Wednesday April 16 9:34 AM EDT
On-Point Technology Systems Inc. reports year end profit
SAN DIEGO--(BUSINESS WIRE)--April 16, 1997-- On-Point Technology Systems Inc Wednesday reported on results of operations for the
year ended Dec. 31, 1996.
For the year ended Dec. 31, 1996, On-Point generated net income of $135,000, or 2 cents per share, vs. a net loss of $8,092,000, or $1.01
per share, for 1995. Subsequent to a net loss in the first quarter of 1996, On-Point generated three consecutive quarters of profit. Revenues
were $11,868,000 in 1996 and $16,309,000 in 1995. The net income for 1996 was achieved despite lower revenues as a result of better
gross profit margins, lower operating expenses and the elimination of the prior year's non-recurring expenses.
In addition to its improved earnings performance, On-Point maintained positive working capital as of Dec. 31, 1996 and owed minimal current
and long-term debt which was only $1,025,000 as of Dec. 31, 1996 on total assets of $14,311,000. On-Point also continued to have
substantial positive equity of $6,921,000 as of Dec. 31, 1996, an increase of $215,000 from the beginning of the year.
Frederick Sandvick, the chairman and chief executive officer of On-Point, stated, "We are very pleased to report our third straight profitable
quarter and, more importantly, a profitable 1996 year. Prior to my appointment to the helm of On-Point in the first quarter of 1996, the
company had suffered two consecutive years of losses in excess of $8 million per year.
"Of course, our competitors took the opportunity throughout 1996, because of the prior year losses, to create the perception with current and
potential customers that On-Point was not economically viable and would not be capable of performing on its obligations. Although the creation of
such perception was obviously self-serving for our competitors, it nevertheless did impact On-Point's marketing and sales efforts in 1996 and,
we believe, was the primary reason certain existing and potential customers did not proceed with new orders with the company.
"The 1996 results for On-Point directly contradicts our competitors' predictions. That is why the results are all that much more rewarding to
the management and associates of On-Point.
"The task of restructuring and repositioning On-Point was challenging, but as shown by the results for 1996, not insurmountable. The 1996
results were directly attributable to strategic cost reductions and increased operating efficiencies effected by our new strategies which we have
been implementing in phases during the year.
"During the first and second quarters of 1996, the company underwent a `right sizing' effort in order to provide the company's high quality
products and services at lower costs. The efforts effected dramatic results as efficiencies were improved and costs, on an annualized basis, were
reduced by over $2.5 million. In that process, the company moved its corporate offices and production to new facilities which were better suited
to fit the company's administrative and manufacturing needs, and were less expensive to operate.
"The company's restructured operations enabled the company to improve operating margins, dramatically reduce general and administrative
expenses and generate three consecutive quarters of net income despite lower revenues. All of these results were accomplished without any
recapitalization or debt issuance that was not in the company's ordinary course of business.
"The company's strategic plans now include diversifying its product lines and enhancing its existing products. In that regard, during 1996 the
company changed its corporate name to On-Point Technology Systems Inc., from Lottery Enterprises Inc., in order to obtain broader recognition
by current and potential customers of the company's expanding line of products and to provide the capital markets with a better definition of the
company's identity.
"We are also very pleased to report that, as a result of the company's improved performance, we have recently completed a private placement of
$800,000 of 10 percent convertible notes. The proceeds improved the company's liquidity. We are also in the process of negotiating additional
debt funding to handle On-Point's near-term cash needs for its planned growth.
"Our results for 1996 show the progress we have made on all fronts. On-Point faces considerable changes, opportunities, and challenges in the
time ahead. Although we believe there is a substantial market for On-Point products, not only in the United States, but internationally, we must
be cautious with respect to the risks involved in all those markets. We will continue our efforts in all areas and look forward to sharing our
results in 1997."
On-Point provides effective technologies for transaction automation. On-Point designs, sells, leases and services high-security vending
machines both domestically and internationally and is a premier supplier of automated, self-service lottery ticket vending machines and prepaid
phone card vending machines.
Any forward-looking statements in this release are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Act of
1995. Investors are cautioned that actual results may differ substantially from such forward-looking statements. Forward-looking statements
involve risks and uncertainties including, but not limited to, continued acceptance of the company's products and services in the marketplace,
competitive factors, new products and technological changes, dependence upon third-party vendors, a limited number of customers, political and
other uncertainties related to customer purchases, and other risks detailed in the company's periodic filings with the Securities and Exchange
Commission.
On-Point Technology Systems Inc.
Selected Financial Information
(In thousands, except per share data)
Year Ended Dec. 31,
1996 1995
Revenues $ 11,868 $ 16,309
Net income (loss) $ 135 $ (8,092) /a
Net income (loss) per share $ 0.02 $ (1.01)
a/ Includes non recurring charges in 1995 of $3,147
CONTACT: On-Point Technology Systems Inc.
Ken Hoitt, 619/621-5050
Wednesday April 16 9:34 AM EDT
On-Point Technology Systems Inc. reports year end profit |
