Recoton Corporation Receives Waivers of Default and Loan and Securities Purchase Agreement Amendments.Business Editors LAKE MARY Lake Mary may refer to:
Recoton Corporation (Nasdaq: RCOT RCOT Rotary Club of Tucson (Arizona) ), a leading global consumer electronics company, today announced that it has received waivers of default and loan and securities purchase agreement amendments from its lenders and noteholders. The Company has submitted for filing a Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. with the Securities and Exchange Commission that includes documents related to these waivers and amendments. The Company has also provided (see attached) pro-forma statements of operations for the three and six-month periods ended June June: see month. 30, 2002, and pro-forma balance sheet data at June 30, 2002. This pro-forma information is being provided to illustrate what Recoton's results would have been had the Company obtained the waivers and amendments by June 30, 2002, the date of our Form 10-Q Form 10-Q See 10-Q. for the 2nd quarter of 2002. Such pro-forma financial statements have not been reviewed by Recoton's accountants and do not constitute an amendment of the financial statements included in the Company's previously filed Form 10-Q for the period ended June 30, 2002. These previously filed financial statements reflected the situation as it existed at the time that such Form 10-Q was filed. Robert Robert, Henry Martyn 1837-1923. American army engineer and parliamentary authority. He designed the defenses for Washington, D.C., during the Civil War and later wrote Robert's Rules of Order (1876). Noun 1. L. Borchardt Borchardt is a surname, and may refer to
Mr. Borchardt concluded, "As previously announced, we have substantially completed the restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). at our video game segment, thus reducing the drag drag Force exerted by a fluid stream on any obstacle in its path or felt by an object moving through a fluid. Its magnitude and how it may be reduced are important to designers of moving vehicles, ships, suspension bridges, cooling towers, and other structures. that this business segment has had on overall operating results. This restructuring, combined with continued profitability at our consumer electronics accessories and audio segments, should produce improved operating results in the second half of 2002. Additionally, and as previously announced, the asset sales that are planned to occur should further serve to strengthen Recoton's financial position by allowing us to reduce debt and improve liquidity." Recoton Corporation is a global leader in the development and marketing of consumer electronic accessories, audio products and gaming products. Recoton's more than 4,000 products include highly functional accessories for audio, video, car audio, camcorder, multi-media/computer, home office and cellular and standard telephone products, as well as 900MHz (MegaHertZ) One million cycles per second. It is used to measure the transmission speed of electronic devices, including channels, buses and the computer's internal clock. A one-megahertz clock (1 MHz) means some number of bits (16, 32, 64, etc. wireless technology products including headphones Head-mounted speakers. Headphones have a strap that rests on top of the head, positioning a pair of speakers over both ears. For listening to music or monitoring live performances and audio tracks, both left and right channels are required. and speakers; loudspeakers and car and marine audio products including high fidelity high fidelity n. The electronic reproduction of sound, especially from broadcast or recorded sources, with minimal distortion. high loudspeakers, home theater An audio/video entertainment center that has a large-screen TV and hi-fi system with three speakers in the front (left, right and center) and left and right speakers in the rear. Starting in the early 1990s, video inputs were added to stereo receivers and preamplifiers. speakers and car audio speakers and components; and accessories for video and computer games. The Company's products are marketed under three business segments: CE Accessory accessory, in criminal law, a person who, though not present at the commission of a crime, becomes a participator in the crime either before or after the fact of commission. , Audio and Gaming. Accessory products are offered under the AAMP AAMP American Association of Meat Processors AAMP African American Museum in Philadelphia (since 1976) AAMP American Academy of Maxillofacial Prosthetics AAMP Advanced Architecture Microprocessor (TM), Ambico(R), AR(R), Acoustic acoustic /acous·tic/ (ah-kldbomacs´tik) relating to sound or hearing. a·cous·tic or a·cous·ti·cal adj. Of or relating to sound, the sense of hearing, or the perception of sound. Research(R), Discwasher(R), Interact Interact can refer to:
