Concord Camera Corp. Announces Record First Quarter Results.HOLLYWOOD Hollywood. 1 Community within the city of Los Angeles, S Calif., on the slopes of the Santa Monica Mts.; inc. 1903, consolidated with Los Angeles 1910. , Fla.--(BUSINESS WIRE)--Oct. 26, 1999-- Concord Concord, cities, United States Concord (kŏng`kərd, kŏn`kôrd'). 1 city (1990 pop. 111,348), Contra Costa co., W central Calif.; settled c.1852, inc. 1906. Camera Corp. ("Concord") (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 National Market: LENS) today reported financial results for the first fiscal quarter ended October October: see month. 2, 1999. (See attached tables.) For the quarter ended October 2, 1999, 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 $41,238,000 compared to $31,024,000 for the first quarter of last year, an increase of $10,214,000 or 32.9%. Concord reported net income for the October 2, 1999 quarter of $3,896,000 or $0.33 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, as compared to $2,458,000 or $0.21 per share for the October 2, 1998 quarter, an increase of $1,438,000 or 58.5%. The profit for the quarter was primarily a result of more favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. absorption of manufacturing overhead and labor utilization resulting from increased sales and manufacturing volume and efficiencies. This resulted in an increase in gross margin to 27.5% from 27.2% for last year's first quarter. Commenting on the financial results, Ira B. Lampert, Concord's Chairman and Chief Executive Officer, said, "Year to date revenues were up for both OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and and Retail distribution sales. Shipments of the new single-use instant and the new reloadable manual instant camera continued to be strong during the quarter and we experienced accelerated growth of single-use flash cameras." Discussing the first quarter, Mr. Lampert continued, "The gross profit percentage increased to 27.5% from 27.2% in the first quarter as a result of more favorable absorption of manufacturing overhead and labor utilization resulting from the increased sales and manufacturing volume and efficiencies. Product development costs associated with new products were $1,182,000 and $1,244,000 for the quarter ended October 2, 1999 and October 3, 1998, respectively. As a percentage of sales, selling and general and administrative expenses declined to 15.3% from last year's first quarter's level of 15.7% despite incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. increases in selling, general and administrative expenses due to increased promotional allowances and royalty expenses attributable to the increased sales of OEM and branded merchandise." As compared to last year's first quarter, SG&A expenses increased overall by $1,337,000 or 27.6%. As a percentage of sales, selling and general and administrative expenses declined to 15.3% from last year's first quarter's level of 15.6% despite incremental increases in selling, general and administrative expenses. Selling expenses for the first quarter of Fiscal 2000 of $2,516,000 increased $123,000 or 5.1% from the same period last year. General and administrative expenses of $3,805,000 increased $1,334,000 or 54.0% from the same period last year, reflecting the increases in costs associated with new OEM contracts and other expenses. Interest expense of $874,000 increased $69,000 or 8.5% from the same period last year. Other income net was $128,000 during the first quarter of Fiscal 2000 as compared to other expense, net of $86,000 in the first quarter of last year. Potential New Products and Relationships The Company is actively engaged in negotiating with existing OEM customers and new potential OEM customers for the development, design and production of a number of new products, including an Advanced Photo System (APS) Single-use Camera, an APS camera, and cameras and image capture devices incorporating digital technology. If negotiations and development efforts are successfully concluded, certain new products would be introduced in Fiscal 2000, impacting results in the second half of that year. Share Repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. Program During the first quarter of Fiscal 2000, the Company repurchased approximately 95,000 shares of its outstanding common stock for an aggregate purchase price of approximately $759,000, bringing the total number of shares repurchased under the Company's stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program to approximately 708,000 shares with an aggregate purchase price of $3,684,000. The Company has approximately $6,816,000 available of the original $10,500,000 to utilize in connection with the stock repurchase program that was previously adopted. Concord's Balance Sheet Remains Strong Mr. Lampert continued, "Concord completed the first quarter in a strong financial position. Shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. is approximately $46.1 million, or approximately $3.94 per share at October 2, 1999. At quarter-end, we had only $17.1 million in long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. and our working capital was $39.8 million. Cash flow provided by operating activities was approximately $8.4 million in the quarter ended October 2, 1999, as compared to $6.5 million in the prior year. We have prepared Concord for the growth we are now experiencing. We continue to invest in human resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. , technologies, manufacturing facilities, capital equipment and product development to support ongoing growth, and our transition to becoming a technology-based OEM." Fiscal 2000 "We continue to anticipate sales in Fiscal 2000 to be in the $150 million to $160 million range, an increase of approximately $32 million to $42 million over Fiscal 1999 sales of $118,000,000 or 27% to 36% from Fiscal 1999. While many factors outside the control of the Company can affect profitability, our expectation is that net income for Fiscal 2000 will be in the range of $11.0 million to $12.0 million, or $.94 to $1.03 per diluted share, or 40% to 54% over Fiscal 1999. The Company should continue to generate positive cash flow. The Company is positioned to continue its growth in Fiscal 2000 and beyond, which growth will be fueled by its technical prowess PROWESS Infectious disease A clinical trial–Recombinant Human Activated Protein C [Zovant™] Worldwide Evaluation in Severe Sepsis and capabilities in the development, design and low-cost manufacture of innovative electro, optical, mechanical devices and apparatus, initially in digital image capture and transmission for large branded international OEM's." This press 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 numerous risks and uncertainties. The Company's actual results could differ materially from those anticipated in such forward-looking statements as a result of certain factors, including those set forth in the Company's filings with the Securities & Exchange Commission, some of which are summarized under the caption "Risk Factors" in the Company's 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. for the fiscal year ended July July: see month. 