I hope this helps. Royal Trusts Growth Fund had the stock in
its top ten holdings but dropped it when leg started
plummetting. Consolidation usually results in a further drop,
or hammering in this case....anyways;
Canadian Corporate News wrote:
>
> ===================================================================
>
> Canadian Corporate News --- Hot Off The Wire
>
> News Release for LEGACY STORAGE SYSTEMS INTERNATIONAL INC
>
> ===================================================================
>
> RETRANSMISSION
>
> NEWS RELEASE TRANSMITTED BY CANADIAN CORPORATE NEWS
>
> FOR: LEGACY STORAGE SYSTEMS INTERNATIONAL INC.
>
> TSE SYMBOL: LEG
>
> AUGUST 22, 1996
>
> LEGACY Storage Systems International Inc. Announces 1996
>
> Year End Results and Proposed 10:1 Common Share Consolidation
>
> MARKHAM, ONTARIO--LEGACY Storage Systems International Inc. reports
>
> financial results for the year ended May 31, 1996. Results include
>
> activities of Tecmar Technologies, Inc. (previously Rexon Incorporated) for
>
> the three months from the date of acquisition (March 4, 1996). Tecmar
>
> Technologies, Inc. is based in Longmont, Colorado and has operations in
>
> Europe and the Far East. All results are in $US.
>
> Revenue for the year was $42.9 million up from $21.8 million in 1995. $14.3
>
> million was contributed by Tecmar. The loss, before writedown of goodwill,
>
> was $4.4 million up from $0.7 million in 1995. In addition Legacy wrote off
>
> goodwill totaling $19.4 million primarily associated with the takeover of
>
> Tecmar. This resulted in a net loss for the year of $23.8 million ($0.40 per
>
> share).
>
> "Legacy's financial position continues to be sound" says Legacy CFO
>
> Robert McQuade. "The company has $14.4 million working capital and
>
> no long term debt. We have also recently negotiated a $10 million
>
> line of credit to finance Tecmar's capital expenditures and
>
> operating requirements."
>
> "The quarter following the acquisition of Tecmar in March, 1996 was
>
> extremely challenging for our management team" says David Killins,
>
> Chairman and CEO of Legacy. "The restructuring and rebuilding of
>
> Tecmar is a process which will take longer than we anticipated and
>
> will continue through the 1997 fiscal year. We continue to believe,
>
> however, that our strategy of acquiring and developing proprietary
>
> technology and distribution capability in the U.S. will enable us
>
> to become a major player in the data storage markets in which we
>
> compete."
>
> Ernie Wassmann, President and CEO of Tecmar Technologies, Inc.,
>
> commented "We have taken the tough decisions necessary to make
>
> Tecmar successful. The business was severely impaired during its
>
> time in Chapter 11 bankruptcy proceedings. Its previous management
>
> team was consumed with court related matters, research and
>
> development had been deferred, customers had become increasingly
>
> concerned over unreliable product shipments and suppliers were
>
> demanding up front payment to secure delivery of product.
>
> Furthermore, on coming out of Chapter 11, the company was faced
>
> with absorbing a 20 percent price reduction in a key product line
>
> to match a major competitor's pricing."
>
> Some of the actions Mr. Wassmann and his team have taken since the
>
> acquisition include:
>
> - Significantly reducing the cost of doing business by reducing
>
> personnel by 19 percent, manufacturing expense reductions of 31
>
> percent and negotiating price reductions from suppliers.
>
> - Paring the product line to focus on higher value-added sales.
>
> Revitalizing the research and development effort to develop new
>
> value-added products with innovative features expected to be
>
> introduced in calendar 1996 as well as enhanced versions of
>
> Tecmar's existing products. Financing has been put in place and
>
> business processes introduced to rebuild customer and supplier
>
> confidence in Tecmar as a reliable business partner.
>
> - Major restructuring of Tecmar's Singapore operation. Outsourcing
>
> manufacturing of some product lines to lower cost suppliers in
>
> Thailand and Malaysia and discontinuing production of other lines.
>
> Obsolete inventory and equipment have been written down.
>
> In Canada the Systems Division launched its first generation of
>
> large scale, near on line, data storage servers based on the
>
> technology developed by the Institute for Space and Terrestrial
>
> Science. Legacy acquired the rights to use this technology in May
>
> 1995.
>
> "We are making steady progress in introducing our proprietary data
>
> storage server system to Canada and the US." says Keith Leno
>
> President and CEO of the Systems Division. "We are building the
>
> marketing and sales infrastructure needed to capture our niche in
>
> these key markets." To date 14 units had been sold.
>
> Also in Canada, Storage One, which purchases data storage products
>
> for sale into world markets and to supply the Systems Division's
>
> manufacturing needs, generated $17.2 million in sales in 1996 vs
>
> $11.9 million in 1995.
>
> Legacy also announced that, subject to regulatory and shareholder
>
> approval, it proposes to consolidate its common shares on a 10:1
>
> basis.
>
> David Killins commented "The proposed stock consolidation will
>
> permit trading of Legacy shares at a price level that will permit
>
> greater access to investments in the Company by institutional
>
> investors who tend not to invest below certain minimum trading
>
> prices." The proposed stock consolidation will result in the
>
> current issued shares being reduced from 83,850,000 to 8,385,000.
>
> Legacy Storage Systems International Inc. is a global leader in the
>
> design, development and manufacture of data storage technologies.
