KNOGO ANNOUNCES RESTRUCTURING OF OPERATIONS AND THIRD
FISCAL QUARTER RESULTS
HAUPPAUGE, N.Y., Jan. 14 /PRNewswire/ -- Knogo Corporation (NYSE: KNO) today announced a restructuring plan to respond to changing market conditions, pending 1992 regulatory changes in the European Common Market and improving product technology. A restructuring charge of approximately $10 million has been recorded in the third quarter of fiscal 1992. In addition, the company has recognized other charges occasioned by market conditions including additional bad debt reserves and certain other selling, general and administrative costs.
For the nine months ended Nov. 30, 1991 revenue was $59,846,000, compared to $59,975,000 for the same nine months of last year. In the third fiscal quarter, revenue was $20,092,000, compared to $24,058,000 in the third quarter of fiscal 1991. Increased competition in Europe, the higher value of the U.S. dollar compared to the same quarter last year and a lower than normal conversion ratio of bookings to revenues adversely affected fiscal 1992 third quarter revenues.
Primarily as a result of the provisions taken in the third quarter, there was a net loss for the nine months ended Nov. 30, 1991 of $13,840,000, or $2.63 per share, compared to net earnings of $1,486,000, or $0.28 per share, last year. For the quarter, there was a net loss of $14,672,000, or $2.79 per share, compared to net earnings of $732,000, or $0.14 per share, in the same quarter of fiscal 1991.
The specifics of the provisions taken in the third quarter include write-downs of earlier generation products and the related impact on the current leased asset base and charges for the redistribution of staff, consolidation of physical facilities and related asset write-downs. The company has obtained the necessary waivers from its banks to assure covenant compliance under its revolving credit agreements notwithstanding the third quarter results, and is in the process of renegotiating these agreements. The company's balance sheet remains sound, with equity of $60 million exceeding debt by 1.7 times.
Arthur J. Minasy, chairman and chief executive officer, commented, "Despite the current economic conditions facing many of our retail customers, demand for our products continues to increase and our bookings are up, although at tougher terms and prices. The changes reflected in the restructuring and other charges taken in the third quarter will permit us to compete more aggressively in the United States and particularly in Europe. The company will be well positioned to take advantage of the changes envisioned in the European Common Market in 1992. Knogo will a leaner, more efficient organization in the years ahead."
Knogo Corporation, founder of the Electronic Article Surveillance (EAS) industry in 1966, is the world's technological leader in the design and manufacture of asset protection systems for retailers and industry. Its Radio Frequency (RF) and Micro-Magnetic (MM) systems protect retail merchandise and business assets. Other products include Knogo's Data Displayer and Surveillor Closed Circuit Video Systems (CCVS), which protect retailers against theft by recording point-of-sale transactions and through video surveillance.
CONSOLIDATED FINANCIAL HIGHLIGHTS
Periods ended Three months Nine months
Nov. 30; 1991 1990 1991 1990
(000s omitted, except share data)
Total revenues $20,092 $24,058 $59,846 $59,975
Operating (loss) profit (14,031) 1,825 (11,395) 4,254
(Loss) income before
income taxes (14,741) 1,046 (13,552) 2,123
Net (loss) income (14,672) 732 (13,840) 1,486
Net (loss) income per
share (2.79) .14 (2.63) .28
Number of shares used in
the computation 5,264,031 5,288,183 5,259,874 5,264,766
/CONTACT: Robert T. Abbott, vice president-finance of Knogo, 516-232-2100, or 800-645-4224/
(KNO) CO: Knogo Corporation ST: New York IN: SU: ERN FC-KW -- NY065 -- 9727 01/14/92 16:56 EST