EX-99.1 2 a07-27809_1ex99d1.htm PRESS RELEASE

EXHIBIT 99.1

 

Investor Relations Contacts:

Public Relations Contacts:

Mark Perry

Martin Flynn

Chief Financial Officer

InFocus Corporation

InFocus Corporation

(503) 685-8112

(503) 685-8960

 

 

InFocus Announces Third Quarter 2007 Financial Results

Reports third consecutive quarter of improved operating performance

 

WILSONVILLE, Ore., October 30, 2007 – InFocus® Corporation (NASDAQ: INFS) today announced its third quarter 2007 financial results. On a GAAP basis, the Company reported revenue of $75.8 million and a net loss of $2.8 million, or $0.07 per share, compared to a net loss of $7.8 million, or $0.20 per share, for the second quarter of 2007 and a net loss of $19.4 million, or $0.49 per share for the third quarter of 2006.

 

Commenting on the third quarter results, Bob O’Malley, President and CEO stated, “We continued to make measurable progress in improving our operating performance during the third quarter. We increased revenue by 2.9 percent and improved gross margin by 1.9 percent over our second quarter performance. These improvements, coupled with continued focus on improving our cost structure, allowed us to reduce our proforma operating loss by nearly 46 percent from Q2 levels, and 69 percent from Q3 of 2006. Our performance in Q3 marks the third consecutive quarter of increased gross margin, lowered operating expenses and reduced operating losses. While we have not yet reached our goal of profitability, I am proud of the continued progress we have made throughout 2007”

 

Included in the third quarter 2007 results is a restructuring charge of $0.25 million, which accounted for $0.01 per share. Restructuring charges in the second quarter 2007 were $ 2.1 million or $0.05 per share and $.85 million or $0.02 per share in the third quarter of 2006.

 

The Company reported total cash, restricted cash, and marketable securities as of September 30, 2007 of $72.7 million, an increase of $5.4 million from Q3 2006 and a decrease of $3.5 from the end of 2006. There were no outstanding borrowings under our line of credit, which was extended to February 28, 2008 during the quarter.

 

Quarterly Revenue, Unit, ASP and Gross Profit Comparisons

 

Third quarter revenues of $75.8 million were up 2.9 percent compared with second quarter revenues and down 6.7 percent from revenues in the third quarter of 2006. Projector unit shipments totaled approximately 85,000 units in the third quarter, an increase of approximately 18 percent from the prior quarter and approximately 15 percent compared to the third quarter of 2006. Average Selling Prices (ASPs) during the quarter decreased by approximately 12 percent. Although ASPs declined, overall gross margin increased by 1.9 percent due to improved product mix and lower costs associated with warranty repair operations. These changes resulted in gross margin of 18.2 percent in Q3, up from Q2 levels of 16.3 percent.

 

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Regionally, Americas revenue increased 2 percent while units shipped increased 18 percent from the second quarter of 2007. Revenue and unit shipments in Europe increased by 3 percent and 17 percent, respectively. Asian revenues increased 7 percent compared to the second quarter of 2007 while units increased 20 percent from the second quarter.

 

Operating Expenses Comparison Excluding Charges

 

Operating expenses, exclusive of charges, were $17.1 million in the third quarter, an improvement of $1.0 million from the second quarter. The reduction is the result of the Company’s continued efforts to align its cost structure with expected business levels and return to profitability.

 

Other income for the third quarter was $0.8 million compared to other income of $0.3 million in the second quarter and other expense of $2.4 million in the third quarter of 2006.

 

Balance Sheet

 

Total cash, restricted cash, and marketable securities as of September 30, 2007 were $72.7 million, with no outstanding borrowings, an increase of $5.4 million from June 30, 1997. Day’s sales outstanding in Accounts Receivable for the third quarter were 59 days, an increase of 2 days from the prior quarter. Inventory levels decreased $4.7 million during the quarter to $28.5 million reflecting the Company’s continued emphasis on improved supply chain management.

 

In closing, Mr. O’Malley commented, “I am pleased with the progress the Company demonstrated in the third quarter. I am proud of the steps that the Management team has put in place to achieve these results and of our employees, who have continued to deliver improved results over the past three quarters. We will continue to focus on improving our operating performance in Q4 and into 2008.”

 

Reconciliation of GAAP and Pro Forma Information

 

The Company has recorded charges that are excluded from operating expenses and earnings for comparative purposes. In accordance with SEC FR-59, attached is a Statement of Reconciliation of GAAP Earnings.

 

Conference Call Information

 

The Company will hold a conference call today at 11:00 a.m. eastern time. The session will include brief remarks and a question and answer period. The conference can be accessed by calling (866) 904-2211 (U.S. participants) or (706) 634-4707 (outside U.S. participants) and Pin # 21076692, or via live audio Web cast at www.infocus.com. Upon completion of the call, the Web cast will be archived and accessible on our website for individuals unable to listen to the live telecast. The conference call replay will also be available through November 9, 2007 by dialing (800) 642-1687 (U.S.) or (706) 645-9291 (outside U.S.) and Pin # 21076692.

