AMPEX CORP /DE/ - 10-Q Quarterly Report

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 June 30, 2004

¨	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 ¨

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of June 30, 2004, the aggregate number of outstanding shares of our Class A Common Stock, $.01 par value, was 3,642,517. There were no outstanding shares of our Class C Common Stock, $0.01 par value.

AMPEX CORPORATION

FORM 10-Q

Quarter Ended June 30, 2004

INDEX


		Page
PART I — FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Balance Sheets (unaudited) at June 30, 2004 and December 31, 2003	3

	Consolidated Statements of Operations and Comprehensive Income (Loss) (unaudited) for the three and six months ended June 30, 2004 and 2003	4

	Consolidated Statements of Cash Flows (unaudited) for the three and six months ended June 30, 2004 and 2003	5

	Notes to Unaudited Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	17

Item 3.	Quantitative and Qualitative Disclosure about Market Risk	31

Item 4.	Controls and Procedures	31

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	31

Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	33

Item 3.	Defaults Upon Senior Securities	33

Item 4.	Submission of Matters to a Vote of Security Holders	33

Item 5.	Other Information	33

Item 6(a).	Exhibits	33

Item 6(b).	Reports on Form 8-K	33

Signatures		35

AMPEX CORPORATION

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)


	June 30, 2004			December 31, 2003
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	6,907		$	14,023
Short-term investments		7,487			—
Accounts receivable (net of allowances of $116 in 2004 and $137 in 2003)		3,645			4,513
Inventories		6,594			6,343
Other current assets		2,396			4,366

Total current assets		27,029			29,245
Property, plant and equipment		4,500			4,825
Other assets		956			1,127

Total assets	$	32,485		$	35,197

LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Notes payable	$	137		$	146
Accounts payable		2,750			1,511
Net liabilities of discontinued operations		1,102			1,076
Accrued restructuring costs		1,300			1,300
Other accrued liabilities		16,866			23,956

Total current liabilities		22,155			27,989
Long-term debt		79,641			74,022
Other liabilities		65,253			63,802
Accrued restructuring costs		2,785			3,450
Net liabilities of discontinued operations		1,661			2,071

Total liabilities		171,495			171,334

Commitments and contingencies (Note 10)

Mandatorily redeemable nonconvertible preferred stock, $1,000 liquidation value:
Authorized: 69,970 shares in 2004 and in 2003 Issued and outstanding - none in 2004 and in 2003		—			—

Mandatorily redeemable preferred stock, $2,000 liquidation value:
Authorized: 21,859 shares in 2004 and in 2003 Issued and outstanding - none in 2004 and in 2003		—			—

Convertible preferred stock, $2,000 liquidation value:
Authorized: 10,000 shares in 2004 and in 2003 Issued and outstanding - none in 2004 and in 2003		—			—

Stockholders’ deficit:
Preferred stock, $1.00 par value:
Authorized: 898,171 shares in 2004 and in 2003 Issued and outstanding - none in 2004 and in 2003		—			—
Common stock, $.01 par value:
Class A:
Authorized: 175,000,000 shares in 2004 and in 2003 Issued and outstanding -3,642,517 shares in 2004; 3,728,017 in 2003		36			37
Class C:
Authorized: 50,000,000 shares in 2004 and in 2003 Issued and outstanding - none in 2004 and in 2003		—			—
Other additional capital		454,408			454,394
Accumulated deficit		(522,365	)		(518,578	)
Accumulated other comprehensive income		(71,089	)		(71,990	)

Total stockholders’ deficit		(139,010	)		(136,137	)

Total liabilities, redeemable preferred stock and stockholders’ deficit	$	32,485		$	35,197

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

AMPEX CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(in thousands, except share and per share data)


	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2004			2003			2004			2003
	(unaudited)
Licensing revenue	$	1,441		$	5,572		$	3,102		$	5,958
Product revenue		5,367			5,927			11,377			11,583
Service revenue		2,105			2,396			4,323			4,984

Total revenue		8,913			13,895			18,802			22,525

Intellectual property costs		2,139			346			2,942			591
Cost of product sales and service		4,497			4,276			8,540			8,492
Research, development and engineering		942			945			1,831			1,630
Selling and administrative		3,053			3,165			5,834			6,247

Total costs and operating expenses		10,631			8,732			19,147			16,960

Operating income (loss)		(1,718	)		5,163			(345	)		5,565

Interest expense		2,419			2,280			4,778			4,501
Amortization of debt financing costs		14			14			28			28
Interest income		(33	)		(16	)		(58	)		(29	)
Other (income) expense, net		(2	)		23			4			33

Income (loss) before income taxes and equity in net gain of limited partnership		(4,116	)		2,862			(5,097	)		1,032

Provision for income taxes		81			573			248			675
Equity in net gain of limited partnership		(338	)		—			(1,558	)		—

Net income (loss)		(3,859	)		2,289			(3,787	)		357

Benefit from extinguishment of mandatorily redeemable preferred stock		—			1,031			—			2,067

Net income (loss) applicable to common stockholders		(3,859	)		3,320			(3,787	)		2,424

Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		46			3			44			13

Comprehensive income (loss)	$	(3,813	)	$	3,323		$	(3,743	)	$	2,437

Basic and diluted income (loss) per share :
Income (loss) per share	$	(1.06	)	$	0.57		$	(1.03	)	$	0.00
Income (loss) per share applicable to common stockholders	$	(1.06	)	$	0.89		$	(1.03	)	$	0.46

Weighted average number of basic and diluted common shares outstanding		3,642,517			3,195,127			3,680,099			3,182,986

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

AMPEX CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


	For the Six Months Ended
	June 30, 2004			June 30, 2003
	(unaudited)
Cash flows from operating activities:
Net income (loss)	$	(3,787	)	$	357
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation, amortization and warrant accretion		408			576
Accretion of interest expense		4,628			4,351
Equity in net gain of limited partnership		(1,558	)		—
Periodic pension cost		945			234
Net loss on disposal of assets		2			—
Changes in operating assets and liabilities:
Accounts receivable		836			(1,116	)
Inventories		(251	)		698
Other assets		3,671			(2,676	)

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