Electronic Retailing Systems International, Inc. Reports Second Quarter Revenues Increase 58%; Company Strengthens Balance Sheet, Improves Operational Efficiencies.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)--Aug. 8, 2000 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 June June: see month. 30, 2000. Total revenues for the quarter were $1,563,000 compared to $910,000 reported for the corresponding 1999 quarter, an increase of 58%. For the first six months of 2000, total revenues were $2,587,000 compared to $1,708,000 for the same six month period in 1999, an increase of 66%. For the quarter, the net loss was $5,388,000 or $.25 per share, as compared to a net loss of $8,534,000 or $.40 per share for the same period in 1999. Net gain for the first six months was $7,688,000 compared to a net loss of $17,307,000 for the same period in 1999. The net gain reflects an extraordinary gain of $18,959,000 in the first quarter 2000 resulting from the retirement of debt. "We accomplished a number of important financial objectives over the past several months to strengthen the company for the future. We've we've Contraction of we have. we've have completed retirement of $147.3 million principal amount at maturity of our debt and substantially lowered our overhead while continuing to invest in R&D to enhance the ShelfNet system," said Bruce Bruce, Scottish royal family descended from an 11th-century Norman duke, Robert de Brus. He aided William I in his conquest of England (1066) and was given lands in England. F. Failing, Jr., Chief Executive Officer of ERS. "ShelfNet is a proven, robust product, and our existing customers, Stop & Shop and Shaw's in particular, continue to select our system for new stores and existing stores that currently operate competitive products." ERS recently completed an eight-month effort to reduce the company's debt, resulting in a dramatically stronger balance sheet. Between November November: see month. 1999 and July July: see month. 6, 2000, ERS retired 100% of its outstanding 13 1/4% Senior Discount Notes for an aggregate of approximately $25.6 million in cash, and issued $5 million principal amount of 10% notes due in 2001 and $5 million principal amount of 8% notes due in 2004, together with $4 million liquidation value Liquidation value Net amount that could be realized by selling the assets of a firm after paying the debt. of preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. , for its Senior Discount Notes. In February February: see month. 2000, to generate economies of scale in SG&A and to take advantage of the rapidly developing opportunity in the self checkout A customer-operated point-of-sale (POS) station. Also called a "self-scanning checkout," customers pay for and bag their own merchandise without interacting with a human cashier, although a support person is typically nearby and available. market, ERS acquired an interest in and entered into an agreement to manage NewCheck Corporation, of Jacksonville, Florida “Jacksonville” redirects here. For other uses, see Jacksonville (disambiguation). Jacksonville is the largest city in the state of Florida and the county seat of Duval County. , which is doing business under the name of Productivity Solutions, Inc. ("PSI"), in exchange for payments aggregating $6.5 million. PSI is one of the leading suppliers of self checkout retailing systems. "The investment in PSI positions ERS to take advantage of the current demand for self checkout systems in supermarkets and mass merchandise retailers. We will continue to invest in both self checkout and ESLs as they give us two complementary products that leverage our sales and marketing efforts and provides enhanced penetration in our core customer base," ended Failing. ERS is a leading developer and supplier of electronic shelf labeling 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. systems designed to improve retailer profitability. The ERS ShelfNet system is designed to assist retailers in cost savings and pricing accuracy by using a wireless network to link a store's central computer both to its checkout scanner (1) See also antivirus program. (2) An optical device that reads a printed page or transparency and converts it into a graphics image for the computer. The scanner does not recognize or differentiate in any manner the content of the material it is scanning. and to the ESLs that display pricing information at the shelf edge. With ShelfNet, this pricing information is updated automatically on the ESLs when prices in the point-of-sale point of sale n. pl. points of sale A business or place where a product or service can be purchased. Also called point of purchase. point (POS (1) See point of sale and packet over SONET. (2) "Parent over shoulder." See digispeak. POS - point of sale ) scanner are changed. This provides price integrity between the shelf edge and the POS scanners. ShelfNet uses spread spectrum RF technology, which is the most widely used method of wireless communication in retail today. In addition, ShelfNet uses a suite of patented software applications designed to communicate merchandising merchandising Element of marketing concerned especially with the sale of goods and services to customers. One aspect of merchandising is advertising, which aims to capture the interest of the segment of the population most likely to buy the product. , inventory and other information to and from store personnel in the aisle. These applications are designed to provide value-added val·ue-add·ed adj. Of or relating to the estimated value that is added to a product or material at each stage of its manufacture or distribution: benefits to retailers in the areas of shelf-edge merchandising, replenishment replenishment the addition of an appropriate quantity of properly prepared solution containing the correct concentration of chemicals to the developer solutions used in radiography. control, strategic pricing and shelf set compliance. 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 timely availability and acceptance of new products, the rate of development of the emerging market for electronic shelf label systems, the impact of competitive products and pricing, the ability to obtain system components from suppliers, the management of growth, 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)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
-------- -------- -------- --------
Revenues
Product sales $ 1,293 $ 671 $ 2,029 $ 1,308
Maintenance 270 239 558 400
-------- -------- -------- --------
Total revenues 1,563 910 2,587 1,708
-------- -------- -------- --------
Cost of goods sold 1,362 1,315 2,329 2,774
-------- -------- -------- --------
Gross profit (loss) 201 (405) 258 (1,066)
-------- -------- -------- --------
Operating expenses
Selling, general and
administrative 1,557 2,593 3,521 5,582
Research and
development 1,107 1,447 2,211 2,586
Depreciation and
amortization 78 99 166 195
-------- -------- -------- --------
Total operating
expenses 2,742 4,139 5,898 8,363
-------- -------- -------- --------
Loss from operations (2,541) (4,544) (5,640) (9,429)
-------- -------- -------- --------
Other income (expenses)
Interest income 438 703 919 1,416
Interest expense (2,756) (4,689) (5,481) (9,282)
Loss on equity
investment (530) (1,067)
Gain/(Loss) on
disposals 1 (4) (2) (12)
-------- -------- -------- --------
Total other expenses (2,847) (3,990) (5,631) (7,878)
-------- -------- -------- --------
Loss before extraordinary
gain on extinguishment
of debt (5,388) (8,534) (11,271) (17,307)
Extraordinary item
Gain on extinguishment
of debt -- 18,959
Net gain (loss) $ (5,388) $ (8,534) $ 7,688 $(17,307)
======== ======== ======== ========
Earnings per common share
Weighted average common
shares outstanding 21,288 21,252 21,288 21,251
======== ======== ======== ========
Basic gain (loss) per
common share $ (0.25) $ (0.40) $ 0.36 $ (0.81)
======== ======== ======== ========
Electronic Retailing Systems International, Inc.
Condensed Consolidated Balance Sheet
(in thousands)
(unaudited)
June 30, December 31,
-------- --------
2000 1999
-------- --------
Assets
Current assets
Cash and cash equivalents $ 21,047 $ 37,386
Other current assets 6,572 6,841
-------- --------
Total current assets 27,619 44,227
Equipment, net 1,988 2,515
Other non-current assets 7,302 2,774
-------- --------
Total assets $ 36,909 $ 49,516
======== ========
Liabilities and Stockholders' Deficit
Current liabilities $ 6,172 $ 3,062
Long-term debt 74,803 98,207
Common stock purchase warrants 5,100 5,100
Stockholders' deficit (49,166) (56,853)
-------- --------
Total liabilities and stockholders' deficit $ 36,909 $ 49,516
======== ========
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion