GENICOM reports highest quarterly earnings since 1988.CHANTILLY, VA--(BUSINESS WIRE)--Feb. 4, 1997-- Growth in Revenue of 21.4% and Earnings of 38.5% in the 4th Quarter GENICOM Corporation (Nasdaq:GECM GECM Gilbert-Elliott Channel Model ) today reported record revenues of $91.8 million for the fourth quarter of 1996, increasing $16.2 million or 21.4% from the fourth quarter of 1995. Relative to the third quarter of 1996, revenues increased 33.3% from $68.8 million. Revenues for the 12 months ended December 29, 1996 grew 3.1% to $303.3 million from $294.1 million for the same period in 1995. Earnings for the fourth quarter of 1996 were the highest since 1988. Recorded earnings for the quarter were $0.18 per share, up $0.05 per share from the fourth quarter of 1995. Earnings per share for the year, before restructuring and environmental charges, were $0.42, compared to $0.51 in 1995. After restructuring and environmental charges of $0.28 per share, reported earnings for 1996 were $0.14 per share. The restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. was directed at Enterprising Service Solutions (ESSC ESSC Earth System Science Center (Pennsylvania State University) ESSC Earth System Science Center (University of Alabama; Huntsville, AL) ESSC Environmental Systems Science Centre ) new "end of runway" depot repair capability. The Company has continued to reduce its interest expense since retiring high interest bonds in February 1996. Interest for the fourth quarter was 20.1% lower than the same period a year ago and 36.7% lower for the year, compared to 1995. The Company realized $32.9 million in cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses , an increase of $16.3 million from 1995. The debt to equity ratio The debt to equity ratio (D/E) is a financial ratio indicating the relative proportion of equity and debt used to finance a company's assets. It is equal to total debt divided by shareholders' equity. improved slightly to 1.45, while absorbing an additional $27 million of debt associated with the acquisition of Texas Instruments' printer business. Contributing to the Company's overall performance were the Company's acquisition of the Texas Instruments See TI. (company) Texas Instruments - (TI) A US electronics company. A TI engineer, Jack Kilby invented the integrated circuit in 1958. Three TI employees left the company in 1982 to start Compaq. printer business, continued progress with product cost reduction programs and further improvements in the balance sheet. Commenting on the fourth quarter performance, Paul T. Winn, President and Chief Executive Officer, stated, "We ended the year with good momentum, which positions the Company for growth in 1997. We entered 1997 with a higher quality revenue stream, in that our products business is significantly larger, with a broader product portfolio and customer base. In addition, our service business is poised for growth, with new customers and a smaller share of our overall business sourced from declining legacy products. Further, the Company realized strong operating cashflow during 1996, which allowed the $27 million acquisition to only marginally impact our debt level by year end, versus 1995. The restructuring and opening of the new "end of runway" facility is anticipated to improve ESSC's performance in the second half of 1997 and provide a new growth offering for the Company. "GENICOM continues to focus on its two operating business units and has structured separate operating plans and associated balance sheets. Both operating companies operating company A business that engages in transactions with outsiders. have developed internal and partnership growth strategies. Revenues for these respective operating companies, in addition to Relays are as follows:" ($ In thousands) Three Months Twelve Months 1996 1995 % 1996 1995 % Documents Solutions Company $57,113 $40,263 41.8 $169,056 $154,743 9.2 Enterprising Service Solutions Company 31,238 32,598 (4.2) 120,551 127,583 (5.5) Relays 3,404 2,709 25.7 13,651 11,726 16.4 $91,755 $75,570 21.4 $303,258 $294,052 3.1 -0- Document Solutions Operating Company (DSC (1) (Digital Signal Controller) A microcontroller and DSP combined on the same chip. It adds the interrupt-driven capabilities normally associated with a microcontroller to a DSP, which typically functions as a continuous process. See microcontroller and DSP. ) The increase in revenue in the fourth quarter of 1996 for Document Solutions was directly attributable to the acquisition of Texas Instruments' printer business. Printer revenue increased 39.5% on strong sales of travel industry printers, a product line acquired from Texas Instruments. In addition, supplies revenue increased 58.3% for the quarter. Revenue for the fourth quarter of 1996 increased $21.7 million, or 61.3% from the third quarter of 1996. Document Solutions revenue increased 9.2% in 1996 from 1995. Commenting further, Mr. Winn indicated, "We are pleased with the results from our acquisition of the Texas Instruments printer business, especially with travel industry products worldwide. Recently the Company entered into a contract with Malaysian Airlines for printers and related products at the Kuala Lumpur Kuala Lumpur (kwä`lə l  m`pr), city (1990 est. pop. airport. The acquisition has
