"Thursday February 22, 4:15 pm Eastern Time
Press Release
Ampex Corporation Reports 2000 Financial Results
Establishes Year-end Reserve for Closure of MicroNet Subsidiary
REDWOOD CITY, Calif.--(BUSINESS WIRE)--Feb. 22, 2001--Ampex Corporation (Amex:AXC - news) today reported that for the fiscal year ended December 31, 2000, it generated a net loss from continuing operations of $26.2 million or $0.46 per diluted share. In 1999, the Company reported a net loss from continuing operations of $8.4 million or $0.16 per diluted share. Operating losses from TV onthe WEB, Inc. and Ampex's write-off of the investment in TV onthe WEB accounted for $0.15 per diluted share of the 2000 loss. In 1999, TV onthe WEB contributed a net loss of $0.11 per diluted share. Revenues from continuing operations, which are comprised of royalties from licensing the Company's patents and revenues from its Internet video operations, totaled $15.1 million in 2000 and $21.7 million in 1999. Revenues in 1999 included a one-time royalty receipt of $6.7 million.
As of year-end 2000, the Company determined to discontinue the operations of MicroNet Technology, Inc., its subsidiary that manufactures disk arrays, and to establish a reserve for the costs of closure. Accordingly, the results of operations of MicroNet have been classified with those of Ampex Data Systems Corporation as ``Discontinued Operations'' for all periods presented. In 2000, MicroNet generated a loss of $11.6 million on revenues of $12.1 million or $0.21 per diluted share. The loss included a provision to write off the balance of the Company's investment in MicroNet, including unamortized goodwill, totaling $0.11 per diluted share. In 1999, MicroNet generated a loss of $4.0 million on revenues of $11.0 million or $0.07 per diluted share. Ampex Data Systems Corporation reported net income of $2.0 million on revenues of $47.9 million or $0.04 per diluted share in 2000. In 1999, Data Systems reported a net loss of $3.0 million on revenues of $51.6 million or approximately $0.06 per diluted share. Ampex continues to seek a buyer for the Data Systems business.
Giving effect to both continuing and discontinued operations discussed above, the Company reported a net loss applicable to common stockholders of $34.5 million or $0.61 per diluted share in 2000 versus $15.0 million or $0.28 per diluted share in 1999.
In 2000, the Company's Internet video operations, conducted through its subsidiary iNEXTV and affiliates, recorded revenue of $2.9 million and incurred an operating loss of $25.6 million or $0.46 per diluted share. In 1999, the Company's Internet video businesses recorded revenues of $1.9 million and incurred an operating loss of $19.5 million or $0.37 per diluted share. In 2000, the Company elected to cease funding the webcasting and video production operations of TV onthe Web, enabling it to redeploy financial resources to the production of made-for-the Internet video programming and technology for distribution on the World Wide Web, which management believes will yield better long-term returns. In 2000 and 1999, TV onthe Web accounted for substantially all of the Company's Internet revenue. iNEXTV will continue to offer certain web video services through its other Internet subsidiaries.
Royalty income from licensing the Company's non-Internet technology totaled $12.3 million in 2000 compared to $19.8 million in 1999, and contributed an operating profit of $11.2 million or $0.20 per diluted share in 2000 compared to an operating profit of $18.6 million or $0.35 per diluted share in 1999. 1999 royalty income included a one-time payment of $6.7 million or $0.13 per diluted share representing a portion of royalties earned in prior periods from a multi-year license agreement.
