Connect with us

Hi, what are you looking for?

New Products

Glenayre Announces Fourth Quarter and Full Year 2005 Results

NEW YORK – March 8, 2006 – Glenayre Technologies, Inc. (NASDAQ: GEMS), a global provider of messaging solutions through Glenayre Messaging and entertainment products through Entertainment Distribution Company, LLC (EDC), today reported fourth quarter and full year financial results for the periods ending December 31, 2005.

On May 31, 2005, the Company’s newly formed Entertainment Distribution Company division (“EDC”) acquired Universal Music Group’s U.S. and central European CD and DVD manufacturing and distribution operations. Accordingly, for comparative purposes this release includes pro forma financial information that summarizes the combined results of operations of Glenayre Technologies and the operations of EDC on a pro forma basis, as though the companies had been combined as of the beginning of each of the periods presented.

Highlights:
• Consolidated revenue of $110.2 million for the fourth quarter and $267.8 million for the full year 2005
• EDC revenue on a pro forma basis of $305.6 million for the full year 2005 compared to $280.4 million in 2004, an increase of 9 percent
• EDC net income on a pro forma basis of $3.6 million, excluding one-time acquisition and compensation related costs, and including $2.1 million of allocated corporate overhead costs, for the full year 2005 compared to $(1.4) million in 2004, with no corporate overhead
• EDC EBITDA (as defined below) on a pro forma basis of $30.6 million, excluding one-time acquisition and compensation related costs, and including $2.1 million of allocated corporate overhead costs, for the full year 2005 compared to $29.0 million in 2004, with no corporate overhead
• Messaging revenue of $78.2 million for the full year 2005 compared to $50.6 million in 2004, an increase of 55 percent
• Messaging net income from continuing operations of $4.7 million for the full year 2005 compared to a net loss of $5.5 million in 2004, excluding $2.7 million of one-time litigation related costs

Glenayre’s Chairman and Chief Executive Officer Clarke Bailey stated, “During 2005, we made significant progress in implementing our strategic plan and positioning the company for growth in 2006 and beyond. We transformed our company through the successful acquisition of EDC and moved rapidly to initiate our multi-pronged growth strategy. We also completed the turnaround at Messaging, returning the business to growth and profitability. Headed by strong management teams, we operate solid businesses that offer substantial opportunities to drive returns through both organic growth and acquisitions. We are committed to maximizing the value of our assets to the benefit of our shareholders.”

“Financially and operationally we surpassed all of our expectations during our first peak holiday season,” stated Jim Caparro, President and Chief Executive Officer of EDC. “The industry definitely took notice of EDC’s exceptional ability to execute and our performance to date has become a major factor in soliciting new third-party business. We remain focused on improving operating efficiencies and adding new customers while prudently expanding capacity, broadening our service offerings and increasing our reach throughout the world.”

“We delivered an impressive financial performance on both the top and bottom line as we benefited from the strategic decisions and investments of the past two years,” said Bruce Bales, President of Glenayre Messaging. “During the year we captured additional market share with our Versera ICE platform and recorded strong international sales which increased 198 percent. In addition, our growth has been driven by a strategic investment in our sales function, which is producing tangible returns. We are seeing significant interest in our new applications and service offerings including Video Mail, Video Portal and VoIP systems and remain focused on building upon the achievements of the past year.”

Glenayre will host a conference call to discuss its fourth quarter and year-end 2005 financial results today at 9:00 a.m. ET. To access the conference call, please dial 973-935-8599 and reference pass code 6973169. A live webcast of the conference call will also be available on the Company’s corporate Web site, located at www.glenayre.com. A replay of the conference call will be available through Tuesday, March 14, 2006, at midnight ET. The replay can be accessed by dialing 973-341-3080. The pass code for the replay is 6973169.

Additional fourth quarter and full year financial details and presentation materials may be found on the Company’s website using the following link:
http://www.glenayre.com/glenayre/investors/quarterly_financials.cfm.

Summary of Fourth Quarter 2005

For the fourth quarter of 2005, the Company reported consolidated revenue of $110.2 million.

EDC’s revenue of $93.7 million compares to revenue on a pro forma basis of $103.6 million for the fourth quarter of 2004, a decline of 10 percent. The reduction to revenue was due partly to a decline in DVD market pricing during 2005, which impacted both revenue and EBITDA. Another factor that impacted revenue, but not EBITDA, was that the 2004 pro forma results included revenues for acting as Universal’s agent in outsourcing DVDs in the U.S. During 2005 Universal outsourced the DVD units directly while EDC developed its DVD manufacturing and outsourcing capabilities.

The Messaging business revenue of $16.6 million for the fourth quarter of 2005 compares to $13.3 million for the fourth quarter of 2004. The increase in revenue was primarily related to international sales of new products.

Advertisement. Scroll to continue reading.

The Company reported net income from continuing operations of $5.7 million for the fourth quarter of 2005, or $0.08 per share, which compares to $0.02 million, or $0.00 per share, for the fourth quarter of 2004.

