CONFORMED
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
JUNE 30, 1999; OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________________
TO ________________.
COMMISSION FILE NUMBER: 0-20728
RIMAGE CORPORATION
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(Exact name of Registrant as specified in its charter)
Minnesota 41-1577970
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
7725 Washington Avenue South, Edina, MN 55439
---------------------------------------------
(Address of principal executive offices)
612-944-8144
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(Registrant's telephone number, including area code)
NA
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(Former name, former address, and former fiscal year, if changed
since last report.)
Common Stock outstanding at August 6, 1999 - 5,072,084 shares
of $.01 par value Common Stock.
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes _X_ No ___
RIMAGE CORPORATION
FORM 10-Q
TABLE OF CONTENTS
FOR THE QUARTER ENDED JUNE 30, 1999
Description Page
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PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of
June 30, 1999 (unaudited) and
December 31, 1998...................................... 3-4
Consolidated Statements of Operations
(unaudited) for the Three and Six Months
Ended June 30, 1999 and 1998............................. 5
Consolidated Statements of Cash Flows
(unaudited) for the Three and Six Months
Ended June 30, 1999 and 1998.......................... 6-7
Condensed Notes to Consolidated
Financial Statements (unaudited)....................... 8-9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations........ 10-15
PART II OTHER INFORMATION............................................ 16-18
Item 1-3. None
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. None
Item 6. Exhibits
SIGNATURES................................................................... 19
2
RIMAGE CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
June 30, 1999 and December 31, 1998
June 30, December 31,
Assets 1999 1998
- ---------------------------------------------------------------------------------------------
(unaudited)
Current assets:
Cash and cash equivalents $11,568,355 7,349,521
Trade accounts receivable, net of allowance for doubtful
accounts and sales returns of $165,000 and $143,000,
respectively 5,146,047 4,772,337
Inventories 1,776,764 1,876,063
Interest receivable 43,412 --
Prepaid expenses and other current assets 159,091 90,667
Deferred income taxes 593,000 593,000
Net assets of discontinued operations 176,034 587,265
=============================================================================================
Total current assets 19,462,703 15,268,853
- ---------------------------------------------------------------------------------------------
Property and equipment, net 691,925 566,114
Goodwill, net of accumulated amortization of $377,286 in 1998 -- 767,977
Other noncurrent assets 210,023 67,427
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Total assets $20,364,651 16,670,371
=============================================================================================
See accompanying condensed notes to consolidated financial statements
3
June 30, December 31,
Liabilities and Stockholders' Equity 1999 1998
- ----------------------------------------------------------------------------------------------------
(unaudited)
Current liabilities:
Trade accounts payable 1,717,536 1,883,100
Income taxes payable 1,234,232 236,728
Accrued compensation 897,389 871,729
Accrued other 765,314 797,545
Deferred income and customer deposits 811,524 712,982
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Total current liabilities 5,425,995 4,502,084
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Stockholders' equity:
Common stock, $.01 par value, authorized 10,000,000 shares,
issued and outstanding 5,050,084 and 4,936,088, respectively 50,500 49,361
Additional paid-in capital 11,740,044 11,545,485
Retained earnings 3,445,238 647,477
Accumulated other comprehensive income - foreign
currency translation adjustment (297,126) (74,036)
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Total stockholders' equity 14,938,656 12,168,287
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Total liabilities and stockholders' equity $ 20,364,651 16,670,371
====================================================================================================
4
RIMAGE CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1999 1998 1999 1998
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Revenues $ 8,728,841 $ 6,601,674 $ 16,245,110 $ 12,733,257
Cost of revenues 4,611,652 3,101,684 8,277,216 6,029,197
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Gross profit 4,117,189 3,499,990 7,967,894 6,704,060
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Operating expenses:
Research and development 584,711 407,466 1,182,669 916,877
Selling, general and administrative 1,621,965 1,571,928 3,284,003 3,118,835
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Total operating expenses 2,206,676 1,979,394 4,466,672 4,035,712
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Operating income from continuing operations 1,910,513 1,520,596 3,501,222 2,668,348
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Other income (expense):
Interest, net 79,773 4,123 151,791 (38,526)
