Andrea Electronics Corporation Announces First Quarter 2001 Results

03 May, 2001, 01:00 ET from Andrea Electronics Corporation

    MELVILLE, N.Y., May 3 /PRNewswire/ -- Andrea Electronics Corporation
 (Amex:   AND) announced today that revenues for the three months ended
 March 31, 2001 were approximately $2.6 million, compared to approximately
 $3.2 million in the same period in 2000.  Net loss applicable to common
 shareholders for the three months ended March 31, 2001 was approximately
 $2.7 million, or $0.18 per share on a diluted basis, compared to a net loss of
 approximately $2.6 million, or $0.19 per share on a diluted basis, for the
 three months ended March 31, 2000.
     The principal factors that contributed to the $2.7 million loss applicable
 to common shareholders for the first quarter ended March 31, 2001 were lower
 than expected revenues, significant investments in research and development
 activities primarily associated with the Company's efforts in developing
 digital audio far-field microphone technologies, goodwill and intangible
 amortization expense, expenses associated with creating and maintaining
 strategic alliances, and significant operating expenses related to marketing
 the Company's digital audio far-field microphone technologies, particularly to
 the automotive telematics market space.  Furthermore, the losses applicable to
 common shareholders for the first quarter 2001 include the effect of
 approximately $146 thousand in preferred stock dividends.
 
                                                        Quarter Ended
                                               March 31, 2001 March 31, 2000
 
     Total Revenues                                $2,615,639     $3,201,484
 
     Loss From Operations                         (2,615,958)    (2,489,467)
     Net Loss                                     (2,546,487)    (2,484,621)
     Preferred Stock Dividends                        146,285         91,377
     Net Loss Applicable To Common Shareholders   (2,692,772)    (2,575,998)
 
     PER SHARE INFORMATION:
     Net Loss Applicable to Common Shareholders
     Basic                                             $(.18)         $(.19)
     Diluted                                           $(.18)         $(.19)
 
     Common Shares Used in Computing Per Share Data:
     Basic                                         14,624,788     13,448,588
     Diluted                                       14,624,788     13,448,588
 
     During the first quarter ended March 31, 2001, research and development
 expenses decreased approximately 13% over the same period in 2000.  This
 decrease is due primarily to a reduction in expenses associated with research
 efforts that were not integral to the Company's core portfolio of digital
 audio far-field microphone technologies.  Notwithstanding, the relatively high
 level of research and development expenses when compared to total sales is
 comprised of the Company's ongoing efforts to develop its digital audio
 far-field microphone technologies, including patented and patent-pending
 DSDA(R), DFTA(TM), PureAudio(TM) and EchoStop(TM), among others.  These
 technologies broaden Andrea Electronics' exposure to key targeted industries,
 including the automotive telematics and PC communications markets, among
 others.  Accordingly, the Company anticipates continued significant spending
 in research and development during 2001.
     During the first quarter ended March 31, 2001, general, administrative and
 selling expenses increased approximately 8% over the same period in 2000.  The
 increase is primarily attributable to operating expenses associated with
 marketing the Company's microphone technologies to the automotive telematics
 market space.
     "Although our first quarter revenue results did not meet expectations, we
 remain cautiously optimistic with respect to our annualized revenue goal,"
 said Christopher P. Sauvigne, President and Chief Operating Officer of Andrea
 Electronics Corporation. "Effective implementation of cost cutting measures
 has enabled the Company to mitigate the effect of our first quarter revenue
 shortfall."
     "We continue to receive favorable feedback on our portfolio of digital
 audio technologies, and we are encouraged by the progression of our strategic
 alliance efforts, particularly in the automotive telematics market space,"
 said John N. Andrea, Co-Chief Executive Officer of Andrea Electronics
 Corporation.  "In conjunction with these developments, we look forward to our
 recently announced relationship with Dain Rauscher Wessels to accelerate the
 execution of our growth strategy."
 
