EXHIBIT 99
[CONCORD CAMERA LOGO]
CONTACT: OR LENS' INVESTOR RELATIONS COUNSEL:
Concord Camera Corp. The Equity Group, Inc.
Brian King Robert Goldstein (212) 371-8660
Senior Executive Vice President Devin Sullivan (212) 836-9608
(954) 331-4200
FOR IMMEDIATE RELEASE
CONCORD CAMERA CORP. ANNOUNCES RESULTS AND RECORD SALES FOR
THE THIRD QUARTER AND NINE MONTHS ENDED MARCH 29, 2003
HOLLYWOOD, FLORIDA - May 9, 2003 - Concord Camera Corp. ("Concord" or "Company")
(NASDAQ National Market: LENS) today reported financial results for the third
quarter and nine months of fiscal 2003 ended March 29, 2003 (see attached
tables).
Third Quarter Comparison
For the third quarter ended March 29, 2003, net sales were $36.2 million, a 37%
increase over the same quarter last year. Net income was $1.3 million, or $0.04
per diluted share. This compared to net sales of $26.4 million, and a net loss
of $(3.3) million, or $(0.12) per share, for the third quarter of the prior
fiscal year.
Commenting on the financial results, Ira B. Lampert, Concord's Chairman, Chief
Executive Officer and President, said, "Concord's net sales for the third
quarter of fiscal 2003 of $36.2 million exceeded the high end of the range ($32
to $35 million) of guidance announced in January and last year's third quarter
sales of $26.4 million by 37%. Third quarter sales also set a Company record by
exceeding sales in any prior third quarter, historically the Company's weakest
quarter. Net income was $1.3 million versus guidance of breakeven. However,
during this quarter net income was positively impacted by the resolution of a
previously disclosed disputed claim with a Design and Manufacturing Services
("DMS") customer. The resolution resulted in a net after tax benefit of $2.0
million from a $2.2 million pretax reduction of cost of products sold.
Mr. Lampert also said, "Sales from our Retail Sales and Distribution ("RSD")
business for the third quarter of fiscal 2003 were $23.1 million, an increase of
$5.4 million, or 30.8%, and accounted for 64% of total sales. This growth was in
large part due to new digital product sales, Polaroid branded single use and
traditional cameras, new accounts and organic growth from existing accounts due
to sell through and new product introductions. Sales from our DMS business were
$13.1 million, an increase of $4.4 million, or 50.2%, and accounted for 36% of
total sales. This increase was in part due to a new single use camera being
manufactured for Eastman Kodak Company ("Kodak") under a new supply agreement
entered into in September 2002.
Mr. Lampert continued, "We are very pleased with the increased market
penetration we experienced with our digital cameras both in our RSD and DMS
businesses. This increased penetration was primarily a result of opening new
accounts, growth in existing accounts and increased digital camera product
offerings. During the first three quarters of 2003, we offered for sale thirteen
(13) Concord branded digital camera models ranging from simple VGA to four
megapixel products.
Concord Camera Corp. Announces Results For
Third Quarter and Nine Months Ended March 29, 2003
May 9, 2003
Page 2
"Our sales of digital cameras during the third quarter of fiscal 2003 were $6.3
million compared to $3.6 million in the same period last year, an increase of
$2.7 million or 75%. For the first three quarters of fiscal 2003, digital camera
sales increased $40.1 million over the same period in fiscal 2002, that is $48.6
million versus $8.5 million. Digital camera sales are the primary reason why our
sales have increased over 30% this fiscal year."
"Gross profit for the third quarter of fiscal 2003 was $8.4 million, or 23.2% of
net sales, versus $1.8 million, or 6.8% of net sales in the same quarter last
year. This year's fiscal third quarter included the $2.2 million pretax benefit
related to the favorable dispute resolution. Last year's fiscal third quarter
included a net inventory provision of $1.5 million. Margins and costs were
positively impacted by increased sales and the resultant efficiency gains in our
manufacturing processes at our vertically integrated world class manufacturing
facility located in the People's Republic of China ("PRC"). We continue to
invest in new product engineering, design and development, primarily focusing on
digital technologies and products. We incurred approximately $2.2 million, or
6.0% of net sales, in product development costs in this year's fiscal third
quarter as compared to $1.8 million, or 6.8% of net sales, last year.
