Inter-Tel Announces First Quarter 2001 Results

Apr 30, 2001, 01:00 ET from Inter-Tel, Incorporated

    PHOENIX, April 30 /PRNewswire/ -- Inter-Tel, Incorporated (Nasdaq:   INTL)
 today announced operating results for the first quarter ended March 31, 2001.
 Net sales for the first quarter of 2001 were $93.7 million, compared to net
 sales of $96.4 million for the first quarter of  2000.  Net income for the
 first quarter ended March 31, 2001 was $1.95 million ($0.08 per diluted common
 share), compared to a net loss of $1.2 million (net loss of $0.05 per diluted
 common share) for the first quarter of 2000, which included a charge for
 in-process research and development costs.
     Included in 2001 first quarter results are net losses, after the effect of
 taxes, of approximately $2.9 million (net loss of $0.11 per diluted share)
 relating to Inter-Tel.NET operations, Inter-Tel's IP telephony-based
 long-distance network.  Excluding these losses, Inter-Tel's net income from
 core business operations for the first quarter of 2001 would have been
 $4.9 million ($0.19 per diluted common share).  Excluding a charge for
 in-process research and development costs in connection with the acquisition
 of Executone, losses from Inter-Tel.NET and losses from Inter-Tel's investment
 in Cirilium Corporation, the core business net income for the first quarter
 of 2000 would have been $4.5 million ($0.17 per diluted common share).
     "Inter-Tel's 2001 first quarter results were impacted by slower economic
 conditions and delays in launching the Eclipse business telephone system,
 Inter-Tel's newest product line," noted Steven G. Mihaylo, Inter-Tel's
 chairman.  "Inter-Tel's core business operations achieved earnings results
 that exceeded 2000 by approximately 10%, when the charge for in-process
 research and development costs in connection with the acquisition of
 Executone, losses from Inter-Tel.NET and losses from Inter-Tel's discontinued
 Cirilium investment are excluded.  Historically Inter-Tel's first quarter is
 the Company's weakest, and we expect a similar trend for 2001."
     "Sales from Inter-Tel.NET were lower than the fourth quarter of 2000 based
 on our planned shift from prepaid calling cards to enterprise and
 carrier-class business.  This transition is expected to reduce costs and
 improve gross margins in the coming months," added Mr. Mihaylo.  "We
 experienced higher sales bookings approaching the second quarter compared to
 those entering the first quarter of 2001 and we were pleased with our ability
 to contain costs during these difficult economic times.  Finally, we welcome
 the new associates that joined Inter-Tel and new customers and relationships
 brought about through the acquisition of selected assets and assumption of
 specific liabilities of Convergent Technologies, Inc.  This acquisition
 presents opportunities to expand our presence in selected markets and to
 expand our operations in existing markets across the U.S."
     During the first quarter of 2001, Inter-Tel repurchased over 1.4 million
 shares of its common stock for approximately $14.1 million, from a stock
 repurchase program that was authorized by its board of directors during 2000.
 In addition, in February 2001 Inter-Tel's board of directors authorized the
 Company to repurchase up to 4,000,000 additional shares of its common stock.
     For the second quarter of 2001, Inter-Tel expects sales revenue of
 $96 million to $100 million and net earnings of $3.0 million to $3.5 million
 ($0.12 to $0.14 per share).  The expected results for the second quarter of
 2001 include the expected results from Inter-Tel.NET.
 
     You may access our quarterly earnings results conference call via the
 Internet at http://www.inter-tel.com.  Select "News & Events" from the top
 navigation bar.  A link to the webcast will be displayed within the "News &
 Events section.  A replay of the conference call will be available on the
 Internet until May 3rd at 12:59 a.m. (EDT)
 