improved scale and has had a positive impact on profits."In our base printer business, we continue to demonstrate growth in the selected markets of industrial graphics and IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) systems environments. Existing product lines now support multiple technology platforms. In 1996, we also introduced a new line of thermal printers, broadening our range of solutions to our customers. Continued growth in these areas has contributed to increased market presence." Enterprising Service Solutions Operating Company (ESSC) The ESSC operating company consists of Multivendor Services and Integrated Network A network that supports both data and voice and/or different networking protocols. See converged network and new public network. Services. Multivendor Services revenue for the fourth quarter of 1996 declined modestly, compared to 1995 and the third quarter of 1996. This business registered growth with important new customer contracts, including Siemens Nixdorf See Fujitsu Siemens. and UNISYS (Unisys Corporation, Blue Bell, PA, www.unisys.com) An information technology company that was created in 1986 as a merger of the Burroughs and Sperry corporations. At that time, it was the largest merger of computer manufacturers in history. and in GENICOM Canada overall. The impact of this growth was offset throughout the year with a decline in legacy business revenue. As the Company finished 1996, this legacy revenue stream was reduced to approximately 20% of domestic revenue, diminishing the importance of this declining revenue in 1997. Integrated Network Services revenue declined 12.3% in the final quarter of 1996, compared to the final quarter of 1995, due primarily to the U.S. systems integration business, which in 1995 benefited from a large contract with Nasdaq. Revenue for 1996 also declined significantly, compared to 1995, but increased for the fourth quarter of 1996 from the third quarter of 1996. The systems integration business in Canada performed well, doubling revenue in the fourth quarter of 1996, compared to 1995, and demonstrated positive year- over-year growth. "It has been a challenging year for ESSC," said Mr. Winn. "Our greatest disappointment was that we were unable to grow the business faster than the decline in the legacy revenue. The opening of the new rapid turnaround depot in Louisville, Kentucky  “Louisville” redirects here. For other uses, see Louisville (disambiguation). is targeted to resolve the issues of redundant facilities and cost inefficiencies created by declining legacy revenue. We are pleased with the growth of the network integration business in Canada and are planning to apply similar implementation to the U.S., giving us an optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op outlook for network integration in 1997." Relay revenue for the fourth quarter increased 25.7% from the fourth quarter of 1995. For 1996, revenue increased 16.4%. The Company continues to negotiate for the sale of this product family. The statements contained in this release that are not historical facts are forward looking statements that involve risks and uncertainties, including, but not limited to, the Company's ability to secure new customers and maintain its current customer base, the risk of customer delays or cancellations in both on-going and new programs, the ability to integrate acquisitions, the ability to transition to new operating facilities, the effect of economic conditions, the impact of competition and other risks detailed, from time to time, in the Company's Securities and Exchange Commission filings. GENICOM Corporation is an international supplier of network integration services, multivendor services and printer solutions. The Enterprising Service Solutions Group (ESSC) provides integrated network solutions, which include network integration, professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. , and help desk support, in addition to logo and multivendor on site and off site product repair and express parts. The Document Solutions Group (DSC) designs and markets a wide range of computer printer technologies for general purpose applications. GENICOM is headquartered within metropolitan Washington, D.C. -0- GENICOM Corporation Condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. Consolidated Statements of Income (In thousands, except per share data)(Unaudited) Three Months Ended Twelve Months Ended Dec. 29 Dec. 31 Dec. 29 Dec. 31 1996 1995 1996 1995 Revenues $91,755 $75,570 $303,258 $294,052 Cost of sales 69,773 57,187 232,289 217,613 Gross profit 21,982 18,383 70,969 76,439 Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. 17,929 14,516 63,584 61,261 Environmental costs 1,479 Restructuring costs 4,183 Gain on sale of investment in subsidiary (1,481) Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. 4,053 3,867 3,204 15,178 Interest, net 1,604 2,027 4,903 7,741 Other expense (income) 31 (122) Income (loss) before income taxes and extraordinary item 2,418 1,840 (1,577) 7,437 Income tax expense (benefit) 218 251 (3,658) 1,285 Net income before extraordinary item 2,200 1,589 2,081 6,152 Extraordinary item - loss on extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of debt, net of $258 tax (422) Net income $ 2,200 $ 1,589 $ 1,659 $ 6,152 Earnings per common share and common share equivalent (primary and fully diluted) $0.18 $0.13 $0.14(a) $0.51 Weighted average number of common shares and common share equivalents outstanding Primary 12,054 12,220 12,168 12,038 Fully diluted 12,054 12,245 12,168 12,056 (a) $0.42 per share before $0.28 per share for restructuring and environmental charges. -0- GENICOM Corporation Condensed Consolidated Balance Sheets consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. (In thousands) December 29, December 31, 1996 1995 (Unaudited) Assets Cash and cash equivalents $ 5,866 $ 4,271 Accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying 65,404 53,572 Other receivables 1,835 3,767 Inventories 46,947 43,079 Property, plant and equipment 26,562 30,896 Other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. 39,465 25,954 $ 186,079 $ 161,539 Liabilities and Stockholders' Equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. Current portion of debt obligations $ 4,222 $ 7,865 Current liabilities Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. 85,134 63,726 Debt obligations, less current portion 50,331 44,474 Other non-current liabilities 8,801 10,941 Stockholders' equity 37,591 34,533 $ 186,079 $ 161,539 CONTACT: James C. Gale Sr. Vice President & CFO See Chief Financial Officer. GENICOM Corporation (703) 802-9259 or Geoffrey Buscher/Jason Langer Morgen-Walke Associates, Inc. (212) 850-5600 |
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