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MELVILLE, N.Y., May 13 /PRNewswire-FirstCall/ -- Andrea Electronics
Corporation (Amex: AND) announced today that revenues for the three
months ended March 31, 2002 were approximately $1.8 million, compared
to approximately $2.6 million in the same period in 2001. Net loss
applicable to common shareholders for the three months ended March
31, 2002, was approximately $1.9 million, or $0.11 per share on
a diluted basis, compared to a net loss of approximately $2.7 million,
or $0.18 per share on a diluted basis, for the three months ended
March 31, 2001.
The principal factors that contributed to the $1.8 million loss
applicable to common shareholders for the first quarter ended March
31, 2002, were lower revenues, significant investments in research
and development, amortization expense, expenses associated with
creating and maintaining strategic alliances, and significant operating
expenses related to marketing Andrea's digital, far-field microphone
technologies, particularly to the automotive telematics and PC communications
markets. Furthermore, the losses applicable to common shareholders
for the first quarter 2002 include the effect of approximately $124
thousand in preferred stock dividends.
Quarter Ended
March 31, March 31,
2002 2001
Total Revenues $1,799,291 $2,615,639
Loss From Operations (1,771,189) (2,615,958)
Net Loss (1,737,492) (2,546,487)
Preferred Stock Dividends 124,102 146,285
Net Loss Applicable To Common Shareholders (1,861,594) (2,692,772)
PER SHARE INFORMATION:
Net Loss Applicable to Common Shareholders
Basic $(.11) $(.18)
Diluted $(.11) $(.18)
Common Shares Used in Computing Per Share Data:
Basic 17,250,869 14,624,788
Diluted 17,250,869 14,624,788
During the first quarter ended March 31, 2002, research and development
expenses decreased approximately 9% over the same period in 2001.
This decrease is due primarily to cost reductions related to expenses
associated with research efforts that were not integral to the Andrea's
digital, far-field microphone technologies. Notwithstanding, the
relatively high level of research and development expenses when
compared to total sales is comprised of our ongoing efforts to develop
digital audio far-field microphone technologies, including patented
and patent-pending DSDA®, DFTA(TM), PureAudio® 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, we anticipate
continued significant spending in research and development during
2002.
During the first quarter ended March 31, 2002, general, administrative
and selling expenses decreased approximately 35% over the same period
in 2001. This decrease is attributable to cost reduction efforts,
as well as our adoption, on January 1, 2002, of Statement of Financial
Accounting Standards No. 142, "Goodwill and Other Intangible Assets"
("FAS 142"). Under FAS 142, goodwill and intangible assets with
indefinite lives are no longer amortized but are reviewed for impairment
from time to time. The adoption of this pronouncement resulted in
a $282 thousand decrease in amortization expense for the first quarter
of 2002 over the same period in the prior year.
KEY FIRST QUARTER 2002 EVENTS
* Andrea Electronics Corporation Generates $4 Million in License
Revenues; John R. Croteau Is Appointed to Andrea Electronics' Board
of Directors
* Andrea Electronics Launches New Call Center Headset Products
* Andrea Electronics Demonstrates Noise Reduction Technologies At
Embedded Systems Conference 2002
* Louis Libin and James M. Griffin Appointed to Andrea Electronics'
Board of Directors
* Andrea Electronics Corporation Announces Patent Issued for Its
Digital Noise Canceling Technology
* Andrea Electronics Licenses its PureAudio(R) Noise Reduction
Technology For Integration With SoundMax(R) PC Audio
KEY SECOND QUARTER 2002 EVENT TO DATE
* Andrea Electronics Corporation Announces Patent Issued For Its
PureAudio(R) Noise Canceling Technology
ABOUT ANDREA:
Andrea Electronics Corporation designs, develops and manufactures
audio technologies and equipment for enhancing applications that
require high performance and high quality voice input. Andrea's
patented Active Noise Reduction (ANR READY®) earphone, Active
Noise Cancellation (ANC) near-field microphone, patented Digital
Super Directional Array (DSDA®) 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 Andrea'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.
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 "Andrea"). Andrea
cautions investors about the following significant factors, which,
among others, have in some cases affected Andrea's actual results
and are in the future likely to affect Andrea'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 Andrea'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 Andrea or third parties; and
Andrea'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 Andrea
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 Andrea's Annual Report on
Form 10-K and in Andrea's Annual Report to shareholders, and in
documents subsequently filed by Andrea 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 Three Months Ended
March 31,
2002 2001
NET SALES $1,799,291 $2,615,639
COST OF SALES 1,165,793 1,919,354
Gross profit 633,498 696,285
RESEARCH AND DEVELOPMENT EXPENSES 905,822 998,900
GENERAL, ADMINISTRATIVE AND SELLING 1,498,865 2,313,343
EXPENSES
Loss from operations (1,771,189) (2,615,958)
OTHER INCOME (EXPENSE):
Interest income 28,888 88,723
Interest expense (10,128) (15,003)
Other 14,937 (4,249)
33,697 69,471
LOSS BEFORE PROVISION FOR INCOME TAXES (1,737,492) (2,546,487)
PROVISION FOR INCOME TAXES -- --
Net loss $(1,737,492) $(2,546,487)
PREFERRED STOCK DIVIDENDS 124,102 146,285
Net loss attributable to common shareholders $(1,861,594) $(2,692,772)
PER SHARE INFORMATION:
Net Loss Per Share - Basic and Diluted $(.11) $(.18)
Shares used in computing net loss per 17,250,869 14,624,788
share - Basic and Diluted
AT ANDREA ELECTRONICS
Richard A. Maue,
Chief Financial Officer
Lauren Rivera,
Marketing Communications Manager
(800) 442-7787
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