BOULDER, Colo., Jan. 26, 2006 /PRNewswire-FirstCall/ -- SpectraLink
Corp. (NASDAQ:SLNK), the leader in workplace wireless telephony,
today reported revenue of $30.3 million and net income of $3.6
million, delivering earnings of 19 cents per fully diluted share,
for the quarter ended Dec. 31, 2005. This represents growth in
revenue of 10 percent over the same period a year ago. In 2004,
fourth quarter net income was $3.9 million, or 20 cents per fully
diluted share, on revenue of $27.6 million. (Logo:
http://www.newscom.com/cgi-bin/prnh/20050324/LATH060LOGO) For the
year ended Dec. 31, 2005, revenue was $97.8 million, with net
income of $12.0 million resulting in 62 cents earnings per fully
diluted share. For the same period a year ago, revenue was $90.0
million, generating $11.0 million in net income and 56 cents
earnings per fully diluted share. Included in fourth quarter
results was approximately $600,000 (before tax) in expenses related
to the KIRK telecom acquisition that reduced reported earnings per
fully diluted share by two cents for the quarter and the year. "I
am pleased that we finished the year on a high note, with the
announced acquisition of KIRK, expanding OEM sales, new technical
executive leadership, and solid fourth quarter performance," said
John Elms, SpectraLink president and CEO. "We are entering the new
year as a truly global provider of workplace wireless telephony,
with a comprehensive product portfolio that positions us strongly
to capitalize on the growing worldwide market." David Rosenthal,
SpectraLink CFO and executive vice president, added, "It was very
satisfying to deliver record contributions from our OEM partners,
from our international organization, and from our NetLink sales in
the fourth quarter, all contributing to deliver over $30 million in
quarterly revenue. The resulting solid financial performance
extended our series to 30 consecutive quarters of positive net
income and 28 consecutive quarters of positive cash flow from
operations." Webcast Information SpectraLink will hold an audio
webcast to discuss fourth quarter and fiscal year 2005 earnings
results, today, Jan. 26, 2006, at 4:30 p.m. Eastern time. You can
access the webcast and replay at http://www.spectralink.com/. In
2005, SpectraLink recognized the following key deliverables: *
Announced the acquisition of KIRK telecom, a leading global
provider of on-site, wireless communications solutions, based in
Denmark; * Introduced a new handset specifically designed to meet
the needs of the healthcare market; * Introduced the industry's
first wireless handset to support VPN security via Nortel; *
Certified interoperability between NetLink Wireless Telephones and
access points from seven leading Wi-Fi companies; * Grew
international revenues more than 50 percent over 2004; and *
Welcomed wireless industry veteran Masood Garahi to our executive
management team as SpectraLink CTO and executive vice president of
engineering. About SpectraLink SpectraLink, the leader in workplace
wireless telephony, delivers the power of mobile voice and
messaging applications to businesses worldwide. Seamlessly
integrating with VoIP and traditional telephony platforms,
SpectraLink's scalable technology provides instant access to people
and business-critical information. SpectraLink handsets free
on-premises employees to be more accessible, productive and
responsive. For more information, visit http://www.spectralink.com/
or call 1-800-676-5465. This release may contain forward-looking
statements that are subject to many risks and uncertainties,
including difficulties in integrating the operations, technologies,
products, and personnel of SpectraLink and KIRK; expectations that
the acquisition will be accretive to SpectraLink's results; the
unpredictable growth in international sales; the inability to close
several large orders in the sales pipeline; OEM agreements with
SpectraLink that impact margins and may not result in increased
future sales of SpectraLink's products or services; adverse changes
in economic and business conditions affecting SpectraLink's
customers; the intensely competitive nature of the wireless
communications industry, and a customer preference to buy all
telephone communications systems from a single source provider that
manufactures and sells PBX or key/hybrid systems; changes in rules
and regulations of the FCC; and the anticipated growth of the
market for on-premises wireless telephone systems. More information
about potential risk factors that could affect our results is
available in SpectraLink's filings with the Securities and Exchange
Commission on Form 10-K for the year ended Dec. 31, 2004, and
subsequent Form 10-Q filings. SPECTRALINK CORPORATION AND
SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
(Unaudited) December 31, December 31, 2005 2004 ASSETS CURRENT
ASSETS: Cash and cash equivalents $16,703 $14,625 Cash in escrow
55,148 -- Investments in marketable securities - current 14,088
11,984 Trade accounts receivable, net of allowance of $343 and
$374, respectively 22,574 21,252 Inventory, net of allowance of
$575 and $720, respectively 8,940 8,076 Deferred income taxes -
current portion 1,626 1,473 Prepaids and other 1,201 1,088 Total
current assets 120,280 58,498 INVESTMENT IN MARKETABLE SECURITIES,
net of current portion -- 27,781 PROPERTY AND EQUIPMENT, at cost:
