-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AvNHHt99tn8FDLymhmmqmwo4VJ3u6+WSNkgPRyv0K62s3iuE2pkieVY8lcJjQfvk 860NEM3QycDvoYzDRtb0EA== 0000911420-04-000110.txt : 20040405 0000911420-04-000110.hdr.sgml : 20040405 20040402195902 ACCESSION NUMBER: 0000911420-04-000110 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040331 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040405 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMDIAL CORP CENTRAL INDEX KEY: 0000230131 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE & TELEGRAPH APPARATUS [3661] IRS NUMBER: 942443673 STATE OF INCORPORATION: DE FISCAL YEAR END: 0724 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-09023 FILM NUMBER: 04715501 BUSINESS ADDRESS: STREET 1: 106 CATTLEMEN ROAD STREET 2: . CITY: SARASOTA STATE: FL ZIP: 34232 BUSINESS PHONE: 941-554-5000 MAIL ADDRESS: STREET 1: 106 CATTLEMEN ROAD STREET 2: . CITY: SARASOTA STATE: FL ZIP: 34232 8-K 1 d956162.txt CURRENT REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): MARCH 31, 2004 --------------------------- COMDIAL CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 0-9023 94-2443673 (STATE OR OTHER (COMMISSION (IRS EMPLOYER JURISDICTION OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.) 106 CATTLEMEN ROAD SARASOTA, FLORIDA 34232 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (941) 554-5000 ITEM 5. OTHER EVENTS On March 31, 2004, the Company announced its results for the fourth fiscal quarter of 2003 and for the fiscal year ended December 31, 2003. The announcement includes disclosures of the Company's EBITDA (which is a non-GAAP financial measure) for certain periods with reconciliation to the comparable GAAP measure. EBITDA is calculated as earnings before interest, taxes, depreciation and amortization, excluding discontinued operations and unusual items such as restructuring and related costs and impairments of long-lived assets. Although EBITDA is a non-GAAP financial measure, it is used extensively by management as one of the primary metrics for evaluating operating performance. The Company believes it is also useful for investors to understand EBITDA and its trends as it provides a link between profitability and operating cash flow. The information in this Form 8-K, including the accompanying exhibit, shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liability of such section, nor shall such information be deemed incorporated by reference into any filing pursuant to the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise expressly stated in such a filing. ITEM 7. EXHIBITS (a) None. (b) None. (c) 99.1 Press Release dated March 31, 2004. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized. COMDIAL CORPORATION By: /s/ Kenneth M. Clinebell ------------------------------------------------ Kenneth M. Clinebell, Senior Vice President and Chief Financial Officer EX-99.1 3 e956144.txt PRESS RELEASE [GRAPHIC OMITTED][GRAPHIC OMITTED] Press Release Comdial Corporation 106 Cattlemen Road Sarasota, FL 34232 Telephone (941) 554-5000 Facsimile (941) 554-5012
Contact: Ken Clinebell, Chief Financial Officer Jody Burfening/Carolyn Capaccio, (212) 838-3777 (941) 554-5000 ext. 1513 Lippert/Heilshorn & Associates
Comdial Reports Fourth Quarter and Full Year End Results SARASOTA, FL. - March 31, 2004 - Comdial Corporation (OTC Bulletin Board: CMDZ.OB), a leading provider of IP telephony and unified communications solutions, today reported financial results for the fourth quarter and full year ended December 31, 2003. Net sales for the quarter were $10.1 million compared to $14.0 million for the same period in 2002. Earnings before interest, taxes, depreciation and amortization ("EBITDA") for the quarter was ($1.1) million compared to $0.0 million for the same period in 2002. Net loss for the quarter was ($2.9) million, compared to ($1.5) million for the same period in 2002 (see "Supplemental Financial Information" section of this press release). Net sales for 2003 were $47.9 million compared to $51.7 million for the same period in 2002. EBITDA for 2003 was $1.8 million compared to ($3.7) million for the same period in 2002. Net loss for 2003 was ($6.1) million compared to $6.5 million for the same period in 2002. Comdial's net income for 2002 included $24.5 million of gains associated with management negotiated debt restructurings, lease renegotiations and an arbitration award (see "Supplemental Financial Information" section of this press release). Fourth quarter 2003 results were primarily affected by: - - Decrease in end-user demand for legacy products. The Company believes that certain customers have been hesitant to invest in traditional communications systems in anticipation of next-generation product