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PROVO, Utah, May 15 /PRNewswire/ -- Larson-Davis Incorporated
(Nasdaq: LDII). Net sales for the quarter ended March 31, 1997 were
$2,204,697 compared to $2,317,430 for the corresponding quarter of 1996.
Lower sales were principally due to the delayed availability of new acoustical
and vibration products announced to the marketing representatives in 1996.
Shipment of certain of these products has already commenced. As these and
other new products are released, it is anticipated that sales of acoustical
and vibration products will return to and exceed historical levels.
According to Brian Larson, CEO and President of Larson-Davis, "During this
same period, our strong patent position in the analytical industry was
enhanced by the submission of four new patent applications. Initially these
inventions are being applied to the design and manufacture of Jaguar, which is
on target for introduction later this year." Jaguar is the new mass
spectrometer recently announced by the Sensar division of Larson-Davis. It is
a low cost, high performance electrospray mass detector to be marketed
primarily to the pharmaceutical industry, with additional applications in
chemical, petroleum, and environmental analysis markets.
Mr. Larson continued, "this past quarter significant expenditures were
applied towards the requisite infrastructure for early production of new
products, and towards the significant costs associated with the successful
consummation of joint ventures. Two weeks ago Larson-Davis announced the
signing of an agreement with Procter & Gamble to develop a commercial
supercritical fluid chromatography (SFC) instrument. In connection with this
exciting project, a team of scientists recently resigned from the existing SFC
market share leader, joined the Larson-Davis team, and are already working on
the chemical separations solutions which hold a strategic position in the
Larson-Davis near- and long-range plans."
Planned increases in operating costs and related losses from operations
were primarily a result of the continued development of new products, the
pursuit of strategic alliances related to the development and marketing of
certain products, the establishment of infrastructure to support future
product demand, and certain other corporate objectives. Cost of sales as a
percentage of net sales increased to 54.8%, compared to 47.7% in the prior
year principally due to the high cost of materials and pre-production costs
associated with the initial Sensar products. However, it is projected that
with the use of the recently acquired fully automated Computer Numeric
Controlled (CNC) machine shop including mills, lathes, high precision
grinders, and other equipment with high tech software, the cost of
manufactured products will decrease as in-house production ramps up and
expected margins will increase to forecasted levels. Furthermore, the use of
the machine shop resources will significantly reduce the time of prototype
production, in some cases from 6 weeks to less than 72 hours. These resources
will be used for multiple product lines, servicing Sensar's Jaguar, SFC, and
other instruments as well as the Larson-Davis Laboratories' acoustic and
vibration instruments.
Research and development costs increased to 43.0% of net sales, compared
to 25.1% in the quarter ended March 31, 1996 arising from the employment of
additional scientists and engineers experienced in chemistry, electrical
engineering, software development, and manufacturing production. The cost of
product commercialization continues to be funded through proceeds from the
exercise of previously issued warrants. Warrants to acquire 1,449,064 share of
common stock are currently outstanding. If such warrants are exercised, the
Company would receive additional proceeds of approximately $7,400,000.
Selling, general and administrative expenses increased to 61.8% of net
sales, compared to 39.1% in the prior year. This increase is due to several
factors including: increased consulting, travel, legal, and administrative
costs associated with the pursuit of joint venture partners; personnel and
other costs associated with the hiring of additional key employees necessary
to establish the infrastructure to support anticipated product demand from the
joint venture relationships; and the additional audit and legal expenses
associated with the change in the Company's year end. Management expects that
as these specific strategic initiatives and future product demand are
achieved, costs and expenses as a percent of net sales will decline to levels
more consistent with historical and forecasted levels.
Stated Mr. Larson, "The key components of our infrastructure are now in
place, and we intend to fully utilize the resources now at our disposal,
including our state-of-the-art machine shop, to speed up the development of
our current and future products. Due to these increased resources, for
example, our CrossCheck(TM) technology is on schedule and we are at this time
working with notable utilities companies around the country to develop our new
generation of products geared towards transformer measurement solutions."
Larson-Davis Incorporated, headquartered in Provo, Utah, develops,
manufactures, and markets leading edge, ultra-sensitive measuring
instrumentation equipment and software for the chemical, gas, acoustics and
vibration markets. Its customers are major industrial companies as well as
government and military agencies.
The following is selected financial data as of March 31, 1997 and December
31, 1996, and for the three months ended March 31, 1997 and for the
corresponding period of 1996. This selected financial data should be read in
conjunction with the Company's reports on Forms 10-K and 10-Q, which are
available upon request.
Statement of Operations Data For the three months ended March 31,
1997 1996
(unaudited) (unaudited)
Net sales $2,204,697 $2,317,430
Cost of sales 1,208,367 1,105,591
Research and development 947,211 581,607
Selling, general, and administrative 1,362,026 907,172
Net loss (1,343,081) (390,848)
Loss per common share (0.12) (0.05)
Weighted average common shares 11,114,125 7,576,427
Balance Sheet Data As of
March 31, 1997 December 31, 1996
(unaudited)
Cash and cash equivalents $4,728,172 $2,696,542
Total current assets 11,317,967 9,521,665
Total assets 22,078,065 19,906,521
Total current liabilities 2,278,958 2,951,754
Total liabilities 3,710,214 4,234,648
Total stockholders' equity 18,367,851 15,671,873
This press release contains certain forward-looking statements that are
subject to risks and uncertainties that could cause actual results to differ
materially from those statements. These risks include completion of
commercial products within projected time frames, market acceptance of
resulting products, technological change, intellectual property rights,
international operations, competitive pressures, and entering into strategic
alliances. These factors and other risks are discussed in detail in the
Company's filings with the Securities and Exchange Commission. |
