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 CINCINNATI, July 30 /PRNewswire/ -- Zonic Corporation (OTC: ZNIC) reported a loss and decline in revenue for both its 1993 fiscal year and fourth quarter that Gerald J. Zobrist, president and chief executive officer, said was due primarily to a continued worldwide recessionary market for the company's capital goods products.
 Zobrist said that the decline in sales was continuing to produce a serious cash flow problem for Zonic causing the company's auditors to express a "going concern" qualification in their opinion on the company's 1993 financial statements.
 At the same time, the company said that because of its reduced capital and surplus position, its stock had been deleted from the National Association of Security Dealers Automated Quotations (NASDAQ) Small Cap Market and is now being traded on the OTC Bulletin Board.
 Zobrist said, however, that despite the problems of the previous year, the company's product offering was strong and that an aggressive turnaround program was being instituted to increase sales and return Zonic to a profitable posture.
 He said Zonic had a detailed business plan for the 1994 fiscal year that contemplates improved cash flow. "We are confident we will be able to generate sufficient cash to meet our vendor obligations and sustain our operations in a viable manner."
 For the fiscal year ended March 31, 1993, Zonic reported a loss of $2,871,008 or 94 cents per share compared to net earnings of $469,645 or 15 cents per share for the prior year. Losses for 1993 include a non- recurring charge of $1,520,311 for restructuring and bad debt reserves taken during the year.
 Sales for the 1993 fiscal year were $7,091,400, a 31 percent decline from $10,302,496 in the 1992 fiscal year.
 For the 1993 fiscal fourth quarter, Zonic reported a loss of $683,572 or 22 cents per share on revenues of $1,685,517 compared with net earnings of $67,128 or 2 cents per share on revenues of $2,801,780 in the year-ago period. The losses for the 1993 fiscal fourth quarter include a non-recurring charge of $183,435 for restructuring and bad debt expense.
 Zobrist said that in addition to the weak world economy, earnings were adversely affected by "uncertainties surrounding the administration's economic program" that management believed "may be causing customers to delay capital purchases."
 He said competitive pressures in the market were also causing the company and its competitors to offer discounts, causing a narrowing of margins.
 Zobrist said that Zonic management was "clearly dis-satisfied with the company's results for the year" but felt "very positive" about prospects for an improvement during 1994.
 "We've cut our operating expenses drastically and have reduced our research and development expenses without significantly sacrificing our new product development plans for the future."
 Zobrist said that Zonic's primary emphasis during the year ahead would be on marketing and sales. "We are committed to increasing our top line," he said, noting that "few cutbacks had occurred in the sales and marketing areas."
 Commenting on the company's cash flow situation, Zobrist said that Zonic had successfully renegotiated its loan with Star Bank, whereby the bank had agreed to extend the maturity date to June 1994 and amend prior loan covenants.
 "We feel this is a very positive step for Zonic and will help us fund our turnaround activities in the year ahead," Zobrist said. He also said that Zonic's cash flow situation would continue to benefit from the balance of a $2.5 million debt financing arrangement concluded earlier in the fiscal year with A&D Co., Ltd. of Japan.
 Zobrist said that Zonic felt very confident with the positive positioning of its three major product lines. "Our development efforts - and costs - are behind us. The products are being shipped, and our customer acceptance has been very encouraging.
 "This is a year when the investment we have made in our new products should start to pay off."
 Zobrist said that Zonic's WCA World Class Analyzer, the company's Apple Macintosh-based noise and vibration measurement system, was being well received in the marketplace with increased interest by the worldwide automotive industry. He said that interest in the WCA was high due to the quality and capabilities of the WCA software which was jointly developed by Zonic and A&D over the past four years.
 He said the company's Computerized Machinery Monitoring systems were receiving good acceptance with two major systems valued at over $3.0 million installed in Thailand and Indonesia. "Our customers are pleased with the just-completed installations, and both have indicated they are contemplating additional purchases," Zobrist said.
 Also well received was Zonic's top-of-the-line Work Station 7000 series, Zobrist said. "A major European automotive company has indicated intentions to purchase a very large system in the very near future and the company continues to receive enthusiastic acceptance from the aerospace and aircraft industries."
 "We have new business coming from Australia, Korea, China and India to complement our existing overseas business in Japan, Indonesia and Thailand," Zobrist said. He noted that the company was also starting to receive inquiries from Eastern Europe.
 Zonic Corporation develops, manufactures and markets proprietary software and computerized test and measurement equipment used in a wide range of industrial and aerospace applications.
 Zonic systems and related software have broad application in product engineering and design, testing and performance monitoring. Company headquarters are located in the Greater Cincinnati metropolitan area with sales and service facilities in North America, Western Europe and the Pacific Rim.
 Financial Data
 Three Months Ended March 31
 1993 1992
 Products & Services $1,533,947 $2,662,831
 Development Contracts, Other 151,570 138,949
 Total 1,685,517 2,801,780
 Operating and other expenses 2,185,654 2,734,652
 Non-Recurring Restructuring
 and Bad Debt Expense 183,435 - - - - -
 Net Profit (Loss) (683,572) 67,128
 Earnings (Loss) Per Share ($0.22) $0.02
 Year Ended March 31
 1993 1992
 Products & Services $6,638,878 $9,391,475
 Development Contracts, Other 452,522 911,021
 Total 7,091,400 10,302,496
 Operating and other expenses 8,442,097 9,832,851
 Non-Recurring Restructuring
 and Bad Debt Expense 1,520,311 - - - - -
 Net Profit (Loss) (2,871,008) 469,645
 Earnings (Loss) Per Share ($0.94) $0.15
 Weighted Average Shares 3,045,695 3,076,949
 Backlog of Orders $1,766,000 $1,950,000
 -0- 7/30/93
 /CONTACT: Clifford A. Reed, treasurer, Zonic Corporation, 513-248-1911/

CO: Zonic Corporation ST: Ohio IN: SU: ERN

BM -- CL009 -- 7767 07/30/93 12:50 EDT
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Publication:PR Newswire
Date:Jul 30, 1993

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