Quarterly Revenue Up 28.5% Over Previous Year
Quarterly Net Income Up 35.8% Over Previous Year
Annual Revenue Up 17.9% Over Previous Year
Annual Net Income Up 45.4% Over Previous Year
SAN JOSE, Calif., Jan. 26 /PRNewswire/ -- Hello Direct, Inc.
(Nasdaq: HELO), the leading developer and direct marketer of desktop telephony
and equipment interface products, today reported financial results for the
fourth quarter and year ended December 31, 1999. For the twelfth consecutive
quarter, the Company has succeeded in increasing sales and net income over the
comparable prior-year period.
Net sales for the quarter were a record $22.1 million, an increase of
28.5 percent over net sales of $17.2 million in the fourth quarter of the
prior year. Net income was $1.1 million, or $0.21 per share (on 5,432,000
diluted shares outstanding), an increase of 35.8 percent over net income of
$823,000, or $0.16 per share (on 5,201,000 diluted shares outstanding), for
the same quarter a year ago.
The Company also reported quarterly operating income of $1.39 million, a
19.8 percent increase over operating income of $1.16 million in the fourth
quarter of last year.
For the year, net sales reached a record $81.1 million, an increase of
17.9 percent over net sales of $68.7 million in 1998. Net income for the year
was $3.88 million, or $0.73 per share (on 5,352,000 diluted shares
outstanding), a 45.4 percent increase over net income of $2.67 million, or
$0.51 per share (on 5,199,000 diluted shares outstanding), in 1998.
"I am very pleased with our quarterly and annual results," said Alec
Glover, Hello Direct's president and CEO, "and especially with our higher rate
of growth. I am also particularly excited about the continuing significant
growth prospects for our profitable Internet and outbound telemarketing
channels." According to Glover, Internet sales for the quarter grew by
125 percent over the year-ago period and represented 16 percent of fourth
quarter 1999 sales, up from 9 percent for the same period a year ago. "This
highlights the success of our effort to build web site traffic and revenue
through expanded alliances and promotion. In the last few months alone we
have concluded agreements with potentially significant traffic sources such as
deltathree.com, the FairMarket Network, smalloffice.com and TelStreet.com,
among others, and we look forward to continuing this development in the coming
year," Glover said. Outbound corporate accounts sales for the quarter grew by
113 percent over the same period a year ago, accounting for 51 percent of
total sales, versus 31 percent in the fourth quarter of 1998.
"While aiming to further increase our Internet and outbound telemarketing
sales, we also plan to keep developing opportunities for our own proprietary
technologies and products. Our OEM agreement with Polycom, Inc., announced in
November 1999, to provide them with an application of our LearnIt(TM) smart
interface technology is an excellent example of this opportunity," said
Glover.
The Company's gross margin for the quarter was 47.9 percent, down from
53.5 percent in the same period in 1998. Because of this, gross margin for
1999 as a whole was 52.9 percent, down from 53.8 percent in 1998. Selling,
general and administrative expenses declined as a percentage of net sales year
to year, from 45.5 percent in 1998 to 43.1 percent in 1999.
"The anticipated decline in gross margins was the result of significant
sales at special introductory pricing to a new and strategically important
corporate account, Intel Corporation, and special promotions and sales
incentives in the fourth quarter aimed at driving new traffic to our website,"
said Glover. "In effect, these were one-time investment spending events, and
we expect gross margins to return to over 50 percent levels this quarter."
Hello Direct also reported that cash and short-term investments as of
December 31, 1999, decreased to $7.3 million from $9.6 million a year earlier.
Working capital as of December 31, 1999, was $18.1 million, compared with
$19.2 million at the close of the previous year. The decrease in working
capital results from the successful acquisition of PhoneZone.com, stock
repurchases, and the purchase of capital assets.
About Hello Direct, Inc.
Hello Direct, Inc. (Nasdaq: HELO) is the leading developer and direct
marketer of desktop telephony and equipment interface solutions, including
headsets, teleconferencing, wireless, and related desktop products. Through a
combination of distinctive catalogs, outbound telemarketing and Internet sales
channels, the Company offers a broad selection of commercial grade solutions
to its customers' evolving communications needs. For more information on
Hello Direct, Inc., please visit http://www.hellodirect.com the leading online source
of telecommunications information, products and services.
