Concord Camera Corp. Announces Results for Fourth Quarter and Year Ended June 29, 2002.Business Editors 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)--Aug. 8, 2002 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 fourth fiscal quarter and year ended June June: see month. 29, 2002 (see attached tables). For the fourth quarter ended June 29, 2002, 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 $30.7 million and net income was $0.9 million, or $0.03 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. This compared to net sales of $36.9 million, and a net loss of $(21.0) million, or $(0.77) per share, for the fourth quarter of the prior fiscal year. The following table highlights certain items of income and expense which impacted operating results ($ in millions):
Q4 Q4
2002 2001
-------- --------
(Loss) before taxes from operations $ (3.0) $ (1.3)
Non-cash variable stock option income 2.8 0
Restructuring reversal/(accrual) 0.4 (1.4)
Accounts receivable and inventory provisions 0 (20.5)
-------- --------
Income/(loss) before taxes as reported $ 0.2 $ (23.2)
Benefit for income taxes 0.7 2.2
-------- --------
Net income/(loss) as reported $ 0.9 $ (21.0)
======== ========
During the fourth quarter of fiscal 2002, non-cash variable stock option accounting resulted in income of $2.8 million. A decrease in Concord's Common Stock price per share at the end of the fourth quarter caused the reversal of previously recognized stock option expense. In addition, $0.4 million of 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). accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. previously expensed and not utilized were taken into income in the fourth quarter of fiscal 2002. Also, for the fourth quarter of fiscal 2002, the Company recognized a $0.7 million income tax benefit as a result of a net loss from operations. Commenting on the financial results, Ira B. Lampert, Concord's Chairman, Chief Executive Officer and President, said, "Concord's net sales for the fourth quarter of fiscal 2002 slightly exceeded the high end of the range ($27 to $30 million) of guidance announced in May. Our net loss from operations after taxes was approximately $(2.3) million, somewhat larger than the high end of the range of prior guidance of a $(1.0) to $(2.0) million loss." Mr. Lampert also said, "Sales from our Retail Sales and Distribution ("RSD RSD Reflex sympathetic dystrophy, see there ") business for the fourth quarter of fiscal 2002 were $23.7 million, an increase of $3.0 million, or 12.7%, and accounted for 86.6% of total sales, primarily due to new product introductions to new and existing customers and organic growth. This compared to $23.6 million, or 64.1% of total sales for the prior year's fourth fiscal quarter. Sales from our Original Equipment Manufacturing ("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 ") business were $4.1 million, a decrease of $9.1 million, or 68.9%, due in part to the previously disclosed expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created of certain OEM contracts, and the completion of a sales commitment to a large cellular manufacturer which was partially offset by an increase in sales to a certain OEM customer. Fourth quarter OEM sales were 13.4% of total sales compared to $13.2 million, or 35.9% of total sales for the fourth quarter of fiscal 2001. "The gross profit for the fourth quarter of fiscal 2002 was $4.1 million, or 13.3% of net sales, versus $0.1 million, or 0.4% of net sales in the same quarter last year. Taking into consideration the items listed in the above table, the gross profit from operations in the fourth quarter of last year would have been $5.4 million, or 14.5% of net sales. Product development costs as a percentage of net sales were 1.1 percentage points higher in the fourth quarter of fiscal 2002 versus the same quarter last year. The efficiencies gained from the restructuring initiated last year allowed us to maintain product margins even though sales were $6.2 million less. We continue to invest in new product engineering, design and development, primarily focusing on digital technologies and products. We incurred approximately $1.8 million in product development costs in the fourth quarters of each of the last two fiscal years, which was 5.8% of net sales in the fourth quarter of fiscal 2002 and 4.7% in the fourth quarter of fiscal 2001. "Selling, general and administrative ("SG&A") expenses, excluding non-cash variable stock option income, for the fourth quarter of fiscal 2002 were $6.5 million, or 21.1% of net sales. This compares to $23.8 million, or 64.5% of net sales for the fourth quarter last year. Taking into consideration the items listed in the above table, the fourth quarter 2002 SG&A expenses would have been $6.8 million, or 22.0% of net sales, as compared to $7.1 million, or 19.2% of net sales last year," said Mr. Lampert. Interest expense was $0.7 million in fiscal fourth quarter 2002, versus $0.8 million in fiscal fourth quarter 2001. Other income, net was $0.4 million in fiscal fourth quarter 2002 versus $1.3 million in fiscal fourth quarter 2001, primarily attributable to lower investment income. Comparison of fiscal year ended June 29, 2002 to the fiscal year ended June 30, 2001 Net sales for the fiscal year ended June 29, 2002 ("2002") were $129.3 million, as compared to $180.1 million for the fiscal year ended June 30, 2001 ("2001"), a decline of $50.8 million, or 28.2%. RSD sales were $95.7 million, an increase of $12.4 million, or 14.9%, and accounted for 74.0% of total sales in 2002 versus $83.3 million, or 46.3% of total sales in 2001. OEM sales were $33.6 million, or 26.0% of total sales in 2002, a decline of $63.1 million, or 65.2%, as compared to $96.8 million, or 53.7% of total sales in 2001. A net loss of $(5.2) million was reported for 2002, or $(0.19) per share, versus a net loss of $(11.8) million, or $(0.45) per share in 2001. The following table highlights certain items of income and expense which impacted operating results ($ in millions):
