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RECOGNITION ANNOUNCES IMPROVED 1991 FINANCIAL RESULTS

 RECOGNITION ANNOUNCES IMPROVED 1991 FINANCIAL RESULTS
 DALLAS, Dec. 9 /PRNewswire/ -- Recognition Equipment Incorporated


(NYSE: REC) today reported net income for the fiscal year ended Oct. 31, 1991, of $6,238,000 or 57 cents of earnings per share of common stock, compared to a net loss of $31,687,000 or $3.10 loss per share of common stock in 1990. Revenues for the year were $155,153,000 compared to $230,618,000 in 1990. Prior year revenue includes revenues of businesses divested during 1990 and the first quarter of 1991.
 Net income for the year included extraordinary gains of $1,210,000 or 11 cents per share as the result of the early extinguishment of debt, and $2,319,000 or 21 cents per share of income tax benefits from operating losses carried forward. Of the tax benefits, $587,000 or 5 cents per share was the tax benefit of operating loss carry forwards related to the early extinguishment of debt and $1,732,000 or 16 cents per share was the tax benefit of operating loss carry forwards partially offsetting the provision for income taxes.
 Net income for the fourth quarter ended Oct. 31, 1991, was $439,000 or 4 cents per share of common stock, compared to a net loss of $16,809,000 or $1.65 loss per share of common stock in the corresponding period last year. Revenues for the fourth quarter were $38,907,000 compared to $51,789,000 in 1990. Substantially all of the revenue decrease can be attributed to the divestiture of businesses during 1990 and the first quarter of 1991.
 Recognition also announced a change in the responsibilities for senior management. The board of directors elected Tom Hurley, formerly co-chief executive officer, to the position of executive vice president and vice chairman of the board to focus additional attention on corporate development acquisitions and strategic relationships. Bob Vanourek was elected president and chief executive officer. Both officers remain as directors of the company.
 Gilbert Lamphere continues as chairman of the board.
 In commenting on the results for 1991, Bob Vanourek, chief executive officer, said, "Our 1990 annual report cover said '1991 begins a series of much better years.' We believe these results for 1991 reflect the beginning of that series. Although the poor global economy continues to hinder our revitalization, we have made significant strides during 1991. The last of our planned divestitures was completed in the first quarter. We strengthened our balance sheet through the conversion of the company's debt owed to The Prospect Group, Inc. into common stock of the company. We expanded our product offerings through the acquisition of Hybrid Systems Inc. And, we continued to make research and development investments which will yield new software and hardware products during 1992 and beyond."
 At Oct. 31, 1991, the company's total backlog of orders believed to be firm was $39,203,000, compared to $37,502,000, at Oct. 31, 1990.
 In addition to these financial results, the company announced that its annual meeting of shareholders will be held on Feb. 27, 1992.
 Recognition, headquartered in Dallas, and its wholly owned subsidiaries, Plexus Software, Inc. and Hybrid Systems Inc., automate work processes through the manufacture, sale and service of data capture, recognition, workflow and document imaging products for customers throughout the world.
 CONSOLIDATED STATEMENT OF OPERATIONS
 For the three months ended October 31 (Unaudited):
 1991 1990
 Revenues $ 38,907,000 $ 51,789,000
 Income (loss) before
 income taxes 616,000 (17,535,000)
 Income tax benefit
 (provision) (606,000) 726,000
 Net income (loss)
 before extraordinary
 item 10,000 (16,809,000)
 Extraordinary item
 Income tax benefit
 from operating
 losses carried
 forward 429,000 ---
 Net income (loss) $ 439,000 $(16,809,000)
 Earnings (loss) per
 share:
 Income (loss)
 before extra-
 ordinary item $ --- $ (1.65)
 Extraordinary item .04 ---
 Net income (loss) $ .04 $ (1.65)
 For the twelve months ended October 31 (Audited):
 1991 1990
 Revenues $155,153,000 $230,618,000
 Income (loss) before
 income taxes 7,008,000 (30,979,000)
 Provision for income
 taxes (4,299,000) (708,000)
 Net income (loss)
 before extraordinary
 items 2,709,000 (31,687,000)
 Extraordinary items
 Income tax benefit
 from operating
 losses carried
 forward 2,319,000 ---
 Gain on early
 extinguishment
 of debt, net of
 $624 of income
 taxes 1,210,000 ---
 Net income (loss) $ 6,238,000 $(31,687,000)
 Earnings (loss) per
 share:
 Income (loss)
 before extra-
 ordinary items $ .25 (3.10)
 Extraordinary items .32 ---
 Net income (loss) $ .57 $ (3.10)
 RECOGNITION EQUIPMENT INCORPORATED AND SUBSIDIARIES
 CONSOLIDATED STATEMENT OF OPERATIONS
 (thousands, except per share)
 Three months ended Twelve months ended
 October 31, October 31,
 1991 1990 1991 1990
 (Unaudited) (Audited)
 Revenues:
 Product $ 18,650 $ 25,765 $ 71,026 $114,521
 Customer service 20,257 26,024 84,127 116,097
 Total 38,907 51,789 155,153 230,618
 Cost of revenues:
 Product 10,793 17,721 38,939 78,750
 Customer service 15,305 19,201 61,737 85,721
 Total 26,098 36,922 100,676 164,471
 Gross profit 12,809 14,867 54,477 66,147
 Operating expenses:
 Research and
 development 2,403 2,857 10,307 9,927
 Marketing 5,876 9,587 24,821 45,500
 General and
 administrative 2,747 4,275 11,480 21,688
 Restructuring --- 12,367 (4,456) 11,640
 Other operating 784 1,264 2,978 3,758
 Operating income
 (loss) 999 (15,483) 9,347 (26,366)
 Interest income 1,560 1,650 6,297 6,366
 Interest expense,
 related party --- (389) (1,090) (1,077)
 Interest expense
 other (1,189) (1,490) (4,866) (6,139)
 Foreign exchange
 gains (losses),
 net 377 96 (361) 755
 Other expense (1,131) (1,919) (2,319) (4,518)
 Income (loss) before
 income taxes 616 (17,535) 7,008 (30,979)
 Income tax benefit
 (provision) (606) 726 (4,299) (708)
 Net income (loss)
 before extra-
 ordinary items 10 (16,809) 2,709 (31,687)
 Extraordinary items:
 Income tax benefit
 from operating
 losses carried
 forward 429 --- 2,319 ---
 Gain on early
 extinguishment
 of debt, net of
 $624 of income
 taxes --- --- 1,210 ---
 Net income (loss) $ 439 $(16,809) $ 6,238 $(31,687)
 Weighted average
 shares out-
 standing 12,171 10,176 10,878 10,213
 Earnings (loss) per
 share:
 Income (loss)
 before extraordinary
 items $ --- $ (1.65) $ .25 $ (3.10)
 Extraordinary
 items .04 --- .32 ---
 Net income (loss) $ .04 $ (1.65) $ .57 $ (3.10)
 -0- 12/9/91
 /CONTACT: Larry H. Lattig of Recognition Equipment, 214-579-6314/
 (REC) CO: Recognition Equipment Incorporated ST: Texas IN: CPR SU: ERN


KD -- NY077 -- 0730 12/09/91 17:19 EST
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Date:Dec 9, 1991
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