Gain (loss) on currency exchange 52,122 32,453 (18,496) 26,770
Other, net 25,413 (14,838) 30,304 (4,194)
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Total other income (expense), net 157,308 21,738 163,599 (15,950)
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Income from continuing operations
before income taxes 2,067,821 1,542,334 3,664,821 2,652,398
Income taxes 744,416 383,733 1,356,554 536,580
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Income from continuing operations 1,323,405 1,158,601 2,308,267 2,115,818
Discontinued operations:
Income (loss) from operations of discontinued
Services Division, net applicable income tax
expense (benefit) 75,375 (111,067) 186,045 (64,808)
Gain on disposal of Services Division, net
applicable income tax expense 303,449 -- 303,449 --
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Net income $ 1,702,229 $ 1,047,534 $ 2,797,761 $ 2,051,010
=======================================================================================================================
Income (loss) per basic share:
Continuing operations $ 0.26 $ 0.24 $ 0.46 $ 0.45
Discontinued operations 0.08 (0.02) 0.10 (0.01)
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Net income per basic share $ 0.34 $ 0.22 $ 0.56 $ 0.44
=======================================================================================================================
Income (loss) per diluted share:
Continuing operations $ 0.23 $ 0.21 $ 0.40 $ 0.39
Discontinued operations 0.06 (0.02) 0.08 (0.01)
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Net income per diluted share $ 0.29 $ 0.19 $ 0.48 $ 0.38
=======================================================================================================================
Basic weighted average shares outstanding 5,048,162 4,713,576 5,022,929 4,677,018
=======================================================================================================================
Diluted weighted average shares and
assumed conversion shares 5,788,746 5,429,184 5,800,592 5,358,843
=======================================================================================================================
See accompanying condensed notes to the consolidated financial statements
5
RIMAGE CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(unaudited)
Six months ended
June 30,
1999 1998
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Cash flows from operating activities:
Net earnings $ 2,797,761 $ 2,051,010
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 305,971 238,800
Change in reserve for excess and obsolete inventories 91,406 76,291
Change in reserve for allowance for doubtful accounts 22,233 (142,185)
(Gain) loss on sale of property, plant, and equipment (27,489) --
Changes in operating assets and liabilities:
Trade accounts receivable (395,943) (654,414)
Inventories 7,893 (527,159)
Income tax receivable -- (2,370)
Interest receivable (43,412) --
Prepaid expenses and other current assets (76,487) 54,139
Net assets of discontinued operations 411,231 787,791
Trade accounts payable (165,564) 326,906
Accrued expenses (6,571) 271,787
Income taxes payable 997,504 --
Deferred income and customer deposits 98,542 49,548
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Net cash provided by operating activities 4,017,075 2,530,144
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Cash flows from investing activities:
Purchase of property, plant, and equipment (295,996) (69,290)
Proceeds from the sale of property, equipment and intangibles 717,084 0
Other noncurrent assets (337,322) 60,374
Receipts from sales-type leases 8,063 58,207
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Net cash provided by (used in)
investing activities 91,829 49,291
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(Continued)
6
RIMAGE CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows, Continued
Six months ended
June 30,
1999 1998
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Cash flows from financing activities:
Proceeds from stock option exercise 233,573 313,707
Cash payments to purchase treasury stock (37,875) --
Principal payments on capital lease obligation -- (14,616)
Repayment of other notes payable -- (450,000)
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Net cash provided by (used in)
financing activities 195,698 (150,909)
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Effect of exchange rate changes on cash (85,768) (3,215)
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Net increase in cash and cash equivalents 4,218,834 2,425,311
Cash and cash equivalents, beginning of period 7,349,521 762,394
- --------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 11,568,355 $ 3,187,705
========================================================================================================
Supplemental disclosures of net cash paid during the period for:
Interest $ -- $ 219,285
Income taxes $ 1,072,480 $ 495,050
See accompanying condensed notes to the consolidated financial statements
7
RIMAGE CORPORATION AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(1) BASIS OF PRESENTATION AND NATURE OF BUSINESS
Rimage Corporation (the Company) develops, manufactures and
distributes high performance CD-Recordable (CD-R) publishing
and duplication systems, and continues to support its long
term involvement in diskette duplication and publishing
equipment.
