Brooktrout Announces Fourth Quarter and Year End 2003 Results

Brooktrout Announces Fourth Quarter and Year End 2003 Results 


NEEDHAM, Mass., Feb. 17  /PRNewswire-FirstCall/ -- Brooktrout, Inc. , a leading
provider of innovative hardware and software platforms that enable applications
for the New Network(TM), today reported that revenue for the fourth quarter of
2003 was $22,286,000 compared to $17,761,000 for the fourth quarter of 2002. 
The company's net income in the fourth quarter of 2003 was $2,003,000, or $0.15
per diluted share, compared to a net loss of$989,000, or $(0.08) per diluted
share, for the same period in 2002.

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Revenue for the year ended December 31, 2003 was $74,656,000 compared to
$73,491,000 for the same period in 2002.  The company's net income in the year
ended December 31, 2003 was $555,000, or $0.04 per diluted share, compared to a
net loss of $4,791,000, or $(0.39) per diluted share, for the same period of
2002.  Net income in the year ended December 31, 2003 included a one-time after
tax gain of $309,000 in connection with the sale of an investment in the third
quarter.

"We are very pleased to report not only a profitable fourth quarter but also net
income for 2003," stated Eric Giler, president of Brooktrout.  "Our fourth
quarter 2003 results demonstrate the leverage inherent in our company and
confirm the validity of our strategic direction: continuous investment in
innovative enabling technologies and the creation of unique service and support
models for ourdiverse customer base.  We made these investments while
significantly improving our balance sheet.  Our cash balances grew over $14
million in 2003, with end of year cash balances at just under $56 million and no
long-term debt.  We now have more cash than at any time since the company's
inception and our financial position is one of the strongest it has been in our
20-year history.  This is one of the many accomplishments of which the entire
Brooktrout organization is exceedingly proud.  We believe that we are
experiencing a sustainable improvement in our business and that we are well-
positioned to lead in 2004 and beyond."

Business Outlook

Giler continued with the following outlook for the first quarter of 2004, "We
believe that first quarter revenue will be approximately $21 million to $22.5
million, which would be consistent with our historic seasonal pattern of first
quarter revenue being down to relatively flat with the prior quarter. Given our
revenue guidance range, we would anticipategross margins to be similar to those
realized in the last two quarters.  However, gross margins can fluctuate as a
result of shifts in product mix, changes in product sales volume and pricing, as
well as variability in component costs.  We anticipate that total operating
expenses for the first quarter will be between $13 million and $13.5 million,
and we expect net income of approximately $500 thousand to $1.0 million."

Conference Call Details

As previously announced, Brooktrout's management will host a conference call at
5:00 p.m. ET today, February 17, 2004, to discuss these quarterly and year end
results, along with business highlights and outlook.  The conference call will
be simultaneously broadcast live over the Internet.  Anyone interestedin
listening to this teleconference can do so by logging onto the Brooktrout, Inc.
website at http://www.brooktrout.com/investor.

The webcast will be available on Brooktrout's website until Wednesday, February
25, 2004.  Following the live broadcast, a telephone replay will also be
available at 1-973-341-3080, passcode #4454045 until midnight ET on Wednesday,
February 18, 2004.

Note to Investors

Statements in this press release that are not historical facts are
forward-looking statements for purposes of the safe harbor provisions under The
Private Securities Litigation Reform Act of 1995.  These statements include, but
are not limited to, statements that we believe that we are experiencing a
sustainable improvement in our business and that we are well- positioned to lead
in 2004 and beyond; statements implying that our future will be impacted by our
continuous investments in innovative enabling technologies and the creation of
unique service and support models for our customers; and statementsregarding
our revenue, gross margin, operating expense and net income guidance for the
first quarter of 2004.  Readers should not place undue reliance on
forward-looking statements because they involve known and unknown risks and
uncertainties, which may cause our actual results, performance, and achievements
to differ materially from what are expressed or implied by such forward-looking
statements.  In particular, there is a risk that our business will not be able
to sustain the profitability achieved in the fourth quarter and year ended
December 31, 2003; that our strategic direction will not contribute to
profitability; that our cash balances will not continue to improve; and that we
will not be able to sustain our current overall financial strength.  Other risks
and uncertainties include, among other things, the current telecommunications
market slow down and its impact on our customers' business and financial
strength, the uncertainties relating to global events, the ability to keep pace
with the evolution of the telecommunications hardware and software market, the
impact of competition, and the impact of changes to regulations affecting the
telecommunications and Internet industries.  Additional information concerning
these and other riskfactors is contained in the "Factors That May Affect Future
Results" section of Brooktrout, Inc.'s Quarterly Report on Form 10-Q for the
quarter ended September 30, 2003 filed with the Securities and Exchange
Commission on November 7, 2003.  In addition, any forward-looking statements
represent our estimates only as of today and should not be relied upon as
representing our estimates as of any subsequent date.  While we may elect to
update forward- looking statements at some point in the future, we specifically
disclaim any obligation to do so, even if our estimates change.

