Imaging Technologies Corp. Reports Second Quarter Fiscal 1999 Financial Results
SAN DIEGO--(BUSINESS WIRE)--Feb. 19, 1999--
Digital Imaging Products Manufacturer Sells PC Card and Storage
Products Distributor and Discontinues Memory Products Operation to
Concentrate on Core Business As Part of Ongoing Corporate Streamlining
(Nasdaq:ITEC) Imaging Technologies Corp. today reported financial
results for the second quarter of fiscal 1999, which ended Dec. 31,
1998.
Sales revenues for the second fiscal quarter were $4.2 million, a
decrease over revenues of $9.8 million in the second fiscal quarter of
1998. Operating income for the quarter fell to a loss of ($3.0
million) compared with operating income of $1.1 million for the second
quarter of fiscal 1998. Earnings per share (diluted) decreased to a
loss of ($.26) per share, compared to earnings of $.08 per share for
the second quarter of fiscal 1998.
The company posted a six-month fiscal 1999 operating loss of
($4.6 million) compared with earnings of $1.8 million for the
comparable period in fiscal 1998. The company reported a loss of
($.36) per share compared with income of $.14 per share for the first
two quarters of fiscal 1998. Revenues for the six-month period were
$11.5 million compared with $17.5 million reported in the first six
months of fiscal 1998.
"ITEC failed to achieve the objectives of our business plan in
the second fiscal quarter in part due to insufficient working capital
limiting our ability to manufacture and deliver products," said Brian
Bonar, chief executive officer of Imaging Technologies. "However, the
recently announced infusion of capital and ongoing negotiations to
establish realistic and workable banking relationships are designed to
put the company back on plan in the coming quarters."
Subsequent to the close of the second quarter, the company
completed a private placement of its capital stock valued at
approximately $5.4 million. The company obtained approximately $2.3
million in cash through the issuance of Series D and E Preferred Stock
with certain accredited and institutional investors and converted
approximately $1.2 million of debt into Series E Preferred Stock. The
company expects to obtain the remaining $1.9 million in cash upon
filing and effectiveness of the registration statement registering the
shares of ITEC common stock issuable upon conversion of the Series D
and E Preferred Stock. ITEC intends to use the funds raised to expand
product shipments to meet demand for the company's printers, image
management print controllers, and color management software.
In addition to posting financial results for the second fiscal
quarter, ITEC today announced the sale of its Prima International
subsidiary, a PC Card and storage products distributor, and the
consolidation and closure of its McMican memory products manufacturing
subsidiary. These moves are part of an ongoing realignment of the
company's operations around its core imaging businesses.
"These efforts are geared toward focusing on markets and products
that produce a higher return on our investment," added Bonar. "The PC
Card and data storage accessories market was not in line with our
present market strategy. We are working to solidify our position in
the industry by concentrating on our areas of greatest strength."
A one-hour audio teleconference to review financial results is
scheduled for 1 p.m. Pacific Time on Friday Feb. 19, 1999. Bonar and
Chris McKee, vice president and chief accounting officer will discuss
the results of the second quarter and answer questions. Those
interested in listening to the conference and ask questions can dial
in on the East Coast 212/676-5363 and on the West Coast 415/908-6250.
IMAGING TECHNOLOGIES CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
ASSETS
Dec. 31, June 30,
1998 1998
Current assets
Cash $ 203 $ 3,023
Accounts receivable, net 4,430 4,133
Inventories 5,131 6,287
Prepaid expenses and other 1,378 1,401
Total current assets 11,142 14,844
Property and equipment, net 1,286 1,525
Capitalized software, net 5,567 3,655
Other 1,024 937
$ 19,019 $ 20,961
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities
Borrowings under bank
lines of credit $ 5,141 $ 5,203
Short-term debt 4,450 1,998
Current portion of
long-term debt 1,575 903
Accounts payable 5,687 5,027
Accrued expenses 1,384 1,398
Total current liabilities 18,237 14,529
Long-term debt, less current portion 2,456 1,828
Total liabilities 20,693 16,357
Shareholders' equity (deficit)
Series A preferred stock,
$1,000 par value, 7,500 shares
authorized, 420.5 shares issued
and outstanding 420 420
Series C preferred stock,
$1,000 par value, 1,200 shares
authorized, 236 shares issued and
outstanding -- 2,360
Common stock, $0.005 par value,
100,000,000 shares authorized;
13,301,078 shares issued and
outstanding 67 62
Paid-in capital 36,506 35,859
Shareholder loans (110) (110)
Accumulated deficit (38,557) (33,987)
Total shareholders' equity
(deficit) (1,674) 4,604
$ 19,019 $ 20,961
IMAGING TECHNOLOGIES CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share data)
(unaudited)
Three Months Ended Six Months Ended
Dec. Dec. Dec. Dec.
