*********OT**********Hayes Corporation Announces Fourth Quarter and 1997 Year End Results
PR Newswire - February 20, 1998 08:04
HAYZ %CPR %TLS %ERN V%PRN P%PRN
Takes Previously Announced One-Time Charges in Q4
Related to Merger and Restructuring
ATLANTA, Feb. 20 /PRNewswire/ -- Hayes Corporation (Nasdaq: HAYZ) today
announced financial results for the fourth quarter and year ended January
3, 1998. Hayes Corporation is the result of the merger completed on December
30, 1997 between Hayes Microcomputer Products, Inc., the company that invented
personal computer communications via the modem, and Access Beyond (formerly
Nasdaq: ACCB), a maker of remote access products. Due to the timing of
the merger, these results only reflect four days of operations of Access
Beyond in the income statement, and include significant merger and
restructuring charges.
Net revenues for Hayes for the fourth quarter of fiscal 1997 were
$52.9 million, versus $56.0 million reported in the fourth quarter of 1996.
The Company reported a net loss before preferred stock dividends for
the quarter of $66.6 million, or $2.71 per share, which includes one time
restructuring and merger charges in the amount of $63.4 million, or
$2.58 per share. Without these charges, the net loss from operations
would have been $3.2 million, or $0.13 per share. The net loss for the
comparable period last year was $3.5 million, or $0.15 per share.
As previously announced, the Company took charges in the fourth
quarter related to its merger with Access Beyond and rationalization of its
overhead structure. These charges include $55.0 million related to the
write-off of in-process research and development, $5.1 million for the cost
of severance actions, facility closures and asset write-offs, and $3.3 million
for other transaction related charges. After these charges and allocation
of consideration given in the merger, $4.0 million in goodwill was recognized,
the amortization of which is not expected to have a material impact on
future operations.
The remaining charges taken by the Company significantly reduce its
overhead structure including personnel costs, investments in
unproductive assets and duplicative facilities. These actions position
the Company to better execute its strategic plan in 1998.
In the fourth quarter, the Company recognized a one-time $3.5 million
non-cash dividend on its 6% Cumulative Convertible Preferred Stock
recognizing the beneficial conversion features of the preferred stock when it
was issued. This dividend does not impact the number of shares into
which the preferred stock is convertible and will result in an increase in
additional paid-in-capital as the conversions are effected. In addition,
dividends earned on such preferred stock from date of issuance to year-end
totaled $0.1 million. For the quarter, the net loss applicable to common
shareholders was $70.1 million, or $2.85 per share.
For the year ended December 31, 1997, net revenues were $199.6 million,
versus $257.5 million reported in the 1996 year. Hayes reported a net
loss before preferred stock dividends for the year of $81.1 million, or
$3.46 per share, which includes the previously described one-time
restructuring and merger charges of $64.1 million, or $2.73 per share.
Without these charges, the net loss from operations for the year would
have been $17.0 million, or $0.73 per share. The net loss in the previous
year was $13.2 million, or $0.54 per share. The net loss applicable to
common shareholders for the year was $84.6 million, or $3.60 per share.
Hayes was not exempt from the estimated 20% overall modem market
decline in revenues for 1997. The 1997 introduction of 56 kbps modems
without an industry wide standard created end user confusion and concern,
resulting in a slowdown in sales and revenues. While Hayes first quarter
1997 revenues were down significantly, revenues returned substantially in
subsequent quarters. In 1998, analysts project that modem market revenues
will increase in excess of 20% in large part due to the recent V.90 56 kbps
modem standard. As the number two premium modem supplier, Hayes
believes it is well positioned to capitalize on expected market growth in
1998.
Using the high performance, low cost products and technology the
Company gained as a result of its recent merger, Hayes is working to expand
its existing remote access business. The Company believes that the
combination of well priced, quality products, combined with the Hayes brand,
global distribution channels and extremely low cost manufacturing
capabilities will provide substantial opportunity for the expansion of the
Company's remote access business. Additionally, Hayes is working
aggressively to become a leading supplier of xDSL and cable modem
products. Recent announcements pertaining to aggressive deployments of
high speed Internet access to the home by leading cable carriers and RBOCs
promise to create tremendous demand for the Company's new products and
technologies in the future.
