Cerplex Announces Second Quarter 1997 Results.TUSTIN, Calif.--(BUSINESS WIRE)--Aug. 27, 1997--The Cerplex Group Inc. (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). BB: CPLX), a leading provider of electronic repair services, spare parts Spare parts, also referred to as Service Parts is a term used to indicate extra parts available and in proximity to the mechanical item, such as a automobile, boat, engine, for which they might be used. Spare parts are also called “spares. and returns processing, Wednesday announced a second quarter loss of $9.4 million, or $0.30 per share, compared with $0.7 million net income for the quarter ended June 30, 1996. 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 for the quarter ended June 30, 1997 were $39.3 million compared with $51.3 million for the second quarter of 1996. During the second quarter of 1997, the company reported a $6.6 million gain from the sale of its subsidiary, Peripheral Computer Support Inc. (PCS (1) (Personal Communications Services) Refers to wireless services that emerged after the U.S. government auctioned commercial licenses in 1994 and 1995. This radio spectrum in the 1. ). Offsetting this gain was a $4.3 million charge for restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). expenses, and $7.8 million write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of excess and obsolete inventory Obsolete Inventory Term that refers to inventory that is at the end of its product life cycle and has not seen any sales or usage for a set period of time usually determined by the industry. This type of inventory has to be written down and can cause large losses for a company. , property and equipment and other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. related to the restructuring, which included the closing of two spare parts business locations and consolidation of depot repair facilities. In addition, there was a decrease in margins due to inefficiencies caused by lower overall sales volume in the company's North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. depot repair and spare parts business. For the six month period ended June 30, 1997, Cerplex reported a loss of $14.4 million compared with a loss of $0.9 million for the comparable period in 1996. Net sales for the first half of 1997 were $85.6 million down from $92.2 million for the same period of 1996. The decrease is primarily due to the sale of InCirT Division in April 1996, the sale of PCS in April 1997, and the closing of Certech Technology Inc. in September 1996, partially offset by the June 1996 purchase of Cerplex SAS (1) (SAS Institute Inc., Cary, NC, www.sas.com) A software company that specializes in data warehousing and decision support software based on the SAS System. Founded in 1976, SAS is one of the world's largest privately held software companies. See SAS System. and the acquisition of the remaining 51% interest in Modcomp/Cerplex L.P. In addition, the company announced that the sale of its Modcomp/Cerplex L.P. subsidiary had been closed with a resulting $6.0 million permanent paydown of senior debt. This transaction completed requirements for effecting an amendment to the company's senior credit agreement and a restructuring of its senior subordinated note agreement. The amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. agreements provide for issuance of an aggregate of 1,762,284 warrants to its senior lenders and subordinated noteholders and will require significant future increases in interest rates if the company is unable to complete a near term refinancing Refinancing An extension and/or increase in amount of existing debt. of its debt. Further details regarding such amendments will be included in the company's Current Report on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. . Stephen J. Hopkins, chief executive officer at Cerplex, said that during the first half of 1997 the company had embarked upon a major internal restructuring of its North America operations to reduce costs. "We reached a point where our corporate infrastructure, originally built to support more locations and divisions, needed adjustment to support our current services offerings," Hopkins said. "By consolidating and reducing excess facilities, capacity and personnel we enhanced our efforts to return to profitability while continuing to provide high quality support to our customers." About Cerplex Cerplex is an independent provider of service outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. for the high technology industry. The company specializes in repair services, spare parts sourcing and service management focusing on the computer peripherals, office automation and communication markets. Specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. post manufacturing capabilities include product repair, remanufacturing and conversion, parts sales and management, returns processing, logistics and service administration. Additionally, the company offers contract manufacturing of high value products and calibration calibration /cal·i·bra·tion/ (kal?i-bra´shun) determination of the accuracy of an instrument, usually by measurement of its variation from a standard, to ascertain necessary correction factors. services in Europe. The company's custom developed programs can offer manufacturers and service providers a reduction in service costs, shortened short·en v. short·ened, short·en·ing, short·ens v.tr. 1. To make short or shorter. 