-----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, D5i+dZ7bsOskTYz8bPe264Ea0M5ywvYs261ZwAYMmgtyP3EsbQ3R56l1c0U2jlmV aDq0wAhFlQED861L14+t+A== 0000950152-99-006064.txt : 19990716 0000950152-99-006064.hdr.sgml : 19990716 ACCESSION NUMBER: 0000950152-99-006064 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990714 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990715 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TELXON CORP CENTRAL INDEX KEY: 0000352495 STANDARD INDUSTRIAL CLASSIFICATION: CALCULATING & ACCOUNTING MACHINES (NO ELECTRONIC COMPUTERS) [3578] IRS NUMBER: 741666060 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-11402 FILM NUMBER: 99665224 BUSINESS ADDRESS: STREET 1: 3330 W MARKET ST CITY: AKRON STATE: OH ZIP: 44333 BUSINESS PHONE: 3306641000 MAIL ADDRESS: STREET 1: P O BOX 5582 CITY: AKRON STATE: OH ZIP: 44334-0582 8-K 1 TELXON CORPORATION FORM 8-K 1 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): July 14, 1999 TELXON CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 0-11402 74-1666060 (STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.) 3330 WEST MARKET STREET, AKRON, OHIO 44333 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE: (330) 664-1000 Not applicable (FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT) 2 ITEM 5. OTHER EVENTS. On July 14, 1999, Telxon Corporation (the Company") issued a press release (the "July Release") announcing its operating results for the fourth quarter of fiscal 1999, and the fiscal year, ended March 31, 1999. The July Release also notes that the Company will require additional time to complete its fiscal 1999 10-K for filing. A copy of the July Release discussing the above and certain related matters is included as Exhibit 99 to this Current Report on Form 8-K and incorporated herein by reference. The July Release includes unaudited consolidated balance sheets of the Company for March 31, 1999 and, as restated to reflect the restatement of the Company's financial statements as discussed in its press releases of February 23, 1999 (the "February Release") and March 1, 1999 (the "March Release"), March 31, 1998 (the March 31, 1998 balance sheet included in the July Release reflects certain limited adjustments to the balance sheet for that date included as part of the March Release) and unaudited condensed consolidated statements of operations for the quarterly and fiscal annual periods ended March 31, 1999 (the fiscal annual statement gives effect to the restatements of the Company's financial statements as discussed in the February Release and the Company's June 16, 1999 press release (the "June Release")) and, as restated to reflect the restatement of the Company's financial statements as discussed in the February Release, March 31, 1998. The February Release, March Release and June Release were each filed under cover of a Form 8-K dated as of the date of that press release. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (c) Exhibits. 99 Press Release issued by the registrant on July 14, 1999. SIGNATURES 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 hereunto duly authorized. TELXON CORPORATION Date: July 15, 1999 By: /s/ Glenn S. Hansen ------------------- Glenn S. Hansen Vice President, Legal Administration and Corporate Counsel EX-99 2 EXHIBIT 99 1 EXHIBIT 99 ---------- [TELXON LOGO] NEWS RELEASE TELXON REPORTS FY99 Q4 AND YEAR-END RESULTS AKRON, OHIO, July 14, 1999 - - Telxon Corporation (Nasdaq: TLXN), a world leader in delivering quality, innovative solutions for mobile information and wireless communications systems, today reported results for its fourth quarter and fiscal year ended March 31, 1999. For the quarter ended March 31, 1999, the company recorded revenues of $77.1 million and a net loss of $84.7 million, or $5.27 per share (diluted), as compared to revenues of $131.4 million and net income of $4.6 million, or $.29 per share (diluted), in the year earlier quarter. The fiscal 1999 fourth quarter net loss includes $23.6 million of adjustments related to the company's previously announced program to discontinue certain of its products, and $7.3 million related to provisions for excess and obsolete inventories. The fourth quarter results also include severance of $3.6 million, bad debt provisions of $3.7 million, non-cash compensation expense related to stock options in its Aironet subsidiary of $3.4 million, and charges relating to a reduction in the carrying value of investments of $2.1 million. For the fiscal year ended March 31, 1999, Telxon reported a net loss of $137.0 million, or $8.50 per share (diluted), as compared to net income of $8.2 million, or $.50 per share (diluted), for fiscal 1998. Revenues were $388.3 million, as compared to