Quarterly Net Revenue Up 17 Percent over Previous Year
Quarterly Net Income Up 29.8 Percent over Previous Year
SAN JOSE, Calif., July 18 /PRNewswire/ -- Hello Direct, Inc.
(Nasdaq: HELO), the leading developer and business-to-business direct marketer
of desktop telephony products, today reported that the second quarter ended
June 30, 2000 marked the Company's fourteenth consecutive quarter of
significant year-on-year increases in both sales and net income.
Net sales for the quarter were $22.6 million, an increase of 17 percent
over net sales of $19.3 million in the second quarter of 1999. Net income was
$1.08 million or $0.20 per share (on 5,505,000 diluted shares outstanding), an
increase of 29.8 percent over net income of $828,000 or $0.16 per share (on
5,291,000 diluted shares outstanding), for the same quarter a year ago.
The Company also reported quarterly operating income of $1.4 million, a
19.5 percent increase over operating income of $1.2 million in the second
quarter of last year. The Company's gross margin for the quarter was 53.4
percent, compared with 54.7 percent in the same period in 1999.
"We are pleased to have achieved record sales and income for the quarter,"
said Alec Glover, Hello Direct's president and CEO, "especially since the
second quarter of the year has typically been our most challenging for
seasonality reasons. I am also pleased with how successfully we further
evolved and strengthened our outbound telemarketing and Internet channels, and
our product and service assortment."
"Internet sales for the second quarter continued to be profitable, were up
93 percent over the same period in 1999, and represented just over 16 percent
of second quarter 2000 sales, up from just under 10 percent for the same
period a year ago. At the same time, revenue from outbound telemarketing to
corporate accounts in the quarter grew by 48 percent over the same period in
the previous year, accounting for 54 percent of total sales, versus 43 percent
in the second quarter of 1999," said Glover.
Glover also cited several significant developments in the Company's
creation of proprietary products and technology during the quarter. "In this
past quarter, we introduced significantly enhanced versions of our best
selling Ultralight(R) EX and Solo(R) II headsets, and began marketing
InternetConnect's DSL networking services to our customers. We also entered
into a partnership with Addvalue Technologies to accelerate the development of
Bluetooth technology-based wireless headsets, a segment wherein Hello Direct
has been the acknowledged market leader for nearly a decade."
Hello Direct reported that cash and cash equivalents as of June 30, 2000,
were $295,000, compared to $7.3 million as of December 31, 1999. Working
capital as of June 30, 2000, was $18.7 million, compared with $18.1 million at
the close of the previous year. The change in cash and cash equivalents
resulted from essentially equal investments in two areas -- capital spending
on computer hardware and software to further enhance customer service and
efficiency, and pre-payments for merchandise that enabled the Company to take
advantage of extremely favorable pricing and cooperative marketing support
from a major vendor.
"This kind of responsible investment in productive assets and inventory is
consistent with our commitment to our successful profit-focused growth
strategy. We are very confident that continued execution of that strategy
will lead to additional record-setting sales and profit achievement through
the rest of this year and beyond," said Glover.
About Hello Direct, Inc.
Hello Direct, Inc. (Nasdaq: HELO) is the leading developer and business-
to-business 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. 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, 1999, 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. AND SUBSIDIARY
Condensed Consolidated Statements of Operations
For the Three and Six Months Ended
June 30, 2000 and 1999
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
Net sales $22,561,000 $19,282,000 $46,239,000 $38,732,000
Cost of goods sold 10,519,000 8,734,000 21,457,000 17,667,000
Gross profit 12,042,000 10,548,000 24,782,000 21,065,000
Selling, general
and administrative
expenses 9,738,000 8,696,000 19,779,000 17,345,000
Product development
expenses 876,000 657,000 1,738,000 1,264,000
Operating income 1,428,000 1,195,000 3,265,000 2,456,000
Other income - net 365,000 186,000 610,000 410,000
Income before income
taxes 1,793,000 1,381,000 3,875,000 2,866,000
Income taxes 718,000 553,000 1,550,000 1,147,000
Net income $1,075,000 $828,000 $2,325,000 $1,719,000
Basic per share amounts:
Net income $0.20 $0.16 $0.44 $0.33
Weighted average
shares outstanding 5,285,000 5,105,000 5,263,000 5,132,000
Diluted per share amounts:
Net income $0.20 $0.16 $0.42 $0.32
Weighted average shares
outstanding 5,505,000 5,291,000 5,525,000 5,323,000
HELLO DIRECT, INC. AND SUBSIDIARY
Condensed Consolidated Balance Sheets
June 30, December 31,
2000 1999
ASSETS
Current assets:
Cash and cash equivalents $295,000 $7,292,000
Trade accounts receivable, less allowance
for returns and doubtful accounts. 10,240,000 9,186,000
Inventories 9,526,000 7,753,000
Deferred tax assets 970,000 874,000
Other current assets 5,791,000 1,904,000
Total current assets 26,822,000 27,009,000
Notes receivable 3,739,000 3,912,000
Property and equipment, net 12,841,000 10,055,000
Goodwill, net 1,400,000 1,600,000
Total assets $44,802,000 $42,576,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term bank borrowing $3,005,000 $-
Accounts payable 3,480,000 6,340,000
Accrued expenses 1,607,000 2,553,000
Total current liabilities 8,092,000 8,893,000
Non-current liabilities 676,000 472,000
Total liabilities 8,768,000 9,365,000
Stockholders' equity:
Common stock 5,000 5,000
Additional paid-in capital 30,166,000 29,668,000
Notes receivable from stock sales (742,000) (742,000)
Retained earnings 7,928,000 5,603,000
Less treasury stock, at cost (1,323,000) (1,323,000)
Total stockholders' equity 36,034,000 33,211,000
Total liabilities and stockholders'
equity $44,802,000 $42,576,000
SOURCE Hello Direct, Inc.
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CONTACT:
Kip Witter, Chief Financial Officer of Hello
Direct, 408-363-6158; General info., Chris West, Analysts, James
Hoyne, or Financial Media, Chris Cook, all of Financial Relations
Board, 415-986-1591
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