SAN JOSE, Calif., April 21 /PRNewswire/ -- Hello Direct, Inc.
(Nasdaq: HELO), the leading direct marketer and developer of desktop telephony
products and equipment interface solutions for business end users, today
reported financial results for the first quarter ended March 31, 1998.
Net sales for the quarter were a record $17.9 million, up 12.4 percent
over net sales of $15.9 million in the first quarter of the prior year. Net
income was $603,000, or $0.12 per share (on 5,182,000 diluted shares
outstanding), an increase of 101 percent over net income of $300,000, or
$0.06 per share (on 5,073,000 diluted shares outstanding), for the same
quarter a year ago.
The Company also reported record operating income of $802,000,
representing a 142 percent increase over operating income of $332,000 for the
first quarter of last year.
"This was an outstanding quarter for the Company in many respects," said
Alec Glover, Hello Direct's President and CEO. "By successfully streamlining
our product offering, focusing on higher margin items, and marketing to higher
value customer segments, we are achieving our goal of increased profitability.
In addition, through increased staffing and internal training programs, we
have strengthened our outbound telemarketing capability, and are now better
positioned to take advantage of the opportunities in the growing corporate and
call center markets."
Glover also noted that the Company's intensified investment in proprietary
product development has resulted in the first shipment of an innovative new
equipment interface product, LineStein(TM), based on Hello Direct's
proprietary CODiT(TM) technology. "LineStein is a unique analog-to-digital
adapter that allows a modem to be connected to any phone system, and can
ensure compatibility of phone systems with teleconferencing equipment. We are
proud of the development effort on this project, and believe it further
demonstrates our ability to respond to our customers' needs," he said.
"The results for the quarter emphasize our successful execution of the
strategic plan we announced two quarters ago," said Glover. "Our gross margin
in the quarter was 53.6 percent, compared to 50.7 percent in the same quarter
last year, and the average order size in the quarter was a record $259, up
from $244 in the same period a year ago."
The Company also reported that cash and short-term investments decreased
to 7.6 million, from $9.0 million at December 31, 1997, primarily as a result
of cash invested in operating activities, and working capital increased to
$18.3 million, from $17.3 million at the year-end.
Hello Direct, Inc. (http://www.hello-direct.com) is the leading direct
marketer and developer of telephone productivity tools including headsets,
teleconferencing, wireless and related desktop products. Through its
distinctive catalogs, website and outbound telemarketing programs, the Company
offers a broad selection of commercial-grade brand name, proprietary and
private label products at competitive prices that provide solutions to its
customers' evolving communication needs.
This release contains forward-looking statements including, but not
limited to, statements regarding new product development and introductions,
sales force expansion, marketing support improvements, implementation and
execution of a new corporate strategy including profitability and stockholder
return gains in connection with such strategy, market opportunities and
operating margins. These forward looking statements involve risks and
uncertainties that could cause actual results to differ, and such differences
could be material. Such factors include, but are not limited to, the
following: future operating results uncertain, fluctuations in quarterly
operating results, rapidly changing technology, need to successfully develop
new products, dependence on headset products, dependence on sole or limited
source suppliers and foreign manufacturing, competition, increase in costs of
catalog mailing, paper and printing, risks associated with managing a growing
business, dependence on a single facility, dependence on key personnel, state
sales tax collection, government regulation of mailing lists, risks associated
with intellectual property rights, product liability and insurance, volatility
of stock price, and control by officers and directors. There can be no
assurance that the Company will be successful in resolving such issues.
Investors are strongly encouraged to review the Company's annual report on
Form 10-K for the year ended December 31, 1997, which is on file at 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 Months Ended
March 31, 1998 and 1997
Three Months Ended
March 31,
1998 1997
Net sales $17,910,000 $15,936,000
Cost of goods sold 8,319,000 7,853,000
Gross profit 9,591,000 8,083,000
Selling, general and administrative
expenses 8,210,000 7,341,000
Product development expenses 579,000 410,000
Operating income 802,000 332,000
Other income - net 203,000 169,000
Income before income taxes 1,005,000 501,000
Income taxes 402,000 201,000
Net income $603,000 $300,000
Basic per share amounts:
Net income $0.12 $0.06
Weighted average shares
outstanding 5,087,000 5,015,000
Diluted per share amounts:
Net income $0.12 $0.06
Weighted average shares
outstanding 5,182,000 5,073,000
HELLO DIRECT, INC.
Condensed Balance Sheets
March 31, December 31,
1998 1997
ASSETS
Current assets:
Cash and cash equivalents $2,370,000 $5,135,000
Short-term investments 5,199,000 3,830,000
Trade accounts receivable,
less allowance for returns
and doubtful accounts 6,804,000 5,752,000
Inventories 6,010,000 5,137,000
Deferred tax assets 898,000 821,000
Other current assets 1,341,000 1,771,000
Total current assets 22,622,000 22,446,000
Notes receivable 4,469,000 4,542,000
Property and equipment, net 4,770,000 4,819,000
Long-term deferred tax assets -- 25,000
Total assets $31,861,000 $31,832,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $2,965,000 $3,856,000
Accrued expenses 1,343,000 1,319,000
Total current liabilities 4,308,000 5,175,000
Non-current liabilities 174,000 --
Total liabilities 4,482,000 5,175,000
Stockholders' equity:
Common stock 5,000 5,000
Additional paid-in capital 28,164,000 28,045,000
Accumulated deficit (345,000) (948,000)
Less treasury stock, at cost (445,000) (445,000)
Total stockholders' equity 27,379,000 26,657,000
Total liabilities and
stockholders' equity $31,861,000 $31,832,000
SOURCE Hello Direct, Inc.
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Related links:
http://www.hello-direct.com
CONTACT:
Raymond E. Nystrom, Vice President Operations
and Chief Financial Officer of Hello Direct, 408-363-5075; Don
Markley, general information, or, Jordan Goldstein, analyst
contact, 415-986-1591, both of The Financial Relations Board
NOTE TO EDITORS: For more information on Hello Direct, Inc. at no
cost, please call 1-800-PRO-INFO using ticker symbol HELO.
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