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MELVILLE, N.Y., Nov. 8 /PRNewswire/ -- Andrea Electronics Corporation
(Amex: AND) announced today that revenues for the three months ended
September 30, 2001 were approximately $2.9 million, versus $5.3
million in the same period in 2000. Net loss applicable to common
shareholders for the three months ended September 30, 2001, before
giving effect to a special, one-time, non-cash equity charge(1),
was approximately $2.2 million, or $0.15 per share on a diluted
basis, compared to a net loss applicable to common shareholders
of approximately $2.1 million, or $0.15 per share on a diluted basis,
for the three months ended September 30, 2000. For the nine months
ended September 30, 2001, the Company reported a net loss applicable
to common shareholders, before giving effect to a special, one-time,
non-cash equity charge(1), of approximately $7.4 million, or $0.50
per share on a diluted basis, compared to a net loss applicable
to common shareholders of $7.2 million, or $0.53 per share for the
nine months ended September 30, 2000. Notwithstanding the significant
decrease in revenues for both the three and nine-month periods ending
September 30, 2001, the Company substantially mitigated incremental
losses through the execution of its cost reduction initiatives.
The principal factors that contributed to the loss for the third
quarter ended September 30, 2001, continues to be 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 loss applicable to common shareholders for the three months
ended September 30, 2001, includes the effect of approximately $141
thousand in preferred stock dividends.
Quarter Ended
September 30, September 30,
2001 2000
Total Revenues $2,937,199 $5,318,936
Loss From Operations (2,060,117) (2,092,278)
Net Loss (2,069,151) (2,045,438)
Preferred Stock Dividends 140,755 60,577
(2,209,906) (2,106,015)
Non-Cash Charge Attributable to
Beneficial Conversion Feature(1) (7,500,000) --
Net Loss Applicable to Common Shareholders $(9,709,906) $(2,106,015)
PER SHARE INFORMATION:
Net Loss Applicable to Common
Shareholders, before special charge(1)
Basic $(.15) $(.15)
Diluted $(.15) $(.15)
Net Loss Applicable to Common Shareholders
Basic $(.64) $(.15)
Diluted $(.64) $(.15)
Common Shares Used in Computing Per Share Data:
Basic 15,137,578 13,836,893
Diluted 15,137,578 13,836,893
(1) Non-cash charge attributable to beneficial conversion feature.
The net
loss applicable to Common Shareholders reflects the intrinsic value of
the realization, during the third quarter of 2001, of a contingent
beneficial conversion feature related to the Company's Series C
Redeemable Convertible Preferred Stock.
During the third quarter ended September 30, 2001, research and
development expenses decreased approximately 38% over the same period
in 2000. This decrease, consistent with the first half 2001, 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
this decrease, 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), PureAudio(R),
DFTA(TM) and EchoStop(TM), among others. These technologies broaden
Andrea Electronics' exposure to key targeted industries, including
the automotive telematics and PC communications markets. Accordingly,
the Company anticipates continued significant spending in research
and development during the remainder of 2001.
KEY THIRD QUARTER 2001 EVENTS
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Andrea Electronics Corporation Extends Into Embedded Microphone
Technology for Home Networking System
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Andrea Electronics' Microphone Array Selected by Delphi Automotive
Systems For Inclusion in Demonstration Vehicle at the International
Motor Show Passenger Cars 2001
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Andrea Electronics Corporations Announces Executive Management
Restructuring
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Andrea Electronics Corporation Expands Into Internet Telephony
With Echostop(TM) Technology
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Andrea Electronics' Customized USB Laptop Array Microphone Available
For Use With IBM's ThinkPad Computers
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Andrea Electronics Corporation Named Recipient of Industry-Wide
Technology Award
KEY FOURTH QUARTER 2001 EVENT TO DATE
About Andrea Electronics
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, Clever Devices, Ltd., 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
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;
the Company's continuing ability to enter and maintain collaborative
relationships with other manufacturers, software authoring and publishing
companies, and distributors; the emergence of new competitors in
the marketplace; the Company's ability to compete successfully against
established competitors with greater resources; the uncertainty
of future governmental regulation; the Company's ability to obtain
additional funds; and general economic conditions. 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 ELECTRONICS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
NET SALES $2,937,199 $5,318,936 $8,170,767 $11,701,688
COST OF SALES 2,105,848 3,772,311 5,897,960 8,537,839
Gross profit 831,351 1,546,625 2,272,807 3,163,849
RESEARCH AND
DEVELOPMENT EXPENSES 774,108 1,249,167 2,654,392 3,488,839
GENERAL, ADMINISTRATIVE
AND SELLING
EXPENSES 2,117,360 2,389,736 6,739,458 6,784,391
Loss from
operations (2,060,117) (2,092,278) (7,121,043) (7,109,381)
OTHER INCOME
(EXPENSE):
Interest income/
(expense) (3,365) 21,208 117,505 92,497
Other (5,669) 25,632 20,220 10,812
(9,034) 46,840 137,725 103,309
LOSS BEFORE
PROVISION FOR
INCOME TAXES (2,069,151) (2,045,438) (6,983,318) (7,006,072)
PROVISION FOR
INCOME TAXES -- -- -- --
Net loss $(2,069,151) $(2,045,438) $(6,983,318) $(7,006,072)
PREFERRED STOCK
DIVIDENDS 140,755 60,577 430,653 212,364
NON-CASH CHARGE
ATTRIBUTABLE TO
BENEFICIAL
CONVERSION FEATURE 7,500,000 -- 7,500,000 --
Net loss applicable
to common
shareholders $(9,709,906) $(2,106,015) $(14,913,971) $(7,218,436)
PER SHARE INFORMATION:
Net Loss Per Share:
Basic $(.64) $(.15) $(1.00) $(.53)
Diluted $(.64) $(.15) $(1.00) $(.53)
Shares used in
computing net
loss per share:
Basic 15,137,578 13,836,893 14,848,707 13,702,946
Diluted 15,137,578 13,836,893 14,848,707 13,702,946
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SOURCE Andrea Electronics Corporation
CONTACT: Richard A. Maue, Chief Financial Officer, or Lauren Rivera,
Marketing Communications Manager, both of Andrea Electronics Corporation,
+1-800-442-7787/
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