INFS ($14-$18) PE=26 Cap=$760mil....18c vs 11c....popped
siliconinvestor.com
WILSONVILLE, Ore.--(BUSINESS WIRE)--Oct. 17, 2001-- InFocus®Corporation (Nasdaq:INFS - news; OSE:IFC) today announced third quarter earnings of $0.18 per share, before merger related and restructuring charges.
Third quarter revenue of $180.2 million declined 3 percent from the $185.3 million reported in the second quarter of 2001. Third quarter earnings per share were $0.18 versus $0.24 reported in the second quarter of 2001 (second quarter earnings per share included $.03 from a one-time, non-operating investment gain). Third quarter and second quarter earnings comparisons exclude merger and/or restructuring related expenses of $6.1 million and $2.3 million, respectively.
``We continued to be adversely affected by the general reduction in capital spending around the world, in addition to the normal seasonal slowdown due to vacation periods, primarily in Europe,'' commented John V. Harker, Chairman, President and CEO. ``However, we did increase market share during the quarter, primarily due to new revolutionary product introductions and aggressive marketing and selling programs; and we saw a sequential increase in revenues in the Americas region, with increased order volumes in all channels despite the extremely tight capital spending environment,'' Harker continued. ``In addition, I was particularly pleased with our ability to achieve end-of-quarter shipments despite a 6-day paralysis of logistics and customs operations in the United States following the events of September 11.''
Gross margins declined slightly in the third quarter to 25.5 percent compared to 26.0 percent in the second quarter 2001, due primarily to quarterly reductions in average selling prices of approximately 8%, which were partially offset by improvement in product mix to higher margin new products and continued component cost reductions and savings realized by consolidation of our distribution and logistics facilities around the world.
Operating expenses of $36.6 million declined $1.5 million from the second quarter of 2001 and $2.5 million compared to the third quarter 2000, representing the lowest level in two years. The reduction was primarily the result of cost reduction programs and merger synergy actions initiated in prior quarters.
The company's balance sheet showed significant improvement with inventory decreasing $19.3 million during the third quarter due to aggressive, real-time supply chain management in the face of significant logistical challenges in the last month of the quarter. In addition, both accounts receivable and day's sales outstanding declined during the quarter.
The company moved forward on the restructuring initiative announced in July to further streamline its SG&A structure and increase outsourcing of manufacturing. During the quarter the company's San Diego facility was closed and the Americas sales and marketing operation was streamlined resulting in some employee reductions. In addition, the company announced today a reduction of employees in its Norwegian facility to be completed predominantly in the fourth quarter. As previously announced, one-time charges relating to this restructuring will approximate $6 million to $8 million in the second half of this year, $1.9 million of which was incurred in the third quarter.
``Given the current environment, it remains very difficult to provide financial visibility into the future,'' Harker continued. ``However, we have seen some signs of improvement in our business particularly in the U.S. in Q3, and in Europe in September. Therefore, if the global economy does not weaken further and material flow continues uninterrupted, we believe our fourth quarter should experience slightly increased sequential revenue and earnings performance compared to the third quarter.''
``In summary, I am pleased with our results in these very difficult times. We are proactively meeting the challenges of the current environment and are working diligently to improve the company's strengths, capabilities and market position, and expect to emerge from this downturn stronger than we entered it. We remain very confident about the long-term prospects of this company and the digital projection industry, Harker concluded.''
The company will hold a conference call today at 11:00 a.m. eastern time. The session will include brief remarks and a question and answer period. The conference can be accessed by calling (800)-792-9296 (U.S. participants) or (706)-634-2419 (outside U.S. participants), or via live audio Web cast at www.infocus.com. Upon completion of the call, the Web cast will be archived and accessible on our website for individuals unable to listen to the live telecast. |