The Company intends to invest a significant portion of the funds that it receives upon the sale of Data Systems in its Internet video activities and its other continuing operations. In anticipation of the sale of Data Systems, the Company raised approximately $8 million from the sale of debt securities late in 2000. The Company is negotiating a sale and leaseback of certain real estate assets in order to repay this debt, which is scheduled to mature in May 2001. At December 31, 2000, the Company's cash and marketable securities totaled $15.4 million. By terminating activities at TV onthe Web and MicroNet, the Company has reduced its operating cash requirements of its continuing operations below levels incurred during 2000. However, in the event that Data Systems is not sold, the Company will be required to raise addition capital during 2001 to finance iNEXTV's operations, which are not expected to be profitable in the next 12 months. Recently, iNEXTV has increased the syndication of its video programming to other web sites under advertising revenue sharing arrangements. By increasing the size of its audiences, management believes that it will materially enhance the attractiveness of its programming to potential buyers of web based video advertising. The Company has also begun to syndicate programming developed by others and will continue to offer services and technology to video enable other companies' web sites.
Ampex Corporation, www.Ampex.com, headquartered in Redwood City, California, is one of the world's leading innovators of technologies for the visual information age. Its iNEXTV subsidiary is the premier producer, aggregator and syndicator of video programming. The Company's rich media content covers numerous lifestyle ``infotainment'' topics as well as entertainment and current affairs, and is syndicated to portals, destination and broadband web sites. In addition, Ampex operates the Internet Technology Group to develop enhanced technology for distributing Internet video.
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risk and uncertainties and unforeseen circumstances that could cause actual results to differ materially from those currently anticipated. Potential risks and uncertainties include, without limitation, risks of continuing losses from future operations, risks of declining liquidity, risks affecting the Company's Internet strategy; ability to sell advertising, and to obtain additional distribution; uncertainty as to the timing or terms of any sale of Data Systems and other risks mentioned in the Company's 1999 Annual Report on Form 10-K filed with the SEC, its Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2000, June 30, 2000 and September 30, 2000, and its 2000 Annual Report on Form 10-K which is expected to be filed shortly. References to net loss and loss per share refer to loss applicable to common stockholders.
AMPEX CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
December 31, December 31,
2000 1999
---------- ----------
ASSETS
Current assets:
Cash and cash equivalents $ 10,384 $ 10,598
Short-term investments 5,011 31,067
Accounts receivable
(net of allowances of
nil in 2000 and $358 in 1999) 127 1,236
Inventories -- 2,261
Other current assets 3,930 4,951
--------- ---------
Total current assets 19,452 50,113
Property, plant and equipment 5,217 5,363
Intangible assets, net 211 9,806
Investment in unconsolidated companies 2,778 1,786
Deferred pension asset 377 5,571
Other assets 1,173 1,620
Net assets of business
held for disposition 11,660 13,060
--------- ---------
Total assets $ 40,868 $ 87,319
========= =========
LIABILITIES, REDEEMABLE PREFERRED
STOCK AND STOCKHOLDERS' DEFICIT
Current liabilities:
Notes payable $ 157 $ 1,103
Accounts payable 554 2,569
Accrued restructuring costs 2,482 67
Other accrued liabilities 7,797 7,913
--------- ---------
Total current liabilities 10,990 11,652
Long-term debt 46,086 43,914
Other liabilities 26,637 21,634
Deferred income taxes 1,213 1,213
--------- ---------
Total liabilities 84,926 78,413
--------- ---------
Commitments and contingencies
Mandatorily redeemable nonconvertible
preferred stock, $1,000 liquidation value:
Authorized: 69,970 shares in
2000 and in 1999
Issued and outstanding -- none
in 2000 and in 1999 -- --
Mandatorily redeemable preferred stock,
