<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
- --- THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
[ ] TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
- --- THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------ ------
Commission File No. 0-20698
BROOKTROUT TECHNOLOGY, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-2814792
---------------- ----------------
(State or other (I.R.S. employer
jurisdiction of identification
incorporation or number)
organization)
410 FIRST AVENUE
NEEDHAM, MASSACHUSETTS 02494-2722
---------------------------------------- ----------
(Address of principal executive offices) (Zip code)
Registrant's telephone number
including area code: (781) 449-4100
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
As of May 1, 1999, 10,911,540 shares of Common Stock, $.01 par value per
share, were outstanding.
Page 1 of 17 pages
<PAGE> 2
BROOKTROUT TECHNOLOGY, INC.
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1999
TABLE OF CONTENTS
PAGE
----
PART I FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets as of
March 31, 1999 and December 31, 1998 3
Condensed Consolidated Statements of Income for
the Three Months Ended March 31, 1999 and
March 31, 1998 4
Condensed Consolidated Statements of Comprehensive
Income (Loss) for the Three Months Ended
March 31, 1999 and March 31, 1998 5
Condensed Consolidated Statements of Cash Flows
for the Three Months Ended March 31, 1999
and March 31, 1998 6
Notes to Condensed Consolidated Financial
Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Three Months Ended March 31, 1999 and 1998 12
Liquidity and Capital Resources 13
PART II OTHER INFORMATION
Item 1. Legal Proceedings 16
Item 6. Exhibits 16
Signatures 17
<PAGE> 3
BROOKTROUT TECHNOLOGY, INC.
Condensed Consolidated Balance Sheets
(In thousands, except share data)
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
-------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and equivalents.................................. $ 10,494 $ 8,518
Marketable securities................................. 2,602 3,837
Accounts receivable (less allowance for doubtful
accounts of $1,930 in 1999 and $2,313 in 1998)...... 17,433 15,837
Inventory............................................. 12,561 10,668
Deferred tax assets................................... 4,456 3,853
Prepaid expenses...................................... 1,653 1,242
-------- --------
TOTAL CURRENT ASSETS................................ 49,199 43,955
-------- --------
Equipment and furniture:
Computer equipment.................................... 8,780 8,602
Furniture and office equipment........................ 6,699 6,336
-------- --------
Total............................................... 15,479 14,938
Less accumulated depreciation and amortization...... (6,941) (5,973)
-------- --------
EQUIPMENT AND FURNITURE - NET....................... 8,538 8,965
Deferred tax assets..................................... 4,632 4,719
Acquired technology and other intangible assets......... 14,300 14,746
Investments and other assets............................ 824 824
-------- --------
TOTAL............................................. $ 77,493 $ 73,209
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and other accruals................... $ 17,992 $ 15,777
Accrued compensation and commissions.................. 4,928 4,529
Customer deposits..................................... 544 614
Accrued warranty costs................................ 1,315 1,314
Accrued taxes......................................... 1,144 496
-------- --------
TOTAL CURRENT LIABILITIES........................... 25,923 22,730
-------- --------
Deferred rent........................................... 392 350
Stockholders' equity:
Common stock, $.01 par value; authorized, 25,000,000
shares; issued and outstanding 10,911,390 shares in
1999 and 10,828,362 in 1998......................... 109 108
Additional paid-in capital............................ 32,750 32,528
Accumulated other comprehensive income (loss)......... (1,957) (1,199)
Retained earnings..................................... 20,276 18,692
-------- --------
STOCKHOLDERS' EQUITY.................................. 51,178 50,129
-------- --------
TOTAL................................................. $ 77,493 $ 73,209
======== ========
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE> 4
BROOKTROUT TECHNOLOGY, INC.