     About Inter-Tel, Incorporated
     Inter-Tel is a leading provider of business telephone systems in the
 United States and related call processing software, voice processing software
 and call accounting software.  Inter-Tel is also an emerging provider in the
 voice and data convergence market, with a line of voice and data routers, IP
 phones, e-commerce Web software, client software and related networking
 software, which allow Inter-Tel to handle networked applications as large as
 20,000 ports.  Inter-Tel's products are marketed to small-to-large-sized
 organizations and divisions through 55 company-owned direct sales offices, two
 international sales offices, a nationwide network of dealers and data and
 e-commerce VARs.  Inter-Tel's products include the Axxess and Eclipse business
 telephone systems, AXXESSORY Talk voice mail system, computer telephony
 products, the InterPrise voice and data routers, and ClearConnect e-commerce
 software.  Inter-Tel also operates Inter-Tel.NET, Inc., an IP telephony-based
 long-distance network and provides traditional circuit-switched services
 through its Inter-Tel NetSolutions, Inc. subsidiary.  The Company also
 provides maintenance, leasing and support services for its products through
 subsidiaries.  The Company's Common Stock is quoted on the Nasdaq National
 Market System under the symbol INTL.  More information is available on the
 worldwide web at http://www.inter-tel.com or http://www.inter-tel.net.
 
     This news release contains forward-looking statements within the meaning
 of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
 Exchange Act of 1934, including statements regarding the results Inter-Tel
 expects for the second quarter of 2001, Inter-Tel's expectations for costs and
 margins for its Inter-Tel.NET business, sales trends and bookings for 2001,
 results of operations from Inter-Tel.NET and impact on Inter-Tel's business of
 selected acquired assets and assumed liabilities of Convergent.  Such
 statements are based on current assumptions that involve risks and
 uncertainties that could cause actual outcomes and results to differ
 materially.  These risks and uncertainties include, among others, the risks
 and uncertainties related to Inter-Tel.Net, market acceptance of new products;
 the market acceptance of network convergence products and services generally;
 timely and successful integration of the combined business operations of
 Convergent; retention of employees, existing dealers and customers; industry,
 competitive and technological changes; general market and economic conditions,
 particularly in the technology and communications industry sectors; the
 composition, timing and size of orders from and shipments to major customers;
 price and product competition; dependence on new product development;
 availability of inventory from suppliers; and product defects.  For a further
 list and description of such risks and uncertainties, please see the Company's
 previously filed SEC reports, including the Company's Form 10-K, dated March
 23, 2001 and most recent Form 10-Q dated November 14, 2000.  Inter-Tel
 disclaims any intention or obligation to update or revise any forward-looking
 statements, whether as a result of new information, future events or
 otherwise.
 
 
                    INTER-TEL, INCORPORATED AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME
                                  (Unaudited)
 
                                                         Three Months
     (in thousands, except per share amounts)            Ended March 31,
                                                      2001             2000
                                                   -------          -------
     NET SALES                                   $  93,703        $  96,363
      Cost of sales                                 54,055           54,823
                                                   -------          -------
     GROSS PROFIT                                   39,648           41,540
                                                   -------          -------
 
      Research & development                         4,139            5,668
      Selling, general and administrative           32,055           30,911
      In process research and development               --            5,433
                                                   -------          -------
                                                    36,194           42,012
                                                   -------          -------
 
     OPERATING INCOME (LOSS)                         3,454             (472)
 
      Equity Share of Cirilium Corp.'s net losses       --           (1,699)
      Interest and other income                        167              342
      Loss on foreign translation adjustments         (303)             (65)
      Interest expense                                (227)             (75)
                                                   -------          -------
 
     INCOME (LOSS) BEFORE INCOME TAXES               3,091           (1,969)
     INCOME TAXES                                    1,143             (748)
                                                   -------          -------
 
     NET INCOME (LOSS)                           $   1,948        $  (1,221)
                                                   =======          =======
 
     NET INCOME (LOSS) PER SHARE -- BASIC        $    0.08        $   (0.05)
                                                   =======          =======
     NET INCOME (LOSS) PER SHARE -- DILUTED      $    0.08        $   (0.05)
                                                   =======          =======
 
     Average number of common
      shares outstanding -- Basic                   25,500           26,249
                                                   =======          =======
 
     Average number of common
      shares outstanding -- Diluted                 25,843           26,249
                                                   =======          =======
 
