Ampex Corporation Reports First Quarter 2001 Financial Results
REDWOOD CITY, Calif.--(BUSINESS WIRE)--May 14, 2001--Ampex Corporation (Amex:AXC) reported a net loss from continuing operations of $4.7 million or $0.08 per diluted share for the first quarter of 2001. The Company's Internet video business contributed an operating loss of approximately $0.06 per diluted share including its equity investment in TV1 Internet Television. In the first quarter of 2000, the Company reported a net loss from continuing operations of $6.7 million or $0.12 per diluted share, of which the Company's Internet video businesses contributed a loss of $0.13 per diluted share. The Internet operating loss for the first quarter in 2000 included $0.04 per diluted share from TV onthe WEB, Inc, a subsidiary of the Company whose operations were discontinued in the fourth quarter of 2000.
Revenues from the Company's continuing operations decreased by 33% in the first quarter of 2001, largely reflecting a decline in royalty income from non-Internet technology licensing during the period. Substantially all Internet revenues in the quarter ended March 31, 2000, consisted of webcasting and video production revenues of TV onthe WEB. In September 2000, the Company wrote off its investment in TV onthe WEB and ceased including its revenues and operating results in the Consolidated Financial Statements after the third quarter of 2000. In the first quarter of 2001, the Company increased its equity interest in its German affiliate, TV1 Internet Television, to 35% and began to account for this investment on the equity method of accounting. As a result, the Company's loss from continuing operations includes a charge of $0.01 per share relating to TV1, substantially all of which represents amortization of goodwill. The financial results of prior periods have been restated to recognize the Company's equity interest in TV1's net operating loss in such periods as a single line item in the Consolidated Statement of Operations. Revenues of TV1, totaling $0.3 million and $0.2 million for the three months ended March 31, 2001 and 2000, respectively, are not included in Internet revenues for such periods.
iNEXTV's strategy is to increase advertising and sponsorship revenues by syndicating its content and that of others for distribution to frequently visited portals and destination websites. The Company shares advertising revenue with its partners and also offers various services to customers who wish to add video content to their own websites. iNEXTV has entered into syndication agreements with Microsoft's WindowsMedia, Yahoo!, Qwest's Online Avenue, Juno, TravelNow, Autobytel and others. These partners' sites have reported aggregate unique monthly visitors in excess of 100 million. As the number of video streams generated by its partners increases, iNEXTV expects to gain significant cost advantages from Ampex's encoding technology, which is used in substantially all iNEXTV's content.
Ampex Data Systems Corporation, a subsidiary which the Company intends to sell and which is accounted for as a discontinued operation, reported a loss of $0.03 per diluted share in the first quarter of 2001, compared to a profit of $0.01 per diluted share in the prior year period. The Company is continuing to offer Data Systems for sale and would use the proceeds of sale to fund the activities and operating losses of iNEXTV and to retire debt. However, due to economic and market conditions, a successful sale of Data Systems is not expected before late 2001 or 2002, if at all. Accordingly, the Company is pursuing alternative financing, which the Company will require in order to fund operations for the balance of 2001 and to pay its debt service and other obligations. Subsequent to the end of the first quarter, the Company has taken steps to reduce headcount and overhead expenses of Data Systems and the Company will record a restructuring charge in the second quarter's financial statements.
The Company's cash and investment balances at March 31, 2001 totaled $11.9 million. In November 2000, the Company issued Senior Discount Notes providing net proceeds of $8 million. Ampex currently is negotiating a sale and leaseback of certain real estate and intends to apply the proceeds from the sale to repay the Notes. The Company and holders of the Notes have reached an agreement in principle to extend the Note maturity date from May 31, 2001 to August 31, 2001 to facilitate completion of the sale and leaseback transaction. |