The accompanying unaudited consolidated financial statements of
the Company have been prepared pursuant to the rules of the
Securities and Exchange Commission. These financial statements
should be read in conjunction with the more detailed financial
statements and notes thereto included in the Company's most
recent annual report on Form 10-K.
The Company extends unsecured credit to its customers as well as
credit to a limited number of authorized distributor
wholesalers, who in turn provide warehousing, distribution,
and credit to a network of authorized value added resellers.
These distributors and value added resellers sell and service
a variety of hardware and software products.
In the opinion of management, the accompanying consolidated
financial statements reflect all adjustments, consisting of
only normal recurring adjustments, necessary for a fair
presentation of the financial position and results of
operations and cash flows of the Company for the periods
presented. Certain previously reported amounts have been
reclassified to conform with the current presentation.
(Continued)
8
RIMAGE CORPORATION AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(2) DISCONTINUED OPERATIONS
On June 30, 1999, the Company completed the sale of the
inventory, fixed assets and intangible assets of its Boulder,
Colorado based Services Division to a third party for a sales
price of approximately $2.1 million in cash, generating a
pre-tax gain of $912,000. Accordingly, the consolidated
financial statements of the Company have been reclassified to
report separately the operating results of this discontinued
division. Revenues of the Services Division were $2,322,000
and $5,757,000 for the six months ended June 30, 1999 and
1998, respectively and $1,186,000 and $2,240,000 for the three
months ended June 30, 1999 and 1998, respectively.
(3) INVENTORIES
Inventories consist of the following as of:
June 30, December 31,
1999 1998
(unaudited)
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Finished goods and demonstration equipment $ 861,580 $ 899,290
Work-in-process 123,281 162,943
Purchased parts and subassemblies 791,903 813,830
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$1,776,764 $1,876,063
======================================================================
(4) COMPREHENSIVE INCOME
The Company's only item of other comprehensive income relates to
foreign currency translation adjustments, and is presented
separately on the balance sheet as required. If presented on
the statement of operations for the six months ended June 30,
1999 and 1998, comprehensive income would be $223,090 less
than reported net income and $25,597 more than reported net
income, respectively, due to foreign currency translation
adjustments.
9
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following table sets forth, for the periods indicated, selected
items from the Company's consolidated statements of operations, shown
in thousands.
Three months ended Six months ended
June 30, June 30,
--------------- ---------------
% %
1999 1998 Change 1999 1998 Change
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Revenues $ 8,729 $ 6,602 32.2% $16,245 $12,733 27.6%
======= ======= ======= =======
Cost of Revenues 4,612 3,102 48.7 8,277 6,029 37.3
======= ======= ======= =======
Operating Expenses 2,207 1,979 11.5 4,467 4,036 10.7
======= ======= ======= =======
Operating Earnings 1,910 1,521 25.6 3,501 2,668 31.2
======= ======= ======= =======
RESULTS OF OPERATIONS
This report contains forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ significantly from
those discussed in the forward-looking statements. Factors that could cause or
contribute to such differences include, but are not limited to, changes in media
or method used for distribution of software, technological changes in products
offered by the Company or its competitors and changes in general conditions in
the computer market.
10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONTINUED)
As discussed in Note 2 of the Condensed Notes of the Consolidated Financial
Statements, the Company divested of its Services Division during the second
quarter of 1999. The comments that follow pertain to the Company's continuing
operations.
REVENUE. Revenue from continuing operations increased 32.2% from $6.6 million
during the second quarter of 1998 to $8.7 million during the second quarter of
1999. The Company continued to intensify its focus on the development of
hardware and software for publishing, duplication and network applications
related to the CD-Recordable (CD-R) market with the introduction of the Producer
2000 line which incorporates 8x recording, color printing and enhanced robotics
and software.
For the six months ended June 30, 1999, revenues from continuing operations of
$16.2 million represented a 27.6% increase as compared to revenues from
continuing operations of $12.7 million during the same period in 1998. This
increase is primarily a result of continued increasing demand of CD-R related
products. The Company continued to add to its worldwide distribution network,
which now encompasses 135 channel partners.
As of and for the six months ended June 30, 1999, foreign revenues from
unaffiliated customers, operating earnings, and net identifiable assets were
$5,046,000, $769,000 and $3,373,000, respectively. As of and for the six months
ended June 30, 1998, foreign revenues from unaffiliated customers, operating
earnings, and net identifiable assets were $3,786,000, $542,000, and $2,638,000,
respectively. The growth is due to increasing penetration in the European
markets of sales of CD-R products.
GROSS PROFIT. Gross profit as a percent of revenues from continuing operations
during the second quarter of 1999 was 47.2% compared to 53.0% during the same
period of 1998. The decrease was due to the Producer 2000 product transition
from a 4x recorder to an 8x recorder as well as a shift in product mix including
stronger sales of lower margin consumables such as media.
Gross profit as a percent of revenues from continuing operations during the six
month period ended June 30, 1999 was 49.0% compared to 52.7% during the same
period of 1998. This decrease is a result of product mix changes.
11
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONTINUED)
OPERATING EXPENSE. Operating expense from continuing operations during the
second quarter of 1999 was $2.2 million, or 25.3% of revenues from continuing
operations compared to $2.0 million, or 30.0% of revenues from continuing
operations, during the second quarter of 1998. The decrease in percentage was
primarily a result of increased sales coupled with a decrease in general and
administrative expense attributable to proceeds from a legal settlement during
the second quarter of 1999. Research and development expense as a percent of
revenues from continuing operations increased to 6.7% during the second quarter
of 1999 compared to 6.2% during the same period of 1998. This increase is in
line with the Company's objective to continue to direct more resources to
research and development activities.
Operating expense from continuing operations during the six month period ended
June 30, 1999 was $4.5 million, or 27.5% of revenues from continuing operations
compared to $4.0 million, or 31.7% of revenues from continuing operations,
during the same period of 1998. The decrease in percentage was primarily a
result of increased sales during the six month period ended June 30, 1999.
OTHER INCOME/(EXPENSE). During June 1998, the Company repaid the outstanding
balance of its Term Note with the bank. During the third quarter of 1998, the
Company eliminated debt associated with a capital lease on certain CD-ROM
equipment and renegotiated capital leases which resulted in their
reclassification as operating leases and the elimination of future interest
expense. As a result of these transactions, the Company recognized net interest
income from continuing operations of $80,000 during the second quarter of 1999
and $152,000 during the six month period ended June 30, 1999 on cash
investments. Net interest income (expense) totaled $4,000 and $(39,000) during
the second quarter of 1998 and the six month period ended June 30, 1998,
respectively.
INCOME TAXES. The provision for income taxes represents federal, state, and
foreign income taxes on earnings before income taxes. Income tax expense for the
second quarter of 1999 amounted to $1,395,000 which included tax expense of
$42,000 related to the operations of the discontinued Services Division, tax
expense of $609,000 related to the gain on the disposal of the Services Division
and tax expense of $744,000 related to the Company's continuing operations.
Income tax expense for the second quarter of 1998 amounted to $347,000 which
included an income tax benefit of $37,000 related to the operations of the
discontinued Services Division and tax expense of $384,000 related to the
Company's continuing operations. Net earnings, excluding the one-time gain from
the disposal of the Services Division, are reflected at a fully taxed rate of
38% for the second quarter of 1999 compared to 25% for 1998. This is due to the
reversal of the valuation allowance during 1998 since, with the continued
earnings, management has determined it more likely than not the deferred tax
asset will be realized.
12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONTINUED)
Income tax expense for the six month period ended June 30, 1999 amounted to
$2,070,000 which included tax expense of $105,000 related to the operations of
the discontinued Services Division, tax expense of $609,000 related to the gain
on the disposal of the Services Division and tax expense of $1,356,000 related
to the Company's continuing operations. Income tax expense for the six month
period ended June 30, 1998 amounted to $520,000 which included an income tax
benefit of $16,000 related to the operations of the discontinued Services
Division and tax expense of $536,000 related to the Company's continuing
operations.
INCOME FROM CONTINUING OPERATIONS. The significant increase in revenue derived
from CD-R related product sales combined with only marginal increases in
operating expense to support those revenues, caused income from continuing
operations to increase to $1.3 million in the second quarter of 1999 and to $2.3
million for the six month period ended June 30, 1999.
LIQUIDITY AND CAPITAL RESOURCES
The Company expects to fund its anticipated cash requirements (including the
anticipated cash requirements of its capital expenditures) with internally
generated funds and, if required, from the Company's existing credit agreement.
Current assets are $19,463,000 as of June 30, 1999 as compared to $15,269,000 as
of December 31, 1998. The allowance for doubtful accounts as a percentage of
receivables was 3% as of June 30, 1999 and December 31, 1998. Current
liabilities increased approximately 21% to $5,426,000 as of June 30, 1999 from
$4,502,000 as of December 31, 1998, reflecting the increase in income taxes
payable netted with normal reductions in accounts payable.
Net cash provided by operating activities increased to $4,017,000 for the six
months ended June 30, 1999 from $2,530,000 for the six months ended June 30,
1998. This increase is the result of increased earnings during the six month
period ended June 30, 1999 combined with an increase in income taxes payable.
Net cash provided by investing activities was $92,000 for the six months ended
June 30, 1999 compared to $49,000 for the six months ended June 30, 1998. At
June 30, 1999, the Company had no significant commitments to purchase additional
capital equipment. Net cash provided by financing activities of $196,000 during
the six months ended June 30, 1999 primarily reflected stock option proceeds.
Net cash used in financing activities of $151,000 during the six months ended
June 30, 1998 principally reflect repayments of debt under the credit agreement.
The Company believes that inflation has not had a material impact on its
operations or liquidity to date.
13
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONTINUED)
YEAR 2000 READINESS
The Company believes the approach of the Year 2000 could have a material effect
on the Company's business, results of operations, and financial condition if it
were not able to avoid the related consequences. To mitigate these potential
consequences, the Company has identified the following areas as requiring
significant analysis: 1) manufactured products, 2) information technology
applications, 3) information technology end user supported applications, 4)
information technology infrastructure, 5) business partners - both vendors and
customers, 6) manufacturing equipment, 7) facility operations (non-information
technology systems). The Company has also identified five phases associated with
each area described above as follows: 1) awareness - educating all levels of the
Company about the importance of Year 2000 readiness; 2) assessment - identify
all electronic systems which are date-sensitive and assess which systems are not
Year 2000 ready; 3) renovation - develop a strategy to repair, replace or retire
the system; 4) validation - testing of changed programs and date files to ensure
they are Year 2000 ready; and 5) implementation - placing the renovated and
validated systems into everyday use. Currently, the Company is in the renovation
and validation phases of its plan to prepare itself for the Year 2000. The
Company anticipates completion of its final phase (the Implementation phase) by
the end of September 1999.
Through June 30, 1999, the Company has incurred costs of approximately $105,000
directly attributable to addressing Year 2000 issues. The Company estimates the
remaining costs that will be incurred in connection with its analysis of Year
2000 issues to be approximately $5,000. The following are some of its most
reasonably likely worst case Year 2000 scenarios the Company has identified: 1)
The Company's manufacturing operations consist primarily of the assembly of
products from components purchased from third parties. While some parts are
stock "off the shelf" components, others are manufactured to the Company's
specifications. Although the Company believes it has identified alternative
assembly contractors for most of its subassemblies, an actual change in such
contractors, as a result of an inability to work with such contractor due to
Year 2000 consequences they face, would likely require a period of training and
testing. Accordingly, an interruption in a supply relationship or the production
capacity of one or more of such contractors could result in the Company's
inability to deliver one or more products for a period of several months. 2) The
Company sells most of its manufactured systems through a limited number of
authorized distributor wholesalers, who in turn provide warehousing,
distribution, and credit to a network of authorized value added resellers. The
interruption of product flow to one or more of these distributors due to their
inability to process date sensitive information could result in lower than
normal sales revenues. To alleviate this decrease, the Company would redirect
these sales to the remaining distributors and/or sell directly to its value
added resellers.