Fiscal Fiscal
2002 2001
-------- --------
Income/(loss) before taxes from operations $ (1.7) $ 10.0
Restructuring reversal/(accrual) 0.4 (1.4)
Accounts receivable and inventory provisions (5.5) (20.5)
Terminated acquisition costs 0 (0.8)
Contribution to victims of Sept. 11 (1.1) 0
Arbitration award 1.2 0
-------- --------
(Loss) before taxes as reported $ (6.7) $ (12.7)
Benefit for income taxes 1.5 0.9
-------- --------
Net (loss) as reported $ (5.2) $ (11.8)
======== ========
Mr. Lampert further commented that, "The gross profit for fiscal 2002 was $19.0 million, or 14.7% of net sales. This compares to a gross profit of $27.5 million, or 15.3% of net sales in fiscal 2001. Taking into consideration the items listed in the above table, the gross profit from operations would have been $22.1 million, or 17.1% of net sales in 2002, versus $32.7 million, or 18.1% of net sales in 2001. The decline in gross margin was primarily related to a 2.3 percentage point increase in product engineering, design and development investments to $7.6 million, or 5.9% of net sales in 2002, versus $6.4 million, or 3.6% of net sales in 2001. Even though sales declined by $50.8 million exclusive of product development costs, our gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. from product sales actually improved by 1.3 percentage points. "SG&A expenses for the fiscal year 2002 were $26.2 million, or 20.2% of net sales, versus $42.3 million, or 23.5% of net sales in 2001. Taking into consideration the items listed in the above table, SG&A expenses for 2002 would have been $23.1 million, or 17.9% of net sales, in comparison to $24.8 million, or 13.8% of net sales in 2001. "Interest expense was $2.5 million for 2002, versus $2.8 million in 2001. Other income, net was $3.1 million in 2002 in comparison to $4.9 million in 2001. The primary reason for the decrease was lower investment income partially offset by approximately $1.2 million associated with an arbitration award An arbitration award (or arbitral award) is a determination on the merits by an arbitration tribunal in an arbitration, and is analogous to a judgment in a court of law. recorded and received in fiscal 2002." Outlook Commenting on the short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. outlook for the Company, Mr. Lampert continued, "Providing long term future guidance continues to be challenging. For the first quarter of fiscal 2003, we anticipate revenues in the range of $30 to $33 million and results in a range of "breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations " to a net loss of approximately $1 million, or $0.00 to a net loss of ($0.03) per share, before non-cash variable stock option expense." Potential New Products and Relationships The Company is negotiating with existing and potential OEM customers for the design, development, and production of new products, including single use, traditional and digital cameras. If negotiations and development efforts are successfully concluded, certain new products could be introduced during the first and second quarters of Fiscal 2003. The Company anticipates introducing several new traditional and digital cameras to potential new and existing Retail Sales and Distribution customers during the next fiscal year. As previously disclosed in the Company's 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. filed with the Securities and Exchange Commission ("SEC") on May 24, 2002, the Company and Polaroid Polaroid: see Land, Edwin H. Corporation concluded two exclusive world wide licensing agreements covering single use cameras and traditional film based cameras, including zoom To change from a distant view to a more close-up view (zoom in) and vice versa (zoom out). An application may provide fixed or variable levels of zoom. A display adapter may also have built-in zoom capability. cameras subject to bankruptcy court bankruptcy court n. the specialized Federal court in which bankruptcy matters under the Federal Bankruptcy Act are conducted. There are several bankruptcy courts in each state, and each one's territory covers several counties. approval. On July July: see month. 12, 2002 the bankruptcy court approved both license agreements. The Company anticipates that both agreements will be executed within the first quarter of Fiscal 2003. Concord's Balance Sheet Remains Strong Mr. Lampert continued, "Concord ended the year with working capital of $128.4 million and we had only $14.9 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. with cash on hand of $103.9 million, or approximately $3.78 per share. We also had total 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. of $149.2 million, or approximately $5.43 per share as of June 29, 2002. We remain convinced that if we adhere to adhere to verb 1. follow, keep, maintain, respect, observe, be true, fulfil, obey, heed, keep to, abide by, be loyal, mind, be constant, be faithful 2. our fundamental strategies of engineering, developing, designing and manufacturing high quality products at low cost and introducing new products to our OEM and RSD customers, our business will progress. 