Three-Five to spin off microdisplay business
By Spencer Chin
03/17/2003 1:05 PM EST
URL: ebnews.com
Three-Five Systems Inc. has decided to spin-off its LcoS (Liquid crystal on silicon) Microdisplay division as a separate publicly traded company, in a move the company said would improve the likelihood of achieving profitability that has so far been elusive.
Under the proposed spin-off, slated to occur in the third quarter, Three-Five Systems will transfer all assets of its microdisplay business, including related manufacturing and business assets, personnel, and intellectual property, to the new company, which will be named Three-Five Microdisplay Inc.
Three-Five Systems will also infuse Three-Five Microdisplays with $20 million to $25 million in cash to help them achieve their business objectives.
The spin-off company will trade on the Nasdaq market under the symbol TFMD. Both Three-Five Systems and Three-Five Microdisplay will maintain corporate headquarters at Three-Five Systems' facility in Tempe, Ariz., which houses high-volume microdisplay manufacturing.
"Both our LCoS Microdisplay division and our Integrated Systems and Displays (ISD) division have excellent future prospects in high growth markets," said Jack Saltich, president and chief executive of Three-Five Systems, in a statement. "We have come to the conclusion, however, that they are fundamentally different businesses with unique needs that must be satisfied in order for them to realize their full potential."
Profitability has been elusive for Three-Five. In 2002, the company lost $17 million, or 79 cents per share, on revenue of $88 million, following an equally unprofitable 2001. About $13 million of Three-Five's 2002 net loss came from the Microdisplay division.
"After carefully considering all of the issues and alternatives, we feel that the best way to build value for the stockholders is to spin-off the microdisplay business and allow the financial markets to evaluate each company on its own merits, " Saltich said. |
