Posted on Sat, Jan. 25, 2003
WORK FORCE REDUCTION
Boss of broadcast equipment company blames cash flow problems
By PAMELA C. TURFA
pamt@leader.net
WHITE HAVEN - Struggling EMCEE Broadcast Products has laid off most of its work force in a move Chief Executive Officer Richard J. Nardone compared to a vacation shutdown.
Nardone blamed cash flow problems - stemming from slow payment of bills by a handful of customers - for the layoffs that affected two dozen employees of the publicly traded company.
The layoffs are temporary and expected to last a couple of weeks, Nardone said Friday afternoon.
The company's ability to call employees back to work in early February is "a function of our cash flow situation," he said. "We haven't done anything other than curtail operations."
Nardone said the five or six employees who remain will continue limited production during the slowdown. "We have production to get out. We have business. We have a backlog."
Friday's virtual shutdown is the latest bad news for the broadcast transmission equipment manufacturing firm whose fortunes rose rapidly during the 1990s stock market heyday, only to slide just as rapidly with the downturn of the telecommunications industry.
In early 2000, EMCEE's stock traded at $14.99 on the Nasdaq.
In November, after the company's stock traded at less than $1 per share for several weeks, Nasdaq "delisted" the stock, meaning it no longer would be included on Nasdaq's main market.
The latest over-the-counter price was 12 cents per share.
Nardone said the company's board of directors will meet next week for an update on EMCEE's situation and to consider options for the company.
Although the company is experiencing cash flow problems, its overall financial picture has changed little in the past 18 months, he said.
EMCEE reported net sales of $6.343 million for the 2001-02 fiscal year, which ended March 31, a slight increase over 2000-01 net sales of $6.109 million.
In his annual letter to shareholders last year, Nardone described EMCEE as a company with a new focus.
Even then, he noted that "foreign customers who purchased product years ago have failed to live up to their payment schedules, placing pressure on our cash flow and requiring write-offs that impacted our balance sheet."
Friday, he said the customers slow to pay bills are located in the United States and abroad.
Two months ago, EMCEE reported it was in merger talks with three unidentified companies about a possible sale. In a filing with the Securities and Exchange Commission, EMCEE said it had signed non-disclosure agreements with the companies, two of them publicly traded.
According to a quarterly report filed Nov. 13 with the SEC, EMCEE has almost 4.9 million shares outstanding, including 102,421 held by officers and directors. According to its last annual report, the shares are owned by almost 1,300 shareholders.
Pamela C. Turfa, a staff writer, may be reached at 829-7177. |
