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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 September 30, 2002
 
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 September 30, 2002, the aggregate number of outstanding shares of our Class A Common Stock, $.01 par value, was 62,982,596. There were no outstanding shares of our Class C Common Stock, $0.01 par value.
 


Table of Contents
 
AMPEX CORPORATION
 
FORM 10-Q
Quarter Ended September 30, 2002
 
INDEX
 
         
Page

PART I— FINANCIAL INFORMATION
    
Item 1.
  
Financial Statements
    
       
3
       
4
       
5
       
6
Item 2.
     
15
Item 3.
     
29
Item 4.
     
29
PART II—OTHER INFORMATION
    
Item 1.
     
30
Item 2.
     
31
Item 3.
     
31
Item 4.
     
31
Item 5.
     
31
Item 6(a).
     
31
Item 6(b).
     
31
  
32
  
32
  
33

2


Table of Contents
 
AMPEX CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
 
    
September 30, 2002

    
December 31, 2001

 
    
(unaudited)
        
ASSETS
                 
Current assets:
                 
Cash and cash equivalents
  
$
7,105
 
  
$
8,015
 
Accounts receivable (net of allowances of $131 in 2002 and $153 in 2001)
  
 
4,609
 
  
 
6,002
 
Inventories
  
 
9,218
 
  
 
13,258
 
Other current assets
  
 
2,707
 
  
 
4,426
 
    


  


Total current assets
  
 
23,639
 
  
 
31,701
 
Property, plant and equipment
  
 
6,077
 
  
 
6,599
 
Other assets
  
 
783
 
  
 
873
 
    


  


Total assets
  
$
30,499
 
  
$
39,173
 
    


  


LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT
                 
Current liabilities:
                 
Notes payable
  
$
607
 
  
$
2,584
 
Accounts payable
  
 
1,885
 
  
 
3,665
 
Net liabilities of discontinued operations
  
 
1,034
 
  
 
1,383
 
Accrued restructuring costs
  
 
1,058
 
  
 
2,038
 
Other accrued liabilities
  
 
8,416
 
  
 
17,333
 
    


  


Total current liabilities
  
 
13,000
 
  
 
27,003
 
Long-term debt
  
 
66,113
 
  
 
58,790
 
Other liabilities
  
 
42,334
 
  
 
41,740
 
Deferred income taxes
  
 
1,213
 
  
 
1,213
 
Net liabilities of discontinued operations
  
 
3,098
 
  
 
3,874
 
    


  


Total liabilities
  
 
125,758
 
  
 
132,620
 
    


  


Commitments and contingencies (Note 8)
                 
Mandatorily redeemable nonconvertible preferred stock, $1,000 liquidation value:
                 
Authorized: 69,970 shares in 2002 and in 2001
                 
Issued and outstanding—none in 2002 and in 2001
  
 
—  
 
  
 
—  
 
Mandatorily redeemable preferred stock, $2,000 liquidation value:
                 
Authorized: 21,859 shares in 2002 and in 2001
                 
Issued and outstanding—13,414 shares in 2002; 15,025 in 2001
  
 
26,828
 
  
 
30,050
 
Convertible preferred stock, $2,000 liquidation value:
                 
Authorized: 10,000 shares in 2002 and in 2001
                 
Issued and outstanding—none in 2002; 51 shares in 2001
  
 
—  
 
  
 
102
 
Stockholders’ deficit:
                 
Preferred stock, $1.00 par value:
                 
Authorized: 898,171 shares in 2002 and in 2001
                 
Issued and outstanding—none in 2002 and in 2001
  
 
—  
 
  
 
—  
 
Common stock, $.01 par value:
                 
Class A:
                 
Authorized: 175,000,000 shares in 2002 and in 2001
                 
Issued and outstanding—62,982,596 shares in 2002; 61,652,996 in 2001
  
 
630
 
  
 
616
 
Class C:
                 
Authorized: 50,000,000 shares in 2002 and in 2001
                 
Issued and outstanding—none in 2002 and in 2001
  
 
—  
 
  
 
