Microphonics Revises Revenue Reporting
NASHVILLE--(BUSINESS WIRE)--Oct. 20, 1999--Microphonics, Inc. (OTC Bulletin Board: MRPS) (http://www.microphonics.com) today reported that it has revised its method of reporting revenues. The Company originally reported revenues for the first two quarters based on the specific delivery dates in contracts with two key distributors. Revenues were recognized when product was available for shipment and invoiced to the distributor, although in some cases the distributor elected to have the Company warehouse the products. The Company has revised revenues due to adopting a preferable, more conservative method of accounting based on the physical delivery of goods. This change will result in revenues for the first three quarters of 1999 being substantially short of expectations and previously reported results. In addition, the Company will not release 1999 year-to-date financial statements until completion of the 1997 and 1998 audited financial statements.
James E. Gayle, CEO of Microphonics:
"Certain contracts which were announced earlier in the year have not been upheld by two key distributors. As a result, revenues which were reported based on the contractual terms and invoicing, have been revised to reflect recognition of sales when goods are actually shipped. This change is a result of our focus on financial reporting and audit preparation. We continue to prepare the documentation required for our audits and are working to ensure that the Company's financial records support a smooth, expeditious audit.
Given our focus on financial statements, we have decided that 1999 year-to-date financial information should be released together with the audited 1997 and 1998 financial statements to provide users with a meaningful benchmark. As we move forward, we will establish a more routine financial reporting calendar.
We will also continue to work with all customers and distributors with whom we have signed contracts to realize the full potential of such agreements. Our long-term perspective with these entities requires us to work with them instead of treating them as simply a destination for our products. It is important to emphasize that we do not expect these sales to be lost, instead we expect that deliveries and related revenues will impact future periods. While these distributors have caused this shortfall by not fulfilling their contractual obligations with Microphonics, we are now in discussions with several customers that were introduced to Microphonics by these distributors, and we expect to contract directly with these customers, which should positively impact future revenues.
We are proud of our products and continue to work to promote further acceptance of our ultrasound devices across a variety of industries and applications. While we acknowledge some setbacks in immediately achieving expected revenues based on contract terms, we believe that our long-term perspective will translate into success during the remainder of 1999 and into 2000."
For more information on Microphonics: microphonics.com
Statements included in this press release which are not historical in nature, are intended to be, and are hereby identified as "forward-looking statements" for purposes of the safe harbor provided by Section 21E of the Securities and Exchange Act of 1934, as amended by Public Law 104-67 and provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words including "anticipate," "believe," "intends," "estimates," "expects," and similar expressions. The Company cautions readers that forward-looking statements, including without limitation those relating to the Company's future business prospects are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in forward-looking statements.
Source: Microphonics
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