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                http://tbutton.prnewswire.com/prn/11690X45745264
 
 

SOURCE Inter-Tel, Incorporated
    PHOENIX, April 30 /PRNewswire/ -- Inter-Tel, Incorporated (Nasdaq:   INTL)
 today announced operating results for the first quarter ended March 31, 2001.
 Net sales for the first quarter of 2001 were $93.7 million, compared to net
 sales of $96.4 million for the first quarter of  2000.  Net income for the
 first quarter ended March 31, 2001 was $1.95 million ($0.08 per diluted common
 share), compared to a net loss of $1.2 million (net loss of $0.05 per diluted
 common share) for the first quarter of 2000, which included a charge for
 in-process research and development costs.
     Included in 2001 first quarter results are net losses, after the effect of
 taxes, of approximately $2.9 million (net loss of $0.11 per diluted share)
 relating to Inter-Tel.NET operations, Inter-Tel's IP telephony-based
 long-distance network.  Excluding these losses, Inter-Tel's net income from
 core business operations for the first quarter of 2001 would have been
 $4.9 million ($0.19 per diluted common share).  Excluding a charge for
 in-process research and development costs in connection with the acquisition
 of Executone, losses from Inter-Tel.NET and losses from Inter-Tel's investment
 in Cirilium Corporation, the core business net income for the first quarter
 of 2000 would have been $4.5 million ($0.17 per diluted common share).
     "Inter-Tel's 2001 first quarter results were impacted by slower economic
 conditions and delays in launching the Eclipse business telephone system,
 Inter-Tel's newest product line," noted Steven G. Mihaylo, Inter-Tel's
 chairman.  "Inter-Tel's core business operations achieved earnings results
 that exceeded 2000 by approximately 10%, when the charge for in-process
 research and development costs in connection with the acquisition of
 Executone, losses from Inter-Tel.NET and losses from Inter-Tel's discontinued
 Cirilium investment are excluded.  Historically Inter-Tel's first quarter is
 the Company's weakest, and we expect a similar trend for 2001."
     "Sales from Inter-Tel.NET were lower than the fourth quarter of 2000 based
 on our planned shift from prepaid calling cards to enterprise and
 carrier-class business.  This transition is expected to reduce costs and
 improve gross margins in the coming months," added Mr. Mihaylo.  "We
 experienced higher sales bookings approaching the second quarter compared to
 those entering the first quarter of 2001 and we were pleased with our ability
 to contain costs during these difficult economic times.  Finally, we welcome
 the new associates that joined Inter-Tel and new customers and relationships
 brought about through the acquisition of selected assets and assumption of
 specific liabilities of Convergent Technologies, Inc.  This acquisition
 presents opportunities to expand our presence in selected markets and to
 expand our operations in existing markets across the U.S."
     During the first quarter of 2001, Inter-Tel repurchased over 1.4 million
 shares of its common stock for approximately $14.1 million, from a stock
 repurchase program that was authorized by its board of directors during 2000.
 In addition, in February 2001 Inter-Tel's board of directors authorized the
 Company to repurchase up to 4,000,000 additional shares of its common stock.
     For the second quarter of 2001, Inter-Tel expects sales revenue of
 $96 million to $100 million and net earnings of $3.0 million to $3.5 million
 ($0.12 to $0.14 per share).  The expected results for the second quarter of
 2001 include the expected results from Inter-Tel.NET.
 
     You may access our quarterly earnings results conference call via the
 Internet at http://www.inter-tel.com.  Select "News & Events" from the top
 navigation bar.  A link to the webcast will be displayed within the "News &
 Events section.  A replay of the conference call will be available on the
 Internet until May 3rd at 12:59 a.m. (EDT)
 