"Selling expenses for the third quarter of fiscal 2003 were $1.9 million, or
5.2% of net sales. This compared to $1.4 million, or 5.4% of net sales, for the
third quarter last year. The increase in absolute dollars was primarily due to
additional sales and marketing personnel, higher variable costs including
freight and handling costs, and royalties related to the Polaroid brand
licenses, all of which are attributable to the Company's sales growth. "
"General and administrative ("G&A") expenses for the third quarter of fiscal
2003 were $5.4 million, or 14.8% of net sales. This compared to $4.1 million, or
15.4% of net sales, for the third quarter last year. The increase in G&A
expenses was primarily due to additional staffing, non-reimbursed legal expenses
associated with defending the Company's class action litigation and certain
intellectual property-related legal costs, insurance costs and additional costs
associated with the Company's growth. Last year's G&A expenses included a $0.3
million bad debt recovery," said Mr. Lampert.
There was no non-cash variable stock option expense for the third quarter of
this fiscal year in comparison to a $1.2 million expense for the same quarter
last year. Last year's third quarter included a $1.2 million recovery of
operating expenses associated with a previously disclosed employee defalcation.
Interest expense for the third quarter of fiscal 2003 was $0.2 million compared
to $0.6 million in the same quarter last year. The decrease of $0.4 million was
attributable to the repurchase in August 2002 of our $15 million, 11% Senior
Notes.
Other (income), net was $(0.5) million for the third quarter of fiscal 2003,
versus $(0.3) million for the third quarter last year. The increase is primarily
related to foreign exchange gains.
Concord Camera Corp. Announces Results For
Third Quarter and Nine Months Ended March 29, 2003
May 9, 2003
Page 3
Nine Month Comparison
For the nine months ended March 29, 2003 ("Fiscal 2003 YTD"), net sales were
$128.3 million, a 30% increase over the same period last year, and net income
was $4.7 million, or $0.16 per diluted share. For the nine months ended March
30, 2002 ("Fiscal 2002 YTD"), net sales were $98.6 million and the net loss was
$(6.2) million, or $(0.23) per share.
RSD sales for Fiscal 2003 YTD were $97.8 million, an increase of $28.7 million,
or 41.7%, and accounted for 76% of total sales. This growth was in large part
due to new digital camera sales, Polaroid branded single use and traditional
cameras, new accounts and organic growth from existing accounts due to sell
through and new product introductions. DMS sales were $30.5 million, an increase
of $1.0 million, or 3.1%, and accounted for 24% of total sales. The increase was
due in part to digital camera sales to a Fuji Photo Film Co., Ltd. subsidiary,
Legend Group Limited in the PRC and Visioneer, Inc., sales of a new single use
camera being manufactured for Kodak under a new supply agreement entered into in
September 2002 and other sales to existing customers, partially offset by the
previously disclosed expiration of certain DMS contracts.
Gross profit for Fiscal 2003 YTD was $25.6 million, or 19.9% of net sales,
versus $14.9 million, or 15.1% of net sales in Fiscal 2002 YTD. This year
included the $2.2 million pretax benefit related to the favorable dispute
resolution partially offset by $0.8 million of additional air freight costs due
to the West Coast dock worker labor dispute, while last year included $3.3
million of net inventory provisions. Fiscal 2003 YTD gross profit margins were
positively impacted by increased sales, efficiency gains and positive labor and
overhead absorption in manufacturing. Product development expenses were $6.1
million, or 4.8% of net sales, for Fiscal 2003 YTD versus $5.8 million, or 5.9%,
of net sales last year.
Selling expenses for Fiscal 2003 YTD were $5.9 million, or 4.6% of net sales.
Last year, selling expenses were $4.6 million, or 4.7% of net sales. The
increase was primarily due to additional sales and marketing personnel, higher
freight and handling costs, and royalties related to the Polaroid brand
licenses, all of which are attributable to the Company's year over year sales
growth.
General and administrative expenses for Fiscal 2003 YTD were $14.9 million, or
11.6% of net sales. This compared to $16.3 million, or 16.5% of net sales last
year. Fiscal 2002 YTD G&A expenses included a $1.6 million accounts receivable
provision due to the Polaroid bankruptcy, a $1.1 million charitable contribution
for victims of the September 11, 2001 terrorist attack, and a net $0.7 million
provision due to the Kmart bankruptcy. Fiscal 2003 YTD G&A expenses included a
$0.5 million reduction in expense due to a payment from Polaroid in settlement
of Concord's outstanding Polaroid claims related to the Polaroid bankruptcy
filing. The remaining elements of G&A expenses increased year over year by
approximately $2.5 million primarily due to additional staffing, professional
and insurance costs, and other costs associated with the Company's growth.
Interest expense for Fiscal 2003 YTD was $1.0 million, versus $1.9 million last
year, a decrease of $0.9 million. The decrease relates to the repurchase of the
Senior Notes described herein.
Other (income), net was $(1.4) million for Fiscal 2003 YTD as compared to $(2.7)
million in Fiscal 2002 YTD. Last year included $1.2 million of income from an
arbitration award and also included higher investment income.
