InFocus (r) Reports Fourth Quarter and Full Year Results
Fiscal 2000 Revenues Increase 29% and Earnings Increase 47% Over Fiscal 1999 Company also updates merger synergies and related one-time charge
Wilsonville, Ore., January 30, 2001 - InFocus Corporation (NASDAQ: INFS, OSE: IFC) today announced revenue and earnings that exceeded recently revised fourth quarter expectations. The Company reported fourth quarter revenues of $224.1M and earnings per share of $.29 before merger related expenses.
Fourth quarter revenues of $224.1M increased 16 percent from the $192.5M reported in the fourth quarter of 1999. Net income (before merger related expenses) in the fourth quarter of $11.8M decreased $5.8M or 33 percent compared to the fourth quarter of 1999 net income of $17.6M. Earnings per share (before merger related expenses) in the fourth quarter of $.29 decreased $.16 compared to the fourth quarter of 1999 earnings per share of $.45. Including merger related expenses of $1.0M, fourth quarter 2000 net income was $10.5M and earnings per share were $.26.
For fiscal year 2000 revenues increased 29 percent to $886.7 compared to 1999 revenues of $688.0M. Net income of $64.0M (before merger related expenses) in fiscal 2000 increased 47 percent over 1999 net income of $43.7M. Earnings per share in fiscal 2000 increased 41 percent to $1.58 per share (before merger related expenses) compared to 1999 earnings per share of $1.12. Reported earnings per share in fiscal 2000 of $1.58 (before merger related expenses) include one time license based fees and related gains. Excluding these fees and related gains, earnings per share from ongoing operations in FY 2000 (before merger related expenses) grew 30% to $1.46. Including merger related expenses of $15.0M, fiscal 2000 net income was $51.9M and earnings per share were $1.28.
"As previously announced, during December we experienced a slowing in demand for our products as weakening economic conditions impacted corporate capital spending," commented John V. Harker, President and CEO. "This slowdown was primarily isolated in the U.S., as revenues in Europe grew 32 percent and our Asia/Pacific revenues increased 37 percent compared to the fourth quarter of 1999. In addition, revenues and earnings were impacted by illumination component supply constraints for some of our newer, higher margin products."
Cash and marketable securities increased slightly in the fourth quarter to $98.6M compared to the third quarter of 2000. The positive cash flow in the fourth quarter was partially offset by an increase in inventory related to the fourth quarter product demand slowdown experienced within vendor lead times.
The company reiterated that its merger with Proxima ASA in fiscal 2000 would result in merger related synergies benefiting fiscal 2001 and future years. The company has been identifying and quantifying these synergies and related savings over the last few months. The following summarizes the synergies identified to this point and actions to be taken, all of which are included in the company's business outlook:
1. Product cost improvement should result from additional material cost reductions as the company has indicated previously. In addition, manufacturing process improvements between the two existing sites are underway, that should favorably impact production efficiencies and reduce future headcount requirements.
2. Faster product introductions and time to market should occur based on the combined, more focused, development resources of the merged company. As previously announced, the company plans to enter a new market, consumer home entertainment, late in the fiscal year. The size of the home entertainment market is estimated to be larger than the market the company currently addresses. Costs associated with this new effort are included in the company's forward-looking projections.
3. Additional savings should result from the consolidation of some duplicate activities existing in the merged companies. The company reported that a recently completed review of its global supply chain has identified some redundancies and consolidation opportunities in distribution, logistics and service operations, as well as opportunities to better balance manufacturing capacity loading in the U.S. and Norway. Direct and related actions associated with these changes should result in savings benefiting primarily gross margins in the range of $5M to $7M in fiscal 2001, with on-going annual savings estimated between $9M and $14M. The company believes these actions will also result in cash flow improvements relating to lower inventory requirements. The company plans to take a one-time merger related pre-tax charge in the first half of fiscal 2001 of approximately $8M to $12M related to these actions.
4. From a non-operational perspective, the company should also benefit from consolidated tax savings resulting from tax structuring efficiencies, resulting in a lower effective tax rate moving forward. The company estimates the effective tax rate will be 31 percent in fiscal 2001, down from the 33 percent reported in fiscal 2000 (before merger related expenses).
"In summary, given current market trends and economic conditions especially in the U.S., the company remains cautious with its guidance in the first half of fiscal 2001," Harker said. The company reiterated its current estimates for first quarter fiscal 2001 revenues in the range of $215M to $220M, and earnings per share (before merger related expenses) in the range of $.22 to $.25. "However, with some second half improvement in the U.S. economy, continued strength in Europe and Asia, planned new product flow in the fast growing mobile segment and cost reductions resulting from our merger synergy actions, we continue to believe fiscal 2001 revenues will grow approximately 20 percent and earnings per share from ongoing operations will grow approximately 25 percent," Harker concluded.
The company will hold a conference call today at 10:30 AM eastern time. The session will include brief remarks and a question and answer period. The conference can be accessed worldwide by calling 847/413-3238 (confirmation No. 3376787), or via live audio Webcast at www.vcall.com. A replay of the call will be available at 888/843-8996 (U.S.) or 630/652-3044 (outside U.S.) (confirmation No. 3376787) or at www.vcall.com
This press release includes forward-looking statements. 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. Forward-looking statements relate to anticipated revenues, gross margins, earnings, availability of components and subassemblies manufactured for the Company, backlog and new product introductions.
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 margins 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 and dependence on third party suppliers; 2) in regard to product vailability and backlog, uncertainties associated with manufacturing capabilities, availability of critical components and dependence on third party suppliers; and 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 and the establishment of full manufacturing capabilities, dependence on third party suppliers and intellectual property rights. Investors are directed to the Company's filings with the securities and Exchange Commission, including the Company's 1999 Form 10-K, 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.
InFocus Corporation (NASDAQ: INFS; OSE: IFC) is the worldwide leader in designing, manufacturing and marketing award-winning data/video projectors, technologies and services. The company provides its customers with the industry's most comprehensive line of data-video projection systems marketed under its three brands: InFocus, Proxima and ASK. Solutions range from three-pound class personal projectors, to feature-packed conference room projectors and super bright fixed installation systems. InFocus Corporation's global headquarters are located in Wilsonville, Oregon. For more information, visit the InFocus Corporation web site at www.infocus.com <http://www.infocus.com> or contact the company toll-free at (800) 294-6400 (U.S. only) or (503) 685-8888.
InFocus, Proxima, and ASK are registered trademarks and LP is a trademark of InFocus Corporation.