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Contact: Karen L. Dexter
Director, Investor Relations
(650) 367-4111
AMPEX CORPORATION REPORTS
Q1 2007 FINANCIAL RESULTS
REDWOOD CITY, Calif., May 10, 2007 – Ampex Corporation (Nasdaq:AMPX) today reported net income of $2.5 million ($0.64 per diluted share) on revenues of $12.4 million in the first quarter of 2007 compared to a net loss of $1.9 million ($0.49 loss per diluted share) on revenues of $8.1 million in the first quarter of 2006.
Key factors affecting each quarter's financial results included:
- Licensing revenue totaled $4.7 million in the first quarter of 2007 compared to $2.6 million in the first quarter of 2006. Licensing revenue from running royalties recognized on current period shipments by our licensees totaled $2.8 million in the first quarter of 2007 compared to $2.6 million in the first quarter of 2006. In the first quarter of 2007, a camcorder manufacturer made a lump sum prepayment of license obligations covering future periods totaling $1.9 million, which was recognized in licensing revenue. There were no such prepayments in 2006.
- Litigation costs incurred in connection with the Kodak lawsuit declined significantly as expected to $0.3 million ($0.07 per diluted share) in the first three months of 2007 from $3.5 million ($0.91 per diluted share) in the first three months of 2006. On November 21, 2006, the District Court granted final judgment in favor of Kodak. We have appealed this decision to the Court of Appeals for the Federal Circuit. We have been advised that oral argument could occur later in 2007 and a final decision should be expected early next year.
- The Recorders segment earned operating income of $1.4 million ($0.37 per diluted share) in the first quarter of 2007 compared to $0.6 million ($0.17 per diluted share) in the comparable period in 2006. Total Recorders segment product and service revenues increased to $7.7 million in the first quarter of 2007 from $5.5 million in the first quarter of 2006, primarily due to increased sales of our solid state and disk-based instrumentation recorders. Backlog of orders totaled $4.1 million at March 31, 2007.
- In 2006, the Company received nonrecurring reimbursements of $1.5 million (shown as a reduction of 2006 selling and administrative expenses) and $0.8 million (shown in 2006 as other income), from non operating investment activities. There were no reimbursements or other income realized in 2007.
As a result of the foregoing, operating income (loss) for the Company's business segments and unallocated corporate expenses were as follows:
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For the three months ended March 31,
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2007
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2006
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(in millions)
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Licensing segment
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$3.9
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$(1.5)
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Recorders segment
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1.4
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0.6
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Unallocated corporate
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(1.9)
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(1.0)
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Operating income (loss)
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$3.4
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$(1.9)
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We continue to evaluate possible infringement of our other digital imaging patents that may be used or useful in digital still cameras, camera equipped cellular phones and other consumer imaging products. As previously announced, we intend to explore additional ways, including possible arrangements with independent patent research and evaluation companies and other third parties, to monetize our intellectual property.
As previously announced, the Company will host a conference call on Thursday, May 10, 2007 at 4:30 p.m. eastern time to discuss its first quarter 2007 financial results. To access the call, please call Genesys Conferencing at (866) 244-4576 by 4:20 p.m. and press 1081021 to enter the call. Parties interested in asking questions of management are requested to give the moderator their name and telephone contact information.
A replay of the conference call will be available on the Ampex website www.ampex.com, Investor Relations, "First Quarter 2007 Earnings Call", for approximately one week shortly after the call has been concluded.
Ampex Corporation, www.ampex.com, headquartered in Redwood City, California, is one of the world's leading innovators and licensors of technologies for the visual information age.
This news release contains predictions, projections and other statements about the future that are intended to be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of l995 (collectively, "forward-looking statements"). Forward-looking statements relate to various aspects of the Company's operations and strategies, including but not limited to the effects of having recently and in the past experienced losses and the risk that the Company may incur losses in the future; the Company's limited liquidity and significant indebtedness and interest expense, and the possible need to seek to refinance or renegotiate its outstanding indebtedness; its sales and royalty revenues declining in future periods, and the risk that the Company will not conclude additional royalty-bearing license agreements covering its digital technologies; the risk that the Company's efforts to further commercialize its intellectual property portfolio will not be successful; delays that might be experienced in the receipt of anticipated royalties from license agreements presently in effect; the Company's marketing, product development, acquisition, investment, licensing and other strategies not being successful; possible future issuances of debt or equity securities; the possible incurrence of significant patent litigation expenses or adverse legal determinations finding the Company's patents not be valid or not to have been infringed; new business development and industry trends; the possible need to raise additional capital or restructure its indebtedness in order to meet the Company's obligations; and the risk that it will not be able to do so; reliance on a former affiliate to make contributions to the Company's pension plans which are substantially underfunded and most other statements that are not historical in nature. Important factors that could cause actual results to differ materially from those described in the forward-looking statements are described in cautionary statements included in this news release and/or in the Company's 2006 Annual Report on Form 10-K filed with the SEC and its Quarterly Report on Form 10-Q for 2007 expected to be filed shortly. In assessing forward-looking statements, readers are urged to consider carefully these cautionary statements. Forward-looking statements speak only as of the date of this news release, and the Company disclaims any obligations to update such statements.
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