8-K

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): July 26, 2005

BROOKTROUT, INC.

(Exact Name of Registrant as Specified in Its Charter)

MASSACHUSETTS	000-20698	04-2814792
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification Number)

250 FIRST AVENUE, NEEDHAM, MASSACHUSETTS 02494

(Address of Principal Executive Offices) (Zip Code)

Registrant’s Telephone Number, Including Area Code: (781) 449-4100

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR.240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.Results of Operations and Financial Condition.

On July 26, 2005, we issued a press release announcing our financial results for the quarter ended June 30, 2005. The full text of this press release is furnished in Exhibit 99.1 to this report. The information contained in the website cited in the press release is not a part of this report.

The information in this report (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Exchange Act of 1933 or the Securities Exchange Act of 1934, except as expressly set forth by specific reference in such a filing.

Item 9.01.Financial Statements and Exhibits.

(c)  Exhibits

The following exhibit relating to Item 2.02 shall be deemed to be furnished, and not filed:

99.1 Press Release of Brooktrout, Inc. issued July 26, 2005 as to financial results for quarter ended June 30, 2005.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		BROOKTROUT, INC.
Date:	July 26, 2005	By:	/s/ ERIC R. GILER
			Eric R. Giler
			President
			(Principal Executive Officer)

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EXHIBIT INDEX

Exhibit  No.	Exhibit
99.1	Press Release of Brooktrout, Inc. issued July 26, 2005 as to financial results for the quarter ended June 30, 2005.

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EX-99.1

			EXHIBIT 99.1
CONTACT:	Bob Leahy	Erin Reilly
	VP Finance & Operations	Investor Relations
	Brooktrout, Inc.	Brooktrout, Inc.
	(781) 433-9426	(781) 292-9378

Brooktrout Announces

Second Quarter 2005 Results

NEEDHAM, Mass., July 26, 2005 – Brooktrout, Inc. (NASDAQ: BRKT), a leading provider of innovative hardware and software platforms that enable applications for the New Network^TM, today reported that revenue for the second quarter of 2005 was $18,654,000 compared with $19,193,000 for the second quarter of 2004. The Company’s net income for the second quarter of 2005 was $473,000, or $0.04 per diluted share, compared to a net loss of $2,927,000, or $(0.22) per diluted share, for the same period in 2004. The net loss in the second quarter of 2004 included a charge for in-process research and development of $2,490,000, or $(0.19) per diluted share, associated with the company’s acquisition of SnowShore Networks, Inc. in April 2004.

Revenue for the six months ended June 30, 2005 was $36,504,000 compared with $37,886,000 for the corresponding period of 2004. The company’s net loss for the six months ended June 30, 2005 was $15,000, or $(0.00) per diluted share, compared with $2,745,000, or $(0.21) per diluted share, for the same period of 2004. The net loss for the six months ended June 30, 2004 included a charge of $2,490,000 for in-process research and development as mentioned above.

“In the second quarter, our fax business grew 12% year-over-year, and our VoIP business posted record revenues despite one large order that was in our backlog but did not ship this quarter,” said Eric Giler, President.  “The second quarter was up sequentially, and we saw building customer interest in our new product introductions and partner initiatives in VoIP, fax over IP, and a new generation of enabling technology for speech recognition applications.   We believe our investment in these areas is paying off, and the positive momentum we are seeing should increasingly offset the maturing we are experiencing in more traditional TDM products.”

Business Outlook

Giler continued with the following outlook for the third quarter of 2005, “We expect sequential growth to continue in the third quarter with revenue in the third quarter 2005 of approximately $20.0 million. Given our revenue guidance, we would anticipate gross margins to be similar to those realized in the last several quarters, or between 68% and 70%. However, gross margins can fluctuate as a result of shifts in product mix, changes in product sales volume and pricing, as well as variability in component costs. We anticipate that total operating expenses for the third quarter will be between $12.3 million to $12.7 million. We expect net income to be approximately $0.8 million to $1.1 million for the third quarter of 2005.”

Conference Call Details

As previously announced, Brooktrout’s management will host a conference call at 5:00 p.m. ET today, July 26, 2005, to discuss these quarterly results, along with business highlights and outlook. The conference call will be simultaneously broadcast live over the Internet. Anyone interested in listening to this teleconference can do so by logging onto the Brooktrout, Inc. website at http://www.brooktrout.com/investor.

