Carver Corporation to sell professional sound line.LYNNWOOD, Wash.--(BUSINESS WIRE)--Nov. 21, 1995--Carver Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CAVR CAVR Canadian Administrators of Volunteer Resources CAVR Canadian Agreement on Vehicle Registration CAVR Center for Audio-Visual Research CAVR Completeness, Accuracy, Validity and Restricted access (financial accounting) ) today announced it has reached an agreement to sell the Carver Professional product line to Phoenix Gold International, Inc., (NASDAQ:PGLD), a top-line, Portland-based manufacturer of car audio equipment. Sales of professional equipment and amplifiers contributed approximately 30% of Carver's total $22 million in revenues in 1994. The total amount of the transaction for the tangible and 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. related to the company's professional line is $2.0 million. The completion of the transaction will result in a one-time net gain to Carver of approximately $900,000 or $0.25 per share after expenses and provisions for potential obsolescence ob·so·les·cent adj. 1. Being in the process of passing out of use or usefulness; becoming obsolete. 2. Biology Gradually disappearing; imperfectly or only slightly developed. of other professional products not covered not covered Health care adjective Referring to a procedure, test or other health service to which a policy holder or insurance beneficiary is not entitled under the terms of the policy or payment system–eg, Medicare. Cf Covered. by the agreement. "Selling the professional amplifier division will benefit Carver by allowing the company to focus on the consumer audio business, reduce staff and overhead, and improve Carver's liquidity and balance sheet. In addition, we gain the potential to increase short-term revenues as Carver becomes able to purchase previously-deferred shipments of offshore-sourced consumer products," said Robert A. Fulton, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . The transaction includes Phoenix Gold's use of the name "Carver Professional," and an agreement by Carver Corporation not to compete against Phoenix in the professional market for a period of five years. In addition, Carver has signed a one-year product supply and manufacturing agreement to continue manufacture of certain products for Phoenix Gold. In conjunction with the sale of the professional line, Carver expects to reduce its work force of 117 employees by more than one-third. "Phoenix Gold has already contacted some of our people to explore career opportunities, and we hope other companies will be able to use our highly skilled and dedicated workers," stated Fulton. The company will take a provision for severance costs in the fourth quarter. Carver also announced it will immediately list for sale its 74,000 square foot facility in Lynnwood. "While the property is carried on the balance sheet at approximately $2 million, reflecting the purchase price in 1985 and accumulated depreciation accumulated depreciation The total amount of depreciation that has been recorded for an asset since its date of acquisition. For example, a computer with a 5-year estimated life that was purchased for $2,000 would have accumulated depreciation of $800 [( , we believe that the building's retail value is well in excess of its book value," Fulton explained. Carver has indicated interest in leasing back part of the space as part of the terms of the sale or will seek smaller quarters in the local area. In a letter to shareholders, Fulton stated: "At the company's annual meeting in May, I announced that we would take whatever steps were necessary to restructure and redefine Verb 1. redefine - give a new or different definition to; "She redefined his duties" define, delimit, delimitate, delineate, specify - determine the essential quality of 2. Carver Corporation in order to turn it towards profitability and stop the erosion in its balance sheet and liquidity. The first steps were taken in June through major cutbacks in staffing and operating budgets Noun 1. operating budget - a budget for current expenses as distinct from financial transactions or permanent improvements budget items, operating cost, operating expense, overhead - the expense of maintaining property (e.g. . This resulted in the lowest quarterly loss in three years in the quarter ended September 30. We are now in position to embark on the next phase." Carver Corporation designs, develops, manufactures and markets high-fidelity consumer and professional audio components and systems which are known for their superior sound reproduction. Phoenix Gold is a leading designer and manufacturer of innovative, high quality, high performance accessories, electronics and speakers for the domestic and international car and custom home audio/video markets. The company's headquarters and manufacturing facilities are located at One Phoenix Gold Way, 9300 N. Decatur Street Decatur Street can refer to:
Note: Distributed on Business Wire at 3:30 a.m. November 21, 1995 CONTACT: Carver Corporation, Lynnwood John P. World, 206/775-1202 |
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