Fall of Interact While the Game Boy device was first released, Interact acquired the rights to sell Datel's Action Replay , Jensen Noun 1. Jensen - modernistic Danish writer (1873-1950) Johannes Vilhelm Jensen (R), Peripheral Any input, output or storage device connected externally or internally to the computer's CPU, such as a monitor, keyboard, printer, disk, tape, graphics tablet, scanner, joy stick, paddle or mouse. (R), Recoton(R), Ross Ross , Sir Ronald 1857-1932. British physician. He won a 1902 Nobel Prize for proving that malaria is transmitted to humans by the bite of the mosquito. (R), Sole Control(R), Sound Quest See Qwest and Quest disk. Quest See also Adventurousness, Journey, Wandering. Ahab, Captain pursues Moby Dick, the great white whale, even to the point of losing his own life. [Am. Lit. (R) and Stinger(R) brand names. Audio products are offered under the Advent(R), AR(R), Acoustic Research(R), HECO HECO Hawaiian Electric Company, Inc. (R), Jensen(R), MacAudio(R), Magnat(R), NHT NHT National Housing Trust NHT Now Hear This (speaker manufacturer; Benicia, California) NHT National Heritage Trust (Australia) NHT Naphtha Hydrotreater NHT Now Here This (R) Now Hear This(R), Phase Linear(R) and Recoton(R) brand names. Gaming products are offered under the Game Shark(R), InterAct(R) and Performance(R) brand names. This press release may contain forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. information within the meaning of the Private Securities 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. Act of 1995. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. Such statements speak only as of the date made. Please refer to the Company's current Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and other SEC filings.
RECOTON CORPORATION AND SUBSIDIARIES
PROFORMA STATEMENT OF OPERATIONS
(FOR THE THREE MONTHS ENDED JUNE 30, 2002)
(DOLLARS In Thousands, Except Per Share Data)
As Proforma As
Reported Adjustments Adjusted
NET SALES, INCLUDING $1,271 IN
RESTRUCTURING AND
OTHER CHARGES IN 2002 $124,227 $ - $124,227
COST OF SALES, INCLUDING $12,840
IN ADDITIONAL VALUATION
ADJUSTMENTS IN 2002 98,470 98,470
GROSS PROFIT 25,757 25,757
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES,
INCLUDING $6,537 IN
RESTRUCTURING AND
OTHER CHARGES IN 2002 44,837 _________ 44,837
-------- --------
OPERATING INCOME (LOSS) (19,080) - (19,080)
OTHER (INCOME) EXPENSES:
Interest expense 5,351 5,351
Amortization of financing
costs 867 867
Investment income (15) (15)
-----------
LOSS BEFORE INCOME TAXES (25,283) - (25,283)
INCOME TAX BENEFIT 29,266 (29,266)(1) -
------ --------
NET LOSS $ (54,549) 29,266 $(25,283)
=========== ====== =========
BASIC AND DILUTED LOSS
PER SHARE: $ (4.49) $ (2.08)
========== =========
NUMBER OF SHARES USED IN
COMPUTING BASIC AND
DILUTED PER SHARE AMOUNTS: 12,138 12,141
====== ======
(1) Release the valuation allowance established at June 30, 2002 for
all of the Deferred Tax Assets, which was based upon uncertainties
at that time with respect to the Company's ability to generate
future income.
RECOTON CORPORATION AND SUBSIDIARIES
PROFORMA STATEMENTS OF OPERATIONS
(FOR THE SIX MONTHS ENDED JUNE 30, 2002 UNAUDITED)
(DOLLARS In Thousands, Except Per Share Data)
As Proforma As
Reported Adjustments Adjusted
NET SALES, INCLUDING $1,271 IN
RESTRUCTURING AND OTHER
CHARGES IN 2002 $255,443 $ - $255,443
COST OF SALES, INCLUDING
$12,840 IN ADDITIONAL
VALUATION ADJUSTMENTS
IN 2002 189,528 189,528
GROSS PROFIT 65,915 65,915
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES,
INCLUDING $6,537 IN
RESTRUCTURING AND
OTHER CHARGES IN 2002 84,271 _________ 84,271
-------- --------
OPERATING INCOME (LOSS) (18,356) - (18,356)
OTHER (INCOME) EXPENSES:
Interest expense 11,804 11,804
Amortization of
financing costs 1,676 1,676
Investment income (27) (27)
----------- ------------
LOSS BEFORE INCOME TAXES (31,809) - (31,809)
INCOME TAX BENEFIT 27,281 (29,266)(1) (1,985)
------ -------- -----------
NET LOSS $ (59,090) 29,266 $(29,824)
=========== ====== =========
BASIC AND DILUTED LOSS
PER SHARE: $ (4.87) $ (2.46)
====== ==========
NUMBER OF SHARES USED
IN COMPUTING BASIC AND
DILUTED PER SHARE AMOUNTS: 12,137 12,139
====== ======
(1) Release the valuation allowance established at June 30, 2002 for
all of the Deferred Tax Assets, which was based upon uncertainties
at that time with respect to the Company's ability to generate
future income.
RECOTON CORPORATION AND SUBSIDIARIES
PROFORMA BALANCE SHEET
(UNAUDITED AS TO JUNE 30, 2002)
(DOLLARS in Thousands)
As Reported Proforma As Adjusted
ASSETS Adjustments
CURRENT ASSETS:
Cash and cash equivalents $ 7,163 $ - $ 7,163
Accounts receivable
(less allowance for doubtful
accounts of $3,775) 141,010 141,010
Inventories, net 140,925 140,925
Prepaid expenses and
other current assets 18,323 10,080(3) 28,403
---------- -------- ---------
TOTAL CURRENT ASSETS 307,421 10,080 317,501
PROPERTY AND EQUIPMENT, NET 45,712 45,712
TRADEMARKS AND PATENTS, NET 4,000 4,000
GOODWILL, NET 30,536 30,536
DEFERRED INCOME TAXES
AND OTHER ASSETS 20,340(3)
9,032 2,633(1) 32,005
------ -------- --------
TOTAL ASSETS $396,701 $33,053 $429,754
======== ========= ========
LIABILITIES
CURRENT LIABILITIES:
Current portion of
long-term debt $233,678 (213,642)(2) $ 20,036
Accounts payable 88,199 88,199
Accrued expenses 2,633 (1)
20,185 1,154 (3) 23,972
------- -------- --------
TOTAL CURRENT
LIABILITIES 342,062 (209,855) 132,207
LONG-TERM DEBT (less current
portion above) - 210,585(1,2) 210,585
OTHER LIABILITIES 2,431 _________ 2,431
-------- -------
TOTAL LIABILITIES 344,493 730 345,223
------- -------
SHAREHOLDERS' EQUITY
PREFERRED SHARES - $1.00 par
value each - authorized
10,000,000 shares; none issued
COMMON SHARES - $.20 par
value each - authorized
40,000,000 shares; issued
13,573,530 shares in 2002
and 13,838,530 as adjusted 2,715 53 (1) 2,768
ADDITIONAL PAID-IN CAPITAL 92,895 3,004 (1) 95,899
RETAINED EARNINGS (24,424) 29,266 (3) 4,842
UNEARNED DEFERRED COMPENSATION (2,455) (2,455)
ACCUMULATED OTHER
COMPREHENSIVE LOSS (9,526) (9,526)
------------ --------- --------
TOTAL 59,205 32,323 91,528
------ ------ ------
TREASURY SHARES -
1,272,532 shares, at cost
And 1,007,532 as adjusted (6,997) (6,997)
---------- -------
TOTAL SHAREHOLDERS' EQUITY 52,208 32,323 84,531
------- ------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $396,701 $33,053 $429,754
======== ======= ========
(1) Record fees of $1.9m, $200k and $500k to be paid to the holders of
our senior debt, subordinated notes and subordinated debt; reprice
existing warrants and issue new warrants for a total adjustment of
$2.4m to holders of our subordinated notes and subordinated
lendors and issue 265,000 shares of common stock from the
Company's treasury to the subordinated note holders.
(2) Reclasify the loans and notes as long term.
(3) Release the valuation allowance established at June 30, 2002 for
all of the Deferred Tax Assets, which was based upon uncertainties
at that time to the Company's ability to generate future taxable
income.
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