EXHIBIT 99.1 Contact: Microelectronic Packaging, Inc. Denis J. Trafecanty, Senior Vice President and Chief Financial Officer (619) 292-7000, ext. 3014 FOR IMMEDIATE RELEASE MICROELECTRONIC PACKAGING ANNOUNCES RESTATEMENT OF FINANCIAL RESULTS FOR THE QUARTERS ENDED JUNE 30, 1997 AND SEPTEMBER 30, 1997 San Diego, California -- March 18, 1998 -- Microelectronic Packaging, Inc. (the "Company") (OTC Bulletin Board: MPIX) today announced that it has restated its previously reported financial statements for the quarters ended June 30, 1997 and September 30, 1997. Interest Expense Related to Discontinued Singapore Operations Debt ------------------------------------------------------------------- On March 3, 1997, prior to the release of its operating results for the year ended December 31, 1996, the Company announced the commencement of the liquidation of its MPM Singapore Pte. Ltd. ("MPM") subsidiary which had been the subsidiary through which the Company was developing multilayer packaging technology pursuant to a licensing agreement with IBM. In addition, on July 10, 1997, the Company announced the commencement of the liquidation of its MPS Singapore Pte. Ltd. ("MPS") subsidiary that had been manufacturing EPROM, CERDIP and other pressed ceramic packages. The total debt pertaining to the MPM and MPS subsidiaries aggregates approximately $25 million as of December 31, 1997. The estimated interest expense pertaining to the MPM portion of this debt for the period from January 1, 1997 to June 30, 1997 was recorded as a charge to discontinued operations as of December 31, 1996. However, from July 1, 1997 to September 30, 1997, the Company accounted for the interest expense for both MPM and MPS as a current period expense in its quarterly report ended September 30, 1997. Subsequently, the Company has determined that it is more appropriate to classify these Singapore operations' financing expenses as estimated loss on disposal of discontinued operations to be consistent with the method of reporting used by the Company at December 31, 1996 and to more accurately reflect the estimated loss on disposal. - more - 1 Accordingly, the Company restated its quarterly results for the three months ended June 30, 1997 to increase its reserves for discontinued operations by $3,500,000 which represents interest expense related to the debt from two of the Company's subsidiaries in Singapore. The interest expense recorded covers the six months ended December 31, 1997 and the projected applicable interest expense that will be incurred by both MPM and MPS through the completion of the liquidation (which is estimated to be December 31, 1998). In addition, for the quarter ended September 30, 1997, the Company restated its results by removing approximately $429,000 of interest expense pertaining to the Singapore operations debt previously recorded as a period expense, which is included in the $3,500,000 restatement adjustment. For the quarter ended September 30, 1997 and for all subsequent quarters through December 31, 1998, payment of interest will be recorded, if necessary, as a reduction of the reserve for discontinued operations. The Company believes that the increase made to its reserves for discontinued operations of $3,500,000 as of June 30, 1997 will be adequate to satisfy all anticipated liabilities of those discontinued operations. The effect of these changes is to decrease the operating loss by $199,000 for the quarter ended June 30, 1997, and to increase the Company's net loss by $3,500,000 for the same period. Further, this change increases operating income by $429,000 for the quarter ended September 30, 1997 and net income by a like amount that same period. The Company is currently attempting to restructure its debt. The Company's ability to successfully restructure its debt will depend in large part upon the cooperation of its various creditors, lenders, equity holders and others. There can be no assurance that such restructuring will be completed successfully. The Company's business is also subject to other risk factors, including the dependence on a limited number of customers and the ability to fund any increased growth in its business. - more - 2 MICROELECTRONIC PACKAGING, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) Three months ended June 30, 1997 -------------------------------- As reported As restated ----------- ------------ Net sales: Product sales $ 8,788,000 $ 8,788,000 Other sales 90,000 90,000 ----------- ------------ 8,878,000 8,878,000 Cost of goods sold: Product sales 8,249,000 8,249,000 Other sales 43,000 43,000 ----------- ------------ 8,292,000 8,292,000 ----------- ------------ Gross profit 586,000 586,000 Selling, general and administrative 1,315,000 1,315,000 Engineering and product development 88,000 88,000 ----------- ------------ Income (loss) from operations (817,000) (817,000) Other income (expense): Interest (expense), net (204,000) (5,000) Other income, net 106,000 106,000 ----------- ------------ Income (loss) from continuing operations before provision for income taxes (915,000) (716,000) Provision for income taxes -- -- ----------- ------------ Income (loss) from continuing operations (915,000) (716,000) Discontinued operations: Income (loss) from operations (3,445,000) (3,645,000) Estimated loss on disposal (3,851,000) (7,350,000) ----------- ------------ Net income (loss) $(8,211,000) $(11,711,000) =========== ============ Net income (loss) per common share and assuming dilution: Income (loss) from continuing operations $ (0.08) $ (0.07) Income (loss) from discontinued operations $ (0.68) $ (1.02) ----------- ------------ Net income (loss) per common share $ (0.76) $ (1.09) =========== ============ Weighted average shares used in per share calculations 10,793,000 10,793,000 =========== ============ - more - 3 MICROELECTRONIC PACKAGING, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) June 30, 1997 ---------------------------- As reported As restated ------------ ------------ ASSETS Current assets: Cash $ 1,192,000 $ 1,192,000 Accounts receivable, net 2,193,000 2,193,000 Inventories 7,660,000 7,660,000 Other current assets 114,000 114,000 ------------ ------------ Total current assets 11,159,000 11,159,000 Property, plant and equipment, net 780,000 780,000 Other non-current assets 338,000 338,000 ------------ ------------ $ 12,277,000 $ 12,277,000 ============ ============ Current liabilities: Debt in default, due on demand $ 16,774,000 $ 16,774,000 Current portion of long-term debt 3,014,000 3,014,000 Accounts payable 12,102,000 12,102,000 Accrued liabilities 2,102,000 2,102,000 Deferred revenue 330,000 330,000 Current liabilities of discontinued operations, net 13,338,000 16,838,000 ------------ ------------ Total current liabilities 47,660,000 51,160,000 Long-term debt, less current portion 2,961,000 2,961,000 Commitments and contingencies Shareholders' deficit: Common stock, no par value 39,839,000 39,839,000 Accumulated deficit (78,183,000) (81,683,000) ------------ ------------ Total shareholders' deficit (38,344,000) (41,844,000) ------------ ------------ $ 12,277,000 $ 12,277,000 ============ ============ - more - 4 MICROELECTRONIC PACKAGING, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) Three months ended September 30, 1997 ------------------------------------- As reported As restated ----------- ----------- Net sales $ 5,655,000 $ 5,655,000 Cost of goods sold 4,019,000 4,019,000 ----------- ----------- Gross profit 1,636,000 1,636,000 Selling, general and administrative 1,008,000 1,008,000 Engineering and product development 79,000 79,000 ----------- ----------- Income (loss) from operations 549,000 549,000 Other income (expense): Interest (expense), net (436,000) (7,000) Other income, net 27,000 27,000 ----------- ----------- Income (loss) from continuing operations before provision for income taxes 140,000 569,000 Provision for income taxes -- -- ----------- ----------- Income (loss) from continuing operations 140,000 569,000 Discontinued operations: Income loss from operations -- -- Estimated loss on disposal -- -- ----------- ----------- Net income (loss) $ 140,000 $ 569,000 =========== =========== Net income per common share and assuming dilution $ 0.01 $ 0.05 =========== =========== Weighted average shares used in per share calculations 10,986,000 10,986,000 =========== =========== - more - 5 MICROELECTRONIC PACKAGING, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) September 30, 1997 ------------------ As reported As restated ------------- ------------- ASSETS Current assets: Cash $ 1,623,000 $ 1,623,000 Accounts receivable, net 2,708,000 2,708,000 Inventories 3,824,000 3,824,000 Other current assets 131,000 131,000 ------------ ------------ Total current assets 8,286,000 8,286,000 Property, plant and equipment, net 757,000 757,000 Other non-current assets 330,000 330,000 ------------ ------------ $ 9,373,000 $ 9,373,000 ============ ============ Current liabilities: Debt in default, due on demand $ 14,833,000 $ 14,833,000 Current portion of long-term debt 3,226,000 3,226,000 Accounts payable 8,341,000 8,341,000 Accrued liabilities 3,008,000 3,008,000 Deferred revenue 295,000 295,000 Current liabilities of discontinued operations, net 13,610,000 16,681,000 ------------ ------------ Total current liabilities 43,313,000 46,384,000 Long-term debt, less current portion 4,265,000 4,265,000 Commitments and contingencies Shareholders' deficit: Common stock, no par value 39,839,000 39,839,000 Accumulated deficit (78,044,000) (81,115,000) ------------ ------------ Total shareholders' deficit (38,205,000) (41,276,000) ------------ ------------ $ 9,373,000 $ 9,373,000 ============ ============ 6