For those who cannot access the live broadcast, a replay will be available on the overview page of the website for five business days following the presentation and will be archived in the Multimedia section of the website thereafter. Following the live broadcast, a telephone replay will also be available at 1-973-341-3080, passcode #6262940 until midnight ET on Wednesday, July 27, 2005.

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Note to Investors

Statements in this press release that are not historical facts are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, the statements set forth above under “Business Outlook,” in particular those relating to future product acceptance, revenue, revenue growth, gross margins, operating expenses and net income. Readers should not place undue reliance on forward-looking statements because they involve known and unknown risks and uncertainties, which may cause actual events or our actual results, performance, and achievements to differ materially from what are expressed or implied by such forward-looking statements. In particular, there is a risk that interest from potential customers for our solutions will not result in sales of our products when projected or at all. Other risks and uncertainties include, among other things, the adverse market conditions in the telecommunications and Internet industries and the impact of such market conditions on our customer’s business and financial strength, the uncertainties relating to global events, the ability to keep pace with the evolution of the telecommunications hardware and software market, the impact of competition on our business, the impact of changes to regulations affecting the telecommunications and Internet industries, the market price of our stock prevailing from time-to-time, the nature of other investment opportunities presented to us from time-to-time, our cash flows from operations and general economic conditions. Additional information concerning these and other risk factors is contained in the “Factors That May Affect Future Results” section of Brooktrout, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2004, filed with the Securities and Exchange Commission on March 16, 2005, and Quarterly Report on Form 10-Q for the quarter ended March 31, 2005 filed with the Securities and Exchange Commission on May 10, 2005. In addition, any forward-looking statements represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change.

About Brooktrout

Brooktrout, Inc., headquartered in Needham, MA, delivers communications hardware and software products that enable applications for the New Network^TM – a Network born through the marriage of the telephone and data networks. Brooktrout, Inc.’s mission is to collaborate with its partners so they can bring innovative solutions to market quickly, increase business and expand into new markets. Brooktrout believes that a solid focus on customers, significant first-to-market products and key acquisitions are making it a partner of choice for today’s hottest communications service and enterprise application providers. Brooktrout, Inc. is traded publicly on NASDAQ under the symbol BRKT. For more information, visit http://www.brooktrout.com/investor.

Brooktrout and the New Network are trademarks or registered trademarks of Brooktrout, Inc. All other trademarks are the property of their respective owners.

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BROOKTROUT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2005			2004			2005			2004
Revenue	$	18,654		$	19,193		$	36,504		$	37,886
Costs and expenses:
Cost of product sold	5,895			6,306			11,378			12,274
Research and development	4,265			4,847			9,129			9,332
In-process research and development	—			2,490			—			2,490
Selling, general and administrative	8,452			8,711			16,961			16,829
Total costs and expenses	18,612			22,354			37,468			40,925
Operating income (loss)	42			(3,161		)	(964		)	(3,039		)
Other income, net	325			117			645			299
Income (loss) before income taxes	367			(3,044		)	(319		)	(2,740		)
Income tax (benefit) provision	(106		)	(117		)	(304		)	5
Net income (loss)	$	473		$	(2,927	)	$	(15	)	$	(2,745	)
Income (loss) per common share:
Net income (loss), basic and diluted	$	0.04		$	(0.22	)	$	(0.00	)	$	(0.21	)
Weighted average shares outstanding, basic	12,709			13,020			12,737			12,937
Weighted average shares outstanding, diluted	13,428			13,020			12,737			12,937

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BROOKTROUT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)

	June 30,		December 31,
	2005		2004
Assets
Current assets:
Cash and cash equivalents	$	14,721	$	18,452
Marketable debt securities	36,269		34,250
Accounts receivable, less allowances for doubtful accounts and sales returns of $749 at June 30, 2005 and $1,048 at December 31, 2004	9,284		10,346
Inventory	5,413		4,118
Deferred tax assets and other current assets	5,199		6,192
Total current assets	70,886		73,358
Equipment and furniture, less accumulated depreciation	2,545		2,477
Intangible assets, less accumulated amortization	4,979		5,658
Deferred tax assets and other non current assets, less accumulated amortization	18,202		17,584
Total assets	$	96,612	$	99,077
Liabilities and Stockholders’ Equity
Current and long-term liabilities	$	16,351	$	17,387
Stockholders’ equity	80,261		81,690
Total liabilities and stockholders’ equity	$	96,612	$	99,077

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