Accent Color Sciences, Inc. Reports Higher Sales and a Greatly Reduced Loss for Fourth Quarter and Full Year.EAST HARTFORD East Hartford, urban town (1990 pop. 50,452), Hartford co., central Conn., on the Connecticut River opposite Hartford; settled c.1640, inc. 1783. East Hartford is a trucking and warehousing center, with bulk oil storage and distribution. , Conn.--(BUSINESS WIRE)--March 10, 1999--Accent Color Sciences, Inc. (Nasdaq: ACLR ACLR American Criminal Law Review (Georgetown University Law Center publication) ACLR Adjacent Channel Leakage Power Ratio ACLR Anterior Cruciate Ligament Reconstruction ACLR Amateur Cross Link Repeater ACLR Athlétic Club La Roche ), a leading provider of high-speed spot color A color that is printed from one printing plate which contains one matched color of ink. Spot colors are used when only one or two solid colors are needed on a page or when a color has to match perfectly and be consistent such as with a company logo or when colors are the trademark of the printing systems, today reported increases in revenues for the fourth quarter and full calendar year, accompanied by a large decline in the net loss. The company shipped 18 Truecolor(TM) systems during the quarter and 50 Truecolor(TM) system upgrades for the full year. The company also reported that its backlog as of December 31, 1998, had grown to 35 systems from 18 at the end of 1997. Accent Color plans to deliver 15 systems to customers during the first quarter of 1999. For the quarter ended December 31, 1998, 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 were $6,216,647 compared to net sales of $292,326 for the fourth quarter of 1997. During the final 1998 quarter, the company, in accordance with its revenue recognition policy on system sales System sales is a business term used in the franchising industry. Franchisors provide supplies, marketing and administration services to franchisees in return for a part of the franchisees' revenues. Some franchisors also operate some outlets directly. , determined that it had adequate warranty experience to begin recognizing revenues upon shipment of systems to its primary OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and (original equipment manufacturer) customer. That determination resulted in approximately $4,261,000 of previously deferred revenues being recorded in the fourth quarter of 1998. The company will continue deferring revenue on shipments to its second OEM customer until systems are in production and are past the warranty period or until the company has adequate warranty history with that customer. The net loss for the quarter was $1,711,877, or $0.13 per basic and 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. share, versus a net loss of $5,584,693, or $0.47 per basic and diluted share, for the year-earlier quarter. For 1998, revenues were $8,219,586, up from $1,577,508 recorded for 1997. Of the sales recognized in 1998, $2,496,000 was from deferred revenue recorded in 1997. The net loss for the year prior to a one-time non-cash imputed Attributed vicariously. In the legal sense, the term imputed is used to describe an action, fact, or quality, the knowledge of which is charged to an individual based upon the actions of another for whom the individual is responsible rather than on the individual's dividend on preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. of $920,000 was $9,769,853, or $0.79 per basic and diluted share, a 48% decrease from the 1997 net loss of $18,690,564, or $1.77 per basic and diluted share. Including the one-time non-cash imputed dividend on preferred stock, the 1998 net loss was $10,689,853, or $0.87 per basic and diluted share. Accent Color cautioned that its expectations for shipments in the early months of 1999 may not be indicative of shipments for the full year 1999. The company has been advised by its primary OEM customer of concerns for sales activity in the second half of 1999 based on several factors, including the possibility of reduced orders because of end-user customer concerns for Year 2000 transition issues. The company believes that its systems are fully Y2K compliant Capable of correctly processing any data that deals with a date beyond the year 1999. See Y2K problem. but expects that general Y2K See Y2K problem and Y2K compliant. Y2K - Year 2000 concerns may lead to deferral deferral - Waiting for quiet on the Ethernet. of purchasing decisions by potential end-user customers in the second half of 1999. Charles E. Buchheit, president and chief executive officer, said: "We are uncertain as to the amount of impact those deferral decisions will have on our sales this year, but we have already begun reducing our expenses through personnel and other reductions to meet our reduced internal forecasts for the second half of this year. In the meantime