EX-99 2 ex99pr2005year_end.htm EX 99 - 2005 Y/E EARNINGS PRESS RELEASE Exhibit 99 - Earnings Press Release

Exhibit 99

FOR IMMEDIATE RELEASE

Contacts: Ewen R. Cameron, President & CEO
ecameron@teltronics.com
941.753.5000

  IDEAS THAT COMMUNICATE

941.753.5000
941.751.7724 (Fax)
2150 Whitfield Industrial Way
Sarasota, FL 34243-4046
   

Teltronics Announces $3.8 Million Net Income for 2005
2005 is the second consecutive profitable year.


SARASOTA, Fla., November 15, 2005 - Teltronics, Inc. (OTCBB: TELT) today announced its financial results for the year ended December 31, 2005. Revenues for 2005 were $46.2 million as compared to $46.0 million reported in 2004. The Company reported net income of $3.8 million, which includes one-time gains of $4.6 million and a write down of impaired assets of $1.6 million, netting $3.0 million. This was a $3.3 million improvement over the $539,000 net income, which included a one-time gain of $1.2 million, reported in 2004. The net income available to common shareholders for 2005 increased to $3,168,000 from, an $85,000 loss for 2004. The Company's diluted net income per share for 2005 was $0.36 as compared to a diluted net loss per share of $0.01 for 2004.

Gross profit margin increased from 39.7% for 2004 to 41.1% for 2005. The Company's operating expenses for 2005, excluding $1,583,000 impairment charge, decreased $33,000 from 2004 due primarily to continued realization of the Company's cost reduction program implemented.

"I am pleased for the second year in a row to report a net profit for Teltronics. In 2005 we more than doubled our operating profit from $952 thousand to $2 million excluding the one time charge for the impairment of asset," said Ewen Cameron, Teltronics' President and Chief Executive Officer. "During 2005, we were able to keep our operating costs flat, and at the same time, were able to increase our gross margin. As we look forward to 2006, we believe that with our new IP products and the enhancements to our sales force that we should continue to see our revenues grow, Cameron concluded.

- continued -


About Teltronics:
Teltronics, Inc. is a leading global provider of communications solutions and services that help businesses excel. The Company manufactures telephone switching systems and software for small-to-large size businesses and government facilities. Teltronics' Enhanced 911 solutions provide lifesaving information to public safety communications centers. Teltronics offers a full suite of Contact Center solutions - software, services and support to help their clients satisfy customer interactions. Teltronics also provides remote maintenance hardware and software solutions to help large organizations and regional telephone companies effectively monitor and maintain their voice and data networks. The Company serves as an electronic contract-manufacturing partner to customers in the U.S. and overseas. Further information regarding Teltronics can be found on their web site, www.teltronics.com.

A number of statements contained in this press release are forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such because the context of the statement will include words such as we "believe," "anticipate," "expect," or words of similar import. Similarly, statements that describe our future plans, objectives, strategies or goals are also forward-looking statements. These forward-looking statements involve a number of risks and uncertainties that may materially adversely affect the anticipated results. Such risks and uncertainties include, but are not limited to, the timely development and market acceptance of products and technologies, competitive market conditions, payment of the consideration under our acquisition agreements, successful integration of acquisitions and the failure to realize the expected benefits of such acquisitions, the ability to secure additional sources of financing, the ability to reduce operating expenses ,the ability to make payments under our outstanding indebtedness, the ability to pay dividends on our preferred stock, risks relating to foreign currency translations, and other factors described in the Company's filings with the Securities and Exchange Commission. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements made herein and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are only made as of the date of this press release and we disclaim any obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.