announcements, resulting in higher than anticipated inventory levels held by distribution partners. Offsetting this product shift was continued end-user buying of current solutions that are upgradeable to the recently announced CONVERSip(TM) line. - - Significant changes in the Company's sales force resulting in longer than expected vacancies in several key sales positions, slowing the selling process. These positions have since been filled. - - A $1.1 million write-down, primarily of discontinued and refurbished product inventory, which is included in cost of goods sold. Page 2 Management has undertaken the following initiatives to correct these near-term issues: - - Improved sales and marketing focus. The restructuring of Comdial's sales organization is nearly complete, including a new regional sales director for the west region and several new regional sales managers in place throughout the US. In addition, the Company intensified its sales training program for all sales personnel, emphasizing the new CONVERSip(TM) line and its dynamic product migration strategy. Further, Comdial is developing stronger product sales tools and materials to assist its channel partners. - - Further streamlining operations. The Company has significantly reduced administrative expenses versus last year, resulting in a reduced operating expense base and a lower break-even level. During the first quarter of 2004, Comdial reduced its workforce by 15% from prior levels. As a result, the Company expects to record severance charges during the first quarter of 2004 of $0.3 million. Additionally, the Company continued its focus on controlling discretionary spending while investing in the above-mentioned selling and marketing improvements. Because of weaker than expected product sales, the simultaneous ramping-up of CONVERSip(TM) sales, and the training period necessary for new additions to its sales force, the Company currently anticipates sales in the first quarter of 2004 will be down from the fourth quarter of 2003. The Company further expects to record a net loss for the first quarter, including the above-mentioned charge for severance. Comdial currently anticipates that sales trends in 2004 should be positive sequentially versus the first quarter of the year as sales force effectiveness increases and the next-generation CONVERSip(TM) products begin to ship in volume. Consequently, giving consideration to the recently implemented cost reduction program, the Company expects to be cash flow positive from operations for the second quarter of 2004 and the remainder of the fiscal year. Neil Lichtman, chief executive officer, commented, "During the fourth quarter, our performance was negatively affected by having a larger than expected number of sales positions open. While admittedly disruptive, we believe these issues represent a near-term concern that is being resolved. We currently expect first quarter results to continue to reflect weakness. However, we look for improving results as 2004 progresses and the new product cycle takes hold. We will maintain strict cost discipline and focus our investment on our next-generation product growth and migration strategy, including the training and education of both Comdial's and our channel partners' sales teams." Mr. Lichtman continued, "As previously announced, we recently closed a $9 million financing, the proceeds of which will drive our 2004 strategic growth plan in the IP telephony market through Comdial's new CONVERSipTM solutions suite. This strategic plan leverages Comdial's brand strength, its long standing distribution channel relationships and our large installed base. The CONVERSip(TM) product family places Comdial squarely in the growing converged telephony segment. CONVERSip(TM) offers an innovative, flexible and cost-efficient method of streamlining collaborative interaction, enabling users to leverage their legacy technology investments and common network infrastructure, while significantly enhancing productivity. Our confidence in our 2004 outlook is bolstered by strong sales of Comdial's IP systems coupled with the reductions we have made in operating expenses and with the promising reaction CONVERSip(TM) has Page 3 received from our channel partners. As we manage this product transition going forward, we will maintain our financial discipline and the focus on service and innovation that has made Comdial a leading-edge communications solutions provider." ABOUT COMDIAL Comdial is a converged voice and data communications solutions provider with over 25 years of long-standing success as a leading brand. Focused on superior customer service and reliable communications solutions, we are dedicated to producing best-in-class small to