Ampex Corporation Reports First Quarter 2005 Financial Results.REDWOOD CITY Redwood City, city (1990 pop. 66,072), seat of San Mateo co., W Calif., on San Francisco Bay; inc. 1868. Manufactures include commmunications, electrical, electronic, and medical equipment. , Calif. -- Ampex (Ampex Corporation, Redwood City, CA, www.ampex.com) A manufacturer of video storage and image processing products. Founded in 1944 by Alexander M. Poniatoff, Ampex pioneered the video recording industry, introducing the first videotape recorder in 1956 and providing innovative products Corporation (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :AEXCA) today reported net income of $5.9 million or $1.52 per 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 after deduction deduction, in logic, form of inference such that the conclusion must be true if the premises are true. For example, if we know that all men have two legs and that John is a man, it is then logical to deduce that John has two legs. of $2.6 million or $0.67 per diluted share for the cost of patent litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. . In the first quarter of 2004 the Company reported a net loss of ($0.3) million or ($0.07) per diluted share after deduction of $0.5 million or $0.13 per diluted share of patent litigation expense. Total revenues were $17.9 million in the first quarter of 2005 compared with $9.9 million in the first quarter of the prior year. Licensing revenue totaled $11.4 million in the first quarter of 2005, up from $1.7 million in the first quarter of 2004. During the first quarter of 2005 new patent licensing agreements were announced with six additional manufacturers of digital still cameras (Casio
Olympus Corporation (オリンパス株式会社 , PENTAX Pentax Corporation (ペンタックス株式会社 Corporation, Samsung Techwin Co., Ltd. and Victor Company of Japan, Ltd.). In the first quarter of 2005, $3.1 million of licensing revenue reflected prepayments Prepayments Payments made in excess of scheduled mortgage principal repayments. of royalty obligations through the first quarter of 2006. The balance of $8.3 million represents royalties in respect of past or current sales under licenses that provide for running royalties based on the licensee's revenues from products that infringe in·fringe v. in·fringed, in·fring·ing, in·fring·es v.tr. 1. To transgress or exceed the limits of; violate: infringe a contract; infringe a patent. 2. our patents. In the first quarter of 2004, all of the Company's licensing revenue came from running royalties paid by manufacturers of digital video camcorders. During the first quarter of 2005, the Company's intellectual property costs included litigation costs of $2.6 million or $0.67 per diluted share related to lawsuits that it initiated in October 2004 against Eastman Kodak Company (NYSE NYSE See: New York Stock Exchange :EK) alleging patent infringement patent infringement n. the manufacture and/or use of an invention or improvement for which someone else owns a patent issued by the government, without obtaining permission of the owner of the patent by contract, license or waiver. . Suits brought against two other manufacturers of digital still cameras were settled in the fourth quarter of 2004 upon successfully concluding licensing agreements. Patent litigation costs incurred in the first quarter of 2004 totaled $0.5 million. The Company may seek to enforce its digital imaging patents by instituting additional litigation against manufacturers of digital still cameras, digital video camcorders, DVD recorders (1) A recordable or rewritable DVD drive that is connected to the computer. It may be an internal or external device. See DVD drives, DVD-R, DVD-RW, DVD+R and DVD+RW. (2) or other products if we believe our patents are being infringed by such manufacturers and licensing agreements cannot be concluded on satisfactory terms. The Licensing segment contributed operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. of $8.4 million or $2.15 per diluted share in the first quarter of 2005 compared to operating profit of $0.9 million or $0.23 per diluted share in the first quarter of 2004. Product sales and service revenues from the Company's Recorders' segment totaled $6.5 million for the first quarter of 2005 compared to $8.2 million in the first quarter of 2004. The sales decline is primarily attributed to an ongoing transition from an older generation of tape-based image and data acquisition products to a newly introduced range of solid state and hard disk-based products. Such sales declines coupled with increased research and development and selling and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. for the Recorders' segment, which were partially offset by improved gross profit margins Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. , resulted in a drop in operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. in the first quarter of 2005 to $0.7 million or $0.17 per diluted share compared to $2.0 million or $0.53 per diluted share in the first quarter of 2004. Interest expense, net and other financing costs, totaled $0.7 or $0.19 per diluted share in the quarter ended March 31, 2005, compared to $2.4 million or $0.64 per diluted share in the quarter ended March 31, 2004, reflecting $62.4 million of debt repayment in the fourth quarter of 2004. On May 3, 2005 the Company called $10 million of its 12% senior notes to be redeemed re·deem tr.v. re·deemed, re·deem·ing, re·deems 1. To recover ownership of by paying a specified sum. 2. To pay off (a promissory note, for example). 