AffinityTechnology Group Engages Morgan Keegan
Affinity Engages Morgan Keegan to Raise Additional Capital and the McBride Firm to Assist with Patent Licensing and Litigation
July 11, 2006--Affinity Technology Group, Inc. (OTCBB:AFFI - News) today announced that it has engaged Morgan Keegan & Company as its exclusive financial advisor to assist the company in raising additional capital and to assist with its patent licensing program. In addition, Affinity has engaged McBride Law, PC of Santa Monica, California as additional counsel with Withrow & Terranova, the Company's current patent licensing representative, to join ongoing patent litigation and the Company's patent licensing program.
Joe Boyle, President and Chief Executive Officer, stated, "We are very pleased to have Morgan Keegan and the McBride Law firm join us as a part of our team." As previously reported, Affinity was notified on March 30, 2006 that the U.S. Patent and Trademark Office had concluded its two year reexamination process, which was initiated by third parties, and resulted in the full allowance of all the claims of the Company's U.S. Patent No. 6,105,007. This decision was preceded by similar successful reexaminations of the Company's U.S. Patent No. 5,870,721C1 and U.S. Patent No. 5,940,811C1. "With the successful reexamination process now behind us and the addition of Morgan Keegan and the McBride Law Firm, Affinity is better positioned to move forward with a vigorous commercialization effort for its broad intellectual property position."
Under the terms of the two-year agreement, Affinity has issued Morgan Keegan a five-year warrant to acquire 2,500,000 shares of Affinity's common stock for $0.50 per share. Affinity's stock price closed at $0.18 per share at the end of trading on Monday. In addition, Affinity has agreed to pay Morgan Keegan a cash fee ranging from 1% to 5% of the amount of capital raised by Morgan Keegan for financings over $5 million. Morgan Keegan has agreed to assist Affinity in placing the remaining $1.4 million under its convertible debenture program for no additional cash fee.
Under the revised agreement with Withrow & Terranova and the addition of the McBride Law firm, Affinity has maintained its existing 25% contingency fee structure, which is payable on all amounts received by the Company as a result of patent litigation and/or patent licensing, with 19% payable to Withrow & Terranova and 6% payable to the McBride Firm. In connection with contingency fees payable to the attorneys for patent licensing unrelated to litigation, the 25% fee structure decreases on a sliding scale to a minimum of 5% as the cumulative amount of patent licensing revenues exceeds $100 million. In addition, Affinity has agreed to pay 50% of these firms' billing rates for work done for the Company.
About Affinity Technology Group, Inc.
Through its subsidiary, decisioning.com, Inc., Affinity Technology Group, Inc. owns a portfolio of patents that covers the automated processing and establishment of loans, financial accounts and credit accounts through an applicant-directed remote interface, such as a personal computer or terminal touch screen. Affinity's patent portfolio includes U. S. Patent No. 5,870,721C1, No. 5,940,811C1, and No. 6,105,007.
Forward-looking statements in this news release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that our business is subject to several substantial risks and uncertainties, including the Company's very limited capital resources and the possibility that we may be unable to raise additional capital in amounts sufficient to permit us to continue operations; the risk that we may lose all or part of the claims covered by our patents as a result of challenges to our patents; the risk that our patents may be subject to additional reexamination by the U.S. Patent and Trademark Office or challenge by third parties; the possibility that all or some of the holders of the convertible secured notes issued by the Company may take action to collect the amounts outstanding under these notes; the result of ongoing litigation; and unanticipated costs and expenses affecting the Company's cash position. If the Company is not able to raise additional capital immediately, it may be forced to consider alternatives for winding down its business, which may include offering its patents for sale or filing for bankruptcy protection. Moreover, if any of the holders of the convertible notes issued by the Company take action to collect the amounts owed by the Company under these notes, the Company will be forced to consider alternatives for winding down its business, which may include offering its patents for sale or filing for bankruptcy protection. These and other factors may cause actual results to differ materially from those anticipated.
Intevac, Illumina, Hansen Natural Corporation and Celgene Corporation
Zacks.com Announces That Jim Collins Highlights the Following Stocks: Intevac, Illumina, Hansen Natural Corporation and Celgene Corporation
Jim Collins, editor of the OTC Insight newsletter, believes that fundamentals suggest stocks will eventually come back strong. Read about Intevac (Nasdaq:IVAC), Illumina (Nasdaq:ILMN), Hansen Natural Corporation (Nasdaq:HANS) and Celgene Corporation (Nasdaq:CELG). Click here for the full story exclusively on Zacks.com: http://at.zacks.com/?id=84.
Highlights from the July 17 Featured Expert column by Jim Collins include:
A Sampling of Company News...
Intevac (Nasdaq:IVAC) shares are higher after the company said last Tuesday full-year sales would top previous projections. Earlier, the company announced it received orders from multiple customers for a total of eleven 200 Lean magnetic disk sputtering systems. Intevac said that with these orders they have booked enough systems to not only exceed the high end of their previous revenue guidance for 2006, but also provide an excellent start for 2007.
Illumina (Nasdaq:ILMN) has signed a genotyping services agreement with Johnson & Johnson Pharmaceutical Research & Development. Under the terms of the agreement, Illumina will develop custom SNP (single nucleotide polymorphism) content for a multi-sample Sentrix BeadChip. The BeadChip platform enables analysis of 12 samples and up to 60,000 SNPs per sample on a single BeadChip.
Stock Picks include...
Hansen Natural Corporation (Nasdaq:HANS) is a holding company and carries on no operating business except through its direct wholly-owned subsidiaries, Hansen Beverage Company and Hard e Beverage Company. Hansen is engaged in the business of marketing, selling and distributing so-called alternative beverage category, such as natural sodas, fruit juices, juice cocktails.
Celgene Corporation (Nasdaq:CELG) is an independent biopharmaceutical company engaged primarily in the discovery, development and commercialization of orally administered, small molecule drugs for the treatment of cancer and immunological diseases.
Read Jim Collins' outlook regarding the stock market's come back and receive more company news as well as stock picks by clicking: http://at.zacks.com/?id=85.
About Zacks Featured Experts
Successful investing requires professional advice from knowledgeable experts who can help investors achieve their financial goals in good markets and improve their portfolios, especially in bad ones. That is why Zacks Investment Research has assembled the best investment experts in the business to offer their powerful advisory newsletters on all the major investment topics: Stocks, Mutual Funds, Bonds, Options, Futures etc.
Additional recommendations from Zacks.com Featured Experts are highlighted in the free investment newsletter, Profit from the Pros. Each issue highlights several Featured Experts in this free e-mail newsletter. Register for a free subscription to "Profit from the Pros" at: http://at.zacks.com/?id=86.
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Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=87.
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Legislation Introduced to Dramatically Expand Study Abroad Among American College Students; Bill Proposes Visionary Program to Ensure Americans are In
Legislation Introduced to Dramatically Expand Study Abroad Among American College Students; Bill Proposes Visionary Program to Ensure Americans are Internationally Educated
NAFSA issued the following release today:
The Abraham Lincoln Study Abroad Act, introduced yesterday by Sens. Dick Durbin (D–Ill.) and Norm Coleman (R–Minn.), offers a historic opportunity to ensure that future generations of Americans are prepared with the international skills and knowledge they will need to effectively manage foreign-policy challenges and to succeed in an interconnected world. It proposes an innovative partnership between the federal government and higher education to dramatically expand participation by U.S. undergraduates in study abroad programs.
This bipartisan legislation's vision is that one million U.S. college students will study abroad annually in ten years' time, and that study abroad opportunities will become more diverse in terms of participants, fields of study, and destinations, especially in the developing world. Today, only about one percent of U.S. college undergraduates have studied abroad, despite opinion polls that indicate that more than three-quarters of Americans believe it is important to do so.
The United States' ability to lead responsibly in the world, to effectively confront emerging threats, and to thrive in the global economy, will depend on preparing our citizens with foreign-language competence and cross-cultural knowledge. One of the best ways to do this is through study abroad. As such, it must be an integral part of a complete college education and the centerpiece of a national effort to ensure that the next generation of Americans is ready for life and leadership in the 21st century. Study abroad is more than an education issue -– it is a national security and foreign policy issue.
The Abraham Lincoln Study Abroad Act was inspired by the work of the late Sen. Paul Simon and informed by the report of a national commission. In his preface to the 2003 NAFSA task force report Securing America's Future: Global Education for a Global Age, Sen. Simon laid out his vision: that with many more of our college students studying abroad, the United States would be "more understanding of the world ... creating a base of public opinion that would encourage responsible action." In 2005, a bipartisan federal commission, appointed by Congress and President Bush, submitted a report recommending a national effort to dramatically increase study abroad by American students, with special attention to expanding study abroad opportunities in the developing world.
