Brooktrout Announces First Quarter 2001 Earnings

Apr 17, 2001, 01:00 ET from Brooktrout, Inc.

    NEEDHAM, Mass., April 17 /PRNewswire/ -- Brooktrout, Inc. (Nasdaq:   BRKT),
 a leading provider of innovative hardware and software platforms that enable
 applications for the New Network(TM), today reported that revenue from core
 continuing operations for the first quarter of 2001 was $27,063,000 compared
 to $33,469,000 for the first quarter of 2000.  Pro forma net income from core
 continuing operations for the first quarter of 2001 was $625,000, or $0.05 per
 share, compared to $3,688,000, or $0.30 per share, for the same period in
 2000.  These results are in line with guidance provided on February 8, 2001.
 Pro forma net income from core continuing operations reflects the results of
 Brooktrout's core activities, businesses in which it maintains 100% ownership
 and day-to-day operating and management control.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/19990806/BRKTLOGO )
     "Given the current economic difficulties, we are pleased with the
 execution of our plan in the first quarter," said Eric Giler, president of
 Brooktrout, Inc.  "Our sale of Brooktrout Software, announced yesterday,
 reaffirms our commitment to stay focused on our New Network initiatives and
 key market segments.  We believe this focus and determination will position us
 well for a leadership role in driving the build out of the New Network when
 the economy turns around."
     Brooktrout's Board of Directors adopted a plan of disposition for
 Brooktrout Software, Inc. (BSW) in February 2001, which resulted in BSW being
 treated as a discontinued operation for financial reporting purposes.  In
 conjunction with the adoption of this plan, Brooktrout recorded a one-time
 charge in the fourth quarter of 2000 related to the disposition of BSW.  This
 charge was an estimate of the expected future costs associated with the final
 disposition of this asset.  With the sale of BSW now complete, the disposition
 charge has been finalized, and a gain from discontinued operations of
 $1,650,000 has been recorded in the financial statements for the first quarter
 of 2001.  An additional gain on the sale of BSW will be recorded in the second
 quarter of 2001.
 
     New Network Technologies
     During the first quarter of 2001, Brooktrout Technology made several key
 product announcements focused on core technologies to help our partners
 succeed in delivering innovative New Network applications and services
 quickly, cost-effectively and with minimum risk:
 
     -- A breakthrough in carrier-grade system density and performance for
        intelligent peripherals and media servers using Brooktrout's
        TRxStream(TM) Series TR1000(TM) application platform.  The company
        demonstrated a dual T-3 (1,344 ports) system in a single CompactPCI
        shelf, processing 3.8 million calls per hour.  These capacities,
        delivered on existing, industry standard architectures, mean
        developers do not need to adopt a new, unproven architecture to take
        advantage of this performance.
     -- With Brooktrout Technology's recent introduction of its S700 Series of
        SS7 products for its TRxStream Series media and Netaccess(R) Series
        interface products, customers can now rely on a single vendor to
        provide their media processing, line interface and SS7 signaling
        solutions.
     -- Support for the Microsoft(R) Small Business Server 2000 Shared Fax
        Service with Brooktrout's TruFax(R) boards will allow users to send
        faxes reliably and directly from their PCs as easily as sending an e-
        mail, using any Microsoft Windows application.
 
     Strategic Partnerships
     Also during the first quarter of 2001, Brooktrout announced strategic
 partnerships that will enable it to deliver competitive technologies for New
 Network development:
 
     -- A partnership with Telchemy, Incorporated, an Atlanta-based company
        focused on developing standards-based products for quality of service
        (QoS) monitoring and management for Voice over IP (VoIP) and other
        multimedia networking applications.  Brooktrout Technology plans to
        incorporate Telchemy's QoS technology into its voice over packet
        products to address an important unsolved problem - managing network
        quality of service to maximize and maintain the quality of voice
        calls.
     -- A partnership with Nuance Communications, Inc., a leader in voice
        interface software, to deliver speech recognition on Brooktrout's
        TR1000 and Vantage(TM) Series platforms for service provider and
        enterprise applications, respectively.  Developers of applications
        such as hands-free dialing, voice portals and automated attendants now
        have platforms that are scalable, flexible and robust enough to meet
        all of their speech recognition development needs.
 