"As we celebrate the 20th Anniversary of Hayes, we are very pleased to
have successfully completed the merger which made Hayes Corporation a
public company," stated Dennis C. Hayes, Chairman. "We enter 1998 with
strong new opportunities in our core modem market, armed with new V.90
products and strategies that are second to none. In addition, the Company
is set to leverage the Hayes Engine to deliver Remote Access products to
the broadening business market, as well as xDSL and Cable modems to end
users hungry for faster and faster Internet access. We look forward to a
very exciting 1998."
Ron Howard, Chief Executive Officer, commented, "Since the completion of
the merger, we have been focused on the execution of our 1998 strategic
plan. A leaner, better-focused Hayes is now working aggressively to
expand into new high growth markets that deliver significantly increased
gross margins. While our stock has been under downward pressure
independent of several positive developments we have announced, we know that
the best way to end the shorting of our stock is to deliver results. To that
end, we are committed."
Based in Norcross, Georgia, Hayes Corporation markets worldwide its
ULTRA(TM), ACCURA(TM), OPTIMA(TM), Practical Peripherals(TM), Cardinal(TM)
and CENTURY(TM) brands of cable, digital and analog modems, remote access
servers and terminal adapters along with Smartcom(TM) communications
software. Hayes introduced the PC modem in 1981 and is currently celebrating
the 20th anniversary of industry innovation. Today, with distributors in
more than 35 countries, Hayes is one of the largest manufacturers of
modems in the world. For more information about Hayes and the Company's
award-winning product lines, visit the Hayes Web site at hayes.com.
Hayes, the Hayes logo, ULTRA, ACCURA, OPTIMA, Practical Peripherals,
Smartcom and CENTURY are trademarks or registered trademarks of Hayes
Microcomputer Products, Inc., a wholly owned subsidiary of Hayes
Corporation. Cardinal is a trademark of Cardinal Technologies, Inc. Other
trademarks are trademarks of their respective companies.
"Safe Harbor" statement under the Private Securities Litigation
Reform Act of 1995: This release contains forward-looking statements that
are subject to risks and uncertainties, including, but not limited to,
the impact of competitive products and pricing, product demand and market
acceptance, new product development, reliance on key strategic alliances,
availability of raw materials, the regulatory environment, fluctuations
in operating results and other risks detailed from time to time in the
Company's filings with the Securities and Exchange Commission.
HAYES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share data)
Quarter Ended Year Ended
Jan. 3, 1998 Dec. 31,1996 Jan. 3, 1998 Dec. 31, 1996
Net Revenues $52,911 $56,018 $199,612 $257,452
Cost of Sales 42,980 43,087 154,799 195,918
Gross Profit 9,931 12,931 44,813 61,534
Operating Expenses 18,486 16,997 68,090 71,367
Restructuring Charges 5,085 (500) 5,840 3,600
In Process Research
& Development Charge 54,990 0 54,990 0
Operating Loss (68,630) (3,566) (84,107) (13,433)
Other income 1,873 78 2,980 6,042
Loss Before Taxes
& Reorganization
Expense (66,757) (3,488) (81,127) (7,391)
Reorganization Expense 0 0 0 5,378
Income Tax Expense (156) 2 (4) 385
Net Loss (66,601) (3,490) (81,123) (13,154)
Preferred Stock Dividend 3,483 0 3,483 0
Loss Applicable to Common
Shareholder $(70,084) $(3,490) $(84,606) $(13,154)
Loss per Common Share $(2.85) $(0.15) $(3.60) $(0.54)
SOURCE Hayes Corporation
/CONTACT: Kerri Dimke, Public Relations Manager of Hayes, 770-840-9200,
ext. 6091; or Investors: Donna N. Stein, APR, or Dan Durkin, or Press: Stan
Froelich, of Morgen-Walke Associates, 212-850-5600, for Hayes/
/Web site: hayes.com
(HAYZ) |