3, 1999 and updated in subsequently filed reports. In particular, expected sales increases could be adversely affected by production difficulties or economic conditions adversely affecting the market for the Company's products. To obtain the results expected from the introduction of new products will require timely completion of development, successful ramp up Ramp Up To increase a company's operations in anticipation of increased demand. Notes: A company might 'ramp up' operations if they just signed a contract creating substantially more demand for their product. See also: Demand, Economies of Scale of full-scale full-scale adj. 1. Of actual or full size; not reduced: a full-scale model. 2. Employing all resources; not limited or partial: production on a timely basis and consumer acceptance of the products. In addition, the Company's potential new OEM relationships will require successful conclusion of negotiations, continued ability of the Company to meet quality and performance tests and successful implementation of production at greatly increased volumes, as to all of which there can be no assurance. Concord Camera Corp. is principally engaged in the manufacture and sale of popularly-priced, easy-to-use, conventional and single-use 35 millimeter One thousandth of a meter, or 1/25th of an inch. See metric system. and Advanced Photo System cameras and 110 cartridge (1) See phono cartridge. (2) A removable storage module that contains magnetic disks, optical discs, magnetic tape or memory chips. Cartridges are inserted into slots in the drive, printer or computer. cameras which it manufactures and assembles in the Peoples Republic of China on an OEM basis and under the trade names CONCORD(R), KEYSTONE key·stone n. 1. Architecture The central wedge-shaped stone of an arch that locks its parts together. Also called headstone. 2. The central supporting element of a whole. (R), LE CLIC CLIC Centre Local d'Information et de Coordination (French) CLiC Climate and Cryosphere (World Climate Research Programme project, Norway) CLIC Compact Linear Collider CLIC Connecticut Licensing Information Center (R), APEX apex (a´peks) pl. apexes, a´pices [L.] tip; the pointed end of a conical part; the top of a body, organ, or part.ap´ical apex of lung the rounded upper extremity of either lung. (R) and, for sales outside the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. , ARGUS Argus (är`gəs) or Argos (är`gŏs, –gəs), in Greek mythology. 1 Many-eyed monster, also called Panoptes. He guarded Io after she had been changed into a heifer. (R) trade names, as well as private labels. The Company sells and markets its camera products worldwide through direct sales offices in the United States, Canada, Germany, Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. , United Kingdom, France and through independent sales agents. -0-
Concord Camera Corp.
Consolidated Statements of Income
(unaudited)
For the quarter ended
October 2, October 3,
1999 1998
------------- ------------
Net sales $41,237,897 $31,023,827
Cost of products sold 29,899,118 22,580,881
------------- ------------
Gross profit 11,338,779 8,442,946
Selling expenses 2,515,627 2,393,179
General and administrative
expenses 3,804,843 2,471,095
Interest expense 873,977 805,189
Other (income) expense, net (128,294) 86,095
------------- ------------
Income before income taxes 4,272,626 2,687,388
Provision for income taxes 377,000 229,000
------------- ------------
Net income $3,895,626 $2,458,388
============= ============
Basic earnings per share $0.36 $0.22
============= ============
Diluted earnings per share $0.33 $0.21
============= ============
Weighted average shares
outstanding - basic 10,959,177 11,139,915
============= ============
Weighted average shares
outstanding - diluted 11,944,326 11,860,551
============= ============
Concord Camera Corp.
Consolidated Balance Sheets
(unaudited)
October 2, July 3,
1999 1999
-------------- -------------
Assets:
Cash $33,984,199 $30,706,761
Accounts receivable, net 19,297,523 18,272,329
Inventories 22,268,314 20,620,556
Prepaid expenses and other
current assets 2,898,643 2,404,400
-------------- -------------
Total current assets 78,448,679 72,004,046
Plant and equipment, net 19,827,865 18,871,300
Goodwill, net 279,109 291,764
Other assets 5,094,906 5,480,342
-------------- -------------
Total assets $103,650,559 $96,647,452
============== =============
Liabilities and Stockholders'
Equity:
Liabilities:
Short-term debt $8,209,281 $8,088,901
Current portion of
long-term debt 0 2,100,000
Current obligations under
capital leases 1,934,585 2,073,492
Accounts payable 19,383,247 16,224,538
Accrued expenses 7,555,524 4,985,789
Income taxes payable 1,275,549 896,142
Other current liabilities 259,751 188,058
-------------- -------------
Total current liabilities 38,617,937 34,556,920
Deferred income taxes 792,358 792,358
Senior notes payable 14,850,000 14,850,000
Obligations under
capital leases 2,248,442 2,623,080
Other long-term liabilities 1,041,693 1,129,569
-------------- -------------
Total liabilities 57,550,430 53,951,927
-------------- -------------
Stockholders' equity:
Common stock, no par value,
40,000,000 Authorized;
11,686,117 and 11,629,592
issued as of October 2, 1999
and July 3, 1999,
respectively 41,168,585 41,117,335
Paid-in capital 1,033,553 1,033,553
Retained earnings 9,982,317 6,086,691
Notes receivable arising from
common stock purchase agreements (1,947,188) (2,163,542)
-------------- -------------
50,237,267 46,074,037
Less: treasury stock, at cost;
771,263 and 675,863 shares,
respectively (4,137,138) (3,378,512)
-------------- -------------
Total stockholders' equity 46,100,129 42,695,525
-------------- -------------
Total liabilities and
stockholders' equity $103,650,559 $96,647,452
============== =============
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