     As previously announced, Brooktrout's management will host a conference
 call at 5:30 p.m. ET today, April 17, 2001, to discuss these results and the
 outlook for 2001.  The conference call will be simultaneously broadcast live
 over the Internet.  Anyone interested in listening to this teleconference can
 do so by logging onto the Brooktrout, Inc. web site at
 http://www.brooktrout.com/investor.
     The webcast will be available on the website for five business days after
 the call.  The live conference call can also be accessed in a "listen only"
 mode by dialing 415-228-3887, password "trout".  Following the live broadcast,
 a replay will also be available at 402-998-1039 until midnight on Wednesday,
 April 18, 2001.
 
     Note to Investors
     This press release may contain forward-looking statements within the
 meaning of the federal securities laws.  Reliance should not be placed on
 forward-looking statements because they involve known and unknown risks and
 uncertainties, which may cause the actual results, performance, and
 achievements of Brooktrout to differ materially from the anticipated future
 results, performance, and achievements that are expressed or implied by such
 forward-looking statements.  These risks and uncertainties include, among
 other things, the current telecommunications market slow down and its impact
 on our customers' business and financial strength, uncertainties regarding the
 valuation of the eYak, Inc. stock received in connection with the disposition
 of BSW and the lack of liquidity of such stock, the ability to keep pace with
 the evolution of the telecommunications hardware and software market, the
 impact of competition, the reliance on a small number of customers, the impact
 of changes to regulations affecting the telecommunications and Internet
 industries.  Additional information concerning these and other risk factors is
 contained in the "Risk Factors" section of Brooktrout, Inc.'s Annual Report on
 Form 10-K for the year ended December 31, 2000 filed with the Securities and
 Exchange Commission on March 19, 2001.  Brooktrout disclaims any obligation to
 update any of the forward-looking statements contained herein to reflect
 future developments or events.
 
     About Brooktrout
     Brooktrout, Inc., headquartered in Needham, MA, delivers communications
 hardware and software products that enable applications for the New
 Network(TM) - a Network born through the marriage of the telephone and data
 networks.  Through its multiple divisions, Brooktrout, Inc.'s mission is to
 collaborate with its partners so they can bring innovative solutions to market
 quickly, increase business and expand into new markets.  Brooktrout believes
 that a solid focus on customers, significant first-to-market products and key
 acquisitions are making it a partner of choice for today's hottest
 communications service and enterprise application providers.  Brooktrout is
 traded publicly on NASDAQ under the symbol BRKT.  For more information, visit
 http://www.brooktrout.com/investor.
     New Network, TRxStream, TR1000, TruFax, Vantage and Netaccess are
 trademarks or registered trademarks of Brooktrout, Inc.
     All other trademarks are the property of their respective owners.
 
 
     PRO FORMA STATEMENTS OF INCOME FROM CORE CONTINUING OPERATIONS
     (unaudited, in thousands, except per share data)
 
                                                         Quarter Ended
                                                            March 31,
                                                       2001           2000
 
     Revenue                                          $27,063       $ 33,469
 
     Costs and expenses:
      Costs of product sold                            11,195         12,937
      Research and development                          5,478          5,786
      Selling, general and administrative               9,708          9,930
     Total costs and expenses                          26,381         28,113
 
     Operating income                                     682          5,356
 
     Other income (expense) (1)                           310            606
 
     Income before income tax provision                   992          5,962
 
     Income tax provision                                 367          2,274
 
     Net income from core continuing operations (2)      $625         $3,688
 
     Diluted net income per common share                $0.05          $0.30
 
     Diluted weighted average shares outstanding       12,254         12,380
 
     (1) Other income (expense) excludes equity in loss of affiliates of
         $(1,055) in the first quarter of 2001 and $0 in the first quarter of
         2000.
     (2) Brooktrout's core continuing operations reflect the results of
         businesses in which it maintains 100 percent ownership and day-to-day
         operating and management control.
 
 
     CONSOLIDATED STATEMENTS OF INCOME
     (unaudited, in thousands, except per share data)
 
                                                          Quarter Ended
                                                            March 31,
                                                       2001           2000
 
     Revenue                                          $27,063        $33,469
 
     Costs and expenses:
      Costs of product sold                            11,195         12,937
      Research and development                          5,478          5,786
      Selling, general and administrative               9,708          9,390
     Total costs and expenses                          26,381         28,113
 
     Operating income                                     682          5,356
 
     Other income (expense)(1)
      Interest income, net                                310            606
      Equity in loss of affiliates                    (1,055)              -
       Total other income (expense)                     (745)            606
 
     Income (loss) before income tax provision           (63)          5,962
 
     Income tax provision                                 367          2,274
 
     Income (loss) from continuing operations           (430)          3,688
 
     Gain (loss) from discontinued operations,
      net of income tax expense (benefit)
      of $1,033 in 2001 and $(594) in 2000              1,650        (3,338)
 
     Net income                                        $1,220           $350
 
     Income (loss) from continuing operations
      per common share, diluted                       $(0.04)          $0.30
 
     Net income per common share, diluted                0.10           0.03
 
     Diluted weighted average shares outstanding       12,126         12,380
 
 
     SELECTED CONSOLIDATED BALANCE SHEET DATA
     (unaudited, in thousands)
                                                  March 31, 2001
 Dec. 31, 2000
     Cash, cash equivalents and
      marketable securities                           $28,753        $25,987
     Accounts receivable, net                          16,819         21,820
     Inventory                                         18,978         19,609
     Long-term debt                                        --             --
 
 

SOURCE Brooktrout, Inc.
    NEEDHAM, Mass., April 17 /PRNewswire/ -- Brooktrout, Inc. (Nasdaq:   BRKT),
 a leading provider of innovative hardware and software platforms that enable
 applications for the New Network(TM), today reported that revenue from core
 continuing operations for the first quarter of 2001 was $27,063,000 compared
 to $33,469,000 for the first quarter of 2000.  Pro forma net income from core
 continuing operations for the first quarter of 2001 was $625,000, or $0.05 per
 share, compared to $3,688,000, or $0.30 per share, for the same period in
 2000.  These results are in line with guidance provided on February 8, 2001.
 Pro forma net income from core continuing operations reflects the results of
 Brooktrout's core activities, businesses in which it maintains 100% ownership
 and day-to-day operating and management control.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/19990806/BRKTLOGO )
     "Given the current economic difficulties, we are pleased with the
 execution of our plan in the first quarter," said Eric Giler, president of
 Brooktrout, Inc.  "Our sale of Brooktrout Software, announced yesterday,
 reaffirms our commitment to stay focused on our New Network initiatives and
 key market segments.  We believe this focus and determination will position us
 well for a leadership role in driving the build out of the New Network when
 the economy turns around."
     Brooktrout's Board of Directors adopted a plan of disposition for
 Brooktrout Software, Inc. (BSW) in February 2001, which resulted in BSW being
 treated as a discontinued operation for financial reporting purposes.  In
 conjunction with the adoption of this plan, Brooktrout recorded a one-time
 charge in the fourth quarter of 2000 related to the disposition of BSW.  This
 charge was an estimate of the expected future costs associated with the final
 disposition of this asset.  With the sale of BSW now complete, the disposition
 charge has been finalized, and a gain from discontinued operations of
 $1,650,000 has been recorded in the financial statements for the first quarter
 of 2001.  An additional gain on the sale of BSW will be recorded in the second
 quarter of 2001.
 
     New Network Technologies
     During the first quarter of 2001, Brooktrout Technology made several key
 product announcements focused on core technologies to help our partners
 succeed in delivering innovative New Network applications and services
 quickly, cost-effectively and with minimum risk:
 
     -- A breakthrough in carrier-grade system density and performance for
        intelligent peripherals and media servers using Brooktrout's
        TRxStream(TM) Series TR1000(TM) application platform.  The company
        demonstrated a dual T-3 (1,344 ports) system in a single CompactPCI
        shelf, processing 3.8 million calls per hour.  These capacities,
        delivered on existing, industry standard architectures, mean
        developers do not need to adopt a new, unproven architecture to take
        advantage of this performance.
     -- With Brooktrout Technology's recent introduction of its S700 Series of
        SS7 products for its TRxStream Series media and Netaccess(R) Series
        interface products, customers can now rely on a single vendor to
        provide their media processing, line interface and SS7 signaling
        solutions.
     -- Support for the Microsoft(R) Small Business Server 2000 Shared Fax
        Service with Brooktrout's TruFax(R) boards will allow users to send
        faxes reliably and directly from their PCs as easily as sending an e-
        mail, using any Microsoft Windows application.
 
     Strategic Partnerships
     Also during the first quarter of 2001, Brooktrout announced strategic
 partnerships that will enable it to deliver competitive technologies for New
 Network development:
 
     -- A partnership with Telchemy, Incorporated, an Atlanta-based company
        focused on developing standards-based products for quality of service
        (QoS) monitoring and management for Voice over IP (VoIP) and other
        multimedia networking applications.  Brooktrout Technology plans to
        incorporate Telchemy's QoS technology into its voice over packet
        products to address an important unsolved problem - managing network
        quality of service to maximize and maintain the quality of voice
        calls.
     -- A partnership with Nuance Communications, Inc., a leader in voice
        interface software, to deliver speech recognition on Brooktrout's
        TR1000 and Vantage(TM) Series platforms for service provider and
        enterprise applications, respectively.  Developers of applications
        such as hands-free dialing, voice portals and automated attendants now
        have platforms that are scalable, flexible and robust enough to meet
        all of their speech recognition development needs.
 
     As previously announced, Brooktrout's management will host a conference
 call at 5:30 p.m. ET today, April 17, 2001, to discuss these results and the
 outlook for 2001.  The conference call will be simultaneously broadcast live
 over the Internet.  Anyone interested in listening to this teleconference can
 do so by logging onto the Brooktrout, Inc. web site at
 http://www.brooktrout.com/investor.
     The webcast will be available on the website for five business days after
 the call.  The live conference call can also be accessed in a "listen only"
 mode by dialing 415-228-3887, password "trout".  Following the live broadcast,
 a replay will also be available at 402-998-1039 until midnight on Wednesday,
 April 18, 2001.
 
     Note to Investors
     This press release may contain forward-looking statements within the
 meaning of the federal securities laws.  Reliance should not be placed on
 forward-looking statements because they involve known and unknown risks and
 uncertainties, which may cause the actual results, performance, and
 achievements of Brooktrout to differ materially from the anticipated future
 results, performance, and achievements that are expressed or implied by such
 forward-looking statements.  These risks and uncertainties include, among
 other things, the current telecommunications market slow down and its impact
 on our customers' business and financial strength, uncertainties regarding the
 valuation of the eYak, Inc. stock received in connection with the disposition
 of BSW and the lack of liquidity of such stock, the ability to keep pace with
 the evolution of the telecommunications hardware and software market, the
 impact of competition, the reliance on a small number of customers, the impact
 of changes to regulations affecting the telecommunications and Internet
 industries.  Additional information concerning these and other risk factors is
 contained in the "Risk Factors" section of Brooktrout, Inc.'s Annual Report on
 Form 10-K for the year ended December 31, 2000 filed with the Securities and
 Exchange Commission on March 19, 2001.  Brooktrout disclaims any obligation to
 update any of the forward-looking statements contained herein to reflect
 future developments or events.
 
