Ampex Corporation Reports Second Quarter Financial Results.Business Editors 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)--Aug. 3, 2000 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 (AMEX AMEX See: American Stock Exchange :AXC AXC Chief Aviation Antisubmarine Warfare Technician (Naval Rating) AXC Add Cross-Connect Card ) reported a net loss of $7.7 million or $0.14 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 for the second quarter ended June June: see month. 30, 2000, compared to a net loss of $0.6 million or $0.01 per diluted share for the comparable period in 1999. Revenues from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the totaled $7.1 million in the second quarter of 2000 and $13.6 million in the second quarter of 1999. In the second quarter of 1999, the Company recorded royalty Compensation for the use of property, usually copyrighted works, patented inventions, or natural resources, expressed as a percentage of receipts from using the property or as a payment for each unit produced. income of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $7.5 million or $0.14 per diluted share earned in prior periods under a license agreement signed during the period. Excluding this nonrecurring Non`re`cur´ring a. 1. Nonrecurrent; as, the costs of a layoff are considered as a nonrecurring expense s>. item, revenues from continuing operations comprised of MicroNet data storage products, current period royalties and Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the revenues increased by $0.9 million or 15% in the second quarter of 2000 compared to the prior year's quarter. In the second quarter of 2000, the Company's 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. operations, which are primarily conducted through its subsidiary iNEXTV and affiliates, recorded revenue of $0.5 million and incurred an operating loss 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. of $0.13 per diluted share. The operating loss included a non-cash expense Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) of $0.03 per diluted share for amortization of goodwill from acquired Internet businesses. In the second quarter of 1999, the Company's Internet video business recorded revenues of $0.4 million and incurred an operating loss of $0.06 per diluted share. The Company has incurred significant expenditures to establish an extensive network of wholly-owned and affiliated af·fil·i·ate v. af·fil·i·at·ed, af·fil·i·at·ing, af·fil·i·ates v.tr. 1. To adopt or accept as a member, subordinate associate, or branch: Internet video web sites and dedicated production and distribution facilities. The Company believes that the rate of such expenditures will decline later in the year. The Company's disk array business, which is conducted through its wholly-owned subsidiary MicroNet Technology, Inc., reported revenues of $3.0 million and an operating loss of $0.02 per diluted share in the second quarter ended June 30, 2000. In the second quarter of 1999, MicroNet reported revenues of $2.8 million and an operating loss of $0.01 per diluted share. A delay in the receipt of outsourced com-ponent parts used in its new generation of high-capacity Genesis(TM) disk arrays was primarily responsible for the increased loss in the quarter, offsetting initial shipments of SANcube(TM), MicroNet's newly introduced Storage Area Network product family. Royalty income totaled $3.6 million or $0.06 per diluted share in the second quarter of 2000 compared to $10.5 million or $0.20 per diluted share in the second quarter of 1999. Royalty income in 1999 was positively impacted by approximately $0.14 per diluted share for royalties earned in prior periods under a multi-year license agreement signed during the period. Ampex Data Systems Corporation, a subsidiary which the Company intends to sell and which is accounted for as a discontinued operation discontinued operation A segment of a business that has been abandoned or sold or for which plans for one or another of these actions have been approved. See also continuing operations. , reported net income of $0.7 million or $0.01 per diluted share in the second quarter ended June 30, 2000, on sales of $12.3 million, compared to a net loss of $5.0 million or $0.09 