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INTERACTIVE MEDIA AMENDS SECOND-QUARTER RESULTS; AYARS NAMED PRESIDENT IN RESTRUCTURING; LOAN EXTENSION SIGNED WITH CANON SALES

INTERACTIVE MEDIA AMENDS SECOND-QUARTER RESULTS; AYARS NAMED PRESIDENT
 IN RESTRUCTURING; LOAN EXTENSION SIGNED WITH CANON SALES
 SCOTTSDALE, Ariz., Jan. 10 /PRNewswire/ -- Interactive Media Technologies, Inc. (NASDAQ: IMTX) today amended its second-quarter results ended Sept. 30, 1991, reporting a net loss of $1.1 million, or 6 cents per share, compared to previously reported net income of $128,508, or 1 cent per share.
 The restatement of revenues came after a comprehensive review of sales procedures, reported on Dec. 7, 1991, revealed that sales reporting methods were responsible for certain recording errors.
 In further action, the company announced major restructuring plans to strengthen senior management, redirect sales emphasis and cut operating expenses. The company also executed an extension to June 18, 1992, of its loan from Canon Sales Co., Inc. (Japan) and has obtained bridge financing commitments to see it through the restructuring period.
 Management Takes Aggressive Action
 "Interactive Media Technologies is at crucial stage in its development," said R. Glenn Williamson, chairman and CEO. "We are confronted with major operating, marketing and financial issues that need immediate resolution. To this end we are taking a number of actions:
 "First, Allen Ayars has been named president and will oversee all sales and marketing and run the company's day-to-day operations. His most immediate task is to focus company sales on our primary markets, i.e., the audio/visual and presentation industries. The redefined marketing program will be implemented in first quarter 1993, which begins April 1, 1992.
 "Second, the company will expand its board of directors shortly. Our intent is to bring seasoned management to the organization in the form of outside directors to help guide the company in the future. The search for additional directors is under way.
 "Third, we reached and executed a final agreement with Canon Sales on extending $1.6 million in loans to June 18 of this year. This financial arrangement and recent cuts in operating expenses have helped us obtain commitments on bridge financing through the anticipated restructuring period. We are also engaged in discussions with several potential equity investors and lenders."
 Strategic Alliances, Product Quality Intact
 Williamson also indicated that the restructuring and recent cuts in operating expenses have not put product quality for the IMTX-8000(TM) nor its relationships with IBM, Varian and Canon Sales at risk. He reiterated the company's plans to support IBM and compatible platforms by making software tools available this year so users in the Windows, OS/2 and DOS environments can take advantage of the IMTX-8000 capabilities just as the Apple community is currently doing. The IMTX-8000 has no known directly competitive products and continues to receive high marks and favorable evaluations in the audio/visual and presentation industries.
 Sales Accounting Methods Changed
 Commenting on the need to restate revenues recognized during the quarter ended Sept. 30, 1991, Williamson explained that certain sales staff may have implied a right-of-return privilege on its primary product, the IMTX-8000, prior to repayment for units shipped to end users. Units with a cost to the company of $762,000 and a sales price of $2 million were shipped apparently with this implied understanding. As a result, these units are now being accounted for as consigned inventory and sales are being recognized only when payment is received.
 Management Changes
 Commenting on Ayars' appointment, Williamson stated, "The transaction from pure R&D to being a fully operational company is a difficult task. We believe Allan Ayars' 22 years of operations and marketing experience make him a strong choice for president. Not only is he an industry marketing pioneer and visionary, Allan also has the operational experience IMT needs to lead the organization."
 Ayars joined Interactive Media in August 1991 as the company's executive vice president. Previously he was director of multimedia industry services for Dataquest, Inc. He also has held senior management positions, including vice president for worldwide marketing of Letraset U.S.A., Inc., vice president of marketing for Quark, Inc., and manager for desktop publishing product marketing with Xerox Corp.
 In a related matter, the company recently accepted the resignations of the executive vice president for sales and the national sales manager.