3. , which will reduce the principal amount to $5.8 million when completed in the second quarter of 2005. The Company's annual effective tax rate was less than the statutory rate in the quarter ended March 31, 2005 due to the ability to offset taxable income Under the federal tax law, gross income reduced by adjustments and allowable deductions. It is the income against which tax rates are applied to compute an individual or entity's tax liability. The essence of taxable income is the accrual of some gain, profit, or benefit to a taxpayer. with available net operating loss carryforwards Net operating loss carryforwards Application of losses to offset earnings in future years. which at December 31, 2004 totaled $178 million. In the quarter ended March 31, 2004 the Company benefited from income, including its pro rata [Latin, Proportionately.] A phrase that describes a division made according to a certain rate, percentage, or share. In a Bankruptcy case, when the debtor is insolvent, creditors generally agree to accept a pro rata share of what is owed to them. share of gains realized on the sale of investments held by a limited partnership, totaling $1.2 million or $0.33 per diluted share. The limited partnership sold or distributed all remaining investments by the end of 2004. Ampex Corporation, www.ampex.com, headquartered in Redwood City, California Redwood City is a suburb located on the San Francisco Peninsula in the San Francisco Bay Area of California. Redwood City is the county seat of San Mateo County. As of the 2005 census, the city had a total population of 76,000. , is one of the world's leading innovators innovators people who will try new things. early innovators important figures in the farming or client community because they are the leaders in the introduction of new techniques and management systems. and licensors of technologies for the visual information age. This news release contains predictions, projections and other statements about the future that are intended to be "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. " within the meaning of 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 l995 (collectively, "forward-looking statements"). Forward-looking statements relate to various aspects of the Company's operations and strategies, including but not limited to the effects of having experienced significant losses in the past and the risk that the Company may incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. losses in the future; the Company's limited liquidity and significant indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. and interest expense; its sales and royalty forecasts for future periods not being attained at·tain v. at·tained, at·tain·ing, at·tains v.tr. 1. To gain as an objective; achieve: attain a diploma by hard work. 2. , and the risk that the Company will not conclude additional royalty-bearing license agreements covering its digital technologies; the Company's marketing, product development, acquisition, investment, licensing and other strategies not being successful; possible future issuances of debt or equity securities; the possible incurrence In`cur´rence n. 1. The act of incurring, bringing on, or subjecting one's self to (something troublesome or burdensome); as, the incurrence of guilt, debt, responsibility, etc. s> Noun 1. of significant patent litigation expenses or adverse legal determinations finding the Company's patents not be valid or not to have been infringed; new business development and industry trends; the possible need to raise additional capital in order to meet the Company's obligations; reliance on a former affiliate to make contributions to the Company's pension plans which are substantially underfunded un·der·fund tr.v. un·der·fund·ed, un·der·fund·ing, un·der·funds To provide insufficient funding for. underfunded adj → infradotado (económicamente) ; and most other statements that are not historical in nature. Important factors that could cause actual results to differ materially from those described in the forward-looking statements are described in cautionary statements included in this news release and/or in the Company's 2004 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. which has been filed with the SEC and its Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the fiscal quarter ended March 31, 2005, which has also been filed with the SEC. In assessing forward-looking statements, readers are urged to consider carefully these cautionary statements. Forward-looking statements speak only as of the date of this news release, and the Company disclaims any obligations to update such statements.
