Osicom Reports Fiscal Third Quarter Results
December 8, 1997 04:01 PM
SANTA MONICA, Calif.--(BUSINESS WIRE)--Dec. 8, 1997--Osicom Technologies, Inc. FIBR today reported revenue of $23.4 million for the third fiscal quarter, which ended October 31, 1997. This compares to revenue of $33.5 million for the same period in the prior year and $32.6 million for the second quarter of the current fiscal year. The Company reported a loss of $4.6 million or $.28 per share for the third quarter, compared to a profit of $1.3 million or $.14 per share for the same period last year. Backlog on October 31, 1997 was a record $20.6 million. Revenue for the nine month period ended October 31, 1997, was $88.6 million, compared to $79.1 million for the same period in the prior year. The loss for the current nine month period is $16.6 million, or $1.23 per share, and includes $13 million in charges posted in the second fiscal quarter for consolidation of certain operations, reduction in purchased technology, and other significant and non-recurring items. For the comparable nine month period in the prior year, the Company reported a loss of $17.1 million or $2.39 per share. The Company attributed the reduced sales in the third quarter to lower-than-expected shipments of the Company's products to several of its larger OEM customers. Orders for these products were delayed for reasons unrelated to the Company or its products, and shipments are expected to return to historical levels. Lower sales, as well as the previously announced non-recurring charge related to settlement of a legal matter contributed to the loss for the quarter. The Company reported total cash balances of $3.4 million and working capital of $6.7 million at October 31, 1997. Long term debt is $3.4 million. Short-term borrowing against the Company's available credit facilities totaling $26.2 million is $11.2 million, with an additional $5.1 million utilized for other working capital purposes, leaving the Company with approximately $10 million of unused borrowing available. Osicom's Chief Financial Officer, John H. Gorman, commented, "None of us, least of all the manager-owners of the Company, are satisfied to be reporting a fall in revenues at this time. However, we believe the fourth quarter will see continued growth in the contribution to sales from our IQX-200(TM) family of remote access products. In addition, our GigaMux(TM) Dense Wavelength Division Multiplexing (DWDM) product, designed for the Metro fiber market, is currently undergoing trials at several customer sites. GigaMux is generating enthusiasm from these customers as well as from the technical press." Gorman added, "The Company's backlog at the end of the quarter was a record $20.6 million and increased to $27 million at the end of November. This leads us to believe shipments will return to at-least-historical levels in our fourth quarter."
About Osicom
Osicom is an innovative leader in wireless-enabled networking and photonic networking. The company allows businesses to connect through wire-line, fiber and wireless technologies, thereby expanding the reach of conventional networking. Osicom offers solutions for LAN, WAN and broadband networks with products that include hubs and switches, routers, remote access servers, network print servers, PC and workstation adapter cards, video switches and multiplexers. Osicom markets and sells its products and services through a broad array of channels including worldwide distributors (including, Ingram Micro, Tech Data, and Merisel), VARs, OEMs, carriers, and government agencies. The Company has over 1000 employees worldwide and is headquartered in Santa Monica, California. Information about Osicom's products and services is available by calling toll-free 888-OSICOM8. For additional company, product and financial information visit the Osicom worldwide web site, osicom.com
Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements that involve risks and uncertainties. The forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially due to a variety of factors, including without limitation the company's ability to develop, produce, and market products that incorporate new technology on a timely basis, that are priced competitively and achieve significant market acceptance; higher expenses associated with the development and marketing of new products; changes in product mix; risks of dependence on third-party component suppliers; inventory risks due to shifts in market demand; the presence of competitors with broader product lines and greater financial resources; intellectual property rights and litigation; needs for liquidity; and the other risks detailed from time to time in the company's reports filed with the Securities and Exchange Commission.