14
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONTINUED)
NEW EUROPEAN CURRENCY
On January 1, 1999, eleven of the fifteen member countries of the European Union
established fixed conversion rates between their existing currencies and the
euro, a new European currency, and adopted the euro as their common legal
currency (the "Euro Conversion"). Either the euro or a participating country's
present currency will be accepted as legal tender from January 1, 1999 to
January 1, 2002, from which date forward only the euro will be accepted.
The Company has customers located in European Union countries participating in
the Euro Conversion. Such customers will likely have to upgrade or modify their
computer systems and software to comply with the euro requirements. The amount
of money the Company anticipates spending in connection with product development
related to the Euro Conversion is not expected to have a material adverse effect
on the Company's results of operations or financial condition. The Euro
Conversion may also have competitive implications for the Company's pricing and
marketing strategies, which could be material in nature; however, any such
impact is not known at this time.
The Company has also modified its internal systems (such as payroll, accounting
and financial reporting to deal with the Euro Conversion. There is no assurance,
however, that all problems related to the Euro Conversion will be foreseen and
corrected, or that no material disruptions of the Company's business will occur.
NEW ACCOUNTING PRONOUNCEMENTS
Statement of Financial Accounting Standard No. 133, "Accounting for Derivative
Instruments and Hedging Activities" (SFAS No. 133), effective in 2001,
established new standards for recognizing all derivatives as either assets or
liabilities, and measuring those instruments at fair value. At the present time,
the Company does not anticipate that SFAS No. 133 will have a material impact on
its financial position or results of operations.
MARKET RISK DISCLOSURE
The Company does not invest in any derivative financial instruments. See the
Company's most recent annual report filed on form 10K (Item 7A.). There has been
no material change in this information.
15
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings
Not Applicable.
Item 2. Changes in Securities
Not Applicable.
Item 3. Defaults Upon Senior Securities
Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders
The Company's Annual Meeting of Stockholders' was held on May 19,
1999. The following members were elected to the Company's Board of
Directors to hold office for the ensuing year:
Nominee In Favor Withheld
------- -------- --------
Bernard Aldrich 4,006,331 11,087
Ronald Fletcher 4,006,331 11,087
George Kline 4,006,331 11,087
Richard McNamara 4,006,331 11,087
James Reissner 4,006,331 11,087
David Suden 4,006,331 11,087
The results of the voting on the following additional items were as
follows:
(a) Ratification of the selection of KPMG as independent
accountants to audit the consolidated financial
statements of Rimage Corporation for the year ending
December 31, 1999. The votes of the stockholders on this
ratification were as follows:
In Favor Opposed Abstained Broker Non-Vote
-------- ------- --------- ---------------
4,004,918 525 11,975 -0-
16
Item 5. Other Information
Not Applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit No. 10.1 Asset Purchase Agreement dated as
of June 30, 1999 by and between
Rimage and ADS
Exhibit No. 11.1 Calculation of Earnings Per
Share.
Exhibit No. 27.1 Financial Data Schedule
(b) Reports on Form 8-K:
Filed July 9, 1999. Reported the disposition of
inventory, fixed assets and intangible assets of its
Boulder, Colorado based Services Division.
17
SIGNATURES
In accordance with the Exchange Act, this report has been signed below by
following persons on behalf of the registrant and on the dates indicated.
RIMAGE CORPORATION
------------------
Registrant
Date: August 13, 1999 By: /s/ Bernard P. Aldrich
------------------- ----------------------
Bernard P. Aldrich
Director, Chief Executive Officer,
and President
(Principal Executive Officer)
(Principal Financial Officer)
Date: August 13, 1999 By: /s/ Robert M. Wolf
------------------- ------------------
Robert M. Wolf
Controller
(Principal Accounting Officer)
18