DPS Records Write-down of Purchased R and D and Accrues Provision for Patent Lawsuit.MARKHAM, Ontario--(BUSINESS WIRE)--Feb. 12, 1998--Digital Processing Systems Inc. ((TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :DPS Minicomputer series from Bull HN. 1. (language, text) DPS - Display PostScript. 2. (language) DPS - A real-time language with direct expression of timing requests. ["Language Constructs for Distributed Real-Time PRogramming", I. .) (OTC Bulletin Board OTC Bulletin Board An electronic quotation listing of the bid and asked prices of OTC stocks that do not meet the requirements to be listed on the NASDAQ stock-listing system. :DGPSF) today announced that, in accordance with Canadian generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting , it will be recording a write-down and an accounting accrual totaling approximately $7,900,000 (after tax - $4,900,000) in its fourth quarter financial results relating to two non-recurring items. As a result of these charges, the Company expects to report a loss for the year of approximately $2,800,000 or 23 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. . The Company will be recording a write-down of approximately $5,000,000 relating to in process research and development resulting from its acquisition of substantially all of the assets of Star Media Systems Corporation, an Illinois-based developer of video editing software Video editing software is application software which handles the editing of video sequences on a computer. It usually includes the ability to import and export video, cut and paste sections of a video clip, and add special effects and transitions; and it sometimes includes the . To the extent that the in process research and development costs no longer meet the criteria for deferral under Canadian generally accepted accounting principles, the Company will be charging these costs to earnings in the fourth quarter. The accounting accrual of approximately $2,900,000 relates to a U.S. patent infringement patent infringement n. the manufacture and/or use of an invention or improvement for which someone else owns a patent issued by the government, without obtaining permission of the owner of the patent by contract, license or waiver. lawsuit that the Company is currently defending. The lawsuit was filed against DPS in March 1997 alleging that certain products manufactured by DPS infringe certain patent rights held by the plaintiff. The Company continues to believe that these infringement claims are entirely unfounded; however, the costs to defend this matter to date have been approximately $1,500,000. Management believes that the accrual, which will be recorded in the Company's fourth quarter results, is sufficient to cover the expected remaining costs of this litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , including any costs of reaching a settlement. "These charges have had a material impact on our 1997 results," commented Ken MacKenzie, Chief Financial Officer. "We believe that recording these non-recurring charges should remove uncertainty present in the minds of our shareholders and allow everyone to focus on the growth opportunities available to DPS in 1998." About DPS - DPS is a leading designer and manufacturer of electronic hardware and software used for creating, editing and processing broadcast-quality video and audio material. The Company has four business segments, Studio Products, Desktop Professional Post-Production, Desktop Multimedia and Digital Security Recorders. The Company's products are used throughout the world by the computer-based desktop video production industry, television broadcasters and by video production and post-production studios. Visit our web site at www.dps.com. CONTACT: Digital Processing Systems Inc. Ken MacKenzie, 905/944-4005 e-mail: ken.mackenzie@dps.com |
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