See attached




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TELTRONICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

(All amounts in thousands, except shares amounts)

ASSETS
December 31,
2005
  2004
Current assets:                  
     Cash and cash equivalents     $ 1,150     $ 1,580  
     Accounts receivable, net       6,568       5,499  
     Costs and estimated earnings in excess of billings on uncompleted contracts   418       343  
     Inventories, net       5,970       3,858  
     Other current assets       953       381  

 
          Total current assets       15,059       11,661  

 
Property and equipment, net       967       3,729  
Goodwill       241       241  
Other Intangible assets, net       357       484  
Other assets       356       309  

 
          Total assets     $ 16,980     $ 16,424  

 
     
CURRENT LIABILITIES AND SHAREHOLDERS' DEFICIENCY
       
Current liabilities:              
     Line of credit     $ 5,112     $ 2,554  
     Current portion of long-term debt       855       2,277  
     Accounts payable       5,630       5,883  
     Billings in excess of costs and estimated earnings on uncompleted contracts       ---       219  
     Accrued payroll       1,400       1,605  
     Other current liabilities       938       657  
     Deferred revenue       1,450       1,388  

 
          Total current liabilities       15,385       14,583  
Long-term liabilities:    
     Deferred dividends       1,100       ---  
     Long-term debt, net of current portion       3,081       7,885  


          Total long-term liabilities       4,181       7,885  
Commitments and contingencies    
Shareholders' deficiency:    
     Common stock, $.001 par value, 40,000,000 shares authorized,    
          8,636,539 and 7,861,539 issued and outstanding at    
          December 31, 2005 and 2004, respectively       9       8  
     Non-voting common stock, $.001 par value, 5,000,000 shares    
          authorized, zero shares issued and outstanding       ---       ---  
     Preferred Series A stock, $.001 par value, 100,000 shares    
          authorized, 100,000 shares issued and outstanding       ---       ---  
     Preferred Series B Convertible stock, $.001 par value, 25,000    
          shares authorized, 12,625 shares issued and outstanding       ---       ---  
     Preferred Series C Convertible stock, $.001 par value, 50,000    
          shares authorized, 40,000 shares issued and outstanding       ---       ---  
     Additional paid-in capital       24,658       24,301  
     Other comprehensive loss       (76 )     (8 )
     Accumulated deficit       (27,177 )     (30,345 )


          Total shareholders' deficiency       (2,586 )     (6,044 )


          Total liabilities and shareholders' deficiency     $ 16,980     $ 16,424  



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TELTRONICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

(All amounts in thousands, except share amounts)

  Years Ended December 31,
  2005
  2004
  2003
Net sales                    
     Product sales and installation     $ 33,380     $ 35,043     $ 37,269  
     Maintenance and service       12,849       11,002       9,615  

 
 
        46,229       46,045       46,884  
Cost of goods sold       27,224       27,773       28,597  

 
 
Gross profit       19,005       18,272       18,287  

 
 
Operating expenses:    
     General and administrative       5,305       5,326       5,951  
     Sales and marketing       7,477       7,799       8,483  
     Research and development       3,673       3,114       4,191  
     Depreciation and amortization       535       1,081       1,258  
     Impairment of fixed assets       1,583       ---       ---  

 
 
        18,573       17,320       19,883  

 
 
Income (loss) from operations       432       952       (1,596 )

Other income (expense):
   
     Interest       (1,263 )     (1,640 )     (1,675 )
     Gain on sale of assets       495       1,233       ---  
     Gain on extinguishment of debt       4,108       ---       ---  
     Other       86       1       (25 )

 
 
        3,426       (406 )     (1,700 )

 
 
Income (loss) before income taxes       3,858       546       (3,296 )
Income taxes       42       7       7  

 
 
Net income (loss)       3,816       539       (3,303 )

Dividends on Preferred Series B and C
   
     Convertible stock       648       624       602  

 
 
Net income (loss) available to common
     Shareholders
    $ 3,168     $ (85 )   $ (3,905 )

 
 

Net income (loss) per share:
   
     Basic     $ 0.39     $ (0.01 )   $ (0.54 )
     Diluted       0.36       (0.01 )     (0.54 )

Weighted average shares outstanding:
   
     Basic       8,041,323       7,838,715       7,297,512  
     Diluted       10,540,391       7,838,715       7,297,512  


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