>
> /T/
>
> 1996 Financial Results
>
> Consolidated Balance Sheet
>
> as at May 31, 1996, with comparative figures for 1995
>
> stated in thousands of United States dollars
>
> 1996 1995
>
> ---------- -----------
>
>
>
> Assets
>
> Current assets:
>
> Cash $ 2,978 $ 4,576
>
> Accounts receivable 12,025 2,568
>
> Inventories 9,362 4,315
>
> Prepaid expenses and other 1,687 144
>
> ---------- -----------
>
> 26,052 11,603
>
>
>
> Fixed assets 4,579 219
>
> Goodwill and other intangibles 2,049 2,992
>
> ---------- -----------
>
> $ 32,680 $ 14,814
>
> ---------- -----------
>
> Liabilities and Shareholders' Equity
>
> Current liabilities:
>
> Accounts payable and
>
> accrued liabilities $ 11,312 $ 2,672
>
> Obligations under capital leases 297 78
>
> ---------- -----------
>
> 11,609 2,750
>
>
>
> Shareholders' equity:
>
> Capital stock 44,827 15,117
>
> Deficit (23,756) (3,053)
>
> ---------- -----------
>
> 21,071 12,064
>
> ---------- -----------
>
> $ 32,680 $ 14,814
>
> ---------- -----------
>
> ---------- -----------
>
> Consolidated Statement of Operations
>
> for the year ended May 31, 1996, with comparative figures
>
> for 1995 stated in thousands of United States dollars, except
>
> per share amounts
>
> 1996 1995
>
> ---------- -----------
>
> Sales $ 42,933 $ 21,836
>
> Cost of goods sold 39,892 19,180
>
> ---------- -----------
>
> 3,041 2,656
>
> Expenses:
>
> General and administrative 5,672 2,472
>
> Research and development 1,702 250
>
> ---------- -----------
>
> Loss before interest,
>
> amortization and other charges (4,333) (66)
>
> Interest expense - long-term 25 163
>
> Interest expense (income) - other (263) 181
>
> Amortization of goodwill
>
> and other intangibles 261 101
>
> Amortization of deferred
>
> financing charges - 196
>
> Write down of goodwill 19,400 -
>
> ---------- -----------
>
> 19,423 641
>
> ---------- -----------
>
> Net loss $ (23,756) $ (707)
>
> ---------- -----------
>
> ---------- -----------
>
> Loss per common share $ (.40) $ (.02)
>
> ---------- -----------
>
> Weighted average number of
>
> common shares
>
> outstanding (in thousands) 60,110 34,783
>
> ---------- -----------
>
> ---------- -----------
>
> Consolidated Statement of Deficit for the
>
> year ended May 31, 1996, with comparative figures
>
> for 1995 stated in thousands of United States dollars
>
> 1996 1995
>
> ---------- -----------
>
> Deficit, beginning of year $ 3,053 $ 1,220
>
> Net loss 23,756 707
>
> Share issue costs - 1,122
>
> Dividends - 4
>
> ---------- -----------
>
> Reduction of stated capital
>
> in respect of common shares (3,053) -
>
> ---------- -----------
>
> Deficit, end of year $ 23,756 $ 3,053
>
> ---------- -----------
>
> ---------- -----------
>
> Consolidated Statement of Changes in Financial Position
>
> for the year ended May 31, 1996, with comparative
>
> figures for 1995 stated in thousands of United States dollars
>
> 1996 1995
>
> ---------- -----------
>
>
>
> Cash provided by (used in):
>
> Operations:
>
> Net loss $ (23,756) $ (707)
>
> Items not involving cash:
>
> Depreciation and amortization
>
> of fixed assets 465 70
>
> Amortization of goodwill
>
> and other intangibles 261 101
>
> Amortization of deferred
>
> financing charges - 196
>
> Write down of goodwill 19,400 -
>
> Changes in non-cash operating
>
> working capital (8,667) (1,758)
>
> ---------- -----------
>
> (12,297) (2,098)
>
> Investments:
>
> Purchases of fixed assets (1,147) (23)
>
> Increase in other intangibles (228) -
>
> Net assets of acquired companies,
>
> less cash on hand
>
> - Patch - 36
>
> - Quasarmetrics - (1,981)
>
> - Tecmar (20,689) -
>
> ---------- -----------
>
> (22,064) (1,968)
>
> Financing:
>
> Principal repayments of long-term debt - (1,386)
>
> Issuance of capital stock:
>
> - for cash consideration 35,332 10,973
>
> - to acquire Patch - 764
>
> - to acquire Quasarmetrics - 1,752
>
> Issuance of capital stock on
>
> exercise of exchange rights 226 -
>
> Share issue costs (2,795) (1,092)
>
> Decrease in due to common shareholder - (204)
>
> ---------- -----------
>
> 32,763 10,807
>
> Dividends - (4)
>
> ---------- -----------
>
> (Decrease) increase in cash (1,598) 6,737
>
> Cash, less bank indebtedness,
>
> beginning of year 4,576 (2,161)
>
> ---------- -----------
>
> Cash, end of year $ 2,978 $ 4,576
>
> ---------- -----------
>
>
>
> /T/
>
> -30-
>
> FOR FURTHER INFORMATION PLEASE CONTACT:
>
> LEGACY Storage Systems International Inc.
>
> David Killins,
>
> Chairman & CEO
>
> (905) 475-1077 Ext. 225
>
> (905) 475-1088 (Fax)
>
> EMAIL: Dave@legacy.ca
>
> or
>
> LEGACY Storage Systems International Inc.
>
> John Thornton, Director, Investor Relations
>
> (905) 475-1077 Ext. 258
>
> (905) 475-1088 (Fax)
>
> EMAIL: jt@legacy.ca
>
> or
>
> LEGACY Storage Systems International Inc.
>
> Robert McQuade, CFO
>
> (905) 475-1077 Ext. 224
>
> (905) 475-1088 (Fax)
>
> EMAIL: Bob_McQuade@legacy.ca
>
> INDUSTRY: DTC
>
> SUBJECT: ERN
>
> -0-
>
> |
