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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 6, 2003
Communications Systems, Inc.
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(Exact name of Registrant as specified in its charter)
Minnesota 0-10355 41-0957999
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(State or other (Commission (IRS Employer
jurisdiction File Number) Identification
of incorporation) No.)
213 South Main Street
Hector, Minnesota 55342
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(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code (320) 848-6231
Item 9. Regulation FD Disclosure.
The following information is furnished pursuant to Item 12, "Results
of Operations and Financial Condition."
On May 6, 2003, Communications Systems, Inc. (the "Company") reported
its financial results for its first fiscal quarter ended March 31, 2003. See the
Company's press release dated May 6, 2003, which is furnished as Exhibit 99 and
incorporated by reference in this Current Report on Form 8-K.
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.
Communications Systems, Inc.
Date: May 6, 2003 By /s/ Paul N. Hanson
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Paul N. Hanson
Vice President and Chief Financial Officer
No. Exhibit Manner of Filing
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99 Press Release dated May 6, 2003. Filed Electronically
Communications Systems Reports
First Quarter 2003 Operating Results.
Hector, MN -May 6, 2003- Communications Systems, Inc. (AMEX: JCS) today reported
net income of $723,000 or $0.09 per diluted share for the first quarter ended
March 31, 2003 compared to net income of $470,000 or $0.06 per diluted share for
the first quarter of 2002. The first quarter results include an after tax loss
of $400,000 or $0.05 per diluted share from the Company's European business unit
Austin Taylor which continues to experience weak telecommunications market
conditions. First quarter 2003 revenues totaled $26,575,000, an increase of 11%
from $23,920,000 in the first quarter of 2002. The 2003 first quarter sales
include $3.5 million in sales contributed from the MiLAN business unit compared
to MiLAN sales of $900,000 in the first quarter of 2002. MiLAN was acquired in
the first quarter of 2002.
Curtis A. Sampson, Chairman and CEO commented: "Despite continuing market
uncertainly CSI continues to increase our revenue, gross margins, and bottom
line. While the company is not giving specific guidance for the second and third
quarters, we are positioned to continue this positive trend."
Jeffrey K. Berg, President and COO said, "We continue to work toward operational
improvements which includes continued cost and expense reductions. Our efforts
to source more manufacturing in Asia, reducing our work force in the UK by 30%
and our May 2 announcement of the closing of our final building in Puerto Rico
with 25 employees effective May 31, 2003 will have a positive impact on our
future operating results.
About Communications Systems
Communications Systems, Inc. provides physical connectivity infrastructure and
services for cost-effective broadband solutions and is a leading supplier of
voice-grade connecting devices and wiring systems. CSI serves the broadband
network market as the world's leading supplier of media conversion technology,
which permits networks to deploy fiber optic technology, while retaining the
copper-based infrastructure already embedded in the network. In addition, CSI
supplies copper wire and fiber optic structured wiring systems for broadband
networks, as well as line filters for digital subscriber line service. CSI also
provides network design, training and management services.
Cautionary Statement: From time to time, in reports filed with the Securities
and Exchange Commission, in press releases, and in other communications to
shareholders or the investing public, the Company may make forward-looking
statements concerning possible or anticipated future financial performance,
business activities or plans which are typically preceded by the words
"believes," "expects," "anticipates," "intends" or similar expressions. For such
forward-looking statements, the Company claims the protection of the safe harbor
for forward-looking statements contained in federal securities laws.
Shareholders and the investing public should understand that such
forward-looking statements are subject to risks and uncertainties which could
cause actual performance, activities or plans to differ significantly from those
indicated in the forward-looking statements. Such risks and uncertainties
include, but are not limited to: lower sales to RBOCs and other major customers;
competitive products and technologies; our ability to successfully reduce
operating expenses at certain business units; the general health of the telecom
sector; profitability of recent acquisitions; delays in new product
introductions; higher than expected expense related to new sales and marketing
initiatives; availability of adequate supplies of raw materials and components;
fuel prices; and other factors discuss from time to time in the Company's
filings with the Securities and Exchange Commission.
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CSI CONSOLIDATED SUMMARY OF EARNINGS
Three Months Ended March 31
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2003 2002
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Sales $ 26,575,150 $ 23,920,340
Gross Margin 7,405,789 6,376,611
Operating Income 1,173,071 634,856
Income Taxes 450,000 165,000
Net Income 723,071 469,856
Basic Net Income Per Share $ .09 $ .06
Diluted Net Income Per Share $ .09 $ .06
Average Shares Outstanding:
Average Common Shares Outstanding 8,160,931 8,285,662
Dilutive Effect of Stock Options Outstanding 10,937 11,255
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8,171,868 8,296,917
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