Condensed Consolidated Statements of Income
(In thousands, except per share data)
Three Months Ended March 31,
----------------------------
1999 1998
------- -------
REVENUE................................. $32,218 $24,176
Cost and expenses:
Cost of product sold.................. 12,957 9,985
Research and development.............. 6,536 5,290
Selling, general and administrative... 10,404 6,632
------- -------
Total cost and expenses........... 29,897 21,907
------- -------
INCOME FROM OPERATIONS.................. 2,321 2,269
Interest income, net.................... 79 450
------- -------
Income before income tax provision...... 2,400 2,719
Income tax provision.................... 816 1,006
------- -------
NET INCOME.............................. $ 1,584 $ 1,713
======= =======
BASIC INCOME PER COMMON SHARE........... $ 0.15 $ 0.16
======= =======
SHARES FOR BASIC........................ 10,862 10,746
======= =======
DILUTED INCOME PER COMMON SHARE......... $ 0.14 $ 0.15
======= =======
SHARES FOR DILUTED...................... 11,404 11,417
======= =======
See notes to condensed consolidated financial statements.
<PAGE> 5
BROOKTROUT TECHNOLOGY, INC.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
1999 1998
-------- --------
<S> <C> <C>
Net income............................................. $ 1,584 $ 1,713
Unrealized gains (losses) on marketable securities.. (1,235) (19)
Foreign currency translation adjustment............. (5) --
------- -------
Comprehensive income before income tax
provision (benefit)................................... 344 1,694
Income tax (benefit) related to items of
comprehensive income.................................. (482) (7)
------- -------
Comprehensive income................................... $ 826 $ 1,701
======= =======
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE> 6
BROOKTROUT TECHNOLOGY, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
Three Months Ended
March 31,
-------------------------
1999 1998
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income..................................... $ 1,584 $ 1,713
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation and amortization.............. 1,414 673
Amortization of (premium) discount on
marketable securities..................... (4) (17)
Deferred income taxes...................... (35) (202)
Increase (decrease) in cash from:
Accounts receivable...................... (1,596) 357
Inventory................................ (1,893) (623)
Other prepaid expenses................... (411) 100
Accounts payable and other accruals...... 3,235 1,715
-------- --------
Cash provided by operating
activities............................ 2,294 3,716
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for equipment and furniture....... (541) (844)
Purchases of marketable securities............. -- (1,755)
Maturities and sales of marketable securities.. -- 1,506
--------
Cash used for investing activities..... (541) (1,093)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the sale of common stock......... 223 16
Cash provided by financing activities.. 223 16
-------- --------
INCREASE IN CASH AND EQUIVALENTS................. 1,976 2,639
CASH AND EQUIVALENTS, BEGINNING OF PERIOD........ 8,518 27,916
-------- --------
CASH AND EQUIVALENTS, END OF PERIOD.............. $ 10,494 $ 30,555
======== ========
See notes to condensed consolidated financial statements.
<PAGE> 7
BROOKTROUT TECHNOLOGY, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have
been prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission regarding interim financial reporting. They
should be read in conjunction with the audited consolidated financial statements
incorporated by reference in or included in the Company's 1998 Annual Report on
Form 10K.
In the opinion of management, the accompanying unaudited condensed
consolidated financial statements have been prepared on the same basis as the
audited consolidated financial statements and include all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of the interim periods presented.
The operating results for the interim periods presented are not necessarily
indicative of the results which could be expected for the full year.
2. Acquisition
On December 17, 1998, the Company acquired the assets and assumed certain
liabilities of the Computer Telephony Products (CTP) business of Lucent
Technologies Inc. CTP provides technologies for the voice processing industry
and manufactures hardware and software components that connect PCs and LANs with
telephone networks. The purchase price was $29.4 million, paid in cash, plus
$1.1 million of transaction costs, and the Company assumed certain liabilities
aggregating $1.9 million. The acquisition has been accounted for as a purchase,
and accordingly, the results of operations of CTP have been included in the
Company's consolidated financial statements from the date of acquisition. The
purchase price has been allocated to the assets acquired based upon their fair
values using independent appraisals.