31, 1998 31, 1997 31, 1998 31, 1997
Revenues
Sales of products $4,195 $8,219 $10,916 $14,497
Engineering fees -- 1,531 395 3,047
Licenses and royalties -- -- 163 --
4,195 9,750 11,474 17,544
Costs and expenses
Costs of products sold 3,309 5,913 7,356 10,186
Selling, general, and
administrative 3,676 2,169 7,316 4,293
Cost of engineering fees 230 572 815 1,169
7,215 8,654 15,487 15,649
Income (loss) from
operations (3,020) 1,096 (4,013) 1,896
Other expense
Interest, net (335) (16) (543) (44)
Income (loss) before
income taxes (3,355) 1,080 (4,556) 1,852
Income tax expense (10) -- (14) (4)
Net income (loss) $(3,365) $1,080 $ (4,570) $ 1,848
Earnings (loss) per
common share
Basic $(0.26) $ 0.10 $(0.36) $ 0.18
Diluted $(0.26) $ 0.08 $(0.36) $ 0.14
Weighted average
common shares 12,852 10,430 12,852 10,111
Weighted average
common shares - assuming
dilution 12,852 13,651 12,852 13,412
-0-
Imaging Technologies Corp. (Nasdaq:ITEC) is a worldwide pioneer
in the development, manufacturing, licensing, and distribution of
high-quality digital imaging solutions. Founded in 1982 and
headquartered in San Diego, the company produces imaging products for
a diverse range of market segments. Beginning with a core technology
in the design and development of Adobe(R) PostScript(R) controllers
for non-impact printers and multifunction peripherals, the company has
expanded its product offerings to include monochrome and color
printers, and software to improve the accuracy of color reproduction.
ITEC's products are marketed and sold directly by Imaging
Technologies and through an established distribution channel of
value-added resellers, manufacturer's representatives, retail vendors,
and systems integrators. ITEC has a network of dealers and
distributors in the United States, Canada, Europe, as well as a
growing number of resellers in Africa, Asia, the Middle East, Latin
America, Australia, Russia and in the Commonwealth of Independent
States.
ITEC's DealSeekers.com E-Commerce operation is an interactive
Internet catalog showroom featuring thousands of computer and digital
imaging products. DealSeekers.com partners with manufacturers and
other market makers offering them a single source for the efficient
and orderly liquidation of excess and previous version inventory and
offers "Hot Deals" to its wholesale and retail customers.
Organized around interrelated operating divisions, ITEC has
evolved a family of technologically advanced imaging products. ITEC
was recently named to Orange Coast "Fast 50," a ranking of the 50
fastest-growing technology companies in the Orange County/San Diego
region of California. News and information are available at the ITEC
Web site at imagetechcorp.com.
Statements in this press release may constitute forward-looking
statements and are subject to numerous risks and uncertainties,
including the failure to complete successfully the development of new
or enhanced products, the company's future capital needs, the lack of
market demand for any new or enhanced products the company may
develop, any actions by the company's partners that may be adverse to
the company, the success of competitive products, other economic
factors affecting the company and its markets, seasonal changes, and
other risks detailed from time to time in the company's filings with
the Securities and Exchange Commission. The actual results may differ
materially from those contained in this press release. The company
disclaims any obligation to update any statements in this press
release.
CONTACT:
Imaging Technologies Corp.
Christopher M. McKee, 619/613-1300, Fax 619/613-1311
cmckee@imagetechcorp.com
KEYWORD: CALIFORNIA
BW1080 FEB 19,1999
6:16 PACIFIC
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