ARC International Reports Third Quarter Results; Executes Term Sheet for Sale-Leaseback Valued at $8 Million with Real Estate Investment Trust on Single Ice Skating Facility.TORONTO--(BUSINESS WIRE)--Nov. 22, 1999-- ARC International This article is about the publicly traded processor company. For the privately held French housewares company of the same name, see ARC International (household). Corporation (AMEX AMEX See: American Stock Exchange :ATV (1) (Advanced TV) An early name for the digital TV standard proposed by the Advisory Committee on Advanced Television Service (ACATS). See ACATS. See also ATV Forum. (2) (Analog TV) Refers to the NTSC, PAL and SECAM analog TV standads. ), a developer and operator of ice skating ice skating, gliding along an ice surface on keellike runners known as ice skates. Skating as a Sport Skating, besides being an important form of winter recreation and the essential skill in the game of ice hockey (see hockey, ice) has developed facilities 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. with significant equity stakes in Ballantyne of Omaha (NYSE NYSE See: New York Stock Exchange :BTN BTN In currencies, this is the abbreviation for the Bhutan Ngultrum. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ) and Cabletel Communications Corp. (AMEX:TTV TTV Transfusion Transmitted Virus TTV Total Thickness Variation (semiconductor wafer planarity) TTV TechTV TTV Total Transaction Value TTV Tapping the Vein (band) TTV Target Test Vehicle ), today reported results for the three- and nine-month periods ended September 30, 1999. All figures are reported in U.S. dollars. The Company also reported that it does not currently have adequate working capital to meet its cash requirements, including funds necessary to complete an ice rink facility under construction in Danbury, Connecticut “Danbury” redirects here. For other uses, see Danbury (disambiguation). Danbury is a city in Fairfield County, Connecticut, United States. It has an estimated population as of July 1, 2005 of 78,736. . Unless the Company obtains additional financing, each of (i) the city of Danbury, (ii) the Company's senior lender under its credit facility, and (iii) the holder of the convertible debenture Convertible Debenture Any type of debenture that can be converted into some other security. Notes: For example, a convertible bond can be converted into stock. issued by one of the Company's subsidiaries, among others, may declare a default and accelerate the obligations of the Company thereunder. In order to meet its liquidity needs and fulfill its other obligations, the Company is exploring a number of options including, without limitation, (i) raising additional financing through the issuance of debt or equity securities, and (ii) selling certain other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. of the Company. In connection with its efforts to obtain financing, ARC International also announced that it has executed a term sheet regarding a sale-leaseback transaction with a Real Estate Investment Trust (REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). ) whose assets exceed $700 million for one of its ice rink facilities, the proceeds of which are expected to approximate $8 million. Under the proposed term sheet, ARC International would continue to operate the facility under a tenant and lease agreement. Such a transaction is subject to obtaining an acceptable agreement from its Senior Lender regarding the use of the proceeds. ARC International believes such transaction could provide the Company with sufficient funds to complete the construction project in Danbury and satisfy certain of its other obligations. However, there can be no assurances that the proposed sale-leaseback transaction can be successfully negotiated and consummated, or that the Senior Lender will agree upon acceptable terms regarding the use of the proceeds. Arnold S. Tenney, Chief Executive Officer of ARC, commented, "The proposed sale-leaseback transaction underscores the intrinsic value Intrinsic Value 1. The value of a company or an asset based on an underlying perception of the value. 2. For call options, this is the difference between the underlying stock's price and the strike price. of our ice rink holdings and these holdings could serve as an effective source of future financing, given the inherent asset value of our ice rink portfolio. We are actively pursuing alternative sources of liquidity, are reviewing a number of strategic alternatives and look forward reporting to shareholders about the outcome of this process in the near future." There can be no assurances that the Company will be successful in raising any additional funds, or that it will be able to timely raise additional funds in order to meet its current liquidity needs. If the Company is unable to raise additional funds to meet its liquidity needs, or if creditors pursue remedies before additional funds can be raised, the Company will be required to consider alternative courses of action including, without limitation, seeking to reorganize re·or·gan·ize v. re·or·gan·ized, re·or·gan·iz·ing, re·or·gan·iz·es v.tr. To organize again or anew. v.intr. To undergo or effect changes in organization. by filing of a voluntary petition seeking protection under the bankruptcy laws. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the three-month period ended September 30, 1999 rose 7% to $19,952,071 from $18,239,397 in the year-ago quarter. Excluding a non-cash holding loss related to deferred income tax, the Company reported a net loss for the 1999 third quarter of $1,900,495, or $0.13 per share. Reflecting the non-cash holding loss, ARC International reported a 1999 third quarter net loss of $5,817,493, or $0.41 per share, compared to a net loss of 312,827, or $0.02 per share, in the 1998 third quarter. The weighted average number of 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. shares outstanding for the third quarters of 1999 and 1998 was 14,655,655 and 14,791,096, respectively. Net sales for the nine-month period ending September 30, 1999 rose 8% to $46,308,925 from $43,065,829 in the comparable 1998 period. Excluding the non-cash holding loss, the Company reported a net loss for the first nine months of 1999 of $5,355,644, or $0.38 per share. Reflecting the non-cash holding loss, ARC reported a loss of $11,000,756, or $0.77 per share, compared to a net loss of $2,255,138, or $0.16 per share, in the first nine months of 1998. The weighted average number of diluted shares outstanding for the first nine months of 1999 and 1998 was 14,655,450 and 15,042,641, respectively. Mr. Tenney commented on the results, "Third quarter revenues benefited from new contributions at our recently opened ice skating facilities in Virginia and Michigan, as well as a strong top-line performance at our Cabletel subsidiary, where pent-up demand for its broadband equipment drove a 35% revenue increase and $500,000 swing in net income. "Demand for ice-time during the upcoming 1999-2000 winter season is in line with expectations. Pre-bookings at our Rockville location are benefiting from a recently signed contract for up to fifteen years with Montgomery Youth Hockey Association and competition between 11 of the area's high schools vying vy·ing v. Present participle of vie. vying vie for practice time at our facility. In addition, East Lansing East Lansing, city (1990 pop. 50,677), Ingham co., S central Mich., a suburb of Lansing, on the Red Cedar River; inc. 1907. The city was first known as College Park, but was renamed when it was incorporated. is starting to derive the benefits of initial contracts with the Greater Lansing Area Hockey Association. Our programming efforts are also starting to pay dividends as we successfully launched the first-ever traveling youth hockey team in Chesapeake and a new three-on-three adult hockey league in East Lansing. Finally, the East Lansing facility sponsored a very successful figure skating competition A figure skating competition is a judged sports competition in figure skating. Types of figure skating competitions Types of figure skating competitions include: International
ARC International Corp. is a leading developer and operator of, and full-service equipment supplier to, ice skating facilities in North America with six locations featuring 16 surfaces of ice. ARC also has significant equity holdings in Cabletel Communications Corp., Canada's leading supplier of broadband equipment, and Ballantyne of Omaha, America's leading manufacturer of motion picture projection and specialty entertainment lighting equipment. Additional corporate information is available at the Company's web site http://www.arc-atv.com. The Company's Consolidated Financial Statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge have been prepared in accordance with Canadian Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ). Except for the historical information in this press release, it includes 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. that involve risks and uncertainties, including, but not limited to, quarterly fluctuations in results, the management of growth, and other risks detailed from time to time in the Company's Securities and Exchange Commission filings. Actual results may differ materially from management expectations. -0-
ARC International Corporation
Consolidated Statements of Operations
(Unaudited, in U.S. Dollars)
Three Months Ended Nine-Months Ended
September 30, September 30,
1999 1998 1999 1998
Net Sales $19,592,071 $18,239,397 $46,308,925 $43,065,829
Cost of Sales 16,720,577 15,072,028 38,841,099 35,464,766
----------- ----------- ----------- -----------
Gross Profit 2,871,494 3,167,369 7,467,826 7,601,063
Selling, General &
Administrative
Expenses 3,261,173 3,247,441 9,887,100 9,631,411
----------- ----------- ----------- -----------
Loss From Operations (389,679) (80,072) (2,419,274) (2,030,348)
Other Income
(Deductions):
Equity share of
income of
Ballantyne 620,908 541,088 1,567,801 1,748,096
Gain (loss) on
issuance of
Ballantyne's shares 0 0 0 (9,837)
Provision for
unrealized
loss (3,916,998) 0 (5,527,761) 0
Interest expense (1,461,357) (477,759) (3,449,118) (1,540,645)
Interest income 43,620 52,319 86,249 342,448
Depreciation and
amortization (562,891) (440,496) (1,513,524) (1,375,859)
Other 0 0 129,260 0
----------- ----------- ----------- -----------
(5,276,718) (324,848) (8,707,093) (835,797)
Loss From Continuing
Operations Before
Income Taxes &
Minority
Interest (5,666,397) (404,920) (11,126,367) (2,866,145)
Income Taxes
(Recovery) 98,941 23,199 (242,962) (352,546)
----------- ----------- ----------- -----------
Loss From Continuing
Operations
Before Minority
Interest (5,765,338) (428,119) (10,883,405) (2,513,599)
Minority Interest 52,155 (115,292) 117,351 (258,461)
----------- ----------- ----------- -----------
Net Loss $(5,817,493) $(312,827)$(11,000,756) $(2,255,138)
=========== =========== =========== ===========
Net Income Per Share
Basic $(0.41) $(0.02) $(0.77) $(0.16)
Diluted $(0.41) $(0.02) $(0.77) $(0.16)
----------- ----------- ----------- -----------
Weighted average
shares outstanding
Basic 14,279,373 14,278,517 14,279,373 14,236,806
========== ========== ========== ==========
Diluted 14,655,655 14,791,096 14,655,450 15,042,641
========== ========== ========== ==========
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