     KEY FIRST QUARTER 2001 EVENTS
 
     -- Andrea Electronics Introduces Second Generation Digital AutoArray(TM)
        Microphone at the 2001 International Consumer Electronics Show;
     -- Andrea Electronics Announces Purchase Agreement With Clever Devices for
        Andrea's Microphone Array Technology;
     -- Andrea Electronics Corporation Announces Patent Issued For its Digital
        Super Directional Array Technology (DSDA(R));
     -- Andrea Electronics Corporation Announces Patent Issued For its
        Direction Finding and Tracking Array Technology (DFTA(R)).
 
     KEY second QUARTER 2001 EVENT TO DATE
 
     -- Andrea Electronics Retains Dain Rauscher Wessels As Its
        Financial Advisor
 
     Andrea Electronics Corporation designs, develops and manufactures audio
 technologies and equipment for enhancing applications that require high
 performance and high quality voice input.  The Company's patented Active Noise
 Reduction (ANR READY(R)) earphone, Active Noise Cancellation (ANC) near-field
 microphone, patented Digital Super Directional Array (DSDA(R)) and
 patent-pending Directional Finding and Tracking Array (DFTA(TM)) far-field
 microphone technologies enhance a wide range of audio products to eliminate
 background noise and ensure the optimum performance of voice applications.
 Applications for the Company's technologies include: speech recognition
 programs, Internet telephony, video/audio conferencing, automobile PCs, home
 automation systems, hand-held devices and multiplayer online games, among
 others.  OEM and software publisher customers and strategic partners of Andrea
 Electronics' include: IBM Corporation, Intel Corporation, Donnelly
 Corporation, BMW of North America, Inc., Clarion Corporation of America,
 Microsoft Corporation, Audio-Technica, U.S., Inc., VCON, Ltd., Lotus
 Development Corporation, Fonix Corporation, Centra Software, Inc. and
 Net2Phone, Inc., among others.  Visit Andrea Electronics' websites at
 http://www.AndreaElectronics.com and http://www.AudioCommander.com or call
 1-800-707-5779.
 
     This press release may contain "forward-looking statements" within the
 meaning of the Private Securities Litigation Reform Act of 1995.  The words
 "anticipates," "believes," "estimates," "expects," "intends," "plans,"
 "seeks," variations of such words, and similar expressions are intended to
 identify forward-looking statements.  These statements are not guarantees of
 future performance and involve matters that are subject to certain risks,
 uncertainties and assumptions that are difficult to predict, including
 economic, competitive, governmental, technological and other factors, that may
 affect the business and prospects of Andrea Electronics Corporation (the
 "Company").  The Company cautions investors about the following significant
 factors, which, among others, have in some cases affected the Company's actual
 results and are in the future likely to affect the Company's actual results
 and could cause them to differ materially from those expressed in any forward-
 looking statements:  the rate at which Andrea Anti-Noise, DSDA, DFTA and other
 Andrea technologies are accepted in the marketplace; the competitiveness of
 Andrea Anti-Noise, DSDA, DFTA and other Andrea products in terms of technical
 specifications, quality, price, reliability and service; the sufficiency of
 the Company's funds for research and development, marketing and general and
 administrative expenses; infringement and other disputes relating to patents
 and other intellectual property rights held or licensed by the Company or
 third parties; and the Company's continuing ability to enter and maintain
 collaborative relationships with other manufacturers, software authoring and
 publishing companies, and distributors.  No assurance can be given that the
 Company will achieve any material sales or profits from the products
 introduced in this release.  These and other similar factors are discussed
 under the heading "Cautionary Statement Regarding Forward-looking statements"
 included in the Management's Discussion and Analysis of Financial Condition
 and Results of Operations in the Company's Annual Report on Form 10-K and in
 the Company's Annual Report to shareholders, and in documents subsequently
 filed by the Company with the Securities and Exchange Commission.
 