<PAGE> 8
3. Income Per Share
Basic income per share is computed using the weighted average number of
common shares outstanding during each year. Diluted income per share reflects
the effect of the Company's outstanding options (using the treasury stock
method), except where such options would be antidilutive. A reconciliation of
weighted average shares used for the basic and diluted computations is as
follows:
Three Months Ended
March 31, March 31,
1999 1998
---------- ----------
Shares for basic..................... 10,862,000 10,746,000
Dilutive effect of stock options..... 542,000 671,000
---------- ----------
Shares for diluted................... 11,404,000 11,417,000
========== ==========
4. Inventory
Inventory is carried at the lower of cost (first-in, first-out basis) or
market and consisted of the following:
March 31, December 31,
1999 1998
------------ ------------
Raw materials........................ $ 4,122,000 $ 3,277,000
Work in process...................... 2,994,000 2,164,000
Finished goods....................... 5,445,000 5,227,000
----------- -----------
Total............................ $12,561,000 $10,668,000
=========== ===========
5. Cash Flow Information
Cash equivalents include highly liquid securities with remaining maturities
of three months or less at the time of purchase.
Supplemental disclosure of cash flow information:
March 31, March 31,
1999 1998
---------- ----------
Cash paid for interest............... $ 4,000 $ 1,000
Cash paid for income taxes........... $ 156,000 $ 1,165,000
<PAGE> 9
6. Major Customers
One customer accounted for approximately 15% and 20% of net revenue for the
three months ended March 31, 1999 and 1998, respectively.
7. Marketable Securities
Marketable securities are classified as available-for-sale and are carried
at fair market value using current market quotes. Unrealized gains or losses are
included in comprehensive income (loss).
Marketable securities consist of publicly-traded corporate equity
securities and U.S. government securities with remaining maturities in excess of
three months. Gross unrealized losses related to the equity securities at March
31, 1999 were $1,235,000.
8. Income Taxes
The Company's quarterly effective tax rate is based on the estimated
effective tax rate for the full year.
9. International Sales
International sales, principally exported from the United States, accounted
for approximately 25% and 20% of revenue for the three months ended March 31,
1999 and 1998, respectively.
<PAGE> 10
10. Segment Reporting
Three Months Ended
March 31,
------------- -------------
1999 1998
------------- -------------
REVENUE:
Brooktrout Technology, Inc. $30,009,000 $22,541,000
Brooktrout Software 1,882,000 1,635,000
Interspeed, Inc. 327,000 --
----------- -----------
Consolidated revenue $32,218,000 $24,176,000
=========== ===========
GROSS MARGIN:
Brooktrout Technology, Inc. $18,298,000 $13,327,000
Brooktrout Software 912,000 864,000
Interspeed, Inc. 51,000 --
----------- -----------
Consolidated gross margin $19,261,000 $14,191,000
=========== ===========
INCOME (LOSS) FROM OPERATIONS:
Brooktrout Technology, Inc.(1) $ 4,702,000 $ 3,819,000
Brooktrout Software (1,122,000) (555,000)
Interspeed, Inc. (1,259,000) (995,000)
----------- -----------
Consolidated income (loss) from
operations 2,321,000 2,269,000
Other income (expense) 79,000 450,000
----------- -----------
Consolidated income before
income tax provision (benefit) $ 2,400,000 $ 2,719,000
=========== ===========
(1) Included in Brooktrout Technology, Inc. are certain marketing and general
and administrative efforts, the cost of which have not been allocated for
internal reporting purposes.
<PAGE> 11
10. Segment Reporting (Continued)
Three Months Ended
March 31,
---------- ----------
1999 1998
---------- ----------
DEPRECIATION AND AMORTIZATION
EXPENSE:
Brooktrout Technology, Inc. $1,217,000 $532,000
Brooktrout Software 128,000 89,000
Interspeed, Inc. 69,000 52,000
---------- --------
Consolidated depreciation and
amortization expense $1,414,000 $673,000
========== ========
<PAGE> 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
RESULTS OF OPERATIONS
Three Months Ended March 31, 1999 and 1998
Revenue during the three months ended March 31, 1999 increased by
approximately 33% to $32,218,000, up from $24,176,000 during the three months
ended March 31, 1998. This growth was primarily attributable to an increase in
voice technology products driven by the acquisition of CTP.
Cost of product sold was $12,957,000, or 40% of revenue, during the three
months ended March 31, 1999, compared to $9,985,000, or 41% of revenue, for the
same period in 1998. Gross profit percentage was approximately 60% and 59% for
the three months ended March 31, 1999 and 1998, respectively. The increase in
gross profit percentage is the result of the increase in voice technology
products sold and the corresponding profit that is generated from these
products.
