EX-99 2 ex99q3pr.htm EXHIBIT 99 - 3RD QUARTER 2006 EARNINGS PRESS RELEASE Exhibit 99 - 3rd Quarter 2006 Earnings Press Release
Exhibit 99
 
FOR IMMEDIATE RELEASE    
 
Contacts: Ewen 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 THIRD QUARTER RESULTS

Operating profits increase 87.3% over 2005


SARASOTA, Fla., November 8, 2006 - Teltronics, Inc. (OTCBB: TELT) today announced its financial results for the three months and nine months ended September 30, 2006.

Sales for the three months ended September 30, 2006 were $12.22 million, as compared to $10.79 million reported for the same period in 2005. Sales for the nine months ended September 30, 2006 were $34.01 million, as compared to $33.52 million for the same period in 2005. Gross profit margin for the three months ended September 30, 2006 was $41.5% as compared to 40.1% for the same period in 2005. Gross profit margin for the nine months ended September 30, 2006 was 41.6%, as compared to 42.3% for the same period in 2005.

“The third quarter was very good for Teltronics. Sales increased by $1.43 million or 13.3% and we were able to reduce our operating costs by 9.2%,” said Ewen Cameron, Teltronics’ President and CEO. “Operating profits for the third quarter of 2006 exceeded 2005 by $1.16 million, and as a result, year to date operating profits were up by 87.3%,” Cameron added.

Operating expenses for the three months ended September 30, 2006 were $4.13 million, as compared to $4.54 million for the same period in 2005. Operating expenses for the nine months ended September 30, 2006 were $12.40 million, as compared to $13.26 million for the same period in 2005. Interest costs for the three months ended September 30, 2006 were $470,000, as compared to $241,000 for the same period in 2005. Interest costs for the nine months ended September 30, 2006 were $1.08 million, as compared to $984,000 for the same period in 2005.

 
- more -

Net income for the three months ended September 30, 2006 was $495,000 or $0.04 per fully diluted share, as compared to $3.48 million or $0.32 per fully diluted share, for the same period in 2005. Net income for the three months ended September 30, 2005 included a $3.96 million gain on extinguishment of debt. Net income for the nine months ended September 30, 2006 was $690,000 or $0.02 per fully diluted share, as compared to a net income of $4.44 million or $0.36 per fully diluted share, for the same period in 2005. Net income for the nine months ended September 30, 2005 included $3.96 million gain on extinguishment of debt.

Net income available to common shareholders for the three months ended September 30, 2006 was $332,000, as compared to $3.32 million for the same period in 2005. Net income available to common shareholders for the nine months ended September 30, 2006 was $201,000 as compared to a net income available to common shareholders $3.95 million for the same period in 2005.

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 Tables Below --
 
2

TELTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
In thousands, except shares and per share amounts

ASSETS
       
 
September 30,
  
December 31,
 
2006
  
2005
 
(Unaudited)
    
Current assets:
      
     Cash and cash equivalents
$
1,059 
  
$
1,150 
     Accounts receivable, net of allowance for doubtful accounts
  
8,491 
    
6,568 
     Costs and estimated earnings in excess of billings
          on uncompleted contracts
  
214 
    
418 
     Inventories, net
  
5,391 
    
5,970 
     Other current assets
  
736 
 
  
953 
          Total current assets
  
15,891 
    
15,059 
           
Property and equipment, net
  
778 
    
967 
Other assets
  
846 
 
  
954 
           
          Total assets
$
17,515 
 
$
16,980 
       
LIABILITIES AND SHAREHOLDERS’ DEFICIENCY
       
Current liabilities:
          
     Line of credit
$
5,479 
  
$
5,112 
     Current portion of long-term debt and capital
          lease obligations
  
819 
    
855 
     Accounts payable
  
5,527 
    
5,630 
     Deferred dividends
  
1,400 
    
--- 
     Other current liabilities
  
4,101 
    
3,788 
          Total current liabilities
  
17,326 
    
15,385 
Long-term liabilities:
          
     Deferred dividends
  
--- 
    
1,100 
     Long-term debt and capital lease obligations, net of
          current portion
  
2,494 
    
3,081 
          Total long-term liabilities
  
2,494 
    
4,181 
Commitments and contingencies
          
Shareholders' deficiency:
          
     Capital stock
  
9 
    
9 
     Additional paid-in capital
  
24,697 
    
24,658 
     Accumulated deficit and other comprehensive loss
  
(27,011)
    
(27,253)
          Total shareholders' deficiency
  
(2,305)
    
(2,586)
           
          Total liabilities and shareholders' deficiency
$
17,515 
  
$
16,980 

 
 
3


TELTRONICS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENT
In thousands, except shares and per share amounts

 
Three Months
Ended September 30,
  
Nine Months
Ended September 30,
 
2006
  
2005
  
2006
  
2005
                       
Net sales
                      
     Product sales and installation
$
9,034 
  
$
7,599 
  
$
23,969 
  
$
24,011 
     Maintenance and service
  
3,183 
    
3,186 
    
10,036 
    
9,510 
   
12,217 
    
10,785 
    
34,005 
    
33,521 
Cost of goods sold
  
7,143 
    
6,457 
    
19,867 
    
19,328 
Gross profit
  
5,074 
    
4,328 
    
14,138 
    
14,193 
Operating expenses:
                      
     General and administrative
  
1,383 
    
1,549 
    
3,750 
    
4,218 
     Sales and marketing
  
1,722 
    
1,836 
    
5,595 
    
5,571 
     Research and development
  
958 
    
1,039 
    
2,800 
    
3,044 
     Depreciation
  
65 
    
120 
    
253 
    
431 
   
4,128 
    
4,544 
    
12,398 
    
13,264 
Income (loss) from operations
  
946 
    
(216)
    
1,740 
    
929 
                       
Other income (expense):
                      
     Interest
  
(470)
    
(241)
    
(1,084)
    
(984)
     Other
  
22 
    
3,958 
    
57 
    
4,519 
   
(448)
    
3,717 
    
(1,027)
    
3,535 
Income before income taxes
  
498 
    
3,501 
    
713 
    
4,464 
Income taxes
  
3 
    
17 
    
23 
    
25 
Net income
  
495 
    
3,484 
    
690 
    
4,439 
Dividends on Preferred Series B and
     C Convertible stock
  
163 
    
163 
    
489 
    
485 
Net income available to
     common shareholders
$
332 
  
$
3,321 
  
$
201 
  
$
3,954 
                       
Net income per share:
                      
     Basic
$
0.04 
  
$
0.42 
  
$
0.02 
  
$
0.50 
     Diluted
$
0.04 
  
$
0.32 
  
$
0.02 
  
$
0.36 
                       
Weighted average shares outstanding:
                      
     Basic
8,636,539 
  
7,880,806 
  
8,636,539 
  
7,874,143 
     Diluted
9,286,768 
  
10,874,280 
  
9,094,402 
  
10,883,415 


4