 

Forward-Looking Statements

 

This press release includes forward-looking statements, including statements related to anticipated revenues, gross profits, expenses, earnings, availability of components and

 

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projectors manufactured for the Company, inventory, backlog, and new product introductions. Investors are cautioned that all forward-looking statements involve risks and uncertainties and several factors could cause actual results to differ materially from those in the forward-looking statements. The following factors, among others, could cause actual results to differ from those indicated in the forward-looking statements: 1) in regard to revenues, gross profits, inventory and earnings, uncertainties associated with market acceptance of and demand for the Company’s products, the impact competitive and economic factors have on business buying decisions, dependence on third party suppliers, the impact of regulatory actions by authorities in the markets we serve; 2) in regard to product availability and backlog, uncertainties associated with manufacturing capabilities, uncertainties associated with working with contract manufacturing partners, availability of critical components, and dependence on third party suppliers; 3) in regard to new product introductions, ability of the Company to make timely delivery of new platforms, uncertainties associated with the development of technology, uncertainties with product quality and availability with the reliance on off-shore contract manufacturing, dependence on third party suppliers and intellectual property rights; and 4) in regard to the Company’s further restructuring actions, uncertainties associated with the timing and impact of further cost reductions and ability to grow revenues and gross profits. Investors are directed to the Company’s filings with the Securities and Exchange Commission, including the Company’s 2006 Form 10-K and 2007 Form 10-Qs, which are available from the Company without charge, for a more complete description of the risks and uncertainties relating to forward-looking statements made by the Company as well as to other aspects of the Company’s business. The forward-looking statements contained in this press release speak only as of the date on which they are made and the Company does not undertake any obligation to update any forward looking statements to reflect events or circumstances after the date of this press release.

 

About InFocus Corporation

 

InFocus® Corporation (NASDAQ: INFS) is the industry pioneer and a leader in the digital projection market. Over twenty years of experience and engineering breakthroughs provide continuous improvements in what you see in the marketplace, and deliver immersive audio visual impact in business, education and home environments. We make the presentation of ideas, information, and entertainment a vivid, unforgettable experience, and believe our product contributions set the standard for what a big picture experience should be like. For more information, visit us at www.infocus.com or call us toll-free at 800.294.6400 (U.S. and Canada).

 

InFocus Corporation’s global headquarters are located in Wilsonville, Oregon, USA, with regional offices in Europe and Asia. For more information, visit the InFocus Corporation web site at www.infocus.com or contact the Company toll-free at 800.294.6400 (U.S. and Canada) or 503.685.8888 worldwide.

 

###

InFocus, IN, ASK, Proxima, LiteShow, LP, ScreenPlay, Play Big, Work Big, Learn Big
and The Big Picture are either registered trademarks or trademarks of InFocus
Corporation in the U.S. and abroad.

 

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InFocus Corporation

Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

 

 

 

Three months ended September 30,

 

Nine months ended September 30,

 

 

 

2007

 

2006

 

2007

 

2006

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

75,790

 

$

81,231

 

$

227,078

 

$

290,892

 

Cost of revenues

 

62,026

 

70,900

 

192,850

 

249,137

 

Gross margin

 

$

13,764

 

$

10,331

 

$

34,228

 

$

41,755

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Marketing and sales

 

$

8,424

 

$

12,116

 

$

27,510

 

$

39,552

 

Research and development

 

3,367

 

3,826

 

11,333

 

13,150

 

General and administrative

 

5,305

 

5,198

 

15,613

 

16,901

 

Regulatory assessments

 

—

 

5,086

 

—

 

5,086

 

Restructuring costs

 

225

 

850

 

4,675

 

2,775

 

 

 

$

17,321

 

$

27,076

 

$

59,131

 

$

77,464

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

$

(3,557

)

$

(16,745

)

$

(24,903

)

$

(35,709

)

 

 

 

 

 

 

 

 

 

 

Other income (expense), net

 

764

 

(2,387

)

1,422

 

(12,161

)

Loss before income taxes

 

(2,793

)

(19,132

)

(23,481

)

(47,870

)

Provision for income taxes

 

27

 

274

 

174

 

724

 

Net Loss

 

$

(2,820

)

$

(19,406

)

$

(23,655

)

$

(48,594

)

 

 

 

 

 

 

 

 

 

 

Basic and fully diluted net loss per share

 

$

(0.07

)

$

(0.49

)

$

(0.60

)

$

(1.23

)

 

 

 

 

 

 

 

 

 

 

