This is good news - Fredrico
HERNDON, Va., Jan. 5 /PRNewswire/ -- Network Imaging Corporation (Nasdaq: IMGX - news) announced today that its shareholders have approved an amendment to the terms and conditions of its Series A Convertible Preferred Stock (Nasdaq: IMGXP - news), effective December 31, 1997. The proposal to modify the terms and conditions of the Preferred A stock, which was approved by a majority of both Preferred A and common shareholders at a special shareholders' meeting, will eliminate the current cash dividend of $3.2 million per year.
''This will have a major positive effect on our earnings and earnings per share,'' states Jim Leto, chairman and chief executive officer of Network Imaging.
''For a company that is not yet profitable, the $3.2 million annual dividend expense has been a major drain on our resources,'' notes Leto. ''This represents investment capital that could be much better spent on sales and marketing as we continue to build our position in the multimedia storage and content market.''
The amendment to the terms and conditions of the Preferred A stock will 1) reduce the $40 million book value associated with the Preferred A stock to $19.3 million 2) eliminate the cash dividend, therefore improving net income by $3.2 million a year 3) eliminate the dividend accrual, which will reduce current liabilities by $1.3 million and correspondingly increase shareholders' equity by the same amount.
The modified Preferred A stock will continue to pay a dividend, but it will be payable in common stock as opposed to cash.
States Leto, ''The modification to the Preferred A stock marks the final phase of a three-year restructuring program that has resulted in the divestiture of 11 non-strategic businesses, a total reorganization of the company to focus on two product lines, increased emphasis on sales and marketing, and now a major capital restructuring effort that should give us greater ability to attract additional capital.
''We enter the new year with a capital structure endorsed by our financial advisors, BT Alex. Brown, and one that positions us to achieve our aggressive growth plans,'' he adds. ''We're optimistic about our ability to build our market position, achieve strong sales growth in our core product lines, and achieve profitability during 1998.''
Network Imaging Corporation develops and markets multimedia content and storage management |
