Applied Innovation, Inc. (AINN) - 500 Beiträge pro Seite

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Profile:Applied Innovation, Inc. provides network management solutions for the operation of distributed voice and data networks primarily in the United States. It provides hardware, software, and service solutions that provide connectivity, visibility, and control of network elements and the systems that support them. The company?s products comprise AIswitch that provides connectivity and mediation for surveillance networks; AIextend, an application mediation device that facilitates integration of network elements with legacy and next-generation operations support systems; AIconnect, a multi-purpose line card that provides integrated, scalable routing solution to support local central office Internet protocol networks; and AIfirewall, a security application, which allows customers to manage services and network devices located at the customer premises. Applied Innovation also offers AIflex, an optical Ethernet aggregation line card that allows for local area network extension beyond the physical boundaries of a central office location over fiber optics; AIscout, which streamlines network management; AIremote-RTP for proactive radio frequency and data rate monitoring of remote cell sites; AIremote that enables operations supports systems to access out-of-band network management information beyond the central office; and AIvortex, a scalable network bridging solution that allows service providers to aggregate remote sites. It primarily offers its products and services to telecommunications companies and government networks in the United States, Australia, Latin and South America, South Africa, and Canada. The company was founded by Gerard Moersdorf, Jr. in 1983. Applied Innovation is headquartered in Dublin, Ohio.



http://www.aiinet.com/

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Applied Innovation Reports Fourth Quarter and Full Year 2006 Financial Results
Friday February 16, 8:30 am ET
Company Reports Second Consecutive Profitable Year


DUBLIN, Ohio, Feb. 16 /PRNewswire-FirstCall/ -- Applied Innovation Inc. (Nasdaq: AINN - News) today announced operating results for the fourth quarter and year ended December 31, 2006.
Sales for the year ended December 31, 2006 totaled $30.6 million, compared to sales of $31.7 million in 2005. Sales for the three months ended December 31, 2006 were $5.1 million, compared to sales of $8.3 million in the fourth quarter of 2005. The Company achieved net income of $3.3 million for 2006, or $0.21 per diluted share, compared to net income of $2.1 million, or $0.14 per diluted share, in 2005. Net income for the year ended December 31, 2006 included a pre-tax gain of $1.0 million related to the sale of land in the first quarter. The year ended December 31, 2005 was negatively impacted by $0.9 million of restructuring charges. Net income for the three months ended December 31, 2006 was $0.7 million, or $0.05 per diluted share, compared to net income of $0.8 million, or $0.05 per diluted share, in the fourth quarter of the prior year.

The Company generated $3.7 million in cash from operations during 2006 and ended the year with $35.3 million of cash and investments. There was no debt outstanding at December 31, 2006.

Chief Executive Officer William H. Largent said, "Although our fourth quarter sales were in line with the low end of our previously announced expected range, we are disappointed that we did not achieve our goal of year over year sales growth in 2006. The significant drop off in orders from a major wireline customer mid-year, combined with slower than anticipated international sales, contributed to our slight decline in year-over-year sales. In spite of slight sales declines in 2006 versus 2005, profitability remained strong, due to lower operating costs, a gain from the sale of land, and increased investment income."

"In 2007, we will continue to focus on research and development investments and market development activities that show the greatest revenue growth potential. Our objectives continue to be to optimize Applied's top and bottom line growth while continuing to serve our worldwide customers and enhance shareholder value," concluded Mr. Largent.

Other Operating Results

The Company's gross profit for the fourth quarter of 2006 decreased to $2.6 million compared to gross profit of $4.5 million for the fourth quarter of 2005. As a percentage of sales, gross profit decreased to 51% for the fourth quarter of 2006 compared to 55% for the fourth quarter of 2005, primarily due to lower sales volumes.

Gross profit on product sales for the fourth quarter of 2006 was $1.9 million, or 49% of product sales of $3.8 million. For the same period last year, product sales were $6.7 million generating gross profit of $3.5 million, or 52% of product sales.

Services gross profit for the fourth quarter of 2006 was $0.7 million, or 55% of services sales of $1.2 million. For the fourth quarter of 2005, services sales of $1.7 million generated gross profit of $1.1 million, or 64% of services sales.

Research and development expenses for the fourth quarter of 2006 were $0.8 million, or 17% of sales, compared to $1.1 million, or 13% of sales, for the fourth quarter of 2005.

Selling, general and administrative expenses for the fourth quarter of 2006 were $1.6 million, or 31% of sales, compared to $2.5 million, or 30% of sales, for the fourth quarter of 2005. Expenses for the fourth quarter of 2006 were reduced by $365,000 as a result of the reversal of management bonuses accrued during the first three quarters of 2006.

The Company's effective tax rate was 10% for the quarter ended December 31, 2006, compared to 32% in the quarter ended December 31, 2005, as a result of the extension of the R&E credit retroactively to January 1, 2006. The Company's effective income tax rate was 32% for the year ended December 31, 2006, compared to an effective rate of 32% for the same period in 2005.

