Cube MVP customer.............
Videonics Experiences Lower Than Expected Revenue, and a Significant
Loss for Fourth Quarter 1997
01/14/98
Business Wire
(Copyright (c) 1998, Business Wire)
CAMPBELL, Calif.--(BUSINESS WIRE)--Jan. 14, 1998--Videonics, Inc., (NASDAQ:VDNX) today announced that it will have lower revenue and a significant loss for its fourth quarter ending December 31, 1997. The company expects to report revenue in the range of $4.5 million to $5.0 million, and a loss of between $7.9 million and $8.6 million for the quarter.
The anticipated loss will include approximately $5.0 to $5.7 million in non-recurring charges. Non-recurring charges are expected to be: a write down of intangible and non-performing assets related to Nova Systems, a charge related to income taxes, the establishment of inventory reserves at KUB Systems and a reserve for the reduction of the company's work force. A write down of certain Nova System's assets is estimated at between $2.6 and $2.9 million. Nova Systems was acquired in September 1995. A tax charge of approximately $2.0 to $2.4 million will occur as the result of establishing a valuation allowance against the company's deferred tax assets and the reversal of the tax benefit recorded during the first nine months of the year, and will be reported as income tax expense for the period.
A reserve of approximately $300,000 will be established for inventories related to KUB Systems, a company acquired in May 1996. The company will also report a small charge related to a reduction of personnel. This personnel reduction will be approximately 12 percent of the company's work force. Excluding these four charges, the company would have generated a net loss of approximately $ 2.9 million or $0.51 per share.
"We are disappointed with the financial results that occurred both in this quarter and in the year," said Michael D'Addio, CEO of Videonics. "Our revenues have been severely impacted by delayed products in both the Videographer and Broadcast markets, as well as our inability to get our computer based products into the appropriate channels until very late in 1997. In addition, our broadcast product line has been very disappointing, both in terms of revenue and profitability. With these facts in mind, management has decided to lower the expense base for the company, until such time as our newer products begin shipping. The company will reduce operations both at its Videographer operation in Campbell, California and at its Broadcast group in Canton, Connecticut."
D'Addio continued, "We were a very successful and profitable company in 1994 and 1995, and we must make every effort to return to those levels. We invested heavily in Research and Development since 1994, and have yet to reap the rewards of those investments. We believe that our Effetto Pronto product and the MXPro Digital Video Mixer will provide substantially increased revenue when they ultimately get to market."
Jim McNeill, Vice President and CFO of Videonics commented, "We are confident that we have arranged adequate financial resources to maintain and grow the business in this difficult time. While we expect to generate increased revenue and return the company to profitability later this year, the timing will be dependent on the shipment of new products and their acceptance into the marketplace."
The preceding paragraphs of this press release contain forward-looking statements that are based on current expectations. Actual results could differ materially from those projected in the forward looking statements as a result of various risks and uncertainties, including continued demand for and market acceptance of the company's products, the company's ability to successfully introduce and achieve market acceptance for new products, variations in the level of operating expenses and other factors.
In addition, the company refers you to the documents the company files from time to time with the Securities and Exchange Commission, specifically the company's latest Form 10-K and Form 10-Q filed with the SEC. These documents contain and identify important factors that could cause the actual results to differ materially from those contained in the company's projections or forward looking statements.
Videonics is a leading designer of affordable, high-quality, digital video post-production equipment for the broadcast, cable, business and industry video post-production markets and the home video producer. Videonics products include edit controllers, mixers, signal processors, character generators and video editing software solutions. Its stock is traded in the U.S. on the NASDAQ National Market System under the symbol VDNX. More information on Videonics may be obtained from the company's SEC filings, or by contacting the company directly.
CONTACT: Videonics, Inc. Jim McNeill, 408/866-8300 V.P. of Finance & CFO
16:12 EST JANUARY 14, 1998 |
