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DATAPOINT ANNOUNCES TERMS OF NEW EXCHANGE OFFER FOR PREFERRED STOCK; FIRST QUARTER RESULTS

            DATAPOINT ANNOUNCES TERMS OF NEW EXCHANGE OFFER
               FOR PREFERRED STOCK; FIRST QUARTER RESULTS
    NEW YORK, Nov. 21 /PRNewswire/ -- Datapoint Corporation (NYSE: DPT) announced today that it was withdrawing its previously proposed exchange offers for its public debt and preferred stock and was proposing a new exchange offer solely with respect to its preferred stock on revised terms.
    The company announced that its board of directors has authorized the filing with the Securities and Exchange Commission of a registration statement on Form S-4, which includes a preliminary prospectus detailing the terms of a new exchange offer for the company's preferred stock. The proposed new offer contemplates that each share of Datapoint's $4.94 exchangeable preferred stock, $38 liquidation preference per share, will be exchanged for one share of new $1.00 preferred stock, $20 liquidation preference per share and two shares of Datapoint common stock.  The new preferred stock will pay dividends on a quarterly basis at an annual rate of $1.00 per share, with the first dividend to be paid on April 15, 1992 and Datapoint will obtain a letter of credit to assure payment of the first eight quarterly dividend payments.  Should Datapoint at any time be in arrears as to dividends for an aggregate of six quarters on the new preferred stock proposed to be issued in the exchange offer, the holders of the new preferred stock will be entitled, at their option, to exchange each share of new preferred stock for two additional shares of common stock and also will be entitled to elect, voting separately as a class, two additional directors to the Datapoint board.
    Tendering holders of preferred stock will be waiving accumulated dividends and the current right to elect two directors to the Datapoint board.  Datapoint announced that its board of directors had determined that, following consummation of the proposed exchange offer and prior to the next annual meeting of shareholders, it would add one director to the board for a single term after considering the suggestions of the holders of preferred stock.
    The Datapoint board approved the proposed preferred stock exchange offer following receipt of written fairness opinions from investment bankers.
    The new exchange offer for preferred stock will be conditioned, among other things, on receipt of the consent of the company's senior lender to permit the payment of dividends on the new preferred stock and approval by at least two-thirds of the outstanding shares of preferred stock and a majority of the outstanding shares of the company's common stock of certain amendments to the terms of the outstanding preferred stock.  Such amendments, among other things, would allow Datapoint, at its option, to exchange each share of the currently outstanding preferred stock which is not tendered in the exchange offer for 0.75 share of the new preferred stock and two shares of Datapoint common stock.  This exchange will occur promptly following consummation of the proposed exchange offer.  The company plans to hold a meeting at which common and preferred stockholders will consider and vote on such amendments.
    The exchange offers previously proposed (each of which was conditioned on consummation of the other) were withdrawn because the company and its financial advisor, Kidder, Peabody & Co. Incorporated, following discussions with holders of the company's outstanding debentures and preferred stock, determined that the company would not be able to offer terms in the prior exchange offers that it believed prudent and that would result in their consummation.
    This announcement does not constitute an offer to sell or to buy any security or the solicitation of any proxies, which offer and proxy solicitation shall only be made by means of a proxy statement/prospectus filed by Datapoint with the Securities and Exchange Commission. Datapoint intends to commence the exchange offer immediately following the effectiveness of its S-4 registration statement.
    First Quarter Profits
    Datapoint Corporation today reported net income of $0.4 million on revenue of $56.9 million for the company's first quarter ended Oct. 26, 1991.  This compares with net income of $3.1 million on revenue of $58.5 million for the first quarter of the prior year.
    Revenue declined from the same period of the prior year due to the sale of a subsidiary during the prior year and a stronger U.S. dollar during the first quarter of 1992 as compared to the same period of the prior year.  Excluding these factors, revenue increased by 8 percent.
    The company had operating income of $0.8 million during the first quarter of fiscal year 1992 compared with operating income of $2.0 million a year ago.  The decline is due to a slightly lower gross profit margin, caused primarily by competitive price pressures and slightly higher operating expenses.
    Non-operating results during the first quarter of 1992 were favorably impacted by improved performance in the company's investment portfolio, and reduced interest expense due to a decline in the level of debt and lower U.S. interest rates, as compared to the same period of the prior year.
    Income tax expense during the first quarter of 1992 includes a credit of $1.1 million in a tax settlement.
    First quarter 1991 results included an extraordinary gain of $3.3 million related to the repurchase and retirement of debentures. No such repurchases or gains occurred during the first quarter of 1992.
    Datapoint, a leader in networking information technology -- telephony services, video conferencing, personal computing and information processing -- markets a variety of products and services in 42 countries worldwide as part of its Open Systems Networking (OSN) strategy.
                    DATAPOINT CORPORATION
                  SUMMARY OPERATING STATEMENTS
              (In thousands, except per share data)
    Three Months Ended         Oct. 26, 1991        Oct. 27, 1990
    Revenue:
     Sales                        $ 30,144            $ 28,945
     Service and lease              26,766              29,572
      Total revenue               $ 56,910            $ 58,517
    Operating income              $    798            $  1,964
    Non-operating income
     (expense), net                   (943)             (1,719)
    Income (loss) before income taxes
      & extraordinary items           (145)                245
    Income tax expense                 309                 843
    Loss before extraordinary items   (454)               (598)
    Extraordinary items:
     Debt extinguishment                --               3,318
     Utilization of tax
      loss carryforward                861                 332
    Net income                    $    407            $  3,052
    Net gain (loss) per share
     applicable to common stock (A)  $(.20)               $.07
    Average common shares       10,128,705          10,116,486
    (A) Includes $2,385 of dividends in arrears for the first quarters
    of 1992 and 1991.
                            DATAPOINT CORPORATION
                            SUMMARY BALANCE SHEETS
                                (In thousands)
                                 Oct. 26, 1991        July 27, 1991
    Current assets                $ 117,107            $ 122,025
    Fixed assets, net                31,197               29,572
    Excess of cost of investment
     over net assets acquired, net   64,729               62,493
    Other assets, net                21,669               21,400
    Total                         $ 234,702            $ 235,490
    Current liabilities           $  81,678            $  87,591
    Long-term debt and other         75,641               76,473
    Stockholders' equity             77,383               71,426
    Total                         $ 234,702            $ 235,490
    -0-               11/21/91
    /CONTACT:  Patricia Coble of Datapoint, 512-593-7910/
    (DPT) CO:  Datapoint Corporation ST:  Texas IN:  CPR SU:  ERN JT -- NY109 -- 6125 11/21/91 17:43 EST
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No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Publication:PR Newswire
Date:Nov 21, 1991
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