revenues of $463.2 million last year. The fiscal 1999 revenues reflect the absence of a $30.0 million sale to a major domestic retail customer recorded in fiscal 1998 as well as the cancellation in December 1998 of a $13.0 million order by a large logistics company. Revenues were further affected by increases to the company's reserve for sales returns and allowances of $11.7 million and the deferral of revenues of $12.5 million related to extended product roll-outs. Revenues of $10.4 million were also deferred as a result of delays in customer acceptance of products delivered. Finally, revenues were negatively impacted by the delay of revenue recognition for $8.0 Telxon Corporation/3330 West Market Street/P.O. Box 5582/Akron, Ohio 44334-0582 800.800.8001/Fax 330.664.2058/www.telxon.com 2 million of goods shipped subject to the company's guarantee of customer lease payments to the third party lessors. The fiscal 1999 net loss includes charges of $37.4 million for inventory obsolescence, $9.8 million in under-absorbed manufacturing overhead costs due to decreased volumes and manufacturing inefficiencies, $3.0 million of material rework and repair costs, $2.0 million of excess warranty repair costs, $7.8 million for bad debt provisions, and $8.1 million for costs incurred in response to takeover and proxy contest proposals and in terminated discussions of proposed business combination transactions. The fiscal 1999 tax provision of $17.4 million reflects a valuation allowance of $10.1 million established against the net deferred tax asset at the beginning of the year and foreign income taxes of $5.2 million. No tax benefit has been recognized for the fiscal 1999 net operating loss. John W. Paxton, Telxon's chairman and CEO, said, "We appreciate the patience that our investors and business partners have shown as we have worked diligently to release our fourth quarter and year-end results. As we mentioned earlier, our fiscal 1999 year-end closing was complicated by the sorting out of the effects of the company's previously announced restatements. Although we are able today to release the results for the period, we will require additional time to complete our fiscal 1999 10-K for filing." Paxton continued, "As we indicated earlier, we have seen revenue growth during the first quarter of fiscal 2000, and we are anticipating quarter-to-quarter sequential growth for the remainder of the year. For the first quarter, we expect to report revenues in the mid $90 million range, which will include growth in both domestic and international operations. Our new management team is in place, we continue to work aggressively on our previously announced potential financing transactions, and we remain focused on executing our strategic plan to stabilize the company and position it for future growth." The company will host a conference call for analysts on Tuesday, July 20 to discuss its fiscal 1999 Q4 and year-end results. 3 Telxon Corporation is a leading global designer and manufacturer of wireless and mobile information systems for vertical markets. The company integrates advanced mobile computing and wireless data communication technology with a wide array of peripherals, application-specific software and global customer services for its customers in more than 60 countries. Telxon's website address is: www.telxon.com. Other than the historical financial information reported above, this news release constitutes forward-looking statements that are inherently subject to risks and uncertainties which could cause Telxon's actual or restated results or other future events pertaining to the company to differ materially from the forward-looking statements. The important factors affecting the realization of those results or the occurrence of those events include, without limitation, the level of customer demand for the company's products, the company's ability to timely obtain contemplated financing on acceptable terms and in adequate amounts, the continued adequacy of the company's internal and external sources of working capital in the interim, and the ability of the company's executive management to successfully implement its strategic plan to stabilize and grow the company, as well as general and industry-specific economic conditions, competitive pressures and rapid technological change. Reference should be made to the discussion of these and other factors affecting Telxon's business and results as included from time to time in the company's filings with the Securities and Exchange Commission. # # # For more information: Alex L. Csiszar Vice President, Investor and Public Relations Telxon Corporation (330) 664-2961 4 Telxon Corporation and Subsidiaries CONSOLIDATED BALANCE SHEET - -------------------------- (In thousands, except per share data)