Concord Camera Corp. Announces Results For
Third Quarter and Nine Months Ended March 29, 2003
May 9, 2003
Page 4
Working Capital
Working capital was $115.4 million at March 29, 2003, $115.2 million at December
28, 2002 and $128.4 million at June 29, 2002. Working capital has declined $13.0
million since the beginning of the fiscal year. Cash and investments decreased
by $20.2 million from $103.9 million at June 29, 2002 to $83.7 million at
December 28, 2002 as a result of the repurchase of the $15 million Senior Notes,
pre-paying $4 million in conjunction with the Polaroid brand license agreements
and incurring $3.9 million of fixed asset expenditures. Cash and investments
during the third quarter increased by $0.7 million. Accounts receivable, net
decreased by $10.0 million during the third quarter and has decreased by $3.6
million from the beginning of the year. Inventory increased from $22.5 million
to $34.4 million during the first three quarters of fiscal 2003, but remained
relatively unchanged from the end of the second quarter of fiscal 2003.
Concord's Balance Sheet Remains Strong
Mr. Lampert continued, "Concord ended the third quarter with working capital of
$115.4 million, no long-term debt, and cash and investments on hand of $83.7
million. We also had total stockholders' equity of $154.6 million, or
approximately $5.54 per share, as of March 29, 2003. We remain convinced that if
we adhere to our fundamental strategies of engineering, developing, designing
and manufacturing high quality products at low cost and introducing new products
to our RSD and DMS customers, our business will progress. We continue to invest
in human resources, technologies, manufacturing facilities, capital equipment
and product development to support growth and our transition to a leading image
capture technology-based DMS and RSD business."
Commenting on the short-term outlook for the Company, Mr. Lampert continued,
"Providing long-term future guidance continues to be challenging. The economy
remains difficult to forecast particularly in light of mixed economic indicators
and disruptive world events. Historically, the Company's fourth quarter has been
relatively strong. Currently, for the fourth quarter of fiscal 2003, we
anticipate revenues in the approximate range of $50 to $55 million and net
income in the approximate range of $0.9 to $1.8 million, or $0.03 to $0.06 per
share, before any non-cash variable stock option expense."
Potential New Products and Relationships
If the Company's development efforts are successfully concluded, the Company
anticipates introducing a number of new digital, single use and traditional
cameras to potential new and existing DMS and RSD customers during the remainder
of this fiscal year and the first part of next fiscal year.
Corporate Governance and Enhanced Reporting
Concord has endorsed and will fully comply with the requirements of NASDAQ, the
Sarbanes-Oxley Act and the new SEC rules related to corporate governance,
accounting and reporting.
Concord Camera Corp. Announces Results For
Third Quarter and Nine Months Ended March 29, 2003
May 9, 2003
Page 5
Investor Conference Call
Ira B. Lampert, Chairman, Chief Executive Officer and President, will host a
conference call today, Friday, May 9, 2003 at 11:30 A.M. Eastern Daylight Time,
to discuss fiscal 2003 third quarter and nine month results. To participate in
the live conference call with management, please call (973) 582-2866 five to ten
minutes prior to the start time. The conference call will also be broadcast live
over the Internet via the WEBCAST section on the home page of Concord's web site
- - www.concord-camera.com. To listen to the live call, go to the web site at
least 15 minutes early to register, download and install any necessary audio
software. If you are unable to listen to the call live, the conference call will
be archived and can be accessed for approximately five business days.
About Concord Camera Corp.
Concord Camera Corp. is a global developer, designer, manufacturer and marketer
of high quality, popularly priced, digital, instant, Advanced Photo System
(APS), and 35mm format cameras and 35mm, APS, and instant format single use
cameras. Concord markets its cameras under the trademarks POLAROID(R),
CONCORD(R), KEYSTONE(R), CONCORD EYE Q(R), LE CLIC(R), GOLDLINE(R), APEX(R), and
ARGUS(R). Concord sells and markets its camera products worldwide through direct
sales offices in the United States, Canada, Germany, Hong Kong, the United
Kingdom and France and through independent sales agents. Concord manufactures
its products in its vertically integrated manufacturing facilities in the
People's Republic of China. The Polaroid trademark is owned by Polaroid
Corporation and is used by Concord under license from Polaroid.