Adv. 1. in the meantime - during the intervening time; "meanwhile I will not think about the problem"; "meantime he was attentive to his other interests"; "in the meantime the police were notified" meantime, meanwhile , our first-half business is continuing at last year's pace and we are focused on getting as many end-user customers as possible into production prior to their Y2K transition periods." The company also cautioned that it continues not to be in compliance with the Nasdaq net tangible asset Tangible Asset An asset that has a physical form such as machinery, buildings and land. Notes: This is the opposite of an intangible asset such as a patent or trademark. Whether an asset is tangible or intangible isn't inherently good or bad. and minimum bid price continued listing requirements Listing requirements Requirements, including minimum shares outstanding, market value, and income, that are laid down by an exchange for any stock to be listed for trading. . Furthermore, the company's ability to raise sufficient equity capital to maintain listing will likely be adversely affected by concerns for the level of sales activity in the second half of 1999. The company said that it has discussed its situation with Nasdaq and that a determination concerning its continued listing is pending and within the discretion of Nasdaq. Accent Color Sciences, Inc. designs, manufactures and sells innovative, high-speed spot color printing systems -- Truecolor(tm) Systems -- for the production printing and production publishing segments of the printing industry. Truecolor(TM) Systems, when integrated with high-speed, digital, black-on-white printers, create a system that prints or highlights critical information in multiple colors for large-volume applications. Such applications include billing statements, account statements, invoices, legal notices, brochures, financial reports and short-run, on-demand publications. "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " Statement Under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: The statements contained in this news release that are forward-looking are based on current expectations that are subject to a number of uncertainties and risks, and actual results may differ materially. Those risks and uncertainties include, but are not limited to: (i) the level of customer acceptance of the Company's products; (ii) the ability of the Company to raise capital sufficient to support its business plan; (iii) the dependence of the Company on third-party suppliers for certain key technology elements, (iv) the effect of Y2K concerns on the market for the company's product, and (v) the potential fluctuations in the Company's quarterly results of operations. Further information on factors that could cause actual results to differ from those anticipated is detailed in the Company's annual report on 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 1998, quarterly reports on Form 10-Q Form 10-Q See 10-Q. , and other filings with the Securities and Exchange Commission. NOTE: Press releases and other information are available on Accent Color Sciences' World Wide Web site at http://www.accentcolor.com. -0-
ACCENT COLOR SCIENCES, INC.
Results of Operations
Three Months Ended 12 Months Ended
December 31, December 31,
1998 1997 1998 1997
Sales $6,216,647 $ 292,326 $8,219,586 $1,577,508
Costs and expenses:
Costs of
production 6,197,630 2,953,475 9,836,379 7,396,828
Research and
development 825,063 2,051,134 4,248,779 8,786,217
Marketing,
general and
administrative 817,373 969,554 3,822,113 4,438,518
7,840,066 5,974,163 17,907,271 20,621,563
Other (income) expense
Interest expense 102,739 44,151 199,572 245,550
Interest income (14,281) (141,295) (117,404) (599,041)
88,458 (97,144) 82,168 (353,491)
Net loss $(1,711,877) $(5,584,693) $(9,769,853) $(18,690,564)
One-time non-cash
imputed dividend on
preferred stock -- -- (920,000) --
Net loss applicable
to common stock $(1,711,877) $(5,584,693)$(10,689,853) $(18,690,564)
Net loss per common
share, basic and
diluted, prior to
one-time non-cash
imputed dividend on
preferred stock $ (0.13) $ (0.47) $ (0.79) $ (1.77)
Net loss per common
share, basic and
diluted, attributable
to one-time non-cash
imputed dividend on
preferred stock $ -- $ -- $ (0.07) $ --
Net loss per common
share, basic and diluted,
after one-time non-cash
imputed dividend on
preferred stock $ (0.13) $ (0.47) $ (0.87) $ (1.77)
Weighted av. no.,
common shares
outstanding 12,682,501 11,775,658 12,330,903 10,566,890
Balance Sheet Data
(In 000s) December 31, December 31,
1998 1997
Cash and cash equivalents $ 1,048 $ 4,006
Working capital 2,646 4,836
Total assets 6,860 12,407
Deferred revenue 595 2,496
Total long-term debt, less discount 2,236 0
Total shareholders' equity 1,790 7,270
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