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 ROCKVILLE, Md., Sept. 16 /PRNewswire/ -- General Kinetics Incorporated (AMEX: GKI) (GKI), a designer, producer and marketer of high-end, digital secure facsimile equipment, plastic sorting and food testing equipment, and precision enclosures headquartered in Rockville, makes the following announcements:
 GKI has filed its 1993 Form 10-K Report including audited financials for the fiscal years ended May 31, 1992 and 1993. Due to certain events which occurred subsequent to the filing of unaudited financial statements with its 1992 Form 10-K Report, and with the concurrence of its auditors, the company has restated the 1992 financial statements to reflect such subsequent events. These adjustments, which were principally related to the carrying value of inventory, totaled approximately $2.7 million, increasing the net loss for fiscal 1992 from $3.6 million to $6.2 million.
 The company announced the following audited results of operations for the fiscal years ended May 31, 1993 and 1992:
 FY 1993 FY 1992
 ended May 31, 1993 ended May 31, 1992
 (OOOs) (OOOs)
 (As Restated)
 Revenues: $13,473 $17,299
 Operating Income (loss): (2,428) (6,273)
 Net income (loss): (3,083) (6,222)
 Earnings (loss) per share: (0.88) (2.94)
 The net loss for the year ended May 31, 1993 was approximately $3.1 million on revenues of $13.5 million compared to a net loss of $6.2 million on revenues of $17.3 million for the year ended May 31, 1992. The net loss for the year was attributable to a number of factors, including a decrease in sales in the Cryptek Secure Communications division due to a drop in demand. In addition, production problems caused by the company's cash flow difficulties caused direct material and labor costs to be significantly higher than the amounts used in bidding on certain fixed price contracts in the Electronic Enclosure Division.
 The company also announced that it intends to expand the product lines of its Cryptek Secure Communications Division and is currently negotiating with the developer of secure computer system products with respect to a potential acquisition and certain product lines. In order to fund such acquisitions and to provide additional working capital for operations, the company is seeking to identify potential sources of private placement equity or debt capital. There can be no assurance that GKI will be able to conclude a definitive acquisition agreement with such developer or close the additional private placement financing which would be required in connection therewith or that if a private placement is consummated that it can be structured to yield working capital in excess of acquisition expenses.
 David Shaw, president of GKI, said: "With the inventory adjustments and the losses of the last two years behind us, and with the potential acquisition and the continuing support of our principal investor, GKI has positioned itself to be better able to serve its customers into the '90s."
 -0- 9/16/93
 /CONTACT: David A. Shaw of General Kinetics, 301-881-2044/

CO: General Kinetics Incorporated ST: Maryland IN: CPR SU:

KD-PB -- DC013 -- 2698 09/16/93 13:00 EDT
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Publication:PR Newswire
Date:Sep 16, 1993

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