EXHIBIT 99.1
[CONCORD LOGO]
CONTACT: OR LENS' INVESTOR RELATIONS COUNSEL:
CONCORD CAMERA CORP. THE EQUITY GROUP INC.
HARLAN PRESS ROBERT GOLDSTEIN (212) 371-8660
VICE PRESIDENT AND TREASURER DEVIN SULLIVAN (212) 836-9608
(954) 331-4200
FOR IMMEDIATE RELEASE
CONCORD CAMERA CORP. ANNOUNCES A RESTRUCTURING PLAN AND OTHER COST
REDUCTION INITIATIVES
HOLLYWOOD, FLORIDA - DECEMBER 6, 2004 - CONCORD CAMERA CORP. ("CONCORD" OR
"COMPANY") (NASDAQ: LENSE) announced that a decision was made to implement a
restructuring plan which involves significantly reducing its reliance on
internally designed and manufactured digital cameras and increasing the design
and co-development of digital cameras with contract manufacturers so as to
continue to provide competitive products to the retail market. The Company's
reliance on internally designed and manufactured digital cameras is expected to
be significantly reduced by the end of the third quarter of Fiscal 2005. The
restructuring plan and other cost-reduction initiatives are a result of the
Company's previously announced strategic review process to determine how the
Company may better compete in the digital camera market. The Company's objective
is to significantly reduce costs and expenses and achieve a more competitive
business model with a goal to return to profitability.
The Company believes that it will be more cost-effective and less capital
intensive to increase its reliance on the design and co-development of digital
cameras with contract manufacturers, due, in part, to the overcapacity in
world-wide digital camera manufacturing. By increasing the design and
co-development of digital cameras with contract manufacturers, the Company
anticipates that it will reduce or eliminate certain costs and risks related to
the digital camera design and manufacturing process. These costs include: (1)
capital expenditures (including tooling, plant, property and equipment), (2)
working capital related to raw materials and components inventory, and (3) those
resulting from digital camera manufacturing inefficiencies. In addition, the
change in direction reduces product development issues and the exposure to the
ongoing erosion in the value of digital camera raw material and component
inventory and purchase commitments. Sufficient quantities of internally designed
and manufactured digital camera products will be available to fulfill customer
commitments and forecasts. Management does not expect any customer service
issues. The Company is continuing to review its strategies including the extent
of its future participation in the digital camera market.
CONCORD CAMERA CORP. PAGE 2
DECEMBER 6, 2004
As a result of the restructuring plan, the Company anticipates incurring
restructuring related charges of approximately $6.6 million in Fiscal 2005. The
restructuring related charges include approximately $2.7 million in employee
severance and retention costs and approximately $3.9 million in anticipated
digital camera and component inventory provisions. In addition, the Company
anticipates incurring approximately $0.9 million in accelerated depreciation, on
equipment, tooling and other fixed assets. Due to the restructuring plan and
other cost-reduction initiatives, approximately 1,700 positions will be
eliminated throughout the world by the end of the third quarter of Fiscal 2005.
The majority of these positions are expected to be eliminated in the Company's
PRC manufacturing facilities and Hong Kong operations.
The Company has also implemented cost-reduction initiatives for Fiscal Years
2005 and 2006 and anticipates incurring in Fiscal 2005 approximately $1.3
million in expenses related to its implementation. The expenses related to the
other cost-reduction initiatives, and the charges related to the restructuring
plan and the accelerated depreciation total approximately $8.8 million. The
restructuring plan and other cost reduction initiatives are anticipated to
result in significant cost reductions in fiscal years 2005 and 2006.
ABOUT CONCORD CAMERA CORP.
Concord Camera Corp., through its subsidiaries, is a global producer of
popularly priced, digital, 35mm traditional and single use cameras. Concord
markets its cameras under the trademarks POLAROID, CONCORD, CONCORD EYE Q and
JENOPTIK. Concord sells and markets its camera products worldwide through direct
sales offices in the United States, Canada, Germany, Hong Kong, the Peoples
Republic of China, the United Kingdom, Japan and France and through independent
sales agents. The Polaroid trademark is owned by Polaroid Corporation and is
used by Concord under license from Polaroid. CONCORD and CONCORD EYE Q are
trademarks and/or registered trademarks of Concord Camera Corp. in the United
States and/or other countries. The JENOPTIK trademark is owned by Jenoptik AG
and is used by Concord under license from Jenoptik AG. Learn more about Concord
Camera Corp. at www.concord-camera.com.
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 expected
cost savings, our ability to meet customer demands and fulfill customer service
obligations and anticipated or expected results and the future implementation of
our strategic plan, in particular, the restructuring plan, cost-reductions
initiatives and anticipated financial benefits of significantly reducing our
reliance on internally designed and manufactured digital cameras and increasing
the design and co-development of digital cameras with contract manufacturers,
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 July 3, 2004 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.
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