—  
 
Other additional capital
  
 
431,471
 
  
 
428,161
 
Notes receivable from stockholders
  
 
(4,642
)
  
 
(4,642
)
Accumulated deficit
  
 
(511,915
)
  
 
(510,023
)
Accumulated other comprehensive income
  
 
(37,631
)
  
 
(37,711
)
    


  


Total stockholders’ deficit
  
 
(122,087
)
  
 
(123,599
)
    


  


Total liabilities, redeemable preferred stock and stockholders’ deficit
  
$
30,499
 
  
$
39,173
 
    


  


 
The accompanying notes are an integral part of these unaudited consolidated financial statements.

3


Table of Contents
 
AMPEX CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(in thousands, except share and per share data)
 
    
For the Three Months Ended September 30,

    
For the Nine Months Ended September 30,

 
    
2002

    
2001

    
2002

    
2001

 
    
(unaudited)
 
Royalty income
  
$
891
 
  
$
2,088
 
  
$
3,416
 
  
$
6,605
 
Product revenue
  
 
8,110
 
  
 
7,500
 
  
 
24,885
 
  
 
25,454
 
    


  


  


  


Total revenue
  
 
9,001
 
  
 
9,588
 
  
 
28,301
 
  
 
32,059
 
    


  


  


  


Intellectual property costs
  
 
186
 
  
 
96
 
  
 
607
 
  
 
482
 
Cost of product sales
  
 
5,466
 
  
 
5,057
 
  
 
15,261
 
  
 
17,640
 
Research, development and engineering
  
 
648
 
  
 
1,181
 
  
 
1,968
 
  
 
4,655
 
Selling and administrative
  
 
2,926
 
  
 
2,935
 
  
 
7,887
 
  
 
10,680
 
Restructuring charges
  
 
—  
 
  
 
—  
 
  
 
—  
 
  
 
808
 
    


  


  


  


Total costs and operating expenses
  
 
9,226
 
  
 
9,269
 
  
 
25,723
 
  
 
34,265
 
    


  


  


  


Operating income (loss)
  
 
(225
)
  
 
319
 
  
 
2,578
 
  
 
(2,206
)
Interest expense
  
 
2,127
 
  
 
1,825
 
  
 
6,286
 
  
 
5,357
 
Amortization of debt financing costs
  
 
15
 
  
 
88
 
  
 
446
 
  
 
263
 
Interest income
  
 
(54
)
  
 
(22
)
  
 
(332
)
  
 
(260
)
Other (income) expense, net
  
 
2
 
  
 
122
 
  
 
194
 
  
 
(1
)
    


  


  


  


Loss from continuing operations before income taxes
  
 
(2,315
)
  
 
(1,694
)
  
 
(4,016
)
  
 
(7,565
)
Provision for (benefit of) income taxes
  
 
(2,402
)
  
 
210
 
  
 
(2,124
)
  
 
676
 
    


  


  


  


Income (loss) from continuing operations
  
 
87
 
  
 
(1,904
)
  
 
(1,892
)
  
 
(8,241
)
Loss on disposal of discontinued operations (net of taxes of none in 2001)
  
 
—  
 
  
 
—  
 
  
 
—  
 
  
 
(10,338
)
Loss from discontinued operations (net of taxes of none in 2001)
  
 
—  
 
  
 
—  
 
  
 
—  
 
  
 
(7,294
)
    


  


  


  


Net income (loss)
  
 
87
 
  
 
(1,904
)
  
 
(1,892
)
  
 
(25,873
)
Benefit from extinguishment of mandatorily redeemable preferred stock
  
 
1,039
 
  
 
1,716
 
  
 
3,162
 
  
 
4,053
 
    


  


  


  


Net income (loss) applicable to common stockholders
  
 
1,126
 
  
 
(188
)
  
 
1,270
 
  
 
(21,820
)
Other comprehensive income (loss), net of tax: