Concord Camera Corp. Reports Third 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. , FL--(BUSINESS WIRE)--April 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 third fiscal quarter and nine months ended April 3, 1999 (See attached tables). For the quarter ended April 3, 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 $21,498,000 compared to $19,151,000 for the third quarter of last year, an increase of $2,347,000 or 12.3%. Concord reported net income for the third quarter of $150,000, or $0.01 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 net income of $661,000, or $0.06 per diluted share for the March 31, 1998 quarter. The gross margin for the third fiscal quarter of 1999 was 21.0% compared to 27.0% for the comparable quarter of the prior year, primarily as a result of costs associated with the production 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 new products, increases in license costs, royalty Compensation for the use of property, usually copyrighted works, patented inventions, or natural resources, expressed as a percentage of receipts from using the property or as a payment for each unit produced. expenses, and product development costs associated with new products. The Company reduced SG&A by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $389,000 from the third fiscal quarter of the prior year. For the nine months ended April 3, 1999, net sales were $83,605,000 compared to $70,286,000 for the comparable period of last year, an increase of $13,319,000, or 19%, before giving effect to approximately $9,492,000 of non-recurring sales in the nine month period ended March 31, 1998. For comparison purposes, excluding the approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. $9,492,000 of non-recurring sales in the nine month period ended March 31, 1998, net sales for the nine month period ended April 3, 1999 were $83,605,000 versus $60,794,000 for the nine months of last year, an increase of approximately $22,811,000, or 37.5%. Net income for the nine months ended April 3, 1999 was $4,936,000, or $0.42 per diluted share, as compared to $3,769,000, or $0.33 per diluted share for the same period in the prior year. Commenting on the financial results, Ira B. Lampert, Concord's Chairman, President and Chief Executive Officer, said, "Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. sales were up for both traditional and single-use cameras and shipments of the new single-use instant camera product continued during the quarter. We also delivered the initial quantities of the new reloadable instant camera product. Product development expenses increased 27.6% from $2,809,000 for the nine months ended March 31, 1998 to $3,585,000 for the nine months ended April 3, 1999, an increase of $776,000. The benefits of these investments, which amounted to approximately $0.30 per diluted share for the nine months ended April 3, 1999, will be realized in subsequent fiscal years when new products are expected to be commercialized. Potential New Products and Relationships The Company is actively engaged in negotiating with existing 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 customers and new potential OEM customers for the development, design and production of a number of new products, including a line of cameras incorporating digital technology. If negotiations and development efforts are successfully concluded, the new products would be introduced in Fiscal 2000, significantly 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 nine month period ended April 3, 1999, the Company repurchased approximately 416,000 of its outstanding common shares for an aggregate purchase price of approximately $1,890,000 in connection with its previously announced share repurchase program. Concord's Balance Sheet Remains Strong Mr. Lampert continued, "Concord completed the third 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 more than $39.5 million, or approximately $3.64 per share. At quarter-end, we had only $17.4 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 working capital of $33.9 million. Cash flow provided by operating activities for the nine months ended April 3, 1999 was approximately $12 million compared to $4.6 million from the same period last year. We have prepared Concord for the growth we are now experiencing. We continue to invest in our 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. , manufacturing facilities, capital equipment and product development to support continued growth. Fiscal 1999 We continue to be comfortable with our previously announced expectation for Fiscal 1999 sales to be in the $115 million to $125 million range and net income to be in the $7 million to $8 million range. Our projection projection, in psychology: see defense mechanism. See rear-projection TV, front-projection TV and LCD panel. (theory) projection - In domain theory, a function, f, which is (a) idempotent, i.e. assumes that pricing pressures do not significantly increase from current levels and market and customers' conditions remain stable. 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 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. Annual Report for the fiscal year ended June June: see month. 30, 1998 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 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 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. , Japan, United Kingdom, France and through independent sales agents. -0-
Concord Camera Corp.