The legislation introduced by Sens. Durbin and Coleman focuses attention on the fact that the biggest obstacles to study abroad are not purely financial ones. While some students need financial support to study abroad, it is more often on-campus factors -- those related to curriculum, faculty involvement, institutional leadership, and programming -- that make the biggest difference. In addition to proposing a pool of direct scholarships, the Abraham Lincoln Study Abroad Program also encourages institutions to address on-campus barriers to study abroad, by making a commitment to institutional reform a prerequisite for access to federal funds.
NAFSA places its full support behind this important and innovative proposal. We urge Congress to pass and fully fund the Abraham Lincoln Study Abroad Act, and we encourage our colleagues in higher education to do their part to make study abroad the norm, not the exception, among American college students.
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NAFSA: Association of International Educators is the world's largest nonprofit association dedicated to international education.
US Census Bureau Report indicates that Businesses With No Paid Employees have Increased to 19.5 Million
US Census Bureau Report indicates that Businesses With No Paid Employees have Increased to 19.5 Million
The image of a typical "mom and pop" business is getting a makeover, according to new data on these burgeoning enterprises released today by the U.S. Census Bureau. Yesterday's notion of a family-run corner store is giving way to Internet-based auctions, nail salons and even motorcycle dealerships, according to "Nonemployer Statistics: 2004."
The nation added nearly a million businesses with no paid employees between 2003 and 2004 to reach 19.5 million, a growth rate of 4.7 percent over a one-year period. Businesses without a payroll make up more than 70 percent of the nation's 27 million- plus firms, with annual receipts over $887 billion.
The report has data on 17 million individual proprietorships and on more than 1.3 million corporations and 1.2 million partnerships. Nonemployer firms may be run by one or more individuals, can range from home-based businesses to corner stores or construction contractors and are often part-time ventures with owners operating more than one business.
Among the fastest-growing: building finishing contractors (22.5 percent), Internet service providers (18.7 percent), nail salons (14.7 percent), electronic shopping and mail-order houses -- including Internet-based consumer trade (12.7 percent), lessors of real estate (9.7 percent), formal wear and costume rental stores (8 percent) and motorcycle dealers (7.4 percent).
Florida led the nation in the growth of these small businesses with a 7.6 percent increase between 2003 and 2004. Georgia climbed to second place with a 7.1 percent increase, while Nevada fell from first to third place with a 6.4 percent increase.
The Census Bureau cautioned that the numbers released today may be understated because the hurricane-impacted areas of Alabama, Florida, Louisiana, Mississippi and Texas were granted additional time by the Internal Revenue Service (IRS) to file 2004 tax returns.
Other highlights:
-- Utah and Arizona had small business increases of 6.1 percent and 5.8 percent, respectively, to round out the top five states. Despite a slight drop in its rate of self-employed business people, Nevada led the nation in receipts with a gain of 12.9 percent.
-- Among the nation's most populous counties, Los Angeles County, Calif., had 777,103 nonemployer businesses, with Cook County, Ill., second at 363,365. They were followed by Miami-Dade County, Fla., at 273,016.
-- In Miami-Dade, Fla., real estate businesses accounted for more than 21 percent of the $10.2 billion total receipts.
-- Other counties with increases in nonemployer business growth included Orange County, Fla. (11.2 percent); Clark County, Nev. (7.9 percent); San Bernardino County, Calif. (7.1 percent); Maricopa County, Ariz. (6.7 percent); Montgomery County, Md., (4.9 percent); and Fairfax County, Va. (4.7 percent).
The detailed Internet tables show the number of establishments in nearly 300 industries and their receipts for the nation, states, counties and metropolitan areas. The data do not cover all self-employed individuals, since many self-employed business owners have paid employees.
Regal Securities First to Implement Online Trading Solution Offered Jointly By Nexa Technologies and QuoteMedia
Regal Securities First to Implement Online Trading Solution Offered Jointly By Nexa Technologies and QuoteMedia
Nexa Rolls Out Meridian Trading Platform Enhanced With QuoteMedia Content
Nexa Technologies, Inc.
(http://www.nexatech.com ), a leading provider of advanced trading
solutions and a subsidiary of Penson Worldwide, Inc. (Nasdaq: PNSN), and
QuoteMedia, Inc. (OTC Bulletin Board: QMCI), a leading provider of market
data services and financial applications, today announced that Regal
Securities has become the first client to implement the new Meridian online
trading platform provided jointly by Nexa and QuoteMedia.
Earlier this year, QuoteMedia and Nexa entered into a strategic
relationship in which Nexa would incorporate QuoteMedia content into
Meridian, Nexa's advanced and flexible browser-based trading platform for
equities, options and futures. Regal Securities is the first client to take
advantage of this joint offering.
Regal Securities and their online discount brokerage division
Investrade Securities, which provide custody functions, state-of-the-art
technology and execution capabilities in all major markets for their
clients, will have access to QuoteMedia's comprehensive financial market
data and research solutions through Meridian.
"We have been extremely impressed with QuoteMedia and Nexa," said
Robert Villaflor, Chief Operating Officer of Regal Securities. "The
seamless integration of QuoteMedia's technologies into our trading platform
enhanced our client offerings instantly. We were especially pleased with
Nexa's and QuoteMedia's ability and willingness to incorporate our
suggestions when tailoring the products to meet our needs. We are committed
to providing our clients with the best possible trading technologies, and
Nexa and QuoteMedia's innovative solutions have enabled us to continue
toward this goal."
"By incorporating QuoteMedia's products into our Meridian offering, we
are able to create a more robust and dynamic offering while expanding the
depth of market data content made available to our clients," said Mark
Munoz, SVP Corporate Development, Nexa Technologies. "Regal is the first to
take advantage of some of the industries most advanced trading tools and
financial content available today."
"The synergies realized through our strategic partnership with Nexa are
profound to both of our businesses," said Dave Shworan, CEO of QuoteMedia
Ltd. "Through this relationship, QuoteMedia is able to reach the broadest
possible audience with our applications. Together, Nexa and QuoteMedia can
provide customers with one of the most comprehensive online trading systems
on the market."
About QuoteMedia, Inc.: http://www.quotemedia.com
QuoteMedia is a leading software developer and syndicator of financial
market information and streaming financial data solutions to media,
corporations, online brokerages and financial services companies. The
Company licenses interactive stock research tools such as streaming
real-time quotes, market research, news, charting, option chains, NASDAQ
level 2, TSX/TSXV market depth, SEC filings, corporate financials, insider
reports, market indices, portfolio management systems, and data feeds.
QuoteMedia provides data and services for companies such as the NASDAQ, the
OTCBB, Forbes.com, Scotia Capital, Southwest Securities, Automated
Financial Systems, FBR Direct, AIM Trimark, Zacks Investment Research,
ChoiceTrade, QTrade, Schaeffer's Investment Research, WallStreet*E,
Business Wire and others. For more information, please visit:
http://www.quotemedia.com.
Statements about QuoteMedia's future expectations, including future
revenue, earnings, and transactions, as well as all other statements in the
press release other than historical facts are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
QuoteMedia intends that such forward-looking statements be subject to the
safe harbors created thereby. These statements involve risks and
uncertainties that are identified from time to time in the company's SEC
reports and filings, and are subject to change at any time. QuoteMedia's
actual results and other corporate developments could differ materially
from that which has been anticipated in such statements.
About Nexa Technologies, Inc.: http://www.nexatech.com
Nexa Technologies, Inc., is a provider of online and direct access
trading solutions. Founded in 1999, Nexa Technologies is a subsidiary of
Penson Worldwide, Inc. Its comprehensive product set incorporates
multi-asset direct access trading systems, FIX-compliant order routing,
comprehensive data and market access to European & North American equity,
options and derivatives exchanges and ECNs.
Nexa Technologies added historical intraday time series data into its
product range in January 2005 when Penson Worldwide acquired Tick Data,
Inc. The Tick Data division, which provides clean, reliable historical
intraday time series data for the equities and futures markets, employs
proprietary compression algorithms, price-filtering techniques, and ticker
symbol mapping processes to produce complete, research-ready historical
data. From efficient data collection and distribution to seamless
integration with third-party analytical software, the Tick Data division
removes the frustration from building and maintaining historical databases.
