Ampex Corporation Reports Preliminary Unaudited Net Income of $10.4 Million and Earnings of $0.20 Per Share for Fiscal 1998.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.--(BUSINESS WIRE)--Feb. 17, 1999--Ampex Corporation (AMEX AMEX See: American Stock Exchange :AXC AXC Chief Aviation Antisubmarine Warfare Technician (Naval Rating) AXC Add Cross-Connect Card ) reported today net income of approximately $10.4 million on sales of $63.3 million and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $0.20 for the fiscal year ended December 31, 1998. In 1997, the Company reported net income of $14.8 million on sales of $80.3 million and diluted earnings per share of $0.32. Significant factors contributing to the fiscal 1998 results were the acquisition of MicroNet Technology, Inc. ("MicroNet") on June 30, 1998, which resulted in operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. and acquisition related charges totaling $3.0 million ($0.06 per share), and an increase in 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. and supplementary pension expense of $5.1 million ($0.10 per share). Earnings also declined due to an increase in net interest expense in 1998 of $3.7 million ($0.07 per share) and the issuance of Common Stock and the dilutive effect Dilutive effect Result of a transaction that decreases earnings per common share (EPS). of the new series of 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. ($0.03 per share). Declining sales in the Company's mass data storage and instrumentation products in 1998, offset by expense reductions, resulted in a decline 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. of $7.1 million ($0.13 per share). Earnings were favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impacted by the settlement of a state tax dispute of $5.2 million ($0.10 per share) and tax benefits realized upon the final liquidation The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts. A type of proceeding pursuant to federal Bankruptcy of an Italian subsidiary of $10.2 million ($0.19 per share). Sales declined by $17.0 million in fiscal 1998, primarily due to lower sales of instrumentation products to government customers and a decline in sales of television aftermarket Aftermarket See: Secondary market. aftermarket See secondary market. products, due to the Company's previously announced withdrawal from television product lines. Demand for the Company's instrumentation products has been affected by previously announced restrictions on government spending Government spending or government expenditure consists of government purchases, which can be financed by seigniorage, taxes, or government borrowing. It is considered to be one of the major components of gross domestic product. . These sales declines were offset in part by the inclusion of revenues of MicroNet, a producer of disk-based storage systems. MicroNet has been withdrawing from lower priced product lines and is refocusing Noun 1. refocusing - focusing again focalisation, focalization, focusing - the act of bringing into focus on higher performance disk-array products which are being introduced in 1999. In the fourth quarter of 1998, the Company reported net income of approximately $0.6 million on sales of $15.3 million and diluted earnings per share of $0.01. In the fourth quarter of 1997, the Company reported net income of $4.9 million on sales of $19.7 million and diluted earnings per share of $0.11. Sales of 19-millimeter data storage products increased materially over fourth quarter 1997 levels, but as noted previously, instrumentation products and aftermarket sales were lower than in the comparable quarter in 1997. MicroNet reported a net loss of $1.5 million in the fourth quarter of 1998 ($0.02 per share), and net interest expense increased by $1.2 million ($0.02 per share). In connection with the purchase of MicroNet, the Company engaged an independent appraisal firm to value all intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. being acquired, including in-process research and development ("IPR&D"), which was charged to operations in the second quarter of 1998. In September 1998, the Securities and Exchange Commission (SEC) specified that a different methodology should be used to value IPR&D from the methodology previously generally employed by valuation experts. Accordingly, the Company instructed the independent appraisal firm to remeasure Re`meas´ure v. t. 1. To measure again; to retrace. They followed him . . . The way they came, their steps remeasured right. - Fairfax. IPR&D using the SEC's stage of completion methodology, resulting in a lower charge. The Company has elected to restate re·state tr.v. re·stat·ed, re·stat·ing, re·states To state again or in a new form. See Synonyms at repeat. re·state its quarterly financial results and to reissue re·is·sue v. re·is·sued, re·is·su·ing, re·is·sues v.tr. To issue again, especially to make available again. v.intr. To come forth again. n. 1. its Form 10-Qs Form 10-Q See 10-Q. for the periods ended June 30, 1998 and September 30, 1998 due to the magnitude of the change, which increased net income by $1.9 million in 1998 ($0.03 per share). Future operating results will be adversely affected by increased goodwill amortization that results from the revised appraisal. Cash and short term investments increased to $62.6 million at December 31, 1998 from $41.8 million at December 31, 1997, largely due to the issuance of $44.0 million in Senior Notes. In 1998, the Company invested a portion of the proceeds in MicroNet and to acquire approximately 20% of Reiter Associates, Inc. ("Reiter"), a provider of turnkey See turnkey system. electronic commerce support, web hosting Making a Web site available on the Internet. Many ISPs host a few personal Web pages for an individual at no additional cost above the monthly service fee, but the address is subordinate to the ISP; for example, www.friendlyisp.com/pat_smith. , Internet consulting and monitoring services The general surveillance of known air traffic movements by reference to a radar scope presentation or other means, for the purpose of passing advisory information concerning conflicting traffic or providing navigational assistance. for enterprises that use the world wide web. Subsequent to year-end, Ampex announced the acquisition of a majority interest in Reiter and a strategic investment