ReSound Corporation Announces Preliminary Fourth Quarter Results
Company Press Release - Tuesday January 19, 7:31 am Eastern Time
REDWOOD CITY, Calif.--(BW Healthwire)--Jan. 19, 1999--ReSound
Corporation (Nasdaq:RSND - news) today announced preliminary
results for the fourth quarter and fiscal year ended December
31, 1998. The Company will report final results for the fourth
quarter and fiscal year on January 27, 1999.
ReSound announced today that it expects to report sales for the
fourth quarter ended December 31, 1998, of approximately $28
million, compared with $33.9 million in the same period a year
ago. Excluding the impact of one-time pretax charges of
approximately $1.4 million accrued in the fourth quarter of 1998
for the previously announced restructuring program, ReSound
anticipates a loss of $5.0 million to $5.6 million, or $0.24 to
$0.27 per share, compared to net income of $1.6 million, or
$0.08 per share in the same period a year ago, excluding one-time
special charges in that earlier period.
Sales for the fiscal year ended December 31, 1998 are expected
to be approximately $123 million, compared with $130.5 million
in the same period a year ago. Excluding the impact of one-time
pretax charges of approximately $18 million accrued for the year
in connection with the previously mentioned restructuring,
ReSound anticipates a loss of $3.9 million to $4.5 million, or
$0.19 to $0.22 per share, compared to a net loss of $0.7 million,
or $0.03 per share in the same period a year ago, excluding
one-time special charges taken in 1997.
The shortfall in sales in the quarter primarily reflects a delay
in the shipment of a significant tender order, a more rapid than
expected decrease in Sonar Hearing Health orders as the Company
completes conversion of Sonar product customers to ReSound
products, the ramp-up in manufacturing for the new Digital 5000
product, and continued pricing pressures on analog products.
This decrease was offset in part by stronger than anticipated
sales in Asia Pacific/Latin America and Northern Europe,
particularly Scandinavia, and favorable foreign exchange rates
compared to the fourth quarter of 1997.
The Company believes the issues contributing to the sales
shortfall are temporary and will be resolved in the first
quarter of 1999. Ramp-up of production of the Digital 5000 is
now on track and the Company expects to be able to meet
customer demand for the product in the first quarter.
Additionally, the Company anticipates it will be able to ship
the tender order in the first quarter. The Company is endeavoring
to convert Sonar product customers to ReSound products and
expects this conversion to accelerate as its new digital products
become available.
''1998 has been a year of transition for ReSound,'' said ReSound
President and CEO Russell D. Hays. ''We have built a new
management team and are beginning to see the results of
streamlining and reducing the cost structure of our business
worldwide. We have introduced three major new products -- the
ReSound Digital 5000, the first fully software-based digital
hearing device, the ReSound Avance, a unique and inconspicuous
hearing device targeted at the mild-to-moderately hearing
impaired segment of the market, and the CommPort, a miniaturized
microphone/receiver system developed through our joint alliance
with Motorola for public safety organizations. We have taken the
steps necessary to position the Company for growth and
profitability in the coming years, and as a result we believe
1999 will be the turnaround year for ReSound.''
ReSound Corporation is a hearing health care Company that designs,
develops, manufactures and markets technologically advanced
hearing devices throughout the world.
This news release contains forward-looking statements based on
current expectations that involve risks and uncertainties that
could cause actual results to differ materially. Many of these
statements are identified by words such as ''anticipates,''
''expects,'' ''intends,'' ''believes'' and the like. These risks
and uncertainties include the timely development, introduction,
acceptance and availability of new products and related
technologies in existing and new markets, the effect of
competition, worldwide political and economic conditions and
uncertainties, the continuance of a successful relationship
with Motorola, the ability of the Company to achieve improved
operating results, the Company's ability to attract and retain
qualified sales and other personnel through its planned
restructuring program, and the other risks and uncertainties
detailed from time to time in the Company's public disclosure
filings with the U. S. Securities and Exchange Commission,
including the Company's Form 10-Q and Form 10-K for the most
recent quarter and fiscal year.
Contact:
ReSound Corporation
Laureen DeBuono, 650/780-7800
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