InFocus� Corporation (NASDAQ:INFS) today announced its fourth
quarter and full year 2008 financial results. For the fourth
quarter, the Company reported revenues of $51.4 million and a net
loss of $13.1 million, or $0.32 per share, compared to revenues of
$70.6 million and a net loss of $4.2 million, or $0.10 per share,
in the third quarter of 2008 and revenues of $81.1 million and a
net loss of $1.9 million, or $0.05 per share, in the fourth quarter
of 2007. For the year, the Company reported revenues of $255.7
million and a net loss of $23.0 million, or $0.57 per share
compared to revenues of $308.2 million and a net loss of $25.6
million, or $0.64 per share for calendar year 2007.
Included in the fourth quarter 2008 results are restructuring
charges of $4.2 million and an impairment charge of $2.6 million.
The restructuring charge consisted primarily of estimated employee
termination costs and lease losses of vacated and unutilized
facilities and accounted for $0.10 of the net loss per share. The
impairment charge related to the carrying value of the Company�s
long-lived assets and accounted for $0.07 of the net loss per
share. Excluding these charges, proforma Operating Loss for the
fourth quarter was $5.3 million.
Commenting on the results, Bob O�Malley, InFocus� President and
CEO stated, �The fourth quarter concluded what was a very
challenging year for InFocus. We entered the quarter with cautious
optimism and new products in the pipeline, ready for sale. However,
we realized mid-quarter that the continued economic downturn and
global reduction in IT spending would require us to re-evaluate our
near term priorities and take measures to dramatically reduce our
cost structure. On December 15, we announced a significant business
restructuring aimed at reducing our breakeven point and preserving
cash.�
�Our restructuring activities are designed to transform our
business and lower our breakeven point to $50-55 million in revenue
per quarter and allow us to achieve profitable operations with
gross margins of 18% and operating expenses ranging from $10-11
million per quarter,� O�Malley added.
In addition to the announced restructuring activities, on
December 10, the Company disclosed the engagement of Thomas Weisel
Partners to provide InFocus with advisory services, including
advice related to unsolicited offers received by the Company. The
evaluation process continues and the company will provide updates
when the InFocus Board of Directors has either reached a definitive
agreement with a party, or has terminated the process.
Quarterly Revenue, Unit, ASP and Gross Margin
Comparisons
Fourth quarter revenues of $51.4 million represent a decrease of
27 percent compared to the third quarter of 2008, and a decrease of
37 percent compared to the fourth quarter of 2007. Projector unit
shipments totaled approximately 63,000 in the fourth quarter, a
decrease of approximately 33 percent compared to both the third
quarter of 2008 and the fourth quarter of 2007. Overall, average
selling prices (ASPs) increased by approximately 8 percent from the
third quarter of 2008. Gross margins were 16.8 percent, an
improvement of 0.7 percent from the third quarter of 2008.
Improvements in Gross Margin were driven by product mix shifts
within the quarter.
Revenue in the Americas decreased by 30 percent, while units
shipped decreased by 38 percent compared to the third quarter of
2008. Revenue and unit shipments decreased by 12 percent and 16
percent, respectively, in Europe. Revenue in Asia decreased by 44
percent and units decreased by 46 percent compared to the third
quarter of 2008.
Operating Expenses and Other Expenses
Excluding charges, operating expenses in the fourth quarter were
$14.0 million, a reduction of $1.1 million from third quarter
expenses of $15.1 million. The reduction was due to ongoing expense
management and lower variable sales and marketing costs.
Non-operating expense was $0.6 million for the fourth quarter,
compared to non-operating income of $0.1 million in the third
quarter of 2008 and non-operating income of $0.4 million in the
fourth quarter of 2007.
Balance Sheet
Total cash and restricted cash as of December 31, 2008 were
$33.4 million, a decrease of $36.9 million from the end of the
third quarter. The reduction in cash was primarily driven by
changes in working capital, the cash loss from operations and
settlement on foreign exchange hedges. Inventories at the end of
the fourth quarter were $38.5 million, an increase of $8.1 million
compared to the third quarter of 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
InFocus will hold a conference call today at 10:00 a.m. Eastern
Time. The call can be accessed by calling 888.680.0894 (U.S.
participants) or 617.213.4860 (outside U.S. participants) and
passcode # 69410512, 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 be available through
February 19th by dialing 888-286-8010 (U.S.) or 617-801-6888
(outside U.S.) and passcode #10993353.
Forward-Looking Statements
This press release includes forward-looking statements including
statements related to anticipated revenues, gross profits,
expenses, earnings, 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 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. Investors are directed to the Company's filings with the
Securities and Exchange Commission, including the Company's 2007
Form 10-K and 2008 Form 10-Q�s, 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 is the industry pioneer and a global leader in the
digital projection market. The company�s digital projectors make
bright ideas brilliant everywhere people gather to communicate and
be entertained - in meetings, presentations, classrooms and living
rooms around the world. Backed by more than 20 years of experience
and innovation in digital projection, and over 240 patents, InFocus
is dedicated to setting the industry standard for large format
visual display. The company is based in Wilsonville, Oregon with
operations in North America, Europe and Asia. InFocus is listed on
NASDAQ under the symbol INFS. For more information, visit the
company�s website at www.infocus.com
InFocus, In Focus, INFOCUS (stylized), 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. All other trademarks are used
for identification purposes only and are the property of their
respective owners in this and other countries. All rights
reserved.