About Brooktrout

Brooktrout, Inc., headquartered in Needham, MA, delivers communications hardware
and software products that enable applications for the New Network(TM) -- a
Network born through the marriage of the telephone and data networks. 
Brooktrout, Inc.'s mission is to collaborate with its partners so they can bring
innovative solutions to market quickly, increase business and expand into new
markets.  Brooktrout believes that a solid focus on customers, significant
first-to-market products and key acquisitions are making it a partner of choice
for today's hottest communications service and enterprise application providers.
 Brooktrout is traded publicly on NASDAQ under the symbol BRKT.  For more
information, visit http://www.brooktrout.com/investor.

Brooktrout and the New Network are trademarks or registered trademarks of
Brooktrout, Inc.

  All other trademarks are the property of their respective owners.

  CONTACT:  Bob Leahy                      Anne Marie Clark
            VP Finance & Operations        Director Corporate Relations
            Brooktrout, Inc.               Brooktrout, Inc.
            [phone]                 [phone]


   BROOKTROUT, INC.
   CONSOLIDATED STATEMENTS OF OPERATIONS
   (unaudited, in thousands, except per share data)


                                     Quarter Ended         Year Ended
                                      December 31,         December 31,
2003       2002       2003       2002

  Revenue                          $22,286    $17,761    $74,656    $73,491

  Costs and expenses:
     Cost of product sold            7,100      7,368     26,380     33,121
   Research and development        4,624      4,955     18,492     20,658
     Selling, general and
      administrative                 7,546      6,957     29,883     28,909
  Total costs and expenses          19,270     19,280     74,755     82,688

 Operating income (loss)            3,016     (1,519)       (99)    (9,197)

  Other income (expense), net:
     Gain on investment                  -          -        499          -
     Interest income, net and
      other                            203        230        820        995
         Total other income
          (expense), net               203        230      1,319        995

  Income (loss) before income
   taxes                             3,219     (1,289)     1,220     (8,202)

  Income tax provision (benefit)     1,216       (300)       665     (3,184)

  Income (loss) from continuing
   operations                        2,003       (989)       555     (5,018)

  Gain from discontinued
   operations, net of taxes (1)          - -          -        227

  Net income (loss)                 $2,003      $(989)      $555    $(4,791)

  Income (loss) from continuing
   operations per common share:
     Basic                           $0.16     $(0.08)     $0.04     $(0.41)
Diluted                          0.15      (0.08)      0.04      (0.41)

  Net income (loss) per common
   share:
     Basic                           $0.16     $(0.08)     $0.04     $(0.39)
     Diluted                          0.15      (0.08)   0.04      (0.39)

  Weighted average shares
   outstanding:
     Basic                          12,516     12,245     12,353     12,226
     Diluted                        13,738     12,245     12,882     12,226



(1) For the year ended December 31,2002, gain from discontinued operations is
net of an income tax benefit of $696.

   BROOKTROUT, INC.
   CONDENSED CONSOLIDATED BALANCE SHEETS
   (unaudited, in thousands)


                                              December 31,      December 31,
 2003              2002
                 ASSETS
  Current assets:
  Cash, cash equivalents, and
   marketable debt securities                    $55,950           $41,788
  Accounts receivable (less allowance
   for doubtful accounts
     and sales returns of $843 in 2003
      and $1,679 in 2002)                         10,232             8,600
  Inventory                                        4,465             6,797
  Deferred taxes and other current
assets                                          5,862            11,482
  Total current assets                            76,509            68,667

  Equipment and furniture, less
   accumulated depreciation and
   amortization                       2,245             3,404
  Intangible assets, less accumulated
   amortization                                    5,909             7,412
  Deferred taxes and other non current
   assets                                         11,916        10,852

  Total assets                                   $96,579           $90,335

  LIABILITIES AND STOCKHOLDERS' EQUITY

  Current liabilities and deferred rent          $14,925           $15,237

  Stockholders' equity                           81,654            75,098

  Total liabilities and stockholders'
   equity                                        $96,579           $90,335


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DATASOURCE: Brooktrout, Inc.



CONTACT:  Bob Leahy, VP Finance & Operations, [phone], or Anne

Marie Clark, Director Corporate Relations, [phone] both of Brooktrout,

Inc.



Web site:  http://www.brooktrout.com/

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