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INCSTAR REPORTS NET LOSS FOR FIRST QUARTER OF 1993, NET OF WORKFORCE REDUCTION CHARGES

 STILLWATER, Minn., April 14 /PRNewswire/ -- INCSTAR Corporation (AMEX:ISR) today reported a net loss of $387,000, or 2 cents per share, for its first quarter ended April 2, 1993, compared with net income of $1,116,000, or 7 cents per share for the first quarter of 1992. Included in first quarter 1993 results is a $750,000 one-time charge relating to a workforce reduction. Excluding this charge, earnings would have been one cent per share.
 Net sales were $11,064,000, approximately two percent higher than last year's first quarter. Sales in January and February were lower than in 1992 due to a general weakness in both United States and European markets. However, sales in March were significantly higher, and more than offset the declines experienced in the first two months. Initial sales of recently launched PTH and Vitamin D assays in the company's bone and mineral metabolism product line were strong. In addition, the company has completed development of its new thyroid receptor antibody kit, which will be introduced into the Japanese and European markets in the second quarter, and is expected to favorably impact sales in the second half of 1993.
 Gross margins declined to 47 percent in the first quarter, from 53 percent in the comparable period last year, due primarily to lower production volumes and higher production costs. Lower pricing on some of the company's products also contributed to the decline.
 Net income was also affected by an 88 percent increase in R&D expense to $1,398,000, from $742,000 in the comparable period last year. This significant increase, which is in line with expectations, relates to expenditures associated with initial efforts to commercialize the company's recently acquired fluorescence polarization immunoassay (FPIA) technology. The company expects that R&D spending will continue to represent a larger percentage of sales while new FPIA assays and associated laboratory instruments are under development.
 During the first quarter, the company was required to adopt Statement of Financial Accounting Standards No. 109 (Accounting for Income Taxes). First quarter results include a $16,000 charge in connection with this adoption.
 Dr. Orwin L. Carter, president and CEO, said, "As a result of slower sales growth, declining gross margins and the need to make substantial investments in our FPIA development program, we have made a decision to downsize our work force by approximately 40 positions, or 10 percent. This reduction, which is being accomplished through layoffs and the elimination of several open positions, resulted in a one-time charge of $750,000, covering severance and other related costs. We believe this restructuring will improve our competitiveness and future profitability. In addition, we will continue to aggressively look for opportunities to increase sales, improve efficiency and reduce costs."
 INCSTAR is a Minnesota-based manufacturer and distributor of high quality immunodiagnostic products for health care professionals and manufacturers. The company is an affiliate of the Italian-based Fiat Group (NYSE:FIA).
 INCSTAR CORPORATION
 Consolidated Statements of Operations
 (In thousands except share and per share data)
 Quarter ended
 April 2, 1993 March 31, 1992
 Net sales $ 11,064 $10,889
 Cost of goods sold 5,827 5,099
 Gross margin 5,237 5,790
 Selling, general & admin. 3,483 3,287
 Research & development 1,398 742
 Unusual item 750 -
 Total operating expenses 5,631 4,029
 Operating income (loss) (394) 1,761
 Interest expense (159) (200)
 Investment and other income
 (expense) 22 (15)
 Income (loss) before taxes
 and extraordinary items (531) 1,546
 Provision (benefit) for
 income taxes (160) 430
 Income (loss) before
 extraordinary items (371) 1,116
 Cumulative effect of
 accounting change (16) -
 Net income (loss) $ (387) $ 1,116
 Net income (loss) per share $ (.02) $ .07
 Weighted average shares
 and equivalents 16,396,873 16,319,126
 INCSTAR CORPORATION
 Condensed Balance Sheets
 (In thousands)
 April 2, December 31,
 1993 1992
 Assets
 Total current assets $22,233 $22,126
 Property and equipment, net 18,076 17,860
 Other 4,934 5,083
 Total $45,243 $45,069
 Liabilities and Shareholders' Equity
 Total current liabilities $ 8,224 $ 8,263
 Long term debt 8,124 8,167
 Other non-current 1,355 1,362
 Shareholders' equity 27,540 27,277
 Total $45,243 $45,069
 -0- 4/14/93
 /CONTACT: John Booth of INCSTAR Corporation, 612-779-1700, or Jack Falker of Swenson Falker Eilertsen, Minneapolis, 612-371-0000, for INCSTAR Corporation/
 (ISR)


CO: INCSTAR Corporation ST: Minnesota IN: HEA SU: ERN

TM -- NY007 -- 5475 04/14/93 07:00 EDT
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Date:Apr 14, 1993
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