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Here it is:
AMPEX CORPORATION REPORTS FOURTH QUARTER NET INCOME
FROM CONTINUING OPERATIONS OF $2.2 MILLION AND EARNINGS
OF $0.05 PER SHARE
REDWOOD CITY, CA, February 3, 1997
Ampex Corporation (AMEX:AXC) reported today net income of approximately $2.2 million on
sales of $24.2 million, for the fourth quarter of 1996, resulting in fully diluted earnings per share of
$0.05, after deducting expenses for patent infringement litigation with a foreign consumer products
manufacturer of approximately $0.04, and moving and reorganization expenses of approximately
$0.02 per share for the quarter. In the fourth quarter of 1995, the Company reported net income
from continuing operations of $4.5 million, on sales of $24.1 million, and fully diluted earnings per
share of $0.11, including restructuring credits of $0.03 and a tax benefit of $0.01. There were no
patent infringement litigation or moving and reorganization costs during the fourth quarter of 1995.
For the year ended December 31,1996 on a preliminary unaudited basis, Ampex generated net
income from continuing operations of $12.7 million on sales of $96.5 million, and fully diluted
earnings per share of $0.28, compared to net income from continuing operations of $19.4 million
on sales of $95.7 million, and fully diluted earnings per share of $0.46 for the comparable period in
1995. Patent infringement litigation reduced earnings by approximately $0.11 per share, and moving
and reorganization costs reduced earnings by approximately $0.03 per share for the year ended
December 31, 1996. There were no patent litigation or moving and reorganization costs during the
comparable period in 1995. Non-recurring royalty settlements related to prior periods increased
earnings by approximately $0.04 per share and other non-recurring items increased earnings by
approximately $0.03 per share in the year ended December 31, 1996. Income in the year ended
December 31, 1995 was increased by non-recurring royalty settlements of approximately $0.21
per share, restructuring credits of approximately $0.05 per share and a tax benefit of $0.01.
Excluding the special items of income and expense referred to above, net income from continuing
operations would have been $5.1 million or $0.11 fully diluted earnings per share for the fourth
quarter of 1996 compared to $2.6 million or $0.07 fully diluted earnings per share for the fourth
quarter of 1995 while net income from continuing operations for the year ended December 31,
1996 would have been $15.9 million or $0.35 fully diluted earnings per share compared to $7.0
million or $0.18 fully diluted earnings per share for the comparable prior year period.
The increase in selling and administrative expenses of $1.9 million for the fourth quarter of 1996
compared to the fourth quarter of 1995 and $4.5 million for the comparable yearly periods was
entirely related to the ongoing patent infringement litigation with a foreign consumer products
manufacturer.
In the fourth quarter and full year of 1995 the Company also recorded a non-cash gain from
discontinued operations of $43.9 million from the disposition of its magnetic tape subsidiaries.
Sales of 19 millimeter data storage and instrumentation products more than doubled between
comparable quarterly and yearly periods and offset declines in sales of other instrumentation
recorders and of professional television and television aftermarket products. Gross margin
percentages for the fourth quarter of 1996 decreased to 46.6% from 48.1% for the fourth quarter
of 1995 and from 45.9% to 45.7% for the comparable yearly periods, primarily due to the
Company's previously announced decision to lower prices of its 19-millimeter data storage and
instrumentation products to broaden their appeal to emerging commercial mass data storage
applications.
Ampex Corporation is one of the world's leading innovators in the fields of magnetic recording,
image processing and high-performance digital storage. Ampex is currently focusing its technology
on the emerging market for mass data storage in the visual information age. During its 52-year
history of innovation, Ampex has been granted thousands of patents and numerous awards for
technical achievement. Headquartered in Redwood City, California, Ampex's customers today
include such leading organizations as Boeing, Eastman Kodak, Mobil Oil, Time Warner and
NASA.
Any statements contained herein that are not historical facts are forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995, and involve risks and
uncertainties. Information on potential factors which could affect the Company's actual results of
operations are included in its filings with the Securities and Exchange Commission, including but not
limited to its 1995 Annual Report on Form 10-K, its 1996 Quarterly Reports on Form 10-Q and
its Annual Report on Form 10-K for the fiscal year ended December 31,1996 which is expected to
be filed shortly.
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