�
InFocus Corporation
Consolidated Statements of
Operations
(In thousands, except per share
amounts)
(Unaudited)
� � � � � �
Three months ended December 31, Year ended
December 31, 2008 2007 2008 2007 �
Revenues $ 51,391 $ 81,103 $ 255,685 $ 308,181
Cost of
revenues 42,747 64,576 209,991 257,426
Gross margin $
8,644 $ 16,527 $ 45,694 $ 50,755 �
Operating expenses:
Marketing and sales $ 7,133 $ 8,267 $ 32,248 $ 35,777 Research and
development 2,725 2,802 11,287 14,135 General and administrative
4,117 4,325 16,688 19,938 Restructuring costs 4,200 3,700 5,530
8,375 Impairment of long-lived assets 2,628 - 2,628 - $ 20,803 $
19,094 $ 68,381 $ 78,225 �
Loss from operations $ (12,159) $
(2,567) $ (22,687) $ (27,470) �
Other income, net (645) 437
812 1,859
Loss before income taxes (12,804) (2,130) (21,875)
(25,611)
Provision for income taxes 282 (203) 1,078 (29)
Net Loss $
(13,086) $ (1,927) $
(22,953) $ (25,582) � �
Basic and diluted
net loss per share $ (0.32) $
(0.05) $ (0.57) $ (0.64) � Basic
and diluted shares outstanding 40,311 39,775 40,059 39,741 � � � �
InFocus Corporation
Consolidated Balance Sheets
(In thousands)
(Unaudited)
�
December 31, December 31, 2008 2007 �
Assets Current Assets: Cash and cash equivalents $ 16,801 $
61,187 Restricted cash, equivalents, and marketable securities
16,569 22,923 Accounts receivable, net of allowances 25,272 46,315
Inventories 38,520 30,984 Other current assets 4,043 7,548 Total
Current Assets 101,205 168,957 � Property and equipment, net -
2,973 Other assets, net 7,023 1,061
Total Assets $
108,228 $ 172,991 �
Liabilities and
Shareholders' Equity Current Liabilities: Accounts payable $
40,428 $ 65,764 Other current liabilities 14,588 19,906 Total
Current Liabilities 55,016
�
85,670 � Other Long-Term Liabilities 2,124 3,623 � Shareholders'
Equity: Common stock and additional paid-in capital 170,306 168,878
Other comprehensive income: Foreign currency translation 27,161
38,246 Accumulated deficit (146,379) (123,426) �
Total
Shareholders' Equity 51,088 83,698 �
Total
Liabilities and Shareholders' Equity $ 108,228
$ 172,991 � � � � � � � � � �
In Focus Corporation
Reconciliation of GAAP
Earnings
(In thousands, except per share
amounts)
(Unaudited)
�
Fourth Quarter 2008 Third Quarter 2008 �
Net
Loss
Net Loss Per
Share
�
Operating
Expenses
�
Loss From
Operations
Net Loss
Net Loss Per
Share
�
Operating
Expenses
�
Loss From
Operations
� � � � � � � �
GAAP $ (13,086) $ (0.32) $ 20,803 $ (12,159)
$ (4,216) $ (0.10) $ 15,529 $ (4,148) �
Adjustments: �
Restructuring costs $ 4,200 $ 0.10 $ (4,200) $ 4,200 $ 430 $
0.01 $ (430) $ 430 �
Impairment of long-lived assets $ 2,628
$ 0.07 $ (2,628) $ 2,628 $ - $ - $ - $ - � � � � � � � �
Proforma excluding adjustments $ (6,258) $ (0.16) $ 13,975 $
(5,331) $ (3,786) $ (0.09) $ 15,099 $ (3,718) � �
Fourth Quarter
2008 Fourth Quarter 2007 �
Net Loss
Net Loss Per
Share
�
Operating Expenses
�
Loss From
Operations
Net Loss
Net Loss Per
Share
�
Operating Expenses �
Income
(Loss) from
Operations
� � � � � � � �
GAAP $ (13,086) $ (0.32) $ 20,803 $ (12,159)
$ (1,927) $ (0.05) $ 19,094 $ (2,567) �
Adjustments: �
Restructuring costs $ 4,200 $ 0.10 $ (4,200) $ 4,200 $ 3,700
$ 0.09 $ (3,700) $ 3,700 �
Impairment of long-lived assets $
2,628 $ 0.07 $ (2,628) $ 2,628 $ - $ - $ - $ - � � � � � � � �
Proforma excluding adjustments $ (6,258) $ (0.16) $ 13,975 $
(5,331) $ 1,773 $ 0.04 $ 15,394 $ 1,133 � �
Year-to-Date
2008 Year-to-Date 2007 �
Net Loss
Net Loss Per
Share
�
Operating Expenses �
Loss From
Operations
Net Loss
Net Loss Per
Share
�
Operating Expenses �
Income
(Loss) from
Operations
� � � � � � � �
GAAP $ (22,953) $ (0.57) $ 68,381 $ (22,687)
$ (25,582) $ (0.64) $ 78,225 $ (27,470) �
Adjustments: �
Restructuring costs $ 5,530 $ 0.14 $ (5,530) $ 5,530 $ 8,375
$ 0.21 $ (8,375) $ 8,375 �
Impairment of long-lived assets $
2,628 $ 0.07 $ (2,628) $ 2,628 $ - $ - $ - $ - � � � � � � � �
Proforma excluding adjustments $ (14,795) $ (0.37) $ 60,223
$ (14,529) $ (17,207) $ (0.43) $ 69,850 $ (19,095)
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