About Applied Innovation

Applied Innovation provides hardware and software applications that drive operational efficiency and improve quality in wireless, wireline and converging networks. Applied Innovation's industry-leading solutions include sophisticated remote site management, 3G network data quality monitoring and logical security of critical networks. Applied Innovation is a certified TL 9000 registered company with solutions currently installed in more than 34,000 sites worldwide.

Headquartered in Dublin, Ohio, Applied is traded on NASDAQ under the symbol AINN. For more information, please visit the Company's Web site at http://www.AppliedInnovation.com.

Safe Harbor Statement

This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. Those statements include, but are not limited to, all statements regarding intent, beliefs, expectations, projections, forecasts and plans of the Company and its management. These forward-looking statements involve numerous risks and uncertainties, including, without limitation: the demand for telecommunication equipment generally and in particular for the equipment and services offered by the Company; sales orders during 2007 and thereafter; that the anticipated demand for the products and services offered by the Company may decrease as a result of the economic and political climate in which the Company operates; the acceptance of the Company's present products and services and its ability to hire technical staff; the Company's ability to adapt to technological changes; the availability of capital to support the Company's business plans; and other risks and uncertainties detailed from time to time in the Company's Securities and Exchange Commission (SEC) filings, including the Company's Annual Report on Form 10-K for the year ended December 31, 2005. One or more of these factors have affected and could, in the future, affect the Company's business and financial results in future periods and could cause actual results to differ materially from plans and projections. Therefore, there can be no assurances that the forward-looking statements included in this press release will prove to be accurate. In light of the significant uncertainties in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company, or any other persons, that the objectives and plans of the Company will be achieved. All forward-looking statements made in this press release are based on information presently available to the management of the Company. The Company assumes no obligation to update any forward-looking statements.




APPLIED INNOVATION INC.
SUMMARY FINANCIAL HIGHLIGHTS
($ in thousands)

Summary Balance Sheet Information

(Unaudited)
December 31, December 31,
2006 2005

Cash and cash equivalents $16,977 $9,874
Short term investments 6,741 10,478
Accounts receivable, net 2,174 4,273
Inventory, net 3,973 2,997
Other current assets 1,417 1,533
Current assets 31,282 29,155
Property, plant and equipment, net 5,112 5,899
Investments 11,548 9,740
Goodwill 3,526 3,526
Other assets 1,437 2,187
Total assets $52,905 $50,507

Accounts payable $908 $1,030
Accrued expenses 1,795 2,985
Deferred revenue 1,093 1,102
Total current liabilities 3,796 5,117
Deferred income taxes 161 -
Deferred revenue 50 -
Total liabilities 4,007 5,117
Stockholders' equity 48,898 45,390
Total liabilities and stockholders' equity $52,905 $50,507



Summary Operational Information (unaudited)
($ in thousands, except per share and shares outstanding)


Three Months Ended Year Ended
December 31, December 31,
2006 2005 2006 2005

Sales $5,064 $8,311 $30,590 $ 31,690
Cost of sales 2,502 3,778 15,132 13,957
Gross profit 2,562 4,533 15,458 17,733
R&D 848 1,111 3,982 4,416
SG&A 1,550 2,525 9,385 10,185
Restructuring charges - (12) - 873
Gain on sale of land - - (1,036) -
Income from operations 164 909 3,127 2,259
Interest and other income,
net 660 299 1,660 822
Income before income taxes 824 1,208 4,787 3,081
Income tax expense 86 390 1,533 978
Net income $738 $818 $ 3,254 $ 2,103

Diluted income per
share $0.05 $0.05 $0.21 $0.14
Diluted shares 15,268,401 15,253,952 15,264,770 15,238,730




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Source: Applied Innovation Inc.

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Applied Innovation to be Acquired by KEG Holdings, Inc.
Friday February 23, 9:00 am ET


DUBLIN, Ohio and HILLSBORO, Oregon, Feb. 23 /PRNewswire-FirstCall/ -- Applied Innovation Inc. (Nasdaq: AINN - News), a leading provider of network management solutions for the communications industry, today announced that it has signed a definitive agreement with KEG Holdings, Inc. (KEG), the parent company of Kentrox, LLC (Kentrox), a supplier of high-speed network access equipment. Pursuant to the agreement, KEG will acquire all of the outstanding shares of Applied Innovation for $3.45 per share in cash. Upon completion of this transaction, Investcorp Technology Partners, a current investor in KEG, will own a controlling interest in the combined company.
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The Boards of Directors of both Applied Innovation and KEG have approved the proposed transaction. In addition, Gerard B. Moersdorf, the founder and a director of Applied Innovation, who beneficially has voting rights for approximately 37% of Applied Innovation's outstanding shares of common stock, has signed a voting agreement in favor of the proposed transaction.

As described in the acquisition agreement to be filed by Applied Innovation with the Securities and Exchange Commission (SEC), the final purchase price is subject to a downward or upward closing adjustment based on Applied Innovation's net working capital at closing. The transaction also is subject to the approval of Applied Innovation's stockholders and other customary closing conditions. It currently is anticipated that the transaction will close on or before the end of Applied Innovation's second quarter.