MARCH 31, MARCH 31, 1999 1998 ------------ ------------ (UNAUDITED) (UNAUDITED AND AS RESTATED) ASSETS Current assets: Cash and cash equivalents $ 22,459 $ 27,500 Accounts receivable, net 84,500 121,932 Notes and other accounts receivable 4,015 15,753 Inventories 129,049 109,935 Prepaid expenses and other 9,029 16,084 --------- --------- Total current assets 249,052 291,204 Property and equipment, net 69,557 53,969 Intangible and other assets, net 30,235 33,292 --------- --------- Total $ 348,844 $ 378,465 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable $ 68,567 $ 3,000 Capital lease obligations due within one year 525 968 Accounts payable 64,966 58,634 Income taxes payable 6,434 3,466 Accrued liabilities 74,285 41,988 --------- --------- Total current liabilities 214,777 108,056 Capital lease obligations 1,435 1,876 Convertible subordinated debentures 106,913 107,224 Other long-term liabilities 5,446 6,867 --------- --------- Total 328,571 224,023 Minority interest 3,307 1,287 Stockholders' equity: Preferred Stock, $1.00 par value per share; 500 shares authorized, none issued - - Common Stock, $.01 par value per share; 50,000 shares authorized, 16,234 and 16,219 shares issued 162 162 Additional paid-in capital 87,029 87,489 Retained (deficit) earnings (61,977) 75,267 Equity adjustment for foreign currency translation (5,464) (4,929) Unearned restricted stock awards (82) (493) Treasury stock; 78 and 162 shares of common stock at cost (1,423) (3,062) Notes related to sale of subsidiary stock (1,279) (1,279) --------- --------- Total stockholders' equity 16,966 153,155 --------- --------- Total $ 348,844 $ 378,465 ========= =========
5 Telxon Corporation and Subsidiaries CONSOLIDATED STATEMENT OF OPERATIONS - ------------------------------------ (In thousands, except per share data)
THREE MONTHS TWELVE MONTHS --------------------------- --------------------------- ENDED MARCH 31, ENDED MARCH 31, --------------------------- --------------------------- 1999 1998 1999 1998 --------------------------- --------------------------- (UNAUDITED) (UNAUDITED) AS AS RESTATED RESTATED Revenues: Product $ 56,391 $ 111,881 $ 305,380 $ 386,410 Customer service 20,692 19,508 82,914 76,746 --------- --------- --------- --------- Total revenues 77,083 131,389 388,294 463,156 Cost of revenues: Product 76,596 64,166 241,265 227,850 Customer service 14,704 13,125 55,078 48,836 --------- --------- --------- --------- Total cost of revenues 91,300 77,291 296,343 276,686 Gross (loss) profit: Product (20,205) 47,715 64,115 158,560 Customer service 5,988 6,383 27,836 27,910 --------- --------- --------- --------- Total gross (loss) profit (14,217) 54,098 91,951 186,470 Operating expenses: Selling expenses 28,410 22,329 96,109 82,054 Product development and engineering expenses 13,878 8,974 42,986 37,500 General and administrative expenses 21,380 10,429 54,923 39,462 Unconsummated business combination costs - - 8,070 - Impairment charge - 4,635 - 6,069 --------- --------- --------- --------- Total operating expenses 63,668 46,367 202,088 165,085 --------- --------- --------- --------- (Loss) income from operations (77,885) 7,731 (110,137) 21,385 Interest income 232 316 801 1,573 Interest expense (3,045) (1,827) (9,872) (7,181) --------- --------- --------- --------- (Loss) income before other non-operating (expense) income and income taxes (80,698) 6,220 (119,208) 15,777 Other non-operating (expense) income (1,438) 950 (414) 625 --------- --------- --------- --------- (Loss) income before income taxes (82,136) 7,170 (119,622) 16,402 Provision for income taxes 2,576 2,745 17,360 7,227 --------- --------- --------- --------- (Loss) income before cumulative effect of accounting change (84,712) 4,425 (136,982) 9,175 Cumulative effect of an accounting change, net of taxes - (224) - 1,016 --------- --------- --------- ---------
6
Net (loss) income $ (84,712) $ 4,649 $(136,982) $ 8,159 ========= ========= ========= ========= Net (loss) income per share before accounting change: Basic $ (5.27) $ 0.28 $ (8.50) $ 0.58 ========= ========= ========= ========= Diluted $ (5.27) $ 0.27 $ (8.50) $ 0.56 ========= ========= ========= ========= Cumulative effect of an accounting change: Basic $ - $ 0.01 $ - $ (0.06) ========= ========= ========= ========= Diluted $ - $ 0.01 $ - $ (0.06) ========= ========= ========= ========= Net (loss) income per share: Basic $ (5.27) $ 0.30 $ (8.50) $ 0.52 ========= ========= ========= ========= Diluted $ (5.27) $ 0.29 $ (8.50) $ 0.50 ========= ========= ========= ========= Average number of common shares outstanding: Basic 16,072 15,708 16,108 15,809 Diluted 16,072 16,255 16,108 16,317
-----END PRIVACY-ENHANCED MESSAGE-----