About Penson Worldwide, Inc.: http://www.penson.com
Penson Worldwide, Inc. is the parent company for Penson Financial
Services, Inc., Penson Financial Services Canada, Inc., Penson Financial
Services, Ltd., Nexa Technologies, Inc. and Penson Financial Futures, Inc.
among other companies. The Penson Worldwide group of companies provides
execution, clearing, custody, settlement, and technology infrastructure
products and services to securities firms and others servicing the
securities industry. Penson Financial Services, Inc., headquartered in
Dallas, Texas, has served the clearing needs of all types of broker/dealers
since 1995. Penson is the flexible choice in global securities services. TM
Forward-Looking Statements
Statements contained in this news release that are not based on current
or historical fact are forward-looking in nature. Such forward-looking
statements are based on current plans, estimates and expectations.
Forward-looking statements are based on known and unknown risks,
assumptions, uncertainties and other factors. Penson's actual results,
performance, or achievements may differ materially from any future results,
performance, or achievements expressed or implied by such forward-looking
statements. Penson undertakes no obligation to publicly update or revise
any forward-looking statement.
SOURCE Nexa Technologies, Inc.
Motorola Announces Decision to Terminate Shareholder Rights Plan
Motorola Announces Decision to Terminate Shareholder Rights Plan
Also Implements Policy to Seek Shareholder Approval of Any Future Plan
Motorola, Inc. (NYSE: MOT - News) announced that its Board of Directors has voted to terminate the company's shareholder rights plan (a device which is sometimes referred to as a "poison pill"). Additionally, Motorola has established a new governance policy providing that any new shareholder rights plan must be subject to shareholder approval within twelve months of its adoption. Subject to this requirement, the Board, by a majority vote of its independent directors, maintains the flexibility to adopt a new shareholder rights plan in the future.
"Our decision to terminate the shareholder rights plan and establish this new policy reflects the Board's continuing commitment to corporate governance best practices," said Ed Zander, Motorola Chairman and Chief Executive Officer. "The Board believes that our new policy is responsive to our shareholders' concerns and also adequately protects our shareholders' best interests."
The Board's actions will accelerate the expiration date of the Company's current shareholder rights plan to August 1, 2006. It was due to expire in November 2008. The shareholder rights plan being terminated was put in place in 1998 to help assure that all Motorola shareholders receive fair treatment and value in the event of an unsolicited attempt to gain control of the Company.
About Motorola
Motorola is known around the world for innovation and leadership in wireless and broadband communications. Inspired by our vision of Seamless Mobility, the people of Motorola are committed to helping you get and stay connected simply and seamlessly to the people, information, and entertainment that you want and need. We do this by designing and delivering "must have" products, "must do" experiences and powerful networks -- along with a full complement of support services. A Fortune 100 company with global presence and impact, Motorola had sales of US $35.3 billion in 2005. For more information about our company, our people and our innovations, please visit http://www.motorola.com .
MOTOROLA and the stylized M Logo are registered in the U.S. Patent & Trademark Office. All other product or service names are the property of their respective owners.
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Source: Motorola, Inc.
Motorola to Acquire Broadbus Technologies, Extend Portfolio of ‘Seamless Video Anywhere’ Solutions
Motorola to Acquire Broadbus Technologies, Extend Portfolio of ‘Seamless Video Anywhere’ Solutions
SCHAUMBURG, Il. – 25 July 2006 – Motorola, Inc. (NYSE: MOT) today announced that it will acquire privately-held Broadbus Technologies, Inc., a Boxborough, Ma.-based provider of technology solutions for Television On-Demand (TOD®).
Broadbus Technologies’ industry-leading, carrier-class technology solutions enable the distribution of on-demand content to consumers through multiple devices. The company's innovative solid-state server architecture is based on the intelligent configuration and management of dynamic random-access memory (DRAM). As a result, the platform can use less space and power than traditional hard-disk based technology, while providing performance, reliability and scalability improvements for video ingest, streaming, and storage.
With the acquisition, Motorola will extend its robust video delivery platform with new content management and distribution capabilities that address growing market opportunities such as mobile video, video on-demand (VOD), time-shifted TV, network-based digital video recording (nDVR), on-demand ad insertion (ODAI) and switched digital video (SDV).
“Today, consumers expect to access video entertainment on the different devices they have, inside and outside of their home, in varying formats – and to have it available upon request. The addition of Broadbus Technologies will bring Motorola’s video delivery platform one step closer to enabling this vision of seamless mobility by providing us with field-proven content management and delivery solutions,” said Dan Moloney, President, Motorola Connected Home Solutions. “Service providers will be able to take advantage of a complete end-to-end seamless video experience enabled by Motorola technology to extend their customer relationships.”
Broadbus Technologies, Inc. was founded in 1999 and currently has more than 60 video-on-demand deployments with service providers worldwide, including Comcast, Charter Communications, and Time Warner Cable. Key financial investors included Battery Ventures, Charles River Ventures, Comcast Interactive Capital and Star Ventures.
Financial terms of the transaction were not disclosed. The acquisition, which is subject to regulatory and other customary approvals, is expected to close in the third quarter.
Business Risks
Statements in this press release that are not historical facts, including statements about impact of the proposed transaction and the uses for the technology, are forward-looking statements based on current expectations that involve risks and uncertainties. Motorola cautions the reader that the factors below, as well as other factors in Motorola's most recent annual report on Form 10-K and in its other SEC filings, could cause actual results to differ materially from the forward-looking statements. These factors include: (1) the ability to consummate the transaction; (2) the possibility that Motorola may be unable to achieve expected synergies and operating efficiencies from the transaction within the expected time-frames or at all; (3) the possibility of customer loss and business disruption following the transaction; and (4) unanticipated technology limitations.
About Motorola
Motorola is known around the world for innovation and leadership in wireless and broadband communications. Inspired by our vision of Seamless Mobility, the people of Motorola are committed to helping you get and stay connected simply and seamlessly to the people, information, and entertainment that you want and need. We do this by designing and delivering "must have" products, "must do" experiences and powerful networks -- along with a full complement of support services. A Fortune 100 company with global presence and impact, Motorola had sales of US $35.3 billion in 2005. For more information about our company, our people and our innovations, please visit www.motorola.com
Motorola Declares Quarterly Dividend
Motorola Declares Quarterly DividendSCHAUMBURG, Ill. – 26 July – Motorola, Inc. (NYSE: MOT) declared a regular quarterly dividend of 5 cents ($0.05) per share, payable in cash on October 13, 2006 to stockholders of record at the close of business on September 15, 2006.
This will be Motorola’s 238th consecutive quarterly dividend.
About Motorola
Motorola is known around the world for innovation and leadership in wireless and broadband communications. Inspired by our vision of Seamless Mobility, the people of Motorola are committed to helping you get and stay connected simply and seamlessly to the people, information, and entertainment that you want and need. We do this by designing and delivering "must have" products, "must do" experiences and powerful networks -- along with a full complement of support services. A Fortune 100 company with global presence and impact, Motorola had sales of US $35.3 billion in 2005. For more information about our company, our people and our innovations, please visit www.motorola.com.
Motorola Announces Record Second-Quarter Sales and Earnings
Motorola Announces Record Second-Quarter Sales and Earnings
Wednesday July 19, 4:05 pm ET
Second-Quarter Financial Highlights
- Record quarterly sales of $10.88 billion, up 29 percent compared to
second-quarter 2005 sales of $8.41 billion
- Earnings of $.55 per share, versus earnings of $.37 per share in the
year-ago quarter
- Record handset shipments of 51.9 million units
- Global handset market share estimated at 22 percent, up 4.3 percentage
points versus the year-ago quarter
- Record digital entertainment set-top devices shipments of 2.4 million
SCHAUMBURG, Ill., July 19 Motorola, Inc. (NYSE: MOT - News) today reported the following sales and earnings.
Second Quarter %
2006 2005 Increase
Sales $10.88B $8.41B 29%
Earnings Per Share:
Continuing operations $0.54 $0.37 46%
Net earnings $0.55 $0.37 49%
Second-quarter earnings from continuing operations in 2006 and 2005 include the following significant items:
EPS Impact
2006 2005
Stock compensation expense $(0.02)
Reorganization of business charges (0.01) (0.01)
Tax benefits 0.11 0.02
Telsim settlement 0.10
Gain on investments, including derivative gain 0.03 0.10
Repayment of previously reserved loan 0.01
Total EPS Impact $0.21 $0.12
During the quarter, the company continued to maintain a very strong balance sheet, generating operating cash flow from continuing operations of approximately $500 million, its 22nd consecutive quarter of positive operating cash flow. In addition, the company repurchased 39 million shares of its stock for $838 million.