mid-sized enterprise communications products. Through innovative technology and flexibility, we are unmatched at providing comprehensive Internet Protocol (IP) communications solutions tailored to meet each customer's evolving business needs. For more information about Comdial and its communications solutions, please visit our web site at www.comdial.com. FORWARD-LOOKING STATEMENTS This press release contains statements that may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Investors and prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, including Comdial Corporation's ability to obtain additional funding for its business should such funding become necessary, its ability to maintain market share and to grow in a very competitive market, its ability to develop technologically advanced products to keep pace with many competitors that are much larger and have significantly more resources than Comdial, market acceptance of new products it develops, lower than anticipated demand brought about by continued weakness in telecommunications spending, risk of dilution of the Company's stock from private placement investments including the financing that was completed in March 2004 and from the private placement that was completed in 2002 as well as any other private investments or public offerings that may occur form time to time, dependence on a relatively small number of large customers, ability to maintain necessary engineering, sales, marketing and other key staff members, the risks associated with the outsourcing of its manufacturing requirements, including international risk factors, its ability to achieve its operational goals and to generate positive cash flow, any unfavorable outcome of pending disputes or litigation, including, but not limited to intellectual property infringement claims that arise from time to time and the various other factors set forth from time to time in Comdial's filings with the SEC, including, but not limited to, Comdial's Form 10-K for the year ended December 31, 2003. Comdial Corporation undertakes no obligation to publicly update or revise the forward-looking statements made in this release to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events. Page 4 Comdial Corporation Condensed Consolidated Statements of Operations
Three Months Ended Years Ended In thousands, except per share amounts December 31, December 31, 2003 2002 2003 2002 ---- ---- ---- ---- Net sales $10,136 $13,957 $47,941 $51,721 ======= ======= ======= ======= Gross profit $ 2,082 $ 4,797 $16,464 $17,216 ======= ======= ======= ======= Operating income (loss) ($2,127) ($ 2,347) ( $2,830) ($10,070) ======== ========= ========= ========= Net income (loss) ($2,948) ($1,469) ($6,091) $ 6,486 Preferred stock dividends - - - (284) Gain on redemption of preferred stock - - - 1,000 -------- -------- --------- ---------- Net income (loss) applicable to common stock ($2,948) ($1,469) ($6,091) $ 7,202 ======== ======== ======== ========= Earnings (loss) per share applicable to common stock: Basic ($ 0.33) ($ 0.26) ($ 0.70) $ 3.59 Diluted ($ 0.33) ($ 0.26) ($ 0.70) $ 3.10 ======== ======== ======== ========= Weighted average common shares outstanding: Basic 8,968 5,574 8,758 2,006 Diluted 8,968 5,574 8,758 2,325 ======== ======== ======== =========
Page 5 Comdial Corporation Condensed Balance Sheets
In thousands December 31, December 31, 2003 2002 ---- ---- Current assets $13,014 $19,154 Long-term assets $17,180 $21,466 ------- ------- Total assets $30,194 $40,620 ======= ======= Current liabilities $ 8,959 $13,290 Long-term liabilities $26,634 $26,991 Stockholders' equity (deficit) ($ 5,399) $ 339 ---------- --------- Total liabilities and stockholders' equity (deficit) $30,194 $40,620 ======= =======
Comdial Corporation Supplemental Financial Information Non-GAAP Financial Measures
In thousands Three Months Ended Years Ended December 31, December 31, 2003 2002 2003 2002 -------- -------- --------- -------- Net income (loss) ($ 2,948) ($ 1,469) ($6,091) $ 6,486 Long-lived asset impairment $ - $ 962 $ 365 $ 962 Gain from restructurings $ - ($ 1,546) $ - ($ 24,507) ------------ ---------- ------------- ------------ Pro forma net loss ($ 2,948) ($ 2,053) ($5,726) ($ 17,059) Depreciation and amortization $ 1,052 $ 1,236 $ 4,293 $ 5,563 Interest expense, cash $ 279 $ 287 $ 1,126 $ 1,324 Interest expense, non-cash (1) $ 545 $ 532 $ 2,153 $ 6,479 ------------ ---------- ------------- ------------ EBITDA (2) ($ 1,072) $ 2 $ 1,846 ($ 3,693) ========= ========== ======= ==========
(1) Represents amortization of deferred financing costs and accretion of discount on bridge notes (2) Earnings before interest, taxes, depreciation and amortization -----END PRIVACY-ENHANCED MESSAGE-----