Safe Harbor Statement
This release contains forward-looking statements including, but not
limited to, statements regarding the expansion of outbound telemarketing and
Internet sales efforts, increased revenue growth rates, and the continuing
success of the Company's growth plans for margins and profits. These
forward-looking statements involve risks and uncertainties that could cause
actual results to differ, and such differences could be material. Such risks
and uncertainties include, but are not limited to, the following: the
uncertainty of the Company's future operating results, the fact that the
market for telecommunication products is generally characterized by rapidly
changing technology, the Company's need and ability to successfully develop
new products, the Company's dependence on and market acceptance of its headset
products, the Company's dependence on sole or limited source suppliers and
foreign manufacturing, the highly competitive market for telecommunications
products, risks associated with managing a growing business, and the Company's
dependence on key personnel. There can be no assurance that the Company will
be successful in addressing such risks and uncertainties. Investors are
strongly encouraged to review the section entitled "Factors affecting
operating results and market price of stock" in the Company's annual report on
Form 10-K for the year ended December 31, 1998, and quarterly reports on Form
10-Q on file with the Securities and Exchange Commission for a discussion of
risks and uncertainties that could affect operating results and the market
price of the Company's stock.
HELLO DIRECT, INC.
Condensed Statements of Operations
For the Three and Twelve Months Ended
December 31, 1999 and 1998
Three Months Ended Twelve Months Ended
December 31, December 31,
1999 1998 1999 1998
Net sales $22,091,000 $17,185,000 $81,052,000 $68,731,000
Cost of goods sold 11,508,000 7,992,000 38,190,000 31,772,000
Gross profit 10,583,000 9,193,000 42,862,000 36,959,000
Selling, general
and administrative
expenses 8,462,000 7,447,000 34,904,000 31,294,000
Product development
expenses 732,000 587,000 2,599,000 2,036,000
Operating income 1,389,000 1,159,000 5,359,000 3,629,000
Other income - net 241,000 211,000 804,000 816,000
Income before
income taxes 1,630,000 1,370,000 6,163,000 4,445,000
Income taxes 512,000 547,000 2,281,000 1,776,000
Net income $1,118,000 $823,000 $3,882,000 $2,669,000
Basic per share
amounts:
Net income $0.21 $0.16 $0.75 $0.52
Weighted average
shares outstanding 5,226,000 5,118,000 5,167,000 5,108,000
Diluted per share
amounts:
Net income $0.21 $0.16 $0.73 $0.51
Weighted average
shares outstanding 5,432,000 5,201,000 5,352,000 5,199,000
HELLO DIRECT, INC.
Condensed Balance Sheets
December 31, December 31,
1999 1998
ASSETS
Current assets:
Cash and cash equivalents $7,292,000 $5,745,000
Short-term investments -- 3,860,000
Trade accounts
receivable, less allowance
for returns and doubtful
accounts 9,186,000 5,491,000
Inventories 7,753,000 6,119,000
Deferred tax assets 874,000 847,000
Other current assets 1,904,000 2,474,000
Total current assets 27,009,000 24,536,000
Notes receivable 3,912,000 4,239,000
Property and equipment, net 10,055,000 6,246,000
Goodwill, net 1,600,000 --
Total assets $42,576,000 $35,021,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $6,340,000 $3,567,000
Accrued expenses 2,553,000 1,736,000
Total current liabilities 8,893,000 5,303,000
Non-current liabilities 472,000 364,000
Total liabilities 9,365,000 5,667,000
Stockholders' equity:
Common stock 5,000 5,000
Additional paid-in capital 29,668,000 28,319,000
Notes receivable from
stock sales (742,000) -
Retained earnings 5,603,000 1,721,000
Less treasury stock, at cost (1,323,000) (691,000)
Total stockholders' equity 33,211,000 29,354,000
Total liabilities and
stockholders' equity $42,576,000 $35,021,000
SOURCE Hello Direct, Inc.
 back to top
Related links:
http: /www.hellodirect.com
CONTACT:
Kip Witter, Chief Financial Officer of Hello
Direct, 408-363-6158; General information, Chris West, or
analysts, Paul Levy, of The Financial Relations Board,
415-986-1591
|