     "Andrea Anti-Noise," "ANR Ready," "DSDA," DSDA-PRO," "DFTA," "SuperBeam,"
 "EchoStop," "PureAudio" and "Desktop Array" are trademarks of Andrea
 Electronics Corporation or an Andrea Electronics Corporation subsidiary.
 
     ANDREA ELECTRONICS CORPORATION AND SUBSIDIARIES
 
     CONSOLIDATED STATEMENTS OF OPERATIONS
     (UNAUDITED)
 
                                                      For the Quarter Ended
                                                             March 31,
                                                         2001           2000
 
     NET SALES                                     $2,615,639     $3,201,484
 
     COST OF SALES                                  1,919,354      2,399,175
 
     Gross profit                                     696,285        802,309
 
     RESEARCH AND DEVELOPMENT EXPENSES                998,900      1,150,478
 
     GENERAL, ADMINISTRATIVE AND SELLING EXPENSES   2,313,343      2,141,298
 
     Loss from operations                         (2,615,958)    (2,489,467)
 
     OTHER INCOME (EXPENSE):
     Interest income                                   88,723        106,838
     Interest expense                                (15,003)       (87,172)
     Miscellaneous expense                            (4,249)       (14,820)
                                                       69,471          4,846
 
     LOSS BEFORE PROVISION FOR INCOME TAXES       (2,546,487)    (2,484,621)
 
     PROVISION FOR INCOME TAXES                            --             --
 
 
     NET LOSS                                    $(2,546,487)   $(2,484,621)
 
     PREFERRED STOCK DIVIDENDS                        146,285         91,377
 
     Net LOSS applicable
      to common shareholders                     $(2,692,772)   $(2,575,998)
 
     PER SHARE INFORMATION:
 
     Net loss per share :
       Basic                                           $(.18)         $(.19)
       Diluted                                         $(.18)         $(.19)
 
     Shares used in computing net loss per share:
       Basic                                       14,624,788     13,448,588
       Diluted                                     14,624,788     13,448,588
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X88141613
 
 

SOURCE Andrea Electronics Corporation
    MELVILLE, N.Y., May 3 /PRNewswire/ -- Andrea Electronics Corporation
 (Amex:   AND) announced today that revenues for the three months ended
 March 31, 2001 were approximately $2.6 million, compared to approximately
 $3.2 million in the same period in 2000.  Net loss applicable to common
 shareholders for the three months ended March 31, 2001 was approximately
 $2.7 million, or $0.18 per share on a diluted basis, compared to a net loss of
 approximately $2.6 million, or $0.19 per share on a diluted basis, for the
 three months ended March 31, 2000.
     The principal factors that contributed to the $2.7 million loss applicable
 to common shareholders for the first quarter ended March 31, 2001 were lower
 than expected revenues, significant investments in research and development
 activities primarily associated with the Company's efforts in developing
 digital audio far-field microphone technologies, goodwill and intangible
 amortization expense, expenses associated with creating and maintaining
 strategic alliances, and significant operating expenses related to marketing
 the Company's digital audio far-field microphone technologies, particularly to
 the automotive telematics market space.  Furthermore, the losses applicable to
 common shareholders for the first quarter 2001 include the effect of
 approximately $146 thousand in preferred stock dividends.
 
                                                        Quarter Ended
                                               March 31, 2001 March 31, 2000
 
     Total Revenues                                $2,615,639     $3,201,484
 
     Loss From Operations                         (2,615,958)    (2,489,467)
     Net Loss                                     (2,546,487)    (2,484,621)
     Preferred Stock Dividends                        146,285         91,377
     Net Loss Applicable To Common Shareholders   (2,692,772)    (2,575,998)
 
     PER SHARE INFORMATION:
     Net Loss Applicable to Common Shareholders
     Basic                                             $(.18)         $(.19)
     Diluted                                           $(.18)         $(.19)
 
     Common Shares Used in Computing Per Share Data:
     Basic                                         14,624,788     13,448,588
     Diluted                                       14,624,788     13,448,588
 