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 growth and our transition to a leading image capture technology-based OEM and RSD business." Corporate Governance Corporate Governance The relationship between all the stakeholders in a company. This includes the shareholders, directors, and management of a company, as defined by the corporate charter, bylaws, formal policy, and rule of law. and Enhanced Reporting Concord has endorsed and will fully comply with the requirements of NASDAQ, the Sarbanes-Oxley Act See SOX. and the new SEC rules related to corporate governance, accounting and reporting. Investor Conference Call Ira B. Lampert, Chairman, Chief Executive Officer and President, will host a conference call today August 8, 2002 at 11:00 A.M. Eastern Daylight Time, to discuss Fiscal 2002 Fourth Quarter and Full Year results. To participate in the live conference call with management, please call (973) 321-1100 five to ten minutes prior to the start time. The conference call will also be broadcast live over the 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 via the Investor Information section of Concord's web site - www.concordcam.com. To listen to the live call, go to the web site at least 15 minutes early to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software. If you are unable to listen to the call live, the conference call will be archived and can be accessed for approximately five business days. About Concord Camera Corp. Concord Camera Corp. is a global developer, designer, manufacturer and marketer of high quality, low cost, digital, instant, Advanced Photo System (APS), and 35mm format cameras and 35mm, APS, and instant format single-use cameras. Concord markets its cameras 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), CONCORD EYE Q(TM), 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), GOLDLINE(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 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). Today, Concord is one of the world's leaders in the single-use camera category, one of the fastest growing segments of the camera market, and the largest producer of single-use cameras in the world in the private label, corporate premium and original equipment manufacturer segments of the industry. Concord sells and markets its camera products worldwide through direct sales offices in 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. , Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , 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). , 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. , the United Kingdom and France and through independent sales agents. Concord manufactures its products in its expansive, vertically integrated manufacturing facilities in the Peoples Republic of China, which includes a class 10,000 "clean room" digital technology manufacturing and assembly facility. 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 and 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 June 30, 2001 and subsequently filed reports. In particular, timely introduction of Concord's new products including, but not limited to, digital cameras will require satisfactory completion of our development efforts and initiation of full-scale production. Furthermore, terrorist attacks in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of and Washington, D.C. in September of 2001 have disrupted dis·rupt tr.v. dis·rupt·ed, dis·rupt·ing, dis·rupts 1. To throw into confusion or disorder: Protesters disrupted the candidate's speech. 2. commerce throughout the United States and other parts of the world. The continued threat of terrorism within the United States and abroad and the potential for military action and heightened security measures Noun 1. security measures - measures taken as a precaution against theft or espionage or sabotage etc.; "military security has been stepped up since the recent uprising" security in response to such threat may cause significant disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. to commerce throughout the world. To the extent that such disruptions result in delays or cancellations of customer orders, a general decrease in consumer spending Consumer demand or consumption is also known as personal consumption expenditure. It is the largest part of aggregate demand or effective demand at the macroeconomic level. , or our inability to effectively market and sell our products, our business and results of operations could be materially and adversely affected. We are unable to predict whether the threat of terrorism or the responses thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. will result in any long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. commercial disruptions or if such activities or responses will have a long-term material adverse effect on our business, results of operations or financial condition. Additionally, any forward-looking statements represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim dis·claim v. dis·claimed, dis·claim·ing, dis·claims v.tr. 1. To deny or renounce any claim to or connection with; disown. 2. To deny the validity of; repudiate. 3. any obligation to do so, even if our estimates change.
Concord Camera Corp. and Subsidiaries
Condensed Consolidated Balance Sheets
June 29, June 30,
2002 2001
------------- -------------
Assets
Current Assets:
Cash and cash equivalents $ 103,867,598 $ 57,474,828
Short-term investments - 49,869,567
Accounts receivable, net 22,984,322 25,253,614
Inventories 22,484,721 30,766,198
Prepaid expenses and other
current assets 4,194,654 4,128,858
------------- -------------
Total current assets 153,531,295 167,493,065
Property, plant and equipment, net 20,985,446 24,396,407
Goodwill, net 3,720,528 3,720,528
Other assets 19,839,191 18,055,713
------------- -------------
Total assets $ 198,076,460 $ 213,665,713
============= =============
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $ 12,502,087 $ 17,991,337
Accrued expenses 12,013,093 15,447,170
Current portion of obligations under
capital leases - 503,547
Other current liabilities 633,600 2,547,719
------------- -------------
Total current liabilities 25,148,780 36,489,773
Senior notes 14,933,931 14,912,501
Other long-term liabilities 8,837,501 7,926,290
------------- -------------
Total liabilities 48,920,212 59,328,564
Commitments and contingencies
Stockholders' equity:
Blank check preferred stock, no par
value 1,000,000 shares authorized,
none issued - -
Common stock, no par value,
100,000,000 shares authorized;
29,029,359 and 28,911,734 shares
issued as of June 29, 2002 and
June 30, 2001, respectively 140,547,679 140,255,065
Paid-in capital 4,412,410 4,321,856
Deferred stock-based compensation (332,445) -
Retained earnings 8,667,119 13,914,908
Notes receivable arising from common
stock purchase agreements (1,377) (17,542)
------------- -------------
153,293,386 158,474,287
Less: treasury stock, at cost,
1,542,526 shares (4,137,138) (4,137,138)
------------- -------------
Total stockholders' equity 149,156,248 154,337,149
------------- -------------
Total liabilities and
stockholders' equity $ 198,076,460 $ 213,665,713
============= =============
Concord Camera Corp. and Subsidiaries
Condensed Consolidated Statements of Operations
For the three months ended For the fiscal year ended
--------------------------- --------------------------
June 29, 2002 June 30, 2001 June 29, 2002 June 30, 2001
------------- ------------- ------------- -------------
Net sales $ 30,742,113 $ 36,857,271 $129,316,594 $180,061,056
Cost of
products
sold 26,648,326 36,710,810 110,344,520 152,597,558
------------- ------------- ------------- -------------
Gross profit 4,093,787 146,461 18,972,074 27,463,498
Selling
expenses 1,756,928 2,836,847 6,343,302 8,148,517
General and
administrative
expenses 4,714,754 20,921,732 20,967,240 33,314,782
(Recovery) of
operating
expenses,
net - - (1,150,000) -
Variable
stock-based
compensation
(income) (2,824,858) - - -
Terminated
acquisition
costs - - - 800,207
Interest
expense 658,039 844,323 2,522,314 2,792,616
Other
(income) net (377,067) (1,251,033) (3,060,163) ( 4,891,425)
------------- ------------- ------------- -------------
Income (loss)
before
income taxes 165,991 (23,205,408) (6,650,619) (12,701,199)
(Benefit) for
income taxes (757,620) (2,178,854) (1,402,830) (930,849)
------------- ------------- ------------- -------------
Net income
(loss) $ 923,611 $(21,026,554) $ (5,247,789) $(11,770,350)
============= ============= ============= =============
Basic
earnings
(loss) per
share $ .03 $ (.77) $ (.19) $ ( .45)
============= ============= ============= =============
Diluted
earnings
(loss) per
share $ .03 $ (.77) $ (.19) $ ( .45)
============= ============= ============= =============
Weighted
average
common
shares
outstanding-
basic 27,474,597 27,326,823 27,437,618 25,991,868
Dilutive
effect of
stock
options 2,279,837 - - -
------------- ------------- ------------- -------------
Weighted
average
common
shares
outstanding-
diluted 29,754,434 27,326,823 27,437,618 25,991,868
============= ============= ============= =============
|
|
||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion