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, 2004
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 ¨
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 September 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.
FORM 10-Q
Quarter Ended September 30, 2004
INDEX
| Page | ||||
| PART I — FINANCIAL INFORMATION |
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| Item 1. |
Financial Statements |
|||
| Consolidated Balance Sheets (unaudited) at September 30, 2004 and December 31, 2003 |
3 | |||
| Consolidated Statements of Operations and Comprehensive Income (Loss) (unaudited) for the three and nine months ended September 30, 2004 and 2003 | 4 | |||
| 5 | ||||
| 6 | ||||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
20 | ||
| Item 3. |
38 | |||
| Item 4. |
38 | |||
| PART II — OTHER INFORMATION |
||||
| Item 1. |
38 | |||
| Item 2. |
39 | |||
| Item 3. |
40 | |||
| Item 4. |
40 | |||
| Item 5. |
40 | |||
| Item 6 |
40 | |||
| 41 | ||||
2
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
| September 30, 2004 |
December 31, 2003 |
|||||||
| (unaudited) | ||||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 5,451 | $ | 14,023 | ||||
| Short-term investments |
9,160 | — | ||||||
| Accounts receivable (net of allowances of $88 in 2004 and $137 in 2003) |
2,892 | 4,513 | ||||||
| Inventories |
6,184 | 6,343 | ||||||
| Other current assets |
4,052 | 4,366 | ||||||
| Total current assets |
27,739 | 29,245 | ||||||
| Property, plant and equipment |
4,333 | 4,825 | ||||||
| Other assets |
598 | 1,127 | ||||||
| Total assets |
$ | 32,670 | $ | 35,197 | ||||
| LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT |
||||||||
| Current liabilities: |
||||||||
| Notes payable |
$ | 132 | $ | 146 | ||||
| Accounts payable |
2,579 | 1,511 | ||||||
| Net liabilities of discontinued operations |
807 | 1,076 | ||||||
| Accrued restructuring costs |
631 | 1,300 | ||||||
| Other accrued liabilities |
11,890 | 23,956 | ||||||
| Total current liabilities |
16,039 | 27,989 | ||||||
| Long-term debt |
89,560 | 74,022 | ||||||
| Other liabilities |
63,618 | 63,802 | ||||||
| Accrued restructuring costs |
1,794 | 3,450 | ||||||
| Net liabilities of discontinued operations |
1,354 | 2,071 | ||||||
| Total liabilities |
172,365 | 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 |
454,468 | 454,394 | ||||||
| Accumulated deficit |
(523,581 | ) | (518,578 | ) | ||||
| Accumulated other comprehensive loss |
(70,618 | ) | (71,990 | ) | ||||
| Total stockholders’ deficit |
(139,695 | ) | (136,137 | ) | ||||
| Total liabilities, redeemable preferred stock and stockholders’ deficit |
$ | 32,670 | $ | 35,197 | ||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
3
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, |
|||||||||||||||
| 2004 |
2003 |
2004 |
2003 |
|||||||||||||
| (unaudited) | ||||||||||||||||
| Licensing revenue |
$ | 1,759 | $ | 1,744 | $ | 4,861 | $ | 7,702 | ||||||||
| Product revenue |
4,390 | 6,367 | 15,767 | 17,950 | ||||||||||||
| Service revenue |
2,173 | 2,065 | 6,496 | 7,049 | ||||||||||||
| Total revenue |
8,322 | 10,176 | 27,124 | 32,701 | ||||||||||||
| Intellectual property costs |
1,653 | 205 | 4,595 | 796 | ||||||||||||
| Cost of product sales |
3,069 | 3,848 | 9,955 | 10,712 | ||||||||||||
| Cost of service |
688 | 747 | 2,342 | 2,375 | ||||||||||||
| Research, development and engineering |
1,022 | 696 | 2,853 | 2,326 | ||||||||||||
| Selling and administrative |
3,326 | 2,848 | 9,160 | 9,095 | ||||||||||||
| Restructuring charges (credits) |
(1,410 | ) | — | (1,410 | ) | — | ||||||||||
| Total costs and operating expenses |
8,348 | 8,344 | 27,495 | 25,304 | ||||||||||||
| Operating income (loss) |
(26 | ) | 1,832 | (371 | ) | 7,397 | ||||||||||
| Interest expense |
2,534 | 2,215 | 7,312 | 6,716 | ||||||||||||
| Amortization of debt financing costs |
14 | 15 | 42 | 43 | ||||||||||||
| Interest income |
(30 | ) | (57 | ) | (88 | ) | (86 | ) | ||||||||
| Other (income) expense, net |
(385 | ) | 2 | (381 | ) | 35 | ||||||||||
| Income (loss) from continuing operations before income taxes and equity in income of limited partnership, including sale of investment |
(2,159 | ) | (343 | ) | (7,256 | ) | 689 | |||||||||
| Provision for (benefit of) income taxes |
— | (3,981 | ) | 248 | (3,306 | ) | ||||||||||
| Equity in income of limited partnership, including sale of investment |
(591 | ) | — | (2,149 | ) | — | ||||||||||
| Net income (loss) from continuing operations (Note 5) |
(1,568 | ) | 3,638 | (5,355 | ) | 3,995 | ||||||||||
| Income from discontinued operations (net of taxes of nil in 2004) |
352 | — | 352 | — | ||||||||||||
| Net income (loss) |
(1,216 | ) | 3,638 | (5,003 | ) | 3,995 | ||||||||||
| Benefit from extinguishment of mandatorily redeemable preferred stock |
974 | 3,041 | ||||||||||||||
| Preferred dividends ascribed, but not declared |
— | (451 | ) | — | (1,416 | ) | ||||||||||
| Undistributed net income (loss) applicable to common stockholders |
(1,216 | ) | 4,161 | (5,003 | ) | 5,620 | ||||||||||
| Other comprehensive income (loss), net of tax: |
||||||||||||||||
| Foreign currency translation adjustments |
2 | (67 | ) | 46 | (54 | ) | ||||||||||
| Comprehensive income (loss) |
$ | (1,214 | ) | $ | 4,094 | $ | (4,957 | ) | $ | 5,566 | ||||||
| Basic and diluted undistributed income (loss) per share (Note 5) : |
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| Undistributed income (loss) per share from continuing operations |
$ | (0.43 | ) | $ | 0.98 | $ | (1.46 | ) | $ | 0.80 | ||||||
| Income per share from discontinued operations |
$ | 0.10 | $ | — | $ | 0.10 | $ | — | ||||||||
| Undistributed income (loss) per share applicable to common stockholders |
$ | (0.33 | ) | $ | 1.28 | $ | (1.36 | ) | $ | 1.75 | ||||||
| Weighted average number of basic and diluted common shares outstanding |
3,642,517 | 3,260,733 | 3,667,572 | 3,207,382 | ||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
4