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 AKRON, Ohio, Oct. 18 /PRNewswire/ -- Telxon Corporation (NASDAQ: TLXN), one of the leading worldwide providers of portable and wireless tele-transaction systems, today reported results for its second fiscal quarter ended Sept. 30, 1993.
 For the quarter, the company reported revenues of $63.1 million and a net loss of $1.1 million, or $.07 per share. This compares with revenues of $66.4 million and net income of $3.5 million, or $.24 per share for the comparable quarter a year earlier.
 For the first six months of fiscal 1994, Telxon reported revenues of $119.6 million and a net loss of $3.1 million, or $.20 per share. This compares to revenues of $133.8 million and net income of $7.4 million, or $.51 per share, for the comparable period a year ago. Net income for the comparable first half of fiscal 1993 includes a cumulative charge of $.4 million, or $.03 per share, as a result of the adoption of SFAS 109, Accounting for Income Taxes.
 "First-half results met expectations pursuant to our long-term strategic plans, and as a result, Q2 sales improved over Q1," said Dan R. Wipff, Telxon's president and chief operating officer. "Revenues in the second quarter grew sequentially 11.6 percent over the first quarter based on increases in North American and International sales. During this same period backlog also increased. Offsetting the improvement in revenues were lower than anticipated gross margins reflecting inclusion of some large orders with below average gross margins.
 "Engineering, general and administrative expenses remained unchanged from the first quarter. Pursuant to our aggressive attitude to make changes quickly in accordance with our strategic plan, a one-time charge to marketing expenses increased operating expenses by $375,000 in Q2. The second quarter results include a reduction of approximately $600,000 in pretax expenses, a portion of which was recorded in Q1, relating to the implementation of a performance-based incentive compensation plan. Additionally, the accruals for contingent income tax liabilities were decreased by $700,000 thereby increasing the tax benefit in that amount for the quarter. Generally, results were largely as we expected.
 "Approximately $1.3 million of product was ready for shipping but delayed to Q3. The combined effect of the delayed shipments and the unusual marketing expense accounted for $.04 of the $.07 loss.
 "The company has made major strides in accomplishing a number of goals established at the beginning of the year in its new strategic Plan '96.
 "The first goal involved the successful reorganization of its North American Sales organization where sales and gross profit in the second half are expected to increase comparably over the second half of FY93 and sequentially greater than the first half of FY94.
 "The second goal involves the introduction of new product prototypes in Q2 and Q3 that will result in production quantities of these new products in Q4 and FY95.
 "Because of opportunities that recently presented themselves to accelerate a third goal, the company has increased its investment in a new consolidated wireless marketing organization and has established a new Vertical Marketing Group to serve the health care, transportation, insurance and factory automation markets earlier than planned. The effect of these two changes will increase selling expenses and marketing costs in Q3 and Q4.
 "In addition, the company anticipates continued lower margins in the second half because of more large volume, lower than average margin orders and forward pricing on new products in anticipation of lower manufacturing costs in FY95. The above two factors are expected to cause a change in previous short-term financial expectations.
 "The impact of the acceleration of sales and marketing expenses and the continuation of lower than earlier planned margins eliminates the expectations of a profit for the year while the Company plans to return to profitability in Q4.
 "With new product introductions to be made in Q4 and acceleration of the Strategic Plan, sales in FY95 are expected to rise substantially over FY94, with planned improvements in profits quarter to quarter over FY94."
 "Our goal this year has been to create and implement a long-term strategic plan to sustain long-term growth in sales and profits and not to sacrifice that goal for a short-term consideration of quarterly earnings in FY94."
 Telxon Corporation, serving more than 7,000 customers in 47 countries around the world, is one of the leading providers of portable and wireless tele-transaction systems. The company integrates advanced Portable Tele-Transaction Computers (PTCs) with wireless and network communication technology, a wide array of peripherals and application- specific software to a diverse group of vertical markets.
 Telxon's executive and engineering offices are headquartered in Akron, Ohio; its manufacturing facility is in Houston.
 Telxon Corporation and Subsidiaries
 Three Months
 Ended September 30,
 1993 1992
 Revenues $ 63,085 $ 66,380
 Income (loss) before cumulative
 effect of an accounting change $ (1,090) $ 3,504
 Net income (loss) $ (1,090) $ 3,504
 Average shares outstanding 15,352,000 14,553,000
 Earnings per share:
 Income before cumulative effect
 of a change in accounting $(.07) $.24
 Net income per share $(.07) $.24
 Six Months
 Ended September 30,
 1993 1992
 Revenues $119,626 $133,792
 Income (loss) before cumulative
 effect of an accounting change $ (3,067) $ 7,876
 Net income (loss) $ (3,067) $ 7,437
 Average shares outstanding 15,352,000 14,545,000
 Earnings per share:
 Net income (loss) per share before
 cumulative effect of an
 accounting change $(.20) $.54
 Cumulative effect of a change in
 accounting for income taxes --- (.03)
 Net income (loss) per share $(.20) $.51
 Telxon Corporation and Subsidiaries
 September 30, March 31,
 1993 1993
 Current assets $130,121 $137,946
 Total assets $203,085 $212,621
 Current liabilities $ 49,104 $ 53,208
 Stockholder's equity $124,565 $128,219
 -0- 10/18/93 R
 /CONTACT: Roger Murphy, vice president, Corporate Development, of Telxon Corporation, 216-867-3700/

CO: Telxon Corp. ST: Ohio IN: CPR SU: ERN

AR -- CL037 -- 3704 10/19/93 07:34 EDT
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Publication:PR Newswire
Date:Oct 19, 1993

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