Basic and fully diluted shares outstanding

 

39,786

 

39,659

 

39,682

 

39,644

 

 

4


 

InFocus Corporation

Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

 

 

September 30,

 

December 31,

 

 

 

2007

 

2006

 

 

 

 

 

 

 

Assets

 

 

 

 

 

Current Assets:

 

 

 

 

 

Cash and cash equivalents

 

$

49,782

 

$

53,716

 

Marketable securities

 

52

 

104

 

Restricted cash, cash equivalents, and marketable securities

 

22,875

 

22,413

 

Accounts receivable, net of allowances

 

49,968

 

50,060

 

Inventories

 

28,526

 

40,107

 

Other current assets

 

10,661

 

10,706

 

Total Current Assets

 

161,864

 

177,106

 

 

 

 

 

 

 

Property and equipment, net

 

3,116

 

3,961

 

Other assets, net

 

918

 

1,189

 

Total Assets

 

$

165,898

 

$

182,256

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

Accounts payable

 

$

59,436

 

$

52,046

 

Other current liabilities

 

19,132

 

26,800

 

Total Current Liabilities

 

78,568

 

78,846

 

 

 

 

 

 

 

Other Long-Term Liabilities

 

4,062

 

3,147

 

 

 

 

 

 

 

Shareholders’ Equity:

 

 

 

 

 

Common stock and additional paid-in capital

 

168,728

 

167,465

 

Other comprehensive income:

 

 

 

 

 

Foreign currency translation

 

36,111

 

30,662

 

Unrealized loss on equity securities

 

(72

)

(20

)

Accumulated deficit

 

(121,499

)

(97,844

)

 

 

 

 

 

 

Total Shareholders’ Equity

 

83,268

 

100,263

 

 

 

 

 

 

 

Total Liabilities and Shareholders’ Equity

 

$

165,898

 

$

182,256

 

 

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InFocus Corporation

Reconciliation of GAAP Earnings

(In thousands, except per share amounts)

(Unaudited)

 

 

 

Third Quarter 2007

 

Second Quarter 2007

 

 

 

Net Loss

 

Net Loss
Per Share

 

Operating
Expenses

 

Loss from
Operations

 

Net Loss

 

Net Loss Per
Share

 

Operating
Expenses

 

Loss from
Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP

 

$

(2,820

)

$

(0.07

)

$

17,321

 

$

(3,557

)

$

(7,788

)

$

(0.20

)

$

20,167

 

$

(8,183

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring charges

 

$

225

 

$

—

 

$

(225

)

$

225

 

$

2,050

 

$

0.06

 

$

(2,050

)

$

2,050

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proforma excluding adjustments

 

$

(2,595

)

$

(0.07

)

$

17,096

 

$

(3,332

)

$

(5,738

)

$

(0.14

)

$

18,117

 

$

(6,133

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Third Quarter 2007

 

Third Quarter 2006

 

 

 

Net Loss

 

Net Loss
Per Share

 

Operating
Expenses

 

Loss from
Operations

 

Net Loss

 

Net Loss Per
Share

 

Operating
Expenses

 

Loss from
Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP

 

$

(2,820

)

$

(0.07

)

$

17,321

 

$

(3,557

)

$

(19,406

)

$

(0.49

)

$

27,076

 

$

(16,745

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring charges

 

$

225

 

$

—

 

$

(225

)

$

225

 

$

850

 

$

0.02

 

$

(850

)

$

850

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Regulatory assessments

 

$

—

 

$

—

 

$

—

 

$

—

 

$

5,086

 

$

0.13

 

$

(5,086

)

$

5,086

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proforma excluding adjustments

 

$

(2,595

)

$

(0.07

)

$

17,096

 

$

(3,332

)

$

(13,470

)

$

(0.34

)

$

21,140

 

$

(10,809

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year-to-Date 2007

 

Year-to-Date 2006

 

 

 

Net Loss

 

Net Loss
Per Share

 

Operating
Expenses

 

Loss from
Operations

 

Net Loss

 

Net Loss Per
Share

 

Operating
Expenses

 

Loss from
Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP

 

$

(23,655

)

$

(0.60

)

$

59,131

 

$

(24,903

)

$

(48,594

)

$

(1.23

)

$

77,464

 

$

(35,709

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring charges

 

$

4,675

 

$

0.12

 

$

(4,675

)

$

4,675

 

$

2,775

 

$

0.07

 

$

(2,775

)

$

2,775

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Regulatory assessments

 

$

—

 

$

—

 

$

—

 

$

—

 

$

5,086

 

$

0.13

 

$

(5,086

)

$

5,086

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proforma excluding adjustments

 

$

(18,980

)

$

(0.48

)

$

54,456

 

(20,228

)

$

(40,733

)

$

(1.03

)

$

69,603

 

$

(27,848

)

 

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