Except for the historical matters contained herein, statements in this press
release are forward-looking and are made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. Investors are cautioned
that forward-looking statements, including the statements regarding anticipated
or expected results and the future introduction of new products, involve risks
and uncertainties which may affect the Company's business and prospects,
including the risks discussed under "Risk Factors" in the Company's Annual
Report on Form 10-K for the fiscal year ended June 29, 2002 and subsequently
filed reports. Any forward-looking statements contained in this press release
represent our estimates only as of the date hereof, or as of such earlier dates
as are indicated, and should not be relied upon as representing our estimates as
of any subsequent date. While we may elect to update forward-looking statements
at some point in the future, we specifically disclaim any obligation to do so,
even if our estimates change.
Concord Camera Corp. Announces Results For
Third Quarter and Nine Months Ended March 29, 2003
May 9, 2003
Page 6
Concord Camera Corp. and Subsidiaries
Condensed Consolidated Balance Sheets
(In Thousands)
March 29, December 28, June 29,
2003 2002 2002
----------- ---------- ----------
(Unaudited) (Unaudited)
Assets
Current Assets:
Cash and cash equivalents $ 33,816 $ 83,028 $ 103,868
Short-term investments 49,906 - -
Accounts receivable, net 19,352 29,339 22,984
Inventories 34,355 34,340 22,485
Prepaid expenses and other current assets 3,948 4,422 4,194
--------- --------- ---------
Total current assets 141,377 151,129 153,531
Property, plant and equipment, net 20,779 20,732 20,985
Goodwill, net 3,721 3,721 3,721
Other assets 25,313 24,580 19,839
--------- --------- ---------
Total assets $ 191,190 $ 200,162 $ 198,076
========= ========= =========
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $ 15,398 $ 18,301 $ 12,502
Accrued expenses 8,885 15,371 12,013
Other current liabilities 1,664 2,220 634
--------- --------- ---------
Total current liabilities 25,947 35,892 25,149
Senior notes - - 14,934
Other long-term liabilities 10,679 10,943 8,837
--------- --------- ---------
Total liabilities 36,626 46,835 48,920
Commitments and contingencies
Stockholders' Equity:
Blank check preferred stock, no par value
1,000 shares authorized, none issued - - -
Common stock, no par value 100,000 shares
authorized, 29,458, 29,457 and 29,029 shares issued as
of March 29, 2003, December 28 and June 29, 2002,
respectively 141,092 141,089 140,547
Paid-in capital 4,507 4,507 4,412
Deferred stock-based compensation (232) (275) (332)
Retained earnings 13,400 12,143 8,667
Notes receivable arising from common stock purchase
agreements - - (1)
Accumulated other comprehensive loss (66) - -
--------- --------- ---------
158,701 157,464 153,293
Less: treasury stock, at cost; 1,543 shares (4,137) (4,137) (4,137)
--------- --------- ---------
Total stockholders' equity 154,564 153,327 149,156
--------- --------- ---------
Total liabilities and stockholders' equity $ 191,190 $ 200,162 $ 198,076
========= ========= =========
Concord Camera Corp. Announces Results For
Third Quarter and Nine Months Ended March 29, 2003
May 9, 2003
Page 7
Concord Camera Corp. and Subsidiaries
Condensed Consolidated Statements of Operations
(In Thousands except per share data)
(Unaudited)
For the quarter ended For the nine months ended
----------------------- -------------------------
March 29, March 30, March 29, March 30
2003 2002 2003 2002
--------- --------- --------- ---------
Net sales $ 36,246 $ 26,422 $ 128,268 $ 98,574
Cost of products sold 27,854 24,615 102,686 83,696
--------- --------- --------- ---------
Gross profit 8,392 1,807 25,582 14,878
Selling expenses 1,886 1,432 5,896 4,586
General and administrative expenses 5,367 4,071 14,914 16,252
(Recovery) of operating expenses, net - (1,150) - (1,150)
Variable stock-based compensation expenses - 1,169 - 2,825
Interest expense 206 570 1,030 1,864
Other (income), net (464) (320) (1,429) (2,682)
--------- --------- --------- ---------
Income (loss) before income taxes 1,397 (3,965) 5,171 (6,817)
Provision (benefit) for income taxes 140 (617) 438 (646)
--------- --------- --------- ---------
Net income (loss) $ 1,257 $ (3,348) $ 4,733 $ (6,171)
========= ========= ========= =========
Basic earnings (loss) per common share $ 0.05 $ (0.12) $ 0.17 $ (0.23)
========= ========= ========= =========
Diluted earnings (loss) per common share $ 0.04 $ (0.12) $ 0.16 $ (0.23)
========= ========= ========= =========
Weighted average common shares outstanding-basic 27,915 27,442 27,858 27,425
Dilutive effect of common stock options 1,627 - 1,561 -
--------- --------- --------- ---------
Weighted average common shares outstanding-diluted 29,542 27,442 29,419 27,425
========= ========= ========= =========