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NEWS RELEASE TRANSMITTED BY CANADIAN CORPORATE NEWS
FOR: LEGACY STORAGE SYSTEMS INTERNATIONAL INC.
TSE SYMBOL: LEG
OCTOBER 30, 1996
LEGACY Storage Systems International Inc Announces Major
Corporate Restructuring
MARKHAM, ONTARIO--LEGACY Storage Systems International Inc.
confirms stock consolidation effective November 1, 1996 and
announces a major corporate restructuring.
The Board of Directors of the Company met October 24, 1996 to
review the financial performance of the company's business units
and assess their prospects. In the light of recent financial
results and the continued need of each unit for capital, the Board
has determined to undertake a restructuring of the Company's
operations. The principal thrust of this restructuring will be to
focus the Company's resources on the tape data storage business
through its subsidiary Tecmar Technologies, Inc. based in Longmont
Colorado.
Legacy's Systems business, which incorporates the V1500,
SmartARRAY and service units, will be divested. Negotiations are
continuing with several parties regarding the disposition of these
business units. The book value of certain assets used in these
units has been written off, as reflected in the fiscal 1997 first
quarter under 'reorganization costs' (see news release of October
30, 1996 regarding Legacy's financial results for the quarter
ending August 31, 1996). Certain proprietary technology used in
the assembly of the Company's SmartARRAY disk-based RAID storage
devices will be transferred to Tecmar Technologies, Inc. for use
in future products it develops.
As a result of the decisions to divest the Systems business
President and CEO Keith Leno has left the company and Legacy CFO
Robert McQuade has resigned as a Director.
Negotiations are also underway regarding the disposition or
restructuring of the Storage One business unit.
Should the Company be able to successfully conclude negotiations
with respect to these dispositions on terms satisfactory to the
Company, the transactions will be subject to regulatory approval.
Subsequent to this restructuring Legacy Storage Systems
International Inc. will be focused on Tecmar Technologies tape
storage business. "This restructuring will enable the Company to
make decisions regarding financing and direction without reference
to the effect on the Canadian business units" said David Killins,
Chairman and CEO of Legacy Storage Systems International Inc.
According to Tecmar Technologies President Ernest H. Wassmann,
"Our renewed investment in research and development, and more than
15 years experience in the tape storage business led to the
WangDAT 3800, the fastest DAT drive available today." Tecmar
announced that NCR Corp. has signed on as the first OEM systems
customer for this new, high-performance drive and that volume
shipments have already begun. Wassmann noted that the commitment
of Tecmar's experienced management team to strong business
relationships such as NCR, excellent customer satisfaction
standards, manufacturing capability and state of the art R&D will
all contribute to Tecmar's future success.
The ten for one consolidation of the Company's common shares,
which was approved by the shareholders at the October 2, 1996
Annual General Meeting, will, subject to final approval by the
Toronto Stock Exchange, become effective on Friday November 1,
1996.
Legacy Storage Systems International Inc. designs, develops and
manufactures tape storage technologies. |