$2,000 liquidation value:
Authorized: 21,859 shares in 2000
and in 1999
Issued and outstanding --
17,173 shares in 2000;
19,321 in 1999 34,346 38,642
Convertible preferred stock,
$2,000 liquidation value:
Authorized: 10,000 shares in 2000
and in 1999
Issued and outstanding --
1,125 shares in 2000; 1,885 in 1999 2,250 3,770
Stockholders' deficit:
Preferred stock, $1.00 par value:
Authorized: 898,171 shares in
2000 and in 1999
Issued and outstanding -- none in 1999
and in 1998 -- --
Common stock, $.01 par value:
Class A:
Authorized: 175,000,000 shares
in 2000 and in 1999
Issued and outstanding --
58,075,396 shares in 2000;
55,941,854 in 1999 581 559
Class C:
Authorized: 50,000,000 shares
in 2000 and in 1999
Issued and outstanding -
none in 2000 and in 1999 -- --
Other additional capital 421,578 415,437
Notes receivable from stockholders (4,466) (4,642)
Accumulated deficit (480,794) (445,001)
Accumulated other comprehensive income (17,553) 141
--------- ---------
Total stockholders' deficit (80,654) (33,506)
--------- ---------
Total liabilities, redeemable
preferred stock and stockholders'
deficit $ 40,868 $ 87,319
========= =========
AMPEX CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(in thousands, except share and per share data)
Year Ended December 31,
-----------------------
2000 1999 1998
-------- --------- ---------
Royalty income $ 12,272 $ 19,850 $ 10,591
Internet revenue 2,869 1,851 --
-------- -------- --------
Total revenue 15,141 21,701 10,591
-------- -------- --------
Intellectual property costs 1,052 1,268 1,504
Internet video programming
and site development 10,910 7,902 --
Research, development
and engineering 452 3 --
Selling and administrative 17,360 11,431 4,547
Amortization of goodwill
and asset writedown 5,412 3,328 --
------- -------- ---------
Total costs and operating expenses 35,186 23,932 6,051
------- -------- ---------
Operating income (loss) (20,045) (2,231) 4,540
Interest expense 5,486 5,559 4,282
Amortization of debt financing costs 350 349 316
Interest income (1,180) (2,385) (2,982)
Other (income) expense, net 224 683 3
--------- --------- --------
Loss from continuing operations
before income taxes (24,925) (6,437) 2,921
Provision for (benefit of)
income taxes 1,262 2,010 (14,328)
--------- --------- ---------
Income (loss) from
continuing operations (26,187) (8,447) 17,249
Loss from discontinued
operations (net of taxes
of nil in 2000, 1999 and
1998, respectively) (5,362) (3,958) (3,016)
Loss on disposal of
discontinued operations
(net of taxes of nil
in 2000, 1999 and 1998,
respectively) (6,278) -- --
Income (loss) of business
held for disposition
(net of taxes of $ 35,
$ 95 and $ 81 in 2000,
1999 and 1998) 2,034 (2,966) (3,795)
--------- --------- -------
Net income (loss) (35,793) (15,371) 10,438
Benefit from extinquishment
of mandatorily redeemable
preferred stock 1,263 374 --
---------- --------- --------
Net income (loss) applicable
to common stockholders (34,530) (14,997) 10,438
Other comprehensive income
(loss), net of tax:
Unrealized gain on marketable
securities (141) 141 --
Minimum pension adjustment (17,553) 29,631 (23)
---------- ---------- ---------
Comprehensive income (loss) $(52,224) $ 14,775 $ 10,415
========== ========== =========
Basic income (loss) per share:
Income (loss) per share
from continuing operations $ (0.46) $ (0.16) $ 0.36
Income (loss) per share
from discontinued operations $ (0.17) $ (0.13) $ (0.14)
Income (loss) per share
applicable to
common stockholders $ (0.61) $ (0.28) $ 0.22
--------- --------- ---------
Weighted average number of
common shares outstanding 56,320,023 53,137,283 47,572,224
========== ========== ==========
Diluted income (loss) per share:
Income (loss) per share
from continuing operations $ (0.46) $ (0.16) $ 0.32
Income (loss) per share
from discontinued operations $ (0.17) $ (0.13) $ (0.13)
Income (loss) per share
applicable to common stockholders $ (0.61) $ (0.28) $ 0.20
--------- --------- ---------
Weighted average number of
common shares outstanding 56,320,023 53,137,283 53,280,956
========== ========== ==========
--------------------------------------------------------------------------------
Contact:
Ampex Corporation
Karen L. Dexter, 650/367-4111 (Investor Relations)"
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