Earnings. YOWCH!
Focus Enhancements, Inc. Reports Third Quarter Results
Non-Apple Computer Business Grows 140%
SUDBURY, Mass., Nov. 15 /PRNewswire/ -- FOCUS Enhancements, Inc. (Nasdaq: FCSE, FCSEW;BSE:
FCS, FCSW) today announced that revenues for the third quarter ended September 30, 1996 were
$3,327,228, compared with revenues of $4,126,078 during the three month period ended September 30, 1995;
representing a decline of 19%. During this period, revenues from Apple Computer represented only 1% of the
Company's revenues as compared to 67% from the comparable quarter in 1995. Additionally, non-Apple
business grew 140% for the quarter from the three month period ended September 30, 1995.
The Company also reported a net loss for the quarter ended September 30, 1996 of ($5,657,639) or ($0.60)
per share as compared to net income of $589,462 or $0.07 per share for the comparable quarter in 1995. The
majority of the losses for the three month period ended September 30, 1996 is the result of non-cash charges
related to the acquisition of TView, Inc. ($2,000,000) and the write down of goodwill related to the acquisition
of Lapis Technologies ($1,275,000). The Company believes that these write downs will allow FOCUS to
reduce its operating charges by over $500,000 annually.
For the nine months ended September 30, 1996 revenues decreased 10% to $11,498,362 compared with
revenues of $12,834,953 during the nine months ended September 30, 1995. During this nine month period
revenues from Apple Computer represented 1% of the Company's revenues as compared to 53% from the
comparable nine month period in 1995. Additionally, non Apple business grew 73% for the nine month period
ended September 30, 1995.
FOCUS also announced a net loss for the nine month period ended September 30, 1996, of ($9,220,737), or
($1.09) per share, compared with net income of $696,735 or $0.10 per share for the nine month period ended
September 30, 1995.
Company President and CEO Thomas L. Massie stated, "The unexpected immediate loss of Apple Computer
business earlier this year has caused our financial performance to be very poor. FOCUS management has
worked very hard to grow and diversify with other OEM partners such as Zenith, and channel partners such as
CompUSA, Fry's, and Future Shops. While growing we have constructively reduced expenses, and have
improved gross profit margins." Massie continued to say, "we feel very bullish about our future, and that in the
near future FOCUS will return to delivering profitable results."
The Company anticipates that new FOCUS products to be sold using the technology acquired from TView will
contribute an incremental $3,000,000 in annualized revenues with additional gross profit contribution of
approximately $1,500,000. The value of this acquisition is evidenced by the Company's recent signing of a
$12,000,000 agreement with Zenith Electronics. The FOCUS Scan 300 ASIC chip, will be one of the new
products to be supplied to Zenith in 1997. The $12,000,000 agreement with Zenith Electronics also marks a
300% or $8,000,000 increase above the current level of purchases from Zenith for FOCUS.
In addition, FOCUS announced that it will not be pursuing the acquisition of Digital Vision at this time. Mr.
Massie stated, "FOCUS and Digital Vision mutually decided that it would not be in the best interests of each
company's stockholders to proceed with the acquisition. We may pursue the opportunity again sometime in the
future."
FOCUS Enhancements, Inc. is an industry leader in the development and marketing of proprietary multimedia
video graphics and networking products for the rapidly converging, multi-billion dollar computer and television
industries. The company's products, which are sold through Original Equipment Manufacturers (OEMs) and
resellers, merge PC's and TV's for a wide range of uses.
Forward looking statements in this release are made pursuant to the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. Investors are cautioned that such forward looking statements involve
risks and uncertainties, including, without limitation, continued acceptance of the company's products, increased
levels of competition for the Company, new products and technological changes, the Company's dependence
upon third-party suppliers, intellectual property rights and other risks detailed from time to time in the Company's
periodic reports filed with the Securities and Exchange Commission.
The condensed consolidated statement of income and selected balance sheet data for the Company follows:
FOCUS Enhancements, Inc.
(Amounts in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30 September 30
1996 1995 1996 1995
Revenues $3,327 $4,126 $11,498 $12,835
Net income (loss) ($5,658) $589 ($9,221) $697
Net income (loss)
per share ($0.60) $0.07 ($1.09) $0.10
Weighted average number
of shares used in
computation of per
share net income(loss) 9,476 8,306 8,477 7,190
Selected Balance Sheet Data
September 30
1996 1995
Cash $672 $1,298
Accounts receivable 4,900 1,975
Inventory 1,926 1,557
Other current assets 266 231
Total current assets 7,764 5,061
Long term assets 1,767 3,080
Total Assets $9,531 $8,141
Liabilities $7,827 $5,601
Equity 1,704 2,540
Total Liabilities & Equity $9,531 $8,141
SOURCE FOCUS Enhancements, Inc. |
