Source: Quadrax Corporation
Quadrax Reports Record Revenues for the Second
Quarter and First Six Months; Reports Loss of ($.10)
Per Share for Quarter
PORTSMOUTH, R.I., Aug. 15 /PRNewswire/ -- Quadrax Corporation (Nasdaq:SCM - news)
and its Chairman and CEO, James J. Palermo announced record operating results for the
second quarter and first six months ended June 30, 1997.
The company reported a net loss of $3,648,082 or ($.10) per share on record revenues of
$4,249,702 for the second quarter, compared to a loss of $2,153,654 or ($.10) per share on
revenues $840,000 for the same period in 1996. The company reported a net loss of
$5,179,068 or ($.15) per share on record revenues of $4,874,956 for the first six months of the
year, compared to a loss of $3,896,717 or ($.19) per share on revenues of $1,927,344 for the
same period in 1996.
The increase in sales was attributable to the revenues of Victor Electric Wire and Cable
Corporation which was acquired by Quadrax in May of 1997. The company's consolidated
revenues incorporate Victor's sales from May 7, 1997 through June 30, 1997 only. Victor's
sales during this time were approximately $3,400,000.
In the second quarter of 1997, Quadrax wrote off litigation and restructuring costs totaling $1.3
million. These 1997 write offs were associated with three events: The 1996 settlement of the
Vega U.S.A. litigation, the divestiture of Lion Golf in 1997 and the finalization of the termination
of the Wimbledon Tennis Racquet licensing relationship.
Commenting on the quarterly results, Chairman and CEO James J. Palermo stated, ``We made
the decision to write off all negative earnings related items in the current quarter so as not to
adversely affect future quarters' numbers with these issues. We are optimistic about the revenue
prospects for the balance of the year and beyond and determined it best get it all out of the way
now.''
Continuing, Palermo said, ``Although I am not pleased with this quarter's performance from a
revenue and net loss standpoint, I have never had more confidence in the future and direction of
this company. The transition from a research and development company to one which is focused
on productivity and profitability is a difficult one. However, we at Quadrax produce superior
products that are manufactured with the best material. We appreciate the loyalty of our
shareholder base and look forward to bringing them value in the quarters to come. The company
is on the verge of signing major contracts with major distributors and OEM's (original equipment
manufacturers) and is in the midst of evaluating several potential strategic acquisitions, some
specifically synergistic with Quadrax and some with Victor. These acquisition candidates would
be accretive to earnings. Brooks Herrick, our new CFO, brings to Quadrax a strong financial
background to assist the company in this transition.''
``We continue to streamline our operation,'' said Palermo, ``and anticipate higher revenues next
quarter both from Quadrax and Victor as we strive to achieve profitability.''
During the first six months of the year, Quadrax announced the unveiling of four new
Thermo-Composite(TM) golf shafts, which have a demonstrated ability to deliver up to 30%
greater accuracy, exceptional distance with an outstanding feel and level of playability. The
company signed a shaft distribution agreement with Golfsmith International. In addition, Quadrax
has begun shipment of golf shafts to several small OEM golf equipment suppliers such as
Echelon and Austads. Numerous professional golfers have been using the Quadrax shaft in
tournament play. These players include Darryl Andersen, 1994 National Long Drive Champion,
Brian Barnes, Senior British Open Champion and many others.
The company also introduced its Thermo-Composite(TM) TP-10-hockey stick which at 300
grams is one of the lightest yet most durable and high in vibration-dampening sticks on the
market. In April, Quadrax announced the hiring of Brad Park as the company's Director of
Hockey Development. Brad, a 1988 Hall of Fame inductee was named to the NHL All-Star
Team seven times and led his teams, the New York Rangers, the Boston Bruins and the Detroit
Red Wings, to the playoffs in every season he played. Having introduced aluminum hockey
sticks to the NHL, Brad is in the process of marketing of Quadrax's TP-10 sticks to hockey
OEM's, professional hockey players and other channels within the hockey community.
In May of 1997, Quadrax announced the acquisition of Victor Electric Wire and Cable
Corporation for $720,000 plus the assumption of $2.5 million in debt. Victor, which has been
booking orders at a rate of $500,000 per week (a 20% increase over the same periods in 1996)
since the acquisition, had net sales of approximately $18 million in fiscal 1996.
Quadrax produces thermoplastic composite materials using a patented fabrication and
manufacturing process. These materials are used in a wide- range of high performance
commercial and consumer products including golf club shafts, hockey stick shafts, lacrosse stick
shafts, mountain bike handle bars and bicycle wheel components.
Statements made herein that are forward-looking in nature within the meaning of the private
securities Litigation Reform Act of 1995 and are subject to risks and uncertainties that could
cause actual results to differ materially. Such risks and uncertainties include, but are not limited
to, those related to business conditions and the financial strength of the sporting goods industry,
and the wire and cable industry.
SOURCE: Quadrax Corporation |