Including discontinued operations, the Company reported net income of $5.7 million, or $0.08 per share, for the fourth quarter of 2005 compared to net income of $2.7 million, or $0.04 per share, for the fourth quarter of 2004.

The Company generated earnings from continuing operations before interest, taxes, depreciation and amortization (“EBITDA”) of $14.3 million in the fourth quarter of 2005 as compared to $18.3 million in the fourth quarter of 2004 on a pro forma basis. After corporate allocations, EDC generated net income from continuing operations of $5.3 million and EBITDA of $13.9 million in the fourth quarter of 2005 as compared to $5.3 million and $18.0 million, respectively, in the fourth quarter of 2004 on a pro forma basis. The Messaging business, after corporate allocations, generated net income from continuing operations of $0.4 million and EBITDA of $0.4 million in the fourth quarter of 2005 as compared to $0.2 million and $0.3 million, respectively, in the fourth quarter of 2004. Included in EBITDA for EDC and Messaging during the fourth quarter of 2005 was corporate overhead of $0.9 million and $0.2 million, respectively. Corporate overhead was allocated 100 percent to the Messaging business in 2004. A reconciliation between results on a GAAP basis and results on an EBITDA basis is provided immediately following the Condensed Consolidated Financial Statements.

As of December 31, 2005, the Company had unrestricted cash and short-term investments of $78.8 million and restricted cash of $40.3 million. $16.5 million of the restricted cash is held as security for EDC’s credit facility, half of which should be released beginning in July 2006 as EDC’s debt repayments are made. Substantially all of the Company’s $94.9 million of cash and short-term investments at December 31, 2004 was unrestricted.

Summary of the Full Year 2005

For the full year 2005, the Company reported revenue of $267.8 million. On a pro forma basis consolidated revenues were $383.9 million.

EDC’s 2005 pro forma revenue of $305.6 million compares to pro forma revenue of $280.4 million for 2004. The increase was attributed to higher CD volumes, and higher pricing as a result of increased raw material costs passed through to Universal, partially offset by a decline in DVD pricing, and a decline in DVD unit sales due to the direct outsourcing of DVD units by Universal in 2005 as described above.

Messaging’s 2005 revenue of $78.2 million compares to $50.6 million for the full year 2004. The growth in revenue was attributed primarily to increased sales of both legacy products and next generation Versera ICE products to existing U.S. customers and to new international customers.

The Company reported 2005 income from continuing operations of $7.6 million, or $0.11 per share, which compares to a loss of ($8.1) million, or ($0.12) per share, in 2004.

Including discontinued operations, the Company reported 2005 net income of $8.0 million, or $0.11 per share assuming dilution, compared to net income of $4.5 million, or $0.07 per share, in 2004.

Excluding one-time charges, the Company generated earnings from continuing operations before interest, taxes, depreciation and amortization (“EBITDA”) of $35.5 million for the full year 2005 as compared to $24.2 million for the full year 2004 on a pro forma basis. After corporate allocations and excluding one-time charges, EDC generated net income from continuing operations of $3.6 million and EBITDA of $30.6 million as compared to ($1.4) million and $29.0 million, respectively, for the full year 2004 on a pro forma basis. The Messaging business (after corporate allocations) generated income from continuing operations of $4.7 million and EBITDA of $4.9 million as compared to ($5.5) million and ($4.8) million, respectively, for the full year 2004, excluding one-time charges. Included in EBITDA for EDC for the seven months of 2005 was corporate overhead of $2.1 million. Corporate overhead was allocated 100 percent to the Messaging business in 2004. A reconciliation between results on a GAAP basis and results on an EBITDA basis is provided immediately following the Condensed Consolidated Financial Statements.

Advertisement. Scroll to continue reading.
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Advertisement

Our Reviews

Digital Music Systems

The Wattson Audio Emerson Digital streamer is not inexpensive but it offers straight forward high-end digital playback that delivers sonically.

Over-Ear Headphones

Portable USB DACs are a new category that can take well regarded headphones from Meze Audio and Audeze to the next level when listening...

Integrated Amps & Stereo Receivers

Music listeners are living in the golden age of Hi-Fi. The $1,595 Rotel A14MKII Integrated Amplifier is proof positive of that reality.

Integrated Amps & Stereo Receivers

An amplifier that has flown under the radar for far too long. The Vincent SV-737 Integrated Amplifier is the real deal.

Reviews

$200 for a soundbar with Dolby Atmos? Does the Monoprice SB-300 Soundbar deliver the sonic goods or fall flat on its face?

Earbuds & In-Ear Headphones

$99 true wireless earbuds are worthy of consideration thanks to long battery life, app tuning and firmware upgradability.

You May Also Like

Advertisement

ecoustics is a hi-fi and music magazine offering product reviews, podcasts, news and advice for aspiring audiophiles, home theater enthusiasts and headphone hipsters. Read more

Copyright © 1999-2021 ecoustics | Disclaimer: We may earn a commission when you buy through links on our site.