AMPEX CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(in thousands, except share and per share data)
For the Three Months Ended
March 31,
----------------- -----------------
2005 2004
----------------- -----------------
(unaudited)
Licensing revenue $11,411 $ 1,661
Product revenue 4,246 6,010
Service revenue 2,274 2,218
----------------- -----------------
Total revenue 17,931 9,889
----------------- -----------------
Intellectual property costs 3,028 803
Cost of product revenue 2,536 3,465
Cost of service revenue 689 578
Research, development and
engineering 1,032 889
Selling and administrative 3,668 2,781
----------------- -----------------
Total costs and operating
expenses 10,953 8,516
----------------- -----------------
Operating income 6,978 1,373
Media pension costs 193 322
Interest expense 741 2,359
Amortization of debt financing
costs 14 14
Interest income (69) (25)
Other (income) expense, net (46) 6
----------------- -----------------
Income (loss) before income
taxes and equity in income of
limited partnership 6,145 (1,303)
Provision for income taxes 221 167
Equity in income of limited
partnership - (1,220)
----------------- -----------------
Net income (loss) 5,924 (250)
Other comprehensive income (loss),
net of tax:
Foreign currency translation
adjustments 53 (2)
----------------- -----------------
Comprehensive income (loss) $ 5,977 $ (252)
================= =================
Basic income (loss) per share $ 1.60 $ (0.07)
----------------- -----------------
Weighted average number of basic
common shares outstanding 3,698,197 3,717,682
================= =================
Diluted income (loss) per share $ 1.52 $ (0.07)
----------------- -----------------
Weighted average number of diluted
common shares outstanding 3,901,223 3,717,682
================= =================
AMPEX CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
March 31, December 31,
2005 2004
-------------- --------------
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 7,426 $ 8,840
Short-term investments 9,187 9,134
Accounts receivable (net of
allowances of $68 in 2005 and $74
in 2004) 2,852 2,602
Inventories 4,885 5,187
Royalties receivable 5,927 -
Other current assets 2,042 2,071
Property held for sale 2,631 2,670
-------------- --------------
Total current assets 34,950 30,504
Property, plant and equipment 1,483 1,560
Other assets 540 555
-------------- --------------
Total assets $ 36,973 $ 32,619
============== ==============
LIABILITIES, REDEEMABLE PREFERRED STOCK AND
STOCKHOLDERS' DEFICIT
Current liabilities:
Notes payable $ 122 $ 131
Accounts payable 3,834 1,577
Net liabilities of
discontinued operations 925 1,042
Accrued restructuring costs 645 645
Other accrued liabilities 17,041 15,260
-------------- --------------
Total current liabilities 22,567 18,655
Long-term debt 29,807 30,275
Other liabilities 72,475 77,993
Accrued restructuring costs 1,464 1,622
Net liabilities of discontinued
operations 3,402 3,503
-------------- --------------
Total liabilities 129,715 132,048
-------------- --------------
Commitments and contingencies
Mandatorily redeemable nonconvertible preferred stock,
$1,000 liquidation value per share:
Authorized: 69,970 shares in
2005 and in 2004
Issued and outstanding - none
in 2005 and in 2004 - -
Mandatorily redeemable preferred
stock, $2,000 liquidation value per
share:
Authorized: 21,859 shares in
2005 and in 2004
Issued and outstanding - none
in 2005 and in 2004 - -
Convertible preferred stock,
$2,000 liquidation value per
share:
Authorized: 10,000 shares in
2005 and in 2004
Issued and outstanding - none
in 2005 and in 2004 - -
Stockholders' deficit:
Preferred stock, $1.00 par
value:
Authorized: 898,171 shares
in 2005 and in 2004
Issued and outstanding -
none in 2005 and in 2004 - -
Common stock, $.01 par value:
Class A:
Authorized: 175,000,000
shares in 2005 and in
2004
Issued and outstanding -
3,700,364 shares in 2005;
3,692,517 in 2004 37 37
Class C:
Authorized: 50,000,000
shares in 2005 and in
2004
Issued and outstanding -
none in 2005 and in
2004 - -
Other additional capital 454,546 454,525
Accumulated deficit (457,756) (463,680)
Accumulated other
comprehensive loss (89,569) (90,311)
-------------- --------------
Total stockholders' deficit (92,742) (99,429)
-------------- --------------
Total liabilities, redeemable
preferred stock and
stockholders' deficit $ 36,973 $ 32,619
============== ==============
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