Research and development expense was $6,536,000, or 20% of revenue,
compared with $5,290,000, or 22% of revenue, for the three months ended March
31, 1999 and 1998, respectively. The dollar increase is primarily attributable
to the inclusion of CTP and the related development efforts on the voice
technology products. The Company intends to continue to commit significant
resources to product development. The Company's continuing development efforts
are focused on the computer telephony software development tools, the next
generation of Primary Rate ISDN telephone network interface products,
Interspeed, Inc., the TR Series product family, as well as the Brooktrout Open
Systems Telephony Architecture (BOSTon).
Selling, general and administrative expense was $10,404,000, or 32% of
revenue, compared with $6,632,000, or 27% of revenue, for the three months ended
March 31, 1999 and 1998, respectively. This higher expense level resulted from
increased staffing, promotional activities and depreciation expense. During the
next several quarters, selling, general and administrative expense as a percent
of revenue may be similar to the results for the three months ended March 31,
1999.
For the three months ended March 31, 1999, interest and other income was
$79,000, compared with $450,000 for the same period in 1998, reflecting lower
investable cash balances after the purchase of CTP.
The Company's effective tax rate was 34% in 1999 and 37% in 1998,
respectively, based on the Company's estimated effective tax rate for the full
year.
<PAGE> 13
Liquidity and Capital Resources
For the three months ended March 31, 1999, the Company funded its
operations principally through operating revenue. The Company's working capital
increased from $21.2 million at December 31, 1998 to $23.3 million at March 31,
1999. The increase was attributable primarily to higher inventory and accounts
receivable balances which were partially offset by higher accounts payable and
other accrual balances.
In August 1998, the Company renewed its working capital line of credit.
Under the renewed line of credit, the Company may borrow up to $10,000,000 on an
unsecured basis, all of which may be used for issuance of letters of credit,
subject to compliance with certain covenants. The line of credit will expire in
July 1999 and at that time any outstanding balances would be payable in full.
Any amounts borrowed under the line would be subject to interest at the bank's
prime rate. At March 31, 1999 there were no commitments outstanding on letters
of credit; no borrowings have been made during any period presented.
During the first three months of 1999, the Company invested approximately
$541,000 in capital equipment. The Company currently has no material commitments
for additional capital expenditures.
The Company anticipates that cash flows from operations, together with
current cash and marketable securities balances and funds available under the
Company's line of credit, will be sufficient to meet the Company's working
capital and capital equipment expenditure requirements for the foreseeable
future.
Quantitative and Qualitative Disclosures about Market Risk
The Company invests cash balances in excess of operating requirements in
short-term securities, generally with maturities of 90 days or less. In
addition, the Company's working capital line of credit agreement provides for
borrowings which bear interest at a variable rate based on a prime rate. As of
March 31, 1999 the Company did not have any borrowings outstanding pursuant to
the credit agreement. The Company believes that the effects, if any, of possible
near-term changes in interest rates on the Company's financial position, results
of operations and cash flows should not be material. The Company owns
publicly-traded corporate equity securities which are considered
available-for-sale for accounting purposes and any unrealized gain or loss is
deferred as a component of other comprehensive income.
The Company has limited exposure to fluctuations in foreign currencies as
it denominates substantially all sales in U.S. dollars and has limited expenses
denominated in foreign currencies, mainly from its limited operations in Belgium
and the United Kingdom. The Company, to date, has not attempted to hedge this
limited foreign currency exposure. The Company does not enter into financial
instrument transactions for trading or other speculative purposes.
<PAGE> 14
YEAR 2000
THE STATEMENTS IN THE FOLLOWING SECTION INCLUDE YEAR 2000 READINESS
DISCLOSURE WITHIN THE MEANING OF THE YEAR 2000 INFORMATION AND READINESS
DISCLOSURE ACT.