OSICOM TECHNOLOGIES, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)
Oct. 31, Jan. 31,
1997 1997
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS
Cash and equivalents $ 1,263 $ 4,055
Restricted cash 2,121 1,744
Accounts receivable, net of
reserve for doubtful accounts $1,181 16,061 19,090
Inventory 21,249 21,835
Other receivables 2,891 985
Prepaid expenses and
other current assets 1,269 1,239
TOTAL CURRENT ASSETS 44,854 48,948
PROPERTY AND EQUIPMENT, NET 16,359 15,417
OTHER ASSETS
Purchased technology, net 2,387 7,588
Excess of cost over net assets
acquired, net 6,864 1,464
Capitalized software, net 3,331 2,005
Other assets 9,373 3,054
TOTAL OTHER ASSETS 21,955 14,111
TOTAL ASSETS $ 83,168 $ 78,476
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term debt $ 11,172 $ 11,151
Current maturities of long
term debt 1,369 1,492
Accounts payable 16,608 18,706
Accrued liabilities 8,183 5,029
Other current liabilities 610 2,737
Income taxes payable 260 235
TOTAL CURRENT LIABILITIES 38,202 39,350
Long-term debt and capital
lease obligations 3,366 3,919
Deferred income taxes 295 299
Other liabilities -- 44
TOTAL LIABILITIES 41,863 43,612
COMMITMENTS AND CONTINGENCIES
Redeemable common stock -- 1,994
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value;
27 shares authorized; cumulative
dividends; 9 shares issued and
outstanding, $11,094 liquidation
preference including accumulated
dividends at October 31, 1997;
41 shares issued and outstanding,
$19,578 liquidation preference
at January 31, 1997 1 1
Common stock, $.10 par value;
20,000 shares authorized; 18,640
shares issued and 18,637 shares
outstanding at October 31, 1997;
10,978 shares issued and 10,975
shares outstanding at
January 31, 1997 1,864 1,098
Additional paid-in capital 73,357 49,246
Accumulated deficit (33,739) (17,297)
Treasury stock, 3 shares, at cost (178) (178)
TOTAL STOCKHOLDERS' EQUITY 41,305 32,870
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 83,168 $ 78,476
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OSICOM TECHNOLOGIES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In Thousands, except per share amounts)
Three Months Ended Nine Months Ended
October 31 October 31
1997 1996 1997 1996
NET SALES $ 23,350 $ 33,457 $ 88,631 $ 79,088
COST OF SALES 15,910 23,010 60,778 58,306
GROSS PROFIT 7,440 10,447 27,853 20,782
OPERATING EXPENSES
Selling and
marketing 4,433 4,182 13,521 9,903
Engineering, research
and development 1,944 2,298 5,317 5,074
General and
administrative 4,912 1,999 12,849 6,076
Purchased in-process
research and development -- -- -- 13,653
Other operating expenses 349 326 11,842 1,508
TOTAL OPERATING EXPENSES 11,638 8,805 43,529 36,214
INCOME (LOSS)
FROM OPERATIONS (4,198) 1,642 (15,676) (15,432)
OTHER INCOME (CHARGES)
Investment income 115 155 368 292
Interest expense (567) (349) (1,531) (1,791)
Gain on disposal of assets (2) -- 424 --
Other income (charges) 46 1 (11) 85
TOTAL OTHER
INCOME (CHARGES) (408) (193) (750) (1,414)
INCOME (LOSS) BEFORE
INCOME TAXES (4,606) 1,449 (16,426) (16,846)
PROVISION FOR
INCOME TAXES -- 105 16 188
NET INCOME (LOSS) $ (4,606) $ 1,344 $(16,442) $(17,034)
INCOME (LOSS) PER COMMON SHARE
ACCRUED UNDECLARED
DIVIDENDS 38 38 113 113
INTEREST EXPENSE
ADJUSTMENT -- 117 -- --
NET INCOME (LOSS)
APPLICABLE TO COMMON
SHARES $ (4,644) $ 1,423 $(16,555) $(17,147)
PRIMARY
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING
(RESTATED, IN THOUSANDS) 16,348 10,512 13,471 7,168
NET INCOME (LOSS) PER
COMMON SHARE: $ (0.28) $ 0.14 $ (1.23) $ (2.39)
FULLY DILUTED
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING
(RESTATED) n/a 11,730 n/a n/a
NET INCOME (LOSS) PER
COMMON SHARE: n/a $ 0.12 n/a n/a
Conference Call Information:
Osicom Technologies, Inc. will hold a conference call to discuss the third quarter results today at 4:30PM EST or 1:30PM PST. To join the conference call, please dial 800/288-8975 (US) or 612/332-0335 (International). Play back of the conference call is available from 7:30PM EST on December 8th to 11:59PM EST on December 9th. Interested parties may access the play back by dialing 800/475-6701 (US) or 320/365-3844 (International). The access code is 352514. |
