-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, K7IS28NnIfFJdlhzW4Rw5gn/09uHPgRytdF1ioaO7fZLDkzHQyf737oW1bQ4W+Kt gvUsZg4kBdOxlz3/SYPyfg== 0001157523-03-007360.txt : 20031216 0001157523-03-007360.hdr.sgml : 20031216 20031216164216 ACCESSION NUMBER: 0001157523-03-007360 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031216 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20031216 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORSTAN INC CENTRAL INDEX KEY: 0000072418 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-TELEPHONE INTERCONNECT SYSTEMS [7385] IRS NUMBER: 410835746 STATE OF INCORPORATION: MN FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-08141 FILM NUMBER: 031057783 BUSINESS ADDRESS: STREET 1: 5101 SHADY OAK ROAD CITY: MINNETONKA STATE: MN ZIP: 55343 BUSINESS PHONE: 6123524000 MAIL ADDRESS: STREET 1: NORSTAN INC STREET 2: 6900 WEDGEWOOD ROAD CITY: MAPLE GROVE STATE: MN ZIP: 55311 FORMER COMPANY: FORMER CONFORMED NAME: NORSTAN RESEARCH & DEVELOPMENT CO DATE OF NAME CHANGE: 19770926 FORMER COMPANY: FORMER CONFORMED NAME: NORSTAN MANUFACTURING CO INC DATE OF NAME CHANGE: 19750918 8-K 1 a4536007.txt NORTSTAN, INC. 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): December 16, 2003 Norstan, Inc. ------------- (Exact name of registrant as specified in its charter) Minnesota 0-8141 41-0835746 --------- ------ ---------- (State or other jurisdiction of (Commission (IRS Employer incorporation) File Number) Identification No.) 5101 Shady Oak Road Minnetonka, Minnesota 55343 --------------------- ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (972) 352-4000 Item 7. Financial Statements, Schedules and Exhibits - ------- -------------------------------------------- (a) and (b) not applicable (c) Exhibits: Exhibit No. Description --- ----------- 99 News release issued by Norstan, Inc. on December 16, 2003 Item 12. Results of Operations and Financial Condition - -------- --------------------------------------------- On December 16, 2003, Norstan, Inc. issued a news release reporting results of operations for the second quarter of its fiscal year 2004. A copy of the news release is furnished as Exhibit 99 and incorporated by reference herein. 2 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. NORSTAN, INC. By: /s/ Scott G. Christian ------------------------ Scott G. Christian Executive Vice President and Chief Financial Officer Dated: December 16, 2003 3 Exhibit Number Description - ------- ----------- 99 Press release dated September 16, 2003 issued by Norstan, Inc. 4 EX-99 3 a4536007ex99.txt NORSTAN, INC. PRESS RELEASE Exhibit 99 Norstan Reports Second Quarter Fiscal 2004 Results; Company Reports Stable Revenue, Improving Gross Margin Sequentially MINNEAPOLIS--(BUSINESS WIRE)--Dec. 16, 2003--Norstan, Inc. (Nasdaq:NRRD), a leading provider of communications technology solutions and services, today reported revenues of $56.4 million for the second quarter ended November 1, 2003, relatively flat as compared to the $56.9 million reported in the first quarter of the same fiscal year. Gross margins of 29.4% improved from the 28.1% reported one quarter ago. The company reported a second quarter net loss of $3.4 million, or $0.26 per share, versus a reported first quarter loss of $1.9 million, or $0.15 per share. During the second fiscal quarter of 2004, Norstan recorded restructuring and other charges of $4.2 million consisting of a restructuring charge of $3.7 million and a write-off of certain fixed assets in the amount of $500,000. Excluding the restructuring and other charges, operating results improved by $2.0 million as compared to results reported last fiscal quarter. This improvement is the result of the workforce reduction, which will have a more significant bottom line impact in the third and fourth quarters of fiscal 2004. "While other sectors of the economy have shown some signs of improvement, the telecommunications industry continues to experience a difficult business environment," said James C. "Jim" Granger, CEO and President of Norstan. "We're nonetheless heartened by the fact that our revenues on a sequential basis remained relatively flat and our gross margins improved, however, we will continue to monitor our costs going forward and take appropriate actions as required to improve our profitability." New Bank Agreement Subsequent to the quarter end, Norstan entered a new five-year $27.5 million bank agreement with Wells Fargo Foothill, Inc. consisting of a $5.0 million revolving line of credit and a $22.5 million term loan (see news release dated December 11, 2003). Year-Over-Year Comparison Second quarter fiscal 2004 revenues declined approximately one percent from $57.1 million reported in the same period last year. Gross margin was down from the 31.5% reported in the second quarter of fiscal 2003, the continuing result of changes in product mix. Including $4.2 million in restructuring and other charges, operating results