Consolidated Income Statements
(Unaudited)
For the quarter ended
April 3, March 31,
1999 1998
-------- --------
Net sales $21,497,763 $19,150,898
Cost of products sold 16,987,800 13,982,230
---------- ----------
Gross profit 4,509,963 5,168,668
Selling expenses 1,454,926 1,715,897
General and administrative
expenses 2,156,574 2,284,075
Financial expenses 836,769 386,754
Other (income) net (123,944) (42,815)
Legal expenses and settlement costs 31,226 79,138
--------- --------
Income before income taxes 154,412 745,619
Provision for income taxes 4,142 85,000
-------- --------
Net income $150,272 $660,619
-------- --------
Weighted average shares
outstanding - basic 10,878,877 10,912,134
Incremental shares using
treasury stock method 818,637 453,533
-------- --------
Weighted average shares
outstanding - diluted 11,697,514 11,365,667
========== ==========
Basic earnings per share $0.01 $0.06
=========== =========
Diluted earnings per share $0.01 $0.06
=========== =========
Concord Camera Corp.
Consolidated Income Statements
(Unaudited)
For the nine months ended
April 3, March 31,
1999 1998
------- -------
Net sales $83,605,175 $70,286,311
Cost of products sold 62,713,625 51,511,244
---------- ----------
Gross profit 20,891,550 18,775,067
Selling expenses 6,046,959 6,067,001
General and administrative
expenses 7,037,791 7,385,847
Financial expenses 2,592,477 1,190,938
Other (income) net (255,866) (165,707)
Legal expenses and settlement
costs 124,592 176,600
---------- ----------
Income before income taxes 5,345,597 4,120,388
Provision for income taxes 409,142 351,548
---------- ----------
Net income $4,936,455 $3,768,840
========== ==========
Weighted average shares
outstanding - basic 10,990,395 10,890,873
Incremental shares using
treasury stock method 845,026 500,610
---------- ---------
Weighted average shares
outstanding - diluted 11,835,421 11,391,483
========== ==========
Basic earnings per share $0.45 $0.35
========= ========
Diluted earnings per share $0.42 $0.33
========= ========
Concord Camera Corp.
Consolidated Balance Sheets
April 3, June 30,
1999 1998
-------- ---------
(unaudited)
Current assets:
Cash $23,321,793 $7,119,699
Accounts receivable, net 13,647,288 19,961,534
Inventories 20,050,781 21,458,595
Prepaid expenses and
other current assets 3,751,915 3,238,129
---------- ---------
Total current assets 60,771,777 51,777,957
Plant and equipment, net 18,534,705 15,930,486
Goodwill, net 412,462 727,633
Other assets 5,671,018 3,645,703
---------- ----------
Total assets $85,389,962 $72,081,779
----------- ----------
Current liabilities:
Short-term debt $7,439,362 $10,822,012
Current portion of
long-term debt - 35,676
Current obligations under
capital leases 1,668,708 870,173
Accounts payable 11,186,901 14,213,757
Accrued expenses 5,433,381 4,418,604
Income taxes payable 784,994 379,662
Other current liabilities 329,366 224,781
--------- ----------
Total current liabilities 26,842,712 30,964,665
Deferred income taxes 689,169 689,169
Senior Notes 14,850,000 -
Long-term debt - 2,460,784
Obligations under capital leases 2,528,507 1,409,865
Other long-term liabilities 1,013,932 452,548
--------- ---------
Total liabilities 45,924,320 35,977,031
--------- ---------
Stockholders' equity:
Common stock, no par value,
40,000,000 authorized;
11,331,343 and 11,214,451
issued as of April 3, 1999
and June 30, 1998. 40,335,187 40,094,559
Paid in capital 1,033,553 850,786
Retained earnings (deficit) 3,314,241 (1,622,215)
Notes receivable arising
from common stock purchase
agreements (2,874,131) (2,765,463)
--------- ----------
41,808,850 36,557,667
Less: treasury stock, at cost;
479,263 and 63,553 shares,
respectively (2,343,208) (452,919)
---------- ----------
Total stockholders' equity 39,465,642 36,104,748
---------- ----------
Total liabilities and
stockholders' equity $85,389,962 $72,081,779
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