"Motorola continues to deliver excellent quarterly sales and earnings growth. With our solid financial performance and unrelenting focus on innovation and customer satisfaction, Motorola is among the fastest growing large-cap technology companies in the world," said Ed Zander, chairman and CEO. "In the second quarter, all of our businesses improved sales and grew profits sequentially versus the first quarter. Mobile Devices led the way, setting records for unit shipments, sales and profits. With our strong balance sheet, leading technologies and proven record of growth, Motorola is well-positioned to continue creating value for its shareholders."
Operating Results
Mobile Devices Segment sales were $7.14 billion, up 46 percent compared with the year-ago quarter. Operating earnings increased to $799 million, compared with operating earnings of $493 million in the year-ago quarter. The company also captured headlines by launching the highly anticipated MOTO Q, which is transforming consumer expectations and experiences for QWERTY devices. During the quarter, Mobile Devices also:
-- Shipped 51.9 million handsets, up 53 percent compared to the second
quarter of 2005 -- and up 12.4 percent compared to 46.1 million
handsets shipped during the first quarter of 2006.
-- Expanded global market share to an estimated 22 percent, up
4.3 percentage points from a year ago and up 1.3 percentage points from
the first quarter of 2006.
-- Increased brand strength and market share leadership in both North
America and Latin America; remained the solid No. 2 with growing brand
momentum in Western Europe, North Asia and the high-growth markets
(Middle East, Africa, India and Southeast Asia); and expanded market
share to greater than 20 percent in China, up 8.9 percentage points
from the second quarter of 2005.
-- Launched 11 new handsets: 5 for GSM networks, 4 for CDMA and 2 for
iDEN. Notably, shipments for iDEN handsets posted a record second-
quarter performance.
-- Since the third quarter of 2005, we have shipped nearly 10 million
music handsets and launched the MOTO (RED) SLVR, joining with Bono and
Project Red to fight AIDS and poverty in Africa.
Networks and Enterprise Segment sales were $2.90 billion, up 3 percent compared with the year-ago quarter and up 15 percent compared with the first quarter of 2006. Operating earnings decreased to $386 million, compared with operating earnings of $494 million in the year-ago quarter, but increased sequentially compared with operating earnings of $299 million in the first quarter of 2006. The second quarter of 2006 included restructuring charges of $37 million. Backlog for the segment increased for the second consecutive quarter. During the quarter, Networks and Enterprise also:
-- Received a contract for a nationwide TETRA system in Portugal that will
provide mission-critical voice and data communications to more than
50,000 users in the police, fire and ambulance services as well as
other public safety and civil protection agencies.
-- Received a contract for a nationwide WiMAX wireless broadband network
from Wateen Telecom in Pakistan.
-- Received a contract from TeliaSonera in Denmark for a commercial
Unlicensed Mobile Access (UMA) fixed mobile convergence solution.
-- Received a contract from Shanghai Telecom to provide a TETRA-based
digital trunking network for Shanghai.
After the end of the quarter, Networks and Enterprise:
-- Completed the sale of the automotive electronics business to
Continental AG for approximately $1 billion.
-- Announced an investment in Clearwire Corporation and our intent to
acquire NextNet as further steps in Motorola's focused strategy to
continue to expand and profitably grow our wireless broadband business
and advance our vision of seamless mobility.
Connected Home Solutions Segment sales were $803 million, up 8 percent compared with the year-ago quarter and up 10 percent compared with the first quarter of 2006. Operating earnings increased to $56 million, compared with operating earnings of $33 million in the year-ago quarter and an operating loss of $11 million in the first quarter of 2006. Motorola continued to maintain and grow its market leadership with strong shipments of video, voice and data infrastructure and consumer devices. During the quarter, the segment:
-- Shipped a record 2.4 million digital entertainment set-top devices,
including approximately 680,000 with digital video recorders (DVR).
-- Shipped a record 900,000 voice-enabled modems.
-- Announced that Sentivision of Japan will deploy Motorola's IP video
set-top platform.
-- Announced the world's first commercial implementation of PacketCable
MultiMedia(TM) (PCMM), through deployment of an end-to-end solution
with StarHub of Singapore.
-- Introduced the Motorola Follow Me TV solution, which enables the
seamless movement of multimedia content within the home and to the
mobile device.
-- Announced that Cox Communications will begin field trials of Motorola's
Open Cable Applications Platform (OCAP) software.
Third Quarter 2006 Outlook
The company's outlook for the third quarter of 2006 is for sales of between $10.9 billion and $11.1 billion, an increase of 20 to 23 percent versus the prior-year quarter, driven primarily by continuing momentum in the Mobile Devices business.
Conference Call and Web-cast
Motorola's quarterly earnings conference call is scheduled to begin at 4:00 p.m. Central Time (USA) on Wednesday July 19, 2006. Motorola plans a live web-cast of the conference call over the Internet, featuring both audio and slides. Investors can view the slides and join the web-cast at http://www.motorola.com/investor .
Consolidated GAAP Results
A comparison of results from operations is as follows:
Second Quarter
(In millions, except per share amounts) 2006 2005
Net sales $10,876 $8,408
Gross margin 3,359 2,757
Operating earnings 1,522 958
Earnings from continuing operations 1,349 919
Net earnings 1,384 933
Diluted earnings per common share:
Continuing operations $0.54 $0.37
Discontinued operations 0.01 --
$0.55 $0.37
Weighted average diluted common shares
outstanding 2,522.0 2,504.0
Business Risks
Statements in this press release that are not historical facts are forward-looking statements based on current expectations that involve risks and uncertainties, including, but not limited to, Motorola's guidance for third quarter 2006 sales. Motorola cautions the reader that the factors below and those on pages 19 through 27 in Item 1A of Motorola's 2005 Annual Report on Form 10-K and in its other SEC filings, could cause Motorola's actual results to differ materially from those stated in the forward-looking statements. These factors include: (1) the uncertainty of current economic and political conditions, as well as the economic outlook for the telecommunications and broadband industries; (2) the company's ability to continue to increase profitability and market share in its wireless handset business; (3) demand for the company's products, including products related to new technologies; (4) the company's ability to introduce new products and technologies in a timely manner; (5) the company's ability to purchase sufficient materials, parts and components to meet customer demand; (6) unexpected negative consequences from the realignment of our Networks and Enterprise business; (7) risks related to dependence on certain key suppliers; (8) the impact on the company's performance and financial results from strategic acquisitions or divestitures that are currently pending or may occur in the future; (9) risks related to the company's high volume of manufacturing and sales in Asia; (10) the creditworthiness of the company's customers, particularly purchasers of large infrastructure systems; (11) unexpected liabilities or expenses, including unfavorable outcomes to any pending or future litigation, including without limitation any relating to the Iridium project; (12) the timing and levels at which design wins become actual orders and sales; (13) the impact of foreign currency fluctuations; (14) the impact on the company from continuing hostilities in Iraq and conflict in other countries; (15) the impact on the company from ongoing consolidation in the telecommunications and broadband industries; (16) the impact of changes in governmental policies, laws or regulations; (17) the outcome of currently ongoing and future tax matters with the IRS, and (18) unforeseen negative consequences from the company's outsourcing of various activities, including certain manufacturing, information technology and administrative functions.
About Motorola
Motorola is known around the world for innovation and leadership in wireless and broadband communications. Inspired by our vision of Seamless Mobility, the people of Motorola are committed to helping you get and stay connected simply and seamlessly to the people, information, and entertainment that you want and need. We do this by designing and delivering "must have" products, "must do" experiences and powerful networks -- along with a full complement of support services. A Fortune 100 company with global presence and impact, Motorola had sales of US $35.3 billion in 2005. For more information about our company, our people and our innovations, please visit http://www.motorola.com .
MOTOROLA and the stylized M Logo are registered in the U.S. Patent & Trademark Office. All other product or service names are the property of their respective owners.