 Cash Flow and Finance Issues
 During the second quarter, Interactive Media obtained a $1 million secured short-term loan from Canon Sales, originally due Dec. 18, 1991. IMT received an extension to the loan agreement, as well as an extension to a $600,000 interim manufacturing loan provided by Canon Sales. The new financing agreement extends the term of each loan to June 18, 1992. The loan extension agreement was signed by Canon Sales and Interactive Media in December 1991.
 "Beyond the accord reached with Canon, we recognize the need for additional financing, either from exercise of warrants or other financing sources for working capital," Williamson said. "These funds are needed for manufacturing, marketing and the financing of accounts receivable and inventories. We are currently engaged in discussions with several potential equity investors and lenders; however, with the exception of the Canon accord, no final agreements have been reached regarding new financing. We hope to report favorable results toward this effort in the near future," Williamson added.
 Interactive Media Technologies, Inc. is a full spectrum communications company specializing in computer-based interactive video products that include proprietary hardware and software systems.
 INTERACTIVE MEDIA TECHNOLOGIES, INC.
 Consolidated Statements of Operations (Restated)
 (Unaudited)
 Three months ended Sept. 30 1991 1990
 Revenues:
 Sales $76,386 --
 Consulting fees -- --
 Total revenues 76,386 --
 Cost of goods sold 181,892 --
 Gross margin (105,506) --
 Costs and expenses:
 Selling, general and administrative 673,597 472,497
 Research and development 244,160 367,473
 Interest 30,895 32,351
 Depreciation 69,216 76,625
 Debt conversion expense -- --
 Total costs and expenses 1,017,868 948,946
 Loss from operations (1,123,374) (948,946)
 Other income 18,027 9,478
 Loss before extraordinary item (1,105,347) (939,468)
 Loss from early retirement of debt -- --
 Net loss before minority interest (1,105,347) (939,468)
 Minority interest in loss of
 IMI subsidiary -- --
 Net loss $(1,105,347) $ (939,468)
 Per share of common stock:
 Loss before extraordinary item $(.06) $(.06)
 Extraordinary item -- --
 Net loss (.06) (.06)
 Weighted average number of common
 shares outstanding 19,611,674 15,487,141
 From inception
 (Aug. 8, 1987)
 Six Months Ended through
 Sept. 30, Sept. 30,
 1991 1990 1991
 Revenues:
 Sales $145,530 -- $172,951
 Consulting fees -- -- 60,307
 Total revenues 145,530 -- 233,258
 Cost of goods sold 181,892 -- 181,892
 Gross margin (36,362) -- 51,366
 Cost and expenses
 Selling, general and
 administrative 1,202,157 1,230,308 5,247,339
 Research and development 986,078 939,601 3,924,016
 Interest 57,821 49,509 179,855
 Depreciation 145,828 153,073 570,484
 Debt conversion expense -- -- 293,333
 Total costs and
 expenses 2,391,884 2,372,486 10,215,027
 Loss from operations (2,428,246) (2,372,486) (10,163,661)
 Other income 29,653 41,870 226,336
 Loss before extra-
 ordinary item (2,398,593) (2,330,616) (9,937,325)
 Loss from early
 retirement of debt -- -- (59,228)
 Net loss before
 minority interest (2,398,593) (2,330,616) (9,996,553)
 Minority interest in
 loss of IMI subsidiary -- -- 25,845
 Net loss $(2,398,593) $(2,330,616) $(9,970,708)
 Per share of common stock:
 Loss before extra-
 ordinary item $(.12) $(.15) $(.78)
 Extraordinary item -- -- --
 Net loss (.12) (.15) (.78)
 Weighted average
 number of common
 shares outstanding 19,444,714 15,438,645 12,729,188
 -0- 1/10/92
 /CONTACT: Karen Blandini of Interactive Media Technologies, 602-443-3093; or Gary Strong, 312-266-7800, or Scott Snyderman, 212-661-8030, both of the Financial Relations Board/
 (IMTX) CO: Interactive Media Technologies, Inc. ST: Arizona IN: CPR SU: ERN PER


CK -- NY060 -- 8740 01/10/92 16:16 EST
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