@bostona.com or Debby Ricker-Rosato, 978-538-5000 DRicker@bostona.com