| News Article: FERROFLUIDICS REPORTS FY93 LOSS AFTER
29-SEP-1993 Length: 55 lines Businesswire
NASHUA, N.H.--(BUSINESS WIRE)--Ferrofluidics Corporation
(NASDAQ:FERO) today reported preliminary results for the fiscal year
ended June 30, 1993: revenues up 11 percent to $29,623,000, gross
profit up 5 percent to $12,114,000, and negative adjustments to
noncurrent assets totaling $8,859,000 - resulting in an operating
loss of $9,870,000 and a total net loss of $10,400,000 ($2.03 per
share).
The operating loss was caused principally by: (i) valuation
adjustments of $6,359,000 relating to the Company's investments in
affiliates; (ii) the reversal of $2,500,000 of license fees received
from Fuji Seiki during the third and fourth quarters and accounting
of those fees as a writedown of Ferrofluidics' investment in that
affiliate, and (iii) the previously reported $1,050,000 restatement
of shipments to an affiliate from revenue to inventory consigned for
future sale, and an approximately $1,500,000 understatement of cost
of goods sold in the Systems Division.
Despite these charges, the Company, at June 30, 1993, reported
current assets of $22,131,000, working capital of $13,092,000, total
assets of $42,273,000, long-term debt of $7,500,000, and net worth of
$25,550,000 ($5.14 per share based on 5,418,218 shares outstanding at
June 30, 1993).
For Q4 FY93, the Company reported revenues of $7,401,000 up 10
percent from Q4 FY92, and negative adjustments to noncurrent assets totaling
$7,359,000 - resulting in an operating loss of $8,810,000 and a total
net loss of $9,940,000. Pursuant to a previous press release,
operating results for the prior three quarters of FY93 will be
restated as a result of certain of the year-end adjustments.
Commented Chief Executive Officer Paul F. Avery, Jr.: "With the
balance sheet adjustments behind us, we, the new management, now can
focus on building Ferrofluidics' core businesses profitably.
Although the results are preliminary, the Company anticipates no
further substantive adjustments to reported FY93 results."
The Company's backlog now stands at approximately $12 million
after removing a previously reported $12 million order for silicon
crystal growing systems for China, which order was reversed due to
heightened uncertainty as to the customer's ability to secure
financing for the order.
Ferrofluidics is the world leader in ferrofluid (magnetic fluid)
technology. The Company combines proprietary Ferrofluidic technology
with broad applied engineering to commercialize applications enabling
customers' products to operate more effectively and efficiently. The
Company currently produces proprietary products for market
applications it believes have high growth potential, including
environmental seals, advanced materials systems, hydrodynamic
bearings and audio speakers.
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