Motorola, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In millions, except per share amounts)
Quarter Ended Quarter Ended
July 1, 2006 July 2, 2005
--------------- ---------------
Net sales $10,876 $8,408
Costs of sales 7,517 5,651
--------------- ---------------
Gross margin 3,359 2,757
--------------- ---------------
Selling, general and administrative
expenses 1,195 915
Research and development expenditures 1,016 878
Other charges (income) (374) 6
--------------- ---------------
Operating earnings 1,522 958
--------------- ---------------
Other income (expense):
Interest income (expense), net 70 4
Gains on sales of investments and
businesses, net 5 409
Other 126 20
--------------- ---------------
Total other income 201 433
--------------- ---------------
Earnings from continuing operations
before income taxes 1,723 1,391
Income tax expense 374 472
--------------- ---------------
Earnings from continuing operations 1,349 919
Earnings from discontinued operations,
net of tax 35 14
--------------- ---------------
Net earnings $1,384 $933
=============== ===============
Earnings per common share
-------------------------
Basic:
Continuing operations $0.55 $0.37
Discontinued operations 0.01 0.01
--------------- ---------------
$0.56 $0.38
=============== ===============
Diluted:
Continuing operations $0.54 $0.37
Discontinued operations 0.01 -
--------------- ---------------
$0.55 $0.37
=============== ===============
Weighted average common shares outstanding
------------------------------------------
Basic 2,464.4 2,460.2
Diluted 2,522.0 2,504.0
Dividends paid per share $0.04 $0.04
Six Months Ended Six Months Ended
July 1, 2006 July 2, 2005
---------------- ----------------
Net sales $20,484 $16,175
Costs of sales 14,199 10,837
---------------- ----------------
Gross margin 6,285 5,338
---------------- ----------------
Selling, general and administrative
expenses 2,296 1,838
Research and development expenditures 1,962 1,685
Other charges (income) (344) 1
---------------- ----------------
Operating earnings 2,371 1,814
---------------- ----------------
Other income (expense):
Interest income (expense), net 137 (4)
Gains on sales of investments and
businesses, net 156 648
Other 107 12
---------------- ----------------
Total other income 400 656
---------------- ----------------
Earnings from continuing operations
before income taxes 2,771 2,470
Income tax expense 766 866
---------------- ----------------
Earnings from continuing operations 2,005 1,604
Earnings from discontinued operations,
net of tax 65 21
---------------- ----------------
Net earnings $2,070 $1,625
================ ================
Earnings per common share
-------------------------
Basic:
Continuing operations $0.81 $0.65
Discontinued operations 0.03 0.01
---------------- ----------------
$0.84 $0.66
================ ================
Diluted:
Continuing operations $0.79 $0.64
Discontinued operations 0.03 0.01
---------------- ----------------
$0.82 $0.65
================ ================
Weighted average common shares outstanding
------------------------------------------
Basic 2,477.7 2,454.1
Diluted 2,538.8 2,495.4
Dividends paid per share $0.08 $0.08
Motorola, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In millions)
ASSETS July 1, December 31,
2006 2005
----------- ------------
Cash & cash equivalents $3,401 $3,774
Sigma funds 10,801 10,867
Short-term investments 188 144
Accounts receivable, net 6,420 5,635
Inventories, net 2,716 2,422
Deferred income taxes 2,123 2,355
Other current assets 2,440 2,360
Current assets held for sale 339 312
----------- ------------
Total current assets 28,428 27,869
----------- ------------
Property, plant and equipment, net 2,084 2,020
Investments 1,395 1,644
Deferred income taxes 991 1,196
Other assets 2,804 2,597
Non-current assets held for sale 302 323
----------- ------------
Total assets $36,004 $35,649
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable and current portion of
long-term debt $490 $448
Accounts payable 4,134 4,295
Accrued liabilities 7,149 7,376
Current liabilities held for sale 281 320
----------- ------------
Total current liabilities 12,054 12,439
----------- ------------
Long-term debt 3,758 3,806
Other liabilities 2,907 2,727
Non-current liabilities held for sale 8 4
Stockholders' equity 17,277 16,673
----------- ------------
Total liabilities and stockholders' equity $36,004 $35,649
=========== ============
Motorola, Inc. and Subsidiaries
Segment Information
(In millions)
Summarized below are the Company's net sales by reportable segment for
the quarters and six months ended July 1, 2006 and July 2, 2005.
Net Sales
---------------------------------------
Quarter Ended Quarter Ended % Change
July 1, 2006 July 2, 2005 from 2005
---------------------------------------
Mobile Devices $7,140 $4,902 46%
Networks and Enterprise 2,903 2,825 3%
Connected Home Solutions 803 743 8%
-----------------------------
Segment Totals 10,846 8,470 28%
Other and Eliminations 30 (62) 148%
-----------------------------
Company Totals $10,876 $8,408 29%
=============================
Net Sales
------------------------------------------
Six Months Ended Six Months Ended % Change
July 1, 2006 July 2, 2005 from 2005
------------------------------------------
Mobile Devices $13,543 $9,317 45%
Networks and Enterprise 5,423 5,562 -2%
Connected Home Solutions 1,535 1,425 8%
--------------------------------
Segment Totals 20,501 16,304 26%
Other and Eliminations (17) (129) 87%
--------------------------------
Company Totals $20,484 $16,175 27%
================================
Motorola, Inc. and Subsidiaries
Segment Information
(In millions)
Summarized below are the Company's operating earnings (loss) by reportable
segment for the quarters and six months ended July 1, 2006 and July 2,
2005.
Operating Earnings (Loss)
------------------------------
Quarter Ended Quarter Ended
July 1, 2006 July 2, 2005
--------------- --------------
Mobile Devices $799 $493
Networks and Enterprise 386 494
Connected Home Solutions 56 33
--------------- --------------
Segment Totals 1,241 1,020
Other and Eliminations 281 (62)
--------------- --------------
Company Totals $1,522 $958
=============== ==============
Operating Earnings (Loss)
-----------------------------------
Six Months Ended Six Months Ended
July 1, 2006 July 2, 2005
---------------- -----------------
Mobile Devices $1,498 $931
Networks and Enterprise 685 909
Connected Home Solutions 45 42
---------------- -----------------
Segment Totals 2,228 1,882
Other and Eliminations 143 (68)
---------------- -----------------
Company Totals $2,371 $1,814
================ =================
--------------------------------------------------------------------------------
Source: Motorola, Inc.
Verizon Wireless Takes Broadband Network To Next Level With Nortel Technology
Verizon Wireless Takes Broadband Network To Next Level With Nortel Technology
Wednesday July 19, 9:00 am ET
CDMA 1xEV-DO Revision A Improves Wireless Experience, Provides New Services
Nortel(x) (NYSE/TSX: NT) has been selected to supply Verizon Wireless with one of the industry's most advanced CDMA 1xEV-DO Revision (Rev.) A technology beginning in the third quarter of 2006. This upgrade will provide data speeds significantly faster than current capabilities and meet customer demand for more high-bandwidth, real-time wireless services such as Voice over Internet Protocol (VoIP), video telephony and advanced multimedia applications. Financial details of the agreement are not being disclosed.
Verizon Wireless is currently trialing new, low-latency applications with Nortel EV-DO Rev. A technology, including push-to-talk, fixed mobile convergence, VoIP and messaging services.
"Successful trials of EV-DO Rev. A have demonstrated the technology's potential for taking the Verizon Wireless broadband experience to new heights," said Ed Salas, vice president of network planning, Verizon Wireless. "We look forward to continuing to bring new services to the market based on our enhanced network capabilities."
Nortel has been a key supplier to Verizon Wireless' nationwide network for over a decade. Nortel was the primary infrastructure supplier in San Diego for Verizon Wireless' initial commercial deployment of BroadbandAccess, which leverages EV-DO Revision 0 technology, in October 2003.
"Nortel's EV-DO Rev. A solution allows Verizon Wireless to introduce new, real-time services such as video and other streaming media that rely on quality of services capabilities," explained Doug Wolff, vice president and general manager, CDMA, Nortel. "These new services provide a very powerful end-user experience that increase customer loyalty."
EV-DO Rev. A allows Verizon Wireless to provide higher network transmission speeds with lower latency to ensure the highest quality user experiences. Nortel's EV-DO Rev. A solution is capable of providing peak data rates of up to 3.1 Mbps on the forward link (information flowing from the cellular base station to the subscriber) and up to 1.8 Mbps on the reverse link (information flowing from the subscriber back to the cellular base station). Nortel has been a major contributor to the development of 1xEV-DO Rev 0 and Rev. A standards in 3GPP2 and proposed key concepts to the standards for improving the transmission capabilities.
Nortel is an industry innovator at the forefront of all broadband access technologies, including wide area cellular, wireline and wireless LAN. Nortel has designed, installed and launched more than 300 wireless networks in over 70 countries.
About Verizon Wireless
Verizon Wireless owns and operates the nation's most reliable wireless network, serving 53 million voice and data customers. Headquartered in Basking Ridge, N.J., Verizon Wireless is a joint venture of Verizon Communications (NYSE:VZ - News) and Vodafone (NYSE and LSE: VOD - News News). Find more information on the Web at www.verizonwireless.com. To preview and request broadcast-quality video footage and high-resolution stills of Verizon Wireless operations, log on to the Verizon Wireless Multimedia Library at www.verizonwireless.com/multimedia.
About Nortel
Nortel is a recognized leader in delivering communications capabilities that enhance the human experience, ignite and power global commerce, and secure and protect the world's most critical information. Our next-generation technologies, for both service providers and enterprises, span access and core networks, support multimedia and business-critical applications, and help eliminate today's barriers to efficiency, speed and performance by simplifying networks and connecting people with information. Nortel does business in more than 150 countries. For more information, visit Nortel on the Web at www.nortel.com. For the latest Nortel news, visit www.nortel.com/news.
Certain statements in this press release may contain words such as "could", "expects", "may", "anticipates", "believes", "intends", "estimates", "targets", "envisions", "seeks" and other similar language and are considered forward-looking statements or information under applicable securities legislation. These statements are based on Nortel's current expectations, estimates, forecasts and projections about the operating environment, economies and markets in which Nortel operates. These statements are subject to important assumptions, risks and uncertainties, which are difficult to predict and the actual outcome may be materially different. Further, actual results or events could differ materially from those contemplated in forward-looking statements as a result of the following (i) risks and uncertainties relating to Nortel's restatements and related matters including: Nortel's most recent restatement and two previous restatements of its financial statements and related events; the negative impact on Nortel and NNL of their most recent restatement and delay in filing their financial statements and related periodic reports; legal judgments, fines, penalties or settlements, or any substantial regulatory fines or other penalties or sanctions, related to the ongoing regulatory and criminal investigations of Nortel in the U.S. and Canada; any significant pending civil litigation actions not encompassed by Nortel's proposed class action settlement; any substantial cash payment and/or significant dilution of Nortel's existing equity positions resulting from the finalization and approval of its proposed class action settlement, or if such proposed class action settlement is not finalized, any larger settlements or awards of damages in respect of such class actions; any unsuccessful remediation of Nortel's material weaknesses in internal control over financial reporting resulting in an inability to report Nortel's results of operations and financial condition accurately and in a timely manner; the time required to implement Nortel's remedial measures; Nortel's inability to access, in its current form, its shelf registration filed with the United States Securities and Exchange Commission (SEC), and Nortel's below investment grade credit rating and any further adverse effect on its credit rating due to Nortel's restatements of its financial statements; any adverse affect on Nortel's business and market price of its publicly traded securities arising from continuing negative publicity related to Nortel's restatements; Nortel's potential inability to attract or retain the personnel necessary to achieve its business objectives; any breach by Nortel of the continued listing requirements of the NYSE or TSX causing the NYSE and/or the TSX to commence suspension or delisting procedures; (ii) risks and uncertainties relating to Nortel's business including: yearly and quarterly fluctuations of Nortel's operating results; reduced demand and pricing pressures for its products due to global economic conditions, significant competition, competitive pricing practice, cautious capital spending by customers, increased industry consolidation, rapidly changing technologies, evolving industry standards, frequent new product introductions and short product life cycles, and other trends and industry characteristics affecting the telecommunications industry; the sufficiency of recently announced restructuring actions, including the potential for higher actual costs to be incurred in connection with these restructuring actions compared to the estimated costs of such actions and the ability to achieve the targeted cost savings and reductions of Nortel's unfunded pension liability deficit; any material and adverse affects on Nortel's performance if its expectations regarding market demand for particular products prove to be wrong or because of certain barriers in its efforts to expand internationally; any reduction in Nortel's operating results and any related volatility in the market price of its publicly traded securities arising from any decline in its gross margin, or fluctuations in foreign currency exchange rates; any negative developments associated with Nortel's supply contract and contract manufacturing agreements including as a result of using a sole supplier for key optical networking solutions components, and any defects or errors in Nortel's current or planned products; any negative impact to Nortel of its failure to achieve its business transformation objectives; additional valuation allowances for all or a portion of its deferred tax assets; Nortel's failure to protect its intellectual property rights, or any adverse judgments or settlements arising out of disputes regarding intellectual property; changes in regulation of the Internet and/or other aspects of the industry; Nortel's failure to successfully operate or integrate its strategic acquisitions, or failure to consummate or succeed with its strategic alliances; any negative effect of Nortel's failure to evolve adequately its financial and managerial control and reporting systems and processes, manage and grow its business, or create an effective risk management strategy; and (iii) risks and uncertainties relating to Nortel's liquidity, financing arrangements and capital including: the impact of Nortel's most recent restatement and two previous restatements of its financial statements; any inability of Nortel to manage cash flow fluctuations to fund working capital requirements or achieve its business objectives in a timely manner or obtain additional sources of funding; high levels of debt, limitations on Nortel capitalizing on business opportunities because of credit facility covenants, or on obtaining additional secured debt pursuant to the provisions of indentures governing certain of Nortel's public debt issues and the provisions of its credit facilities; any increase of restricted cash requirements for Nortel if it is unable to secure alternative support for obligations arising from certain normal course business activities, or any inability of Nortel's subsidiaries to provide it with sufficient funding; any negative effect to Nortel of the need to make larger defined benefit plans contributions in the future or exposure to customer credit risks or inability of customers to fulfill payment obligations under customer financing arrangements; any negative impact on Nortel's ability to make future acquisitions, raise capital, issue debt and retain employees arising from stock price volatility and further declines in the market price of Nortel's publicly traded securities, or any future share consolidation resulting in a lower total market capitalization or adverse effect on the liquidity of Nortel's common shares. For additional information with respect to certain of these and other factors, see Nortel's Annual Report on Form 10-K/A, Quarterly Report on Form 10-Q and other securities filings with the SEC. Unless otherwise required by applicable securities laws, Nortel disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
(x) Nortel, the Nortel logo and the Globemark are trademarks of Nortel
Networks.
--------------------------------------------------------------------------------
Source: Nortel
Motorola Inc. Earnings Conference Call (Q2 2006)
Motorola Inc. Earnings Conference Call (Q2 2006)
Scheduled to start Wed, Jul 19, 2006, 5:00 pm Eastern
Check back at the scheduled start time for
the audio link to appear in this spot.
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from this page until Fri, Jul 20, 2007
About Motorola Inc. (NYSE:MOT)
Motorola, Inc. engages in the design, manufacture, marketing, and sale of mobility products worldwide. It operates in four segments: Mobile Devices, Government and Enterprise Mobility Solutions, Networks, and Connected Home Solutions. The Mobile Devices segment offers wireless handsets with related software and accessory products. This segment develops its products using GSM, CDMA, iDEN and 3G technologies. The Government and Enterprise Mobility Solutions segment provides wireless communications systems for government and public safety markets; business wireless devices, networks, and applications for enterprise organizations; and electronics and telematics systems for automobile manufacturers. The Networks segment provides cellular infrastructure systems; fiber-to-the-premise and fiber-to-the-node transmission systems; wireless broadband systems; and embedded communications computing platforms. This segment also offers cellular networks, including radio base stations, base site controllers, associated software and services, mobility soft switching, application platforms and third-party switching for CDMA, GSM, iDEN, and UMTS technologies. In addition, it provides optical line terminals and optical network terminals for passive optical networks; access points, subscriber modules, and backhaul modules for wireless broadband systems; and advanced TCA and micro TCA communications servers. The Connected Home Solutions segment offers various broadband products, high speed data products, hybrid fiber coaxial network transmission systems, digital satellite program distribution systems, direct-to-home satellite networks and private networks for business communications, and video communication products. The company offers its products through direct sale, distributors, dealers, and retailers. Motorola was founded in 1928 and is headquartered in Schaumburg, Illinois.
Form 10QSB for MODAVOX INC
Form 10QSB for MODAVOX INC
--------------------------------------------------------------------------------
17-Jul-2006
Quarterly Report
ITEM 2. MANAGEMENT'S DISCUSSION AND
ANALYSIS OR PLAN OF OPERATION.
GENERAL
THE FOLLOWING DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND RESULTS OF OUR OPERATIONS SHOULD BE READ IN CONJUNCTION WITH FINANCIAL STATEMENTS AND THE NOTES TO THOSE STATEMENTS INCLUDED ELSEWHERE IN THIS REPORT. THIS DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS REFLECTING OUR CURRENT EXPECTATIONS THAT INVOLVE RISKS AND UNCERTAINTIES. ACTUAL RESULTS AND THE TIMING OF EVENTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN THESE FORWARD-LOOKING STATEMENTS DUE TO A NUMBER OF FACTORS, INCLUDING THOSE DISCUSSED UNDER BUSINESS- RISK FACTORS NOTED IN OUR 10KSB FOR THE YEAR ENDED FEBRUARY 28, 2006 AS FILED WITH THE SECURITY AND EXCHANGE COMMISSION.