Year 2000 Readiness Disclosure
This section contains certain statements that are forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, as amended. The Company's
Year 2000 compliance, and the eventual affects of the Year 2000 on the Company
may be materially different than currently projected. This may be due to, among
other things, delays in the implementation of the Company's Year 2000 Plan and
the failure of key third parties with whom the Company has a significant
business relationship to achieve Year 2000 compliance.
The Year 2000 issue relates to a complex of potential problems arising from
the ways in which computer software can handle dates. Many older systems use a
two digit date format which may create ambiguities in passing into a new
century.
The Year 2000 is a special case in the Gregorian calendar which can create
problems with certain leap-year calculation routines. In addition, various
contemporary computer operating systems, including systems on which many of the
Company's and its suppliers' products are dependent, employ binary dating
conventions which cannot currently manage dates falling after certain times
after the year 2000 (e.g., the year 2038 in the case of most 32-bit Windows
software.)
The Company has a Year 2000 Plan, which it is actively pursuing to address
the Company's Year 2000 issues. The Company's Year 2000 Plan focuses on each of
the Company's internal systems, the Company's products, and third parties with
which the Company has a significant business relationship. However, no assurance
can be given that the Company or such third parties will successfully address
its or their Year 2000 issues.
The Company's Year 2000 Plan relating to its internal systems consists of
three phases - assessment, testing and implementation. The Company is currently
in the implementation phase and anticipates completing this phase during the
third quarter of 1999. The Company believes that all material systems will be
compliant by the Year 2000 and that the cost to address this issue is not
material. The Company does not have any contingency plans in the event that its
material systems are not Year 2000 compliant, however, if the Company determines
that its systems may not be compliant prior to 2000, it shall create and
implement contingency plans as necessary.
The Company has gathered, tested and produced information about the
Company's products impacted by the Year 2000 transition. Although the Company
believes that most of its products are in or will be (through maintenance
releases or patches) in Year 2000 compliance, the Company has determined that
certain of its older products are not and will not be compliant, although
customers generally will have upgrade paths available to move to the Company's
newer compliant products, generally requiring some change in the operating
environment. The Company is taking steps to inform such affected users of this
issue.
<PAGE> 15
All organizations dealing with the Year 2000 must address the effect this
issue will have on their significant business relationships with key third
parties. The Company's significant business relationships which may be adversely
impacted by the Year 2000 issue include certain contractual relationships with
key suppliers of components for the Company's products, service providers for
the Company's internal systems and major customers for the Company's products
(including one such customer which accounts for more than 10% of the Company's
revenue). The Company continues to work with key third parties to understand
their ability to continue providing services, products and demand for the
Company's products through the change to the Year 2000. If any significant Year
2000 problems are identified with key third parties, contingency plans will be
developed.
The Company continues to evaluate the estimated costs associated with
achieving Year 2000 readiness. To date, costs associated with achieving Year
2000 readiness are $350,000. Based on current estimates, the remaining costs
associated with the Company's Year 2000 Plan will be approximately $400,000.
The Company anticipates that substantial litigation may be brought against
vendors of all component products of systems that are unable to properly manage
data related to the Year 2000. The Company has not received any threats of such
litigation against it, but no assurance can be given that such litigation may
not be threatened or brought in the future. The Company's agreements with
customers typically contain provisions designed to limit the Company's liability
for such claims. It is possible, however, that these measures will not provide
protection from liability claims, as a result of existing or future federal,
state or local laws or ordinances or unfavorable judicial decisions.
Furthermore, the failure of the Company or the Company's key suppliers and/or
customers to be Year 2000 compliant may also result in litigation being brought
against the Company in addition to making it more difficult and/or costly for
the Company to manufacture and sell its products. Any such claims, with or
without merit, or the failure of the Company, its suppliers or customers to be
Year 2000 compliant could result in a material adverse affect on the Company's
business, financial condition and results of operations, including increased
warranty costs, customer satisfaction issues and potential lawsuits.
EURO ISSUE
Some of the countries in which the Company sells its products are Member
States of the Economic and Monetary Union (EMU). Beginning January 1, 1999
Member States of the EMU may begin trading in either their local currencies or
the euro, the official currency of EMU participating Member States. Parties are
free to choose the unit they prefer in contractual relationships during the
transitional period, beginning January 1999 and ending June 2002. The new
accounting system that the Company implemented can be upgraded to support the
euro and process transactions in either a country's local currency or the euro.