Furniture and fixtures 2,866 2,481 Equipment 15,441 10,503
Leasehold improvements 1,225 1,036 19,532 14,020 Less - accumulated
depreciation and amortization (11,110) (9,436) Net property and
equipment 8,422 4,584 DEFERRED INCOME TAXES, net of current portion
-- 103 OTHER 2,090 460 TOTAL ASSETS $130,792 $91,426 LIABILITIES
AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable
$1,478 $1,132 Income taxes payable 746 1,038 Accrued payroll,
commissions and employee benefits 4,500 3,727 Accrued sales, use
and property taxes 804 732 Accrued warranty expenses 947 901 Other
accrued expenses 3,883 3,315 Deferred revenue 7,503 6,595 Current
portion of long-term debt 15,000 -- Total current liabilities
34,861 17,440 Long-term debt, net of current portion 18,050 --
Other long-term liabilities 900 763 LONG-TERM LIABILITIES 18,950
763 TOTAL LIABILITIES 53,811 18,203 STOCKHOLDERS' EQUITY: Preferred
stock, $0.01 par value, 5,000 shares authorized, none issued and
outstanding -- -- Common stock, $0.01 par value, 50,000 shares
authorized, 23,839 and 23,407 shares issued, respectively, and
19,106 and 19,138 shares outstanding, respectively 238 234
Additional paid-in capital 81,751 77,356 Retained earnings 32,383
28,030 Treasury stock, 4,732 and 4,269 shares, respectively, at
cost (37,391) (32,397) TOTAL STOCKHOLDERS' EQUITY 76,981 73,223
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $130,792 $91,426
SPECTRALINK CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED
STATEMENTS OF INCOME (In thousands except per share amounts)
(Unaudited) Three Months Ended Years Ended December 31, December
31, 2005 2004 2005 2004 NET SALES $30,313 $27,604 $97,774 $90,010
COST OF SALES 10,914 10,273 34,273 32,643 Gross profit 19,399
17,331 63,501 57,367 OPERATING EXPENSES: Research and development
3,714 2,263 11,362 8,899 Marketing and selling 8,036 7,212 27,272
25,065 General and administrative 1,935 1,882 6,772 6,352 Total
operating expenses 13,685 11,357 45,406 40,316 INCOME FROM
OPERATIONS 5,714 5,974 18,095 17,051 OTHER INCOME AND EXPENSES
Interest income 408 256 1,543 648 Interest expense (184) -- (184)
-- Other income (expense), net (222) 48 (369) 40 Total other income
and expenses 2 304 990 688 INCOME BEFORE INCOME TAXES 5,716 6,278
19,085 17,739 INCOME TAX EXPENSE 2,115 2,373 7,061 6,785 NET INCOME
$3,601 $3,905 $ 12,024 $ 10,954 BASIC EARNINGS PER SHARE $0.19
$0.20 $0.63 $0.58 BASIC WEIGHTED AVERAGE SHARES OUTSTANDING 19,030
19,060 19,061 19,050 DILUTED EARNINGS PER SHARE $0.19 $0.20 $0.62
$0.56 DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING 19,320 19,450
19,370 19,550 SPECTRALINK CORPORATION AND SUBSIDIARY CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
Years Ended December 31, 2005 2004 CASH FLOWS FROM OPERATING
ACTIVITIES: Net income $12,024 $10,954 Adjustments to reconcile net
income to net cash provided by operating activities: Depreciation
and amortization 1,746 1,637 Gain on disposal -- (83) Amortization
of premium on investments in marketable securities 131 --
Amortization of debt acquisition costs 52 -- Loss on sale of
investments in marketable securities 64 -- Loss on forward currency
contract 182 -- Income tax benefit from the exercise of stock
options 740 950 Provision for bad debts 18 118 Provision for excess
and obsolete inventory 683 1,212 Deferred income taxes 49 137
Changes in assets and liabilities: Increase in trade accounts
receivable (1,340) (6,900) Decrease in income taxes receivable --
204 Increase in inventory (1,547) (1,635) Increase in other assets
(1,005) (361) Increase (decrease) in accounts payable 346 (321)
(Decrease) increase in income taxes payable (292) 1,038 Increase in
accrued liabilities 1,537 2,068 Increase in deferred revenue 1,078
825 Net cash provided by operating activities 14,466 9,843 CASH
FLOWS FROM INVESTING ACTIVITIES: Purchases of property and
equipment (5,584) (2,239) Proceeds from disposal of property and
equipment -- 184 Proceeds from sale of marketable securities 32,060
-- Purchases of investments in marketable securities (6,659)
(39,784) Capitalized acquisition costs (419) -- Cash in escrow
(55,148) -- Net cash used in investing activities (35,750) (41,839)
CASH FLOWS FROM FINANCING ACTIVITIES: Borrowing on long-term debt
33,050 -- Principal payments under long-term obligation (35) (29)
Capitalized debt acquisition costs (690) -- Proceeds from exercises
of common stock options 3,339 4,779 Proceeds from issuances of
common stock 363 643 Dividends paid (7,671) (7,630) Purchases of
treasury stock (4,994) (3,003) Net cash provided by (used in)
financing activities 23,362 (5,240) INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 2,078 (37,236) CASH AND CASH EQUIVALENTS,
beginning of period 14,625 51,861 CASH AND CASH EQUIVALENTS, end of
period $16,703 $14,625 SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION: Cash paid for income taxes, net $6,571 $4,456
SUPPLEMENTAL DISCLOSURE OF NON CASH INVESTING AND FINANCING
ACTIVITIES: Assets acquired under long-term obligation $-- $28
http://www.newscom.com/cgi-bin/prnh/20050324/LATH060LOGO
http://photoarchive.ap.org/ DATASOURCE: SpectraLink Corp. CONTACT:
Bob Husted, Director of Investor Relations, or David Rosenthal,
Chief Financial Officer, both of SpectraLink Corp., +1-303-440-5330
Web site: http://www.spectralink.com/
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