"In today's business environment, and especially in our industry, scale is becoming more critical in order to continue to bring technologically competitive and cost-competitive products to the marketplace," said William H. Largent, President and Chief Executive Officer of Applied Innovation. "By bringing together the technical and service capabilities of Applied Innovation and Kentrox, our telecommunications customers will have expanded access to more advanced products."

"We are excited about the combination of Applied Innovation and Kentrox, which will clearly help us achieve our strategic vision faster, while greatly expanding our offering to our valued customers," said Jeff Estuesta, KEG's President and Chief Executive Officer. "We also look forward to welcoming Applied Innovation's employees to the Kentrox family."

"We believe our continued investment in KEG Holdings will allow the combination of Kentrox and Applied Innovation to continue to innovate, create new products and achieve their growth plans," said Anand Radhakrishnan of Investcorp Technology Partners.

Raymond James & Associates, Inc. has acted as financial advisor to Applied Innovation in connection with the transaction, and has rendered a fairness opinion to its Board of Directors.

This press release is for informational purposes only and is not an offer to buy or the solicitation of an offer to sell any shares of Applied Innovation common stock. Applied Innovation intends to file a proxy statement with the SEC in the near future with respect to this transaction. The proxy statement will contain important information that should be read carefully by Applied Innovation stockholders. It will be made available to Applied Innovation stockholders at no charge to them and will also be available (along with all other documents filed with the Securities and Exchange Commission) at the SEC's website at www.sec.gov.

About Applied Innovation

Applied Innovation provides hardware and software applications that drive operational efficiency and improve quality in wireless, wireline and converging networks. Applied Innovation's industry-leading solutions include sophisticated remote site management, 3G network data quality monitoring and logical security of critical networks. Applied Innovation is a certified TL 9000 registered company with solutions currently installed in more than 34,000 sites worldwide.

Headquartered in Dublin, Ohio, Applied is traded on NASDAQ under the symbol AINN. For more information, please visit the Company's Web site at http://www.AppliedInnovation.com.

About Kentrox

Kentrox is a leading supplier of high-speed network access equipment, including the recently-introduced and award-winning QoS appliance, Q-Series QoS access routers, DSU/CSUs, ATM access concentrators and wireless base station products. Its extensive customer base includes enterprises and small- to-medium offices, carriers, wireless service providers and government entities worldwide. Kentrox is based in Hillsboro, Oregon. Contact the company at 800-733-5511 or via the Web at www.kentrox.com.

About Investcorp Technology Partners

Investcorp Technology Partners is a leading growth and buyout investor in small and medium-sized technology businesses in North America and Europe. The team focuses on growth capital, buyout, corporate carveout and take-private transactions, generally investing between $15 million and $40 million of equity. Investcorp Technology Partners is part of Investcorp, a leading provider and manager of alternative investment products with over $10 billion in invested assets under management. Further information is available at www.investcorp.com.

Safe Harbor Statement

This communication contains forward-looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995, particularly those statements regarding the effects of the proposed merger and those preceded by, followed by or that otherwise include the words "believes," "expects," "anticipates," "intends," "estimates," or similar expressions. Forward-looking statements relating to expectations about future results or events are based upon information available as of today's date, and there is no assumed obligation to update any of these statements. The forward-looking statements are not guarantees of future performance, and actual results may vary materially from the results and expectations discussed. For instance, although Applied Innovation and KEG Holdings, Inc. have signed an agreement for a subsidiary of KEG Holdings, Inc. to merge with and into Applied Innovation, there is no assurance that they will complete the proposed merger. The proposed merger may not occur if the companies do not receive necessary approval of Applied Innovation's stockholders, or if it is blocked by a governmental agency, or if either Applied Innovation or KEG Holdings, Inc. fail to satisfy other conditions to closing. Other risks and uncertainties to which the companies are subject are discussed in the companies' reports filed with the Securities and Exchange Commission (the "SEC") under the caption Risk Factors and elsewhere, including, without limitation, Applied Innovation's Annual Report on Form 10-K for the year ended December 31, 2005 (filed March 20, 2006), Quarterly Report on Form 10-Q for the quarter ended September 30, 2006 (filed November 13, 2006), Quarterly Report on Form 10-Q for the quarter ended June 30, 2006 (filed August 11, 2006), and Quarterly Report on Form 10-Q for the quarter ended March 31, 2006 (filed May 12, 2006). Copies of Applied Innovation's filings with the SEC can be obtained on Applied Innovation's website, or at the SEC's website at www.sec.gov. One or more of these factors have affected, and could affect Applied Innovation's business and financial results in future periods, and could cause actual results and issues related to the merger transaction to differ materially from plans and projections. Any forward-looking statement is qualified by reference to these risks, uncertainties and factors. Forward- looking statements speak only as of the date of the documents in which they are made. These risks, uncertainties and factors are not exclusive, and Applied Innovation undertakes no obligation to publicly update or review any forward-looking statements to reflect events or circumstances that may arise after the date of this release, except as required by law.




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Source: Applied Innovation Inc.