Moderated By: rjm2 -- (Moderated) -- Started: 11/17/2000 2:10:26 PM Revision History
This one has a book value of $2.46, 38 cents of that is a tax asset which they need $7 million in taxable income to utilize. They believe its more likely than not that they will earn that kind of $ in the future, else it would be all written off.
Net current assets =$1.32 per share and sales have been off and they have been incurring losses. Hopefully this will change next year.
Short term it will be interesting to see if it can stay near $1 so as to avoid a delisting or reverse split.
CARSON, Calif., Nov. 10 /PRNewswire/ -- Educational Insights, Inc. (Nasdaq: EDIN - news) announced today that consolidated revenue was $9,898,000 for the quarter ended September 30, 2000 which represents a 26.3% decrease from the $13,435,000 reported for the same period one year ago. Sales decreases were experienced in each of the Company's primary markets. The decrease is principally due to delays in the introduction of most of its new product offerings. Net loss for the quarter was $1,291,000 or $0.18 per share compared to net income of $800,000 or $0.11 per share for the same period in 1999. The net loss was primarily due to the $3,537,000 decrease in sales volume as well as the valuation allowance of $800,000 recorded as additional tax expense during the quarter to reduce deferred tax assets to their estimated realizable value.
Consolidated revenue was $21,933,000 for the nine-month period ended September 30, 2000, a decrease of 27.2% or $8,176,000 compared to the same period one year ago. Sales decreases occurred in each of the Company's primary markets. The decrease in the Company's core school market was a reflection of the weakness of product reorders that the Company experienced in the fourth quarter of 1999 and the first half of 2000. Additionally, sales in all the Company's markets were adversely affected by delays in the introduction of the Company's new product offerings.
The Company's business is highly seasonal. Typically, sales and operating income are highest during the third and fourth quarters and lowest during the first and second quarters. This seasonal pattern is primarily due to the increased demand for the Company's products during the ``back-to-school'' and year-end holiday selling seasons. Due to the lateness in the introduction of most of its new products, the Company expects sales volume in the year 2000 to be $11,000,000 to $12,000,000 lower than the $41,100,000 experienced in the prior year.
Gross profit margins as a percentage of sales decreased to 41.3% for the quarter ended September 30, 2000, as compared to the 46.2% for the same period in 1999. Gross profit margins as a percentage of sales decreased to 44.2% for the nine-month period ended September 30, 2000, as compared to the 46.6% for the same period in 1999. The decrease in the gross profit margin percentages on both a quarterly and year-to-date basis is principally due to lower gross profit in the specialty retail market. This resulted primarily from sales to certain customers at lower-than-standard margins as well as charges to rework certain inventory items to resolve certain technical and packaging problems.
Total operating expenses decreased $422,000 to $4,494,000 for the quarter ended September 30, 2000, from $4,916,000 for the same period in 1999. This decrease was primarily a result of the Company's cost reduction efforts principally in the marketing, operations, and general and administrative departments. For the nine-month period ended September 30, 2000, total operating expenses increased $442,000 to $13,875,000, compared to $13,433,000 for the same period in 1999. The noted increase primarily resulted from an increase in research and development expense. The increase in research and development expense on both a quarterly and year-to-date basis was due primarily to increased development activity for both new and repackaged products, as well as increased use of outside resources to attempt to reduce the design time of new products, thereby mitigating any further delays in the introduction of new products to market.
Reid Calcott, the Company's new President and CEO stated that: ``The lateness of the Company's new product introductions, which has been the primary cause of the decrease in sales that the Company is experiencing, will continue to have an adverse affect on revenue and operating income this year. We are in the process of completing the cost reduction program which was started in the third quarter and which has already mitigated some of the impact on operating income that the lower sales volume is causing. However, the trend in lower sales is expected to continue through the remainder of the year and we expect to record a significant loss in the fourth quarter. On the positive side, virtually all of the Company's problems are internal in nature and, therefore, should be reversible. We believe that the cost reduction efforts along with the restructuring occurring this year will enable the Company to be profitable in the future.''
Educational Insights, Inc. designs, develops and markets a variety of educational products, including electronic learning aids, electronic games, activity books, science and nature products, board games and other materials for use in both schools and homes. The Company's product line, including its most popular product, GeoSafari®, appeals to children as well as students ranging mainly from pre-kindergarten to eighth grade and is designed to make learning fun.
SOURCE: Educational Insights
CARSON, Calif., Oct. 13 /PRNewswire/ -- Educational Insights, Inc. (Nasdaq: EDIN - news) announced today that it anticipates revenue for the year will be $11 to $12 million below the 1999 revenue of $41.1 million and, as a result, will incur a material net loss for the year. The Company had earlier reported that it anticipated a shortfall in sales due to the lateness in the introduction of its new products this year.
Reid Calcott, the Company's recently appointed President and CEO, today confirmed that now having had the opportunity to more thoroughly assess the Company's activities he believes that the Company will experience a material net loss for the year because of the shortfall in sales and because spending levels during the early part of the year were based on much higher anticipated sales.
Mr. Calcott stated that although operating losses will be significant in the short term, he believes that the underlying problems are internal in nature and should be reversible. For example, he stated that the Company's aggressive cost reduction program has already reduced wages significantly and that the Company has eliminated spending on programs which were not expected to produce results in the very near future.
In addition, the Company's development process has been completely revamped and is now being led by a senior executive with extensive experience in this field. The majority of the Company's product identification and selection responsibilities have been shifted to James Whitney, Executive Vice President, Marketing and Product Concept, who has a long history of experience in the education field. Mr. Calcott stated that the Company is increasing its emphasis on developing products for the educational portion of its business.
On a positive note he added that the Company has obtained an option to purchase the Amazing Live Sea-Monkeys® intellectual property and that its license with the current owner of this property has been renewed on a basis that gives Educational Insights the opportunity to create a wider range of products for worldwide distribution and to establish sub-licenses for this 40 year-old product line.
(They borrowed $1 million from their chairman at 9.5% to purchase this option.) |