in TV onthe Web, an Internet video Video material obtained from the Internet. It may refer to streaming video from real time broadcasts, streaming archival material or downloading video files for watching later, all of which are viewed on the computer. provider. The Company has previously announced that it is evaluating, both internally and through acquisitions, additional technology initiatives and strategic investments relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc its Internet video strategy. These activities are expected to require significant expenditures that may result in consolidated net losses in future periods, while the Company is building its presence in Internet video markets. Ampex Corporation (www.ampex.com), is one of the world's leading providers of technologies for the acquisition, storage and processing of visual information. Today, Ampex is delivering digital image solutions for large-scale corporate, government, network, entertainment and telecommunications applications. During its more than 50-year history of innovation, Ampex has been granted thousands of patents and numerous awards for technical achievement. Ampex customers include such leading organizations as AT&T, CNN CNN or Cable News Network Subsidiary company of Turner Broadcasting Systems. It was created by Ted Turner in 1980 to present 24-hour live news broadcasts, using satellites to transmit reports from news bureaus around the world. , Federal Aviation Administration Federal Aviation Administration (FAA), component of the U.S. Department of Transportation that sets standards for the air-worthiness of all civilian aircraft, inspects and licenses them, and regulates civilian and military air traffic through its air traffic control , Fox Television, Netcom, and Prevue Networks. Any statements contained herein that are not historical facts are "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 1995 and involve risks and uncertainties. Information on potential factors which could affect the Company's actual results of operations are included in its filings with the Securities and Exchange Commission, including but not limited to its 1997 Annual Report in 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. , its quarterly reports on Form 10-Q for the fiscal quarters ended March 31, 1998, June 30, 1998 (as restated) and September 30, 1998 (as restated) and its Annual Report on Form 10-K for 1998 which is expected to be filed shortly. -0-
AMPEX CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share data)
Year Ended December 31,
-----------------------------------
1998 1997 1996
----------- ----------- -----------
(unaudited)
Net sales $ 63,319 $ 80,311 $ 96,485
Cost of sales 37,612 41,140 52,407
----------- ----------- -----------
Gross profit 25,707 39,171 44,078
Selling and administrative 23,978 24,452 27,084
Research, development and
engineering 11,688 15,464 15,930
Royalty income (10,591) (12,550) (10,497)
Restructuring charges
(credits) 2,526 (1,659) (453)
Acquisition of in-process
research and development 929 - -
----------- ----------- -----------
Operating income (loss) (2,823) 13,464 12,014
Interest expense 4,329 86 756
Amortization of debt
financing costs 316 - 85
Interest income (3,496) (2,991) (3,257)
Other (income) expense, net (1) 59 35
----------- ----------- -----------
Income (loss) before
income taxes (3,971) 16,310 14,395
Provision for (benefit of)
income taxes (14,409) 1,507 1,654
----------- ----------- -----------
Net income 10,438 14,803 12,741
----------- ----------- -----------
Basic income per share :
Income per share $ 0.22 $ 0.32 $ 0.29
=========== =========== ===========
Weighted average number of
common shares outstanding 47,572,224 45,616,344 43,307,645
=========== =========== ===========
Diluted income per share :
Income per share $ 0.20 $ 0.32 $ 0.28
=========== =========== ===========
Weighted average number
of common shares outstanding 53,280,956 46,461,321 44,723,031
AMPEX CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
December 31, December 31,
1998 1997
------------ ------------
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 23,357 $ 24,076
Short-term investments 39,222 17,685
Accounts receivable (net of
allowances of $1,360 and $1,484) 11,789 13,033
Inventories 19,766 16,380
Other current assets 2,510 1,560
------------ ------------
Total current assets 96,644 72,734
Property, plant and equipment 10,546 8,892
Intangible assets, net 5,461 -
Other assets 3,350 45
------------ ------------
Total assets $ 116,001 $ 81,671
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Notes payable $ 180 $ 933
Accounts payable 6,470 5,173
Income taxes payable 12 373
Accrued restructuring costs 2,135 1,706
Other accrued liabilities 17,593 19,942
------------ ------------
Total current liabilities 26,390 28,127
Long-term debt 43,380 2
Other liabilities 51,743 70,708
Deferred income taxes 1,213 1,267
Accrued restructuring costs 688 1,612
------------ ------------
Total liabilities 123,414 101,716
------------ ------------
Commitments and contingencies
Redeemable nonconvertible preferred
stock, $1,000 liquidation value:
Authorized: 69,970 shares 1998
and 1997
Issued and outstanding - none
1998; 69,970 shares 1997 - 69,970
Redeemable preferred stock, $2,000
liquidation value:
Authorized: 21,859 shares 1998
and none 1997
Issued and outstanding - 21,859
shares 1998; none 1997 43,718 -
Convertible preferred stock, $2,000
liquidation value:
Authorized: 10,000 shares 1998
and none 1997
Issued and outstanding - 10,000
shares 1998; none 1997 20,000 -
Stockholders' deficit:
Preferred stock, $1.00 par value:
Authorized: 898,171 shares
1998 and 1997
Issued and outstanding - none
1998 and 1997 - -
Common stock, $.01 par value:
Class A:
Authorized: 125,000,000
shares 1998 and 1997
Issued and outstanding -
49,782,547 shares 1998;
45,936,707 shares 1997 498 459
Class C:
Authorized: 50,000,000
shares 1998 and 1997
Issued and outstanding -
none 1998 and 1997 - -
Other additional capital 391,849 383,513
Note receivable from stockholder (4,818) (4,818)
Accumulated deficit (429,630) (440,068)
Accumulated other comprehensive
income (29,030) (29,101)
------------ ------------
Total stockholders' deficit (71,131) (90,015)
------------ ------------
Total liabilities and
stockholders' deficit $ 116,001 $ 81,671
============ ============
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