per diluted share in the second quarter of 1999, on sales of $13.3 million. Ampex's Internet video operations are funded from its own liquid resources which amounted to $27.2 million at June 30, 2000 compared to $33.1 million at March 31, 2000. During the quarter, Ampex increased its investment in AENTV, a majority-owned Internet video subsidiary based in Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. , and gave notice that it would increase its investment in TV1 Internet Television Internet television (or Internet TV) is television distributed via the Internet. Overview In the past, television was only distributed by cable, satellite, or terrestrial systems. based in Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). . The Company intends to invest a significant portion of the funds that it currently expects to receive from the sale of its Ampex Data Systems subsidiary in its Internet video activities and its other continuing operations. Ampex Corporation, (www.Ampex.com), headquartered in Redwood City, CA, 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. of technologies for the visual information age. Its iNEXTV subsidiary is the premier developer and netcaster See Netscape Netcaster. of video for the Internet. The iNEXTV network of affiliated video websites currently includes: AENTV.com, one of the largest on-demand On-Demand refers to a service or feature which addresses the user's need for instant gratification and immediacy of use. In most cases the value proposition for an on-demand service is wrapped up in the fact that the user or consumer of the service avoids a significant up-front streaming video A one-way video transmission over a data network. It is widely used on the Web as well as company networks to play video clips and video broadcasts. Computers in home networks stream video to digital media hubs connected to a home theater. sites about the entertainment industry; EXBTV.com, a producer and netcaster of original Internet programming covering the executive branch of government; istyle.com, a premier video driven lifestyle website; TV onthe WEB.com Web.com, Inc (NASDAQ: WWWW), formerly Interland (NASDAQ:INLD), was a provider of websites and web services to small businesses and consumers, based in Atlanta, Georgia. Web. , a leading provider of webcasting services; and TV1 Internet Television, one of Europe's top webcasters. In addition, iNEXTV operates the Internet Technology Group to develop enhanced technology for Internet video. Ampex's two other wholly-owned subsidiaries, MicroNet Technology, Inc. and Ampex Data Systems Corporation, provide high-performance Adj. 1. high-performance - modified to give superior performance; "a high-performance car" superior - of high or superior quality or performance; "superior wisdom derived from experience"; "superior math students" digital storage solutions for industry, entertainment and government applications. 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. 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 that involve risk and uncertainties and unforeseen circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or that could cause actual results to differ materially from those currently anticipated. Potential risks and uncertainties include, without limitation, risks of continuing losses from future operations, risks affecting the Company's Internet strategy, uncertainty as to the timing or terms of any sale of Data Systems and other risks mentioned in the Company's 1999 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. filed with the SEC, its Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the fiscal quarter ended March 31, 2000 and its Quarterly Report of Form 10-Q for the fiscal quarter ended June 30, 2000, which is expected to be filed shortly. References to loss per share in the quarter ended June 30, 2000 and June 30, 1999 refer to loss applicable to common stockholders.
AMPEX CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
(unaudited)
June 30, December 31,
2000 1999
ASSETS
Current assets:
Cash and cash equivalents $ 14,784 $ 10,598
Short-term investments 12,429 31,067
Accounts receivable
(net of allowances
of $285 in 2000
and $358 in 1999) 1,927 1,236
Inventories 3,044 2,261
