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TEXSCAN REPORTS PROFITABLE FOURTH QUARTER ON INCREASED SALES

 TEXSCAN REPORTS PROFITABLE FOURTH QUARTER ON INCREASED SALES
 EL PASO, Texas, July 20 /PRNewswire/ -- Texscan Corporation (AMEX: TSX) reported today results for its fourth quarter and year ending April 30, 1992. For the quarter, the company reported a profit of $86,000 or $.04 per share on revenue of $13,268,000 as compared to a profit of $406,000 or $.18 per share on revenue of $12,089,000 a year earlier. For the full year, the company reported a net loss of $813,000 or $.37 per share on revenue of $42,963,000 as compared to a profit of $149,000 or $.07 per share on revenues of $40,071,000 for the prior year.
 In the fourth quarter, revenue increased 10 percent due to a record quarter for the advertising insertion segment and strong performance by the fiber optic segment. The CATV segment revenues decreased 16 percent compared to the prior year quarter. This sharp decrease in shipments of cable television equipment resulted in an overall decrease in gross profit margin of 2.4 percent in the quarter due to continued under capacity operation at the company's Cd. Juarez, Mexico manufacturing facility. Operating income was negatively affected by an increase in engineering, selling and administrative expense. This increase is in support of technical and marketing resources for the company's advertising insertion segment and the rebound in the CATV marketplace which started in the quarter.
 For fiscal year 1992, revenue increased 7 percent over the prior year due to record revenues in the advertising insertion and fiber optic segments. The cable equipment segment, however, had revenue 17 percent below fiscal 1991. The company continued its cost reduction and productivity efforts, but was unable to effect sufficient fixed overhead reductions at Juarez/El Paso CATV facilities to offset this reduction in revenue. As a result, gross profit for the year decreased by approximately 3 percent. Gross profit percentage for advertising insertion and fiber optic systems segments was stable. Engineering, selling and administration expense increased slightly to support technical and marketing efforts for the advertising insertion segment and, in the fourth quarter, in support of market improvement for domestic CATV.
 At the end of the fiscal year, the cash balance was $5.6 million, compared to $9.3 million at the prior year end. The decrease of $3.7 million for the year is attributable to an increase in accounts receivable of $3.6 million. A large portion of this increase in receivables is for the company's fiber optic systems segment as substantial billings for long-term contracts occurred at the end of the fourth quarter.
 While FY'92 and FY'91 backlog remained relatively constant at $7.1 million, June 1992 month-end backlog increased significantly to approximately $10.8 million due to improved domestic CATV distribution order input and contracts received for the company's fiber optic systems segment.
 Despite substantial order input for CATV products, the company expects revenue for the first quarter of FY'93 to be less than that realized in the prior year quarter. A severe shortage of hybrid integrated circuit components, required in CATV distribution products, has hampered the rebound in revenues for the first quarter. This shortage is believed to affect all domestic suppliers of distribution products for the cable television industry. It is anticipated that this shortage will be alleviated in the second quarter.
 Commenting on the quarter and year-end results, William H. Lambert, chairman and CEO of Texscan, stated, "The performance for FY'92 was below what had been expected. While our fiber optic systems and advertising insertion businesses did very well, and continue their trend of high profitability, we had anticipated that the CATV distribution business would rebound from FY'91 levels. This did not happen and, indeed, the slump which began in FY'91 worsened."
 "Order input has recently been strong in CATV. We are plagued by a shortage of hybrids, however, which is believed to affect all domestic manufacturers. Our balance sheet remains strong with $5.6 million in cash on-hand and no principal payments on long-term debt this year. I feel we are well positioned from a capital perspective to deal with the expected market turnaround in CATV and to fund the working capital needs of our other businesses."
 "The first quarter of 1993 will be a problem despite excellent order input. Without hybrids we just cannot ship product at the levels we would like given the size of our backlog."
 Additionally, we have experienced a delay in anticipated sizable order input at fiber optic systems as a result of the Olympia and York reorganization of the Canary Wharf project. This has caused a delay in the contract award for the Jubilee line in Metropolitan London, including our own fiber optic system integration subcontract, for that project."
 "In spite of our difficulties in fiscal 1992 and the first quarter of FY'93, I am optimistic about the remainder of the year. It appears that the upturn in the cable equipment market is continuing and we are well positioned in our advertising insertion and fiber optic systems businesses. I look for the second through fourth quarters of FY'93 to be significantly improved."
 "Our strategic planning with Allen & Company, announced on April 30, is continuing but there are no definite plans to be announced at this time."
 Headquartered in El Paso, Texas, Texscan Corporation is a leading manufacturer of electronic advertising insertion equipment and CATV distribution electronics and a large scale, fiber optic systems integrator for road, subway and railway applications, primarily in Europe.
 TEXSCAN CORPORATION
 (In thousands, except per share data)
 (Unaudited) (Audited)
 Periods Ended Three Months 12 Months
 April 30 1992 1991 1992 1991
 Net sales $13,268 $12,089 $42,963 $40,071
 Cost of sales 9,083 7,989 29,091 25,826
 Gross profit 4,185 4,100 13,872 14,245
 Engineering, selling &
 administrative expenses 3,617 3,144 13,322 13,142
 Income from operations 568 956 550 1,103
 Interest & other income,
 net of other expense 63 139 533 791
 Interest expense (481) (485) (1,928) (1,935)
 Foreign currency exchange
 gain (loss) (83) (262) 50 296
 Income (loss) before provision
 for income taxes 67 348 (795) 255
 Income tax expense (benefit) (19) (58) 18 106
 Net income (loss) 86 406 (813) 149
 Net income (loss) per share $0.04 $0.18 $(.37) $0.07
 Weighted avg. shrs. & dilutive
 stock options outstdng. 2,245,968 2,245,738 2,210,308 2,216,983
 Selected Balance Sheet Data(A) April 30
 1992 1991
 Cash & equivalents $ 5,611 $ 9,350
 Net receivables 10,641 6,924
 Inventories 9,294 9,488
 Total current assets 26,027 26,180
 Total assets 34,877 34,682
 Total current liabilities 7,840 6,968
 Long-term debt 17,006 17,056
 Stockholders' equity 10,031 10,658
 Stockholders' equity per share $4.57 $4.87
 (A) Derived from the company's audited annual consolidated financial statements.
 -0- 7/20/92
 /CONTACT: Harold C. Tamburro of Texscan, 915-594-3555, or Ed Kearney of Kearney Associates, 215-579-9029, for Texscan/
 (TSX) CO: Texscan Corporation ST: Texas IN: SU: ERN


OS -- NY076 -- 0924 07/20/92 16:55 EDT
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