     During the first quarter ended March 31, 2001, research and development
 expenses decreased approximately 13% over the same period in 2000.  This
 decrease is due primarily to a reduction in expenses associated with research
 efforts that were not integral to the Company's core portfolio of digital
 audio far-field microphone technologies.  Notwithstanding, the relatively high
 level of research and development expenses when compared to total sales is
 comprised of the Company's ongoing efforts to develop its digital audio
 far-field microphone technologies, including patented and patent-pending
 DSDA(R), DFTA(TM), PureAudio(TM) and EchoStop(TM), among others.  These
 technologies broaden Andrea Electronics' exposure to key targeted industries,
 including the automotive telematics and PC communications markets, among
 others.  Accordingly, the Company anticipates continued significant spending
 in research and development during 2001.
     During the first quarter ended March 31, 2001, general, administrative and
 selling expenses increased approximately 8% over the same period in 2000.  The
 increase is primarily attributable to operating expenses associated with
 marketing the Company's microphone technologies to the automotive telematics
 market space.
     "Although our first quarter revenue results did not meet expectations, we
 remain cautiously optimistic with respect to our annualized revenue goal,"
 said Christopher P. Sauvigne, President and Chief Operating Officer of Andrea
 Electronics Corporation. "Effective implementation of cost cutting measures
 has enabled the Company to mitigate the effect of our first quarter revenue
 shortfall."
     "We continue to receive favorable feedback on our portfolio of digital
 audio technologies, and we are encouraged by the progression of our strategic
 alliance efforts, particularly in the automotive telematics market space,"
 said John N. Andrea, Co-Chief Executive Officer of Andrea Electronics
 Corporation.  "In conjunction with these developments, we look forward to our
 recently announced relationship with Dain Rauscher Wessels to accelerate the
 execution of our growth strategy."
 
     KEY FIRST QUARTER 2001 EVENTS
 
     -- Andrea Electronics Introduces Second Generation Digital AutoArray(TM)
        Microphone at the 2001 International Consumer Electronics Show;
     -- Andrea Electronics Announces Purchase Agreement With Clever Devices for
        Andrea's Microphone Array Technology;
     -- Andrea Electronics Corporation Announces Patent Issued For its Digital
        Super Directional Array Technology (DSDA(R));
     -- Andrea Electronics Corporation Announces Patent Issued For its
        Direction Finding and Tracking Array Technology (DFTA(R)).
 
     KEY second QUARTER 2001 EVENT TO DATE
 
     -- Andrea Electronics Retains Dain Rauscher Wessels As Its
        Financial Advisor
 
     Andrea Electronics Corporation designs, develops and manufactures audio
 technologies and equipment for enhancing applications that require high
 performance and high quality voice input.  The Company's patented Active Noise
 Reduction (ANR READY(R)) earphone, Active Noise Cancellation (ANC) near-field
 microphone, patented Digital Super Directional Array (DSDA(R)) and
 patent-pending Directional Finding and Tracking Array (DFTA(TM)) far-field
 microphone technologies enhance a wide range of audio products to eliminate
 background noise and ensure the optimum performance of voice applications.
 Applications for the Company's technologies include: speech recognition
 programs, Internet telephony, video/audio conferencing, automobile PCs, home
 automation systems, hand-held devices and multiplayer online games, among
 others.  OEM and software publisher customers and strategic partners of Andrea
 Electronics' include: IBM Corporation, Intel Corporation, Donnelly
 Corporation, BMW of North America, Inc., Clarion Corporation of America,
 Microsoft Corporation, Audio-Technica, U.S., Inc., VCON, Ltd., Lotus
 Development Corporation, Fonix Corporation, Centra Software, Inc. and
 Net2Phone, Inc., among others.  Visit Andrea Electronics' websites at
 http://www.AndreaElectronics.com and http://www.AudioCommander.com or call
 1-800-707-5779.
 
