ADAC Laboratories Reports Financial Results for the Third Quarter of Fiscal 1999.MILPITAS Milpitas (mĭl'pē`təs), city (1990 pop. 50,686), Santa Clara co., W Calif., a suburb of San Jose, southeast of San Francisco; inc. 1954. Manufactures include computers and paint. , Calif.--(BW HealthWire)--Aug. 18, 1999-- ADAC ADAC Allgemeiner Deutscher Automobil Club (German automobile club) ADAC Aboriginal Drug and Alcohol Council ADAC Art Directors and Artists Club (Sacramento, California) ADAC Alcohol and Drug Abuse Council Laboratories (Nasdaq:ADAC) today announced its financial results for the third quarter of fiscal 1999 ended July July: see month. 4, and has filed its Form 10-Q Form 10-Q See 10-Q. with the Securities and Exchange Commission. For the third quarter of fiscal 1999, revenues were $75.6 million, an 8 percent increase over the $69.8 million reported for the same period in fiscal 1998. Excluding the pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta impact of restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of $0.5 million and non-ordinary charges and expenses of $9.5 million, the Company's loss for the third quarter was $5.4 million, compared to net income of $3.4 million reported for the third quarter of fiscal 1998, which translates to a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. loss per share of 26 cents compared to diluted net income per share of 17 cents for the same quarter in 1998. For the first nine months of fiscal 1999, revenues were $257.3 million, a 22 percent increase over the $211.7 million reported for the same period in fiscal 1998. Excluding the pre-tax impact of restructuring charges of $3.8 million and non-ordinary charges and expenses of $26.7 million, the Company's loss for the first nine months was $7.0 million, compared to net income of $3.3 million reported for the first nine months of fiscal 1998, which translates to a diluted loss per share of 34 cents compared to diluted net income per share of 16 cents, for the same period in fiscal 1998. Including the effects of restructuring charges of $0.5 million and non-ordinary charges and expenses totaling $9.5 million, the Company reported a net loss of $13.2 million for the third quarter and a net loss of $30.1 million for the first nine months of fiscal 1999. This translates to a diluted loss per share of 64 cents for the third quarter and a diluted loss of $1.47 per share for the first nine months of fiscal 1999. The Company's financial statements for the third quarter of 1999 include two notable items. First, the Company increased its reserves by $7.1 million for South American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed and recourse The right of an individual who is holding a Commercial Paper, such as a check or promissory note, to receive payment on it from anyone who has signed it if the individual who originally made it is unable, or refuses, to tender payment. obligations. This increase brings the total reserve to $8.2 million against approximately $12.9 million of these receivables and recourse obligations. Secondly, the Company also took charges at its ADAC Medical Technologies (AMT See vPro. ) business of $2.4 million for obsolete inventory Obsolete Inventory Term that refers to inventory that is at the end of its product life cycle and has not seen any sales or usage for a set period of time usually determined by the industry. This type of inventory has to be written down and can cause large losses for a company. and $0.5 million for the restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). of this business. These charges and reserves are described in greater detail in the Company's recently filed 10-Q and impact both the Statement of Operations See Income statement. and Balance Sheet. The Company noted that the majority of the non-ordinary charges and expenses are non-cash in nature and mostly focused in ADAC's Medical Systems business. The results of the Company's operations for the third quarter of fiscal 1999 caused the Company to be out of compliance with the financial covenants in its syndicated $75 million revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility. The Company is negotiating an amendment to the facility, which will include a waiver The voluntary surrender of a known right; conduct supporting an inference that a particular right has been relinquished. The term waiver is used in many legal contexts. of the Company's covenant default in the third quarter, as well as modified financial covenants that are more reflective Refers to light hitting an opaque surface such as a printed page or mirror and bouncing back. See reflective media and reflective LCD. of the Company's current financial performance. The Company has reached a verbal agreement with the syndicate Syndicate organized crime unit throughout major cities of the United States. [Am. Hist.: NCE, 2018] See : Gangsterism on the principle terms and conditions of the amendment and expects that the final written agreement will be completed and executed by August 31, 1999. Failure to secure this amendment to the facility could have a material adverse effect on the Company. "The past several quarters have been extremely difficult for ADAC and its shareholders," said R. Andrew Eckert Eck·ert , John Presper 1919-1995. American engineer who contributed to the development of ENIAC (Electronic Numeral Integrator and Calculator), the first electronic computer (1946). , chairman and chief executive officer. "However, we continue to make significant investments in our organization, infrastructure and technology. We have a strong pipeline of new products in development and are working to improve our operational efficiency. In addition, having transitioned to our new and more stringent revenue recognition policy, we expect revenues to be higher in the fourth quarter of fiscal 1999," Mr. Eckert stated. ADAC Laboratories is the world market share leader in nuclear medicine and radiation therapy planning systems See spreadsheet and financial planning system. and a leading supplier of radiology radiology, branch of medicine specializing in the use of X rays, gamma rays, radioactive isotopes, and other forms of radiation in the diagnosis and treatment of disease. and cardiology cardiology Medical