CalComp Posts Financial Results for Third Quarter, Nine Months; Ramps Up Production of CrystalJet Product Line; Identifies Fourth-Quarter Funding Requirements.ANAHEIM, Calif.--(BUSINESS WIRE)--Nov. 2, 1998 Plans Divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of Non-Strategic Businesses CalComp Technology Inc. (Nasdaq:CLCP CLCP Certified Literate Community Program ) Monday announced financial results for the third quarter and nine months ended Sept. 27, 1998, and disclosed the need for additional financing in the fourth quarter to avoid material liquidity problems. CalComp also announced that it is ramping up production of its newly developed CrystalJet(TM)-based wide-format printers, and made the decision to divest its non-strategic businesses. For the third fiscal quarter, the company reported a reduction in its net loss to $15.8 million, or 34 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , from a net loss of $23.7 million, or 51 cents per share, for the same quarter last year. 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 $35.5 million, compared with $47.3 million a year earlier. For the first nine months of fiscal 1998, CalComp reported a net loss of $48.2 million, or $1.02 per share, vs. a net loss of $40.6 million, or 86 cents per share, a year ago. Net sales were $114.9 million, compared with $159.9 million for the comparable period last year. CalComp also noted that its revolving credit agreement Revolving credit agreement A legal commitment in which a bank promises to lend a customer up to a specified maximum amount during a specified period. revolving credit agreement See line of credit. and cash management agreement with Lockheed Martin For the former company, see . Lockheed Martin (NYSE: LMT) is a leading multinational aerospace manufacturer and advanced technology company formed in 1995 by the merger of Lockheed Corporation with Martin Marietta. Corp. (NYSE NYSE See: New York Stock Exchange :LMT LMT left mentotransverse (position of fetus). ) together provide aggregate credit totaling $27 million. Lockheed Martin last increased credit availability by $8.5 million on Sept. 25, 1998, to fund near term operating requirements pending its review of CalComp's business strategy and proposed operating plans, as well as CalComp's own review of strategic alternatives. CalComp said it anticipates a requirement for additional funding during the fourth quarter, and that failure to obtain such funding from Lockheed Martin or other sources will result in material liquidity problems for the company. During the quarter, CalComp resumed shipments of its new wide-format printers that incorporate proprietary technology for achieving significantly faster print speeds and lower costs of operations than traditional wide-format printers. Applications are for short runs of point-of-purchase displays, packaging, banners, posters, trade show materials and related items. "Our CrystalJet printers have been well received by the graphic arts graphic arts: see aquatint; drawing; drypoint; engraving; etching; illustration; linoleum block printing; lithography; mezzotint; niello; pastel; poster; silk-screen printing; silhouette; silverpoint; sketch; stencil; woodcut and wood engraving. industry," said John C. Batterton, president and chief executive officer. "The company has instituted significant improvements in the CrystalJet manufacturing process, adding key personnel and reworking and streamlining printer manufacturing and testing functions. "Calcomp has also added new capital equipment designed to improve and increase volume production. With these investments in our core business, the units now in production have shown an impressive level of operating performance." On Oct. 27, 1998, CalComp made the decision to divest its Input Technologies Division, Cutter Division, and current Service and Support businesses. "These businesses are considered non-strategic, and CalComp has made the decision to focus its efforts and resources on its CrystalJet product line," said Batterton. In connection with this decision, CalComp will take a one-time noncash charge Noncash charge A cost, such as depreciation, depletion, and amortization, that does not involve any cash outflow. That is, this is treated as an accounting expense -- not a real expense that demands cash. in the fourth quarter of fiscal 1998 of approximately $60 million to write-down the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of the net assets Net assets The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand. net assets See owners' equity. of these businesses to their estimated fair value. Additionally, CalComp is currently evaluating the business model and strategy of its 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 and, as a result, expects to record noncash charges of approximately $30 million to $35 million in the fourth quarter of fiscal 1998 related to the impairment of certain long-lived assets, including goodwill. These noncash charges will have no effect on the company's current or future cash flows. Subject to obtaining sufficient financing to continue its operations, the company is also evaluating the need to realign re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. and restructure its continuing operations. The company plans to complete this evaluation in the fourth quarter of 1998 and, if required, record the appropriate realignment re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. and 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. during this quarter. CalComp Technology is a leading developer and manufacturer of computer graphics peripherals and supplies for personal, business and professional applications. As an industry leader in piezo "Piezo", derived from the Greek piezein, which means to squeeze or press, is a prefix used in:
This news release contains certain 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 related to CalComp Technology's ability to successfully develop and market new products which incorporate the company's new CrystalJet inkjet technology, achieve profitability in 1999, further extend its credit facility and attain additional funding to meet liquidity requirements. Actual results may differ materially from those indicated by such statements, as well as other factors, including those discussed in the company's periodic reports filed with the SEC.
CalComp Technology Inc.
Condensed Consolidated Statement of Operations
(In thousands, except share and per share data)
Three Months Ended Nine Months Ended
Sept. 27, Sept. 28, Sept. 27, Sept. 28,
1998 1997 1998 1997
Revenue $ 35,547 $ 47,336 $114,913 $159,919
Cost of revenue 32,289 45,360 102,095 135,780
Gross Profit 3,258 1,976 12,818 24,139
Operating Expenses 18,511 23,736 57,849 60,027
Loss from Operations (15,253) (21,760) (45,031) (35,888)
Other (Expense)
Income, Net (500) (1,754) (3,009) (3,913)
Loss Before Income Taxes (15,753) (23,514) (48,040) (39,801)
Provision for Taxes 95 225 160 752
Net Loss $(15,848) $(23,739) $(48,200) $(40,553)
Basic and Diluted
Loss Per Share $ (0.34) $ (0.51) $ (1.02) $ (0.86)
Weighted Average
Shares Outstanding 47,120,650 46,943,435 47,100,606 46,913,578
Condensed Consolidated Balance Sheet
Sept. 27, Dec. 28,
1998 1997
(In thousands)
Assets:
Cash $ 4,296 $ 6,494
Accounts Receivable, Net 19,573 30,636
Inventories 34,968 43,069
Other Current Assets 4,209 4,783
Total Current Assets 63,046 84,982
Plant and Equipment 29,323 29,048
Goodwill 75,468 79,994
Other Assets 15,230 15,433
Total Assets $ 183,067 $ 209,457
Liabilities and Stockholders' Equity:
Accounts Payable $ 21,151 $ 19,986
Deferred Revenue 7,672 6,828
Other Current Liabilities 37,188 39,014
Line of Credit with Majority Shareholder 16,322 --
Total Current Liabilities 82,333 65,828
Line of Credit with Majority Shareholder -- 59,525
Other Long-Term Liabilities 7,859 8,371
Stockholders' Equity 92,875 75,733
Total Liabilities and
Stockholders' Equity $ 183,067 $ 209,457
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