The Company does not anticipate a large demand from its customers to transact in
euros, so this upgrade is not planned for implementation until the fourth
quarter of 1999.
<PAGE> 16
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
On October 4, 1996, Syntellect Technology Corp. ("Syntellect") filed a
Complaint against the Company in the United States District Court for the
Northern District of Texas (the "Texas Court"), alleging infringement of certain
patents then owned by Syntellect relating to certain aspects of "automated
attendant" technology (the "Syntellect Complaint"). The Syntellect Complaint
sought injunctive relief, damages in an unspecified amount, and multiple damages
on account of alleged willful infringement. In October 1997, the Company filed a
Motion for Summary Judgement which was granted by the Texas Court on May 10,
1998. On June 10, 1998, the period for Syntellect to appeal the summary judgment
decision expired.
On September 22, 1998, Syntellect served the Company with notice that it
intended to pursue arbitration of a claim based on an alleged breach of a patent
license agreement. On October 5, 1998, the Company filed a Complaint against
Syntellect (the "Complaint") in the United States District Court for the
District of Massachusetts (the "Massachusetts Court") seeking a declaratory
judgement that Syntellect does not have the right to pursue its claim in
arbitration. On October 7, 1998, the Company filed a motion to stay Syntellect's
arbitration claim, which the Massachusetts Court denied on November 2, 1998. On
December 17, 1998, the Massachusetts Court denied the Company's renewed motion
to stay arbitration and ordered that all other matters be held in abeyance until
completion of the arbitration proceedings.
On October 22, 1998, Syntellect filed a demand for arbitration, with the
American Arbitration Association (the "AAA") in Dallas, Texas, in which
Syntellect asserts that Brooktrout failed to pay certain royalties under a
patent license agreement. On December 15, 1998, the Company filed an opposition
to Syntellect's supplemental motion to dismiss. On December 16, 1998, the AAA
granted the Company's request that any arbitration hearing be conducted by the
Boston Regional Office of the AAA. On January 6, 1999, the Company filed an
answering statement in the arbitration proceedings, in which all claims were
denied. An arbitrator has been selected, and the Company has filed a memorandum
explaining its position regarding the scope of the arbitration proceedings. The
Company intends to vigorously defend against Syntellect's claims in the
arbitration.
Items 2. through 5.
None
Item 6. Exhibits
(a) Exhibits
None
<PAGE> 17
SIGNATURES
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 thereunto duly authorized.
BROOKTROUT TECHNOLOGY, INC.
Date: May 12, 1999 By: /s/ Eric R. Giler
--------------------------------
Eric R. Giler
President
(Principal Executive Officer)
Date: May 12, 1999 By: /s/ Robert C. Leahy
--------------------------------
Robert C. Leahy
Vice President of Finance and
Operations and Treasurer
(Principal Financial and
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
BROOKTROUT TECHNOLOGY, INC.'S CONDENSED CONSOLIDATED BALANCE SHEET AND
STATEMENTS OF INCOME FOR THE PERIOD ENDED MARCH 31, 1999 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH BROOKTROUT TECHNOLOGY, INC.'S 10-Q FOR THE
PERIOD ENDED MARCH 31, 1999.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 10,494
<SECURITIES> 2,602
<RECEIVABLES> 17,403
<ALLOWANCES> 1,960
<INVENTORY> 12,561
<CURRENT-ASSETS> 49,169
<PP&E> 15,479
<DEPRECIATION> 6,941
<TOTAL-ASSETS> 77,463
<CURRENT-LIABILITIES> 25,893
<BONDS> 0
0
0
<COMMON> 109
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 77,463
<SALES> 32,218
<TOTAL-REVENUES> 32,218
<CGS> 12,957
<TOTAL-COSTS> 12,957
<OTHER-EXPENSES> 16,940
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4
<INCOME-PRETAX> 2,400
<INCOME-TAX> 816
<INCOME-CONTINUING> 1,584
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,584
<EPS-PRIMARY> .15
<EPS-DILUTED> .14
</TABLE>