specialty dealing with heart diseases and disorders. It began with the 1749 publication by Jean Baptiste de Sénac of contemporary knowledge of the heart. Diagnostic methods improved in the 19th century, and in 1905 the electrocardiograph was invented. information and image manage systems in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . ADAC is headquartered in Milpitas, CA with its HealthCare Information Systems Division in Houston Houston, city (1990 pop. 1,630,553), seat of Harris co., SE Tex., a deepwater port on the Houston Ship Channel; inc. 1837. Economy The fourth largest city in the nation and the largest in the entire South and Southwest, Houston is a port of entry; , TX. For further information, visit the Company's web site at www.adaclabs.com. This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , including statements concerning the Company's revenues, expenses and earnings, the establishment of additional reserves, the taking of special charges and expenses and the Company's future financial performance. Factors that could cause actual results to differ materially from those contained in such forward-looking statements include, but are not limited to, the existence of significant competition in each of the business segments in which the Company conducts business; the impact of Year 2000 on the Company's results; the Company's dependence on successfully developing, introducing and commercializing new products and developing enhancements to existing products; the collectibility of the Company's receivables, changes to the Company's operating structure and changes and dislocations that may result therefrom there·from adv. From that place, time, or thing. Adv. 1. therefrom - from that circumstance or source; "atomic formulas and all compounds thence constructible"- W.V. ; the impact of international economic conditions on the Company's business; and a number of factors that can introduce variability in the Company's operating results, including the timing of product orders, shipments and installations. Further information on these and other factors is described in the "Business Considerations" section of the Company's most recent Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended September September: see month. 27, 1998, including subsections headed "Competition", "Year 2000 Compliance", "Dependence on New Products and Product Enhancements" and "Future Operating Results." All forward-looking statements are based on information available to the Company on the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" , and the Company assumes no obligation to update such statements. -0-
ADAC LABORATORIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share data)
(Unaudited)
Three Months Ended Nine Ended Months
July 4, June 28, July 4, June 28,
1999 1998 1999 1998
----------------------- -----------------------
Revenues, net:
Product $ 50,400 $ 49,472 $184,826 $151,292
Service 25,220 20,284 72,466 60,424
-------- -------- -------- --------
75,620 69,756 257,292 211,716
-------- -------- -------- --------
Cost of revenues:
Product 37,942 25,986 132,724 82,136
Service 16,606 14,402 51,435 40,098
Discontinued Product - - - 14,494
-------- -------- -------- --------
54,548 40,388 184,159 136,728
-------- -------- -------- --------
Gross Profit 21,072 29,368 73,133 74,988
-------- -------- -------- --------
Operating expenses:
Marketing and
sales 15,200 12,289 49,801 35,762
Research and
development 4,546 3,669 13,390 12,950
General and
administrative 16,584 5,698 40,811 15,758
Goodwill amortization 507 588 1,497 1,625
Restructuring
charges 474 - 3,774 -
-------- -------- -------- --------
37,311 22,244 109,273 66,095
-------- -------- --------- --------
Operating Income
(loss) (16,239) 7,124 (36,140) 8,893
Interest and
other expense, net 549 1,579 3,530 3,507
-------- -------- -------- --------
Income (loss) before
(benefit) provision
for income taxes (16,788) 5,545 (39,670) 5,386
Provision (benefit)
for income taxes (3,574) 2,163 (9,521) 2,101
--------- ------- --------- --------
Net income (loss) $(13,214) $ 3,382 $(30,149) $ 3,285
========= ======== ========= ========
Net income (loss)
per share
Basic $ (0.64) $ 0.17 $ (1.47) $ 0.17
========= ======== ========= ========
Diluted (0.64) $ 0.17 $ (1.47) $ 0.16
========= ======== ========= ========
Number of shares
used in per share
calculations
Basic 20,504 19,681 20,443 19,291
======== ======== ======== ========
Diluted 20,504 20,443 20,443 20,184
======== ======== ======== ========
ADAC LABORATORIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS)
July 4, September 27,
1999 1998
(Unaudited)
------------ -------------
ASSETS
Current Assets:
Cash and cash equivalents $ 4,867 $ 4,869
Trade receivables, net 77,449 55,316
Tax and other receivables 2,701 7,294
Inventories, net 43,122 78,311
Prepaid expenses and other
current assets 5,616 4,928
-------- --------
Total current assets 133,755 150,718
Service parts, net 19,157 18,063
Fixed assets, net 16,552 11,007
Capitalized software, net 16,575 11,770
Intangibles, net 25,895 25,336
Deferred income taxes 33,687 24,167
Other assets, net 1,061 2,748
-------- --------
Total Assets $246,682 $243,809
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Notes payable to banks $ 47,695 $ 23,396
Accounts payable 12,072 22,887
Deferred revenues 18,273 11,591
Customer deposits and advanced
billings 4,066 2,004
Accrued compensation 11,566 8,903
Warranty and installation 6,171 6,595
Other accrued liabilities 20,146 14,423
-------- --------
Total current liabilities 119,989 89,799
Non-current deferred income taxes 13,988 14,026
Non-current liabilities and
deferred credits 3,161 3,082
-------- --------
Total Liabilities 137,138 106,907
-------- --------
SHAREHOLDERS' EQUITY:
Preferred stock, no par value;
Authorized: 5,000 shares;
Issued and outstanding: none
Common stock, no par value:
Authorized: 50,000 shares;
Issued and outstanding: 20,529,
shares at July 4, 1999 and
20,253 shares at September 27,
1998 153,743 149,599
Accumulated deficit (40,415) (10,266)
Translation adjustment (3,784) (2,431)
-------- --------
Total Shareholders' Equity 109,544 136,902
Total Liabilities and Shareholders'
Equity $246,682 $243,809
======== ========
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