Headline: Glenayre (NASDAQ:GEMS) says customer could hurt earnings
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CHARLOTTE, N.C., April 27 (Reuters) - Telecommunications
company Glenayre Technologies Inc. said Tuesday its future
earnings could be hurt in a "significant" way by the loss of
receivables from a troubled financing customer.
But the company said it did not know what quarter might be
affected, saying only it could change its estimate of what it
can collect from the unnamed customer in the near term. The
company said the change could have a "significant" impact on
its results of operations in the quarter it records the change.
The company was expected to earn $0.04 per share in the
second quarter and $0.21 per share for the year.
Glenayre on Tuesday posted a loss of $0.03 per share for
the first quarter compared to break even earnings a year ago.
Wall Street had been expecting the company to lose about $0.05
per share in the first quarter, according to First Call.
Copyright 1999, Reuters News Service
Headline: Glenayre Technologies Reports First Quarter 1999 Results
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CHARLOTTE, N.C., April 27 /PRNewswire/ -- Glenayre Technologies Inc.
(NASDAQ:GEMS) today announced results for the first quarter ended March 31,
1999.
Net sales for the first quarter 1999 decreased to $70.0 million or 26%
from $94.5 million for the first quarter 1998. The company reported a loss
from operations of ($9.9) million for first quarter 1999 compared to a loss
from operations of $0.1 million for the same period in 1998. Loss per share
was ($0.03) per share for the first quarter 1999 compared to $0.00 breakeven
per share for first quarter 1998.
The company reported that a decline in shipments of its paging products
was the primary reason for the decrease in net sales. Results were also
negatively impacted during the first quarter due to internal restructuring
costs of $1.3 million that were previously announced and integration costs of
$1.0 million. Glenayre also reported that although orders were soft in paging
products, orders were strong in its Integrated Networking Group and Western
Multiplex Group. Overall, however, the company's book-to-bill ratio was below
one. The company realized a first quarter 1999 net tax benefit of $3.9
million as a result of the reduction in the valuation allowance related to net
operating loss carryforwards from its 1997 Open Development Corporation
acquisition.
Stan Ciepcielinski, Glenayre's chief financial officer, stated, "Due to
last quarter's restatement of in-process research and development based on new
guidance from the Securities and Exchange Commission, the company will include
a new measure of financial performance in its earnings announcements. The new
measure will exclude amortization of intangibles from net income. During the
first quarter of 1999, net income exclusive of amortization of intangibles was
$0.03 per share as compared to $0.08 per share for the first quarter of 1998."
The company also reported that a customer for whom it had provided
approximately $49 million in financing might be in financial difficulties.
The company stated that the customer is in weak financial condition due to
continued operating losses, and is dependent on continued financial support
from its vendors and financial institutions and its ability to secure other
capital monies. An estimate of a possible range of the loss on the
receivables from this customer cannot be determined at this time. However, a
change in the estimate of the collectability of the receivables from this
customer could occur in the near term with a significant impact on Glenayre's
results of operations in the quarter in which the change is recorded.
"We are continuing to evaluate strategic initiatives that will help
Glenayre regain positive momentum," Chairman Ramon Ardizzone, stated. "For
example, last week we announced two major agreements with Motorola and
Solectron that will improve the company's market share, cash position and
operating costs. These agreements are beneficial for the company, and we
expect to realize positive contributions in the latter half of this year."
For over 30 years, Glenayre Technologies Inc. has been developing and
providing leading edge personal telecommunication systems, including products
for paging, digital and cellular networks. With over 2,200 employees and with
products installed in 100 countries, Glenayre's net sales exceeded $399
million in 1998. Additional information about Glenayre is available on the
company's Web site at: glenayre.com .
Audio broadcast and replay of Glenayre's first quarter 1999 teleconference
will be available on the Internet. It can be accessed at
glenayre.com under Investor Relations.
This news release contains statements that may be forward looking within
the meaning of applicable securities laws. The statements may include
projections regarding future earnings results, and are based upon the
company's current expectations and assumptions, which are subject to a number
of risks and uncertainties. Factors that could cause actual results to differ
are discussed in the company's most recently filed Form 10-Q. These factors
may include: potential market changes resulting from rapid technological
advances; acceptance of two-way paging products; competition; variability of
quarterly results; volatility of the company's stock price; limits on
protection of proprietary technologies; potential changes in government
regulation; financing customer purchases for development of the two-way
communications market; and international business risks.
GLENAYRE TECHNOLOGIES INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
(Previously Restated)
First Quarter First Quarter
Ended 3/31/99 Ended 3/31/98
Net Sales $70,021 $94,533
Cost of Sales 38,081 45,764
Selling, General &
Administrative 21,575 25,313
Research & Development 11,663 14,193
Depreciation &
Amortization 8,614 9,377
Loss from Operations (9,912) (114)
Interest Income, Net 2,388 2,191
Other Income (Expense),
Net 37 (96)
Income (Loss) before Income
Taxes (7,487) 1,981
Provision (Benefit) for
Income Taxes (5,890) 1,860
Net Income (Loss) ($1,597) $121
Net Income (Loss) per
Common Share Assuming
Dilution ($0.03) $0.00
Number of Shares Used to
Compute Diluted per
Share Data 62,116 63,270
BALANCE SHEET DATA
(In thousands)
(Unaudited)
3/31/99 12/31/98
Cash $ 23,596 $ 12,283
Working Capital 165,115 154,472
Total Assets 532,310 561,795
Stockholders' Equity 460,751 462,153
ESTIMATED NET SALES BREAKOUT
(In millions)
(Unaudited)
By Segment
Q1 99 Q1 98
Paging
U.S. $24.6 $37.1
International 20.6 35.0
Subtotal 45.2 72.1
Mobile & Fixed Network
U.S. 9.4 7.4
International 6.7 8.7
Subtotal 16.1 16.1
Microwave Communication
U.S. 6.1 5.3
International 2.6 1.0
Subtotal 8.7 6.3
Total $70.0 $94.5
SOURCE Glenayre Technologies, Inc.
-0- 04/27/99
/CONTACT: Mark Smalley, VP -- Investor Relations of Glenayre
Technologies, Inc., 704-553-0038/
/Company News On-Call: prnewswire.com or fax,
800-758-5804, ext. 111723/
/Web site: glenayre.com / |
