Graham-Field Announces Preliminary Results for the Year Ended December 31, 1998 and First Quarter Ended March 31, 1999
BAY SHORE, N.Y., May 18 /PRNewswire/ -- Graham-Field Health Products, Inc. (NYSE: GFI), a manufacturer and supplier of healthcare products, announced preliminary financial results for the year ended December 31, 1998 and first quarter of 1999. The Company also reported that it has notified the Securities and Exchange Commission that it would be delaying the filing of its Quarterly Report on Form 10-Q for the first quarter until it files its Annual Report on Form 10-K for 1998, which will include restated financial results for 1996 and 1997. The Form 10-K is substantially complete and currently being reviewed by the Company's auditors. The Company expects to file its Form 10-K later this month and its final results for the first quarter of 1999 shortly thereafter. The Company also announced today that it has reduced its debt service by issuing a new series of preferred stock to its largest shareholder, Brierley Investments Limited, in exchange for a $4 million interest bearing Note.
For the year ended December 31, 1998, the Company announced preliminary net revenues of approximately $380 million and a preliminary adjusted pre-tax loss of approximately $12 million, excluding all non-recurring, restructuring, merger-related and other charges. Including these one-time charges, the Company announced a preliminary pre-tax loss for 1998 of approximately $33 million, which includes the correction of certain accounting errors during the first three quarters of 1998. These errors are unrelated to the accounting investigation conducted by the Company's Audit Committee, which was previously announced in March 1999.
For the quarter ended March 31, 1999, the Company announced preliminary revenues of approximately $85 million and a preliminary pre-tax loss of approximately $8 million, which includes professional and other advisory fees of approximately $4 million, a substantial portion of which is anticipated to be non-recurring items. For the same period in 1998, the Company announced preliminary restated net revenues of approximately $98 million and a preliminary restated pre-tax loss of approximately $1 million.
"The Company's new management team is working diligently to finalize its 1998 Form 10-K as rapidly as possible. We appreciate the patience of our investors as we deal with these issues," said John G. McGregor, who was appointed as President and Chief Executive Officer in March 1999.
As a way to reduce its debt service, the Company has exchanged a Note held by Brierley Investments Limited, the Company's largest shareholder, for preferred stock. The 7.7% $4,000,000 Note due April 1, 2001 was exchanged for 2,036 shares of Series D Preferred Stock. The shares of preferred stock are non-voting but have substantially the same economic rights as 2,036,000 shares of common stock. Based on the closing price of the common stock on May 12, 1999, that number of shares would have a market value of $4,072,000, which represents the aggregate of the unpaid principal amount and accrued interest on the Note. Under the terms of the arrangement, the Company was provided with a one-year option to effectuate an exchange of the preferred stock for 2,036,000 shares of common stock, subject to obtaining applicable corporate approvals.
"The exchange of the Note for the preferred stock demonstrates confidence from our largest shareholder in the intrinsic value of the Company," said Mr. McGregor |