declined from the operating income of $1.2 million reported in the second quarter of fiscal 2003. Second quarter net losses increased from the net income of $584,000 in the same period last fiscal year. 2004 Year-To-Date Results For the six-month period ending November 1, 2003, Norstan recorded revenues of $113.3 million, an increase of 3.8% from the same six-month period of fiscal 2003. Gross margin of 28.7% declined from the 31.6% in the comparable period of fiscal 2003. Including the restructuring and other charges of $4.2 million incurred in the second quarter of fiscal 2004, Norstan reported operating losses of $7.9 million as compared to operating income of $1.9 million reported for the prior year's six-month period. Net loss from continuing operations totaled $5.4 million, or $0.42 per share, as compared to net income from continuing operations of $473,000, or $0.03 per share, in the comparable period of fiscal 2003. For the six-month period, net losses totaled $5.3 million, or $0.41 per share, versus net income of $2.8 million, or $0.21 per share, reported in fiscal 2003. During fiscal 2003, Norstan reported a $2.3 million net gain on the disposal of discontinued operations. Excluding the second quarter fiscal 2004 restructuring and other charges, net loss from continuing operations for the six-month period of fiscal 2004 totaled $2.9 million, or $0.22 per share. Conference Call and Webcast Norstan will discuss its second quarter fiscal 2004 results on a conference call scheduled today, December 16, at 5 p.m. Eastern time. The conference call can be accessed toll-free by callers at (888) 443-9986 or on the Internet at www.norstan.com. Starting today at approximately 7:00 p.m. Eastern time, the replay of the call can be accessed toll-free until midnight, December 23, by dialing (800) 642-1687 (conference ID number is 3921210) or on the Internet at www.norstan.com. Cautionary Statement Under the Private Securities Litigation Reform Act of 1995 This release contains forward-looking statements within the meaning of the Private Securities Litigation Acts of 1995. A number of factors should be considered in conjunction with the above forward-looking statements, including changes in economic and market conditions, factors related to the development of new technologies, product pricing, industry regulation, management of growth, integration of acquisitions, access to adequate long-term financing and other factors set forth in cautionary statements included in Norstan's Form 10-K and other documents as filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on forward-looking statements, which reflect management's analysis only as of the date of this release. The company undertakes no obligation to update these forward-looking statements to reflect events and circumstances that may arise after the date of this release. Disclosure of revenue dollars are not intended to reflect materiality, and are subject to confidentiality provisions and customer consent. About Norstan, Inc. Norstan, Inc. (Nasdaq:NRRD) - ...the technology services people who improve the way their customers communicate. A full-service telecommunications solutions company that delivers voice and data technologies and services, and remanufactured equipment to select corporate end-users and channel partners. Norstan also offers a full range of technologies for call center design, messaging, infrastructure, conferencing and mobility. Norstan has offices throughout North America. To learn more, visit the Norstan website at www.norstan.com. Norstan and associated product names are trademarks or registered trademarks of Norstan, Inc. in the United States and/or other countries. All other products and services mentioned in this document may be trademarks of the companies with which they are associated. NORSTAN, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) For the Quarter For the Six Ended Months Ended ----------------- ----------------- Nov. 1, Oct. 26, Nov. 1, Oct. 26, 2003 2002 2003 2002 -------- -------- -------- -------- Revenues Communications Technology Solutions and Services $48,167 $48,732 $97,221 $92,559 Resale Services 7,898 7,429 15,164 14,828 Financial Services 381 916 945 1,773 -------- -------- -------- -------- Total revenues 56,446 57,077 113,330 109,160 -------- -------- -------- -------- Cost of sales 39,826 39,081 80,744 74,656 -------- -------- -------- -------- Gross margin Communications Technology Solutions and Services 13,179 14,328 26,092 27,568 Resale Services 2,926 2,807 5,334 5,312 Financial Services 515 861 1,160 1,624 -------- -------- -------- -------- Total gross margin 16,620 17,996 32,586 34,504 -------- -------- -------- -------- Selling, general, and administrative expenses 17,469 16,816 36,316 32,555 Restructuring and other charges 4,180 - 4,180 - -------- -------- -------- -------- Operating income (loss) (5,029) 1,180 (7,910) 1,949 Interest expense (553) (487) (1,001) (1,179) Other income (expense), net 18 (1) 24 (7) -------- -------- -------- -------- Net income (loss) from continuing operations before taxes (5,564) 692 (8,887) 763 Income tax provision (benefit) (2,169) 263 (3,466) 290 -------- -------- -------- -------- Net income (loss) from continuing operations (3,395) 429 (5,421) 473 Discontinued operations (net of tax): Income from operations of discontinued operations - - - 20 Gain (loss) from disposal of discontinued operations (5) 155 150 2,284 -------- -------- -------- -------- Net income (loss) $(3,400) $584 $(5,271) $2,777 ======== ======== ======== ======== Net income (loss) per share - Continuing operations $(0.26) $0.03 $(0.42) $0.03 Net income (loss) per share - Discontinued operations (0.00) 0.01 0.01 0.18 -------- -------- -------- -------- Net income (loss) per share $(0.26) $0.04 $(0.41) $0.21 ======== ======== ======== ======== Weighted average shares outstanding 12,984 12,817 12,939 12,966 ======== ======== ======== ======== NORSTAN, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In Thousands, Except Share Amounts) Nov. 1, April 30, 2003 2003 --------- --------- ASSETS ------ CURRENT ASSETS Cash $1,693 $1,185 Accounts receivable, net 32,090 33,523 Current lease receivables 5,867 6,846 Inventories 8,255 7,248 Costs and estimated earnings in excess of billings 5,161 5,746 Prepaid expenses, deposits and other 5,723 5,216 --------- --------- Total current assets 58,789 59,764 --------- --------- PROPERTY AND EQUIPMENT Furniture, fixtures and equipment 92,751 89,988 Less accumulated depreciation and amortization (76,388) (72,304) --------- --------- Net property and equipment 16,363 17,684 --------- --------- OTHER ASSETS Lease receivables, net 2,782 5,503 Deferred income taxes 16,356 12,564 Net non-current assets of discontinued operations 623 693 Goodwill 4,524 4,379 Intangible and other assets 2,438 2,735 --------- --------- Total other assets 26,723 25,874 --------- --------- $101,875 $103,322 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ CURRENT LIABILITIES Current maturities of long-term debt $3,403 $1,641 Current maturities of discounted lease rentals 3,835 4,897 Accounts payable 17,147 14,465 Deferred revenue 19,589 21,521 Accrued liabilities 11,001 11,031 Net current liabilities of discontinued operations 63 150 Billings in excess of costs and estimated earnings 7,738 6,827 --------- --------- Total current liabilities 62,776 60,532 --------- --------- LONG-TERM DEBT, NET 18,100 15,600 DISCOUNTED LEASE RENTALS, NET 1,822 3,600 --------- --------- Total liabilities 82,698 79,732 --------- --------- SHAREHOLDERS' EQUITY Common stock - $0.10 par value: 40,000,000 authorized shares: 13,092,612 and 12,784,122 shares issued and outstanding 1,309 1,278 Capital in excess of par value 57,613 56,891 Accumulated deficit (37,791) (32,520) Unamortized cost of stock (97) (134) Accumulated other comprehensive loss (1,857) (1,925) --------- --------- Total shareholders' equity 19,177 23,590 --------- --------- $101,875 $103,322 ========= ========= Norstan, Inc. and Subsidiaries Reconciliation of Non-GAAP Financial Measures (In Thousands) Operating loss - before restructuring and other charges - ------------------------------------------------------- For the For the Quarter Quarter Ended Ended -------- -------- Nov. 1, Aug. 2, 2003 2003 -------- -------- Operating loss - before restructuring and other charges $(849) $(2,881) Restructuring and other charges (4,180) - -------- -------- Operating loss $(5,029) $(2,881) ======== ======== Net loss from continuing operations - before restructuring and other charges - ---------------------------------------------------------------------- For the For the Six Quarter Months Ended Ended -------- -------- Nov. 1, Nov. 1, 2003 2003 -------- -------- Net loss from continuing $(845) $(2,871) operations - before restructuring and other charges Restructuring and other charges (4,180) (4,180) Change in income tax (provision) benefit 1,630 1,630 -------- -------- Net loss from continuing operations $(3,395) $(5,421) ======== ======== Earnings before interest, taxes, depreciation and amortization - continuing operations - ---------------------------------------------------------------------- For the For the Quarter Ended Six Months Ended ----------------- ----------------- Nov. 1, Oct. 26, Nov. 1, Oct. 26, 2003 2002 2003 2002 -------- -------- -------- -------- EBITDA - continuing operations $(2,803) $3,676 $(3,495) $7,008 Interest expense (553) (487) (1,001) (1,179) Income tax (provision) benefit 2,169 (263) 3,466 (290) Depreciation and amortization (2,208) (2,497) (4,391) (5,066) -------- -------- -------- -------- Net income (loss) - continuing operations $(3,395) $429 $(5,421) $473 ======== ======== ======== ======== CONTACT: Norstan, Inc., Minneapolis Jan W. Drymon, 952-352-4292 jan.drymon@norstan.com or The Carideo Group Tony Carideo, 612-317-2880 tony@carideogroup.com -----END PRIVACY-ENHANCED MESSAGE-----