Electronic Retailing Systems International, Inc. Reports First Quarter Results.Business Editors NORWALK Norwalk (nôr`wôk'). 1 City (1990 pop. 94,279), Los Angeles co., S Calif.; settled in the 1850s, inc. 1957. With the arrival (1875) of the Southern Pacific RR, it became a center for the dairy and logging industries, but , Conn.--(BUSINESS WIRE)--May 21, 2001 Electronic Retailing Systems International, Inc. ("ERS ERS, n.pr See extended rotated side-bent. ") (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). BB:ERSI ERSI Environment Remote Sensing Institute ) today reported financial results for the quarter ended March 31, 2001. Revenues for the first quarter of 2001 were $1,176,000 compared to $1,024,000 for the same period last year. The net loss was $3,582,000 or $0.17 per share, as compared to a net income of $13,076,000 or $0.61 per share for the same period in 2000. Net income for the three-month period ended March 31, 2000 reflects an extraordinary gain of $18,959,000, from the retirement of debt. On May 2, 2001, ERS announced that it had commenced the winding down of its electronic shelf label Electronic Shelf Label is a system used by Retailers for displaying price on shelves. Automating the price change process enhances in-store merchandising and store compliance. These features add up to increased sales and reduced overall operational costs. (ESL (1) An earlier family of client/server development tools for Windows and OS/2 from Ardent Software (formerly VMARK). It was originally developed by Easel Corporation, which was acquired by VMARK. ) operations on an orderly orderly /or·der·ly/ (or´der-le) an attendant in a hospital who works under the direction of a nurse. or·der·ly n. An attendant in a hospital. basis, as a result of apparent insufficient interest in the retail community for ESL systems to justify or attract further economic investment in the reasonably foreseeable fore·see tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees To see or know beforehand: foresaw the rapid increase in unemployment. future. ERS will continue its management agreement with NewCheck Corporation. To reflect the costs of the winding down of ESL operations, ERS expects to record significant charges in its financial statements for the second quarter of this year, ranging from an estimated $2.3 - $2.5 million. These charges include 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. and accelerated depreciation Accelerated Depreciation Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years of the life of an asset. Notes: The straight-line depreciation method spreads the cost evenly over the life of an asset. and other asset-related charges for equipment, leasehold improvements Leasehold Improvement Improvements on a leased asset that increase the value of the asset. Notes: A leasehold improvement is classified as an asset that must be depreciated over time. , warehouse closing costs Closing Costs The numerous expenses (over and above the price of the property) that buyers and sellers normally incur to complete a real estate transaction. Costs incurred include loan origination fee, discount points, appraisal fee, title search, title insurance, survey, taxes, , software and other fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → , and severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when and other employee-related costs. ERS also previously announced the formation of a special board committee to consider a merger proposal received from its principal shareholders which, if consummated con·sum·mate tr.v. con·sum·mat·ed, con·sum·mat·ing, con·sum·mates 1. a. To bring to completion or fruition; conclude: consummate a business transaction. b. , would result in the acquisition for cash in the amount of $0.24 per share, of the shares of ERS Common Stock not contributed by them and certain other investors to a newly-formed corporation organized by them. The proposed transaction is subject to agreement with ERS and, subsequently, negotiation of definitive documentation. The special board committee has engaged investment bankers Investment Banker A person representing a financial institution that is in the business of raising capital for corporations and municipalities. Notes: An investment banker may not accept deposits or make commercial loans. and special counsel to advise it concerning the proposed transaction. 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 risks and uncertainties. ERS' actual results may vary from those anticipated due to a number of factors, including, without limitation, the progress of ERS' winding down of ESL operations, the timely availability and acceptance of new products, the impact of competitive products and pricing, the ability of ERS to raise additional financing, and other factors set forth in reports and other documents filed by ERS with the Securities and Exchange Commission from time to time.
Electronic Retailing Systems International, Inc.
Condensed Consolidated Statement of Operations
(in thousands, except per share amounts)
Three Months Ended
March 31,
(unaudited)
-------------------------
2001 2000
-------- --------
Revenues
Product sales $ 1,017 $ 736
Maintenance 159 288
-------- --------
Total revenues 1,176 1,024
-------- --------
Cost of goods sold 1,099 967
-------- --------
Gross loss 77 57
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Operating expenses
Selling, general and
administrative 1,710 1,964
Research and development 976 1,104
Depreciation and
amortization 42 88
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Total operating
expenses 2,728 3,156
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Loss from operations (2,651) (3,099)
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Other income (expenses)
Interest income 22 481
Interest expense - (2,725)
Loss on investment
and other assets (953) (537)
Loss on disposals - (3)
-------- --------
Total other expenses (931) (2,784)
-------- --------
Loss before extraordinary
gain on extinguishment
of debt (3,582) (5,883)
Extraordinary item
Gain on extinguishment
of debt - 18,959
-------- --------
Net gain (loss) $ (3,582) $ 13,076
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Earnings per common share
Weighted average common
shares outstanding 21,333 21,286
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Basic gain (loss) per
common share $ (0.17) $ 0.61
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Electronic Retailing Systems International, Inc.
Condensed Consolidated Balance Sheet
(in thousands)
March 31, December 31,
-------- -----------
2001 2000
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Assets
Current assets
Cash and cash equivalents $ 490 $ 2,887
Other current assets 2,839 3,176
-------- --------
Total current assets 3,329 6,063
Equipment, net 1,229 1,361
Other non-current assets 6 6
-------- --------
Total assets $ 4,564 $ 7,430
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Liabilities and Stockholders'
Deficit
Current liabilities $ 7,808 $ 7,092
Long-term debt 6,882 6,882
Common stock purchase warrants 5,100 5,100
Preferred stock 3,999 3,999
Stockholders' deficit (19,225) (15,643)
-------- --------
Total liabilities and
stockholders' deficit $ 4,564 $ 7,430
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