Eicon Technology Reports Fiscal 2000 Third Quarter
Results
MAY 11, 2000
MONTREAL, CANADA--Eicon Technology announced today that sales for
its fiscal third quarter which ended March 31, 2000 totalled $29.3
million compared to $49.7 million for the third quarter last year.
Year-to-date revenue is up 1 % to $127.1 million compared to
$126.3 million for the previous year. These lower-than-projected
quarterly sales have led to a loss of $24.9 million (a loss per
share of $0.73). This loss takes into consideration a
restructuring charge of $6 million. Net loss per share for this
quarter, excluding the restructuring charge, was $0.56. For the
same quarter last year, the Company reported earnings per share of
$0.10. The loss per share for the first nine months amount to
$0.71 compared to earnings of $0.21 for the same period of the
previous year.
The decline in sales was for the most part due to the slow pace at
which the Company's customers placed orders in the wake of the
industry-wide slowdown following the passage to Y2K. In addition,
Eicon's results were adversely affected by the erosion of gross
margins in the ISDN markets due to increased competition, by the
reduction in value of the Euro and by an unanticipated delay in
introducing its DSL-based family of products to the market place.
"The widespread industry slowdown has affected us more severely
than we had initially anticipated during the last quarter. We are
clearly disappointed by these results and regret reporting losses
to our shareholders. The increasingly competitive market and the
resultant pressure on gross margins have led the Company to reduce
its cost structure, to review its global strategy, to increase its
focus on high-growth market segments and to reduce the
distribution of commodity priced-products. With these changes
underway, we remain confident that the Company will return to
stronger sustainable growth in the near future," said Peter
Brojde, President and CEO of Eicon Technology.
During the third quarter, the Company recorded a pre-tax charge of
$6 million as a result of the Company's decision to restructure
its operations and infrastructure. This restructuring charge
primarily relates to costs associated with staff and inventory
reductions, office closures and consulting fees.
A conference call discussing Eicon's new strategy will be held on
May 11, 2000 at 5h00 PM Montreal time. All those interested may
access a live web cast of the conference call through the
Investors Relations section of Eicon's web site,
eicon.com or by going directly to Vcall at
vcall.com.
Eicon Technology Corporation
Eicon Technology Corporation is a worldwide provider of Internet
access products for personal computers. The Company develops,
markets and supports hardware and software products for connecting
network servers and desktop and notebook PCs to corporate
networks, host computers and the Internet. Its products are sold
in more than 80 countries through a network of certified channel
partners and Original Equipment Manufacturers. Eicon Technology
shares are traded on the Toronto Stock Exchange under the symbol
"EIC." Information about Eicon and its products is available at
eicon.com. |