Overview
The Company has accumulated losses aggregating $9,254,717 since inception. During this time period, we have developed software and an operating model for audio communications over the Internet, principally talk radio. On February 28, 2006 we acquired Kino Interactive ("Kino"), our Interactive Media Division, which produces and delivers digital online audio/visual media content that allows our customers, which include governments, colleges and universities and businesses, to communicate with, advertise to and sell products to targeted audiences. All Interactive products, which include ad streaming, website development, audio/video streaming and pay for view event production, are built around existing industry streaming media infrastructure to provide scalable, secure, and highly compatible whole solutions. Our products enable Internet and private networks to become successful broadcast channels. Our Interactive Media business generates revenue by selling custom client software applications for e-commerce, and digitized audio/video media content distribution and also, receives revenue for related hosting. Additionally, production and installation revenues are generated from the content creation process.
During the quarter ending May 31, 2006, the Company was focused on integrating the Kino Acquisition, which included integrating accounting records, employees and Kino products into the Modavox sales function. In addition, in March the Chairman of the Board resigned, which required the CEO and Vice Chairman to focus on the related Settlement Agreement and transition process. As a result of these distractions from the business development and marketing efforts, Interactive Media Division revenues did not meet expectations. However, the Company believes that potential contracts in the "Pipeline" present opportunities for the remainder of the fiscal year. In order to assist in achieving this potential, effective June 26, 2006, Nathaniel Bradley, Vice Chairman of the Board of Directors and a founder of Kino, will become a full-time employee as Executive Vice President of Business Development and Marketing Strategies.
-11-
During the quarter ended May 31, 2006, we raised capital through the issuance of common stock of $269,501 net of related costs. We have reduced overdue payables and are engaged in discussions with the IRS concerning a payment plan for payroll taxes which were not paid between 2004 and October 2005. As a result of the merger with Kino, we have stockholders equity of $1,355,790 as of May 31, 2006. However, at that date we have negative tangible equity of $1,685,219. During this period, we issued warrants for services and common stock in settlement of liabilities. Accounting valuations of these items resulted in income statement charges of $356,000, thereby increasing our loss by that amount of non-cash charges.
During quarter ended May 31, 2006, the Company derived its revenues through production fees received from hosts and their sponsors featured on the talk radio content programs and from Interactive Media Division revenues. Production fees are generally sold in 13-week segments and are generally prepaid. Cash, or a portion thereof, is generally received by the Company at the time a Host contract is signed. The total amount to be received under the contract is amortized ratably into revenues over the production period, which may begin 20-60 days after the contract is signed. An increase or decrease in contract closings will immediately affect available cash and, increases or decreases in contract closings may not affect revenues for 30-60 days. In addition, sales commissions are expensed as the cash is received, which generally precedes the recording of revenues.
Interactive Media Division Revenues are derived from internet advertising products, event specific Online digital media content delivery, monthly hosting fees and website development. Monthly hosting fees are billed and recorded as revenues in the month that the hosting occurs and all other revenues are billed and recorded at the completion of the related project or event. As of May 31, 2006, there were three Interactive Media contracts in process for which cash received was recorded as deferred revenue. The developing nature of the market for Interactive Media Products generally results in lengthy time periods between the initiation of potential customer contracts and the closing of successful contracts. A portion of the contract amount is generally received at contract closing.
Operating expenses consist primarily of network operations, include the cost of technical personal and service costs and fees paid to third parties, including communication services providers. Selling, general and administrative expenses consist primarily of salaries and related expenses for sales, marketing, accounting, and administrative personnel and other general corporate expenses such as rent. Theses costs include commissions for sales personnel and fees paid to third parties.
In October 2005 the then Chairman and Chief Executive Officer resigned his Chief Executive Officer position and David J. Ide became the Chief Executive Officer. The company then began the process of reducing expenses with the objective of creating near term break even cash flow. In the quarter ending May 31, 2006 the company used $194,000 in operating activities however, this amount included $125,000 separation payment to the then Chairman of the Board of Directors, $31,500 in legal fees paid in connection with this separation & Kino merger, and $27,000 paid to the IRS to reduce the 2003 & 2004 unpaid payroll taxes and $20,000 to reduce overdue payables. While the IRS obligation and overdue payables will require the use of cash in the future the company believes that it is making progress in its effort to in the near term reach break even or positive cash flow from current operations.
Historically, the Company's revenues have been less than its expenses. As a result, the Company has been dependent on raising capital to continue its operations and continuation of operations is still dependent upon the Company's ability to raise sufficient capital to fund its operating deficiency, IRS obligation and overdue payables (see liquidity and capital resources).
-12-
Results of Operations
The discussion of the results of operations compares the quarter ended May 31, 2006 with the quarter ended May 31, 2005, and the quarter ended May 31, 2005 with May 31, 2004, and is not necessarily indicative of the results which may be expected for any subsequent periods. Our limited operating history makes predicting future operating results very difficult. Our prospects should be considered in light of the risks, expenses and difficulties encountered by companies in similar positions. We may not be successful in addressing these risk and difficulties.
2006 VS. 2005
For the quarter ending May 31, 2006 revenues were $432,903 compared to $240,247.00 for the quarter ending May 31, 2005. Revenues for the quarter ended May 31, 2006 included $143,000.00 from the Interactive Media Division and $289,903 from the Broadcast Media Division while all revenues in the 2005 quarter were generated though the Broadcast Media Division.
Operating expenses were $121,802 in the 2006 May quarter compared to $156,552 in the prior quarter reflecting expense reductions and technological efficiencies realized through from the consolidating the company operations with Kino.
Selling, General, and Administrative expenses were $907,357 for the first quarter 2006 compared with $462,616 for the first quarter ending 2005.The 2006 first quarter included non-cash expenses of $356,341 arising from the valuation of warrants discussed in Note 3 and common stock issued to settle liabilities.. The 2006 expenses also included the $125,000 of expenses related to the separation of the then Chairman of the Board of Directors, and $44,000 of legal fees related to this separation and the Kino Merger.
Depreciation and amortization expense was $90,990 in the 2006 quarter compared with $12,179 in the 2005 quarter. The 2006 amortization expense includes $78,600 from software acquired in the Kino Acquisition.
Interest expense was $535 in the 2006 quarter compared with $118,775 in the 2005 quarter. The reduction in interest expense is the result in 2005 in the conversion of outstanding debt into common stock.
The net loss of $669,233 in 2006 compared to the loss of $509,875 in the 2005 quarter. The loss in 2006 was impacted by the valuation of stock and warrants discussed above and the separation and merger expenses. These items and the additional amortization expense arising from the intangible assets acquired in the Kino merger offset the increase in revenues, the reduction in interest expense, and the reduction in operating expenses.
2005 VS. 2004
Revenues for the quarter ending May 31, 2005 were $240,247 a decline of $70,334 of 23% from the comparable quarter of the previous year. This decline was due to reduced contract closings in the months preceding the start of the quarter due principally to the reorganization of the company that was being finalized at the time. Subsequently, contract closings have increased and the company anticipates increased revenues in future quarter.
-13-
Costs of production were $290,268, a reduction of $95,228 of 25% from the comparable period of the prior year. This decline occurred as a result of the previously discussed reorganization which resulted in outsourcing of production function and reduction of personnel.
General and administrative expenses were $328,900, a reduction of $99,402 of 23% from the comparable period of the prior year. This reduction results principally from a reduction in payroll expenses as a result of the reorganization previously discussed.
Interest expense was $118,775 an increase of $109,053 due the interest cost of the convertible notes.
Other income of $273,026 in 2004 arose from the return of common stock. There was no comparable transaction in 2005.
The net loss of $(509,875) in 2005 was greater than the net loss of $(245,989) in 2004 because of the other income of $273,026 in 2004 and the increased interest expense offset the net benefit from expense reductions in 2005 arising from the reorganization.
-14-
LIQUIDITY AND CAPITAL RESOURCES
During the Quarter ended May 31, 2006 cash generated from revenues was not adequate to pay the Company's Operating Expenses and overdue obligations. During the quarter ended May 31, 2006 we raised $269,501.00 through the issuance of common stock. As of May 31, 2006, the Company had not paid all outstanding delinquent payroll taxes and overdue payables from fiscal 2004 & 2005. At May 31, 2006 the overdue payroll taxes, including interest and penalties, aggregated approximately $278,364 and $240,762 of accounts payable were past their scheduled due dates.
