Larson-Davis Incorporated Announces Termination of Lucent Technologies Agreement
PROVO, Utah, Sept. 14 /PRNewswire/ -- Larson-Davis Incorporated (Nasdaq: LDII) announced today that it has terminated its 1997 Technical Information Agreement and Patent License Agreement with Lucent Technologies. This agreement provided Larson-Davis with certain exclusive rights to patents and technology for the development of a particle analysis system. The termination agreement cancelled all financial obligations due to Lucent by Larson-Davis, including royalty payments of over $2 million. The first royalty payment of $125,000 was due to be paid September 1, 1998 with another due March 1, 1999. The termination agreement also provided that Lucent would purchase the prototype model developed by LDII for $100,000. No extraordinary charge will be taken as a result of this termination.
COO Jeffrey Cohen stated, "Our decision to cancel the Lucent agreement was not made lightly. A number of factors contributed to this decision including the current slow down in a major potential market for this device -- the semiconductor market; the very aggressive minimum royalty payments; the technical performance of the Lucent prototype; and the costs and risks associated with bringing this technology to market."
President and CEO Andrew Bebbington commented, "Every technology in our portfolio must be capable of earning revenue in the near term and justify the overhead attaching to it. If this goal is not achievable then we will move quickly to either realize value for the technology in other ways or cut the associated overhead. The Lucent technology did not meet these criteria. Our short term goal remains to reduce the historical rate of losses such that the company can sustain ongoing operations without recourse to further financing and then to return the company to profitability."
"Our acoustics business continues to trade according to plan and will make a very satisfactory contribution to our results for the quarter. On the Sensar side, activity has continued at an aggressive pace, although placement of units has been slower than we would have liked so far, we continue to forecast a reduction in the rate of losses for the quarter and an improvement to our second quarter operating performance provided orders committed to us are fulfilled."
Located in Provo, UT, Larson-Davis is a manufacturer of chemical instrumentation for the analysis and quantification of molecular compounds. Its Larson Davis Labs division is a manufacturer of acoustical measuring equipment for the research, environmental and industrial markets. |