2. response times, and improved customer satisfaction. The company has transportation hubs Transportation hub is a location where traffic is exchanged across several modes of transport. These modes may include any of railway, tramway, rapid transit, bus, automobile, truck, airplane, spacecraft, ship, ferry, pedestrian or any other kind of transportation. and specialized facilities in the U.S. and Europe that enable it to support the diverse needs of its global customers. Visit Cerplex's homepage at www.cerplex.com . -0-
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(Unaudited)
June 30, Dec. 31,
1997 1996
ASSETS
Current assets:
Cash and cash equivalents $ 21,788 $ 23,782
Accounts receivable, net 17,023 19,539
Inventories 8,987 17,326
Net assets of discontinued
operations -- 1,681
Prepaid expenses and other
current assets 5,116 8,146
Total current assets 52,914 70,474
Property, plant and equipment,
net 23,836 28,039
Goodwill (272) 4,953
Other long-term assets 1,639 2,028
Total assets $ 78,117 $ 105,494
-0-
LIABILITIES & STOCKHOLDERS' DEFICIENCY
Current liabilities:
Notes payable to banks $ 35,897 $ 6,000
Notes payable 4,826 5,026
Accounts payable 15,117 19,498
Accrued and other
current liabilities 28,083 25,347
Income taxes payable -- 1,729
Total current liabilities 83,923 57,600
Long-term debt, less current
portion 18,114 56,817
Long-term obligations 6,214 6,214
-0-
Commitments and contingencies
Subsequent events
Stockholders' deficiency:
Preferred stock, par value $0.001;
3,066,340 shares authorized, none
outstanding. 8,000 shares Series B
Convertible Preferred Stock of which
657 and 7,197 are issued and outstanding
as of June 30, 1997 and Dec. 31, 1996,
respectively; aggregate liquidation
preference of $1,314 and $14,394 as of
June 30, 1997 and Dec. 31, 1996,
respectively. 657 7,197
Common stock, par value $0.001
per share; 60,000,000 and 30,000,000
shares authorized as of June 30, 1997
and Dec. 31, 1996, respectively;
34,217,655 and 14,110,949 issued and
outstanding as of June 30, 1997 and
Dec. 31, 1996, respectively. 34 14
Additional paid-in capital 58,646 51,648
Notes receivable from
stockholders -- (139)
Unearned compensation -- (73)
Accumulated deficiency (88,774) (74,414)
Cumulative translation
adjustment (697) 630
Total stockholders' deficiency (30,134) (15,137)
Total liabilities and
stockholders' deficiency $ 78,117 $ 105,494
-0-
CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
1997 1996 1997 1996
Net sales $ 39,266 $ 51,339 $ 85,606 $ 92,185
Cost of
sales 37,465 40,370 76,076 74,285
Gross
profit 1,801 10,969 9,530 17,900
Selling,
general
and
administrative
expenses 10,933 8,870 20,121 15,860
Restructuring
charge 4,307 -- 4,307 --
Operating
income
(loss) (13,439) 2,099 (14,898) 2,040
Equity in
earnings
from
joint
venture -- -- -- 357
Gain on
sale of
PCS 6,607 -- 6,607 --
Gain on
sale of
InCirT
Division -- 450 -- 450
Other
(income)
expense,
net 422 (288) 998 (221)
Interest
expense,
net 1,709 1,658 3,956 3,169
Income
(loss)
before
income
taxes (8,963) 1,179 (13,245) (101)
Provision
for income
taxes 394 477 1,115 770
Net income
(loss) $ (9,357) $ 702 $ (14,360) $ (871)
Net income
(loss) per
common
share $ (0.30) $ 0.05 $ (0.60) $ (0.07)
Weighted
average
common
and common
equivalent
shares
outstanding 31,678 14,846 23,742 13,286
-0- NOTE TO EDITORS: 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. that involve risks and uncertainties. The company's actual results may differ significantly from the results contained in the forward-looking statements. Factors that might cause such differences include, but are not limited to, the effect of losses and other factors on the company's credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities , business and results of operations; the company's limited capital resources and its ability to fulfill ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. its existing obligations and ongoing capital needs; risks associated with excess or obsolete inventory; the potential impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of assets; the company's dependence on key customers and their financial viability; the impact of competition; and the company's abilities to effectively manage growth. These and other risk factors are discussed in the company's filing on Forms 8-K, 10-Q and 10-K. CONTACT: Cerplex, Tustin Robert W. Hughes, 714/258-5631 rhughes@cerplex.com |
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