To All:
It doesn't look like TSNG is going to be acquired by anyone, since there isn't much of anything left. They company states below that they are winding up their graphics chip business and are looking for an acquisition. I guess the only reason to hold this stock is that you have faith that the acquisition(s) they do make will either be successful or at least buoy the stock.
Wednesday February 11, 8:30 am Eastern Time
Company Press Release
Tseng Labs Announces 1997 Fourth Quarter and Full
Year Results
NORRISTOWN, Pa.--(BUSINESS WIRE)--February 11, 1998--Tseng Labs, Inc. (Nasdaq
National Market:TSNG - news) today announced financial results for the fourth quarter and fiscal
year ended December 31, 1997.
Fourth quarter 1997 revenues were $1,035,000, a decrease of nearly 66% from $3,020,000 in the
corresponding period in 1996. The net loss for the quarter, including the one-time charges discussed
below, was $6,023,000 or $.32 per share versus $11,054,000 or $.58 per share in the last year's
fourth quarter.
For the year ended December 31, 1997, revenues were $8,015,000 compared to $26,231,000 in
1996. The net loss for 1997 was $11,429,000 or $.60 per share as compared to $13,965,000 or
$.73 per share in 1996.
On December 16, 1997, the Company announced the sale of its graphics design assets to ATI
Technologies Inc. for which it was paid approximately $3 million in cash, and the assumption of
certain employee incentive payments. Since that time, ATI has been leasing Tseng's former
Newtown, PA facility under a three year lease with renewal options through 2007. The transaction
resulted in a pre-tax write-off of approximately $3.7 million. In conjunction with previously
announced charges for downsizing and severance, total pre- tax charges of approximately $5.7
million were taken in the fourth quarter ending December 31, 1997.
The Company entered the new fiscal year with liquid assets of approximately $25.7 million ($1.70
per share). This coupled with the cash flow from the lease of its former facility to ATI and significant
reduction in operating expenses should eliminate the need for the Company to utilize its working
capital and fully support Tseng's acquisition strategy.
Jack Gibbons, CEO, commented, ''The fourth quarter of 1997 was a significant turning point for
Tseng Labs. We sold our graphics assets to ATI technology, rented the facility to the acquirer,
acquired a substantial portion of the Tseng family's stock, relocated our offices to a small facility, and
began our search for acquisition target(s). We have reduced the staff to 7 employees and are
currently winding down the graphic chip business by arranging last time buys with our customer
base. Certain support services for these products will continue until March of 1999 through
contractual arrangements with third parties. We expect by early in the second quarter 1998 to
essentially wind up the graphic chip business and further reduce the staff.
''While we look for acquisition(s), we expect both to improve our current cash position by
converting noncash assets into cash and to maintain our net worth. We have already looked at over
forty acquisition possibilities. While several are still under study, it is difficult to predict the timing of
any potential acquisition(s).''
Tseng Labs, Inc. is a public company seeking to utilize its assets and stock to acquire a growth
company or growth companies in diverse industries. The new address for Tseng Labs, Inc., is
Courthouse Plaza, 18 W. Airy Street, Suite 100, Norristown, PA 19401.
NOTE: All forward looking information are estimates of Tseng Labs, Inc.'s management and are
subject to various risks and uncertainties that may influence the Company's ability to execute its
acquisition strategy and other risks as detailed from time to time in the Company's SEC reports and
filings.
TSENG LABS, INC.
Condensed Consolidated Statements of Income
(In Thousands, except per share amounts)
Three Months Ended Year Ended
December 31, December 31,
1997 1996 1997 1996
(Unaudited)
Net Sales $ 1,035 $3,020 $8,015 $26,231
Cost of Sales 806 6,216 6,172 25,255
Gross Profit 229 (3,196) 1,843 976
Research & Development 1,554 10,204 8,778 14,561
Selling, General &
Administrative 861 3,822 4,749 9,239
Loss on Sale of Graphics
Operations 3,698 -- 3,698 --
Restructuring Expenses 2,031 -- 2,031 --
Operating Loss (7,915) (17,222) (17,413) (22,824)
Interest Income 337 374 1,534 1,487
Loss Before Income Taxes (7,578) (16,848) (15,879) (21,337)
Income Tax Benefit (1,555) (5,794) (4,450) (7,372)
Net Loss $ (6,023) $(11,054) $(11,429) $(13,965)
Net Loss Per Share $ (.32) $ (.58) $ (.60) $ (.73)
Weighted Average Number
of Shares
Outstanding 18,664 19,079 18,975 19,020
One time charges of $1,047,000, $2,354,000, $8,660,000 and
$1,838,000 are included in fourth quarter 1996 Net Sales, Cost of
Sales, Research and Development, and Selling, General and
Administrative expenses, respectively, in the accompanying table.
-0-
TSENG LABS,INC.
Condensed Consolidated Balance Sheets
(in Thousands)
December 31, December 31,
1997 1996
Assets
Cash and Short-Term Investments $ 22,751 $ 22,912
Accounts Receivable, net 1,294 5,165
Inventories 33 2,369
Income Tax Receivable 3,588 6,368
Other Receivables 1,004 --
Prepaid Expenses and Other 147 333
Notes Receivable -- 4,441
Total Current Assets 28,817 41,558
Land and Building under lease, net 2,491 --
Property and Equipment, net 68 9,333
Other Assets 42 618
$ 31,418 $ 51,539
Liabilities and Stockholders' Equity
Accounts Payable $ 309 $ 2,098
Accrued Expenses 2,789 3,222
Total Current Liabilities 3,098 5,320
Deferred Income Taxes -- 991
Stockholders' Equity 28,320 45,228
$ 31,418 $ 51,539 |
