Record Annual Net Sales and Operating Income Achieved
SAN JOSE, Calif., Feb. 4 /PRNewswire/ -- Hello Direct, Inc.
(Nasdaq: HELO), the leading direct marketer of desktop telephone productivity
tools, today reported record financial results for the quarter and year ended
December 31, 1997.
Net sales for the quarter were $15.9 million, up 13.1 percent over net
sales of $14.0 million in the same period of the prior year. Net income in
the quarter was $596,000, or $0.12 per share, compared with net income of
$36,000, or $0.01 per share, in the fourth quarter of 1996.
Net sales for the year were $63.8 million, an increase of 23.8 percent
over net sales of $51.6 million in 1996. Net income for the year was
$1,776,000, or $0.35 per share, compared with net income of $741,000, or
$0.15 per share, in the prior year.
The Company also reported operating income of $2.3 million for the year,
compared with operating income of $534,000 in 1996.
"We are extremely pleased with the results of the quarter and the year,"
said Alec Glover, Hello Direct's President and CEO. "The new strategic
emphasis we initiated earlier this year continued to show its positive impact
in the fourth quarter. We are making excellent progress in streamlining our
product offerings, focusing increasingly on more profitable, higher
value-added proprietary and nationally branded items. We are also seeing the
early benefits from increased emphasis on our outbound telemarketing to
corporate accounts."
According to Glover, the Company showed much improved results along a
number of fronts. "Our gross margin in the fourth quarter was 53.0 percent,
compared with 49.4 percent in the fourth quarter last year. Also, during the
quarter our selling and administrative expenses declined to 45.1 percent of
sales, from 48.4 percent of sales in the same quarter last year. Finally, our
average order size reached $253 in the quarter, up from $209 in the final
quarter of 1996," he said.
"We are now very well positioned to more profitably capitalize on the
large, growing and dynamic business end-user telephony market," said Glover.
"As mentioned earlier, another emphasis of our new strategy is on accelerating
development of new products. Our proprietary development efforts have already
produced the industry's leading wireless headsets and the breakthrough
proprietary CODiT(TM) technology. CODiT(TM) allows universal compatibility to
numerous telephone equipment interfaces. We are also significantly building
our outbound telemarketing efforts to much more aggressively target the more
profitable corporate account customer."
Hello Direct, Inc. ( http://www.hello-direct.com ) is the leading direct
marketer/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 including plans to finance such expansion, marketing
support improvements, implementation of a new corporate strategy including
market share, profitability and stockholder return gains in connection with
such strategy, the ability to control costs and achieve improvements in net
sales, operating results, operating margins, and product mix. 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: need for continued and
increased market acceptance of existing and new products, the Company's
ability to attract, train and retain qualified sales force personnel, the
Company's ability to develop, introduce and market new product developments
and enhancements, management's ability to successfully implement and execute
such corporate strategy, the ability to control costs and achieve improvements
in margins and profitability, changes in the Company's management team and
fluctuating economic conditions. There can be no assurance that the Company
will be successful in resolving such issues. Investors should also refer to
the Company's Annual Report on Form 10-K for the year ended December 31, 1996,
and Quarterly Reports on Form 10-Q, which are on file at the Securities and
Exchange Commission.
For more information on Hello Direct via fax, dial 800-PRO-INFO, code
HELO. No cost.
HELLO DIRECT, INC.
Condensed Statements of Operations
For the Three and Twelve Months Ended
December 31, 1997 and 1996
Three Months Ended Twelve Months Ended
December 31, December 31,
1997 1996 1997 1996
Net sales $15,865,000 $14,024,000 $63,846,000 $51,590,000
Cost of goods sold 7,450,000 7,097,000 30,759,000 25,181,000
Gross profit 8,415,000 6,927,000 33,087,000 26,409,000
Selling, general
and administrative
expenses 7,154,000 6,784,000 29,234,000 24,277,000
Product development
expenses 489,000 210,000 1,592,000 1,598,000
Operating income
(loss) 772,000 (67,000) 2,261,000 534,000
Other income - net 201,000 132,000 699,000 700,000
Income before
income taxes 973,000 65,000 2,960,000 1,234,000
Income taxes 377,000 29,000 1,184,000 493,000
Net income $596,000 $36,000 $1,776,000 $741,000
Basic per share amounts:
Net income $0.12 $0.01 $0.35 $0.15
Weighted average
shares outstanding 5,061,000 5,004,000 5,036,000 4,982,000
Diluted per share amounts:
Net income $0.12 $0.01 $0.35 $0.15
Weighted average
shares outstanding 5,163,000 5,055,000 5,117,000 5,043,000
HELLO DIRECT, INC.
Condensed Balance Sheets
December 31, December 31,
1997 1996
ASSETS
Current assets:
Cash and cash equivalents $5,135,000 $2,492,000
Short-term investments 3,830,000 6,007,000
Trade accounts receivable, less
allowance for returns and
doubtful accounts. 5,752,000 4,852,000
Inventories 5,137,000 5,287,000
Deferred tax assets 821,000 628,000
Other current assets 1,771,000 1,339,000
Total current assets 22,446,000 20,605,000
Notes receivable 4,542,000 3,497,000
Property and equipment, net 4,819,000 3,792,000
Long-term deferred tax assets 25,000 1,072,000
Total assets $31,832,000 $28,966,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $3,856,000 $3,839,000
Accrued expenses 1,319,000 484,000
Total current liabilities 5,175,000 4,323,000
Stockholders' equity:
Common stock 5,000 5,000
Additional paid-in capital 28,045,000 27,807,000
Accumulated deficit (948,000) (2,724,000)
Less treasury stock, at cost (445,000) (445,000)
Total stockholders' equity 26,657,000 24,643,000
Total liabilities and
stockholders' equity $31,832,000 $28,966,000
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, Inc., 408-363-5075;
or general information, Don Markley, or analysts, Jordan
Goldstein of the Financial Relations Board, 415-986-1591, for
Hello Direct
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