     About Inter-Tel, Incorporated
     Inter-Tel is a leading provider of business telephone systems in the
 United States and related call processing software, voice processing software
 and call accounting software.  Inter-Tel is also an emerging provider in the
 voice and data convergence market, with a line of voice and data routers, IP
 phones, e-commerce Web software, client software and related networking
 software, which allow Inter-Tel to handle networked applications as large as
 20,000 ports.  Inter-Tel's products are marketed to small-to-large-sized
 organizations and divisions through 55 company-owned direct sales offices, two
 international sales offices, a nationwide network of dealers and data and
 e-commerce VARs.  Inter-Tel's products include the Axxess and Eclipse business
 telephone systems, AXXESSORY Talk voice mail system, computer telephony
 products, the InterPrise voice and data routers, and ClearConnect e-commerce
 software.  Inter-Tel also operates Inter-Tel.NET, Inc., an IP telephony-based
 long-distance network and provides traditional circuit-switched services
 through its Inter-Tel NetSolutions, Inc. subsidiary.  The Company also
 provides maintenance, leasing and support services for its products through
 subsidiaries.  The Company's Common Stock is quoted on the Nasdaq National
 Market System under the symbol INTL.  More information is available on the
 worldwide web at http://www.inter-tel.com or http://www.inter-tel.net.
 
     This news release contains forward-looking statements within the meaning
 of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
 Exchange Act of 1934, including statements regarding the results Inter-Tel
 expects for the second quarter of 2001, Inter-Tel's expectations for costs and
 margins for its Inter-Tel.NET business, sales trends and bookings for 2001,
 results of operations from Inter-Tel.NET and impact on Inter-Tel's business of
 selected acquired assets and assumed liabilities of Convergent.  Such
 statements are based on current assumptions that involve risks and
 uncertainties that could cause actual outcomes and results to differ
 materially.  These risks and uncertainties include, among others, the risks
 and uncertainties related to Inter-Tel.Net, market acceptance of new products;
 the market acceptance of network convergence products and services generally;
 timely and successful integration of the combined business operations of
 Convergent; retention of employees, existing dealers and customers; industry,
 competitive and technological changes; general market and economic conditions,
 particularly in the technology and communications industry sectors; the
 composition, timing and size of orders from and shipments to major customers;
 price and product competition; dependence on new product development;
 availability of inventory from suppliers; and product defects.  For a further
 list and description of such risks and uncertainties, please see the Company's
 previously filed SEC reports, including the Company's Form 10-K, dated March
 23, 2001 and most recent Form 10-Q dated November 14, 2000.  Inter-Tel
 disclaims any intention or obligation to update or revise any forward-looking
 statements, whether as a result of new information, future events or
 otherwise.
 
 
                    INTER-TEL, INCORPORATED AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME
                                  (Unaudited)
 
                                                         Three Months
     (in thousands, except per share amounts)            Ended March 31,
                                                      2001             2000
                                                   -------          -------
     NET SALES                                   $  93,703        $  96,363
      Cost of sales                                 54,055           54,823
                                                   -------          -------
     GROSS PROFIT                                   39,648           41,540
                                                   -------          -------
 
      Research & development                         4,139            5,668
      Selling, general and administrative           32,055           30,911
      In process research and development               --            5,433
                                                   -------          -------
                                                    36,194           42,012
                                                   -------          -------
 
     OPERATING INCOME (LOSS)                         3,454             (472)
 
      Equity Share of Cirilium Corp.'s net losses       --           (1,699)
      Interest and other income                        167              342
      Loss on foreign translation adjustments         (303)             (65)
      Interest expense                                (227)             (75)
                                                   -------          -------
 
     INCOME (LOSS) BEFORE INCOME TAXES               3,091           (1,969)
     INCOME TAXES                                    1,143             (748)
                                                   -------          -------
 
     NET INCOME (LOSS)                           $   1,948        $  (1,221)
                                                   =======          =======
 
     NET INCOME (LOSS) PER SHARE -- BASIC        $    0.08        $   (0.05)
                                                   =======          =======
     NET INCOME (LOSS) PER SHARE -- DILUTED      $    0.08        $   (0.05)
                                                   =======          =======
 
     Average number of common
      shares outstanding -- Basic                   25,500           26,249
                                                   =======          =======
 
     Average number of common
      shares outstanding -- Diluted                 25,843           26,249
                                                   =======          =======
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X45745264
 
 SOURCE  Inter-Tel, Incorporated