During the quarter ended May 31 2006 cash used in operations of $194,000 was funded through capital raised through the issuance of common stock. Included in the cashed used in operations were the separation payment to the then Chairman of the Director of the Board of $125,000.00, $31,500 in legal expenses arising from the separation and Kino merger, and $27,000 paid to the IRS for 2003 & 2004 unpaid payroll taxes.
During the year ended February 28,2006, all convertible debt and related accrued interest was converted into common stock. Therefore at May 31, 2006 the only debt outstanding was a bank loan aggregated $20,000 which is due on demand and an equipment financing obligation of $2,311 which is due monthly through 2007.
In connection with the Kino Merger, the Company issued mandatory redeemable preferred stock. During the Quarter ended May 31, 2006, the Company redeemed $125,000 of this stock. Also, during the quarter ending May 31,2006, the company issued warrants and stock for services, which increased additional paid-in capital, the net loss and the accumulated deficit by $356,000, but did not require the use of cash.
The Company believes that its required capital expenditures for fiscal 2006 will not exceed $200,000.
As noted above the company has not historically had adequate cash or projected cash flow to fund its operations and continuation of its operations is dependent upon its ability to raise additional capital through equity and debt issuance until the company can achieve its goal of positive cash flow. While the company is making progress in achieving this objective, the current negative operational cash flow and its obligation to the IRS for 2003 & 2004 unpaid payroll taxes will necessitate continued capital raising. In July, 2006, Warrants for 300,000 shares of common stock were exercised for $75,000 in order to facilitate a $100,000 payment on July 17,2006 to the IRS for previously unpaid payroll taxes.
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RISK FACTORS
PLEASE SEE FORM 10KSB FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 14, 2006 FOR COMPANY RISK FACTORS. IN ADDITION TO THE RISK FACTORS DISCLOSED IN FORM 10KSB, THE FOLLOWING RISK FACTORS SHOULD BE CONSIDERED:
"THE INTERNAL REVENUE SERVICE COULD SEIZE THE COMPANIES LIQUID ASSETS AS A RESULT OF THE LIEN FILED ON MAY 1, 2006."
As a result of the lien which the IRS filed against the Companies assets, it is possible for the IRS to seize the Companies liquid assets, thereby potentially eliminating the Companies ability to conduct future operations.
FORWARD LOOKING STATEMENTS
This Quarterly Report on Form 10-QSB and the documents incorporated herein by reference contain forward-looking statements that have been made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations, estimates and projections about our industry, management's beliefs, and certain assumptions made by management. Words such as "anticipate," "expect," "intend" "plans," "believe," "seek," "estimate" and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and actual actions or results may differ materially. These statements are subject to certain risks, uncertainties and assumptions that are difficult to predict, including those noted in the documents incorporated herein by reference. Particular attention should also be paid to the cautionary language appearing elsewhere in this report. We undertake no obligation to update publicly any forward-looking statements as a result of new information, future events or otherwise, unless required by law. Readers should, however, carefully review the risk factors included in other reports or documents we file from time to time with the Securities and Exchange Commission, including in our Annual Report Form 10-KSB for our fiscal year ended February 28, 2006.
AFFINITY TECHNOLOGY GROUP INC
Form 8-K for AFFINITY TECHNOLOGY GROUP INC
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18-Jul-2006
Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.
(a) On July 14, 2006, the Compensation Committee (the "Committee") and the Board of Directors (the "Board") of Affinity Technology Group, Inc., a Delaware corporation ("Affinity"), approved the following compensation related matters:
o The base salary payable to Joseph A. Boyle, President and Chief Executive Officer of Affinity, was increased to $250,000 per year. Effective July 3, 2006, Mr. Boyle resumed full-time employment with Affinity.
o The base salary payable to S. Sean Douglas, Chief Operating Officer of Affinity, was increased to $125,000 per year.
o The following stock option awards were granted to the officers of
Affinity:
No. of Shares
of Common Stock
Officer Underlying Award Exercise Price Term
------- ---------------- -------------- ----
Joseph A. Boyle 2,500,000 $0.50 10 years
S. Sean Douglas 850,000 $0.50 10 years
Affinity Engages Morgan Keegan to Raise Additional Capital and the McBride Firm to Assist with Patent Licensing and Litigation
Affinity Technology Group, Inc.
Affinity Engages Morgan Keegan to Raise Additional Capital and the McBride Firm to Assist with Patent Licensing and Litigation
COLUMBIA, S.C. - July 11, 2006
Affinity Technology Group, Inc. (OTCBB:AFFI - News) today announced that it has engaged Morgan Keegan & Company as its exclusive financial advisor to assist the company in raising additional capital and to assist with its patent licensing program. In addition, Affinity has engaged McBride Law, PC of Santa Monica, California as additional counsel with Withrow & Terranova, the Company's current patent licensing representative, to join ongoing patent litigation and the Company's patent licensing program.
Joe Boyle, President and Chief Executive Officer, stated, "We are very pleased to have Morgan Keegan and the McBride Law firm join us as a part of our team." As previously reported, Affinity was notified on March 30, 2006 that the U.S. Patent and Trademark Office had concluded its two year reexamination process, which was initiated by third parties, and resulted in the full allowance of all the claims of the Company's U.S. Patent No. 6,105,007. This decision was preceded by similar successful reexaminations of the Company's U.S. Patent No. 5,870,721C1 and U.S. Patent No. 5,940,811C1. "With the successful reexamination process now behind us and the addition of Morgan Keegan and the McBride Law Firm, Affinity is better positioned to move forward with a vigorous commercialization effort for its broad intellectual property position."
Under the terms of the two-year agreement, Affinity has issued Morgan Keegan a five-year warrant to acquire 2,500,000 shares of Affinity's common stock for $0.50 per share. Affinity's stock price closed at $0.18 per share at the end of trading on Monday. In addition, Affinity has agreed to pay Morgan Keegan a cash fee ranging from 1% to 5% of the amount of capital raised by Morgan Keegan for financings over $5 million. Morgan Keegan has agreed to assist Affinity in placing the remaining $1.4 million under its convertible debenture program for no additional cash fee.
Under the revised agreement with Withrow & Terranova and the addition of the McBride Law firm, Affinity has maintained its existing 25% contingency fee structure, which is payable on all amounts received by the Company as a result of patent litigation and/or patent licensing, with 19% payable to Withrow & Terranova and 6% payable to the McBride Firm. In connection with contingency fees payable to the attorneys for patent licensing unrelated to litigation, the 25% fee structure decreases on a sliding scale to a minimum of 5% as the cumulative amount of patent licensing revenues exceeds $100 million. In addition, Affinity has agreed to pay 50% of these firms' billing rates for work done for the Company.
About Affinity Technology Group, Inc.
Through its subsidiary, decisioning.com, Inc., Affinity Technology Group, Inc. owns a portfolio of patents that covers the automated processing and establishment of loans, financial accounts and credit accounts through an applicant-directed remote interface, such as a personal computer or terminal touch screen. Affinity's patent portfolio includes U. S. Patent No. 5,870,721C1, No. 5,940,811C1, and No. 6,105,007.
Forward-looking statements in this news release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that our business is subject to several substantial risks and uncertainties, including the Company's very limited capital resources and the possibility that we may be unable to raise additional capital in amounts sufficient to permit us to continue operations; the risk that we may lose all or part of the claims covered by our patents as a result of challenges to our patents; the risk that our patents may be subject to additional reexamination by the U.S. Patent and Trademark Office or challenge by third parties; the possibility that all or some of the holders of the convertible secured notes issued by the Company may take action to collect the amounts outstanding under these notes; the result of ongoing litigation; and unanticipated costs and expenses affecting the Company's cash position. If the Company is not able to raise additional capital immediately, it may be forced to consider alternatives for winding down its business, which may include offering its patents for sale or filing for bankruptcy protection. Moreover, if any of the holders of the convertible notes issued by the Company take action to collect the amounts owed by the Company under these notes, the Company will be forced to consider alternatives for winding down its business, which may include offering its patents for sale or filing for bankruptcy protection. These and other factors may cause actual results to differ materially from those anticipated.
Contact:
Affinity Technology Group, Inc.
Joe Boyle, 803-758-2511
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Source: Affinity Technology Group, Inc.