     This press release may contain "forward-looking statements" within the
 meaning of the Private Securities Litigation Reform Act of 1995.  The words
 "anticipates," "believes," "estimates," "expects," "intends," "plans,"
 "seeks," variations of such words, and similar expressions are intended to
 identify forward-looking statements.  These statements are not guarantees of
 future performance and involve matters that are subject to certain risks,
 uncertainties and assumptions that are difficult to predict, including
 economic, competitive, governmental, technological and other factors, that may
 affect the business and prospects of Andrea Electronics Corporation (the
 "Company").  The Company cautions investors about the following significant
 factors, which, among others, have in some cases affected the Company's actual
 results and are in the future likely to affect the Company's actual results
 and could cause them to differ materially from those expressed in any forward-
 looking statements:  the rate at which Andrea Anti-Noise, DSDA, DFTA and other
 Andrea technologies are accepted in the marketplace; the competitiveness of
 Andrea Anti-Noise, DSDA, DFTA and other Andrea products in terms of technical
 specifications, quality, price, reliability and service; the sufficiency of
 the Company's funds for research and development, marketing and general and
 administrative expenses; infringement and other disputes relating to patents
 and other intellectual property rights held or licensed by the Company or
 third parties; and the Company's continuing ability to enter and maintain
 collaborative relationships with other manufacturers, software authoring and
 publishing companies, and distributors.  No assurance can be given that the
 Company will achieve any material sales or profits from the products
 introduced in this release.  These and other similar factors are discussed
 under the heading "Cautionary Statement Regarding Forward-looking statements"
 included in the Management's Discussion and Analysis of Financial Condition
 and Results of Operations in the Company's Annual Report on Form 10-K and in
 the Company's Annual Report to shareholders, and in documents subsequently
 filed by the Company with the Securities and Exchange Commission.
 
     "Andrea Anti-Noise," "ANR Ready," "DSDA," DSDA-PRO," "DFTA," "SuperBeam,"
 "EchoStop," "PureAudio" and "Desktop Array" are trademarks of Andrea
 Electronics Corporation or an Andrea Electronics Corporation subsidiary.
 
     ANDREA ELECTRONICS CORPORATION AND SUBSIDIARIES
 
     CONSOLIDATED STATEMENTS OF OPERATIONS
     (UNAUDITED)
 
                                                      For the Quarter Ended
                                                             March 31,
                                                         2001           2000
 
     NET SALES                                     $2,615,639     $3,201,484
 
     COST OF SALES                                  1,919,354      2,399,175
 
     Gross profit                                     696,285        802,309
 
     RESEARCH AND DEVELOPMENT EXPENSES                998,900      1,150,478
 
     GENERAL, ADMINISTRATIVE AND SELLING EXPENSES   2,313,343      2,141,298
 
     Loss from operations                         (2,615,958)    (2,489,467)
 
     OTHER INCOME (EXPENSE):
     Interest income                                   88,723        106,838
     Interest expense                                (15,003)       (87,172)
     Miscellaneous expense                            (4,249)       (14,820)
                                                       69,471          4,846
 
     LOSS BEFORE PROVISION FOR INCOME TAXES       (2,546,487)    (2,484,621)
 
     PROVISION FOR INCOME TAXES                            --             --
 
 
     NET LOSS                                    $(2,546,487)   $(2,484,621)
 
     PREFERRED STOCK DIVIDENDS                        146,285         91,377
 
     Net LOSS applicable
      to common shareholders                     $(2,692,772)   $(2,575,998)
 
     PER SHARE INFORMATION:
 
     Net loss per share :
       Basic                                           $(.18)         $(.19)
       Diluted                                         $(.18)         $(.19)
 
     Shares used in computing net loss per share:
       Basic                                       14,624,788     13,448,588
       Diluted                                     14,624,788     13,448,588
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X88141613
 
 SOURCE  Andrea Electronics Corporation