SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2003
OR
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 0-20292
AMPEX CORPORATION
(Exact name of Registrant as specified in its charter)
| Delaware |
13-3667696 | |
| (State of Incorporation) |
(I.R.S. Employer Identification Number) |
1228 Douglas Avenue
Redwood City, California 94063-3199
(Address of principal executive offices, including zip code)
(650) 367-2011
(Registrant’s telephone number, including area code)
Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
As of March 31, 2003, the aggregate number of outstanding shares of our Class A Common Stock, $.01 par value, was 63,841,796. There were no outstanding shares of our Class C Common Stock, $0.01 par value.
AMPEX CORPORATION
FORM 10-Q
Quarter Ended March 31, 2003
| Page | ||||
| PART I—FINANCIAL INFORMATION | ||||
| Item 1. |
3 | |||
| Consolidated Balance Sheets (unaudited) at March 31, 2003 and December 31, 2002 |
3 | |||
| Consolidated Statements of Operations (unaudited) for the three months ended March 31, 2003 and 2002 |
4 | |||
| Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2003 and 2002 |
5 | |||
| 6 | ||||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
14 | ||
| Item 3. |
29 | |||
| Item 4. |
29 | |||
| PART II—OTHER INFORMATION |
||||
| Item 1. |
29 | |||
| Item 2. |
31 | |||
| Item 3. |
31 | |||
| Item 4. |
31 | |||
| Item 5. |
31 | |||
| Item 6(a). |
31 | |||
| Item 6(b). |
31 | |||
| 32 | ||||
| 32 | ||||
| 33 | ||||
2
AMPEX CORPORATION
(in thousands, except share and per share data)
| March 31, 2003 |
December 31, 2002 |
|||||||
| ASSETS |
(unaudited) |
|||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ |
5,475 |
|
$ |
7,579 |
| ||
| Short-term investments |
|
1,515 |
|
|
1,483 |
| ||
| Accounts receivable (net of allowances of $196 in 2003 and $112 in 2002) |
|
5,863 |
|
|
4,064 |
| ||
| Inventories |
|
7,029 |
|
|
7,336 |
| ||
| Other current assets |
|
3,035 |
|
|
2,368 |
| ||
| Total current assets |
|
22,917 |
|
|
22,830 |
| ||
| Property, plant and equipment |
|
5,498 |
|
|
5,757 |
| ||
| Other assets |
|
722 |
|
|
752 |
| ||
| Total assets |
$ |
29,137 |
|
$ |
29,339 |
| ||
| LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT |
||||||||
| Current liabilities: |
||||||||
| Notes payable |
$ |
304 |
|
$ |
457 |
| ||
| Accounts payable |
|
1,385 |
|
|
962 |
| ||
| Net liabilities of discontinued operations |
|
1,003 |
|
|
1,108 |
| ||
| Accrued restructuring costs |
|
1,300 |
|
|
1,300 |
| ||
| Other accrued liabilities |
|
10,205 |
|
|
10,471 |
| ||
| Total current liabilities |
|
14,197 |
|
|
14,298 |
| ||
| Long-term debt |
|
70,367 |
|
|
68,218 |
| ||
| Other liabilities |
|
64,515 |
|
|
64,413 |
| ||
| Accrued restructuring costs |
|
1,353 |
|
|
1,700 |
| ||
| Net liabilities of discontinued operations |
|
2,843 |
|
|
3,024 |
| ||
| Total liabilities |
|
153,275 |
|
|
151,653 |
| ||
| Commitments and contingencies (Note 7) |
||||||||
| Mandatorily redeemable nonconvertible preferred stock, $1,000 liquidation
value: |
|
— |
|
|
— |
| ||
| Mandatorily redeemable preferred stock, $2,000 liquidation value: |
|
24,680 |
|
|
25,754 |
| ||
| Convertible preferred stock, $2,000 liquidation value: |
|
— |
|
|
— |
| ||
| Stockholders’ deficit: |
||||||||
| Preferred stock, $1.00 par value: |
|
— |
|
|
— |
| ||
| Common stock, $.01 par value: |
||||||||
| Class A: |
|
638 |
|
|
634 |
| ||
| Class C: |
|
— |
|
|
— |
| ||
| Other additional capital |
|
428,969 |
|
|
427,899 |
| ||
| Accumulated deficit |
|
(514,760 |
) |
|
(512,828 |
) | ||
| Accumulated other comprehensive income |
|
(63,665 |
) |
|
(63,773 |
) | ||
| Total stockholders’ deficit |
|
(148,818 |
) |
|
(148,068 |
) | ||
| Total liabilities, redeemable preferred stock and stockholders’ deficit |
$ |
29,137 |
|
$ |
29,339 |
| ||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
3
AMPEX CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands, except share and per share data)
| For the Three Months Ended |
||||||||
| March 31, 2003 |
March 31, 2002 |
|||||||
| (unaudited) |
||||||||
| Royalty income |
$ |
386 |
|
$ |
1,215 |
| ||
| Product revenue |
|
8,244 |
|
|
8,770 |
| ||
| Total revenue |
|
8,630 |
|
|
9,985 |
| ||
| Intellectual property costs |
|
245 |
|
|
232 |
| ||
| Cost of product sales |
|
4,216 |
|
|
5,220 |
| ||
| Research, development and engineering |
|
685 |
|
|
681 |
| ||
| Selling and administrative |
|
3,082 |
|
|
2,632 |
| ||
| Total costs and operating expenses |
|
8,228 |
|
|
8,765 |
| ||
| Operating income |
|
402 |
|
|
1,220 |
| ||
| Interest expense |
|
2,221 |
|
|
2,123 |
| ||
| Amortization of debt financing costs |
|
14 |
|
|
417 |
| ||
| Interest income |
|
(13 |
) |
|
(162 |
) | ||
| Other (income) expense, net |
|
10 |
|
|
(3 |
) | ||
| Loss before income taxes |
|
(1,830 |
) |
|
(1,155 |
) | ||
| Provision for income taxes |
|
102 |
|
|
153 |
| ||
| Net loss |
|
(1,932 |
) |
|
(1,308 |
) | ||
| Benefit from extinguishment of mandatorily redeemable preferred stock |
|
1,036 |
|
|
1,104 |
| ||
| Net loss applicable to common stockholders |
|
(896 |
) |
|
(204 |
) | ||
| Other comprehensive loss, net of tax: |
||||||||
| Foreign currency translation adjustments |
|
10 |
|
|
(9 |
) | ||
| Minimum pension adjustment |
|
(118 |
) |
|
— |
| ||
| Comprehensive loss |
$ |
(1,004 |
) |
$ |
(213 |
) | ||
| Basic and diluted loss per share : |
||||||||
| Loss per share |
$ |
(0.03 |
) |
$ |
(0.02 |
) | ||
| Loss per share applicable to common stockholders |
$ |
(0.01 |
) |
$ |
0.00 |
| ||
| Weighted average number of common shares outstanding |
|
63,416,917 |
|
|
61,658,165 |
| ||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
4
AMPEX CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
| For the Three Months Ended |
||||||||
| March 31, 2003 |
March 31, 2002 |
|||||||
| (unaudited) |
||||||||
| Cash flows from operating activities: |
||||||||
| Net loss |
$ |
(1,932 |
) |
$ |
(1,308 |
) | ||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
||||||||
| Depreciation, amortization and warrant accretion |
|
302 |
|
|
301 |
| ||
| Accretion of interest expense |
|
2,418 |
|
|
2,030 |
| ||
| Periodic pension cost |
|
118 |
|
|
— |
| ||
| Net loss on disposal of assets |
|
— |
||||||