Other current assets 2,578 4,951
Total current assets 34,762 50,113
Property, plant and equipment 6,479 5,363
Intangible assets, net 7,738 9,806
Investment in unconsolidated
companies 1,786 1,786
Deferred pension asset 7,207 5,571
Other assets 1,395 1,620
Net assets of business
held for disposition 19,682 13,060
Total assets $ 79,049 $ 87,319
LIABILITIES, REDEEMABLE PREFERRED
STOCK AND STOCKHOLDERS' DEFICIT
Current liabilities:
Notes payable $ 553 $ 1,103
Accounts payable 4,387 2,569
Accrued restructuring costs 358 67
Other accrued liabilities 11,215 7,913
Total current liabilities 16,513 11,652
Long-term debt 45,220 43,914
Other liabilities 21,240 21,634
Deferred income taxes 1,213 1,213
Accrued restructuring costs 11 -
Total liabilities 84,197 78,413
Commitments and contingencies - -
Mandatorily redeemable junior
preferred stock - -
Mandatorily redeemable nonconvertible
preferred stock, $1,000
liquidation value:
Authorized: 69,970 shares
in 2000 and in 1999
Issued and outstanding -
none in 2000 and in 1999 - -
Mandatorily redeemable preferred stock,
$2,000 liquidation value:
Authorized: 21,859 shares in
2000 and in 1999
Issued and outstanding -
18,784 shares in 2000;
19,321 in 1999 36,494 38,642
Convertible preferred stock,
$2,000 liquidation value:
Authorized: 10,000 shares in
2000 and in 1999
Issued and outstanding -
1,125 shares in 2000;
1,885 in 1999 2,250 3,770
Stockholders' deficit:
Preferred stock, $1.00 par value:
Authorized: 898,171 shares
in 2000 and in 1999
Issued and outstanding -
none in 2000 and in 1999 - -
Common stock, $.01 par value:
Class A:
Authorized: 175,000,000 shares
in 2000 and in 1999
Issued and outstanding -
57,066,503 shares in 2000;
55,941,854 in 1999 571 559
Class C:
Authorized: 50,000,000 shares
in 2000 and in 1999
Issued and outstanding -
none in 2000 and in 1999 - -
Other additional capital 419,574 415,437
Notes receivable from stockholders (4,642) (4,642)
Accumulated deficit (459,406) (445,001)
Accumulated other comprehensive
income 11 141
Total stockholders' deficit (43,892) (33,506)
Total liabilities, redeemable
preferred stock and stockholders'
deficit $ 79,049 $ 87,319
AMPEX CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands, except share and per share data)
(unaudited)
For the three For the six
months ended months ended
June 30, June 30,
2000 1999
Royalty income $ 3,587 $ 10,460 $ 6,706 $ 13,122
Internet revenue 488 395 1,063 395
Product sales 2,990 2,787 6,251 5,612
Total revenue 7,065 13,642 14,020 19,129
Intellectual property
costs 238 188 608 565
Internet video
programming and site
development 2,461 - 5,710 -
Cost of product sales 2,598 2,045 4,853 4,637
Research, development
and engineering 367 257 811 441
Selling and
administrative 6,483 4,015 12,277 6,246
Amortization of goodwill 1,459 473 2,336 776
Total costs and
operating expenses 13,606 6,978 26,595 12,665
Operating income (loss) (6,541) 6,664 (12,575) 6,464
Interest expense 1,383 1,392 2,747 2,744
Amortization of debt
financing costs 87 88 175 174
Interest income (214) (534) (761) (1,273)
Other (income) expense, net 223 626 222 624
Income (loss) from
continuing operations
before income taxes (8,020) 5,092 (14,958) 4,195
Provision for income taxes 365 1,065 688 1,325
Income (loss) from
continuing
operations (8,385) 4,027 (15,646) 2,870
Income (loss) of business
held for disposition
(net of taxes of $(35)
in 2000 and
none in 1999) 693 (5,008) 1,241 (5,798)
Net loss (7,692) (981) (14,405) (2,928)
Benefit from
extinguishment
of mandatorily
redeemable preferred
stock - 374 - 374
Net loss available for
common stockholders (7,692) (607) (14,405) (2,554)
Other comprehensive loss,
net of tax:
Unrealized gain (loss)
on marketable
securities (11) 68 (141) 267
Foreign currency
translation
adjustments 1 - 11 -
Comprehensive loss $ (7,702) $ (539) $ (14,535) $(2,287)
Basic and diluted
income(loss) per share :
Income (loss) per
share from
continuing
operations $ (0.15) $ 0.08 $ (0.28) $ 0.06
Income (loss)
per share from
discontinued
operations $ 0.01 $ (0.09) $ 0.02 $ (0.11)
Income (loss) per
share available
to common
stockholders $ (0.14) $ (0.01) $ (0.26) $ (0.05)
Weighted average
number of common
shares
outstanding 55,916,857 53,113,090 55,717,651 51,865,591
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