     About Brooktrout
     Brooktrout, Inc., headquartered in Needham, MA, delivers communications
 hardware and software products that enable applications for the New
 Network(TM) - a Network born through the marriage of the telephone and data
 networks.  Through its multiple divisions, Brooktrout, Inc.'s mission is to
 collaborate with its partners so they can bring innovative solutions to market
 quickly, increase business and expand into new markets.  Brooktrout believes
 that a solid focus on customers, significant first-to-market products and key
 acquisitions are making it a partner of choice for today's hottest
 communications service and enterprise application providers.  Brooktrout is
 traded publicly on NASDAQ under the symbol BRKT.  For more information, visit
 http://www.brooktrout.com/investor.
     New Network, TRxStream, TR1000, TruFax, Vantage and Netaccess are
 trademarks or registered trademarks of Brooktrout, Inc.
     All other trademarks are the property of their respective owners.
 
 
     PRO FORMA STATEMENTS OF INCOME FROM CORE CONTINUING OPERATIONS
     (unaudited, in thousands, except per share data)
 
                                                         Quarter Ended
                                                            March 31,
                                                       2001           2000
 
     Revenue                                          $27,063       $ 33,469
 
     Costs and expenses:
      Costs of product sold                            11,195         12,937
      Research and development                          5,478          5,786
      Selling, general and administrative               9,708          9,930
     Total costs and expenses                          26,381         28,113
 
     Operating income                                     682          5,356
 
     Other income (expense) (1)                           310            606
 
     Income before income tax provision                   992          5,962
 
     Income tax provision                                 367          2,274
 
     Net income from core continuing operations (2)      $625         $3,688
 
     Diluted net income per common share                $0.05          $0.30
 
     Diluted weighted average shares outstanding       12,254         12,380
 
     (1) Other income (expense) excludes equity in loss of affiliates of
         $(1,055) in the first quarter of 2001 and $0 in the first quarter of
         2000.
     (2) Brooktrout's core continuing operations reflect the results of
         businesses in which it maintains 100 percent ownership and day-to-day
         operating and management control.
 
 
     CONSOLIDATED STATEMENTS OF INCOME
     (unaudited, in thousands, except per share data)
 
                                                          Quarter Ended
                                                            March 31,
                                                       2001           2000
 
     Revenue                                          $27,063        $33,469
 
     Costs and expenses:
      Costs of product sold                            11,195         12,937
      Research and development                          5,478          5,786
      Selling, general and administrative               9,708          9,390
     Total costs and expenses                          26,381         28,113
 
     Operating income                                     682          5,356
 
     Other income (expense)(1)
      Interest income, net                                310            606
      Equity in loss of affiliates                    (1,055)              -
       Total other income (expense)                     (745)            606
 
     Income (loss) before income tax provision           (63)          5,962
 
     Income tax provision                                 367          2,274
 
     Income (loss) from continuing operations           (430)          3,688
 
     Gain (loss) from discontinued operations,
      net of income tax expense (benefit)
      of $1,033 in 2001 and $(594) in 2000              1,650        (3,338)
 
     Net income                                        $1,220           $350
 
     Income (loss) from continuing operations
      per common share, diluted                       $(0.04)          $0.30
 
     Net income per common share, diluted                0.10           0.03
 
     Diluted weighted average shares outstanding       12,126         12,380
 
 
     SELECTED CONSOLIDATED BALANCE SHEET DATA
     (unaudited, in thousands)
                                                  March 31, 2001
 Dec. 31, 2000
     Cash, cash equivalents and
      marketable securities                           $28,753        $25,987
     Accounts receivable, net                          16,819         21,820
     Inventory                                         18,978         19,609
     Long-term debt                                        --             --
 
 SOURCE  Brooktrout, Inc.