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EXHIBIT 99.1
[COLORADO MEDtech, Inc. LOGO]
FOR IMMEDIATE RELEASE: NEWS
- ---------------------- NASDAQ-CMED
December 21, 2000
COLORADO MEDTECH, INC. COMMENTS ON
EXPECTED SECOND QUARTER RESULTS
BOULDER, Colorado -- Colorado MEDtech, Inc. (NASDAQ -- CMED), a Boulder,
Colorado-based medical products and outsourcing services company, today
announced that it anticipates that it will post an operating loss of
approximately $700,000 for its second quarter ended December 31, 2000, which
includes one-time charges of not less than $250,000 related to the company's
response to the unsolicited acquisition proposal by HEI, Inc. These results are
lower than analyst estimates. Revenues for the quarter are expected to be
slightly ahead of prior quarter revenues of $17.1 million.
The preliminary estimates primarily reflect increased expenses and reduced
revenues as a result of addressing manufacturing and quality systems issues.
During the quarter, the company invested heavily in its manufacturing and
quality systems, and expects the investments to result in long-term cost-savings
and improved performance and profitability. The company's previous guidance
included substantial investment in manufacturing systems and processes. However,
as the company's new management team reviewed these systems and processes, the
need for further change became evident and the company management responded by
increasing training and fortifying its systems and processes. As a result,
spending for these matters exceeded the original estimates and the company
experienced delays in certain production projects. The increased investment and
reduced shipments have had a negative impact on results for the current quarter
and are expected to have an impact for the remaining two quarters of the
company's fiscal year.
The anticipated quarter results also include the effect of an increase in
research and development expense associated with the company's x-ray generator
product.
The company continues to experience growth in bookings in its manufacturing,
imaging and CIVCO business units.
"These results are not what we anticipated in our plan, but we as a management
team have concluded that aggressively accelerating our investment in
infrastructure and quality improvements is necessary for the long-term success
of the company," said Mr. Onody. "Frank Maguire, our Chief Operations Officer,
and I have shared our plans with key clients and they have agreed with our
aggressive program to strengthen our manufacturing and quality systems. Our new
management is absolutely committed to improving our position as a leading
medical device company."
Colorado MEDtech plans to announce second quarter results on February 6, 2001.
The company will, over the next several weeks, update shareholders and the
financial community on the effect the above developments will have on its
operating results for the remaining six months of this fiscal year.
Colorado MEDtech, Inc., through its wholly-owned subsidiaries and operating
divisions, is a leading full-service provider of advanced medical products and
comprehensive outsourcing services.
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CONFERENCE CALL
Colorado MEDtech will hold a conference call at 9:00 a.m. Eastern time on
December 21, 2000 to discuss its expectations for its second quarter results.
Interested parties may listen to the call via Colorado MEDtech's website at
www.cmed.com or by calling 888-222-2994. A replay of the call will be available
until December 28, 2000 at 800-428-6051, passcode 149695. The webcast replay
will also be available until December 28, 2000.
FORWARD-LOOKING STATEMENTS
The statements in this news release and in the conference call that are not
historical facts are forward-looking statements that represent management's
beliefs and assumptions based on currently available information.
Forward-looking statements can be identified by the use of words such as
"believes," "intends," "may," "will," "should," "anticipated," "expected" or
comparable terminology or by discussions of strategy. Although the Company
believes that the expectations reflected in such forward-looking statements are
reasonable, it cannot assure that these expectations will prove to be correct.
Such statements involve risks and uncertainties including, but not limited to,
the risk that the Company's existing level of orders may not be indicative of
the level or trend of future orders, the risk that the Company may not
successfully complete the work encompassed by current or future orders, the risk
that unforeseen technical or production difficulties may adversely impact
project timing and financial performance, the risk that the management changes
will not produce the desired results, the risk of potential litigation, the
risks associated with regulation by the Federal Food and Drug Administration,
the risk that acquired companies cannot be successfully integrated with the
Company's existing operations and the risk that a downturn in general economic
conditions or customer budgets may adversely affect research and development and
capital expenditure budgets of potential customers upon which the Company is
dependent. Should one or more of these risks materialize (or the consequences of
such a development worsen), or should the underlying assumptions prove
incorrect, actual results could differ materially from those forecasted or
expected. These factors are more fully described in the Company's documents
filed from time to time with the Securities and Exchange Commission. The Company
disclaims any intention or obligation to update publicly or revise such
statements whether as a result of new information, future events or otherwise.
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CONTACTS:
Colorado MEDtech, Inc.
Stephen K. Onody, President and CEO Telephone: 303.530.2660
Gregory A. Gould, CFO Fax: 303.581.1010
Email: cmedinfo@cmed.com Website: www.cmed.com